Relationship with testamentary freedom

  • Testator is generally free to dispose of their property as they see fit.
  • Testamentary freedom is subject to an order of the court that the testator ought to have made provision for the maintenance, education or advancement in life of an eligible person.
  • Family provision legislation prevents a testator from not providing for their dependents.
  • A claim may even be made by a person who receives the entire estate if they can establish they have been left without proper provision and there is a notional estate from which further provision can be made: Frisoli v Kourea [2013] NSWSC 1166.
  • Historically a married woman was entitled to dower (‘widow’s share’) on her husband’s death — a life interest in her husband’s realty.
    • Abolished in 1833.
  • Complete testamentary freedom in NSW until 1916 when the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW) (‘TFM Act’).
    • The provided some protection for spouses and children.
    • Scope of the TFM Act expanded by the Family Provision Act 1982 (NSW) (‘FPA’).
      • Took effect from 1 September 1983.
      • Class of eligible persons was expanded.
      • Concept of notional estate introduced.
  • The FPA replaced from 1 March 2009 by similar provisions in the Succession Act 2006 (NSW) (‘Succession Act’) ch 3 by the Succession Amendment (Family Provisions) Act 2008 (NSW).
  • Initial cases considering ch 3 of the Succession Act held that the principles applicable under the former legislation continued to apply: Faulkner v McLeod [2011] NSWSC 92; Graham v Graham [2011] NSWSC 504; Keep v Bourke [2012] NSWCA 64.
    • However, a majority in the Court of Appeal suggested that the approach is subtly broader: Andrew v Andrew (2012) 81 NSWLR 656.
      • At [26]–[32], Basten J (Allsop P agreeing; Barratt JA dissenting) identified three years of difference:
        • Previously the legislation prohibited the making of an order unless there was inadequate provision for the eligible person’s proper maintenance, etc — ch 3 now suggests that the court may prioritise the needs of the eligible person over testamentary freedom.
        • Previously the legislation required a two-stage process in exercising the jurisdiction — ch 3 suggests that there is now only one question for the court: what would be the adequate provision for the eligible person?
        • The legislation (specifically s 60) now requires the court to examine a much broader range of factors in deciding adequate provision: at [36] it is suggested that ‘community standards’ are relevant.
  • Succession Act ch 3 does not confer a statutory entitlement to receive from a deceased’s estate or impose any limitation on the deceased’s power of disposition by will.
    • It empowers the court to alter a testator’s disposition to produce a result that is consistent with the purpose of the Act, and is a discretionary power: Faulkner v McLeod [2011] NSWSC 92 [24].
    • The right of an eligible person to bring an application does not constitute property and is not a chose in action (because the court can refuse to exercise discretion) : Kavan v Mallery [2013] FCCA 210 [35]; Neale v Neale [2013] NSWSC 983; White v White (1995) 19 Fam LR 696.
  • The court must have jurisdiction — a death must be able to be established.
    • If the date or time of death is uncertain, the court has power to set a date or time of death that is reasonable for the purposes of making a family provision order: s 97.
    • Where there is doubt as to the death of the deceased, the court may make a family provision order contingent upon an undertaking that property be returned if the deceased is found to be living: s 67.
  • Under the FPA, there was no jurisdiction until grant of administration: Estate of Cassel [2000] NSWSC 294.
    • Under ch 3 of the Succession Act family provisions proceedings are permitted where there is no grant: s 58(1).
    • Under s 91 of the Succession Act, the court is may make a grant of administration for the purpose of family provision proceedings where satisfied it is proper to do so, and only for the purposes of permitting the application to be dealt with.
      • There must be some need for a grant to be made.
      • A grant may be needed where there is a notion estate order.
    • When a grant should be made for the purposes of family provision proceedings:
      • There is no requirement in s 59 that there is a grant of probate as a condition on the power to make an order: Cabban v Cabban [2010] NSWSC 1433 [55].
      • s 91 is directed at overcoming the fact that under the previous legislation a grant had to be made purely to remove a barrier to a claim: Cabban v Cabban [2010] NSWSC 1433 [57]–[58], citing Estate of Cassel [2000] NSWSC 294 [7], [10].
      • A grant of administration is not required before the commencement of proceedings: Polistena v Mitton [2011] NSWSC 931 [110]
  • Proceedings can be commenced in the Equity Division of the Supreme Court or the District Court (the latter cannot make provision in excess of $250,000 — District Court Act 1973 (NSW) s 134(2)).

Eligible persons

  • Succession Act s 57 provides for the following eligible persons:
    • The spouse at time of death.
    • A person with whom the deceased was living in a de facto relationship at time of death.
    • A child of the deceased.
    • A child of a domestic relationship to which the deceased was party at the time of death.
    • A former spouse.
    • A grandchild who was at any time wholly or partially dependent upon the deceased.
    • A person who was at any time wholly or partially dependent upon the deceased and was at any time a member of the household of which the deceased was a member.
    • A person with whom the deceased was living in a close personal relationship at the time of the deceased’s death.

De facto relationship

  • De facto relationship defined as two adult persons (regardless of sex) living together as a coupe who are not married or related by family: Interpretation Act 1987 (NSW) s 21C.
    • Can exist even where one of the persons is legally married or in a registered relationship with someone else.
    • Relationship as a couple determined with reference to:
      • The duration of the relationship.
      • The nature and extent of their common residence.
      • Whether a sexual relationship exists.
      • The degree of financial dependence or interdependence and any arrangements for financial support between them.
      • The ownership, use and acquisition of property.
      • The degree of mutual commitment to a shared life.
      • The care and support of children.
      • The performance of household duties.
      • The reputation and public aspects of the relationship.
    • Related by family includes:
      • Child-parent relationships (including adopted children).
      • Descendant-ancestor relationships (including intervening adoptive relationships).
      • They have a parent in common (including adoptive parents).
    • Adoptive relationships are relevant even where an adoption is declared void or is of no effect, and the adoption took place under foreign or domestic law.
    • Family relationships apply in relation to parentage orders within the meaning of the Surrogacy Act 2010 (NSW) even if it ceases to have effect.
  • The factors indicating a de facto relationship are not exhaustive: Roy v Sturgeon (1986) 11 NSWLR 454.
  • The totality of the relationship must be examined including its changing nature: Bar-Mordecai v Hillston [2004] NSWCA 65.
    • Bouts of selfishness or infidelity are not necessarily inconsistent with the existence of such a relationship.

Domestic relationship

  • A close personal relationship is one between two adults, whether or not related by family, other than a marriage or de facto relationship, who are living together, and in which one or each provides the other with domestic support and personal care other than for reward: Succession Act s 3(3).
  • Ye v Fung (No 3) [2006] NSWSC 635 — a close personal relationship was found to exist between a university student who boarded with an elderly lady:
    • The student lived with her free of charge and he provided her with domestic support and personal care.
      • The court held that the deceased owed the student a testamentary duty greater than that owed to her siblings.
      • Student was awarded $425,000 out of an estate of $1.5 million.
    • Decision upheld on appeal: Fung v Ye [2007] NSWCA 115.
  • From 1 March 2009 an eligible person who was in a close personal relationship must demonstrate factors warranting the making of the application before the court can make a family provision order: s 59(1)(b).
  • Domestic support and personal care normally means more than emotional support: Bayssari v Bazouni [2014] NSWSC 910 [45].
  • Domestic support and personal care for ‘fee and reward’ is a commercial or business relationship between the parties living together: Skarica v Toska [2014] NSWSC 34 [45]; Barlevy v Nadolski [2011] NSWSC 129 [157].
    • However, receipt of a carer’s pension or allowance from the government ‘does not require that an essentially private relationship be characterised as a business relationship: Skarica v Toska [2014] NSWSC 34 [46].
      • On the other hand, under the Property (Relationships) Act 1984 (NSW) it was held that receipt of a government carer’s pension precluded the existence of a close personal relationship with the deceased: Bayssari v Bazouni [2014] NSWSC 910 [46].

Living with

  • This does not require physical presence all the time: Weston v Public Trustee (1986) 4 NSWLR 407; Turnley v Swaab [1999] NSWSC 594; Fung v Ye [2007] NSWCA 115; Hayes v Marquis [2008] NSWCA 10 [70], [78]–[79].
  • Whether a couple is living together in a close personal relationship turns on an evaluation of the nature and extent to which they share a household — it is ultimately a value judgment to determine whether there is a relationship which fulfils the definition as a whole: Hayes v Marquis [2008] NSWCA 10 [76], [79].
  • The requirement in a close personal relationship of ‘personal care’ may be satisfied through the provision of either physical or emotional support: Hayes v Marquis [2008] NSWCA 10 [87].
  • Ordinarily lack of common residence, lack of contributions or lack of financial or non-financial dependence will not give rise to a duty to make provision, but the absence of these factors does not precluded such a duty: Forsyth v Sinclair [2010] VSCA 147 [106].
  • A de facto or close personal relationship does not end when one person is temporarily absent from the household: Fung v Ye [2007] NSWCA 115 [30].

Child

  • Includes a child of any age: Gorton v Parks (1989) 17 NSWLR 1; Hunter v Hunter (1987) 8 NSWLR 513.
    • Includes adopted and ex-nuptial children.
    • Does not include stepchildren unless dependent on the deceased and are part of the deceased’s household.
    • Includes children of a domestic relationship, including children of the relationship and children whose long-term welfare both parties have parental responsibility for within the meaning of the Children and Young Persons (Care and Protection) Act 1998 (NSW).

Former spouse

  • Refers to a spouse who is divorced from the deceased.
  • A separated spouse is treated as a spouse rather than a former spouse.
    • This applies even if divorced proceedings had been commenced but were not finalised at time of death: Chen v Lu [2014] NSWSC 1053.
  • The court must first determine whether there are circumstances past or present warranting the making of an application before considering the application: s 59(1)(b).
  • Generally as to whether there are factors that warrant the making of an application the Act draws a distinction between those persons who are the natural object of a testators bounty, such as spouses and children, and those persons who are not normally so: Diver v Neal [2009] NSWCA 54 [8].
    • Some factor will have to be established that takes the latter kind of eligible person beyond their status as a mere former spouse or dependent, etc: Milewski v Holben [2014] NSWSC 388.
  • Whether there has been a family law settlement will be relevant, but if there has been a change of circumstances since the settlement the court will look more favourably upon the application: Dijkhuijs v Barclay (1988) 13 NSWLR 639.
  • Factors to be considered when deciding whether there are factors that warrant the making of an application by a former spouse and the determination of what provision — Milewski v Holben [2014] NSWSC 388 [67]–[75]:
    • The length of the marriage.
    • Whether fault was involved in the marriage breakdown.
    • Whether or not there was a property settlement.
    • The level of post-marriage contact between the parties (including any promises of future support).

Persons dependent

  • The court must determine whether there are circumstances (past or present) that warrant the making of an application before proceeding to consider the application: s 59(1)(b).
  • Dependence is not emotional dependence, but must be some form of financial dependence: Benny v Jones (1991) 23 NSWLR 359. Cf Andrews v Howard [1999] NSWCA 409. See also Skinner v Frappell [2008] NSWCA 296 [85].
  • There can be dependency even though no actual support is being provided at the given time, such as where a person is a member of another’s family: Estate of Kallidis; Kallidis v Kallidis [2012] NSWSC 1485 [147]–[154].
  • It need only be partial financial dependence: Andrews v Howard [1999] NSWCA 409.
  • It is not restricted to provision of necessities, and includes dependence in order to support a lifestyle to which the parties were accustomed: Ball v Newey (1988) 13 NSWLR 489.
  • Dependence can exist even where the eligible person lives apart from the deceased: Andrews v Howard [1999] NSWCA 409.
    • The court is concerned with what the parties did, not what they could have done.
  • A child living with a parent in the home of a third party (eg a grandparent) raises the question of whether they are dependent on the parent or third party.
    • Dependence is a question of fact.
    • The better view is often that the child is not dependent on the third party, but on the parent instead: McCarthy v Dorney [2007] NSWSC 742.
    • Where the parent has primary responsibility the child is dependent on them alone, and the mere fact that gifts or benefits were given (occasionally or regularly) by the third party is not sufficient to establish partial dependence: Davis v Public Trustee [2007] NSWSC 731.
  • An elderly parent may be considered a dependant person where they resided with a deceased child or were co-owner with the deceased child: Alexander v Jansson [2010] NSWCA 176.
  • Even co-owners can be regarded as dependants notwithstanding their right to occupy the premises: Alexander v Jansson [2010] NSWCA 176 [14]–[15].
  • Foster children: Re: Fulop (1987) 8 NSWLR 679.
  • Step children: Petrohilos v Hunter (1991) 25 NSWLR 343; McKenzie v Topp [2004] VSC 90; Evans v Levy [2011] NSWCA 125.
    • A step child who relies upon dependency upon the deceased and being a member of the deceased’s household must also show that there are factors warranting the making of an order:
      • This will be the case where it is demonstrated that the relationship between the deceased and the step child was so close as to be analogous to a child of the deceased and thus a natural object of their testamentary bounty: Diver v Neal [2009] NSWCA 54 [8], [33].
  • Formerly, same sex partners were considered under this category.
  • Claims by grandchildren as eligible persons should follow the principles in Estate of Kallidis; Kallidis v Kallidis [2012] NSWSC 1485 [251]:
    • Generally, grandparents have no obligation to make provision — this is the obligation of the parent.
    • Grandchildren are not normally regarded as a natural object of the deceased’s testamentary recognition.
    • Where the grandparent becomes a surrogate parent through death or other circumstances, such factors would prima facie give rise to a claim.
      • The fact that the grandchild resides with one or more of their grandparents is a significant factors.
        • It should be demonstrated that (in the deceased’s life), the deceased had assumed a position more akin to a parent than a grandparent.
          • Factors such as taking direct responsibilities for support and welfare or a continuing and substantial relationship to support the applicant grandchild financially or emotionally.
    • The mere fact of a family relationship is not enough.
      • A moral obligation may be created on a case-by-case basis by reason of the care and affection provided by a grandchild to their grandparent.
    • A pattern of significant generosity does not convert the grandparental relationship into one of obligation to the recipients.
    • Occasional gifts for the benefit of the grandchild does not make the grandchild wholly or partially dependent upon the grandchild.
    • The dependence must be direct and immediate.
    • It is relevant to consider what inheritance or financial support a grandchild might fairly expect from their parents, but such an obligation does not necessarily negate the moral obligation of a grandparent to make provision for the maintenance, education or advancement in life of a grandchild out of their estate.
    • The fact that the parents of the grandchild have predeceased the grandparent may be relevant.
  • The conferral of particular care and affection by a grandchild and his or her legitimate expectations of inheritance may be relevant to determining whether such an obligation exists: Chapple v Wilcox [2014] NSWCA 392 [65]–[67], [96]–[99] (Barrett JA).
  • Where a person is not a grandchild of the deceased, they must establish that they are a member of the same household in order to rely upon dependency: s 57(1)(e).
  • A deceased person can maintain more than one household, and a person will be an eligible person if they are a member of one of those households: Wolff v Deavin [2012] NSWSC 1315.
  • A person is a member of a household where the is some intimate connection with the householder and normally involves more than occasional visits and involves regular overnight stays: Wolff v Deavin [2012] NSWSC 1315.
  • A former de facto person would be regarded as an eligible person under this category of being a person dependent on the deceased who was a member of the deceased’s household.
    • Where the deceased made provision for their former de facto partner after the relationship ended, even years later, the former de facto partner could be regarded as a natural object of the deceased’s bounty, thus establishing factors warranting the making of the application: Estate Morris; Grade v Deavin [2014] NSWSC 1034.

Exercise of discretion

  • Succession Act s 59 requires the court determine:
    • Is the applicant an eligible person?
    • If the applicant is a former spouse, dependent person or a member of a close personal relationship are there factors that warrant the making of the application?
    • Did the deceased fail to make adequate provision for the proper maintenance, education or advancement in life of the applicant under their will?
  • If these factors exist, the court must determine what provision ought to be made for the applicant, having regard to the facts known at the time the order is made: s 59(2).
  • Once the court has made an order for provision it cannot make a further order unless there has been a substantial detrimental change in the eligible person’s circumstances or undisclosed property is discovered that would have resulted in a different order: s 59(3).
    • This also applies where an initial order for provision is refused: s 59(4).
  • Before determining whether there has been adequate provision, the court must first construe the will in order to determine its meaning: Clifford v Mayr [2010] NSWCA 6 [151].
  • The exercise of the discretion under the FPA was a two-step process — Singer v Berghouse (No 2) (1994) 181 CLR 201, 209–210 (Mason CJ, Deane and McHugh JJ):
    • The court decides whether the deceased has made appropriate provision for the maintenance, education or advancement in life of the eligible person.
    • If the deceased has failed to make such provision, the court may exercise the discretion to determine whether and what appropriate provision should be made.
  • The term ‘moral duty’ sometimes clouded the issue as was said to be unnecessary: Singer v Berghouse (No 2) (1994) 181 CLR 201, 209; Permanent Trustee Co v Fraser (1995) 36 NSWLR 24.
    • The court has, however, recently affirmed the use of the expression in the context of explaining the discretion to ensure that a testator makes proper provision for an eligible person: Vigolo v Bostin (2005) 221 CLR 191.
  • It has been suggested that the two-stage process may be regarded as one step in determining what in the circumstances is adequate provision: Andrew v Andrew (2012) 81 NSWLR 656 [26]–[40] (Basten JA, Allsop P agreeing).
    • Basten JA also noted that there was no universal acceptance of the use of the term ‘moral duty’ and preferred to ask whether the exercise of testamentary freedom reflected ‘current social conditions and standards’.
  • Barrett JA differed from Basten JA and maintained the two-stage approach: Andrew v Andrew (2012) 81 NSWLR 656 [65], [79]–[81], [94].
  • While it is appropriate to have regard to ‘perceived prevailing community standards of what is right and appropriate’, this may be an imprecise, variable and contestable standard: Chapple v Wilcox [2014] NSWCA 392 [62]–[64] (Barratt JA).
  • There is currently no agreement on whether the approach is a two-stage or single-stage process:
    • Cases supporting the two-stage process: Estate of Kallidis; Kallidis v Kallidis [2012] NSWSC 1485 [200]; Bolger v McDermott [2013] NSWSC 919 [335]; Franks v Franks [2013] NSWCA 60; Aubrey v Kain [2014] NSWSC 15; Zagame v Zagame [2014] NSWSC 1302.
    • Cases supporting the single-stage process: Keep v Bourke [2012] NSWCA 64; Verzar v Verzar [2012] NSWSC 1380 [92]–[93]; Oldereid v Chan [2013] NSWSC 434 [53]; Peters v Salmon [2013] NSWSC 953 [80].
    • There is suggestion that whether it is a two-stage or single-stage process makes no difference to the evaluative judgment required of the court: Salmon v Osmon [2015] NSWCA 42 [54] (Beazley P).
    • The line between the two stages may not be clear: Phillips v James [2014] NSWCA 4 [49]–[53] (Beazley P). See also Gardiner v Gardiner [2014] NSWSC 435; Estate of Marras [2014] NSWSC 915.
  • Basten JA reconsidered his previous comments to clarify that while a two-stage process is now not required under the legislation, there may be some circumstances in which it is appropriate to apply: Poletti v Jones [2015] NSWCA 107 [19].
    • The current position appears to be that the process used will depend on the facts of the case.
  • Generalisation is of little use, and the outcome of each case depends upon the opinion of the court having regard to the circumstances of the case: Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 [11].
  • An applicant must prove their need for provision by offering evidence and cannot rely upon the perceived lack of need or affluence of the beneficiaries under the will: Moratelli v Westhoff [2000] NSWSC 279.
    • However, the court cannot consider the propriety and adequacy (or inadequacy) of any provision for an applicant in isolation from the resources and needs of other claimants on the deceased’s bounty.
      • These claimants include other beneficiaries entitled to a share of the deceased’s estate, whether or not they themselves have made a claim: Foley v Ellis [2008] NSWCA 288 [88]; Salmon v Osmond [2015] NSWCA 42 [79]–[87].
  • Need is a relative concept that must be assessed in light of all other factors and must be for adequate provision for the proper maintenance, education and advancement in life and is not a need ‘at large’.
    • Needs and wants are not the same thing: Zagame v Zagame [2014] NSWSC 1302 [110]–[116].
  • An eligible person cannot manufacture a need by engaging in a loss making enterpsie for personal reasons when other options are available to alleviate the loss: Bates v Cookes [2014] NSWSC 1259.
  • An appellate court will not readily overturn the exercise of the discretion inherent in the two-stage process set out in Singer v Berghouse (No 2) unless there is an erroneous application of principle: Andrews v Howard [1999] NSWCA 409; Blackmore v Allen [2000] NSWCA 162 [20].
    • The normal principles restrict appellate courts interfering with discretionary judgments will apply: Clifford v Mayr [2010] NSWCA 6 [74]; Hastings v Hastings [2010] NSWCA 197; Durham v Durham [2011] NSWCA 62; Verzar v Verzar [2014] NSWCA 45; Phillips v James [2014] NSWCA 4.
  • The court may disregard the interests of any eligible person (not a beneficiary of the estate) who has not also applied for provision if notice has been given to the other eligible person: s 61.
  • The court may vary or revoke an order for family provision so as to make an order in favour of another eligible person only if that other eligible person can show sufficient cause for not having applied for an order themselves: s 70.

Maintenance, education or advancement in life

  • The court considers what the deceased ought to have done by putting itself in the position of the deceased ‘as wise and just rather than a fond and foolish husband or father’: Bosch v Perpetual Trustee Co [1938] AC 463; 2 All ER 14, 21.
  • The court looks at the applicant’s need and the deceased’s ability to meet that need:
    • The court determines firstly whether there has been proper provision.
    • The court determines secondly what proper provision ought to be made out out of the estate if proper provision has not been made.
  • ‘Proper’ provision is not determined by adequacy of subsistence but by having regard to the size of the estate, the nature of the relationship between the eligible person and the deceased, and the competing claims by others upon the deceased’s bounty: Singer v Berghouse (No 2) (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191.
  • A testators reasons for failing to provide for a person in their will may be a relevant consideration but is not determinative: Salmon v Osmond [2015] NSWCA 42 [67]–[78].
  • The question of proper provision and adequacy involves value judgments on which minds can legitimately differ — there are no definite criteria by which the question can be answered: Palaganio v Mankarios [2011] NSWSC 61 [72]; Estate of Kallidis; Kallidis v Kallidis [2012] NSWSC 1485.
    • Assessment of proper provision involves an ‘intuitive assessment’: Kay v Archbold [2008] NSWSC 254 [126].
    • It is ‘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 [40].
  • The court is not to be swayed by what use the eligible person might put provision to or the prospect of a third party indirectly benefiting: Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 [39].
    • However, it has been held to be a relevant factor that can be taken into account in the exercise of the discretion, such as in the case of an eligible person with limited life expectancy where the benefit of an order is likely to be enjoyed by the beneficiaries of the eligible person’s estate: Milillo v Konnecke [2009] NSWCA 109 [85].
  • In determining whether proper provision has been made, the court makes the assessment based on the circumstances at time of trial.
    • If the estate has been administered in a way that diminishes the benefit an eligible person received under the will, this can be taken into account: Phillips v James [2014] NSWCA 4.
  • An applicant’s needs may include funds necessary to pay off debts thus saving an asset from the hands of creditors — this may be seen as necessary for the advancement in life of the eligible person: Diver v Neal [2009] NSWCA 54 [69].
    • Where any provision would likely go straight to creditors without benefit to the eligible person then provision might not be said to be for the advancement in life of the eligible person: Caska v Caska [1999] NSWSC 289 [78], [92]–[93].
  • ‘Provision’, ‘maintenance’ and ‘advancement in life’ are not defined and are interpreted broadly: Zagame v Zagame [2014] NSWSC 1302 [90]–[99].
  • Advancement in life is not confined to needs particularly where the size of the estate is large and may encompass broader considerations: Lloyd-Williams v Mayfield (2005) 63 NSWLR 1.
  • Considerations of moral duty and moral obligation are relevant but not determinative.
    • Circumstances not known to the deceased or that have arisen after death may be relevant in assessing claims: Nicholls v Hall [2007] NSWCA 356.
  • Determining future needs is not a precise exercise quantifiable the same as damages for personal injury.
    • The court should not treat an application for a family provision order as if it were a personal injury: Goldberg v Landerer [2010] NSWSC 1431 [88].
    • In determining a lump sum, there is no general rule that the 3% discount tables ought to be used: Tchadovitch v Tchadovitch [2010] NSWCA 316.
    • Expert reports along these lines are often unhelpful and unnecessarily costly: Verzar v Verzar [2012] NSWSC 1380 [153]; Tchadovitch v Tchadovitch [2010] NSWCA 316 [4].
  • The court may take into account a variety of factors — Succession Act s 60(2):
    • Any family or other relationship between the applicant and the deceased person, including its nature and duration.
    • The nature and extent of any obligations or responsibilities owed by the deceased to the applicant, other persons in respect of whom an application has been made, or to any beneficiary of the deceased’s estate.
    • The nature and extent of the deceased’s estate (including any notional estate) and any liabilities or charges to which the estate is subject as in existence when the application is being considered.
    • The financial resources (including earning capacity) and financial needs, present and future, of the applicant, other persons in respect of whom an application has been made, or to any beneficiary of the deceased’s estate.
    • If the applicant is cohabiting with another person — the financial circumstances of the other person.
    • Any physical, intellectual or mental disability of the applicant, other persons in respect of whom an application has been made, or to any beneficiary of the deceased’s estate that is in existence when the application is being considered or that may reasonably be anticipated.
    • The age of the applicant when the application is being considered.
    • Any contribution (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’s death, for which adequate consideration (not including a pension or other benefit) was not received by the applicant.
    • Any provision made for the applicant by the deceased, either during the deceased’s person’s lifetime or made from the deceased’s estate.
    • Any evidence of the testamentary evidence of the deceased, including evidence of statements made by the deceased.
    • Whether the applicant was being maintained (wholly or partly) by the deceased before death and, if relevant, the extent to and basis on which the deceased did so.
    • Whether any other person is liable to support the applicant.
    • The character and conduct of the applicant before and after the date of the death of the deceased.
    • The conduct of any other person before and after the date of the death of the deceased.
    • Any relevant Aboriginal or Torres Strait Islander customary law.
    • Any other matter the court considers relevant, including matters in existence at the time of the deceased’s death or at the time the application is being considered.
  • These factors were not set out in the FPA but encompass the basic considerations laid out in Singer v Berghouse (No 2) (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191.
    • No matter is more or less important than any other, and the weight of each will be taken into account according to the facts of the particular case: Estate of Kallidis; Kallidis v Kallidis [2012] NSWSC 1485 [203]; West v Mann [2013] NSWSC 1852 [12]; Zagame v Zagame [2014] NSWSC 1302 [127].

Claims by spouses

  • Principles according to Goodman v Windeyer (1980) 144 CLR 490:
    • Conduct of the spouse to deceased is relevant, even if not disentitling conduct (eg whether a wife cares for an ill husband).
    • Benefit of a spouse to the deceased need not be financial.
    • Size of the estate is relevant to what is proper.
    • A wise and just testator would consider future contingencies.
  • Principles in Goloski v Goloski (Unreported, New South Wales Court of Appeal, 5 October 1993), cited in Bingham v Forrest [1999] NSWSC 540:
    • Respect must be paid to the principle of testamentary freedom — court will only disturb the will to the extent necessary to make proper provision.
    • The court’s role is not to correct hurt feelings but merely to remedy inadequate provision.
    • Each case must be considered on its merits and caution should be exercised in relying on other cases.
    • Absent special circumstances, it is normally the duty of the testator to provide the spouse with a place to live commensurate with that to which they are accustomed.
    • To the extent able, the testator should ensure the spouse has a fund available to meet future unforeseen contingencies.
    • A mere right of residence is normally inadequate.
    • Consideration of:
      • The nature and quality of relationship.
      • The conduct of claimant.
      • The future needs of the claimant.
      • The size of the estate and relevant dispositions, which may have reduced the estate.
      • The strengths of competing claims on the testator’s bounty.
      • Any contributions to the property or welfare of the deceased.
  • Provision of a home and a fund to meet contingencies is reserved for where the marriage has been long and happy: Bingham v Forrest [1999] NSWSC 540 [35]; Blanchard v Cameron [2000] NSWSC 192; Blackmore v Allen [2000] NSWCA 162.
    • Broad general rule is that ‘the duty of the testator to his widow is … to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provider her with a fund to enable her to meet any unforeseen circumstances: Luciano v Rosenblum (1985) 2 NSWLR 65, 69–70.
      • Approved by the Court of Appeal in O’Loughlin v O’Loughlin [2003] NSWCA 99.
      • Principle is equally applicable to a de facto wife: Re Marcuola-Bel Estate; Marcuola-Bel v Tran [2005] NSWSC 1182 [31].
      • There is authority that gives weight to where the parties have entered into a formal, binding commitment: West v France [2010] NSWSC 845 [66].
      • Widows are not per se entitled to be treated better than other eligible persons.
        • Where the widow is elderly and/or otherwise unable to increase her income as compared to other younger parties, the widow’s position will be stronger: Bladwell v Davies [2004] NSWCA 170; Milillo v Konnecke [2009] NSWCA 109.
    • Mere rights of residence and even life estates do not normally amount to proper provision for a widow: Bouttell v Rapisarda [2014] NSWSC 1192.
      • Courts have sometimes made a ‘Crisp’ order in the form of a portable life estate, in which a widow is given a life estate in the family home, but the executor is authorised to sell the property to purchase more suitable accommodation in the future (eg in a retirement home): Crisp v Burns Philp Trustee Co Ltd (Unreported, Supreme Court of New South Wales, 18 December 1979); Court v Hunt (Unreported, Supreme Court of New South Wales, 14 December 1987); Milillo v Konnecke [2009] NSWCA 109 [47]–[48]; Kowalski v Kowalski [2012] QCA 234 [29].
  • Not all spouses will be treated in this manner, especially where they have significant assets: Marshall v Carruthers [2002] NSWCA 47 [65]–[67], [73]–[74].
  • Marriage prima facie gives rise to a testamentary obligation.
    • Separation without divorce in the absence of disentitling conduct does not bring to an end a testator’s obligations to make proper provision for their spouse: Kalmar v Kalmar; Estate of Kalmar [2006] NSWSC 437 [50].
  • The claim of a spouse is greatly strengthened if the spouse is left with the care of minor children: Verzar v Verzar [2014] NSWCA 45.
  • Where a benefit is left to a spouse under a will that is discretionary (eg a discretionary trust or a conditional benefit) the court may view this as not being proper provision: Taylor v Farrugia [2009] NSWSC 801 [62]; Lowe v Lowe [2014] NSWSC 371.

Claims by children

  • Proper provision must be made for adult children including ‘lame ducks’ and those whom the testator has allowed to become dependent upon them: Hughes v National Trustee Executors and Agency Co of Australia (1979) 143 CLR 134.
  • Dependency at death is a powerful factor in a claim — the community expects that testators will make provision for those who are dependent upon them at the time of their death: Alexander v Jansson [2010] NSWCA 176 [16].
  • There is no requirement that adult children must show a special need beyond that of other applicants: Hunter v Hunter (1987) 8 NSWLR 513, 580 (Kirby P).
    • Decisions show that judges previously took a very limited view of the provision appropriate to be made (for example) for able-bodied adult sons and married daughters — these decisions do not express contemporary values: Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 [29].
    • However, it remains that an adult child must establish that their resources are ‘inadequate’ or be unlikely to succeed: Hasting v Hastings [2010] NSWCA 197 [7]–[8].
      • It may be open doubt whether there is a generally held social view that parents have a moral or natural obligation to adult able-bodied children sufficient to deprive the parent of unfettered testamentary disposition — differing views are open to judges, and as there is no standard, a legitimate range of outcomes exists: Hastings v Hastings [2010] NSWCA 197 [20] (Basten JA).
  • There is no rule or presumption that equal provision ought to be made for siblings: Moratelli v Westhoff [2000] NSWSC 279.
  • The size of the estate is relevant so that although the children of a wealthy testator are not so much in need of the ‘bread and butter’ a wise and just testator would provide a little of the ‘cheese and jam’: Gorton v Parks (1989) 17 NSWLR 1, 8–9 (Bryson J). See also Neil v Jacovou [2011] NSWSC 87.
  • Despite a temptation of the court to be overgenerous in the case of a very large estate, testamentary freedom can only be displaced under the legislation where there has been a failure to comply with a moral duty towards those who in the eyes of the community should have been given proper provision: Anasson v Phillips (Unreported, Supreme Court of New South Wales, Young J, 4 March 1988).
    • Where the estate is a large one, more liberal assessment of the moral duty can be made to accomodate a lifestyle that has been enjoyed by the plaintiffs as a result of association with a wealthy testator.
  • As a general rule, there is no requirement that a child be treated by a testator as generously as a widow but this will also depend upon the size of the estate: Ogden v Green [2003] NSWCA 352.
  • There is no rule excluding provision of a house or money to buy one for an adult and presently able-bodied child: McGrath v Eves [2005] NSWSC 1006.
    • Conversely, there is no rule that an adult child must be provided with a home: Salmon v Osmond [2015] NSWCA 42 [107]–[112].
  • Useful principles to consider when dealing with claims by able-bodied adult children — Butler v Morris [2012] NSWSC 748 [106]:
    • Relationship between parent and child changes when the child leaves home.
      • A child does not cease to be a natural recipient of parental ties, affection or support as the bonds of childhood are relaxed.
    • It is impossible to describe the moral obligation/community expectations of a parent to their adult child in terms of universal application.
      • The community expect a parent to raise and educate their children while they remain children, and probably assist them where it is feasible with tertiary education and obtaining a ‘start in life’ (eg a deposit on a home, or other form).
        • The community does not ordinarily expect a parent to provide an unencumbered house or means to acquire, although this obligation may arise where assets permit and the relationship is such to justify it: citing McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
    • Generally the community does not expect a parent to look after their child for the rest of the child’s life and into retirement, especially where this obligation falls on someone else (eg a spouse).
      • If an adult child remains a dependent of their parent, the community usually expects the parent to make provision to fulfil that ongoing dependence after death.
      • Where a child, even an adult child, falls on hard times and there are assets available, the community may expect a parent to provide a buffer against contingencies.
      • Where a child has been unable to accumulate superannuation or make other provision for their retirement might be expected lest they be left destitute: citing Taylor v Farrugia [2009] NSWSC 801.
    • If the applicant has an obligation to support others (eg dependent children of their own) it will be a relevant factor in determining appropriate provision: citing Re Buckland Deceased [1966] VR 404, 411; Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134, 148; Goodman v Windeyer (1980) 144 CLR 490, 498, 505.
      • The Act does not permit orders to be made to provide for the support of third persons to whom the applicant (however reasonably) wishes to support where there is no obligation to support such persons: citing Re Buckland Deceased [1966] VR 404, 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532, 537; Mayfield v Lloyd-Williams [2004] NSWSC 419 [86].
    • There is no need for an applicant to show some special need or claim: citing McCosker v McCosker (1957) 97 CLR 566; Kleinig v Neal (No 2) [1981] 2 NSWLR 532, 545; Bondelmonte v Blanckensee [1989] WAR 305; Hawkins v Prestage (1989) 1 WAR 37, 45 (Nicholson J).
    • The adult child’s lack of reserves to meet demands (particularly of ill health, which becomes more likely with advancing years) is a relevant consideration: citing MacGregor v MacGregor [2003] WASC 169 (28 August 2003) [181]–[182]; Crossman v Riedel [2004] ACTSC 127 [49].
      • Financial security and a fund to protect against the ordinary vicissitudes of life is relevant: citing Marks v Marks [2003] WASCA 297 [43].
      • In addition, if the applicant is unable to earn or has limited means of earning an income this could give rise to an increased call on the estate of the deceased: citing Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 [17].
    • The applicant has the onus of satisfying the court on the balance of probabilities that the claim is justified: citing Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134, 149.
    • The Act permits discrimination between children by specifically identifying individual conduct, circumstances, financial resources (including earning capacity) and financial needs in the courts determination of an applicant’s case.
  • Where there is a breakdown in a parent-child relationship, courts will look to the reason for the breakdown — whether the child was driven away by the conduct of the deceased, or whether the child’s actions severed the bond: Gorton v Parks (1989) 17 NSWLR 1.
    • Principles for dealing with cases of estrangement between parent and child — Popovski v Kenjar [2011] NSWSC 731 [100]:
      • ‘Estrangement’ is merely the condition that results from the attitudes or conduct of one or both of the parties — whether the moral claim of the plaintiff is extinguished or merely reduced (and to what extent) depends on the circumstances of the case: citing Lathwell v Lathwell [2008] WASCA 256 [33].
      • The nature of the estrangement and the underlying reason for it is relevant to an application under the Act: citing Palmer v Dolman [2005] NSWCA 361 [88]–[94]; Foley v Ellis [2008] NSWCA 288.
      • There is no rule that the plaintiff is not entitled to ‘ample’ provision if they have been estranged from the deceased — the general directions in the Act require close attention to the facts of individual cases.
      • The court should accept that the deceased is entitled to make no provision for a child in some circumstances, particularly in the case of one ‘who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility’: quoting Ford v Simes [2009] NSWCA 351 [71] (Bergin CJ in Eq, Tobias JA and Handley AJA agreeing).
      • The legislation represents a limited disturbance of the right to testamentary freedom by establishing a privilege for a small class of the immediate family of a testator to seek provision different from that in the will: citing Hunter v Hunter (1987) 8 NSWLR 573, 574 (Kirby P, Hope and Priestly JJA agreeing).
  • A bare legal relationship will not always exclude provision: Howard v Reed (Unreported, Supreme Court of New South Wales, Powell J, 15 April 1991); Palmer v Dolman [2005] NSWCA 361 [107]–[110] (Ipp JA); Nicholls v Hall [2007] NSWCA 356.
  • Even if a deceased never knew of the existence of a child, the child may still have a strong claim and a court can find that the child was left without adequate provision: Nicholls v Hall [2007] NSWCA 356 [43]–[48].
    • The mere bringing of a child into the world may give rise to a moral duty to make proper provision: Dudic v Jakovljevic [2014] NSWSC 169.
      • This does not apply to sperm donors: Nicholls v Hall [2007] NSWCA 356 [44].
  • Estrangement as a result of the conduct of a parent does not absolve the child of a duty to attempt reconciliation.
    • Where a child has not made such an attempt, the moral duty of provision is diminished: Keep v Bourke [2012] NSWCA 64.
      • This approach has been doubted with less weight being given to the fact that the child does not attempt to re-establish contact where the child establishes a case of need for provision: Andrew v Andrew [2012] NSWCA 308.
  • There is no rule that a parent must always provide for an estranged child unless the reason for the estrangement is the egregious conduct of the child (eg murder): Burke v Burke [2014] NSWSC 1015 [35]; Underwood v Gaudron [2014] NSWSC 1055 [235].

Benefits received in the deceased’s lifetime

  • The court cannot make an order for provision unless satisfied that the provision made be the deceased in his or her lifetime or out of the will is inadequate: s 60(2)(i).
    • Example — £8,000 and an annuity of £3,500 out of an estate of £4.8 million: Re Buckland [1966] VR 404.
  • The court must consider the contribution of the applicant to the acquisition and improvement of the deceased’s property: s 60(2)(h).
    • The contribution to the welfare of the deceased (including any contribution as homemaker) is relevant.
  • The court must consider the circumstances before and after the death of the deceased: s 60(2)(p).
    • The court considers whether adequate provision has been made by reference to the circumstances existing at the date of trial.

Disentitling conduct

  • The conduct of the applicant before and after the deceased’s death may be considered: s 60(2)(m).
    • Conduct must be relevant for the purposes of a family provision order (ie directed towards the deceased and showing that the applicants needs is due to their own fault): Will of Gilbert (1946) 46 SR (NSW) 318, 321 (Jordan CJ).
  • The greater the need of the eligible person for provision, the more serious the disentitling conduct must be in order to defeat the claim: Hughes v National Trustee, Executors and Agency Co of Australia (1979) 143 CLR 134, 156.
  • Conduct by a child that causes shame upon the parent or the family is a relevant consideration in deciding whether a parent owed a moral duty to make provision for the child: Hastings v Hastings [2010] NSWCA 197 [37].
    • The same is also true of conduct that might show a tendency of the eligible person to dissipate money easily (eg drug use) or that the person’s needs are due to their own conduct: Hampson v Hampson [2010] NSWCA 359 [94]–[103].
      • Not all conduct in older cases would be viewed with disapproval today.
  • The court may have regard to the conduct of any other person before and after the date of the death of the deceased: s 60(2)(n).
    • Conduct and family relationships may be relevant, but the court disapproves of attempts by family members to blacken each other’s character — allegations about incidents that occurred years before the deceased’s death are unlikely to advance either party’s case: Graham v Graham [2011] NSWSC 504 [198].

Duty of the executor

  • The executor has a duty to defend the will and/or compromise the claim and to place evidence and the case of the adult beneficiaries before the court, and separate representation of beneficiaries under the will is not ordinarily permitted: Vasiljev v Public Trustee [1974] 2 NSWLR 497.
    • The court must approve any compromise of the claim.
  • If the executor does not provide evidence as to the financial position of any beneficiaries, the court may infer that each has sufficient income/resources to meet their needs: Anderson v Teboneras [1990] VR 527, 535–536; Mason v Permanent Trustee Co Ltd (Unreported, Macready M, 5 December 1996) [6].
    • The justification for that inference is an assumption that the executor has acted in accordance with their duty to lead such evidence if relevant: Tobin v Ezekiel [2012] NSWCA 285 [94].
  • A legal personal representative may be personally liable if they distribute an estate without reference to the possibility of future proceedings for a family provision order.
    • Where more than 6 months have elapsed from the death of the deceased and the legal personal representative gives notice in the approved form that within 30 days or more distribution will take place then the legal personal representative will not be personally liable if they distribute the estate without notice of a claim: s 93.
    • Even if the legal personal representative has notice of a potential claim, they will not be personally liable if they distribute after 12 months from the death of the deceased provided they have complied with s 93(1) unless the legal representative receives written notice that the application has been commenced in the court or is served with a copy of the application before making the distribution: s 94.
  • A claim cannot be made against the legal personal representative by a person who consents in writing to the distribution or who advises in writing that they do not intend to make an application that would affect the distribution: s 94(3).
  • A legal personal representative is not liable if they distribute to an eligible person dependent upon the deceased at the time of death for the purpose of providing those things immediately necessary for the maintenance of education of that eligible person: s 94(1).

Notional estate

  • A court can make provision out of property that may have been given away prior to death or distributed after death, so as to prevent frustration of the court’s order.
  • The Privy Council held that under the TFM Act, a testamentary contract was outside the scope of the legislation: Schaefer v Schuhmann [1972] AC 572.
    • The concept of a notional estate was introduced in NSW to overcome this decision, but covers a much broader range of transactions.
      • The South Australian legislation has no concept of notional estate, but the High Court has held that transactions such as testamentary contracts and mutual wills are within the legislation, overturning the Privy Council decision: Barns v Barns (2003) 214 CLR 169.
        • Regardless, a deceased might have dealt with property during their lifetime or incurred obligations that take the property outside the estate or notional estate available for distribution under the family provision legislation.
  • Notional estate is property designated as part of the estate of the deceased for the purposes of making a family provision (and is therefore available for distribution): s 63(5).
  • An applicant may apply for a declaration that the property is part of a notional estate and for provision in the same application: Kavalee v Burbidge (1998) NSWLR 422, 441.
  • Notional estate covers all forms of property and extends to superannuation: Kerrlo v Kerrlo [2010] NSWSC 1331.
  • The provisions were designed to enable the court to make provision for the dependents of a deceased person in certain circumstances, including where the deceased transferred assets into a structure over which they had a measure of control (even though not actual ownership): Belfield v Belfield (2012) 83 NSWLR 189 [68] (Campbell JA).
  • Assets in a family discretionary trust with a corporate trustee controlled by the deceased is a paradigm case for the intended application of the notional estate provisions: Wardy v Salier [2014] NSWSC 473 [141].
  • The application of s 64 to property outside NSW has been held to be beyond the constitutional competence of the NSW Parliament: Hitchcock v Pratt [2010] NSWSC 1508 [45].
    • The court cannot make a family provision order affecting succession to property outside NSW of a testator who dies domiciled outside NSW.
  • Once property becomes subject to a notional estate order the rights of any other person in respect of that property are extinguished: s 84.
  • For property to be the subject of a notional estate order it must constitute a relevant property transaction.
    • A relevant property transaction is an act or omission leading to property being placed outside of the estate (whether in the deceased’s lifetime or not) for less than full valuable consideration: s 75(1).
    • Full valuable consideration is consideration amounting to (actually or approximately) the fair value of that for which it is given: Zagame v Zagame [2014] NSWSC 1302 [158].
      • It does not have to be measured in money — it can be measured in terms of services provided such as personal care and attention.
  • The legislation provides a non-exhaustive list of transactions capable of constituting a relevant property transaction if undertaken for less than full valuable consideration: s76.
    • A common example is where property has been held in joint tenancy by the deceased — in this situation property would pass upon death to the surviving joint tenant; creation of, or failure to sever, a joint tenancy for less than full valuable consideration may constitute a relevant property transaction.
  • The time when certain relevant property transactions take effect are set out: s 77.
  • Property can only be designated as notional estate if it is necessary to make a family provision order (or costs order, but only where a family provision order is made): s 78.
  • The court may make a notional estate order even where property has been distributed: s 79.
  • A notional estate order may also be made where property is held by the legal personal representative or is held upon trust: s 81.
  • A court is not limited to property that is traceable from estate property: Phillips v James [2014] NSWCA 4.
  • A court may designate as notion estate any property of the disponee, whether or not it was the subject of the relevant property transaction: s 80.
    • This will not apply if the application is made more than 12 months after the death of the deceased unless there are special circumstances: s 90.
    • It will not apply if property is held by the disponee as trustee only: s 89(3).
  • Where the deceased entered a relevant property transaction during their lifetime, a notional estate order can only be made in one of the following situations:
    • If the transaction took effect within three years before death and was entered with the intent of denying or limiting provision to any eligible person — intent requires more than mere contemplation and it is the intent not the consequence that must be established: Kastrounis v Foundouradakis [2012] NSWSC 264 [108]–[112]; Zagame v Zagame [2014] NSWSC 1302 [171].
    • If the transaction took effect within one year before death and was entered into at a time when the deceased had a moral obligation to make provision for any eligible person.
    • If the transaction took effect on or after the death of the deceased.
  • Because of the consequences of making a notional estate order, the court must not make an order unless it has considered the reasonable expectations of others in receiving that property and the justice and merits of making the order in the particular case: s 87.
    • It is relevant to determining reasonable expectations to take into account whether property was distributed within the time allowed for a family provision application: Phillips v James [2014] NSWCA 4.
  • Under s 88 the court is prevented from making a notional estate order unless:
    • the deceased left no estate, or
    • the deceased’s estate is insufficient for the making of the family provision order, or any order as to costs, that the court is of the opinion it should be made, or
    • provision should not be made wholly out of the deceased’s estate because there are other persons entitled to apply for family provision orders or because there are special circumstances.
  • Under s 89 the court must consider:
    • The present value and nature of the property.
    • The value and nature of any consideration given in a relevant property transaction.
    • Changes in the value and nature of the property.
    • Whether the property could have been used to generate income since the relevant property transaction was entered into.
    • Any other matter.
  • The court has to consider the importance of not interfering with the reasonable expectations in relation to the property — for example, a beneficiary who receives property may have spent money or worked on it, or where a beneficiary relies upon the promise in relation to the property: D’Albora v D’Albora [1999] NSWSC 468 [53].
  • No designation is permitted unless the relevant property transaction disadvantaged the estate: s 83.
  • The court must not make a notional estate order that would exceed the amount that is to be ordered by way of family provision: s 89(2).
  • The court may substitute property not in the estate or not designated notional estate if another person offers substitute property: s 92.
  • The court will take a broad approach to these provisions so as to give effect to the legislative intent in preventing testators from organising their assets so as to defeat the claims of eligible persons: Schaeffer v Schaeffer (1994) 36 NSWLR 315.
  • The definition of property (Succession Act s 3(1)) is broad enough to encompass the increase in value of property as a ‘valuable benefit’ — property in the hands of a person that alters in value as a result of the testator’s death can be designated as a notional estate: Schaeffer v Schaeffer (1994) 36 NSWLR 315.
  • s 75 covers acts or omissions that are a cause (though not the operative cause) of another becoming the holder of property: Kavalee v Burbidge (1998) 43 NSWLR 422, 446.
    • Such a cause may be indirect: Belfield v Belfield (2012) 83 NSWLR 189.
  • The omission to exercise a power to dispose of property prior to death so that it continues to be held by another can, by reason of s 75, lead to that property being designated as notional estate: Kavalee v Burbidge (1998) 43 NSWLR 422, 454.
    • This can include failure to sever a joint tenancy: Sinclair v Griffiths [1999] NSWSC 491.
      • The failure to sever a joint tenancy immediately before death can make that property the subject of notional estate unless full valuable consideration was given for this omission.
      • Whether there was full valuable consideration must be considered at the time immediately before death and it must be given by some positive act by a third party and not merely an automatic accrual of benefits: Cetojevic v Cetojevic [2007] NSWCA 33.

Effect of an order for provision

  • An order has effect as if it were a codicil to the will or, if there is an intestacy, as if it were a will: s 72.
  • Although the court can make a variety of orders, normally a legacy is given: ss 65–66.
  • The court can order that certain beneficial entitlements are to bear the burden of that order: s 65.
  • The court may make an interim order for family provision if it is satisfied that no less provision would be ultimately ordered: s 62(1).

Compromise and release of the right to apply for provision

  • Where proceedings have been commenced or are likely to be commenced, the parties may wish to compromise proceedings.
  • The proceedings can only be compromised by an order of the court under s 59 that gives effect to the compromise.
  • The court needs to be satisfied of the matters that give the court jurisdiction and that the compromise is one the court ought to make by way of order under s 59: Bartlett v Coomber [2008] NSWCA 100.
  • In making an order under s 59, the court may take into account the fact that the parties have reached an agreement to compromise the proceedings and the terms of the agreement: Bartlett v Coomber [2008] NSWCA 100.
    • The court may reject the compromise and refuse to make an order where it is outside the range of order that could on the evidence be made if the matter were to proceed to trial.
      • The court may also do this where the agreement runs counter to the policy of the family provision legislation, is an abuse of process or is contrary to public policy: Bartlett v Coomber [2008] NSWCA 100.
  • The fact that one of the parties to the compromise seeks to withdraw from the agreement is not fatal to the court making a s 59 order to give effect to the compromise, but it is a factor along with the reason for such withdrawal that the court will consider: Bartlett v Coomber [2008] NSWCA 100.
  • The entitlement to a family provision order cannot be contracted out of.
    • Where a person wants to prevent a claim being made against their estate, a release of the eligible person’s rights must be sought.
      • An ante-nuptial agreement is of evidentiary value only: Singer v Berghouse (No 2) (1994) 181 CLR 201.
      • The fact that spouses have entered into an agreement as to how their assets are to be divided during or after their marriage is a circumstance the court must take into account in determining the totality of their relationship where one spouse claims against the estate of the other: Hills v Chalk [2008] QCA 159; Milillo v Konnecke [2009] NSWCA 109 [86]–[88].
  • s 95(1) prevents any release except as provided by s 95.
    • Even without this provision, the nature of the legislation is such that it cannot be contracted out of: Lieberman v Morris (1944) 69 CLR 69.
  • A release is either an instrument to give effect to a release or an agreement to execute such an instrument: s 95(5).
  • A release must be approved by the court, and can be approved by death (eg as part of a family law settlement) or after death: s 95(2).
  • In deciding to approve a release, the court must under s 95(4) have regard to:
    • the advantage to the releasing party,
    • whether it is prudent to make the release,
    • whether the provisions of an agreement to release are fair and reasonable, and
    • whether the releasing party has had independent legal advice.
  • A release can be as to the whole or part of the estate: s 95(3).
  • ‘Fair and reasonable’ takes into account all the circumstances as they exist at the time the release is sought: Neil v Jacovou [2011] NSWSC 87 [84].
  • Whether it was prudent to make the release may involve its terms as well as the way in which the agreement was reached: Neil v Jacovou [2011] NSWSC 87 [84].
  • Independent advice must be adequate and bring home to the mind of the releasing party the full effect of the release: Neil v Jacovou [2011] NSWSC 87 [91]–[97].

Time limitations

  • An application for provision must be made within 12 months of the deceased’s death: s 58(2).
  • Later claim can be made if sufficient cause is shown, including:
    • The reason for the late claim.
    • Prejudice to beneficiaries.
    • Unconscionable conduct on either side.
    • The strength of the applicant’s case.
  • See further: Turnley v Swaab [1999] NSWSC 594 [23]–[26]; Campbell v Chabert-McKay [2010] NSWSC 859 [47].
  • An application for an extension of time is now ordinarily dealt with on the hearing of the substantive proceedings (that is, during the provision order application).
  • Provided the plaintiff establishes an adequate explanation for the delay and the plaintiff would receive substantive relief then the application ought to be granted: Davis v Public Trustee [2007] NSWSC 731 [23]–[29].
  • In showing sufficient cause the reasons for delay outside as well as inside the 12 month period must be explained: Underwood v Gaudron [2014] NSWSC 1055 [125].
  • A plaintiff who is out of time cannot rely upon factors that would strengthen the claim where those factors have arisen since the time when the claim ought to have been made.
    • The court will examine the strengths of the plaintiff’s claim at the time when it ought to have been made: Durham v Durham [2011] NSWCA 62; Verzar v Verzar [2012] NSWSC 1380.
  • It is no answer to delay to say the beneficiaries of the estate will still receive the same entitlement under the will notwithstanding the delay: Durgam v Durgam [2011] NSWCA 62.
  • The decision to extend time is discretionary — other than ‘sufficient cause being shown’ there are no statutory criteria or rigid rules for the exercise of the discretion: Thomas v Pickering [2011] NSWSC 572.
    • The principles governing the exercise of discretion under the Act include the reasons for the lateness of the claim, whether beneficiaries under the will would be unacceptably prejudice if time were to be extended, whether there has been any unconscionable conduct by either side, and the strength of the claim of the party seeking an extension of time: citing John v John [2010] NSWSC 937 [37]–[51]; Campbell v Chabert-McKay [2010] NSWSC 859 [45]–[47]; Durham v Durham [2010] NSWSC 389 [15]; Taylor v Farrugia [2009] NSWSC 801 [14]; Burton v Moss [2010] NSWSC 163 [31].
    • The onus lies on the applicant to establish sufficient cause.
    • The court will determine the strength of the applicant’s claim.
    • The prejudice to which the section looks is any prejudice occasioned by the delay in lodging the claim rather than any disappointment that might occur consequent upon readjustment of the interests under the will in order to make provision for the applicant: Cetojevic v Cetojevic [2006] NSWSC 431; McCann v Ward [2010] VSC 452 [11].
    • Where there has been a long period since the deceased died, the lapse of time might by itself create prejudice in any fact-finding exercise: citing Vasconelos v Bonetig [2011] NSWSC 1029 (19 August 2011) [21].
    • ‘Unconscionable conduct’ may refer to conduct directed towards a deliberate delay in bringing proceedings designed to lull the beneficiaries into a false sense of security: citing De Winter v Johnstone (Unreported, New South Wales Court of Appeal, 23 August 1995) (Sheller JA).
    • It may be doubted whether a mere change in mind constitutes unconscionable conduct: citing De Winter v Johnstone (Unreported, New South Wales Court of Appeal, 23 August 1995) (Cole JA).
    • Given an application for extension of time is dealt with at the time of the application of substantive relief, it has been argued that no extension of time ought to be granted unless it is established that the applicant would (if the extension was granted) be entitled to an order for substantive relief: citing De Winter v Johnstone (Unreported, New South Wales Court of Appeal, 23 August 1995) (Powell JA).
      • On the other hand, it has been argued that the applicant need only show that the application was not bound to fail: De Winter v Johnstone (Unreported, New South Wales Court of Appeal, 23 August 1995) (Sheller JA).
    • Where the delay is not unduly long and the estate remains undistributed, ignorance during the period within which proceedings are to be commenced, followed by a prompt application to extend the time will usually be a sufficient explanation: Clark v Burns [2011] VSC 394 [6].
  • The failure of a legal practitioner to commence proceedings in time due to oversight will not normally constitute grounds for an extension of time — it is clear legislative policy that claims should be dealt with within 12 months: Madden-Smith v Madden [2012] NSWSC 146 [23]–[25].
  • The decision to extend time is discretionary and on appeal is treated the same as any other discretionary decision: Verzar v Verzar [2014] NSWCA 45.

Evidence

  • Provision is made for the admissibility of statements by the deceased to other persons, notwithstanding the hearsay rule, provided those statements would otherwise be admissible: s 100.

Costs

  • The court can order costs of an eligible person be paid out of the estate: s 99(1).
    • This should not be taken for granted — the court will look at the real dispute between the parties in order to consider a costs order: McCusker v Rutter [2010] NSWCA 318.
  • In family provision cases, the overall justice of the case is the key factor.
    • The overall justice is not remote from the rule that costs follow the event: Salmon v Osmond [2015] NSWCA 42 [170]–[176]; Chapple v Wilcox [2014] NSWCA 392.
  • As a rule of thumb, the court will rarely award a successful party costs greater than the amount of the provision awarded: Carroll v Cowburn [2003] NSWSC 248 [36].
  • Costs must ordinarily be proportionate to the outcome of the case: Civil Procedure Act 2005 (NSW) s 60; Re Sherborne Estate (No 2) (2005) 65 NSWLR 268.
  • The amount of legal fees charged for Family Provision Act have been criticised — ‘One sometimes gets the impression in Family Provision Act matters that for the level of fees charged, the work is very sloppily done and that if an hourly rate is being charged, the people who are charging that rate are not sufficiently skilled to be able to deal with this sort of litigation competently, efficiently and quickly. I am not saying that that is so in this case, I am making that as a general comment’: Carroll v Cowburn [2003] NSWSC 248 [35].
  • Principes applicable to the question of costs — Harkness v Harkness (No 2) [2012] NSWSC 35:
    • It is not uncommon for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position (even if unsuccessful), and it may be appropriate for an unsuccessful applicant to have their costs paid out of the estate: citing Singer v Berghouse (1993) 114 ALR 521, 522 (Gaudron J).
    • The court has wide discretion under s 99 in relation to costs.
    • The view that making tenuous claims carries little risk because even if it fails the applicant will likely get their costs from the estate has been thoroughly discredited: citing Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) [2010] VSCA 195.
    • It is much more common that it previously was for an unsuccessful applicant to be ordered to pay the defendant’s costs: citing Lillis v Lillis [2010] NSWSC 359 [23].
    • Where the issue is whether an unsuccessful applicant should bear the costs of the successful defendant, s 98 of the Civil Procedure Act and the above rules will apply — in the absence of some good reason to the contrary there should be an order that the costs of the successful defendant be paid by the unsuccessful plaintiff: Moussa v Moussa [2006] NSWSC 509 [5].
    • An unsuccessful plaintiff will usually be ordered to pay costs where the claim was frivolous, vexatious, made with no reasonable prospects of success, or where they have been guilty of some improper conduct in the course of the proceedings: Re Stich (No 2) [2005] VSC 383.
    • In small estates particularly the court should be careful not to foster the proposition that obstinacy and unreasonableness will not result in an order for costs: Dobb v Hacket (1993) 10 WAR 532, 540.
    • There are also other circumstances that may lead the court to order payment out of the estate of the costs of an unsuccessful plaintiff — the court may allow an unsuccessful plaintiff costs out of the estate if in all the circumstances the case had merit, was reasonable or ‘borderline’: citing McDougall v Rogers [1972] Qd R 281; Shearer v The Public Trustee (Unreported, NSWSC, Young J, 21 April 1998).
    • The court should take into account the conduct of negotiations and attempts to resolve the proceedings, as well as the general conduct of proceedings in good faith: citing Smith v Smith (No 2) [2011] NSWSC 1105 [77].
  • The provision of the Uniform Civil Procedure Rules (NSW) pt 42 r 42.15A relating to the use and benefits of making an offer of compromise will apply in family provision proceedings: Toth v Graham [2014] NSWSC 393.
  • Under s 99(2), regulations may be made to control the costs of legal practitioners in family provision proceedings (these are likely to be made).
  • The court may also make orders capping the costs that may be recovered by the parties: Civil Procedure Act 2005 (NSW) s 98(4)(c); Supreme Court of New South Wales Equity Division, Practice Note No 7 — Family Provision, 2 December 2013 [42].
  • It has been argued that costs should be capped very rarely: Re Sherborne Estate (No 2); Vanvalen v Neaves (2005) 65 NSWLR 268, 276 [42] (Palmer J).
    • A broader approach has been adopted by some courts: see, eg, Ireland v Retallack (No 2) [2011] NSWSC 1096.
    • Current authority is that it is not necessary to decide if costs would be capped only in rare cases, but there must be a proper evidentiary basis for a court to make a capping order such as demonstrating that costs were unreasonable and/or unreasonably incurred: Nicholls v Michael Wilson & Partners Ltd (No 2) [2013] NSWCA 141 [22] (Sackville JA, Meagher and Barrett JJA agreeing).
  • There is power to regulate or prohibit advertising by legal practitioners in respect of family provision proceedings: s 98(4)(b).
    • No such regulations have been made at present.

Mediation

  • Pursuant to s 98(2) the court must refer a matter to mediation before proceeding to hear the application unless special circumstances exist.