Family Provision Part 1 11 January 2017 Craig Birtles 2017.

Family Provision Part 1 11 January 2017 Craig Birtles 2017

Mead v Lemon [2015] WASC 71 Gibson “Eden of Coronet“ – Musikmesse Axolotls are Masters of Regeneration 11 January 2017 Craig Birtles 2017

Mead v Lemon [2015] WASC 71 (2) Estimated estate between $400m and $1bn The plaintiff was the deceased’s daughter, but little contact between them. Plaintiff was 20 years old at time of hearing. Trust established for plaintiff, $3m to be settled on it. Trust fund to vest absolutely in the plaintiff upon her attaining age of 30 years, but subject to excluding conditions set out at para [19] of judgment Defendants conceded that any award would have no effect whatsoever on the beneficiaries under the Will 11 January 2017 Craig Birtles 2017

Mead v Lemon [2015] WASC 71 (3) Refer paragraphs [42] to [45] for judicial commentary on plaintiff’s expressed needs Para [49] – actuary estimated that the amount needed to provide for the plaintiff during her lifetime was $20,528,500 on the 3% discount scales and $15,371,000 on the 5% discount scales. 11 January 2017 Craig Birtles 2017

Mead v Lemon [2015] WASC 71 (4) Master Sanderson: [11] “Much judicial ink has been split attempting to define what is meant by the expression 'adequate provision' in the section. In the end all that can be said is what is adequate depends on the circumstances of the case - the size of the estate, the nature of the relationship between the claimant and the deceased, the claimant's present circumstances and other legitimate claims. Any attempt to refine the meaning of this section runs the risk of putting a gloss on the statute.” 11 January 2017 Craig Birtles 2017

2015 (preliminary) Court statistics
The Supreme Court of NSW Annual Review 2014 (published 2 October 2015) and Provisional Statistics (published 25 February 2016) records that: There were 26,408 uncontested probate applications filed in 2015 (up from 24,526 in 2014). There were 207 contested probate applications filed in 2015 (down from 212 in 2014). 972 Family Provision cases filed in 2015 (of a total of 2,146 cases filed in the Equity Division General List) and 835 were disposed of. At 31 December 2015 there were 554 Family Provision cases pending (compared to 760 as at 31 December 2011). 107 Protective List matters filed. It is also recorded that 51% of court-annexed mediations settled. 11 January 2017 Craig Birtles 2017

2015 judgments published on NSW Caselaw
58 cases concerning Family Provision. 15 cases concerning the proper construction of a Will. 2 statutory will applications. 2 applications for an order that there be an interim distribution of a deceased estate. 3 applications for the appointment of an interim administrator. 6 contested Probate matters in respect of an informal testamentary document. 10 contested Probate matters where testamentary capacity or knowledge and approval was at issue. 4 applications concerning an intestate estate (the NSW Trustee & Guardian was a party to each). 2 applications concerning estate accounts (both concerning the same estate). 11 January 2017 Craig Birtles 2017

2015 and 2016 NSW Court of Appeal decisions on Family Provision
Salmon v Osmond [2015] NSWCA 42 – provision reduced; costs orders varied. Smith v Johnson [2015] NSWCA 297 – defendants' appeal successful; order for provision overturned. Burke v Burke [2015] NSWCA 195 – unsuccessful plaintiff's appeal dismissed (estrangement). Neale v Neale [2015] NSWCA 206 – defendant's appeal dismissed. Poletti v Jones [2015] NSWCA 107 – defendant's appeal dismissed; burden of provision varied. Bates v Cooke [2015] NSWCA 278 – unsuccessful plaintiff's claim dismissed. Underwood v Gaudron [2015] NSWCA 260 – unsuccessful plaintiff’s appeal dismissed. Chan v Chan [2016] NSWCA 222 – unsuccessful plaintiff’s appeal upheld 11 January 2017 Craig Birtles 2017

Resources (1) Supreme Court Practice Note SC Eq 7
Practice and Procedure Tab > Practice Notes > Equity Division > Current > SC Eq 7 Supreme Court of NSW website/Approved civil forms 11 January 2017 Craig Birtles 2017

Resources (2) Legislation: www.legislation.nsw.gov.au
Chapter 3 of the Succession Act 2006 Family Provision Act 1982 Supreme Court Rules 1970 11 January 2017 Craig Birtles 2017

Family Provision claims – be analytical
What was the date of death? Which Act applies? What is the time limit for making an application? Consider eligibility. If the category is not an obvious category of eligibility, is there a relevant statute or case? Are factors warranting required? What does “factors warranting” mean? Has adequate provision been made? Of the factors in section 60(2) of the Succession Act 2006 what is known and what is unknown? What provision could be made bearing in mind the factual limitations? Are “general considerations” a useful guide which might apply to the matter? Are there facts which take the matter outside of the type of case to which “general considerations” might apply? Is notional estate an issue? What requirements need to be considered? Costs issues. 11 January 2017 Craig Birtles 2017

Chapter 3 Succession Act 2006
Applies to DOD after 1 March 2009 Prior legislation is Family Provision Act 1982 (DOD 1 September – 1 March 2009) Before that Testator’s Family Maintenance and Guardianship of Infants Act 1916 (DOD prior to 1 September 1983) 11 January 2017 Craig Birtles 2017

Determining Applications General considerations Other matters
Eligibility Determining Applications General considerations Other matters 11 January 2017 Craig Birtles 2017

S 57 Succession Act 2006 The following persons are eligible:
Husband or wife at DOD De facto partner at DOD Child Former husband or wife (factors warranting) Dependent grandchild or dependent member of the household (factors warranting) Close personal relationship at DOD (factors warranting) 11 January 2017 Craig Birtles 2017

De Facto relationship S 21C(2) Interpretation Act 1987 – relationship as a couple living together and not married to one another or related by family S 21C(3) – in determining whether two persons are in a “relationship as a couple” take into account: (a) the duration of the relationship, (b) the nature and extent of their common residence, (c) whether a sexual relationship exists, (d) financial dependence or interdependence, and financial support (e) the ownership, use and acquisition of property, (f) the degree of mutual commitment to a shared life, (g) the care and support of children, (h) the performance of household duties, (i) the reputation and public aspects of the relationship. No particular finding in relation to any of those matters is necessary in determining whether 2 persons have a relationship as a couple 11 January 2017 Craig Birtles 2017

De Facto relationship (cont)
Roy v Sturgeon (1986) 11 NSWLR 454, Powell J – determination of DFR is a value judgment having regard to all of the circumstances Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677 – Estate Shelia Sarah Cohen; DOD 13/6/85; Will 7/6/83 appointed brother executor; he renounced in favour of Perpetual. Plaintiff and deceased met regularly at North Sydney Bowling Club from 1967 to 1980; when Plaintiff separated from his wife in 1980 he moved in with deceased; there was a sexual relationship; they cared for each other; they travelled together; publicly they presented as a couple; when she became ill and was hospitalised he was a regular visitor. Defendant argued that they maintained their separate lifestyle; she had her own friends and continued to play golf without him regularly; no intermingling of finances. Court determined that the relationship had an element of permanence; each had rich emotional support for the other; there was a merging of lives and they held out themselves to friends as a couple 11 January 2017 Craig Birtles 2017

De Facto relationship (cont)
Can a DFR exist even though the parties did not, and had never, lived together in a single residence? Consider the way in which s 21C Interpretation Act 1987 is framed Where two persons of a long relationship have multiple periods of temporary absence - eg Dion v Rieser [2010] NSWSC 50; or where they lived together for a short part of each week – Vaughan v Hoskovich [2010] NSWSC 706; compare Piras v Egan [2008] NSWCA 59 11 January 2017 Craig Birtles 2017

Child S 95 Adoption Act 2000 – child includes adopted child
S 9(1) Status of Children Act 1996 – child born to wife presumed to be child of husband or (2) cohabiting partner Not step child or foster child 11 January 2017 Craig Birtles 2017

Child – Fertilisation procedures
S 14(1) Status of Children Act 1996 – husband presumed to be father of child born to wife as a result of fertilisation procedure but only if he consented to the procedure; wife presumed to be mother even if she did not provide the ovum S 14(1A) same provisions apply for de facto partners S 14(2) man providing sperm presumed not to be the father S 14(3) woman providing ovum presumed not to be mother S 14 presumptions irrebuttable 11 January 2017 Craig Birtles 2017

Former husband or wife Property settlement significant, usually but not necessarily determinative Factors warranting required 11 January 2017 Craig Birtles 2017

Dependent grandchild or dependent member of the household
May include parents, nephews and nieces, foster children, step- children, former de facto spouses, friends, carers Dependence at any time but degree and duration of dependence relevant Financial dependence; or dependence analogous to financial dependence (services) Can include accommodation; shared pool of resources for expenses Factors warranting required 11 January 2017 Craig Birtles 2017

Dependence Ball v Newey (1988) 13 NSWLR 489 – “dependence” is the condition of depending on something or on someone for what is needed. It includes actual dependence not just for basic necessities or sustenance but also to support a standard of life set by the parties themselves. DOD 10/9/85; 1981 Plaintiff and deceased commenced homosexual relationship; in 1983 they rented a house together; in 1984 they decided to purchase a home together; St George bank provided 95% of the capital for the house; both of their incomes was required to meet the loan repayments; they had a joint savings account Young J had dismissed claim at first instance. Appeal allowed. Matter sent back to SCNSW for further trial 11 January 2017 Craig Birtles 2017

Dependence (cont) Benney v Jones (1990) 12 NSWLR 559 – NSWCOA
At first instance Young J determined that plaintiff and deceased were not dependent on each other; they were not members of the same household and if they were there were no factors warranting. Plaintiff and deceased had a homosexual relationship from 1970’s. They each had their own residence. Deceased purchased farm property in June 1985; DOD was 16/12/88; each of plaintiff and deceased was financially capable of buying premises elsewhere Plaintiff’s Counsel submitted that dependency could be emotional dependency alone – this submission was rejected; but Priesley JA said there was some financial dependence referring to Samuels JA in Ball v Newey - “If it is relevant, it cannot be said that what they chose to do (ie their living arrangements) was unreasonable; and in order to support the mode of life they wished to pursue, each was, it is open to find, partially dependent on the other.” 11 January 2017 Craig Birtles 2017

Dependence (cont) Petrohilios v Hunter (1991) 25 NSWLR 343 – NSWCOA
Step child claim; appeal from decision of Master Windeyer who determined that plaintiff was not eligible; there were no factors warranting and no case made for provision. Plaintiff lived with deceased from 1946 to 1959 (when she was married at 18). The evidence was that the deceased step-mother treated her as her own child during that time. COA found dependence and factors warranting, ordering provision of $20,000. – “Dependence … is not limited to financial or material matters but also includes other forms of dependence analogous to but distinct from financial dependence such as a mother’s services to a young child.” 11 January 2017 Craig Birtles 2017

Grandchild Vanvalen v Neaves [2005] NSWSC 593 (Estate Alma Sherborne)
Applications by two children and one grandchild. DOD 21/2/01; Will 22/2/01; H1 was John Chivery DOD 1947; two children Barbara and Helen; Helen’s daughter was Julia; He owned the Tarlo property which devolved to deceased and was the deceased’s home. H 2 was William Sherborne DOD 1976; one child of marriage Grant; deceased inherited Willow Vale from William Sherborne. Will provided that Grant take the real estate and the interest in the farming partnership if he paid each of Barbara and Helen $20,000; Barbara and Helen entitled to residue. Grandchild alleged four periods of dependence; (1) when Julia, her mother and sibling stayed with deceased for three months after father became violent; (2) school holidays from age of 12 to 16; (3) when Julia lived and worked, by her own choice, from the end of year 10 (1985) to 1993 on Willow Vale; (4) 1993 to 1994 when she lived and worked on Tarlo 11 January 2017 Craig Birtles 2017

Vanvalen v Neaves [2005] NSWSC 593 (cont)
Court found no dependence. Period 1 was support for Helen; Period 2 was hospitality; Period 3 was a different property; was Julia’s choice and she was not financially dependent. Period 4 was Julia’s choice and she was not financially dependent (then aged 24). Grandchild dependence must be direct and immediate not indirect and incidental such as a grandparent providing support and maintenance of the grandparent’s own child. See postscript – Sherborne Estate (No 2) [2005] NSWSC 1003 More recent grandchild case – Chapple v Wilcox [2014] NSWCA 392 11 January 2017 Craig Birtles 2017

Member of the household
In Doshen v Pedisich [2013] NSWSC 1507 at [66], Hallen J cited with apparent approval the following passage from Churchill v Roach [2002] EWHC 3230; [2003] WTLR 779. It is, of course, dangerous to try and define what 'living in the same household' means. It seems to me to have elements of permanence, to involve a consideration of the frequency and intimacy of contract, to contain an element of mutual support, to require some consideration of the degree of voluntary restraint upon personal freedom which each party undertakes, and to involve an element of community of resources. None of these factors of itself is sufficient, but each may provide an indicator. ...It is perfectly possible to have one household and two properties. 11 January 2017 Craig Birtles 2017

Discussion - Oakes v Oakes [2014] NSWSC 1312 Divorced former daughter in law The plaintiff first met the deceased when she commenced employment for him and his wife Gwen at the Poplars Motel in Coonabarabran. They employed her in a general hospitality role. She was a young girl at the time and attended to such duties as waitressing, bar work, office administration and cleaning. The deceased's son Wayne from his first marriage was also employed at the Poplars Motel and performed a variety of duties there. The plaintiff and Wayne met in the family business in 1977 and rapidly became romantically involved in. Soon afterwards they commenced a relationship and began to live together. She was fifteen and he was about twenty years of age. Accommodation was provided for them by the deceased in a house that formed part of the motel complex. From 1978 the plaintiff and Wayne commenced living together in the house (until 1979). They later married, but not until They were divorced on 9 May 2011. 11 January 2017 Craig Birtles 2017

Discussion 2 - Oakes v Oakes [2014] NSWSC 1312 Several times a year the plaintiff and Wayne would go to the property known as Westlynne. These migrations occurred during the harvest season and also when it was necessary to plough and scarify the land or to sow seed. The practice of going to Westlynne for these activities commenced in about 1979 and continued until about The house on the property at Westlynne had three bedrooms. The family group stayed there and the plaintiff initially shared a room with Kathryn. Afterwards she and the second defendant shared a room. The deceased had his own room. The household was a shared community. The plaintiff's job was predominantly to look after the house, to wash, clean, cook and prepare all of the meals for the household while the men would tend to the farm work. There was no remuneration paid to her for this work. I accept that the family relationship at Westlynne during these seasonal visits was that of a household. The members of the family who were there had meals together whenever it was convenient to do so. They lived at Westlynne for the common purpose of conducting essential farming operations during those times of the year when it was necessary to do so. 11 January 2017 Craig Birtles 2017

Miller v Ryan; Payne v Ryan [2015] NSWSC 1713 (Young AJA) Nieces; lived in same house The problem for the plaintiffs here is that one of them in the period of 1946 to was aged between 3 and 7 and the other between 0 and 5. By their infancy they were not in a position where they could contribute to the running of the household or have close relationships, other than emotional relationships, with other people in the house. However, they were not employees, they were not children of employees, they were in the house because it was their parents’ home. Moreover they were related by blood to Grandma Sheehan who would appear to be the head of the house. Further, there is nothing to suggest that within their limitations they did not take part in the activities of the household including, no doubt, special celebrations at Christmas and birthdays. In my view the plaintiffs have established that they were members of the same household as the testator. But no dependency on uncle; grandmother was head of household; and parents were there as well 11 January 2017 Craig Birtles 2017

Close personal relationship
S 3(3) Succession Act 2006 – defined as a relationship between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care. S 3(4) – not for fee or reward; or on behalf of another person or organisation (eg government agency) Not de facto partners Factors warranting required Skarica v Tosha [2014] NSWSC 34 an example of a successful claim by CPR plaintiff; note difficulties for defendant executor 11 January 2017 Craig Birtles 2017

Ye v Fung [2006] NSWSC 243 Estate of Frances Lan Fong Fung DOD 21/6/01
Plaintiff Chinese immigrant; came to Australia to study; non-sexual relationship; they lived together but deceased was 37 years older; Free accommodation; paid $22k towards tuition and other benefits totalling $70k; said in letters “I will treat him as my own nephew”; shared domestic duties; complex additional facts Plaintiff claimed DFR (unsuccessful); Ye v Fung (No 3) [2006] NSWSC 635 Court found CPR, provision of Legacy of $425, awarded + debt forgiveness $22, Fung v Ye [2007] NSWCA 115; Estate appealed; claimed CPR ended prior to death; COA dismissed appeal; mere temporary absence does not mean that relationship had ended (attendance at hospital). 11 January 2017 Craig Birtles 2017

SS 58-59 Succession Act 2006 An order may be made if:
S58 – application filed within 12 months of DOD (FPA 18 months) S59(1)(a) – applicant is an eligible person S59(1)(b) – where necessary there are factors warranting the making of the application S59(1)(c) – the Court may make an order if, at the time of hearing, adequate provision has not been made THEN - S59(2) – such provision as the Court thinks ought to be made for the maintenance education or advancement in life of the applicant. CONSIDER factors in s 60(2) SA 11 January 2017 Craig Birtles 2017

S 60(2) Succession Act 2006 The Court may consider: (a) relationship including the nature and duration of the relationship, (b) the nature and extent of any obligations or responsibilities owed to applicant and to other beneficiaries, (c) the nature and extent of the estate and notional estate, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant and of any beneficiary (e) the financial circumstances of anyone cohabiting with the applicant, (f) any physical, intellectual or mental disability of the applicant, or any beneficiary, 11 January 2017 Craig Birtles 2017

S 60(2) Succession Act 2006 (cont)
(g) the age of the applicant when the application is being considered, (h) any contribution by the applicant to the acquisition, conservation and improvement of the estate or to the welfare of the deceased, for which adequate consideration was not received, (i) any provision made during the deceased person’s lifetime or made from the deceased person’s estate, (j) any evidence of the testamentary intentions of the deceased (k) whether the applicant was being maintained by the deceased (l) whether any other person is liable to support the applicant, 11 January 2017 Craig Birtles 2017

S 60(2) Succession Act 2006 (cont)
(m) the character and conduct of the applicant, (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. 11 January 2017 Craig Birtles 2017

A two stage process? Under the Family Provision Act 1982, the Court developed a “two-stage” process as described in Singer v Berghouse [1994] HCA 40; 181 CLR 201 at per Mason CJ, Deane and McHugh JJ: “The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. [the jurisdictional question] The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. [the discretionary question]” 11 January 2017 Craig Birtles 2017

Singer v Berghouse - Facts
Plaintiff was widow; second marriage for both deceased and plaintiff; each had children from prior marriage; 12 month marriage DOD; Prior to marriage Deed entered under which each agreed that they would leave their own property to their children from the prior marriage; release not approved by Court under s 31 FPA; relevant only as evidence as to what parties thought was fair at the time it was entered into. Dismissed at first instance and on appeal. At first instance Master Windeyer said that there was nothing to suggest that the plaintiff could not live a perfectly satisfactory life based on her own assets (consider evidence) 11 January 2017 Craig Birtles 2017

Singer v Berghouse (cont)
Two stage test relevant because Court required to consider how it should approach appeal House v The King (1936) 44 CLR 499 principles applied HCA determined that principles which govern appellate review of discretionary decisions should apply to jurisdictional question as well as discretionary question Appellant did not show that first instance decision was erroneous Plaintiff relied solely on “moral claim” that a widow might have on a deceased’s estate. Mason CJ, Deane and McHugh JJ said (obiter) “moral claim” may be understood as a “gloss” on the statutory language. 11 January 2017 Craig Birtles 2017

A two stage process – further discussion
Note Vigolo v Bostin (2005) 221 CLR 191 Callinan and Heydon JJ at [121] – “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 in two” In Andrew v Andrew [2012] NSWCA 308, Basten JA seemed to suggest that Chapter 3 of the Succession Act 2006 has done away with the two-stage process, although Barrett JA disagreed and Allsop P suggested that it didn’t matter. Compare FPA s9(2) with SA s 59(1)(c) Andrew v Andrew also prompts discussion about: The relevance of “Moral duty” The relevance of estrangement. 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2011] NSWSC 115
Andrew v Andrew [2011] NSWSC 115 Hallen J Estate Rita Melba Andrew - Claim by daughter. Will provided 40% of home at Chifley to the executor son. $10,000 pecuniary legacy to the Plaintiff. Residue to be divided between Defendant, Jennifer, Lisa and Tracey (ie other children). Net distributable estate $800k. Reasons given in Will – para 22 of first instance judgment. 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2011] NSWSC 115 (cont)
Plaintiff had no assets apart from super ($4k). She was looking for work. Shared care of foster child. Sought altruistic goals rather than material gain. Centrelink Newstart allowance. Plaintiff's son Nicholas was 20 and was not dependent on her. Plaintiff resided in her friend's flat. Estrangement and some disentitling conduct; lack of contact over long periods (no evidence about cause) and general put downs. In considering the totality of the relationship his Honour determined that additional provision was not appropriate. 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2011] NSWSC 115 (cont)
“[141] I have set out the provision made for the Plaintiff in the deceased's Will. Judged by quantum and looked at through the prism of her financial and material circumstances, adequate provision for her proper maintenance or advancement in life was not made by the Will of the deceased, or by the operation of the intestacy rules, in relation to the estate of the deceased, or both. [142] Whilst an additional lump sum, by way of advancement in life, in other circumstances, would be appropriate, that is not all that I am required to consider at the first stage. The totality of the relationship of the Plaintiff and the deceased, the age and capacities of the other beneficiaries, and the claim of each on the bounty of the deceased, are very relevant factors in determining the answer at the first stage. [143] Those considerations lead me to find that there was no failure, on the part of the deceased, to make adequate provision for the Plaintiff. Accordingly, the Plaintiff fails at the jurisdictional stage. That finding concludes the matter and must lead to the dismissal of the Plaintiff's proceedings. [144] However, even if I were wrong in coming to that conclusion, the same considerations, which I summarise below, would, at the second stage, produce the result that, as a matter of discretion, I would not be satisfied that a family provision order ought to be made.” 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2012] NSWCA 308
Plaintiff appealed. Successful – in lieu of provision of $10,000, Plaintiff to receive $60,000, drawn unequally from provision made for others. Defendant to pay Plaintiff's costs including of appeal. 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2012] NSWCA 308
Allsop P – “This is a difficult case. The difficulty arises from the need to apply a statutory test couched in evaluative language embodying human values and norms of conduct deeply personal to those involved and often incapable of clear expression. The human expression of will concerning the disposition of property flowing from considerations of emotion (including love and disappointment), reason and societal and family obligation cannot often be fully understood.” "I agree with Basten JA that 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. Whether the process engaged by the Court in s 59 can still be described as "two staged" in the sense discussed in Singer v Berghouse may be an analytical question of little consequence.” 11 January 2017 Craig Birtles 2017

Andrew v Andrew [2012] NSWCA 308 (cont)
Moral duty discussed – “…the notion of compliance by the testator with a moral duty (on what he or she knew) (is) apt to distract from the statutory task of the Court.” "Accepted and acceptable social and community values permeate or underpin many, if not most, of the individual factors in s 60.” Allsop P (cont) “Given the fact of estrangement and not hostility, it is not to be supposed that if the testator had known and appreciated all the circumstances of the appellant, including the detail of the appellant's lack of means, her responsibilities to a young foster child and her inability to see her own adult son through lack of funds, that she would have closed her bounty to her daughter." 11 January 2017 Craig Birtles 2017

Basten JA contrasted provisions of FPA - "the Court shall not make an order… unless it is satisfied that" provision is inadequate. With provisions of Chapter 3 SA - "the Court may make an order if it is satisfied that the testator has not made adequate provision" “Under the former scheme the statute identified a non-inclusive list of considerations which might be taken into account in determining what provision (if any) ought to be made, a step only to be taken once the prohibition had been lifted. That is not to say that the listed considerations were not relevant to the first stage of the enquiry, but only that the earlier statute did not address the issue. The Succession Act, by contrast, states that the listed factors may be taken into account in determining whether to make a family provision order and the nature of any such order. The intention of a two stage process is no longer apparent in the structure of either s 59 or s 60 of the Succession Act.” 11 January 2017 Craig Birtles 2017

Basten JA (cont) (on estrangement) “Estrangement does not describe conduct, but the condition which results from the attitudes or conduct of one or both parties. It is a term sometimes applied to the natural process of separation of child from parent, which often takes place in adolescence but which may continue into adult life sometimes without resolution of the underlying tension. At least when kept within reasonable bounds, the negative consequences of such a process should arguably be ignored or at least not given disproportionate significance when assessing the expectation that a parent will provide for a child whose condition in life is financially advantageous when compared with other claimants on the testator's conscience.” 11 January 2017 Craig Birtles 2017

Barrett JA [91] “I am not persuaded that any change is evident here… The identified aim is to address cases in which the Court assesses the provision (if any) actually made to be not adequate. Once the Court has found lack of adequacy, it must make a discretionary judgment as to what, if any, order should be made. There is nothing in the present Act indicating that the court is to take an approach more "generous" to claimants than previously. It is true that s 60(2) refers to a greater number of matters that may be taken into account in deciding what order, if any should be made but, as I have said, to the extent that these go beyond the list in the former s 9(3) they reflect things to which it was open to the Court to pay attention under the superseded legislation in any event.” Barrett JA dismissed the appeal 11 January 2017 Craig Birtles 2017

A two stage process? - discussion (cont)
In Wheat v Wisbey [2013] NSWSC 537, Hallen J expressed the view that the legislation does not alter the two stage test. Reference was made in his Honour’s judgment to: a differently constituted NSW Court of Appeal finding (prior to Andrew v Andrew) that the two stage test continued to apply - Keep v Bourke [2012] NSWCA 64; Ball J expressing the view that the task of the trial judge is to follow the latter decision of Andrew v Andrew – Oldfield v Chan [2013] NSWCA 434; and an again differently constituted NSW Court of Appeal adopting the two stage process – Franks v Franks [2013] NSWCA (to which Ball J in Oldfield v Chan was not directed). 11 January 2017 Craig Birtles 2017

A clarification? – Poletti v Jones [2015] NSWCA 107
Basten JA from [19]: “In Andrew v Andrew, I suggested that the changes in the structure of the legislative provisions resulting from the enactment of ss59 and 60 of the Succession Act meant that a two stage process was no longer required. That was not to say that there might not be circumstances in which such an approach was the preferable way to proceed. My only point was that the legislation no longer dictated such an approach in circumstances where a rigid demarcation of issues along those lines would be artificial, a point made by Callinan and Heydon JJ in Vigolo v Bostin, a case under different legislation. … In the present case the appellant submitted that a failure to address separately the precondition in s59(1)(c) was apt to distort the application of the power conferred on the court, because it would lead too readily to a conclusion that some provision should be made. In other words, the court should ask first whether the testator acted appropriately in excluding the respondents from any share in his estate, before asking what kind of provision might have been appropriate… Accepting that there will be cases in which that approach should be adopted, this is not such a case.” 11 January 2017 Craig Birtles 2017

Discussion – moral claim
Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 – NSWCOA decision shortly after Singer v Berghouse obiter re “gloss” Kirby P said “moral claim” merely a shorthand reference to the legislation; verbal not substantive error; and did not require additional proof beyond the terms of the legislation. Sheller JA said that prevailing community standards of what is right and appropriate must inform consideration of the legislative test. 11 January 2017 Craig Birtles 2017

Discussion – moral claim (cont)
Vigolo v Bostin (2005) 221 CLR 191 Plaintiff unsuccessful at first instance and on appeal; WA legislation; Submitted that “moral claim” arose from past business and family dealings. Gleeson CJ – “fitness and propriety are value-laden concepts… Morality is the source of many of the values that are expressed in the common law, in statutes and in discretionary judicial decision making” – “Moral claim” is a gloss on the statutory language but it may be a helpful gloss; as a guide to the operation of the statute not a substitute for it. Callinan and Heydon JJ – the Act makes moral considerations relevant – “proper”, “maintenance”, “support”, “advancement” and disentitling conduct – but use of the words “moral claim” cannot make considerations outside the terms of the Act relevant. 11 January 2017 Craig Birtles 2017

Factors warranting Sometimes described as part of the jurisdictional test but cannot usually be determined as a preliminary question unless case so hopeless that question can be determined without service of evidence by defendant. In Re Fulop (1987) 8 NSWLR 679 at 681D, McLelland J said that claimants in paragraphs (d), (e) and (f) need to show that they have "the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased": at 681D. Reasoning – other claimants (widows, children) would usually be natural objects of testamentary affection Two claims – Janos Fulop was deceased’s stepson; FW included (1) established relationship, as if child of deceased; (2) deceased benefitted from his father’s estate; (3) description as “son” in prior Will Rose Fulop was foster child; FW included (1) integration into family as a young child; (2) close and loving relationship (3) reference in Will as “my daughter”; (4) provided care and support after death of Mr Fulop Snr 11 January 2017 Craig Birtles 2017

Factors warranting (cont)
Churton v Christian (1988) 13 NSWLR 241 – claims by ex wife and step child; Mrs Christian FW (1) upon marriage her entitlement to a war widow’s pension came to an end; (2) no property settlement; (3) no moral blame for divorce; (4) continuation of family ties after divorce Mrs Bailey FW - lived in household from age 5 to age 20; asked to leave for a trivial reason; relationship as parent and child. In Vo v Lai & Anor [2013] NSWSC 1693 at [57], Windeyer AJ said that these considerations continue to be applicable. 11 January 2017 Craig Birtles 2017

Vo v Lai (cont) In Vo v Lai (summarising para 59 of judgment)
The claim was by a former de facto spouse where the relationship ended 2 years before DOD and was ended by the plaintiff Plaintiff maintained contact with deceased for the purpose of taking part in the care of their daughter Plaintiff did not live with deceased at DOD Plaintiff did not provide any financial support Plaintiff would be expected to have care of the child after DOD Plaintiff was not a good financial manager Plaintiff had qualifications and capacity to earn an income Deceased left entire estate for the benefit of daughter 11 January 2017 Craig Birtles 2017

Skarica v Toska [2014] NSWSC 34
Lindsay J Estate of Neda Duracic DOD 18/3/12; Will 9/11/07 Gave 1/3 interest in real estate to plaintiff in 1989 Estate valued at $850,000; small legacies; residue left to “my very poor sister” (resident in Croatia). Clause 6 of Will provided: “I hereby declare that I do not wish to make any further provision to my boyfriend the said NEVENKO SKARICA because I already gave him one third of my property at [address].” Plaintiff and deceased did not live together until plaintiff moved into property shortly prior to deceased’s death 11 January 2017 Craig Birtles 2017

Skarica v Toska [2014] NSWSC 34 (cont)
Lindsay J at [32] regarding eligibility: “Objectively, what emerges from the evidence, with all its contradictions, is a personal relationship between the plaintiff and the deceased which was geographically proximate, familial and characterised by a special friendship, sometimes volatile, attended by the provision of support, care and attention by the other.” 11 January 2017 Craig Birtles 2017

Skarica v Toska [2014] NSWSC 34 (cont)
Lindsay J at [51] regarding factors warranting: Plaintiff provided the deceased with domestic support and care after the date upon which she made her will incorporating declaration in clause 6 Element of doubt about plaintiff’s mental stability Misguided pursuit of appeal/challenge to Guardianship Tribunal orders affecting the deceased, was encouraged or condoned by the deceased. 11 January 2017 Craig Birtles 2017

Jurisdictional test (if still applicable)
S 59(1)(c) SA – Has adequate provision for the proper maintenance, education and advancement for the plaintiff been made by the Will or by the rules of intestacy? Eg Weekes v Barlow [2014] NSWSC 1776 at [40], citing 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." 11 January 2017 Craig Birtles 2017

Jurisdictional test (if still applicable) (cont)
Weekes v Barlow (cont) at [43] citing Vigolo v Bostin [2005] HCA 11; 221 CLR 191, at [114], Callinan and Heydon JJ "[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 ... 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.“ Discussion – what is left for the Court to consider after answering the jurisdictional question? 11 January 2017 Craig Birtles 2017

What order should be made?
S 65(2) SA sets out the types of orders which can be made including: Lump sum; Periodic payments; Application of existing or future property; Absolute or limited interest in property; Set aside property as a class fund for the benefit of 2 or more persons; In any other manner the Court thinks fit. 11 January 2017 Craig Birtles 2017

What order should be made?
Court must specify burden of order Orders operate as a codicil to the Will Orders can be enforced by an administration suit (proceedings in which a beneficiary compels the executor to administer the estate). Form of order may allow for re-listing before Trial Judge or Family Provision List Judge. Abatement or adjustment may be necessary if estate on distribution found not to be large enough to meet all claims (Third Schedule Part 2 Probate and Administration Act 1898) Court may make consequential and ancillary orders – s 66 SA 11 January 2017 Craig Birtles 2017

2016 Decisions Chan v Chan [2016] NSWCA 222 (first instance [2015] NSWSC 1043, [2015] NSWSC 1361) Petkovic v Koutalianos [2016] NSWSC 1817 11 January 2017 Craig Birtles 2017

“General Considerations”
Weekes v Barlow [2014] NSWSC 1776 per Hallen J [81] “As I have stated in a number of cases (see, for example, Bowditch v NSW Trustee and Guardian [2012] NSWSC 275), I do not intend what I have described as "principles" to be elevated into rules of law, propositions of universal application, or formulae. Nor do I wish to suggest that the jurisdiction should be unduly confined, or the discretion at the second stage should be constrained, by statements of principle found in dicta in other decisions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered. I identify them merely as providing useful guidance, which may be applied, with circumspection, in considering the statutory provisions, the terms of which must remain firmly in mind.” 11 January 2017 Craig Birtles 2017

Husband and Wife – General Considerations
Eg Jagoe v Maguire [2013] NSWSC 1283 at [137] per Hallen J (a) There is no different approach to widowers than to widows. (b) As a broad general rule, and in the absence of special circumstances, the general duty of the deceased to his, or her, spouse, to the extent to which his, or her, assets permit him, or her to do so, is: (i) To ensure that she, or he, is secure in the matrimonial home; (ii) to ensure that she, or he, has an income sufficient to permit her, or him, to live in the style to which she, or he, is accustomed; and (iii) to provide her or him with a fund to enable her, or him, to meet any unforeseen contingencies. (c) Generally speaking, the amount should be sufficient to free the spouse's mind from any reasonable fear of any insufficiency as she, or he, grows older and her, or his, health and strength fail. . 11 January 2017 Craig Birtles 2017

General Considerations Jagoe v Maguire (cont)
(d) Concern as to the capacity of the spouse to maintain herself, or himself, independently, and autonomously, may also bear upon the notion of what is proper provision. (e) what is have said above is not of immutable application. (f) The three elements identified above are not necessarily mutually independent. (g) The position of surviving spouse does not attract primacy (having regard to the strict terms of the legislation). (h) Where, after competing factors have been taken into account, it is possible to do so, a spouse ought to be put in a position where she, or he, is the master of her, or his, own life, and in which, for the remainder of her, or his, life, she, or he, is not beholden to beneficiaries. (i) Usually, a mere right of residence will be an unsatisfactory method of providing for a spouse's accommodation. 11 January 2017 Craig Birtles 2017

De Facto relationship – General considerations
The general considerations relating to claims made by de facto partners are similar to those applicable to claims by a widow or widower – see Re Marcuola-Bel Estate; Marcuola-Bel v Thi Ly Tran [2005] NSWSC 1182 at [31] cited by Hallen J in Vidler v Ivimey [2013] NSWSC 1605 at [121] Perhaps give more weight to length, duration and nature of relationship 11 January 2017 Craig Birtles 2017

Child – General considerations
Eg Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915 at [177]: The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to: raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation. 11 January 2017 Craig Birtles 2017

Eg Hedman v Frazer; Egan v Frazer (cont) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute. If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such person. 11 January 2017 Craig Birtles 2017

Eg Hedman v Frazer; Egan v Frazer (cont) There is no need for an applicant adult child to show some special need or some special claim. The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased. The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim. 11 January 2017 Craig Birtles 2017

Former husband or wife general considerations
Eg Glynne v NSW Trustee and Guardian; Lindsay v NSW Trustee and Guardian [2011] NSWSC 535 at [89]: "The policy of the law is to promote the finality of settlements of property disputes by orders made in the Family Court or by the amicable division of matrimonial property prior to death. Another policy of the law is that parties whose marriage has been dissolved, and in respect of whom orders have been made disposing of their matrimonial property, or where there has been an amicable division of that property, should be able to go their own separate ways. Except for the specific cases provided for under the Family Law Act 1975 (Cth), and provided there has been compliance with the orders, or the agreement for amicable division, made, such parties should, thereafter, face no financial obligation, one to the other. 11 January 2017 Craig Birtles 2017

Eg Glynne v NSWTAG; Lindsay v NSWTAG (cont)
A settlement, whether by order of the Family Court, or by agreement reached amicably, and complied with, however, does not preclude a claim by a former spouse for a family provision order, but, in those circumstances, additional, and different, considerations will arise. The Act gives a specific entitlement to a former spouse to make a claim. That provision contemplates there will be cases where such a claim will succeed, notwithstanding the public policy of the finality of a property settlement. It is not the task of this Court to go behind the orders made in the Family Court or the amicable agreement of the parties unless a specific basis is advanced for this Court to do so (e.g. fraud). In every case involving a former spouse, it will be necessary to examine the actual relationship between the two people concerned, as far as possible without preconceptions based only on the fact of the dissolution of their marriage and their property division. 11 January 2017 Craig Birtles 2017

Eg Glynne v NSWTAG; Lindsay v NSWTAG (cont)
The terms of the parties division of property will be relevant in determining the Plaintiff's needs and the extent to which those needs may have been satisfied in the deceased's lifetime, as will be the length of time from the separation of the former spouse to the death of the deceased, and the course that the lives of the two spouses have followed since separation. There is a distinction between "factors which warrant the making of the application' and the factors that warrant the making of an order. Merely establishing that an applicant is a former spouse and that she, or he, has a financial need, would not, as such, entitle her, or him, to an order. In addition, even if there are factors that warrant the making of the application, the applicant may fail in establishing that an order for provision should be made. What has to be decided is whether what is relied upon in the case by the applicant, in association with all other relevant matters, puts her, or him, within the class of persons to whom the deceased had an obligation to make provision." 11 January 2017 Craig Birtles 2017

General considerations grandchildren
Eg Sammut v Kleemann [2012] NSWSC 1030 at [107]: "As a general rule, a grandparent does not have an obligation or responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased's testamentary recognition. Where a grandchild has lost his, or her, parents at an early age, or when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes a surrogate parent, these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. The fact that the grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Even then, it should be demonstrated that the deceased had come to assume, for some significant time in the grandchild's life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild's support and welfare, or else that the deceased has undertaken a continuing and substantial responsibility to support the applicant grandchild financially or emotionally. 11 January 2017 Craig Birtles 2017

Eg Sammut v Kleemann (cont)
The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created, in a particular case, by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence. The fact that the grandparent occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the grandparent for the purposes of the Act. 11 January 2017 Craig Birtles 2017

Eg Sammut v Kleemann (cont)
The grandchild's dependence, whether whole or partial, on the grandparent must be direct and immediate; it is not sufficient that the grandchild's dependence is the indirect result of the deceased providing support and maintenance for his, or her, own adult child, and thereby, incidentally, benefiting the deceased's grandchildren who are directly dependent on that child. It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents. Yet, the obligation of a parent to provide for his, or her child does not, necessarily, negate, in an appropriate case, the moral obligation of a grandparent to make provision for the maintenance, education or advancement in life of a grandchild out of her, or his, estate. The fact that the parents, or either of them, of a grandchild have, or has, predeceased the grandparent may be a relevant factor in support of the claim made by a grandchild." 11 January 2017 Craig Birtles 2017

Other matters S 59(3)(a) SA – further provision can only be made if substantial detrimental change in the eligible person’s circumstances since order last made; S 59(3)(b) SA - or at the time of order there was undisclosed estate property which would result in the estate being substantially greater and which would have resulted in a different order S 59(4) SA – similarly for applications previously refused if circumstances in (3)(b) apply 11 January 2017 Craig Birtles 2017

Other matters (cont) S 61 SA – Court may disregard interests of other potential applicants if notice served or Court considers that service is unnecessary, unreasonable or impracticable Note Luciano v Rosenblum (1985) 2 NSWLR 65 S 62(1) SA – Court may make interim family provision order if it is satisfied that on final hearing no less provision would be made S 62(3) SA – Court may make order restraining distribution of estate pending determination of the FP application 11 January 2017 Craig Birtles 2017

Release of Family Provision rights
Release of rights not effective unless approved by the Court. The Court must be satisfied that: Release to the benefit of the releasing party and prudent for them to make (now or at the time made) The agreement is or was fair and reasonable. The releasing party has taken independent advice and has given due consideration to it. S 95(4) SA; s 31(5) FPA 11 January 2017 Craig Birtles 2017

Mead v Lemon [2015] WASC 71 (cont)
Returning to Mead v Lemon – what do you think happened? 11 January 2017 Craig Birtles 2017

Master Sanderson: [30] “…the whole structure is unwieldy. To have her fate in the hands of a man she had never met and who had close ties with other family members is unreasonable. How could the first defendant be expected to understand the wants and needs of a 19 year old girl living in Perth's outer suburbs when he was a solicitor in Sydney? How was the first defendant to ensure the plaintiff did not fall foul of any of the provisions of cl 14? The terms of the Trust make it incumbent upon him to ensure the plaintiff did not breach any of the terms of that clause. The first defendant may well have had a philosophy that it was best to retain earnings in the Trust so that when the plaintiff turned 30 she would come into a substantial fortune. All of that is uncertain. The whole system is unworkable.” 11 January 2017 Craig Birtles 2017

Master Sanderson: [62] …When it comes to exercising a discretion three factors are consistently found in the cases - the size of the estate, the needs of the plaintiff and the interests of other parties having a legitimate call on the bounty of the deceased. From time to time other factors arise in particular cases. But these themes are universally present. The weight to be given to each of these factors varies between the cases, as is to be expected. But the result is always what might be called a triangulation - a balancing exercise within the reference points provided by the three factors. But this case is different. The estate is massive and its value irrelevant in determining the outcome. No other individual will be prejudiced no matter what award (within reason) I make. That means there is no way of triangulating here; put another way, there are no factors to weigh in the balance. There are no markers for an exercise of discretion. 11 January 2017 Craig Birtles 2017

Master Sanderson: [64] In the exercise of my discretion I would award to the plaintiff a cash payment of $25 million conditional upon her forfeiting any right or interest in the Trust. Subject to hearing from the parties that amount ought be paid to the plaintiff within 60 days. [65] …Even in this day and age $25 million is a considerable amount of money. But in the context of this estate it is little more than a rounding error. 11 January 2017 Craig Birtles 2017

Discussion points If a solicitor is given instructions to draft a Will and the testator expressly states that he or she wishes to disinherit (or simply does not wish to benefit) a person who would have an expectation to inherit: Should the solicitor give advice about: the existence of Family Provision legislation? how the Court would determine a claim? what in the solicitor’s opinion the Court might award a prospective plaintiff? 11 January 2017 Craig Birtles 2017

Discussion points (cont)
Is a testator better off making a gift to the person whom they wish to exclude? If the testator with the benefit of advice does not wish to make a gift for the person, is there anything else which could be done? 11 January 2017 Craig Birtles 2017

Next week Family provision – notional estate
Family provision – estrangement Other matters if not covered today Discussion examples 11 January 2017 Craig Birtles 2017

Family Provision Part 1 11 January 2017 Craig Birtles 2017.

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Family Provision Part 1 11 January 2017 Craig Birtles 2017.

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