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Slater v Thorne [2011] NSWSC 279 (8 April 2011)
Last Updated: 18 April 2011
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Decision:
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1. Having found that the Plaintiff is an eligible
person and that the provision made for her in the Will of the deceased is
inadequate,
order that, in lieu of the provision made for the Plaintiff in the
Will of the deceased, she is to receive out of his estate, a lump
sum of
$200,000. 2. Order that the lump sum should be paid, as to $150,000, within
28 days, and as to the balance, within 28 days thereafter, failing
which,
interest on any amount not so paid, should be paid, such interest to be
calculated at the rate prescribed on unpaid legacies,
from that date until the
date of payment. 3. Order that the burden of the provision made for the
Plaintiff be borne by the Defendant and that it shall constitute a charge on
the
Mt Kembla property until it is paid. 4. As requested, I defer making any
order for costs until after these reasons are delivered and the parties have an
opportunity to
consider them. 5. Stand the proceedings over to a mutually
convenient date for any argument as to costs.
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Catchwords:
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Application for family provision order under
Chapter 3 of the NSW Succession Act 2006 - Plaintiff and Defendant only children
of deceased
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Parties:
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Maxine Thorne Slater (Plaintiff) Hayley Thorne
(Defendant)
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Representation
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Counsel: Mr R Wilson (Plaintiff) Mr D
Liebhold (Defendant)
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- Solicitors:
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Solicitors: Williamson Isabella
(Plaintiff) Lough & Wells (Defendant)
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Judgment
The Application
- HIS
HONOUR: Maxine Thorne Slater ("the Plaintiff"), who is a child of Robert
John Thorne ("the deceased"), applies for a family provision order
under Chapter
3 of the NSW Succession Act 2006 ("the Act"). The Act applies in respect
of the estate of a person who died on, or after, 1 March 2009. The Act replaces
the Family Provision Act 1982 ("the former Act"), which was repealed,
effective from 1 March 2009. A family provision order is an order made by the
court, under
Chapter 3, in relation to the estate, or notional estate, of a
deceased person, to provide from that estate for the maintenance,
education, or
advancement in life, of an eligible person.
- The
Plaintiff commenced the proceedings, by Summons filed on 9 March 2010, that is,
within the time prescribed by s 58(2) of the Act
(not later than 12 months after
the date of the death of the deceased).
- The
Defendant named in the Summons is Hayley Thorne, to whom Probate in common form
of the deceased's Will was granted, with the Plaintiff.
She, too, is a child of
the deceased and the sister of the Plaintiff. Naturally, it was the Defendant
who represented the estate
in the proceedings.
- There
is no question, in the present case, of any provision being sought out of
notional estate of the deceased.
Background Facts
- The
following facts are uncontroversial.
- The
deceased died on 9 March 2009. He was then aged 62 years (having been born in
December 1946).
- The
deceased left a Will that he made on 29 January 2007, Probate of which was
granted, on 7 December 2010, by the Supreme Court of
New South Wales, to the
Plaintiff and the Defendant.
- The
deceased's Will, relevantly, provided:
(a) a devise of the residence occupied by the deceased at the date
of his death, to the Defendant absolutely;
(b) the rest and residue of the estate to be divided equally between the
Plaintiff and the Defendant.
- In
the Inventory of Property, a copy of which was placed inside, and attached to,
the Probate document, the deceased's estate, at
the date of death, was disclosed
as having an estimated, or known, gross value of $440,419. No liabilities were
disclosed. The estate
was said to consist of real property at Mt Kembla
($360,000), money on deposit ($4,743), superannuation ($33,200) a car ($25,000)
and accrued annual leave and other employment sums ($17,475). It was the Mt
Kembla property that was the residence occupied by the
deceased at the date of
his death.
- In
an affidavit sworn by the Defendant on 22 March 2011, the Defendant disclosed
that a payment was made, after the date of death,
to the estate, being an
additional amount of superannuation ($169,560). It is possible that a further
amount of $28,200 might be
paid to the estate as well.
- None
of the estate had been distributed at the date of hearing. The parties agreed
that the value of the estate available for distribution,
subject to the payment
of some debts and other expenses, and, if so ordered, the costs of the
proceedings, was about $650,000. The
parties also agreed that the current value
of the Mt Kembla property was $400,000.
- The
estimated current value of the Plaintiff's share of residue (depending upon the
burden of costs of the proceedings) was estimated
to be about $117,000. Thus,
the Defendant's share of the estate may be calculated to be about $517,000
(depending upon the burden
of costs of the proceedings).
- In
calculating the value of the estate, finally available for distribution, the
costs of the present proceedings should be considered,
since the Plaintiff, if
successful, normally, will be entitled to an order that her costs be paid out of
the estate of the deceased,
whilst the Defendant, irrespective of the outcome of
the proceedings, normally, will be entitled to an order that her costs be paid
out of the estate.
- The
Plaintiff's costs and disbursements of the proceedings, including counsel's
fees, calculated on the indemnity basis, have been
estimated to be about $58,400
(inclusive of GST and upon the basis of a one day hearing). The costs and
disbursements of the Plaintiff,
including counsel's fees, calculated on the
ordinary basis, are said to be about $50,000.
- The
Defendant's costs and disbursements of the present proceedings, including
counsel's fees, calculated on the indemnity basis (inclusive
of GST and upon the
basis of a one day hearing), have been estimated to be no more than $37,032.
- With
some hesitation on the part of the Defendant, the parties accepted that, for the
purposes of the hearing, I should determine
the Plaintiff's application upon the
basis that the actual net distributable estate, after the payment of such costs
as may be ordered
to be paid out of the estate, and assuming that the estimates
are accurate, will be about $550,000.
- The
persons described as eligible persons, within the meaning of the Act, are the
Plaintiff and the Defendant, as well as their mother,
Allyson Thorne, the former
wife of the deceased. She and the deceased separated in 1999 and were divorced
in 2006. Mrs Thorne gave
evidence in the proceedings by affidavit and was
cross-examined by counsel for the Defendant. It is clear that she does not wish
to make any claim under the Act.
- Only
the Plaintiff has commenced proceedings under the Act.
The Statutory Scheme - The Act
- I
shall discuss the statutory scheme that is relevant to the facts of the present
case.
- The
wording of the Act is similar to the wording of the former Act. However, it is
necessary to remember the warning of Kirby P in
Samsley v Barnes [1990]
NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas
which previously existed in the common law or in an earlier
statute, that
lawyers will approach the construction of the Act affected by the previous law.
Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty
Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the
specialised activity of law, of a universal phenomenon of psychology
long
established in relation to human perception generally. We tend to perceive what
we expect. We expect that with which we are
familiar.
There is a particular danger in the case of the Family Provision Act
in construing its terms by reference to the law which developed around the
Testators' Family Maintenance and Guardianship of Infants Act 1916 . That
Act was passed in earlier times to govern the entitlements of a testator's
family, as narrowly defined. The definition by s
3(1) of that Act confined
applications to those made by "the widow, husband or children of such persons".
There was no mention in
it of former spouses. Doubtless this was because, for
the early part of this century, divorce was relatively infrequent and then
based
upon concepts of matrimonial fault which would make interference in the
testamentary disposition of the deceased unlikely.
When enacted, the statute was
a radical interference in the power of testamentary disposition. That was a
significant power over
private property, the disturbance of which was regarded
as highly exceptional."
- Whilst
the relevant amendments made by the Act are not as significant to those made by
the former Act, it remains necessary to bear
his Honour's warning in mind in
construing the statutory framework. In doing so, a construction that promotes
the purpose, or object,
of the Act is to be preferred to a construction that
would not promote that purpose or object. In my view, the principles applied
by
the courts to the former Act continue to apply, except to the extent that the
Act otherwise requires.
- The
former Act was repealed by s 5 of the Succession Amendment (Family Provision)
Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic
of family provision from deceased estates. The long title of the
Act describes
that new Chapter as one to ensure that adequate provision is made for the
members of the family of a deceased person,
and certain other persons, from the
estate of the deceased person. Importantly, this should not be taken to mean
that the Act confers
upon those persons, a statutory entitlement to receive a
certain portion of a deceased person's estate. Nor does it impose any limitation
on the deceased's power of disposition by his, or her, will. It is only if the
statutory conditions are satisfied, that the court
is empowered, under the Act,
to alter a deceased's disposition to produce a result that is consistent with
the purpose of the Act.
Even then, the court's power to do so is discretionary.
- The
key provision is s 59 of the Act. The court must consider, first, whether the
applicant is an eligible person within the meaning
of s 57 (s 59(1)(a)). There
are six categories of persons by, or on whose behalf, an application may be
made. In the case of an applicant
who falls within s 57(1)(d), (e) or (f), the
court must next consider whether the court is satisfied that there are factors
which
warrant the making of the application (s 59(1)(b)). Then, if those
considerations are satisfied, the court must determine whether
adequate
provision for the proper maintenance, education and advancement in life of the
applicant has not been made by the will of
the deceased, or by the operation of
the intestacy rules in relation to the estate of the deceased, or both (s
59(1)(c)). It is only
if it is satisfied of the inadequacy of provision, that
the court considers whether to make a family provision order (s 59(2)). It
may
take into consideration, then, the matters referred to in s 60(2) of the Act. In
this way, the court carries out a two-stage
process.
- Other
than by reference to the provision made in the will of the deceased, or by the
operation of the intestacy rules in relation
to the estate of the deceased, or
both, s 59(1)(c) leaves undefined the norm by which the court must determine
whether the provision,
if any, is inadequate for the applicant's proper
maintenance, education and advancement in life. The question would appear to be
answered by an evaluation that takes the court to the provision actually made in
the deceased's Will, or on intestacy, or both, on
the one hand, and to the
requirement for maintenance, education and advancement in life of the applicant
on the other. No criteria
are prescribed in the Act as to the circumstances that
do, or do not, constitute inadequate provision for the proper maintenance,
education and advancement in life of the applicant.
- It
was said in the court of Appeal (per Basten JA) in Foley v Ellis [2008]
NSWCA 288 at [3], that the state of satisfaction "depends upon a multi-faceted
evaluative judgment".
- Importantly,
there no longer appears to be any sanction, in s 59(1)(c) of the Act, to
consider the provision made by the deceased
during his, or her, lifetime for the
applicant (see, s 9(2) of the former Act).
- Under
both s 59(1)(c) and s 59(2) of the Act, the time at which the court gives its
consideration to the question is the time when
the court is considering the
application.
- "Provision"
is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA
54 at [34], that the term "covers the many forms of support and assistance which
one individual can give to another. That support and assistance
will vary over
the course of the person's lifetime".
- Neither
are the words 'maintenance' and 'advancement in life' defined. However, in
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon
JJ, at [115], said, of the words 'maintenance', 'support' and 'advancement':
"'Maintenance' may imply a continuity of a pre-existing state of
affairs, or provision over and above a mere sufficiency of means
upon which to
live. 'Support' similarly may imply provision beyond bare need. The use of the
two terms serves to amplify the powers
conferred upon the court. And,
furthermore, provision to secure or promote 'advancement' would ordinarily be
provision beyond the
necessities of life. It is not difficult to conceive of a
case in which it appears that sufficient provision for support and maintenance
has been made, but that in the circumstances, say, of a promise or an
expectation reasonably held, further provision would be proper
to enable a
potential beneficiary to improve his or her prospects in life, or to undertake
further education."
- In
In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77 King CJ
said:
"The words 'advancement in life' have a wide meaning and
application and there is nothing to confine the operation of the provision
to an
earlier period of life in the members of the family: Blore v Lang [1960] HCA 73; (1960)
104 CLR 124, per Dixon CJ at 128."
- In
Mayfield v Lloyd-Williams [2004] NSWSC 419, White J noted:
"In the context of the Act the expression "advancement in life" is
not confined to an advancement of an applicant in his or her younger
years. It
is phrase of wide import. ( McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566 at 575)
The phrase "advancement in life" has expanded the concept used in the Victorian
legislation which was considered in Re Buckland permitting provision to
be made for the "maintenance and support" of an eligible applicant. However Adam
J emphasised that in a large
estate a more extravagant allowance for
contingencies could be made than would be permissible in a small estate and
still fall within
the conception of maintenance and support."
- The
word 'adequate' connotes something different from the word 'proper'. 'Adequate'
is concerned with the quantum, whereas 'proper'
prescribes the standard, of the
maintenance education and advancement in life: Devereaux-Warnes v Hall [No 3]
[2007] WASCA 235; (2007) 35 WAR 127 at [72] and at [77] per Buss JA.
- Each
of the words were considered by Lord Romer in delivering the advice of the Privy
Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable
importance. It connotes something different from the word 'adequate'.
A small
sum may be sufficient for the 'adequate' maintenance of a child, for instance,
but, having regard to the child's station
in life and the fortune of his father,
it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may
be quite insufficient
for the 'adequate' maintenance of a child and yet may be
sufficient for his maintenance on a scale that is 'proper' in all the
circumstances."
- Dixon
CJ and Williams J, in McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566 at 571, after
citing Bosch v Perpetual Trustee Co Ltd , went on to say, of the word
'proper', that:
"It means "proper" in all the circumstances of the case, so that
the question whether a widow or child of a testator has been left
without
adequate provision for his or her proper maintenance, education or advancement
if life must be considered in the light of
the competing claims upon the bounty
of the testator and their relative urgency, the standard of living his family
enjoyed in his
lifetime, in the case of a child his or her need of education or
of assistance in some chosen occupation and the testator's ability
to meet such
claims having regard to the size of his fortune. If the court considers that
there has been a breach by a testator of
his duty as a wise and just husband or
father to make adequate provision for the proper maintenance education or
advancement in life
of the applicant, having regard to all these circumstances,
the court has jurisdiction to remedy the breach and for that purpose
to modify
the testator's testamentary dispositions to the necessary extent."
- In
Goodman v Windeyer (1980) 144 CLR 490, Gibbs J said at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are
no fixed standards, and the court is left to form opinions upon
the basis of its
own general knowledge and experience of current social conditions and
standards."
- In
Vigolo v Bostin at [114], Callinan and Heydon JJ said:
"[T]he use of the word "proper" ... implies something beyond mere
dollars and cents. Its use, it seems to us, invites consideration
of all the
relevant surrounding circumstances and would entitle a court to have regard to a
promise of a kind which was made here
... The use of the word "proper" means
that attention may be given, in deciding whether adequate provision has been
made, to such
matters as what use to be called the 'station in life' of the
parties and the expectations to which that has given rise, in other
words,
reciprocal claims and duties based upon how the parties lived and might
reasonably expect to have lived in the future."
- The
first stage of the process provided for by s 59(1)(c) has been described as "the
jurisdictional question": Singer v Berghouse (No 2) [1994] HCA 40; (1994)
181 CLR 201 at 208-209. At this stage, the court will consider whether it can
make an order for provision for the maintenance, education and advancement
in life of a particular applicant.
- Whether
the applicant has a 'need' is a relevant factor at the first stage of the
enquiry. It is an element in determining whether
'adequate' provision has been
made for the 'proper' maintenance education and advancement in life of the
applicant in all of the
circumstances: Collins v McGain [2003] NSWCA 190
[42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).
- Tobias
JA said:
"42. There can be no question that, at least as part of the first
stage of the process, the question of whether the eligible person
has a relevant
need of maintenance etc is a proper enquiry. This is so as the proper level of
maintenance etc appropriate for an
eligible person in all the circumstances
clearly calls for a consideration of his or her needs. However, the question of
needs must
not be too narrowly focused. It must, in my view, take into account,
depending upon the particular circumstances of the case, present
and future
needs including the need to guard against unforeseen contingencies.
...
47. As I have observed, the issue of need is not confined to whether or not
an eligible person has, at the date of hearing, a then
need for financial
assistance with respect to his maintenance etc. It is a broader concept. This is
so because the question of needs
must be addressed in the context of the
statutory requirement of what is "proper maintenance etc" of the eligible
person. It is the
cause of that context that, in the present case, the "proper
maintenance etc" of the appellant required consideration to guard against
the
contingency to which I have referred."
- In
Devereaux-Warnes v Hall [No 3] at [81]-[85], Buss JA said, in respect of
the first stage of the process:
"The term 'need' has been used to refer to the claimant's inability
to satisfy his or her financial requirements from his or her own
resources. See
Singer per Gaudron J at 227.
'Need' has also been used in the context of a value judgment or conclusion,
namely, that the claimant is 'in need' of maintenance,
etc, because inadequate
provision has been made for his or her proper maintenance, etc. See Gorton v
Parks (1989) 17 NSWLR 1 per Bryson J at 10-11.
The determination of whether the disposition of the deceased's estate was not
such as to make adequate provision for the proper maintenance,
etc, of the
claimant will always, as a practical matter, involve an evaluation of the
provision, if any, made for the claimant on
the one hand, and the claimant's
'needs' that cannot be met from his or her own resources on the other. See
Hunter per Kirby P at 575.
Although the existence or absence of 'needs' which the claimant cannot meet
from his or her own resources will always be highly relevant
and, often,
decisive, the statutory formulation, and therefore the issue in every case, is
whether the disposition of the deceased's
estate was not such as to make
adequate provision for his or her proper maintenance, etc. See Singer per
Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v
McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."
- In
the event that the court is satisfied that the power to make an order is
enlivened (i.e. it is satisfied that the applicant is
an eligible person, and,
where necessary, that factors warranting have been satisfied, and that adequate
provision for the proper
maintenance, education or advancement in life of the
person has not been made), then, the court determines whether it should
make an order, and if so, the nature of any such order, having regard to the
facts known to the court at the time the order is made.
- The
second stage of the process arises under s 59(2) and s 60(1)(b). Mason CJ, Deane
and McHugh JJ, in Singer v Berghouse , at 211, affirmed that the decision
made at the second stage involves an exercise of discretion in the accepted
sense. The fact that
the court has a discretion means that it may refuse to make
an order even though the jurisdictional question has been answered in
the
applicant's favour.
- Section
60 of the Act, at least in part, is new. It provides:
"(1) The court may have regard to the matters set out in subsection
(2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the
"applicant") is an eligible person , and
(b) whether to make a family provision order and the nature of any such
order.
(2) The following matters may be considered by the court :
(a) any family or other relationship between the applicant and the deceased
person , including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the
deceased person to the applicant , to any other person
in respect of whom an
application has been made for a family provision order or to any beneficiary of
the deceased person 's estate,
(c) the nature and extent of the deceased person 's estate (including any
property that is, or could be, designated as notional estate
of the deceased
person ) and of any liabilities or charges to which the estate is subject, as in
existence when the application is
being considered,
(d) the financial resources (including earning capacity) and financial needs,
both present and future, of the applicant , of any other
person in respect of
whom an application has been made for a family provision order or of any
beneficiary of the deceased person
's estate,
(e) if the applicant is cohabiting with another person-the financial
circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant , any
other person in respect of whom an application has been
made for a family
provision o r der or any beneficiary of the decease d person 's estate that is
in existence when the application
is being considered or that may reasonably be
anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the
acquisition, conservation and improvement of the estate
of the deceased person
or to the welfare of the deceased person or the deceased person 's family,
whether made before or after the
deceased person 's death, for which adequate
consideration (not including any pension or other benefit) was not received, by
the
applicant ,
(i) any provision made for the applicant by the deceased person , either
during the deceased person 's lifetime or made from the deceased
person 's
estate,
(j) any evidence of the testamentary intentions of the deceased person ,
including evidence of statements made by the deceased person
,
(k) whether the applicant was being maintained, either wholly or partly, by
the deceased person before the deceased person 's death
and, if the court
considers it relevant, the extent to which and the basis on which the deceased
person did so,
(l) whether any other person is liable to support the applicant ,
(m) the character and conduct of the applicant before and after the date of
the death of the deceased person ,
(n) the conduct of any other person before and after the date of the death of
the deceased person ,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the court considers relevant, including matters in
existence at the time of the deceased person 's death or at
the time the
application is being considered."
- It
can be seen that s 60(2) enumerates 15 specific matters which the court may take
into account, together with "any other matter
the court considers relevant", for
the purposes of determining eligibility, whether to make a family provision
order , and, if so,
the nature of any such order. There is no mandatory command
to take into account any of the matters enumerated. None of the matters
differentiate in their application between classes of eligible person.
Similarly, there is no distinction based on gender.
- Considering
each of the relevant matters does not prescribe a particular result, and whilst
there is likely to be a substantial overlap
in the matters that the court may
take into account when determining the answers to what is posed in s 60(1),
those matters are not
identical. For example, when considering eligibility under
sub-s (1)(a), many of the matters in ss (2) will be largely, if not wholly,
irrelevant.
- Furthermore,
consideration of some of the matters in s 60(2) not only permits, but requires,
a comparison to be made between the respective
positions of the applicant and of
other eligible persons as well as of the beneficiaries named in the deceased's
will, whilst others
do not. Importantly, also, many of the matters in ss (2), of
themselves, are incapable of providing an answer to the questions posed
in s
60(1).
- Leaving
aside the question of eligibility, the matters referred to in s 60(2) may be
considered on "the discretionary question", namely
whether to make an order and
the nature of that order. Importantly, under s 60(2), attention is drawn to
matters that may have existed
at the deceased's death, or subsequently.
- This
does not mean, however, that some of the matters referred to in s 60(2) will not
be relevant to the jurisdictional question to
be determined at the first stage.
I am comforted in reaching this conclusion by the following comments made in
Singer v Berghouse (at 209-210):
"... The determination of the first stage in the two-stage process
calls for an assessment of whether the provision (if any) made
was inadequate
for what, in all the circumstances, was the proper level of maintenance etc
appropriate for the applicant having regard,
amongst other things, to the
applicant's financial position, the size and nature of the deceased's estate,
the totality of the relationship
between the deceased and other persons who have
legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar
considerations. Indeed, in the first stage of the process,
the court may need to
arrive at an assessment of what is the proper level of maintenance and what is
adequate provision, in which
event, if it becomes necessary to embark upon the
second stage of the process, that assessment will largely determine the order
which
should be made in favour of the applicant."
- And
by the comments of Callinan and Heydon JJ in Vigolo v Bostin (at
230-231):
"We do not therefore think that the questions which the court has
to answer in assessing a claim under the Act necessarily always
divide neatly
into two. Adequacy of the provision that has been made is not to be decided in a
vacuum, or by looking simply to the
question whether the applicant has enough
upon which to survive or live comfortably. Adequacy or otherwise will depend
upon all of
the relevant circumstances, which include any promise which the
testator made to the applicant, the circumstances in which it was
made, and, as
here, changes in the arrangements between the parties after it was made. These
matters however will never be conclusive.
The age, capacities, means, and
competing claims, of all the potential beneficiaries must be taken into account
and weighed with
all of the other relevant factors."
- Section
61 of the Act permits the court to disregard the interests of any other person
by, or in respect of whom, an application for
a family provision order may be
made (other than a beneficiary of the deceased's estate), but who has not made
an application. However,
the court may disregard any such interests only if:
(a) notice of the application, and of the court's power to
disregard the interests, is served on the person concerned, in the manner
and
form prescribed by the regulations or rules of court; or
(b) the court determines that service of any such notice is unnecessary,
unreasonable or impracticable in the circumstances of the
case.
- Section
65(1) of the Act requires the family provision order to specify:
(a) the person or persons for whom provision is to be made; and
(b) the amount and nature of the provision; and
(c) the manner in which the provision is to be provided and the part or parts
of the estate out of which it is to be provided; and
(d) any conditions, restrictions or limitations imposed by the court.
- The
order for provision out of the estate of a deceased person may be made in a
variety of ways, including a lump sum, periodic sum,
or "in any other manner
which the court thinks fit" (s 65(2) of the Act). If the provision is made by
payment of an amount of money,
the order may specify whether interest is payable
on the whole, or any part, of the amount payable for the period, and, if so, the
period during which interest is payable and the rate of interest (s 65(3) of the
Act).
- The
order may be made, relevantly, in this case, in relation to the estate of the
deceased. As the deceased died leaving a Will, his
estate includes all property
that would, on a grant of probate of the Will, vest in the executor of the Will
(s 63 of the Act).
- Any
family provision order under the Act will take effect, unless the court
otherwise orders, as if the provision was made in a codicil
to the Will of the
deceased, or in the case of intestacy, as in a Will of the deceased (s 72(1) of
the Act).
- Section
66 of the Act sets out the consequential and ancillary orders that may be made.
- The
court, also, may, at the time of distribution of an estate that is insufficient
to give effect to a family provision order, make
such orders concerning the
abatement, or adjustment, of distributions from the estate, as between the
person in whose favour the
family provision order is made and the other
beneficiaries of the estate as it considers to be just and equitable among the
persons
affected (s 72(2) of the Act).
Applicable Legal Principles
- In
addition to the above matters, there are some general principles that are
relevant to the facts of this case. Whilst most of these
principles were stated
in the context of the previous legislation, they are equally apt in a claim such
as this one.
- Bryson
J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the
former Act, that it is not appropriate, to endeavour to achieve a 'fair'
disposition of the deceased's
estate. It is not part of the court's role to
achieve some kind of equity between the various claimants. The court's role is
not
to reward an applicant, or to distribute the testator's estate according to
notions of fairness or equity. Rather, the court's role
is of a specific type
and goes no further than the making of 'adequate' provision in all the
circumstances for the 'proper' maintenance,
education and advancement in life of
an applicant.
- In
Stott v Cook (1960) 33 ALJR 447 at 450, Taylor J, although dissenting in
his determination of the case, observed, at 453-4, that the Court did not have a
mandate
to rework a will according to its own notions of fairness. His Honour
added:
"There is, in my opinion, no reason for thinking that justice is
better served by the application of abstract principles of fairness
than by
acceptance of the judgment of a competent testator whose knowledge of the
virtues and failings of the members of his family
equips him for the
responsibility of disposing of his estate in far better measure than can be
afforded to a Court by a few pages
of affidavits sworn after his death and which
only too frequently provide but an incomplete and shallow reflection of family
relations
and characteristics. All this is, of course, subject to the proviso
that an order may be made if it appears that the testator has
failed to
discharge a duty to make provision for the maintenance, education or advancement
of his widow or children. But it must
appear, firstly, that such a duty existed
and, secondly, that it has not been discharged."
- In
Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the court
to be vigilant in guarding "against a natural tendency to reform the testator's
will according
to what it regards as a proper total distribution of the estate
rather than to restrict itself to its proper function of ensuring
that adequate
provision has been made for the proper maintenance and support of an applicant".
- The
court's discretion is not untrammelled, or to be exercised according to
idiosyncratic notions of what is thought to be fair, or
in such a way as to
transgress, unnecessarily, upon the deceased's freedom of testation (
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA
19; (1961) 107 CLR 9, per Dixon CJ at 19); McKenzie v Topp [2004] VSC 90
at [63]. Freedom of testamentary disposition remains a prominent feature of the
Australian legal system. Its significance is both practical
and symbolic and
should not be underestimated.
- Yet,
in considering the question, the nature and content of what is adequate
provision for the proper maintenance, education and advancement
in life, is not
fixed or static. Rather, it is a flexible concept, the measure of which should
be adapted to conform with what is
considered to be right and proper according
to contemporary accepted community standards: The Pontifical Society for the
Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, 17
May 1996, unreported); Vigolo v Bostin at [11]; Stern v Sekers; Sekers
v Sekers [2010] NSWSC 59.
- The
Act is not a "destitute persons Act", and it is not necessary, therefore, that
the applicant should be destitute to succeed in
obtaining an order: In re
Allardice, Allardice v Allardice (1909) 29 NZLR 959 at 966.
- In
relation to a claim under the Act by an adult child of the deceased, the
following matters should also be noted:
(a) 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.
(b) It is impossible to describe in terms of universal application, the moral
obligation, or community expectation, of a parent in
respect of an adult child.
It can be said that, ordinarily, the community expects parents to raise, and
educate, their children to
the very best of their ability while they remain
children; probably to assist them with a tertiary education, where that is
feasible;
where funds allow, to provide them with a start in life - such as a
deposit on a home, although it might well take a different form.
The community
does not expect a parent, in ordinary circumstances, to provide an unencumbered
home, or to set their children up in
a position where they can acquire a home
unencumbered, although in a particular case, where assets permit and the
relationship between
the parties is such as to justify it, there might be such
an obligation [ McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia
[2009] NSWSC 801].
(c) Generally, also, the community does not expect a parent to look after
his, or her, child for the rest of the child's life and
into retirement,
especially when there is someone else, such a spouse, who has a prime obligation
to do so. Plainly, if an adult
child remains a dependent of a parent, the
community usually expects the parent to make provision to fulfil that ongoing
dependency
after death. But where a child, even an adult child, falls on hard
times and where there are assets available, then the community
may expect a
parent to provide a buffer against contingencies; and where a child has been
unable to accumulate superannuation or
make other provision for their
retirement, something to assist in retirement where otherwise they would be left
destitute: Taylor v Farrugia .
(d) In the case of a child who has maintained herself, or himself, and had,
perhaps, accumulated means, that child might well be expected
to be able to
fight the battle of life without any extraneous assistance. But, even in such a
case, if the fight were proved to be
a great struggle, and some aid might help
in that struggle, and the means of the deceased were sufficient, the Court might
properly
provide aid by means of an order: In re Allardice per Stout CJ.,
at 969.
(e) There is no obligation upon the deceased to have treated all of his, or
her, children by making provision that is equal. In Carey v Robson &
Anor; Nicholls v Robson & Anor [2009] NSWSC 1142, Palmer J commented:
"57 The strongest ground for relief urged by Rosemary and Marion, though put
somewhat obliquely, is that the provision made for them
by the testator is
vastly disproportionate to the provision made for Alan. One can understand the
sense of grievance which one child
may have at being treated by a parent
differently from another child. Some may be tempted to think that great
disproportionality
of testamentary treatment in itself indicates some essential
error in the testamentary process which requires amelioration under
the
Family Provision Act so as to achieve approximate equality between a
testator's children.
58 That is not, of course, a position from which one can begin in this, or in
any other case under the family provision legislation."
(f) Menzies and Fullager JJ in Blore v Lang [1960] HCA 73; (1960) 104 CLR 124 at
134-5, commented:
"Bad conduct or character may disentitle a member of the family to needed
assistance, but good conduct and honest worth are not to
be rewarded by a
generous but second-hand legacy at the hands of the Court. Nor, in a case where
a testator has chosen to dispose
of his estate according to his inclination,
ought the generous treatment of a child who has no need of the testator's bounty
be used
to determine the provision to be made for a child whose need has been
disregarded or overlooked. The measure to be applied is not what has been
given to one, but what the other needs for his or her proper maintenance, giving
due
regard to all the circumstances of the case... The Act is legislation
for remedying... breaches of a testator's moral duty to make adequate provision
for the proper maintenance
of his family - not for the making of what may appear
to the Court to be a fair distribution of a deceased person's estate among
the
members of his family. As it has been said in another context, the Act is to
provide maintenance, not legacies. Equality is not something to be achieved
by the application of the Act, although in some cases equality may set a limit
to the order
to be made- for instance where there is not enough to provide
proper maintenance for all entitled to consideration whose need is
the same."
(My emphasis)
Their Honours also added, rather colourfully, in respect of "a married woman
with a healthy husband in satisfactory employment who
supports her in reasonable
comfort" that, "[H]er need is not for the bread and butter of life, but for a
little of the cheese or
jam that a wise and just parent would appreciate should
be provided if circumstances permit".
(g) Even more vividly, but to similar effect, is the approach in Worladge
v Doddridge [1957] HCA 45; (1957) 97 CLR 1 at 12, in which Williams and Fullagar JJ
approved the following statement, in Re Harris (1936) 5 SASR 497 at 501:
"Proper maintenance is (if circumstances permit) something more than a
provision to keep the wolf from the door - it should at least
be sufficient to
keep the wolf from pattering around the house or lurking in some outhouse in the
backyard - it should be sufficient
to free the mind from any reasonable fear of
any insufficiency as age increases and health and strength gradually fail."
(h) There is no need for an adult child to show some special need or some
special claim: McCosker v McCosker ; Kleinig v Neal (No 2) [1981]
2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v
Prestage (1989) 1 WAR 37 per Nicholson J at 45.
Credibility of Witnesses
- I
am satisfied that, generally, there were not many facts seriously in dispute.
The cross-examination of the parties, and of Mrs Thorne,
was very short and
really did no more than elicit information to clarify what had been written.
Additional Facts
- I
set out the additional facts I am satisfied are either not in dispute, or that,
in my view, have been established by the evidence.
I do so by reference to s 60
of the Act.
(a) any family, or other, relationship between the applicant and
the deceased pe rson, including the nature and duration of the relationship
- The
Plaintiff is the daughter of the deceased. She resided with her parents until
they separated in 1999. About 3 months after the
separation, the Plaintiff moved
in with the deceased at the Mt Kembla property. She remained living with him
until 2003. Thereafter,
they still maintained a high level of contact with each
other.
- The
Plaintiff's relationship with the deceased was happy, loving and harmonious (as
was the Defendant's). I am satisfied that the
Plaintiff was a loving daughter to
the deceased.
(b) the nature and extent of any obligations or responsibilities
owed by the deceased person to the applicant, to any other person
in respect of
whom an application has been made for a family provision order or to any
beneficiary of the deceased person's estate
- Leaving
aside any obligation, or responsibility, arising as a result of their
relationship as parent and child, the deceased did not
have any legal, or
financial, obligation to the Plaintiff imposed upon him by statute or common
law.
- However,
an obligation, or responsibility, to make adequate provision for the Plaintiff's
proper maintenance and advancement in life
is usually recognised in the case of
a child.
- The
deceased did not assume any obligation, and responsibility, towards the
Defendant either. Any obligation, or responsibility, otherwise,
was that
naturally arising from his parental relationship to her.
(c) the nature and extent of the deceased person's estate
(including any property that is, or could be, designated as notional estate
of
the deceased person) and of any liabilities or charges to which the estate is
subject, as in existence when the application is
being considered
- I
have dealt with this earlier in this judgment. On any view, the deceased's
estate is not a large one.
- There
is no relevant notional estate. Other than costs of the proceedings the only
liabilities left to be paid out of the estate are
estimated to be about $14,000.
(d) the financial resources (including earning capacity) and
financial needs, both present and future, of the applicant, of any other
person
in respect of whom an application has been made for a family provision order or
of any beneficiary of the deceased person's
estate
- The
Plaintiff worked, part time, as a shop assistant in a florist shop until late
August 2010, when she took maternity leave. She
has returned to work, one day
per week. She earns about $100 per week net. She receives family assistance,
each quarter ($300) and
a baby bonus allowance, by way of fortnightly payments
($407). It is not clear, from the evidence, how long that assistance will
last.
- Her
husband, Daniel Slater, is employed. In the year ending 30 June 2010, he had a
gross income of $70,707.
- The
Plaintiff sets out her assets and liabilities as follows:
Assets
|
(a)
|
House at Dapto (jointly owned with husband)
|
$350,000
|
|
(b)
|
Savings in Plaintiff's name only
|
$14,000
|
|
(c)
|
Superannuation (Plaintiff)
|
$18,000
|
|
(d)
|
Motor vehicle:
|
$32,400
|
Liabilities
|
(a)
|
Mortgage to IMB Limited - joint
|
$191,000
|
|
(b)
|
Balance of loan from Allyson Thorne to purchase car)
|
$27,000
|
- The
Plaintiff also sets out her husband's assets and liabilities as follows:
Joint Assets
|
(a)
|
House at Dapto (jointly owned with husband):
|
$350,000
|
Sole Assets of Husband
|
(a)
|
Savings Account:
|
$2,000
|
|
(b)
|
Superannuation:
|
$46,600
|
|
(c)
|
Motor vehicle:
|
$12,000
|
Liabilities
|
(a)
|
Mortgage to IMB Limited - joint:
|
$191,000
|
- The
Plaintiff estimates the family's monthly expenses at $4,473, which estimate
includes the repayments of mortgage ($2,000 per month).
The surplus of income
over expenditure is about $100 per month, although, it is likely, that this
amount varies.
- The
Plaintiff says that:
(a) she and her husband do not have any savings;
(b) their home requires repair and maintenance, the total costs of which are
estimated to be $12,370;
(c) she requires a fund to enable her to pay off debts;
(d) she requires a capital sum for exigencies of life.
- It
was submitted that the Plaintiff should receive a lump sum of $290,000.
- The
Defendant sets out her financial and material circumstances, and that of her
fiance, as follows:
(a) She is 37 years old.
(b) She works as a florist and has an interest in a florist shop (although
the value of the florist business is not disclosed).
(c) She and her fiance, Mark White, own a residence at Farmborough Heights
with an estimated value of between $400,000 and $430,000,
which is subject to a
debt of approximately $5,500 secured by mortgage and other debts of
approximately $10,000.
(d) She and Mr White have cash savings of about $14,342, two cars, with an
estimated combined value of $10,000. Mr White has a fishing
boat ($12,000).
(e) She has superannuation entitlements of $6,628, whilst Mr White's
superannuation is estimated to be $57,684.
(f) The Defendant and Mr White have a four year old child and also support,
in their home, the son of a previous relationship of Mr
White, who is 19 years
old. Child-care costs for their son is estimated to be $577 per month.
(g) The Defendant's and Mr White's estimated average combined after-tax
income is approximately $1,258.
(e) if the applicant is cohabiting with another person - the financial
circumstances of the other person
- The
Plaintiff is co-habiting with her husband and their two children, one of whom
was born in May 2007, and the other, who was born
in September 2010. The
financial circumstances of her husband have been set out above.
- There
is some question whether the Plaintiff's son is the beneficiary of a trust fund
created by the deposit into a bank account of
moneys by Mrs Thorne. However,
this is tangential to the issues in the proceedings (although the Plaintiff's
debt of $27,000, to
which reference has been made above, relates to an amount
borrowed ($32,000) from this fund to purchase a car).
(f) any physical, intellectual or mental disability of the
applicant, any other person in respect of whom an application has been
made for
a family provision order or any beneficiary of the deceased person's estate that
is in existence when the application is
being considered or that may reasonably
be anticipated
- The
Plaintiff suffers from no physical, intellectual, or mental, disability.
However, following the death of the deceased, she did
have to attend trauma
counselling. She still suffers from anxiety issues surrounding the deceased's
death. It may reasonably be anticipated
that, with time, these issues will
resolve.
- The
Defendant says that she is not in good health. She suffers from depression and
anxiety and takes anti-depressant medication to
relieve her symptoms. She also
has problems with her right wrist. She sees her doctor once every 2 months or
so. There was no evidence
as to when, or if, these issues will resolve.
(g) the age of the applicant when the application is being
considered
- The
Plaintiff is presently 33 years of age. She was born in March 1978.
(h) any contribution (whether financial or otherwise) by the
applicant to the acquisition, conservation and improvement of the estate
of the
deceased person or to the welfare of the deceased person or the deceased
person's family, whether made before or after the
deceased person's death, for
which adequate consideration (not including any pension or other benefit) was
not received, by the applicant
- The
Plaintiff does not specifically identify any financial contributions to the
acquisition, conservation and improvement of the estate
of the deceased. She
says, however, that when she lived with the deceased between 1999 and 2003, she
assisted him with small renovations
and improvements to the Mt Kembla property,
including assisting with removing old carpet, repainting the interior of the
house, and
helping him build a retaining wall outside the home. She also made
curtains and otherwise attended to domestic duties. They shared
cooking and
washing.
- In
relation to the welfare of the deceased, the Plaintiff says, and I accept, that
she cared for the deceased. She says that, with
the Defendant, she assisted him
in the last weeks of his life. They would spend time together, often and
regularly.
- It
was not suggested that the Plaintiff received adequate consideration (not
including any pension or other benefit) for what she
did.
(i) any provision made for the applicant by the deceased person,
either during the deceased person's lifetime or made from the deceased
person's
estate
- The
deceased made no specific provision, during his lifetime, for the Plaintiff. He
did not provide any gifts or other benefits. The
Plaintiff receives one half of
residue under the deceased's Will.
(j) any evidence of the testamentary intentions of the deceased
person, including evidence of statements made by the deceased person
- There
is some evidence of the testamentary intentions of the deceased and the reasons
why he made his Will in the way that he did.
It was common ground that his
decision to leave the Mt Kembla property to the Defendant and the residue
divided equally between the
Plaintiff and the Defendant was based upon the
expectation that Mrs Thorne intended to leave her home to the Plaintiff and that
she
would divide the residue of her estate between the Plaintiff and the
Defendant (all of which she has done).
(k) whether the applicant was being maintained, either wholly or
partly, by the deceased person before the deceased person's death
and, if the
court considers it relevant, the extent to which and the basis on which the
deceased person did so
- There
is no evidence that the deceased maintained the Plaintiff, either wholly, or
partly, before his death.
(l) whether any other person is liable to support the applicant
- Apart
from the Commonwealth government's limited responsibility to continue to provide
the Plaintiff with the family assistance and
baby bonus, there is no other
person with a liability to support the Plaintiff.
(m) the character and conduct of the applicant before and after
the date of the death of the deceased person
- The
Act does not limit the consideration of "conduct" to conduct towards the
deceased. There is nothing to suggest any conduct of
the type towards the
deceased that might disentitle the Plaintiff to relief under the Act.
- To
their credit, the parties were not critical of each other so far as the
relationship of each with the deceased was concerned.
(n) the conduct of any other person before, and after, the date
of the death of the deceased person
- It
was not suggested that the relationship of the deceased with the Defendant was
in any respects different to that of the Plaintiff
and the deceased. She is the
chosen object of the deceased's testamentary beneficence in respect of the Mt
Kembla property, but that
is explicable, other than by reference to her being
regarded by the deceased in any special way.
- It
is clear that the Defendant, too, had a close, happy and loving relationship
with the deceased and like the Plaintiff, seemed to
have done all that she could
to assist him after his diagnosis with cancer.
(o) any relevant Aboriginal or Torres Strait Islander customary
law
- This
is not relevant in the present case.
(p) any other matter the court considers relevant, including
matters in existence at the time of the deceased person's death or at
the time
the application is being considered
- There
are no other matters that I consider relevant.
Determination
- There
is no dispute that the Plaintiff is an eligible person within the meaning of
that term in s 57(1)(c) of the Act. It is, thus,
unnecessary to consider whether
there are any factors warranting the making of her application.
- As
the Plaintiff's proceedings have been commenced within the time prescribed by
the Act, the first question for determination is
whether, at the time when the
court is considering the application, adequate provision for the proper
maintenance, education or advancement
in life of the person in whose favour the
order is to be made, has not been made, by the Will of the deceased, or by the
operation
of the intestacy rules in relation to the estate of the deceased, or
both.
- I
have set out the provision made for the Plaintiff in the deceased's Will. When
one considers, amongst other things, the Plaintiff's
financial position, the
size and nature of the deceased's estate, the totality of the relationship
between the Plaintiff and the
deceased, and the relationship between the
deceased and, relevantly, the Defendant, that adequate provision for the proper
advancement
in life of the Plaintiff 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, is, in my view, tolerably clear. In coming to this
conclusion, I have also considered the fact that
the Plaintiff has an expectancy
under the current Will of her mother. However, I cannot place too much weight on
this fact, since
her mother is only 60 years old, and may, at any time, alter
that Will.
- Whilst
it is true, as the Defendant's counsel submitted, that the Plaintiff and her
husband are able to pay their expenses as they
fall due, they do not have any
substantial savings, they have some superannuation, but they have a reasonably
significant mortgage.
Surplus monthly income is small and it is, no doubt,
variable.
- The
Defendant's counsel also, correctly, submits that the residue of the estate will
have been reduced because of the costs associated
with these proceedings, and
that those costs have altered the amount that the Plaintiff would have received
had the proceedings not
been commenced. In this regard, the Defendant referred
to her costs of the proceedings, which, if deducted from residue, would reduce
each party's share of residue to about $100,000.
- However,
even if the provision made for the Plaintiff were calculated as the value of one
half of residue, without deduction for costs,
I would have concluded that the
provision was neither adequate nor proper.
- It
is then necessary to consider whether to make a family provision order and the
nature of any such order.
- As
stated, previously, the Plaintiff submitted that, in lieu of the provision made
in the deceased's Will, she should receive a lump
sum of $290,000. That sum is
calculated as an amount to pay off the mortgage and to provide her with a sum of
$100,000 for exigencies
of life.
- As
stated, the Defendant submits that the Plaintiff's proceedings should be
dismissed. No submission was made, on behalf of the Defendant,
as to what would
constitute adequate and proper provision in the event that the principal
submission was not accepted.
- There
was certainly the view expressed by the Plaintiff, during cross-examination,
that the provision made for her in the deceased's
Will was "unfair" and that it
was this unfairness that should be remedied. I have previously set out the
principles that prevent
questions of "fairness" arising. I do not accept that
the freedom of testamentary disposition should be so encroached upon that the
deceased's decisions, as expressed in the Will, have only a prima facie effect,
the real dispositive power being vested in the court.
- In
my view, the Plaintiff should receive, in lieu of the provision made in the Will
of the deceased, a lump sum of $200,000.
- If
the Plaintiff uses that amount to pay off the joint mortgage, then family income
of $2,000 per month will become available. Then,
at least some, if not all, of
the repairs and renovations on the home, should be able to be completed with the
surplus funds if the
mortgage is paid out entirely. The debt payable to her
mother should not take too long to repay from the income saved if the monthly
mortgage repayments do not have to be made.
- In
coming to this lump sum, I have, of course, considered the nature and value of
the estate that would be left for the Defendant.
It seems to me that, subject to
the order for costs yet to be decided, she should be able to retain the Mt
Kembla property, if not
completely unencumbered, then with only a relatively
small debt secured by mortgage on it.
- Having
found that the Plaintiff is an eligible person and that the provision made for
her in the Will of the deceased is inadequate,
I order that, in lieu of the
provision made for the Plaintiff in the Will of the deceased, she is to receive
out of his estate, a
lump sum of $200,000.
- The
lump sum should be paid, as to $150,000, within 28 days, and as to the balance,
within 28 days thereafter, failing which, interest
on any amount not so paid,
should be paid, such interest to be calculated at the rate prescribed on unpaid
legacies, from that date
until the date of payment.
- I
order that the burden of the additional provision be borne by the Defendant. The
amount shall constitute a charge on the Mt Kembla
property until such time as it
is paid.
- I
have also considered whether I should make any order adjusting rights in the
event that Mrs Thorne leaves her current Will in place.
Leaving aside any power
to do so (the availability of which is questionable), I do not think I should do
so. It may be that Mrs Thorne
will consider whether she wishes to alter her Will
to take into account that the Plaintiff has received additional provision out
of
the deceased's estate. I had the impression that that had there been an
agreement between the parties she would do so.
- In
my view, as judicial intervention was required, it is a matter entirely for Mrs
Thorne whether she alters her Will.
- I
was requested by the parties to defer making any order for costs until after
these reasons were delivered and the parties had an
opportunity to consider
them. I shall stand the proceedings over to a mutually convenient date for any
argument as to costs.
**********
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