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Supreme Court of New South Wales |
Last Updated: 22 June 2011
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Decision:
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Orders:
1. The plaintiff receive a legacy of $150,000 out of the estate of the deceased and forgiveness of any debt she owes the estate. 2. The plaintiff's costs on the ordinary basis and the defendant's costs on the indemnity basis are to be paid or retained out of the estate of the deceased. 3. Interest is to run on the legacy at the rate provided in the Probate and Administration Act 1898 from three months after the date of these orders. |
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Catchwords:
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WILLS AND ESTATES - family provision claim -
competing claims or interests - contributions by the plaintiff - obligations
owed by
deceased - relationship with the
deceased - nature and extent of estate - charges on property - deceased's daughter sole beneficiary - daughter bankrupt - deceased severed joint tenancy with plaintiff prior to death - deceased and plaintiff living separately and apart under the one roof - plaintiff provided some financial support for deceased and cared for deceased until his death - whether deceased had a moral obligation towards plaintiff. |
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Legislation Cited:
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Cases Cited:
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Daemar v Industrial Commission of New South Wales (No
2) 22 NSWLR 178
Metherell v Public Trustee In Its Capacity As Executor of the Estate of the Late Official Receiver in Bankruptcy v Schultz [1990] HCA 45 Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120 at 123 to 124 Patricia Helen Peek [2010] WASC 205 Pevsner. Re [1983] FCA 119; (1983) 68 FLR 254 Silvia v Thompson (1989) 87 ALR 695 Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Sonenco (No 77) Pty Ltd v Silvia [1989] FCA 462; (1989) 24 FCR 105 at 112 and 117 |
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Parties:
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Representation
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Publication Restriction:
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Will of the deceased
Assets in the estate
Family history
Eligibility
"The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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 applicant and the deceased, and 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. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
Sondra Sturits
Vikki Sturits
Discussion
"By legislation of this kind, the legislature takes power to deal with a person's property, not as he or she would wish to deal with it, but because the legislature, through those it empowers, thinks that he or she should have dealt with it differently. It has taken this power not simply because the persons who may apply under the Act are without proper means: the justification is that the deceased owed a duty to the applicant, and that duty involved that the deceased should have dealt with his property differently, and the failure of duty is to be rectified.
As the cases have shown from the commencement of the history of this legislation, this duty is a moral duty."
"Whilst again emphasising that this list is non-exhaustive and is no more than guidelines, it would seem to me that the following cases would clearly be ones where there would be factors warranting the court considering the application:
(1) Except where the Family Court itself gives relief, cases where there has been a divorce and a spouse has died before property matters have been resolved by the Family Court;
(2) Cases where the husband and wife have not finally settled all their property dealings at the time of the divorce;
(3) Cases where maintenance was being paid to the ex-spouse as at the date of the deceased's death and the orders for maintenance were inadequate to provide for the ex-spouse after death of the paying spouse;
(4) Cases where despite the divorce there was some dependency on the deceased as at the date of death. An example of this would be where some years after the divorce the present plaintiff fell grievously ill and because of a residue of affection the now deceased spouse provided moneys for medical treatment or living expenses.
A fifth class of case is rather hard to define. Under the Testator's Family Maintenance and Guardianship of Infants Act there were a series of cases where persons whose marriage had got into problems had signed separation deeds or had maintenance orders against them or had had a decree nisi made which had not become absolute by the date of death. In such cases it was
consistently held that what a spouse is entitled to under the Testator's Family Maintenance and Guardianship of Infants Act cannot be concluded merely by considering whether the plaintiff would have been entitled in the spouse's lifetime to an order for maintenance: see, eg, Delacour v Waddington [1953] HCA 64; (1953) 89 CLR 117; Re Mayo [1968] 2 NSWR 709. Unreported decisions where these problems have been considered include Gray v Peil (Holland J, 11 February 1976, unreported) and Groth v Perpetual Trustee Co Ltd (Powell J, 16 October 1978, unreported): see also Re Howard (1925) 25 SR (NSW) 189; 42 WN 34 and Re Clissold [1970] 2 NSWR 619. In almost all of these cases, despite a limited maintenance order, a more generous order was made under
the Testator's Family Maintenance and Guardianship of Infants Act because as was pointed out by almost all the judges, the issue in the maintenance proceedings and the issue in the Testator's Family Maintenance proceedings was different, though of course, many factors overlapped. The probability is that these cases will continue to be followed in applications under the Family
Provision Act where the applicant is a widow or widower as opposed to being a former spouse. Apart from one type of case, it seems to me difficult to see how there are any special circumstances involved in such cases, especially where there has been an order of the Family Court of Australia in respect of
property, because the Family Law Act (Cth), s 81, is aimed at finally breaking all financial relations between the parties.
The one type of case in this category where there may be some special factor involved, is where there is a very small estate and whilst the parties are alive it was only possible to give a pittance to the claiming spouse because the other spouse needed funds to maintain his own life but that now one spouse is dead, the barrier to giving the other spouse the whole of the family property
has vanished. However, I merely raise these matters and leave this fifth class case for decision if a case comes to the Court raising those particular problems.
Clearly on the other side of the line is a case where there has been a determination between the spouses on a final basis by a competent court, and the orders of the court or the agreement between the parties sanctioned by the court have been performed and there has been no material change in circumstances other than the death of one of the parties. Somewhere between this type of case and the other five classes of case which I have discussed, the line must be drawn in respect of applications by ex-spouses - just where, may be able to be determined with more precision after there have been a larger number of cases before the court."
"Q. ... You didn't ever tell your mother, prior to your father's death, that your father had changed his will, did you?
A. No.
Q. You weren't ever present during a conversation in which your father told your mother he was going to change his will?
A. No.
Q. You weren't ever present when your father told your mother he was going to sever the joint tenancy on the home at North Narrabeen?
A. No.
Q. To your knowledge, your father never told your mother that he was going to sever the joint tenancy on the property at Narrabeen?
A. No.
Q. You are not aware of any of that, are you?
A. No.
Q. He did discuss it with you?
A. Not until after returning from E and A Lawyers.
Q. Just to repeat the question, you weren't ever present when your father said to your mother, "I am applying for a divorce"?
A. No.
Q. And you weren't ever present when the topic of a letter advising your mother of the severance of the joint tenancy was discussed by them, were you?
A. Yes, I was.
Q. I thought you said you weren't ever present when the topic of the severance was discussed by your mother and father?
A. What I understood you to say was when he ever brought up the severance and I have misunderstood you by meaning two situations, prior to the severance and at the stage when the letter was received in the mail. I was there when the letter was received in the mail.
Q. And how did your mother react, according to your evidence, when your father said, "I want to sever the tenancy on this house and put the property in two names"? How did your mother react to that?
A. She didn't understand the letter and asked dad to explain it. A lot of the time she didn't believe my father.
Q. Well, let us just stop there. What words did your father use when he sought to explain it?
A. "I am - I have applied for a divorce and I have been told by the lawyers that I need to sever the joint tenancy for this reason so that I can get my pension in full. The divorce and the - the severance of the tenancy are part of me getting my pension payments. This is why I am doing it".
Q. And according to what you have just said then, your mother didn't understand this, the severance of the joint tenancy?
A. No, not the severance of the joint tenancy.
Q. So what did your father say about that, explaining that?
A. He didn't - he didn't explain. He gave her the letter back.
Q. And what was your mother's reaction? What were her words? Did she say, "This is outrageous, it's my house"?
A. No.
Q. What did she say?
A. What did she say, she asked me to read the letter. She felt she could trust me at that time. She asked me to read the letter and please explain what it meant to her.
Q. And then what did she say?
A. She waited until I finished reading the letter. I then told her what I thought the letter meant.
Q. And what did she say then?
A. "That's fine. As long as your father can look after himself and pay for himself, I don't care".
Q. But this conversation didn't happen at all, did it?
A. Yes, it did.
Q. Because when, after your father's death, your mother learnt that he had changed his will and you were going to get your dad's estate, she became outraged, didn't she?
A. She did become outraged.
Q. Extremely outraged?
A. She did."
"[130] In Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639, Kirby P noted the public policy underlying the finality of settlements of property disputes and agreed with what had been said by Young J (as his Honour then was) in O'Shaughnessy v Mantle (1986) 7 NSWLR 142 (at 149) that in most cases the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Kirby P noted (at 652) nevertheless that:
[P]ublic policy, important though it is, must adapt itself to the new provisions of the Act, with its reforming inclusion of a specific entitlement of a former spouse to claim. That provision contemplates there will be cases where such a claim will succeed, notwithstanding the public policy [of finality of property settlement].
[131] Similarly, in Dijkhuijs' case, Mahoney JA said that it was inherent in the Family Provision legislation that, special cases apart, an order was only to be made if the deceased had defaulted in the performance of a duty which he owed to the particular plaintiff. His Honour said (at 657):
That does not mean that, if the plaintiff establishes a financial need within the section and if on taking into account the consideration referred to in s 9(2) (the discretionary considerations) there be nothing to the contrary, an order must be made . The statute assumes that the deceased, in what he has done during his life and by his will, has failed to discharge a duty which he owed to the plaintiff (the moral duty). Thus, a plaintiff may be a former spouse who, on dissolution of the marriage, received what on any view she was entitled to have and there may have been no further relationship between them so that none of the factors in s 9(3)(a) to s 9(3)(c), are of relevance. But, at the deceased's death, she may have a financial need. In such circumstances, the fact that the plaintiff has established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s 9(3)(d), the deceased had a duty to her which involved that he should have provided for her financial need (my emphasis).
[132] In Smith v Smith [1986] HCA 36; (1986) 161 CLR 217, however, the High Court pointed out that there was a very real difference between settling financial affairs between living persons under the Family Law Act and the position of persons entitled to make an application under a statute such as the Family Provision Act.
[133] Bryson J in Mulcahy v Weldon [2001] NSWSC 474 noted (at [22]), "According to general community standards a former spouse who has been accorded all rights under a property settlement and does not have any continuing entitlement to maintenance, adjudicated or not, is not generally regarded as a natural object of testamentary recognition. Although such testamentary recognition does occur, it is, in my understanding, regarded as altogether exceptional and remarkable when it occurs".
[134] In Ernst v Mowbray [2004] NSWSC 1140, Young CJ in Eq (as his Honour then was) considered what he had said in O'Shaughnessy v Mantle in relation to the effect of the Family Law Act on an application by a divorced spouse. His Honour noted (at [32]) that the ex-spouse might obtain an order under "limited circumstances" under the Family Provision Act such as where the parties had not finally settled all their property dealings at the time of the divorce or where there was continued financial dependency after the divorce.
[135] Here, no final property settlement orders were made, nor was there a binding financial agreement for the purposes of the Family Law Act. The parties were not divorced. Nevertheless, accepting that financial need of some degree is established by Mrs Scott, the question still remains what would be regarded as adequate provision for her in all the circumstances. Those circumstances must take into account both the fact of her separation from the deceased and the fact that, as between themselves, a division of their assets appears to have already been effected (albeit predicated on a 50:50 basis for all assets, as opposed to the 75:25 split required (in the absence of particular agreement) for the Long Jetty property).
[136] What then is the position of a spouse, separated from her husband, in circumstances where an informal division of assets has taken place and where it would seem the marital relationship is to all intents and purposes at an end?
[137] Considering the above authorities, it seems to me that, while Mrs Scott remained the deceased's wife even after their separation, and hence was a person for whom the community might expect the deceased to have made some provision for her continued support and maintenance in life (in recognition of the long marriage and her contribution to the building up of their joint assets and to his welfare in life), the community might also consider that a testator in the deceased's position had done "the right thing" by effecting an amicable division of their assets prior to his death and had limited, if any, further moral duty to support his widow.
[138] In Kalmar v Kalmar [2006] NSWSC 437, White J noted (at [50]) that the bond of matrimony, prima facie, gave rise to a testamentary obligation, citing Re Clissold (dec'd) [1970] 2 NSWR 619 at 621, and that it could not be assumed that that obligation would come to an end on the parties separating without their being divorced at least where there had been no disentitling conduct by the claimant (again citing Re Clissold , as well as Re Mercer (dec'd) [1977] 1 NZLR 469 at 472-473 which had been cited with approval in Palmer v Dolman [2004] NSWCA 361 at [118]).
[139] In Armstrong v Sloan [2002] VSC 229, Harper J in the Supreme Court of Victoria, noted (at [43]) that:
[A]rrangements made by a husband during his lifetime which on his death leave his widow in comfortable financial circumstances would ordinarily discharge his moral duty to make in his will adequate provision for her proper maintenance and support. That would (again, generally speaking) only not be so if, although comfortable, her circumstances did not allow her as a widow to maintain a standard of living comparable to that which she enjoyed as a wife.
[140] His Honour noted that a settlement reached under the Family Law Act does not necessarily preclude a claim by a former spouse for family provision but that in those circumstances different considerations come into play.
[141] In Armstrong v Sloan , Harper J considered that Mrs Armstrong's position was as close to that of a divorcee as could be in the absence of a divorce. There, his Honour considered that Mrs Armstrong was not left by the deceased without adequate provision for her proper maintenance and support but that, if she was, he would have exercised his discretion against the claim for further provision stating (at [56]) that "by giving effect to the settlement, Mr Anderson discharged his moral duty to his wife, and thereby removed the "legislative justification to abridge freedom of testation": Grey v Harrison [1997] 2 VR 359 at 365 per Callaway JA.
[142] On balance, I consider that Mrs Scott's position comes very close to that of Mrs Armstrong in that the marital bond had come to an end and the deceased had taken steps to effect what seems to have been an amicable and relatively fair (though not precise, having regarding to their unequal entitlements to the Long Jetty property) division of all of their assets so as to terminate any moral claim the deceased might have had to the spouse from whom he was separated (and with a degree of finality appreciated by both parties from at least six months before his death). Nevertheless, I accept that the deceased himself appeared to recognise that there was scope for Mrs Scott to regard their financial dealings as not finally resolved and I am prepared to accept that from a community perspective there was some moral claim remaining, given the length of this marriage and the subsistence of an amicable relationship between the couple for some period after their separation."
"This conclusion directly raises the question of whether the word 'ought' in s 7 of the Act carries with it an idea of moral obligation. In answering this question some guidance may be obtained from authoritative decisions under the Testator's Family Maintenance & Guardianship of Infants Act 1916 (as amended), using due care to take account of the differences between the two Acts.
...
It seems plain from the comparison of the two Acts, and particularly from s 3 of the 1916 Act and s 7 and s 9 of the present Act, that language from the earlier Act has been deliberately carried into the later one. It would seem that at least one purpose of this retention of much litigated sets of words is that the benefit of the authorities on those words may be available in the construction of the present Act. The same reasoning supports the view that where the new Act uses a different word in an important operative section from the word in the corresponding section of the earlier Act, the difference is deliberate and has a purpose.
The Act draws a distinction between the eligible persons referred to in par (a) and par (b) on the one hand and par (c) and par (d) on the other. Broadly speaking, the distinction can be seen as one between classes of people who, in the ordinary course of family life would, prima facie, be persons to whom the deceased person spoken of in s 3 of the 1916 Act and s 7 of the present Act would have an obligation to make provision, whereas those in the other class would, prima facie, not be regarded in the ordinary course of family life as being likely to be made the subject of provision by the deceased.
In regard to the first class, the more usual approach under the 1916 Act was that before making an order, the court needed to be satisfied that the testator ought to have made provision for the applicant, in all the circumstances of the case: see Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478-479 and Hughes v National Trustees Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 146-147 per Gibbs J, with whom Mason and Aickin JJ both agreed. However, there was a differing view, expressed by Murphy J, in the same case when, after commenting (at 158) that 'many cases suggest that an applicant must show a moral claim ...', he went on to say that this was a gloss on the Act that was unwarranted and inconsistent with the language of the legislative scheme.
It seems to me that the introduction into s 7 of the present Act of the word 'ought' in replacement of the words from s 3 of the 1916 Act 'as the Court thinks fit' shows the intention of the present Act to accept the approach adopted by the majority in Hughes and to reject that of Murphy J. The word 'ought' seems to be deliberately adopted, in the present Act, from what Gibbs J called the classical statement in Bosch . To my mind, this is a very clear indication that an eligible person within par (c) and par (d) must show a moral claim on the estate before an order can be made; I also think this is the same thing as saying that the deceased person must have had a moral obligation to that eligible person. It is hard to imagine how the one could exist without the other. It seems to me that the same reasoning is very probably applicable to applications by eligible persons within par (a) and par (b) although it is unnecessary to decide that in this case."
"Whether an order should be made raises (as it has been described) the moral or normative question. That question remains, whether the application is made under the former or the present Act. The nature of that question was discussed in this Court and in the High Court in White v Barron [1980] HCA 14; (1980) 144 CLR 431; and in Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490: see, also, Kearns v Ellis (Court of Appeal 5 December 1984 unreported) and Gorton v Parks (1989) 17 NSWLR 1
Where the applicant is a member of the deceased's family, as referred to in the earlier paragraphs of s 6(1) relating to eligible persons, the nature of the duty which the deceased should have fulfilled is reasonably clear."
"In Singer's case, a widow who had been married less than one year to a sixty-eight year old man failed in her application under this Act in this court, in the Court of Appeal and in the High Court. The majority of the court said at p 208 and following that to assess a claim under the present Act there is a two stage process. The first stage is to determine whether an applicant has been left without adequate provision and the second stage is to determine what provision ought to have been made. At p 209 the Judges point out that Re Allen has guided past courts and has three times been approved by the Privy Council or High Court, but that 'we doubt this statement provides useful assistance in elucidating the statutory provision. Indeed, references to 'moral duty' or 'moral obligation' may well be understood as amounting to a gloss on the statutory language'. They then say '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 applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty."
"In Fraser's case, Kirby P at p 29 said that 'I do not consider that it would be safe for this court, or other courts in this State, to disregard the obiter dicta in Singer v Berghouse concerning 'moral duty.' However, his Honour's decision made it quite clear that he thought that references to moral duty in the judgment under appeal really amounted to little more than a shorthand expression for the lengthier statutory provisions actually used in the Act. His Honour made it clear that there was no drastic change in the law 'either by the observations of the majority in Singer or by the High Court's reference, in the footnote to what Murphy J said earlier (p 27).'
Handley JA thought that the dicta in the High court in Singer should not be followed and pointed out that even as late as 1994 in Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509, the High Court was itself using the words 'moral claim' in decisions under this Act.
Sheller JA again did not consider that the High Court's suggested abandonment of concepts of moral claim or moral obligation changed the task of the court. He said, with reference to decisions of Murphy J at p 42, 'the point made in the judgments to which Murphy J referred was that the existence of a moral obligation owed by the deceased to the claimant was a necessary part of the claimant's case but not alone sufficiently to justify an order in the claimant's favour. Thus, in theory an order would not be made out of the estate of a deceased parent in favour of a child who had over many years completely cut himself or herself off from the parent, even though the child was left in need. On the other hand, a wealthy child who had cared for the parent throughout his or her life may have no claim for further provision under the legislation. The courts, in giving effect to the legislative scheme, having accepted that the bare moral claims of the sort mentioned by Stout CJ in re Allardice (1910) 29 NSWLR 959, 970 will not alone suffice to empower the court to make an order."
"I do not consider that there is any purpose in analysing whose fault it was that the state of non-communication came into place. In family relationships, hurts are often inflicted or suffered some times consciously, some times unconsciously. ...
The important matter is not fault but whether in all the circumstances it would be expected by the community that the testator would have to make a greater benefaction than he in fact did to constitute proper or adequate provision for the plaintiff.
Accordingly, I reject the approach that all an applicant under this Act has to do is to prove that he or she is an eligible person and that he or she reasonably needs more financial assistance. The cases show that there must be a full investigation into all the facts and circumstances of the matter to see whether the community would expect that a person in the plight of this testator ought to have made provision or further provision for the applicant..."
"112. I agree with his Honour's remarks, although I would express the rider that, often, where an applicant is a person within paragraphs (a) or (b) of the definition of 'eligible person' in s6(1) of the Act, proof that the applicant is a person in need will be sufficient. I accept however that there must be a full investigation into all the facts and circumstances as his Honour expounds."
Order
I order that:
1. The plaintiff receive a legacy of $150,000 out of the estate of the
deceased and forgiveness of any debt she owes the estate.
2. The plaintiff's
costs on the ordinary basis and the defendant's costs on the indemnity basis are
to be paid or retained out of
the estate of the deceased.
3. Interest is to
run on the legacy at the rate provided in the Probate and Administration Act
1898 from three months after the date of these orders.
**********
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