LINDSAY J: May Berry ("the deceased") died on 7 July 2013, a widow aged 94 years, leaving a will dated 29 July 1997. Her husband, Eric Ronald Berry, died in about 1978. There were nine children of their marriage; namely, Ronald Eric (now aged about 74 years); Sandra May (now aged about 70); Eric Joseph (now aged about 69); Kenneth Lee (now aged about 67); Diane (now aged about 65); Denise Therese (now aged about 59); Noel Patrick (now aged about 57); Leslie John (now aged about 56); and Colleen Louise (now deceased).
Colleen predeceased her mother. She died in 2011, survived by two children: a daughter Chanel Louise Michels (now aged about 28 years) and Ria May Zeus Michels (now aged about 26 years).
All persons interested in the estate of the deceased (May Berry), including the parties to the present applications for family provision relief under chapter 3 of the Succession Act 2006 NSW, have lately agreed that the deceased's will dated 29 July 1997 should be admitted to probate in solemn form notwithstanding a competing will dated 27 October 2009.
The consensus which has emerged within the family is that, at the time she made the 2009 will, the deceased (afflicted by dementia) lacked testamentary capacity. I am satisfied that the proper course is to admit the 1997 will to probate in solemn form.
The family has also agreed that the deceased's son, Eric Joseph Berry, should administer her estate, even though he is not the executor named in the 1997 will.
The named executor having renounced probate, Eric applied for a grant of letters of administration with the will annexed.
With the agreement of all interested persons, these family provision proceedings have been heard on the basis that Eric is the appropriate person to represent the deceased's estate, as contradictor to the two applicants for family provision relief (his sisters, Sandra and Diane), and as the defendant named in the summonses upon which they respectively rely.
The orders to be made in disposition of proceedings on those summonses for family provision relief are accompanied by orders (made upon an exercise of the Court's probate jurisdiction supplemented, for more abundant caution, by a representative order made under the Uniform Civil Procedure Rules 2005 NSW, Part 7) for a grant of administration of the deceased's estate to Eric, hereafter described as, "the Defendant."
With the consent of the parties, the family provision applications of Sandra and Diane have been heard together, with evidence in one set of proceedings evidence in the other, so far as may be relevant.
Each applicant (named as plaintiff in her summons) is indisputably eligible to apply for family provision relief by virtue of her status as a daughter of the deceased: Succession Act, s 57(1)(c).
Sandra's summons was filed on 4 June 2014, within 12 months of the date of the deceased's death and, so, within the limitation period prescribed by s 58(2) of the Succession Act. The summons was later amended (consequentially upon substitution of Eric for Diane as defendant) but nothing presently of consequence turns on that.
Diane's summons was filed on 17 October 2014, three months and ten days outside the 12 month limitation period prescribed by s 58(2).
Diane applies for, and the defendant opposes, an order under s 58(2) for an extension of the time within which she is entitled to apply for family provision relief.
I propose to make such an order. No person interested in the deceased's estate would suffer a material prejudice should such an order be made. The estate is only today the subject of a grant of administration. The estate remains intact, with no part of it the subject of a distribution. Diane's application for family provision relief has been heard, in an orderly way, in conjunction with Sandra's application.
Diane's explanation for delay is adequate, in all the circumstances. Only after she reflected upon the potential consequences of Sandra's application (made by a summons filed shortly before the limitation period expired), and after she realised that one consequence could be that the provision made for her out of the deceased's estate could be reduced, did she resolve to make her own application for a family provision order. In all the circumstances, her delay in the filing of her summons was not such as should impede an otherwise meritorious claim for relief.
The parties agree that the deceased's estate, net of liabilities, presently has an estimated value of about $1.4 million.
The principal asset of the asset, and the substantive focus of the plaintiffs' attention, is the deceased's former residence at Sans Souci. It has an estimated value of between $1.6 million and (Diane suggests) $1.7 million.
The balance of the estate comprises liquid assets (chiefly, cash at bank and a refundable bond associated with the retirement village of which the deceased was a resident) offset by a debt of approximately $593,000 owed to a Berry family company and sundry expenses.
The deceased's will provides (in cl 3) for her former residence to be sold, for expenses to be paid out of the proceeds of sale, and for the balance to be held on trust for named members of the family, including each of her nine children, in specified percentages.
By cl 4, the share intended for Colleen (25%) passes to her two daughters.
Clause 5 of the will provides for the residue of the deceased's estate to pass to Colleen or, more particularly, Colleen having predeceased her mother, Colleen's daughters.
Given the size and composition of the deceased's estate, there is comparatively little residuary estate to attract the operation of cl 5. The focus of attention, not only for the plaintiffs, is principally upon the deceased's former residence and the shares of estate property, referable to it, nominated by cl 4. Each of Sandra and Diane is entitled, on the face of cl 3, to 12.5% of the trust property identified in cl 3.
The defendant's opposition to his sisters' family provision applications (and, it can be reasonably inferred, the opposition of all estate beneficiaries other than the applicants) focuses upon two interrelated questions, respectively encapsulated in s 59(1)(c) and s 59(2) of the Succession Act and necessarily to be asked, in relation to each application, by reference to the present time and the facts presently known to the Court:
(a). First, has adequate provision for the proper maintenance, education or advancement in life of the applicant been made in the deceased's will? (s 59(1)(c)).
(b). Secondly, if not, what, if any, order for provision ought to be made for the applicant's maintenance, education, or advancement in life? (s 59(2)).
These questions fall to be considered by reference to the criteria for which s 60 of the Succession Act provides, and, having regard to the evaluative judgments required to be made by the Court under s 59‑60, the concept of "community standards" discussed, inter alia, in Andrew v Andrew (2012) 81 NSWLR 656 and, perhaps as a counter point to that judgment in the context of estranged relationships within a family, Burke v Burke [2015] NSWCA 195.
The merits of each application must ultimately be considered on its own facts. Nevertheless, there are in this case common themes that can be found intertwined in the two sets of proceedings, jointly and severally, before the court.
The deceased and her late husband reared a large family (9 children) and developed a family business (involving the manufacture of safes) which, in one form or another, continues to flourish under the stewardship of the next generation; that is, all siblings but Sandra and Diane.
The patriarch (the deceased's husband) attended to the business. The deceased (the matriarch) ran the family home.
Within the family, gender roles reflected a generation now passing beyond youth, if not this world. If required to do so, everybody lent a hand; but boys were destined to work in the family business at an early age, and girls were required to bear a disproportionate share of domestic duties. Nobody escaped the rigours of a disciplined work ethic.
Two years or so before the death of the deceased's husband, the family business was restructured. The precise legal form of that restructure is not critically important. Of greater importance is that, emerging from that restructure, the deceased and her husband put in place arrangements that provided for each of their children to be provided for out of the fruits of the family business.
The present applicants for family provision relief, Sandra and Diane, were not excluded from this. Nevertheless, the discipline within which life in the family home and business was conducted led to fractured personal relationships, at least from the perspective of Sandra and Diane.
Relationships within the family were not assisted by the fact that, at about the age of 31 years, Sandra suffered a mental breakdown which has since continued to haunt her.
Nor were personal relationships enhanced by descent of the family into litigation, in this court, in or about 1992. Sandra commenced proceedings to enable her to be paid out of the family business. Diane took the opportunity, thus presented, to seek, also, to be bought out. Each was bought out by payment of a capital sum to her or, perhaps more accurately, her branch of the extended family.
Sandra and her son received $400,000.00, which Sandra divided between them, leaving her with $200,000.00. Diane and her family (herself, her husband, and a child) received in total $300,000.00. Each capital sum was paid by way of instalments.
Since that time of litigation, cordial family relationships have been distant at best, more often non-existent.
The perception of both Sandra and Diane is that, economically and socially, life has passed them by while the remainder of their siblings have prospered with the benefit of ongoing assistance from, if not direct involvement in, the family business.
There may be truth in their assessment about the comparative wealth and financial circumstances of themselves and other family members; but the evidence does not permit detailed comparisons to be made.
The beneficiaries of the deceased's estate, other than Sandra and Diane, took a deliberate forensic decision not to adduce evidence about their respective financial and material resources. As far back as 19 June, 2015 the Family Provision List Judge (Hallen J) allowed them an opportunity to file such evidence. At a directions hearing held on 31 July, 2015, his Honour formally noted that no beneficiary intended to put on any such evidence.
Having regard to s 61 of the Succession Act, the consequence of this forensic decision is that the Court may disregard any financial claims beneficiaries may have on the deceased's estate, though not moral claims they may have on the bounty of the deceased, in competition with the claims of Sandra and Diane: Bruce v Greentree [2015] NSWSC 1611.
I accept that each of the beneficiaries, whether a child or a grandchild of the deceased (as they all are), has a moral claim on the bounty of the deceased that cannot lightly be disregarded, and should not be interfered with except to the extent necessary upon a due exercise of the jurisdiction for which s 59 of the Succession Act provides.
I emphatically reject, as I must, any suggestion (not far from the surface in evidence given by Sandra and Diane) that it is open to the Court to make a family provision order based upon a subjective assessment of competing claims of "fairness."
The Court's assessment of an application for family provision relief must remain within the parameters of chapter 3 of the Succession Act: in this case, focused upon considerations relating to "adequacy" (not "fairness") of provision, as reflected in s 59(1)(c) and s 59(2) of the Act.
Neither applicant is materially well off.
Sandra is a pensioner, living alone with precious family pets, in public housing, without husband or son (both deceased), struggling with ongoing mental health issues, for which she continues to receive treatment, anxious about threats (sometimes perceived) from neighbours, some of whom are thought to have mental health issues of their own, and, in some cases, social problems arising from alcohol or drug abuse. The one thing she has going for her is that, within the public housing system, she has security of tenure, at least (as far as the evidence goes), until 2018.
My impression is that, despite the trials life sometimes presents, she has found a reasonable degree of security and contentment in her present accommodation.
Diane and her husband at least have each other, and an adult daughter, but they too live without substantial means, or work, dependent on the pension and without reserves, living in rental accommodation, without secure accommodation.
Each applicant asks the Court to find that she has been left without adequate provision, and that she should be allowed out of the estate sufficient provision (extending beyond that in fact made for her in the deceased's will) to enable her to buy alternative accommodation (in each case, with an estimated value of about $330,000) together with a fund for contingencies.
Absent a family provision order, each applicant will receive a legacy of about $175,000, subject to orders for costs made in disposition of these proceedings. On the parties' respective estimates of costs, if all costs are paid out of the estate on the customary bases, the applicants are each currently expected to receive not less than about $130,000.
The defendant submits, not without force, that the deceased might reasonably be thought to have made adequate provision for each of the applicants, both during her lifetime and in her will; the deceased was under no obligation to make further provision for adult children, especially given years of estrangement that accompanied, and followed, the family's socially disastrous experience of civil litigation in the 1990s; and an increase in the provision made for the applicants from the deceased's estate would both fail to satisfy a "community standards" test and pay too little regard to the deceased's seasoned judgment about how, in justice and wisdom, to deal with her estate.
On balance, and not without intermittent hesitation, I have come to the firm view that I should find that each applicant has been left without adequate provision, notwithstanding the deceased's endeavour to spread her estate across a broad spectrum of claims on her bounty, and despite the provision made for each applicant in the deceased's will.
Each applicant is left without material wealth of significance, in need of greater material security as old age encroaches, in circumstances in which the deceased's estate is extensive enough to allow greater alleviation than has been put in place to relieve their straitened circumstances.
This family's breakdown in personal relationships, occupying several years, is a factor to be taken into account, but it is not a decisive impediment to a finding that the applicants have, or ought to have, an entitlement to family provision relief, discretionary though such relief is.
That said, in my assessment, the Court should order only a modest increase in the amount of provision to be allowed for the applicants out of the deceased's estate.
This will not satisfy their respective aspirations for a fully funded transition to "more secure accommodation," but that cannot be done without impinging on the moral claims other members of family have on the deceased's bounty. It will, however, go some way to increasing the plaintiffs' financial security.
Mindful of their different personal circumstances, but conscious of the parity of treatment allowed to them by the deceased, I determine that the appropriate level of relief to be allowed to each applicant is $50,000 above the parties' estimate of the provision that would otherwise be allowed to them under the deceased's will, coupled with an order for their costs of these proceedings to be paid out of the estate.
Accordingly, and subject to allowing the parties an opportunity to comment as to the form of the orders to be made, I propose to make orders and notations in the following terms.
In the proceedings numbered 2013/00265620 (entitled "The Estate of May Berry") in the probate list, I make the following orders:
Order that the will dated 29 July 1997 of May Berry, who died on 7 July 2013 at Taren Point in the State of New South Wales, be admitted to probate in solemn form.
Order that letters of administration with that will annexed be granted to Eric Joseph Berry ("the administrator").
Order that the proceedings be referred to the registrar to complete the grant.
Order that any requirement for further compliance with the Probate Rules (including any requirement for the provision of an administration bond) be dispensed with.
Order that the administrator's costs of the application for a grant be paid out of the estate on the indemnity basis.
In the proceedings numbered 2014/00166897 (entitled "Sandra Nicholls v Eric Berry") and the proceedings numbered 2014/00305184 (entitled "Diane Figueiredo v Eric Joseph Berry"), in the Family Provision List, I make the following notations and orders:
Note that, by orders made on 16 February 2016, these proceedings have been heard together.
Note that, with the agreement of the parties to these proceedings and that of all other interested persons, orders have been made today (18 February 2016), in the probate proceedings numbered 2013/00265620, for letters of administration to be granted to the defendant (Eric Joseph Berry) with the will dated 29 July 1997 of the deceased (May Berry) attached.
Order (pursuant to the Uniform Civil Procedure Rules 2005 NSW, Pt 7) that, pending completion of the grant of administration made in the proceedings numbered 2013/00265620 today (18 February 2016), the defendant be appointed to represent the interests of the deceased in these proceedings (respectively numbered 2014/00166897 and 2014/00305184).
Note that the defendant is and was at all material times a party to these proceedings in the capacity of representative of the estate of the deceased.
Order, pursuant to s 58(2) of the Succession Act 2006 NSW, that the time within which Diane Figueiredo may apply for family provision relief under chapter 3 of the Act be extended up to and including the date of commencement of the proceedings numbered 2014/00305184.
Order, pursuant to s 59 of the Succession Act 2006, that Sandra May Nicholls receive out of the estate of the deceased whichever is greater of:
(a) a legacy of $225,000 in lieu of the provision made for her in cl 3 (iv) of the will of the deceased dated 29 July 1997; or
(b) the legacy from which that clause of the will provides for her.
Order, pursuant to s 59 of the Succession Act, that Diane Figueiredo receive out of the estate of the deceased whichever is greater of:
(a) a legacy of $225,000 in lieu of the provision made for her in cl 3(iii) (second occurring) in the will of the deceased dated 29 July 1997; or
(b) the legacy for which that clause of the will provides for her.
Order that, if Sandra May Nicholls and Diane Figueiredo respectively receive the legacies for which orders 6(a) and 7(a) of these orders provide, then:
(a) those legacies are to be charged, in the first instance, against the residuary estate of the deceased referred to in cl 5 of the will dated 29 July 1997 and, only thereafter, against the trust property referred to in cl 3 of the will.
(b) the persons beneficially entitled to the legacies from which cl 3 of the will provides (read with cl 4 of the will) are to take the trust property referred to in cl 3 in the same proportions, vis-à-vis one another, as those for which cl 3 (omitting the second clause numbered 3(iii) and that numbered 3(iv)) provides; namely:
(i) the estate of the late Colleen Louise Michels, 33 1/3%.
(ii) Denise Therese Berry, 16 2/3%.
(iii) Tammy Anne Berry, 16 2/3%.
(iv) Ronald Eric Berry, 6 2/3%.
(v) Eric Joseph Berry, 6 2/3%.
(vi) Kenneth Bede Berry, 6 2/3%.
(vii) Noel Patrick Berry, 6 2/3%.
(viii) Leslie John Berry, 6 2/3%.
Order that Sandra May Nicholls' costs of these proceedings be paid out of the estate of the deceased on the ordinary basis.
Order that Diane Figueiredo's costs of these proceedings be paid out of the estate of the deceased on the ordinary basis.
Order that the defendant's costs of these proceedings be paid out of the estate of the deceased on the indemnity basis.
Order that the costs of these proceedings, for which orders 9, 10 and 11 of these orders provide (together with the costs for which the orders today made in the proceedings numbered 2013/00265620 provide), be charged, in the first instance, against the residuary estate of the deceased referred to in cl 5 of the will dated 29 July 1997 and, only thereafter, against the trust property referred to in cl 3 of the will.
Order that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file and appeal, or until any appeal has been determined.
Reserve liberty to apply for further orders, if any, required in the working out of these orders.
Order that these orders be entered forthwith.
In making provision for Sandra and Diane in the terms for which orders 6 and 7 provide, I allow for the possibility that, against all expectations, a sale of the deceased's former residence may produce a greater amount than the presently estimated value of the property.
[The parties made submissions about the form of orders proposed, and costs, following which his Honour delivered supplementary reasons ex tempore as follows].
By documents styled, "Offer of Compromise" dated 21 December 2015, the defendant offered to settle these proceedings on the basis, relevantly, of an offer of a legacy of $316,000 to be allowed to Sandra, and an offer of a legacy of $225,000 to be allowed to Diane, each offer conditional upon an acceptance of the offers by both plaintiffs.
For the purpose of argument on the question of costs, counsel for the defendant accepts that neither plaintiff was informed of the terms of the offer made to her co‑plaintiff.
It should also be remarked that, at the time the offers of compromise were served, no order had been made granting to the defendant an entitlement to represent the estate of the deceased. Furthermore, the form of each "offer of compromise", might be thought to have fallen short of the requirements of r 20.26(2) of the Uniform Civil Procedure Rules in so far as it did not set out in full the orders that could be made, or would be made, in disposition of the plaintiffs' respective family provision claims, including orders as to which part or parts of the estate of the deceased would bear the burden of any statutory provision made for the plaintiffs or costs.
I do not doubt that the regime for the making of "offers of compromise" (embodied in UCPR Pt 20 Div 4 and Pt 42 Div 3) can be applied, as may be appropriate to the circumstances of a particular case, in proceedings under chapter 3 of the Succession Act.
I note, also, that the "offers of compromise" served in these proceedings provide that, should they fail to meet the requirements of the UCPR, each offer is, in any event, to be taken to have been made in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.
The jurisdiction of the Court to make orders for costs is to be found, not only in the Civil Procedure Act 2005 NSW, s 98, but also in the Succession Act, s 99.
Whichever section is relied upon, the Court has a broad discretion as to the form of any costs order to be made, a discretion which must exercised judicially.
My attention has been drawn, in this regard, to Harkness v Harkness (No 2)[2012] NSWSC 35 as a source of guidance.
The offer of compromise made to Diane (for a legacy of $225,000) was, in substance, the same as the quantum of relief in contemplation by today's judgment. The form of offer made to Sandra ($316,000) was more favourable to her than the current judgment contemplates.
I am mindful of the policy reasons for encouraging parties to settle, and of the importance of the application of that policy in all areas of the Court's jurisdiction, including family provision cases.
Nevertheless, it seems to me, one needs to bear in mind the particular circumstances of the particular case, the course of the proceedings and the object of making orders under chapter 3 of the Succession Act. Were I to make the orders for costs urged upon me by the defendant, the effect of my doing so would be, I apprehend, to derogate from the purpose of making a family provision order in the first place.
I am mindful that, although not an "a person under legal incapacity" for the purpose of those provisions of the Uniform Civil Procedure Rules that govern tutors (UCPR Pt 7 Div 4), and, although not incapable of managing her affairs to such an extent as requiring an exercise of the court's protective jurisdiction, Sandra does suffer from mental health problems which, in my view, should be taken into account in deciding whether or not she has acted reasonably in her pursuit of the proceedings to the point of a final judgment.
I am mindful also that Diane has had to make decisions in the context of proceedings which could be determined, in practical reality, only in conjunction with, or after, a determination of Sandra's claim for relief.
In all the circumstances, notwithstanding the service of "offers of compromise" which were (in the case of Diane) equal to or (in the case of Sandra) better than judgments the plaintiffs have obtained after a contested hearing, the appropriate order for costs in relation to each of the parties is the order that I have foreshadowed above. Accordingly, I propose to adhere to the proposed orders, that the costs of the plaintiffs respectively be paid out of the estate on the ordinary basis and that the costs of the defendant be paid out of the estate on indemnity basis.
[2]
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Decision last updated: 25 February 2016