Andrew v Andrew

THE PARAMETERS OF THE PARTIES' DISPUTE

1. A substantial battleground occupied by the parties is found in section 59(1)(c) of the Succession Act. That paragraph requires the Court to be satisfied, as a prerequisite to the making of a family provision order, that, at the time when the Court is considering an application, the applicant for an order has been left without adequate provision for his or her proper maintenance, education or advancement in life.
2. The words "adequate" and "proper" require assessment of "adequacy of provision" relative to the facts of the particular case. What is "proper" maintenance, etc is relative to the age, mode of life and personal circumstances of the particular applicant. What is "adequate" is relative, not only to the applicant's needs, but also to his or her own capacity and resources for meeting them. What is "adequate" and "proper" is also relative to the size and composition of the deceased estate in question, other demands on the estate and the deceased's expressed, testamentary intentions: Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 11.
3. The defendant contends that neither plaintiff can overcome the hurdle for which section 59(1)(c) provides. That is because, the defendant contends, each of the plaintiffs is, independently of their mother's will, materially well off and, by virtue of the will, expected to receive from the deceased's estate at least $330,000 or thereabouts (subject to whatever costs orders may be made in the proceedings).
4. If (over the objections of the defendant) either plaintiff overcomes the hurdle for which section 59(1)(c) of the Succession Act provides, section 59(2) provides another hotly contested field of battle between the parties.
5. Section 59(2) provides that "[the] Court may make such order for provision out of the estate of the deceased person as the Court thinks fit to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made."
6. Although sections 59(1)(c) and 59(2) provide distinct exercises in decision making for the Court, there is substantial overlap between each of those exercises, both of which (as recognised in Andrew v Andrew (2012) 81 NSWLR 656) require the Court to make an evaluative judgement in the nature of a discretionary decision.
7. The Court's decision making is aided by a check list of factors, identified in section 60(2) of the Succession Act that may be, in practice generally must be, and in these proceedings has been, the subject of consideration. That checklist aids the Court in its assessment, inter alia, of the personal circumstances of each applicant, and any beneficiary affected by the proceedings; interpersonal relationships bearing upon competing claims to the bounty of the deceased; the resources available, in the deceased's estate and to competing claimants on the bounty of the deceased; and the testamentary intentions of the deceased.
8. Aided by the check list for which section 60(2) provides, the Court is required to have regard to "all the circumstances of the case" at the present time, upon a consideration of section 59(1)(c) and section 59(2), severally and jointly, in a decision making process that requires current community standards to be consulted: Andrew v Andrew (2012) 81 NSWLR 656.
9. It is common ground between the parties that each of them was loving and dutiful towards the deceased, and that each of them maintained a close relationship with her right up until her death.
10. The defendant emphasises the closeness of his own relationship with the deceased by noting that, in each of the three wills she is known to have made (in 1973, 1998 and 2014 respectively), he was named as an executor or (had she been survived by her husband) an alternate executor.
11. Not much turns on this. The defendant may have been favoured over his siblings, at least to some extent, in the 1973 will. However, in the 1998 will, upon an assumption that her husband would predecease her, she divided the whole of her estate between the three children equally. The 2014 will favours the defendant, but not by such a degree as to cast doubt upon the nature and quality of the deceased's relationships with her other children.
12. The first plaintiff is the eldest of the three children. She was born in 1953 and is presently aged 63 years. The defendant was born in 1955, and is presently aged 61. The second plaintiff was born in 1958, and is presently aged 58 years.
13. My attention has been drawn to Hallen J's summary of principles relating to family provision claims by adult children (Comernik v Reholc [2012] NSWSC 1537 at [159]) and approval of that summary by the Court of Appeal (in Smith v Johnson [2015] NSWCA 297 at [62]).
14. The principles to be applied were not the subject of debate in these proceedings. Attention remained firmly focussed on the facts.
15. Neither of the plaintiffs was cross examined. Nor were any of their supporting witnesses.
16. The only witness cross examined, on either side, was the defendant.
17. A strong, underlying imperative for the plaintiffs' applications appears to be a belief that their mother really wanted her estate to be distributed equally between her three children. That is not the formal basis upon which the plaintiffs' claims for relief have been put by counsel - indeed, such a case has been expressly disclaimed - but traces of such a case remain embedded in the evidence. Not only in the evidence of statements attributed to the deceased after the date upon which she made her last will (the validity of which has not been the subject of contest in these proceedings, despite criticism by the plaintiffs of the circumstances in which the will was made), but also in evidence that, under questioning by the plaintiffs immediately following the deceased's death and the reading of her will, the defendant indicated that he would hold 40% of the estate for the deceased's nine grandchildren (representing three children in the three branches of the family) in equal shares.
18. Whether the defendant will make, or is under any obligation to make, a distribution to any or all of the grandchildren from his share of the deceased's estate has not been a question explored by any party in their presentation of this case. No witness was cross examined on the topic. No submissions were made on either side of the record about it. It is a territory I formally notice, for completeness, but refrain from entering upon.

THE FIRST PLAINTIFF'S PERSONAL AND FINANCIAL CIRCUMSTANCES

1. The first plaintiff married in 1972 and was divorced in 1980, the three children of that marriage (presently aged 44, 40 and 33 years) having since attained their majority.
2. Since 2010 the first plaintiff has been living in a stable de facto relationship with a man whose wealth extends to several unencumbered properties and undisclosed income.
3. The first plaintiff's substantial asset is her residence (in Currawang Street, Concord West), the former matrimonial home of herself and her ex-husband, presently valued at $1.5 million and unencumbered. She has savings of approximately $94,000, as a consequence of superannuation payments, and no debts. She has a car, nine or 10 years old, said to be worth $13,000, although insured for $20,000.
4. She describes herself as "unemployed". She presently receives $300 a week, or thereabouts, for renting out a granny flat forming part of her residential property.
5. Both the first plaintiff and her de facto partner swear that they have separate financial arrangements, grounding her evidence that she remains financially independent of him. In the absence of cross examination, I accept that evidence. Nevertheless, both parties contribute to their joint household.
6. In the absence of cross examination, I also accept the first plaintiff's evidence to the effect that, although her name appears on the title to property at Newington and in The Drive, Concord West, she has no beneficial interest in either property. She regards the Newington property as belonging solely to her daughter and son-in-law. The property in The Drive is occupied by her ex-husband, in whose favour she says she executed a transfer at the time of their family law property settlement; but, for his own reasons, he has thus far retained her name on the title by delaying registration of the transfer.

THE SECOND PLAINTIFF'S PERSONAL AND FINANCIAL CIRCUMSTANCES

1. The second plaintiff and his wife married in 1980. They have three children, respectively aged 31, 29 and 19 years. The youngest of the children remains dependent upon her parents.
2. The second plaintiff and his wife jointly own their own home (in Burwood Road, Concord), valued at about $1.8 million or more, unencumbered. They have recently purchased a property at Sanctuary Point for $460,000, using savings of $100,000 and borrowing the remaining $360,000. The property is not rented out. The mortgage debt is a debt of choice, consequent upon a discretionary purchase.
3. The second plaintiff is self employed, with a taxable income of the order of $40,000 per annum net. He and his wife both own a car worth about $30,000, as well as trucks used in the family business. The second plaintiff also owns a boat, and has superannuation of $80,000. His wife has superannuation of the order of $13,000 and, it seems, some savings of her own. Her taxable income appears to be of the order of $30,000 per annum. In each case, however, up-to-date figures are not available.

THE PLAINTIFFS' HEALTH CONCERNS

1. The first plaintiff claims to be in indifferent health. She suffers from a compressed spine and arthritis, as a result of which she is unable to stand for extended periods of time. She also suffers from high blood pressure and reflux, both of which require daily medication.
2. The second plaintiff has a heart condition, from which he has suffered for many years, and he regularly takes medication for blood pressure and cholesterol problems. He suffers, also, from a torn tendon in his right shoulder which, he anticipates, will require surgery at some indefinite time in the future.

THE DEFENDANT'S CIRCUMSTANCES

1. The defendant, evidently, has been twice married. He has a daughter from his first marriage (presently aged about 38 years) and two daughters (one aged 20 years, the other 18) from his second marriage.
2. The defendant and his second wife married about 25 years ago, separated in 2008 and, although no longer living as a couple, remain on good terms. They have not formally divorced, although, from time to time, but not consistently, the plaintiff refers to his wife as his "ex-wife". Their finances, at least to some extent, remain co-mingled. She continues to help him in management of his finances. In December last year, they agreed upon a Family Court property settlement, the effect of which is that the defendant's wife took ownership of the former matrimonial home at Homebush and he took ownership of a house at Narooma. At about the same time, the parties, jointly, purchased a hobby farm at Narooma. Their capacity to do so was enhanced by the fact that, in 2013, they were named as beneficiaries in the deceased estate of an elderly neighbour.
3. Although the defendant was cross examined in a manner that cast doubt on his credit, vis-a-vis property dealings and the character of his ongoing relationship with his wife, the cross examination did not call into question the basic picture relating to the nature and scope of his assets. If it be relevant, I accept that, although the defendant continues to spend time at the former matrimonial home (when he visits, as he regularly does, his children), he and his wife do not live as a married couple. That they nevertheless have an ongoing relationship of some character is not denied.
4. The defendant has not been employed since he suffered a work-related injury 30 years or so ago. He continues to suffer back pain and other ailments, including clinical depression, high blood pressure and heart problems. The first plaintiff attributes to him mental health problems. He acknowledges that he has consulted psychiatrists over the years.
5. Before he and his wife separated in 2008, she supported him financially. Since this separation, he has received a disability pension. He will lose the pension if, and when, he receives his entitlement under the deceased's will.

EVALUATION OF THE PLAINTIFF'S CLAIMS

1. Although the defendant's personal and financial circumstances must be consulted, bearing in mind that the burden of any order for provision made in favour of the plaintiffs would be borne by him, the focus of attention must return to the particular circumstances of the plaintiffs.
2. Each plaintiff contends that, by an order for provision, each of them should receive not 20% of the deceased's estate, but 30% or thereabouts. In practical terms, each seeks (in addition to orders providing for the costs of the proceedings to be paid out of the estate on the usual bases) a share of the estate of the order of $495,000, rather than the $330,000 or thereabouts anticipated in the absence of any family provision order is being made.
3. I find myself unable to make a finding that either plaintiff has been left without "adequate provision" within the meaning of the Succession Act, section 59(1)(c). I am not satisfied that the provision made for the plaintiffs in the deceased's will (something of the order of $330,000) is less than adequate. I do not accept, as their senior counsel put their case, that they should be found to be entitled to something extra "for cheese and jam", an allusion to Gorton v Parks (1989) 17 NSWLR 1 at 9B-C.
4. I accept the defendant's submissions that each of the plaintiffs is materially well off independently of the deceased's will, and that the provision made for them in the will leaves them, respectively, adequately provided for. Particular notice may be taken of the fact that each of them owns their home, and has a modest but significant investment.
5. In my opinion, any need for assistance from the deceased's estate which the plaintiffs call in aid of their respective applications cannot justify interference with what appears (absent any direct challenge to the validity of the deceased's will) to have been a deliberate decision by the deceased to favour the defendant over the plaintiffs in testamentary disposition of her estate. Her last will moved away from the equal distribution of her estate found in her penultimate will. The present proceedings do not provide a vehicle, or justification, for returning to or nearer the scheme of the revoked, penultimate will.
6. The mental health problems suffered by the defendant, and by one of his children, provide a rational foundation for an inference that the deceased might reasonably have formed the view that he required assistance beyond that afforded his siblings. It is not necessary, however, to explore that territory.
7. The defendant's personal and financial circumstances are not so much more favourable than those of his siblings as to bear, without noticing, the increased provision the plaintiffs seek at his expense.
8. The deceased left each of the plaintiffs a sizeable proportion of her estate, augmenting their own relatively comfortable estates.
9. In these circumstances, I am not satisfied that either of the plaintiffs has been left without adequate provision for their maintenance, education and advancement in life.
10. Accordingly, I order that the summons be dismissed.
11. I will allow the parties an opportunity to make submissions about costs.

EDITORIAL NOTE

1. After publication of these reasons for judgment, and hearing submissions on costs, Lindsay J made the following orders: 1. ORDER that the summons be dismissed. 2. ORDER that the plaintiffs pay the defendant's costs of the proceedings assessed: 1. up to and including 30 June 2015, on the ordinary basis; and 2. thereafter, on the indemnity basis. 1. RESERVE to the parties liberty to apply for directions, in administration of the estate of the deceased, if and as the parties may be advised to seek orders for the plaintiffs' interests under the will of the deceased to be charged with their obligation to pay the defendant's costs of the proceedings. 2. 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 an appeal, or until any appeal has been determined. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 April 2016