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Parties: Evgenia Armouti and Evgenia Giannarou as administrators of the estate of the late Constantinos Armoutis (Appellants) Stella Nenes (First Respondent) Michael Nenes (Second Respondent)

Representation: Counsel D Moujalli (Appellants) F Salama and A Smyth (Respondents)

Solicitors McInnes Wilson (Appellants) Caper Legal (Respondents)

File Number: ACTCA 21 of 2021

Decision under appeal: Court/Tribunal: ACT Supreme Court Before: Crowe AJ Date of Decision: 12 April 2021 Case Title: Nenes v Armouti Citation: [2021] ACTSC 53 Court File Number(s): SC 435 of 2019 ELKAIM ACJ and RANGIAH J:

1. On 12 April 2021 Crowe AJ made the following orders:

2. Pursuant to s 8 of the Family Provision Act 1969 (ACT) the sum of $360,000 be paid to Michael Nenes from the estate of the late Constantinos Armoutis.

3. There be judgment for Stella Nenes against the defendants in the sum of $11,450.

4. After hearing the parties as to costs, his Honour then made these orders:

5. The defendants to pay 50% of the plaintiffs’ costs on a party-party basis.

6. The executors’ costs are to be paid out of the estate on an indemnity basis.

7. This appeal is concerned only with the first order.

8. Section 8 of the Family Provision Act 1969 (ACT) (the FPA) states:

Family provision orders (1) On application by a person entitled, under section 7, to apply for provision out of the estate of a deceased person, the Supreme Court may order that the provision as that court thinks fit be made for the applicant out of the estate.

(2) The Supreme Court shall only make an order under subsection (1) if satisfied, in consideration of the criteria set out in subsection (3), that as at the date of the order, adequate provision for the proper maintenance, education or advancement in life of the applicant is not available—

(a) under the will of the deceased; or (b) if the deceased died intestate—under the law applicable to that intestacy; or (c) under that will and that law combined. (3) The criteria for the Supreme Court’s decision under subsection (2) in relation to the deceased and the applicant are as follows:

(d) the character and conduct of the applicant; (e) the nature and duration of the relationship between the applicant and the deceased; (f) any financial and non-financial contributions made directly or indirectly by or on behalf of either or both the applicant and the deceased to the acquisition, conservation or improvement of any of the property or financial resources of either or both persons; (g) any contributions (including any in the capacity of homemaker or parent) by either the applicant or the deceased to the welfare of the other, or of any child of either person; (h) the income, property and financial resources of the applicant and the deceased; (i) the physical and mental capacity of the applicant, and the deceased (during his or her life), for appropriate gainful employment; (j) the financial needs and obligations of the applicant and the deceased (during the life of the deceased); (k) the responsibilities of either the applicant or the deceased (during his or her life) to support any other person; (l) the terms of any order made under the Domestic Relationships Act 1994, section 15 with respect to the property of the applicant or the deceased; (m) any payments made to either the applicant or the deceased by the other, under an order of the court or otherwise, in respect of the maintenance of the other person or any child of the other person; (n) any other matter the court considers relevant. (4) The Supreme Court may regard an application for provision out of the estate of a deceased person by a single person as an application made on behalf of all the persons entitled to make applications for provision out of the estate of the deceased person.

5. The dispute is derived from the provisions of the will of Mr Constantinos Armoutis (“the deceased”) who died on 2 May 2018. He had never married or had children. There was no ‘de facto’ partner.

6. The respondents to the appeal are Stella and Michael Nenes (first and second respondents respectively). They are brother and sister. They were born in Australia. They were not related to the deceased. The respondents’ parents were born in Greece and came to Australia prior to 1970. By this time the deceased had already migrated from Greece to Australia.

7. The respondents’ parents and the deceased were partners in various retail businesses commencing in the early 1970s.

8. The partnership purchased various properties in the Canberra area.

9. The partnership continued until the respondents’ mother died. Thereafter the deceased and the respondents’ father were partners.

10. The respondents’ father left a will leaving his estate to the respondents in equal shares. His interest in the properties that had been purchased by the partnership formed part of the estate. The respondents’ father died in 2009.

11. From 1998 the deceased lived with the respondents’ family until their father’s death.

12. The properties inherited by the respondents from their father produced rent and capital when they were sold. It was calculated that the second respondent had received a financial benefit from the properties in the sum of $895,577.

13. In 1999 the deceased made a will leaving his whole estate to the respondents’ father, but if he died before the deceased, then the estate went to the respondents. This will became redundant on 8 April 2009 when a new will was made by the deceased leaving his estate to his siblings living in Greece, George and Evgenia.

14. The appellants are the administrators of the deceased’s estate. The estate has a net distributable value of $1.62 million.

15. The case before the primary judge had been put on three bases: firstly, there was an equitable estoppel entitling the respondents to a declaration that part of the deceased’s estate was held on trust for them. This allegation failed.

16. Secondly it was asserted that the respondents were entitled to relief under the FPA. This part of the case succeeded, as reflected in the order in favour of the second respondent. There is no challenge in this appeal to the eligibility of the second respondent to have made a claim under the FPA.

17. Thirdly the respondents said that they had made loans of $100,000 to the deceased. In respect of the second respondent $50,000 was taken into account in his FPA claim. For the first respondent, the loan claim succeeded to the extent of $10,000 plus interest of $1,450. This result is not the subject of any appeal.

18. The second respondent was eligible to make an FPA claim because he fell within s 7(1)(b). This means he was in a “domestic relationship with the deceased person for two or more years continuously at any time”. The existence of this relationship was not disputed. As stated by his Honour, at [85]:

The issue to be determined in relation to each plaintiff is whether, in all of the circumstances, each provided “personal or financial commitment and support of a domestic nature” which was for Con’s “material benefit” and that such commitment and support continued unbroken for two years or more at any time.

19. It is appropriate at this stage to make some general statements of principle. It is uncontroversial that the two-stage approach dictated by the High Court in Singer v Berghouse (1994) 181 CLR 201 remains appropriate. This was described in Singer as follows:

20. 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. 210. 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.”

21. His Honour in the trial followed the two-stage approach. He said at [113]:

I approach Michael’s claim by first determining whether adequate provision for his proper maintenance, education and advancement in life is not available under Con’s will. This determination must be made having regard to the criteria set out in s 8(3). An order under s 8(1) can only be made if it is determined that the required provision was not made in the will. This is the “two stage” process described by Mason CJ, Deane and McHugh JJ in Singer v Berghouse (1994) 181 CLR 201.

21. If the second stage is reached, it is equally uncontroversial, that this involves a discretionary exercise. Then, as stated in Singer at [26]:

The principles of law which regulate the circumstances in which an appellate court may review the exercise of a judicial discretion not in doubt ((15) House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505).

22. The appellant challenges two aspects of the primary judgment:

(i) The finding that the will did not make adequate provision for the second respondent.

(ii) Assuming the second respondent was entitled to provision, the amount awarded was not appropriate.

23. In their written submissions the appellants set out the task before them in this appeal. They said, at [4.9]:

It follows that the Appellants, in order to set aside the Primary Judge’s determination, must show: … an error of principle; a material error of fact; a failure to take into account some material consideration, or the converse; or that the result is unreasonable or plainly unjust so as to bespeak error of such a kind: Burke v Burke at [40] (Ward JA, Meagher and Emmett JJA agreeing); Mulcahy v Weldon [2002] NSWCA 206 at [24] (Hodgson JA, Handley and Campbell JJA agreeing).

24. It is important to note two concessions made by the appellant:

(a) This finding by his Honour at [142] was correct: “Overall, I consider that Con’s reasons for Michael’s omission are not sufficiently ascertainable to enable me to take them into account as required by s 22.” This concession immediately obviated the need for his Honour to “have regard to the testator’s reasons…. for making the dispositions made by will or for not making provision for further provision, as the case may be, for a person who is entitled to make an application under this Act.”

(b) His Honour did not err in seeking guidance as to whether or not there had been adequate provision from authorities based on an adult to child relationship. His Honour therefore, at [147], was correct in seeking guidance from the principles set out by Hallen J in Camernik v Reholc [2012] NSWSC 1537.

25. The deceased’s will made no provision for the second respondent. This, of itself, is not the basis for an award. It was still necessary for the second respondent to establish, through the statutory considerations mandated in s 8(3), that adequate provision had not been made for him for his “proper maintenance, education or advancement in life”.

26. The appellants concentrated their attack on his Honour’s conclusion is relating to subsections (e) and (g) of s 8(3).

27. The appellants accepted that where the applicant is of a mature age, that is a relevant consideration in determining the applicant’s capacity to deal with his future. As stated by Hallen J in Camernik v Reholc [2012] NSWSC 1537 at [159], (notably referring to Crossman v Reidel [2004] ACTSC 127):

(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17].

28. The second respondent was 59 years of age at the date of hearing. His income was $1,000 per fortnight in JobKeeper payments, which were due to end in March 2021.

29. The appellant submitted that his Honour erred in concluding, at [149] that the second respondent’s residence represented “more than half” of his net asset position. In order to understand the conclusion in [149] it is necessary to begin the examination of his Honour’s reasons from [147]: Consideration – Was adequate provision made? 147. I approach the evaluation I am required to make on the basis that Michael’s claim should be assessed in a broadly similar manner as if he was Con’s adult child. Given the nature and duration of the relationship, and the fact that Con had no children of his own, that analogy seems to me to be appropriate in this case, although I bear in mind that Michael was not actually Con’s son. It seems to me that the analogy is appropriate having regard to the rather unusual circumstances of this case, and the extended basis of eligibility which I have discussed above. On that basis, I accept the often-quoted principles from the decision of Hallen J in Camernik v Reholc [2012] NSWSC 1537 as providing helpful guidance. His Honour said at [159]: (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 obligation, responsibility, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: 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 as a spouse, who has a primary 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 if he or she is able to do so. 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) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons to whom the applicant, however reasonably, wishes to support, where there is no obligation to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86]. (e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2), at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45. (f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17]. (g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149. 148. Mr Moujalli submitted for the defendants that Michael has a “comfortable degree of financial security”. He argued that the evidence did not establish a lack of sufficient reserves to meet the demands of advancing years or the ordinary vicissitudes of life. On this basis he suggested that Michael had failed to demonstrate that inadequate provision had been made for him. 149. I do not accept these submissions. While it is true that Michael’s net assets amount to a little under $1,000,000, the reality is that his home represents more than half of this sum. It is not an income producing asset. Also, this figure includes a very modest superannuation fund of $120,000. The reality is that Michael is on the cusp of retirement. He suffers from significant health issues. His income earning capacity is much reduced. His combined employment income over the past several years (extracted from Ex “D3”) was $46,354 for 2016-2017, $12,415 for 2017-2018 and $6,586 for 2018-9. While I take into account that Michael was spending considerable time caring for Con during these years, the trend apparent from these figures must be concerning in regards to a man about to turn 60 who suffers from a bad back and coronary artery disease. 150. It is also instructive to assess the income generated for Michael by the assets aside from his home and personal property. In 2016-2017 he received $1,984 in interest and $4,708 in net rent from the Mitchell and Pearce properties. In 2017-8 he received $2,179 in interest and $6,188 in net rent from the Pearce properties. In 2018-9 the interest figure was $1,134. He also received $1,714 by way of dividends (inclusive of franking credits) and $1,291 in net rent from the Pearce properties. 151. It is apparent that Michael would be in dire straits indeed if he becomes unable to work at all in the coming years. Given that he still has a mortgage debt of $360,000, he would have to resort to his capital to defray his ordinary living expenses. Given that, with successful medical treatment, he can expect to live for another 20 years or more there must be a real risk that Michael would exhaust his capital during that time. 152. In this context, the estate is significant. The beneficiaries are persons who were relatively remote from Con’s life, particularly during his final years, compared with Michael. And there is no evidence as to the relevant circumstances of the beneficiaries. 153. Having regard to all of the criteria in s 8(3) and the circumstances discussed above, I am satisfied that adequate provision for Michael’s proper maintenance or advancement in life is not available under Con’s will. (Having regard to his age and circumstances I do not see the reference to education as being relevant here.)

30. Dealing first with the asserted error in [149] as to the mathematical calculation in the comparison between the second respondent’s net assets and the extent of these assets made up by his residence. The relevant sentence in [149] is:

While it is true that Michael’s net assets amount to a little under $1,000,000, the reality is that his home represents more than half of this sum.

31. If the sentence is read as being a comparison between the total of the net assets (say $950,000) and the equity in the home (say $150,000) then there is obviously a mathematical error. However, if the sentence is read as comparing the value of the house with the net assets then there is no error. Having regard to the whole of [149] in which his Honour is attempting to describe a global picture of the second respondent’s financial position, the second interpretation is probably correct.

32. However, whichever interpretation is correct, is of little consequence. His Honour was endeavouring, and did, summarise the second respondent’s global financial position as net assets of “a little under $1 million” which included a house worth about $510,000, but upon which there was an outstanding mortgage of $360,000.

33. In regard to the value of the second respondent’s net assets the appellants submitted that he had “undervalued the true position by an unknown amount” (written submissions 4.17). The submission is somewhat surprising having regard to the fact that under cross-examination counsel for the appellants actually put to the second respondent that his net assets were worth about $900,000 to which should be added about $50,000 relating to a property in Greece. The proposition was agreed to by the second respondent (Transcript page 58).

34. His Honour’s assessment of the second respondent’s financial position, at [149-151] formed the basis for his conclusion that adequate provision had not been made for the second respondent. Besides the criticism dealt with above concerning the proportion of the residence compared to the second respondent’s net assets, the appellants also said that his Honour acted without regard to what might be called the detail of his living conditions. For example there was no evidence of his weekly expenditure, or how much his medical treatment costs or the price of his medical insurance. Without these, submitted the appellants, his Honour could not reliably reach a conclusion about whether or not adequate provision had been made for the second respondent.

35. But His Honour did know that, other than government benefits, the second respondent had received $4,139 from rent or dividends in the previous financial year. He also knew that the second respondent had medical problems and a life expectancy of about 20 years. In addition he had the obligations attendant upon his mortgage.

36. The details which the appellants assert were missing from the evidence, are essentially the minutiae of his daily existence. There is no suggestion there was another source of income or income producing assets. His Honour could take judicial notice that there would be ‘normal’ living expenses to be derived from the known sources of income.

37. The appellants suggested that the approximately $600,000 in assets was a sufficient, perhaps even generous, amount from which the second respondent could sustain himself, meet all his medical expenses and all of his financial obligations over 20 years.

38. Although the appellants had no onus before the primary judge, no suggestion was forthcoming as to the manner in which the second respondent’s assets could generate a necessary income without their dissipation. Once it became necessary to realise parts of the assets, the remaining assets would still need to provide some income, but this would of course be limited and more difficult.

39. We can see no difficulty with his Honours conclusion that “there must be a real risk that Michael would exhaust his capital during that time”.

40. It is also noteworthy, that at [152], his Honour took into account the unknown circumstances of the beneficiaries after noting that they were persons who had been “relatively remote from Con’s life, particularly during his final years, compared with Michael”.

41. In addition, the failure of the first respondent to derive any benefit from the estate, other than the loan repayment of $11,450, enabled the beneficiaries to receive a greater amount from the estate than might otherwise have been the case.

42. The next question is whether or not his Honour erred in exercising his discretion by awarding $360,000 to the second respondent. The first point to be made is that his Honour approached his decision on the footing of assessing an adult child relationship, a basis which is specifically not the subject of any complaint.

43. The appellants submitted that there was no principle that said a mortgage debt should be paid off or that a successful applicant should be entitled to be placed in a debt free position.

44. Plainly, his Honour did not award the $360,000 pursuant to any principle or rule stating that adequate provision necessarily required the paying off of debts. Rather His Honour’s approach was as stated in [157]:

Having particular regard to the size of the estate, the absence of evidence as to the situation of the beneficiaries, Michael’s current circumstances, the nature and duration of his relationship with Con and his devotion and care during the last years of the latter’s life, I conclude that provision should be made favour of Michael in the sum of $360,000. In my view that sum, which gives Michael the option of paying off his mortgage, represents adequate provision for the vicissitudes in life which he now faces.

45. Thus the $360,000 was not a figure directed to paying off the mortgage. His Honour allowed for such a payment as an “option”, but arrived at the figure as representing “adequate provision for the vicissitudes in life which he now faces”.

46. In addition, it is to be recalled that the second respondent’s loan case failed but payments made by him were a factor in his Honour’s approach to his assessment of adequate provision. As His Honour stated from [158]:

47. In his submissions Mr Moujalli indicated that the defendants were prepared to consent to a judgment of $50,000 plus interest from the commencement of proceedings in relation to these claims. 159. However, I have found that the advances made by Michael, probably sometime after the signing of the loan acknowledgement document on 1 October 2013, were in the nature of gifts rather than loans. As far as I can determine from the evidence, $20,000 of the moneys paid to Con, having taken into account the $50,000 repayment made by him in October 2014, was paid jointly by Michael and Stella. The remaining $30,000 was paid by Michael only. 160. As I have taken these payments into account in favour of Michael in consideration of his FPA claim, I do not propose to make any repayment order in relation to the payments made by him.

48. We cannot see any error in the exercise of his Honours discretion, let alone any error that would justify intervention as prescribed in House v The King (1936) 55 CLR 499.

49. Accordingly, the Court makes the following orders:

50. The appeal is dismissed.

51. The appellants are to pay the respondents’ costs of the appeal, with such costs to be paid out of the estate of the late Constantinos Armoutis. I certify that the preceding forty-eight [48] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Chief Justice Elkaim and his Honour Justice Rangiah.

Associate:

Date: 3 June 2022

McWilliam AJ:

49. I have had the benefit of reading, in draft form, the reasons of Elkaim ACJ and Rangiah J. I have reached a different conclusion on the appeal.

50. The Family Provision Act (1969) (ACT) (the Act) is concerned with the Court intervening to make provision out of a person’s estate after they have died for the deceased’s family, or in this case, those who are treated as family by a man who died without any children of his own, that being the late Constantinos Armoutis (Testator), referred to as “Con” in Nenes v Armouti [2021] ACTSC 53, being the judgment at first instance.

51. Relevant to this appeal, the application for provision was made by the second respondent, or “Michael” in the judgment below. The basis for seeking provision was not that the second respondent was family or had been in any way dependent upon the Testator, but that he had a “domestic relationship” with the Testator because he provided care and ad hoc financial support for the Testator over a period of more than two years at the end of the Testator’s life.

52. The second respondent’s friendship, care, and financial support for the Testator in the declining years of the Testator’s life was itself founded upon what was described by the second respondent as an “inseparable” friendship between his own father and the Testator, through their business partnership over a number of decades. The Testator died in May 2018. In a will that he had made in April 2009 (the Will), the Testator left his entire estate to his immediate family members, namely his brother and sister. The primary judge intervened under the Act to disturb that choice made by the Testator, to make provision for the second respondent – a close family friend – in a sum of $360,000 out of an estate that had a net worth of $1.62 million. That judgment is what has been challenged on appeal by the appellant executors.

53. Five grounds of appeal were raised, as follows:

(a) Error in determining pursuant to s 8 of the Act that adequate provision was not available for the second respondent in circumstances where the evidence indicated that:

(i) The net asset position of the second respondent was about $950,000; and

(ii) There were no identifiable needs or obligations of the second respondent which could not be met from the second respondent’s existing financial resources (Ground 1).

(b) Error in considering in [149] of the primary reasons that the second respondent’s home accounted for more than half of the second respondent’s net asset position when the value of the second respondent’s home, net of the mortgage debt which it secured, accounted for only about 16% of the second respondent’s net asset position (Ground 2).

(c) Error in determining at [151] of the reasons for decision that there was a “real risk that Michael would exhaust his capital” during the balance of his lifetime in the absence of any evidence to support this conclusion (Ground 3).

(d) Error in failing to have regard to the totality of the financial resources available to the second respondent in considering whether adequate provision was available to the second respondent (Ground 4).

(e) Alternatively to (a), (b), (c) and (d) above, error in determining that provision should be made in favour of the second respondent in the sum of $360,000 in circumstances where the evidence indicated that:

(i) The net asset position of the second respondent was about $950,000; and

(ii) There were no identifiable needs or obligations of the second respondent which could not be met from the second respondent’s existing financial resources (Ground 5).

54. The above grounds were grouped by the appellants and argued as two complaints on the appeal:

(a) Error in finding that adequate provision for the proper maintenance and advancement of the second respondent was not available under the Will of the Testator; and

(b) Error in finding that provision should be made in favour of the second respondent in the sum of $360,000.

55. That approach by the appellant executors reflects a challenge to each part of the two-stage process articulated in Singer v Berghouse (1994) 181 CLR 201 (Singer v Berghouse) and referred to at [19] of the above reasons of Elkaim ACJ and Rangiah J.

56. Accepting that the first limb of Singer v Berghouse involves an evaluative decision, it is nevertheless one that can only be disturbed on appeal if there were an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or that the result is so unreasonable or plainly unjust to bespeak error of such a kind: see Burke v Burke (No 2) [2015] NSWCA 195 (Burke) at [40], Bates v Cooke [2015] NSWCA 278 at [59]-[61]; Phillips v James [2014] NSWCA 4; 85 NSWLR 619 (Phillips) at [54]-[55].

57. For the reasons that follow, I consider that appeal Grounds 4 and 5 ought to succeed, because there was such an error of principle. In my view, an erroneous approach was taken to the first limb, which in turn led to a failure to take material considerations into account. As a consequence, the discretion of the primary judge miscarried, both in determining that adequate provision for the proper maintenance or advancement of the second respondent was not available under the Will, and in determining the amount that represented “adequate provision for the vicissitudes in life” which the second respondent now faces (being the words used by the primary judge at [157] of the reasons for judgment).

The first complaint: did the primary judge err in finding that adequate provision for the second respondent’s proper maintenance and advancement was not available under the Will?

58. The orders made by the primary judge, a recitation of the facts, s 8 of the Act and parts of the primary judge’s reasons are all set out in the judgment of Elkaim ACJ and Rangiah J. It is unnecessary to repeat those matters here.

59. The finding under challenge is the conclusion in [153] of the reasons at first instance, where, having regard to all of the criteria in s 8(3) and the circumstances discussed above, the primary judge was satisfied that adequate provision for the second respondent’s proper maintenance or advancement in life was not available under the Will. That finding has been set out at [29] of the reasons of Elkaim ACJ and Rangiah J above, along with the reasons leading to such a conclusion.

60. Their Honours have dealt with other aspects of the appellants’ submissions (at [30]- [39] above) in terms of asserted mathematical errors and the second respondent’s true asset position, being appeal Grounds 1 to 3.

61. While I agree with their Honours in relation to any mathematical error not having any consequence ([32] of the reasons of Elkaim ACJ and Rangiah J above), I have not found it necessary to deal directly with those more specific criticisms because there was an overarching complaint in the appellants’ argument about the primary judge’s approach, which I have accepted has substance. The reasoning that follows addresses this first as the underlying basis for the appeal.

62. In respect of the first complaint, the appellants contended that the primary judge failed to have regard to the “totality of the financial resources available to the Second Respondent” in considering whether adequate provision was available to him, which is Ground 4 of the Amended Notice of Appeal.

63. The appellant executors submitted, among other things (4.11 of their written outline of submissions):

The mere fact that the Will made no provision for the Second Respondent did not necessarily mean that adequate provision was not available for him under the Will. All the relevant factors need to be considered and the absence of any provision in a will may be proper in the circumstances: Vasey v Henry [2019] NSWSC 996 at [134].

64. The submission went on to emphasise the circumstances of “an older adult applicant, such as the second respondent, who through the substantial inheritance received from his father and by other means has had the opportunity to accumulate significant financial reserves.”

65. The appellant’s argument directs attention to what was “proper” in circumstances where the second respondent’s own father (“Alex” in the judgment below) had already substantially provided for him and where what the Court was being called upon to do was intervene in the valid will of a family friend.

66. The authorities discussed below focus on the critical question raised by the appellants of what amounts to adequate provision by reference to what is “proper” in all the circumstances of the case. In undertaking that assessment, the primary judge (at [147] of the primary reasons) elevated the nature of the relationship between the second respondent and the Testator to one that was akin to father and son and applied the authorities that specifically deal with provision for adult children (set out in the reasons of Elkaim ACJ and Rangiah J at [29] above).

67. Establishing that a devoted family friend was someone who was loved by the Testator as a son or daughter does not translate the nature of the relationship into one which carries the familial obligations of maintenance and advancement that a father may have to a son, even an adult son. That distinction affects notions of what is “proper”, as explained below.

68. The misapplication of the principles that are set out in detail below as to what constitutes “proper” provision permeated the entire reasoning process, affecting how the primary judge treated a number of considerations under s 8 of the Act. As a result, the primary judge took an erroneous approach.

69. The error had a number of consequences for the reasoning process of the primary judge. As Elkaim ACJ and Rangiah J state at [34] of their Honours’ reasons, the assessment of the second respondent’s financial position formed the basis for the primary judge’s conclusion that adequate provision had not been made for the second respondent. It is clear from that reasoning that his Honour did fail to have regard to the totality of the financial resources that had been provided to the second respondent in considering whether adequate provision was available, because his Honour ignored the provision that had been made by the second respondent’s actual father. That is the crux of Ground 4, and in my view, that aspect of the appellants’ complaints succeeds.

Applicable principles

70. A number of the authorities below concern similar legislation enacted in different jurisdictions. There are important statutory differences, including as to eligibility to make a claim for family provision, but for the purposes of understanding what is “proper” and what is necessary to adequately provide for a claimant, the principles that have been established have the same application to s 8 of the Act under consideration here.

The melting pot

71. In Jones (a pseudonym) v Smith (a pseudonym) [2016] VSCA 178 (Jones), Ferguson JA, (with whom Whelan JA and Kaye JA agreed) stated at [66] (emphasis added):

…It is not a case of looking in isolation at the value of the assets that the claimant has and deciding whether the person has enough to get by on whether comfortably or otherwise. Rather, the claimant’s assets and income are just two facts that go into the melting pot in determining whether there has been adequate provision made. Another important element for this consideration is the size of the estate. If there is more money to go around, then that will affect what is adequate for the proper maintenance and support of the claimant.

72. It was pointed out in Sgro v Thompson [2017] NSWCA 326 (Sgro) at [45] that the particular statutory provision in Victoria under consideration in Jones was different from the words of the equivalent section in New South Wales, with the relevant provision (s 91(1) of the Administration and Probate Act 1958 (Vic)) referring to “maintenance and support”, without reference to advancement. Nevertheless, the language of the statute there in question included a requirement for the court to consider what was adequate for the “proper” maintenance and support of a person. It is perhaps no more than an evocative way of restating what is a long-established principle emerging from Vigolo v Bostin [2005] HCA 11; 221 CLR 191 (Vigolo) at [122]:

... 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 of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.

73. Accordingly, the idea of a melting pot, and the notion that whether a person has enough to get by on comfortably or otherwise is only one ingredient in that pot, remains apt for consideration here.

The size of the estate

74. As to the size of the estate, in Anasson v Phillips (Supreme Court of NSW, Young J, 4 March 1988), Young J (as his Honour then was) said at 20-21 (emphasis added):

…with a very large estate... there is great temptation on a court to be over-generous with other people’s money. This is especially so when the Court can see that Plaintiffs have been very hardly done by at the hands of a domineering testatrix. However, the case should not be approached in this way as the application has to be determined in accordance with the legal principles. These principles include the fact that in Australia there is freedom of a person to leave her property in whatever way she wishes, to love whom she wishes, to hate whom she wishes, and it is only when there has been a failure to comply with a moral duty to those who in the community’s eyes she should have made proper provision for, that anyone can legally complain about another person’s will. Even then, the Court has no power to re-write the will, but can only adjust things, in substitution for the testatrix, in such a way as to… fulfil her moral duty. If the estate is a large one the Court has a slightly different approach. The basic principles are the same, that is, the will can only be affected to the extent that it is necessary to discharge the moral duty by making adequate provision for the plaintiffs, but where there is a large estate, competition between claimant and claimant, and claimant and beneficiary under the will is much reduced or eliminated. Further, there may be a more liberal assessment of the moral duty owed, to be reflected in what is proper provision for the plaintiffs. In particular, the lifestyle that has been enjoyed by the plaintiffs because they have been associated with a wealthy testatrix is a relevant factor.

75. The above passage was most recently referred to by Hallen J in Starr v Miller [2021] NSWSC 426 (Starr) at [614]. The emphasised words in the above extract are to foreshadow the concern I have about the approach taken in the present case.

76. Picking up on the last point of emphasis and the notion of the lifestyle of a claimant, an outcome of keeping a claimant in the lifestyle and accommodation which he or she has enjoyed, provided that it is not extravagant, should, if possible, be supported. In McCosker v McCosker (1957) 97 CLR 566 (McCosker), it was stated at 571-572 (emphasis added):

The word “proper… 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…”

77. Examples of that type of approach being taken may be found in Oldereid v Chan [2013] NSWSC 434 at [57] and [62]; Roberts v Roberts (1992) 9 WAR 549 at 558; and Mayfield v Lloyd-Williams [2004] NSWSC 419 at [115] and [137] where White J (as his Honour then was) allocated a capital sum to provide for the vicissitudes and conveniences of life.

The importance of testamentary freedom

78. The authorities are replete with references to the principle that the Court will not interfere with the testator’s freedom to leave their estate to whomever they choose, unless there is some proper basis for doing so under the legislation: Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 (Pontifical Society) at 19 (per Dixon CJ, McTiernan J agreeing); Blair v Blair [2004] VSCA 149; 10 VR 69 at [15] (per Chernov JA, Nettle JA and Hansen JA agreeing); Grey v Harrison [1997] 2 VR 359 (Grey) at 363 (per Callaway JA, Tadgell JA and Charles JA agreeing at 360 and 361 respectively); cited in Jones at [38].

79. In Stott v Cook (1960) 33 ALJR 447, Taylor J said at 453-454 (emphasis 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.

80. The above passage was cited in Sgro at [82], and in Starr at [601]. The emphasised words in the above extract highlight two significant matters that inform the process of evaluating what is “proper”.

81. In Starr, Hallen J helpfully collected (at [602]-[609]) a number of authorities concerning the importance of the freedom of testamentary disposition and the respect that the courts must give to that choice, not as a starting point from which to depart, but throughout the statutory evaluative process permitted by the Succession Act 2006 (NSW), being the same process employed in applying the Act under consideration here. With due appreciation, and with some additions and different emphasis so as to apply them to the facts of the present case, the extracts set out below draw largely from the authorities recently collated by Hallen J.

82. In Pontifical Society Dixon CJ said at 19 (emphasis added):

The words “proper maintenance and support”, although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.

83. Returning to Vigolo in the context of testamentary freedom, Gleeson CJ referred to the relevant legislation there under consideration as not conferring new rights of succession, nor creating legal rights of inheritance. His Honour stated at [10]:

… [the statute] preserved freedom of testamentary disposition, but subjected that freedom to a new qualification.

84. Gleeson CJ later stated at [25]:

In explaining the purpose of testator’s family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded…

85. Of relevance to both grounds of challenge, in the same case, Gummow and Hayne JJ at [74] referred to the joint judgment in Singer v Berghouse at 211, which cited the below stated in Goodman v Windeyer (1980) 144 CLR 490 at 502 (emphasis added):

[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.

86. In Grey, Callaway JA wrote, at 366 (emphasis added):

... [I]t is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator’s dispositions unless he or she has abused that right. To do so is to assume a power to take property from the intended object of the testator’s bounty and give it to someone else. In conferring a discretion in the wide terms found in s. 91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent.

87. In Ilott v The Blue Cross [2017] 2 WLR 979; 4 All ER 545, at [47], the UK Supreme Court wrote (emphasis added):

It is not the case that once there is a qualified claimant and a demonstrated need for maintenance, the testator’s wishes cease to be of any weight. They may of course be overridden, but they are part of the circumstances of the case and fall to be assessed in the round together with all other relevant factors.

88. In Ford v Simes [2009] NSWCA 351, Bergin CJ in Eq said at [71] (emphasis added):

... it is very important for the maintenance of the integrity of the process in these types of applications that this Court acknowledge once again the entitlement of testators, in certain circumstances, to make no provision for children…

89. The case of Sgro is an example where a testator had done precisely that – made no provision for an adult child. In this case, the NSW Court of Appeal found this to be “proper” in circumstances where that child had effectively received her share of an inheritance early. At [83], White JA (McColl JA agreeing) confirmed what his Honour had earlier stated when sitting as a single judge in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522; 85 NSWLR 253 (Slack v Rogan) at [127], which relevantly included the following (emphasis added):

...respect should be given to a capable testator’s judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator’s death is necessarily inadequate. Typically, … there can be no or only limited contradiction of the applicant’s evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant’s maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased’s death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator’s testamentary wishes in recognition of the better position in which the deceased was placed: Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454, cited in Nowak v Beska [2013] NSWSC 166 at [136]. This is subject to the qualification that the court’s determination under s 59(1)(c) and s 59(2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased’s death or will.

90. White JA went on in Sgro to state at [86] (emphasis added):

To recognise that the court is not in as good a position as a capable testator to assess what maintenance or advancement in life is proper for an applicant having regard to all of a family’s circumstances, including the relationships between the applicant and the deceased, and the merits and claims of other family members, is not to put a gloss on the statute. Rather, it is to acknowledge the superior position of the testator. The most important word in s 59(1)(c) is “proper”. Until the court has identified what is proper maintenance, education and advancement in life for an applicant, it cannot assess whether the provision made, if any, is adequate. What is proper requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties’ financial circumstances. Whilst the court will know the latter, it will only have an incomplete picture of the former. Of course, the court’s assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application. That does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.

91. McColl J agreed with White JA. In a separate judgment, but in the course of agreeing with the reasoning of White JA, Payne JA said at [4]-[6] (emphasis added):

[4] As White JA explains, whether a two-stage analysis is applicable to claims for family provision orders … has been the subject of significant debate in this Court, but the question should be of no real significance, provided that the nature of the first stage of the inquiry is not misunderstood. [5] The decision in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 makes clear the multi-faceted approach necessary to be adopted … [6] What is “proper” requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties’ financial circumstances. I agree with White JA that while the Court’s assessment of what is proper maintenance, education and advancement in life must be made at a time when the Court is considering the application, that does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.

92. It is important to recognise that, where it is evident that a capable testator did give due consideration as to the adequacy of provision for a particular claimant, that will not of itself be determinative of any subsequent claim for family provision. The issue is how freedom of testamentary disposition is factored into the assessment: see Steinmetz v Shannon [2019] NSWCA 114; 99 NSWLR 687, per White JA at [50] – [51].

A testator’s moral duty and societal values

93. The Court is required to take into account community expectations and judgments of the fair and reasonable person in the community: Burke at [124]; Andrew v Andrew [2012] NSWCA 308; 81 NSWLR 656 (Andrew) at [95]; Hertzberg v Hertzberg [2003] NSWCA 311 at [34], McCarthy v McCarthy [2010] NSWCA 103 at [20] and Evans v Levy [2011] NSWCA 125 at [51]. It is not always self-evident what the community expects, or what its standards or values are: Phillips at [113], per Basten JA.

94. In Andrew, Allsop P (when a member of that Court) cautioned at [18] that statements in authorities based on a particular factual assessment of circumstances by reference to human and societal values ought not be extrapolated to form principles or rules of general application. That being accepted, it is necessary to have some appreciation or understanding of the evaluative process that is involved in the statutory task.

95. A useful discussion in that regard is to be found in Henry v Hancock [2016] NSWSC 71 (Henry v Hancock) where Brereton J (as his Honour then was) stated at [68]-[70] (references omitted; emphasis added):

[68] It is important also to bear in mind the principle articulated by Young J, as he then was, in Stewart v McDougall, in explaining that the court's role is limited to making adequate provision for an eligible person's proper maintenance and advancement: It is important to state what the Family Provision Act permits a Court to do and what it does not permit a Court to do. The Act recognises that Australians have freedom to leave their property by their will as they wish with one exception. The exception is that a person must fulfil any moral duty to make proper and adequate provision for those whom the community would expect such provision to be made before they can leave money as they wish. Thus, in these cases, one does not ask if the will is fair, one does not ask if the testatrix divided her property equal, one does not as a judge ask how would I have made a will had I been the testatrix. What must be asked is did the testatrix fail in her moral duty to those who have a claim on her. Even if the Court comes to the view that the question should be answered in the affirmative, the Court still does not remake the will, but only alters it to the extent adequate provision is made for the eligible person in respect of whom the testatrix failed in her moral duty. [69] Formerly, the yardstick which was applied was that of the wise and just testator. Nowadays, it is fashionable to couch it in terms of “community standards”, although I am not at all sure that this is any different from the moral obligation of a wise and just testator and, as has not infrequently been pointed out, there is no ascertainable external community standard to guide the decision, which involves a broad evaluative judgment unconstrained by preconceptions and predispositions, and affording due respect to the judgment of a capable testator who appears to have duly considered the claims on his or her testamentary bounty – subject to the qualification that the court’s determination is made having regard to the circumstances at the time of the hearing, rather than at the time of the testator’s will or death. [70] Fair and reasonable members of the community may well differ as to whether a parent owes a moral or natural obligation to an able-bodied adult child such as to fetter the parent’s testamentary freedom. In Taylor v Farrugia, in a passage which appears subsequently to have received general approval, I said of a claim by an adult child: These are claims by adult children. It is impossible in this area to describe in terms of universal application the moral obligation or community expectation of a parent in respect of an adult child. I think, however, 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, and where that is feasible; where funds allow, to provide them with a start in life – such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [McGrath v Eves [2005] NSWSC 1006]. Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives 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 parents 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. It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent.

Provision for adult children

96. In Watton v MacTaggart [2020] NSWSC 1233 at [40] Ward CJ in Eq stated:

There have been a number of cases in which the question of what is proper provision for an adult child has been considered. Suffice it to make clear that there are no special rules or principles applicable to claims of adult children (nor any presumption for or against there being a moral obligation to make provision for an adult child), as Hallen J recognised in Towson v Francis [2017] NSWSC 1034 …(see at [78]-[80], there citing Burke v Burke [2015] NSWCA 195; Nicholas v Tubb [2016] TASSC 53; Toscano v Toscano [2017] NSWSC 419; and Underwood v Gaudron [2014] NSWSC 1055). Each case must be considered by reference to its particular facts and circumstances (though see the summary of principles in Camernik v Reholc [2012] NSWSC 1537 per Hallen J (at [159]).

97. Her Honour’s reference to Camernik v Reholc [2012] NSWSC 1537 (Camernik v Reholc) was to the same passage relied upon by the primary judge, which has been set out in the reasons of Elkaim ACJ and Rangiah J at [29] above. It is unnecessary to repeat it here.

98. Because of the submissions put by the appellants on appeal (discussed below) it is important to emphasise that although there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one (Mayfield v Lloyd-Williams [2004] NSWSC 419, at [110]), the community does not expect such a parent to provide an unencumbered house in ordinary circumstances (Kohari v Snow [2013] NSWSC 452 Hallen J, at [121]). Both decisions were subsequently cited in Salmon v Osmond [2015] NSWCA 42 at [109]-[110].

The approach taken by the primary judge here

99. On the authorities above, the primary judge erred in the approach taken at the first stage of enquiry, which, in my view, can be seen throughout the initial discussion of the applicable principles, the consideration of the various matters set out in s 8(3) of the Act, and then the ultimate reasoning to the finding challenged.

100. The primary judge stated at [114] and [115]:

[114] There is a useful summary of the approach to be taken to the words “adequate” and “proper” contained in the judgment of Hallen J in Hogan v Hogan [2013] NSWSC 1405 which I adopt for the purposes of this case. [115] I accept that the concepts of “moral duty” or “moral obligation” as discussed in Vigolo [2005] HCA 11; 221 CLR 191… remain relevant. However, I am conscious that those concepts must not supplant the application of the specific language of the statute. In that context, I address each of the criteria set out in s 8(3).

101. Two points may be made about this passage setting out the applicable principles. First, the primary judge identified the approach to evaluating what is “proper” by way of a general citing of what is a lengthy discussion in Hogan, without any specific identification of the matters to which attention has been drawn in the authorities above. While that is not of itself an error, it means that it is difficult, in light of the reasoning that followed, to confirm that the primary judge properly considered and applied the principles of testamentary freedom, and the need to evaluate this particular Testator’s moral obligations (or lack thereof) to people in the category of the second respondent.

102. The problem is compounded because his Honour did not then again refer to testamentary intention or any particular moral duty of this Testator vis-à-vis the son of a long-standing friend and business partner in undertaking the first stage of the task articulated in Singer v Berghouse. The only reference to such a consideration occurred when his Honour was dealing with the second limb at [153]-[155]. That omission is one indicator of an erroneous approach with regard to the first stage of the enquiry.

103. Second, the consideration of a moral duty or obligation of a Testator is not a separate matter. It is not a question of concepts of moral duty supplanting the language of the statute. Rather, they inform the approach taken to what is “proper” in applying the statute. The Testator had no children of his own. He was assisted in the sunset years of his life by the son of effectively his best mate, who had never been dependent on him. The question is whether that assistance was such as to somehow give rise to an obligation on the Testator to provide for the second respondent in his Will. Again, the passing reference to moral duty or obligation in [115] did not then feature in the primary judge’s consideration at all. That is a further indicator of an erroneous approach.

104. On this appeal, there was no challenge to the factual finding made by the primary judge that the second respondent was eligible to make the application. This case is therefore not the occasion to examine the interplay between the Domestic Relationships Act 1994 (ACT) and the consequent wide class of persons who may be eligible under the Act. I will only observe that if the facts of this case occurred in any other state or territory in Australia, the second respondent would not have been eligible to even make any claim for provision: see Succession Act 2006 (NSW), s 57; Family Provision Act 1970 (NT), s 7; Succession Act 1981 (Qld), s 41; Inheritance (Family Provision) Act 1972 (SA), s 6; Testator’s Family Maintenance Act 1912 (Tas), s 3A; Administration and Probate Act 1958 (Vic), ss 90, 90A and 91; Family Provision Act 1972 (WA), s 7. Whether the legislature intended such a divergent consequence by the incorporation of “domestic relationship” into eligibility under the Act is a question for another day.

105. However, merely establishing eligibility under the Act does not establish that proper provision for a person should have been made in a person’s will. In considering whether an applicant has been left without adequate provision, it is necessary to consider the relationship with the deceased that gave rise to the entitlement: Bayssari v Bazouni [2014] NSWSC 910 at [60] per Ball J. I have emphasised entitlement because nowhere in the primary judge’s reasoning on the first stage of the enquiry (or at all) is there any reflection upon the circumstances by which eligibility was established under the Act, and what might entitle the second respondent to “proper” provision out of the Will of this particular Testator in those circumstances.

106. Moving next to the primary judge’s consideration of the various matters set out in s 8(3), with regard to the nature and duration of relationship between the second respondent and the Testator, the primary judge stated as follows (at [116] and [117]):

Michael’s character and conduct (s 8(3)(a)) [116] Whatever disagreements occurred in the aftermath of Alex’s death, Michael showed himself to be loyal and caring supporter of Con in his declining years. His personal and financial contributions to Con’s welfare were those that one might expect from a child who has remained close to his/her parent during that child’s adult life. Indeed, Michael, in the course of cross-examination, said that he assisted Con because “he was wholly and solely part of my family for 40 years” and because he “genuinely loved the man”. I had no doubt that Michael was honestly expressing what he felt about Con when he gave that evidence. Nature and duration of relationship between Michael and Con (s 8(3)(b)) [117] To some degree this is already addressed in the preceding paragraph. Mr Sharwood for the plaintiffs submitted that the relationship should be seen as being in the nature of a parent/child or uncle/niece and nephew relationship. I accept that submission. The reality is that the plaintiffs grew up with Con as, effectively, their third parent. That relationship commenced in the early 1970s and continued, with some ups and downs, until Con’s death.

107. That then tied into the primary judge’s finding that the nature of the relationship was one akin to father and son (again, see [27] of the reasoning of Elkaim ACJ and Rangiah J), with the principles set out in Camernik v Reholc applied by his Honour.

108. The difficulty I have with how the primary judge characterised the relationship is that the fact that the second respondent loved his father’s closest friend like his own father and cared for him in that fashion in the latter years of his life, does not substitute the Testator as his father under the Act.

109. It does not result in the Testator having any obligation to provide for the second respondent in his Will, particularly in circumstances where the second respondent had already received very significant provision from his own father, both during his father’s lifetime and beyond, through a substantial inheritance, which resulted in the second respondent personally receiving, in the two and a half years before the Testator died, at least $650,000, from the sale of a property in Mitchell and the sale of two units in Pearce. That money was in addition to the second respondent receiving $310,000 in 2011 from the sale of the former family home in Hackett in 2011.

110. The importance of that consideration carries even greater force in circumstances where there was no established need other than a desire to guard against the vicissitudes of life (a matter to which I will return when addressing the second aspect of the appeal below). If the Testator had any obligation to provide for the second respondent at all by virtue of his “domestic relationship”, it was very much informed by the second respondent’s substantial inheritance from his own father, and in turn affected the assessment of what was “proper”. That is the gravamen of the appellants’ complaint, as set out above.

111. The view the primary judge took of the relationship affected the way that the primary judge then dealt with a number of the remaining mandatory statutory considerations in s 8 of the Act. His Honour considered the financial and non-financial contributions of the Testator and second respondent at [118]-[119]:

[118] Mr Sharwood argued that, while it is true that the size of Alex’s estate was in part due to the contribution and hard work of Con, in the partnerships between he and Alex and Joana, and then he and Alex after Joana’s death, the converse was also true. That is, Con had benefited to an equal degree from the hard work put in by Alex and Joana over the nearly 40 years that they had run businesses and managed commercial properties together. [119] I consider there is force in this submission. It seems to me that the partnership contributions largely balanced out over the years.

112. The finding that “the partnership contributions” Con made to the second respondent’s parents and vice versa “largely balanced out over the years” is again indicative of the error in approach. This was not a case about equitable contributions or fairness. This was a case about whether the Court should interfere with a Will because “proper” provision had not been made for the second respondent. Many people contribute to the wealth of others in life through their individual endeavours. It does not mean their children have an entitlement to provision out of the other person’s will.

113. His Honour then considered the specific financial contributions of around $40,000 made by the second respondent to the Testator: see [120] of the reasons of the primary judge. Although the primary judge determined that those payments were gifts and not loans, it is hard to reconcile the primary judge’s statement at [121] that the second respondent did not have “any particular expectation that they would be repaid” with the fact that those moneys formed part of the loan claim made by the second respondent as a debt that should be repaid by the estate in this litigation.

114. What is telling in relation to that aspect of the reasoning is the absence of any particular contribution that was of such significance as to give rise to some obligation on the Testator to make provision for the second respondent, so that in failing to leave him anything, “proper” provision was not available.

115. The next matter dealt with by the primary judge concerned the contributions of the second respondent and the Testator to each other’s welfare. The primary judge stated at [122]:

I have found that Michael made very substantial contributions to Con’s welfare in the last three years of his life. It is difficult to see that there was any reciprocal contribution.

116. As a bare fact, the primary judge’s finding may have been correct in relation to that time period. But it is devoid of the critical context of recognising why the Testator’s “contribution” to the second respondent’s welfare (s 8(3)(d) of the Act) was not “reciprocal” – he was not actually the second respondent’s father and had no obligation at all to contribute to the second respondent’s welfare. I have also put to one side the focus on the last three years of the Testator’s life. Given the nature of the relationship between Con and the father of the second respondent, there may well have been contributions made by the Testator to the second respondent’s welfare when he was a child. The focus on the last three years may be an example of the incomplete picture presented to the Court, as discussed in the authorities set out above (and in particular those at [79] and [90] of these reasons).

117. However, the point of addressing each of the considerations is to demonstrate why the characterisation of the relationship in the way adopted by the primary judge then skewed the statutory considerations, with the result that the discretion miscarried.

118. Consideration by the primary judge was then given to the income, property, and financial resources of the second respondent and the Testator: see [123]-[130] of the primary reasons. The primary judge’s treatment of the second respondent’s resources was the key part of the appellants’ complaint on this appeal.

119. The only reference in the reasons of the primary judge to the substantial inheritance provided to the second respondent by his own father, in fulfilment of the moral obligation of a father to maintain and advance his child even throughout adulthood was in the context of discussing the fact that the second respondent failed to disclose the substantial amounts received at [123]:

Mr Moujalli submitted by reference to Foye v Foye [2008] NSWSC 1305 (per McLaughlin AsJ at [14]-[15]) that the obligation of an applicant for FPA relief is to make full and frank financial disclosure. He submitted that Michael had not made such a disclosure. In cross-examination Mr Moujalli pointed out to Michael that he had not disclosed in his affidavit evidence that he had received $310,000 from the sale of the family home at Hackett following Alex’s death. Nor had he disclosed what he did with that money. Moreover, he had not disclosed that he had received $275,000 from the sale of Mitchell, nor what he had done with those funds.

120. The primary judge considered (at [128]) these were “the minutiae of past financial transactions” but that “[t]he disclosure which is crucially important is the current position”. Such reasoning does not take account of the fact that the inheritance was a relevant consideration, indeed, a highly significant consideration, to any provision in favour of the second respondent that the Testator as a family friend might then consider it appropriate to make in his Will, at the expense of his own brother and sister. It is a further indication of the erroneous approach taken that the primary judge reduced the significant financial provision made to the second respondent by his own father in the two to three years prior to the death of the Testator to a discussion that only focused on a disclosure of the second respondent’s current position as being what was “crucially important”. It simply does not take into account all the necessary ingredients of the melting pot in determining whether “proper” provision was available. On the contrary, the language used by the primary judge appears to reflect an approach that was precisely what the High Court in Vigolo cautioned against at [122]; that is, an assessment of the current position of a claimant in a vacuum.

The “concessions” made by the appellants

121. Elkaim ACJ and Rangiah J refer at [24] of their Honours’ reasons above to two concessions made by the appellant. I wish to deal with them in reverse order. In relation to the characterisation of the relationship between the Testator and the second respondent, the submission made by counsel for the appellants was:

…even applying these principles to a parent-child relationship, even if the second claimant had been a child of the deceased, the application of these principles would not have justified a conclusion that adequate provision was not available. … …the way that it can be tested is this, even if the second claimant was a child of the deceased and the second claimant is coming to the court where the second claimant has, and I'll take your Honours to the evidence, some $640,000 in terms of financial reserves such as shares in a bank, deposits in a bank, and in addition to that, owns a house valued at $510,000, subject to a mortgage debt of $360,000. In my submission, your Honour, in those circumstances, a community – the community would not expect the parent to make provision for such a claimant to have an unencumbered house, particularly in view of all of the financial [resources] already available to that claimant. … Here the claimant has lived independently for many years, both through his own efforts and through the very substantial inheritance from his own father, had accumulated significant reserves. Even if this was the child of the deceased, apply[ing] what Hallen J said would not result in the conclusion that there was some moral obligation on the parent to ensure that that child had an unencumbered house, and if that conclusion is right, your Honour, it has to apply with even greater force to someone in the position of the second respondent who wasn't in a parent-child relationship.

122. The focus of the above submission remained that the approach taken by the primary judge disregarded the provision that had been made for the second respondent which resulted in him having substantial financial resources, and the significance of such provision to the assessment of what was “proper”.

123. I respectfully disagree with Elkaim ACJ and Rangiah J that a concession as to the relationship as being one akin to father and son had a further consequence of conceding the Testator’s moral duty to provide for the second respondent. I have set out the concession in the terms that it was made to draw attention to the point the appellants were making, which was that any moral duty that might flow from the characterisation of the Testator’s relationship with the second respondent in that way could not be assessed in a vacuum. The lack of a direct attack on the specific finding of the primary judge about how to characterise the relationship between the Testator and the second respondent was not a concession that the approach taken by the primary judge in that regard was necessarily correct.

124. The references to amounts and the unencumbered house in the appellants’ submission have particular relevance to the second stage of inquiry and are discussed separately below.

125. The reasoning process undertaken in the reasons above is different from the path taken by the appellants in their written submissions, and as submitted orally above, the result is the same as the substance of what was submitted by the appellants in relation to what was “proper” with regard to any moral obligation of the Testator to the second respondent.

126. As to the other concession in relation to the finding at [142] of the primary reasons, it is important to first understand the finding. The primary judge’s reasons were as follows:

Section 22 of the FPA requires me to have regard to Con’s reasons for omitting Michael from his will, so far as they are ascertainable. While I have inferred that his initial decision in 2009 to change his will was based on his disagreement with Michael and Stella over the care of Alex, and perhaps the management of his property, it is not really possible to determine why Con determined to continue that omission up to the time of his death. Mr Wijesundara suggested in his evidence that Con remained unhappy about the partnership split in 2011. That might explain why he did not revisit the 2009 will. However, the wish referred to in [140] above rather suggests that Con did have second thoughts towards the end of his life. However, he did not act upon them. Overall, I consider that Con’s reasons for Michael’s omission are not sufficiently ascertainable to enable me to take them into account as required by s 22.

127. The appellants did not challenge that finding. However, all that s 22 of the Act provides is:

22 Relevance of testator's reasons (1) The Supreme Court shall, in determining an application for an order under section 8 or 9A, have regard to the testator's reasons, so far as they are ascertainable, for making the dispositions made by will or for not making provision or further provision, as the case may be, for a person who is entitled to make an application under this Act. (2) The Supreme Court may receive in evidence a statement signed by the testator and purporting to bear the date when it was signed and to set out reasons for making or not making provision or further provision by the will of the testator for a person as evidence of those reasons. (3) If a statement of a kind referred to in subsection (2) is received in evidence, the Supreme Court shall, in determining what weight (if any) ought to be attached to the statement, have regard to all the circumstances from which any inference may reasonably be drawn about the accuracy of the matters referred to in the statement.

128. A distinction must be made between the existence of any statement of a testator’s reasons and the principle of testamentary freedom. A concession that it was correct not to take into account any expression of reasons made by the Testator because they were not sufficiently ascertainable to meet the requirements of s 22 has no bearing at all on the latter. Section 22 of the Act is a facilitative provision to enable the Court to form a view about matters that affect what is “proper” provision. If a testator does take the trouble to explain choices made about who should receive the benefit of the estate, then s 22 requires the Court to take them into account. However, a testator does not have to give reasons for the choices they make about who should be provided for in the Will.

129. That is so, even where there is evidence that a testator was estranged from a sibling, as was the case here. There may numerous reasons why family members become estranged over time. Life experience suggests that it is not uncommon for a person to want to make amends at the end of their life or to set the ledger straight, and they may choose to do so through their will. There is no legal requirement for a testator to explain why, notwithstanding the fact that they have not spoken to their brother or sister for many years, they nevertheless want to benefit them and their families through an inheritance. The testamentary wish is enough. That may seem unfair to a claimant who feels as though their friendship and carer responsibilities to the Testator make him a more deserving recipient, and who may have had conversations with the Testator to the contrary, but as the authorities emphasise (see, for example, the emphasised words in the extract from Henry v Hancock set out above at [95]), the Court is not assessing what would have been fair.

130. When the totality of the circumstances here (the ingredients) are included in the melting pot, having regard to the Testator’s blood ties to his sister and brother overseas versus the son of his former business partner, I see no reason to conclude that the Testator in this case did not act as a “wise and just” testator in weighing the competing claims on his estate (to use the words of Dixon CJ and Williams J in McCosker at 571-572). There was no social, domestic, or moral obligation on the part of the Testator here to provide for the second respondent: see Chapple v Wilcox [2014] NSWCA 392; 87 NSWLR 646 (Chapple v Wilcox) at [15]. That was a case where the will under consideration involved a grandfather of the claimant. The observation must apply with even greater force when the relationship with the claimant is a family friend. This is also not a case where something has happened after the Testator died. On the contrary, at [134] of the primary judge’s reasons, his Honour records that the second respondent has “no particular financial needs or obligation[s]”.

131. Despite the obvious care and attention given to assimilating the evidence, and the transparent manner in which the primary judge applied the criteria of the Act, what is missing from the findings and reasoning of the judgment below is an articulation of any inadequacy or failure in the Testator’s duty. There is simply no consideration of what is a critical consideration in the factual matrix of the case. As Allsop P stated in Andrew at [7], if the reason why there is any breach of (parental) duty recognised by society cannot be articulated, then there is no basis for the court to intercede and interfere with the clearly expressed testamentary wish.

132. Great friendships have been described as among the sweetest joys in life. They at times involve care, commitment, sacrifices and investment of time and money. However, establishing that the second respondent was someone the Testator obviously loved does not, in my view, give rise to an obligation on the Testator to make provision for that friend in his Will so that a failure to make provision warrants intervention. That failure is the “proper provision” with which the Act is concerned. The financial and welfare contributions made to the Testator by the second respondent and the second respondent’s current and future financial circumstances were not such as to create any obligation to provide where there was otherwise none.

133. Accordingly, the first complaint, and Ground 4 in particular, succeeds.

The second complaint: did the primary judge err in finding that provision should be made in favour of the second respondent in the sum of $360,000?

134. The above reasoning makes it somewhat artificial to consider the second complaint. However, I have done so for completeness. That is because, even if the specific errors raised by the appellants and rejected by Elkaim ACJ and Rangiah J on the first complaint, combined with the concession made by the appellants as to the nature of the relationship, were dispositive of the first ground of appeal, the second complaint still falls to be decided. The concessions made by the appellants do not impact upon this aspect of the complaint.

135. The reasoning in relation to the first complaint applies to the second complaint, in that the error in approach has a flow on effect for the second stage of the enquiry as to what is adequate for proper provision.

136. If the Court determines to intervene, it is to do so only to the extent necessary: McCosker at 572. Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1 at 6, that it is not appropriate to endeavour to achieve “an overall fair” division of the deceased’s estate. It is not part of the Court’s function to achieve some kind of equity between the various claimants. The Court’s power to intervene 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; it is limited to provision which meets needs and does not have the power to express generosity: Bryson J at 6.

137. Here, even being mindful of appellate restraint on such matters, the evidence simply did not support a determination that it was “necessary” to adjust the terms of the Will to make proper provision for the second respondent in the sum of $360,000.

138. The second respondent’s submissions (at paragraph 34) indicate a clear understanding of the appellants’ argument that in determining what was “proper” provision, the primary judge needed to have regard to:

(a) The second respondent’s existing financial resources;

(b) The absence of evidence of any need which could not be met from his own financial resources;

(c) The size of his inheritance from his father’s estate; and

(d) The Testator’s own contribution during his lifetime to the size of that inheritance.

139. However, the second respondent did not then address that fundamental point, that the approach taken by the primary judge did not take account of those matters, as being the broader considerations for what was proper provision.

140. As noted by Elkaim ACJ and Rangiah J above at [26], the appellants concentrated on ss 8(3)(g) and 8(3)(e) of the Act, and in particular the financial needs and obligations of the second respondent.

141. The appellants’ submission emphasised that it is incumbent on an applicant for provision to disclose to the Court, as fully and as frankly as possible, all details of his or her financial and material circumstances: see Foye v Foye [2008] NSWSC 1305 at [14]-[15] (McLaughlin AsJ); In the Estate of the late Anthony Marras [2014] NSWSC 915 at [238] (Bergin CJ in Eq); and, more recently, Singh v Singh [2015] NSWSC 1457 at [153]–[154] (Black J)). In Collings v Vakas [2006] NSWSC 393, Campbell J (as his Honour then was) stated at [67]:

…[B]efore a court can be satisfied that a plaintiff has been left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff’s financial situation.

142. There are good reasons for this. Apart from the obvious point that it is for the claimant to prove their case, and that includes disclosing all the positive and negative factors that affect the assessment of what amounts to “proper” provision, the Court has the power under s 11(1) of the Act to specify conditions, restrictions and limitations subject to which the provision is to be made. For example, where it is clear that a particular claimant has certain problems which have led to a precarious financial position (gambling or other addictions being one example), it may be appropriate to require that certain provision be used to pay off a mortgage.

143. I accept the appellants’ submission that there was no evidence before the Court that the second respondent had any financial, medical or other needs which he was unable to meet from existing resources. The second respondent agreed in cross-examination that if he had any particular needs that he was unable to meet, he was required to include them in the affidavits he had prepared. In addition, he accepted he had not put forward any such needs.

144. I also consider that the appellants’ submission that the second respondent chose to give no evidence as to his living expenses, expenditure, or financial obligations, has merit. The cash financial position alone established an ability to meet his general daily living expenses. There was no evidence as to the costs of servicing his home loan, nor any evidence as to any current, or anticipated future difficulty in servicing the loan.

145. The second respondent appears to have conceded (at paragraph 28 of his written submissions) to he did not provide the full picture to the primary judge to explain what happened to more than half a million dollars in proceeds of sale from assets over the two years leading up to the Testator’s death. That remains of concern on appeal. On one view, it should have led to the primary judge dismissing the second respondent’s application.

146. Further, although the second respondent suffered a heart attack last year, his own evidence was that he did not have any medical expenses that he could not meet now or would be unlikely to meet in the future.

147. The primary judge accepted (at [134] of his Honour’s reasons) the second respondent’s circumstances were that he had no particular need or financial obligation he could not meet. Taking that finding as the starting point, it is then necessary to examine the reasons on which the primary judge based the finding that the future needs of the second respondent were such as to make it necessary to interfere with the Testator’s intentions apparent in the Will to reallocate what amounted to more than one-fifth of the Testator’s estate.

148. The reasoning of the primary judge comes down to two paragraphs, [151] and [157]: [153] It is apparent that Michael would be in dire straits indeed if he becomes unable to work at all in the coming years. Given that he still has a mortgage debt of $360,000, he would have to resort to his capital to defray his ordinary living expenses. Given that, with successful medical treatment, he can expect to live for another 20 years or more there must be a real risk that Michael would exhaust his capital during that time. … [157] Having particular regard to the size of the estate, the absence of evidence as to the situation of the beneficiaries, Michael’s current circumstances, the nature and duration of his relationship with Con and his devotion and care during the last years of the latter’s life, I conclude that provision should be made [in] favour of Michael in the sum of $360,000. In my view that sum, which gives Michael the option of paying off his mortgage, represents adequate provision for the vicissitudes in life which he now faces.

149. The first difficulty with the primary judge’s reasoning is one of logic, highlighted by the discussion at [35] and [36] of the reasons of Elkaim ACJ and Rangiah J, namely that the income from the second respondent’s employment was modest. It was so modest that it could not have been servicing the home loan. A potential inability to work in the future might be a change in circumstance, but given the income recorded, it was not one that the evidence supported as having any bearing on the second respondent’s ability to meet his mortgage repayments.

150. On the evidence, $250,000 was shortly due to the second respondent, representing his share in the sale of the Happy Days Amusements business in Broadway Sydney. The second respondent had a very small amount of superannuation, namely $120,000. He presently owns $60,000 worth of CommSec shares, and cash assets of approximately $13,000 in bank accounts solely owned by him. He has further cash assets of approximately $200,000 (being his sole share) held in a bank account with his sister. That is $643,000. Added to this are property assets in Greece valued at almost $180,000.

151. The existing house owned by the second respondent has three bedrooms and two bathrooms. The second respondent is single with no children. He accepted under cross-examination that the value of $535,000 was a value he attributed to his home, solely based on one sales figure of the house next door in 2015. That led to the second respondent agreeing that his estimate was in fact at an undervalue.

152. The only liability listed at all for the second respondent was a mortgage of $360,000.

153. In those circumstances, the primary judge’s determination that $360,000 was the quantum of “proper provision” that should be made was not based on any established current or future need. As can be seen from the reasons extracted above, the quantum was based entirely on a “buffer” for the vicissitudes of life, including hypothetical health issues, and a possible reduction in employment given the second respondent’s age (60 years).

154. Provision of such a kind may be appropriate: see Crossman v Riedel [2004] ACTSC 127 at [49] and the cases there-cited. I also agree with Elkaim ACJ and Rangiah J at [45] of their Honours’ reasons that the figure chosen was not expressly tied to paying off the mortgage.

155. However, the amount arrived at by the primary judge was expressly designed to enable the second respondent to be immediately debt free if he chose, with $643,000 in ready cash reserves and a 3-bedroom house owned outright, the value of which exceeded $535,000.

156. Such an amount is not provision that reflects the minimum intervention necessary, as required by the authorities set out above. The decision below equated to a determination that the Testator – a family friend – was required to put the second respondent in a position where he had an unencumbered house: an asset that was itself significantly larger in size than the accommodation actually needed by the the second respondent and accepted to be valued at more than the second respondent had estimated. That was in addition to having recourse to his shares in other property assets overseas if required. As submitted by the appellants, on the principled application of the authorities referred to above, not even an actual adult son of the Testator could have expected such a result as the appropriate buffer for the vicissitudes of life.

157. The sum arrived at by the primary judge was one that was based on what was desirable and convenient, rather than one that was based on what was proven to be necessary for the second respondent’s proper provision, taking into account the discussion in relation to the first complaint above.

158. For the primary judge not only to intervene, but to make provision in a monetary sum that bore no resemblance to any “need” identified, in an amount that could not even be justified if the second respondent was the actual son of the Testator, is so out of kilter with prevailing community standards of what is right and appropriate in the circumstances of this case as to bespeak error (to use the phraseology of Ward JA in Burke at [105]): see further discussion in Slack v Rogan at [125]-[127]; Chapple v Wilcox at [11]-[15], [62]-[64], [67]; Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 at 46; c.f. Burke at [105].

159. For these reasons, Ground 5 also succeeds.

The re-exercise of the discretion

160. If the Court were re-exercising the discretion, at the risk of labouring the point, it is again necessary to have regard to the nature of the relationship between the Testator and the second respondent, the second respondent’s financial and welfare contributions as discussed above, the family ties of the existing beneficiaries under the Will, the size of the estate (which here permits a more liberal understanding of testator obligations), the age and financial circumstances of the second respondent, his existing accommodation and the other matters set out in s 8 of the Act which have not been given prominence here but remain part of the melting pot.

161. A further consideration is that it is generally desirable to keep the second respondent in the accommodation he has previously enjoyed, if the size of the estate permits (as to which see [76] above). However, there was no evidence as to the costs of the second respondent servicing his home loan, nor the interest rate applicable on the mortgage. That is unsatisfactory, but it does not prevent the Court from calculating what would constitute an adequate financial buffer to provide for the second respondent.

162. An example of adequate provision to guard against the vicissitudes of life may have been more in the nature of $194,000 being provided to the second respondent, which represents an adjustment of the Will by approximately 12%. With such provision, the second respondent would have had a sum of money sufficient to reduce the mortgage on his present house to a level of $166,000, if he chose to do so. He would have the ability to own his house outright almost immediately if he chose to use his significant cash reserves. Alternatively, he could continue to pay the significantly reduced mortgage over a number of years, using part of his current cash reserves. Assuming mortgage repayments of approximately $500 per week, and an average interest rate of 3% (as an example), that would permit him to repay the mortgage in about seven years, and at approximately that time, he would qualify for the age pension. At that point, the second respondent would have a house he owned outright, a small amount of superannuation, any pension in retirement, and (assuming he did not adopt an extravagant lifestyle in the meantime), a significant amount of cash still in reserve upon which he could draw over the years. He would have assets overseas that he could liquidate, and of course an ability to down-size in order to realise additional cash assets.

163. In my view, if the primary judge’s finding that adequate provision was not available under the Will were maintained, the sum of $194,000 is the high-water mark of what might have constituted adequate provision for the second respondent’s proper maintenance and advancement.

Conclusion

164. As will be apparent from the foregoing, I would have allowed the appeal, set aside order 1 made by the primary judge and in lieu thereof ordered that the second respondent’s claim pursuant to the Act be dismissed.

165. However, on the findings of the primary judge in relation to what was described as the loan claims at [159]-[161] of his Honour’s reasons, the consequence of resolving the claim for family provision in that manner may have been that the second respondent was then entitled to judgment in the sum of $10,000 plus interest at the same rate as that calculated by the primary judge at [162] of his Honour’s reasons.

166. In light of the reasoning of Elkaim ACJ and Rangiah J, which is determinative of the appeal, consideration of any costs consequences that follow is unnecessary.

I certify that the preceding one hundred and eighteen [118] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Acting Justice McWilliam

Associate: Zoe Saunders

Date: 3 June 2022

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Amendments

3 June 2022 Replace “first respondent” with “second respondent Paragraph [42]

Insert “,” after “(b)”. Paragraph [53](e)

Replace “Elkaim and Rangiah JJ” with “Elkaim ACJ and Paragraph [107] Rangiah J”.

Replace “makes it is somewhat artificial” with “makes it Paragraph [134] somewhat artificial”. Replace “accommodation actually needed by the Paragraph [156] Testator” with “accommodation actually needed by the second respondent