Aveyard v Selwood; Philpott v Selwood; Riley v Selwood

Supreme Court of NSW|2023-09-29|Before: Robb J

JUDGMENT

These reasons deal with three applications made by daughters of the late John Raymond Selwood (the Deceased) for further provision under s 59 of the Succession Act 2006 (NSW) in respect of the will of the Deceased made on 23 March 1984.
The plaintiffs are Linda Joy Riley, Vicki Pauline Aveyard and Susan Christine Philpott. For reasons that will be explained below, Linda Joy Riley's proceedings have been brought by her next friend, Kim Anthony, who is her husband.
The defendant in each of the proceedings is Garry John Selwood, who was the Deceased's only son, and is the executor and sole beneficiary under the Deceased's will.
The Deceased's wife, Thelma Eileen Selwood, was the mother of the parties. She died in 2014. She made a mirror will to the Deceased's will on the same date.
The Deceased died on 22 October 2021 at the age of 85 years. The proceedings were commenced on 14 or 15 July 2022 so that all of the proceedings are within time for the purposes of s 58(2) of the Succession Act. As a daughter of the Deceased, each of the plaintiffs is an eligible person for the purposes of s 57(1)(c) of the Succession Act.
A fourth daughter of the deceased, Debbie Ann Smith, has not made an application for further provision out of the estate of the Deceased. She has in each proceeding been served with a notice of eligible persons, and so her interests may be disregarded by the Court for the purposes of these proceedings pursuant to s 61 of the Succession Act.
Save for the Deceased, I will, with no disrespect intended, refer to the members of the family by their first names.

The Deceased's estate

As already noted, the principal asset in the Deceased's estate is a farming property outside Orange called Hillcrest. If Garry inherits Hillcrest under the Deceased's will, he will be the fourth generation of the Selwood family to own the farm.
Hillcrest was valued at $2,650,000 as at 16 February 2023, pursuant to a valuation report of registered valuers dated 6 March 2023, which has been accepted by the parties.
The other major asset of the Deceased's estate consisted of an interest in a neighbouring property to Hillcrest called "Leighton" that was purchased in 1978 in the names of the Deceased, Thelma and Garry, who at that time operated a farming partnership together. It is not clear whether the partners treated Leighton as an asset of the partnership. The balance sheet prepared by the accountant for the year ended 30 June 2017 was prepared for the initial partnership, even though Thelma died in 2014. It is doubtful that Leighton was treated as an asset of the partnership, because the total value of property, plant and equipment was stated to be $82,251. There is no evidence as to the purchase price of Leighton. However, the loan from Elders Rural Bank that was used to purchase Leighton is treated as a non-current liability of the partnership. Garry lived on Leighton until the property was sold after the death of the Deceased. Garry then moved into a house on Hillcrest.
As the Deceased inherited all of Thelma's estate under her will, he inherited Thelma's one third interest in Leighton, so that his own estate included a two thirds share in Leighton.
Leighton was sold on 20 January 2023. Garry's solicitor received the net amount of $1,177,805.64 from the sale. The Deceased's estate is entitled to $785,203.76 and Garry is entitled to $392,601.88.
The Deceased's estate included money in bank accounts totalling $9,490.27, which had been expended on liabilities of the Deceased's estate by the time of the hearing. The deceased had shares with an estimated value of $11,298.21. The deceased also had personal effects, including two motor vehicles. A value of between $4,000 and $10,000 has been assumed for the motor vehicles, and there is no evidence of the monetary value of the Deceased's personal effects. Garry adopted $4,000 as the value of the motor vehicles, which seems reasonable given what I infer was their age. The parties disagreed as to the value of the Deceased's interest in the farming partnership that he had with Garry after Thelma's death.
Garry presented evidence that the Deceased's estate had liabilities estimated at $33,437 in total.
The plaintiffs submitted in par 33 of their written submissions that, around the date of the death of the Deceased, the assets of the partnership were its fixed and non-current assets valued at $120,256 and its cattle on hand, while the liabilities of the partnership were primarily composed of loans to Elders Rural Bank of $368,367.77, as well as a debt owed to Thelma's estate.
The affairs of the two partnerships have been complicated by the fact that there was no accounting at the time the initial three-way partnership was dissolved upon Thelma's death, and in fact the business and affairs of that partnership were continued to be operated by the Deceased and Garry in partnership as if the original partnership had simply continued.
In pars 29 to 38 of their written submissions, the plaintiffs made submissions as to the value of the partnership interests that the Court should attribute to the Deceased's estate. The submissions are relatively complex and based upon an insubstantial evidentiary foundation, which is not the fault of the plaintiffs, but arises out of the inadequacy or indefiniteness of the relevant evidence. At pars 37 to 38, the plaintiffs' submissions assert the following ultimate conclusion: 37. There is no evidence as to the value of the other Partnership assets. As at the date of death of the Deceased. Garry estimated the 'plant and stock' at $150,000. That estimate is unrealistic where the value of 97 head of cattle sold in the 2021-2022 financial year was $170,022. Based on the sale price around the time of death of around $1,980 per head, the value of the herd is between $268,179 and $302,940. That, together with an estimate of $150,000 for 'plant and stock', gives a total asset position of the partnership of between $425,000 and $450,000, and a net asset position, taking into account the Rural Bank debt and the debt owed to Thelma's estate, of between $27,000 and $60,000. Thus, the Deceased's share in a notional winding up of the Partnership is between $18,000 and $40,000. 38. It is well-settled (see e.g. Houghton v Immer (No. 155) Pty Ltd (1997) 44 NSWLR 46 at 60, Handley JA (Mason P and Beazley JA agreeing) that the Court should 'resolve doubtful questions against the party "whose actions have made an accurate determination so problematic."'. The reason that the determination of the asset position of the Partnership is problematic is that Garry, as a fiduciary, has not properly wound up the Partnership (and the Earlier Partnership) pursuant to his duty. Any question of the proper value of the Partnership business, and the Partnership assets, should be resolved against Garry.
At pars 23 and 24 of his written submissions, Garry submitted that the best valuation of the partnership is $110,143, being the profit or distribution realised in the 2022 financial year, plus the assets of $121,522, less an amount of $72,580 that I will explain below, giving a total deduction of $48,927, less $13,599 owed to the Australian Taxation Office for GST. Garry submitted that the $72,580 should be deducted as a partnership asset because, although it was included in the value of land and buildings in the partnership's 2022 financial statements, it related to the acquisition of property called a "lane" which is now part of Hillcrest, and included within the $2,650,000 for Hillcrest. The $72,580 should therefore be excluded to avoid double counting. If that is done, the resulting figure is $145,516, which is close to the $150,000 value in the inventory of property attached to the grant of probate. The Deceased's estate's share would be two thirds of that amount, being $97,100.
I note that that amount is greater than the range of $18,000 to $40,000 suggested by the plaintiffs in par 37 of their written submissions.
I do not accept the plaintiffs' submission that the value of the Deceased's estate should be assessed for the purposes of these proceedings upon the basis that any breach of fiduciary duty by Garry has made an accurate determination of the value of the Deceased's share in the partnership with Garry problematic.
Garry was not Thelma's executor, so he was not required to take any formal steps to dissolve the initial partnership for the benefit of Thelma's estate. Moreover, as noted above, the Deceased was the majority partner of the continuing partnership with a two thirds interest. It seems plain that the partnership simply continued to operate, and following the financial statements for the 30 June 2017 year, financial statements were prepared in the name of the partnership between the Deceased and Garry. The partnership operation was not so formal as to require Garry to take steps to cause either partnership to be dissolved and formal accounts prepared.
Further, Garry is the sole beneficiary of the Deceased's will and until he was served with the plaintiffs' summonses in mid-2022, he had no reason to believe that he should conduct the affairs of the partnership in any other way than he saw fit. The advent of the family provision claims by his sisters has not had the effect of retrospectively requiring him to conduct the affairs of either partnership in a formal manner.
In any event, a review of the financial statements of the partnership between the Deceased and Garry that were in evidence shows that there have been significant variations in its financial affairs from year to year. Further, the economic value of the assets of the partnership may differ significantly, depending upon whether those assets must be sold because Hillcrest is required to be sold, or whether they can be used on an ongoing basis for the purpose of continuing farming operations by Garry.
The total value of the assets of the partnership between the Deceased and Garry, as stated in the financial accounts for the financial year to 30 June 2022, is $121,552. The total liabilities are $313,599, giving a net asset deficiency of $192,047. However, the loan to Elders Rural Bank is $300,000. That loan was repaid out of the sale proceeds of Leighton. If the liability to Elders Rural Bank of $300,000 is excluded, the value of the partnership would be $107,953. The Deceased's two thirds share of that value would be about $72,000, say, $70,000. I will adopt that value, which lies between the values suggested by the parties. I will do so on the basis that it is not a very reliable assessment of the value, and in any event, the relatively low value that will be attributed to the Deceased's interest in the partnership will have little consequence for the determination of the present applications.
The value of the Deceased's estate is therefore close to $3,500,000.
The plaintiffs' costs of the proceedings are $197,731.36, split almost equally between the three plaintiffs. Garry's costs are $168,000. The total costs are $365,731.36, say $365,000. Although Garry's submissions noted that any costs awarded to the plaintiffs, if they are successful, may be less than the amount charged to the plaintiffs, he accepted the plaintiffs' claim for costs for the purpose of determining the value of the Deceased's distributable estate. On that basis, the value of the distributable estate of the deceased would be about $3.15 million.

Parties' positions concerning orders to be made

I will now set out the positions adopted by the parties concerning the orders that the Court should make to determine these proceedings.
The plaintiffs submitted that the evidence justified the Court in making orders for equal lump sum further provision for each of the plaintiffs in the sum of $600,000. The plaintiffs urged on the Court that, as they are sisters, it is appropriate that they be treated equally in respect of their inheritance from the Deceased's estate. If orders were made as requested by the plaintiffs, the value of the Deceased's estate that would be received by Garry would be reduced by $1.8 million, plus costs of $365,000, giving a total of about $2,165,000. On the plaintiffs' estimate of the value of the Deceased's estate, Garry would be left to receive $1,335,000.
In possible recognition of the difficulty in supporting the outcome, in the face of the applications for further provision made by the plaintiffs, that the plaintiffs should receive nothing out of the Deceased's estate, Garry made submissions that were directed at justifying orders for further provision in favour of the plaintiffs that would have the residual effect that Garry would retain sole ownership of Hillcrest.
At this stage, I will only explain the ultimate result for which Garry's submissions contended as being the upper limit of the further provision that should be ordered. The submissions were detailed and I will consider them more fully below. Garry submitted at par 13 that an order for further provision could be made in favour of Linda up to the amount of $367,000 (albeit that the money should be made available subject to a trust of which Garry was the trustee, so that Garry would in some circumstances receive part of the trust fund upon Linda's death). Garry submitted at par 14 that an order for further provision could be made in favour of Vicki in the sum of $273,000. In relation to Susan, Garry submitted that she had not established that adequate provision had not been made for her proper maintenance out of the estate of the Deceased, but added, at par 15, that the Court might be satisfied that an order for further provision in the sum of $68,000 be made in favour of Susan.
If the orders for further provision reluctantly suggested by Garry were made by the Court, the total amount that would be required to be paid out of the estate, before any order for the parties' costs, would be $708,000.
If the value of the Deceased's estate is taken to be $3,200,000, and the value of Hillcrest at $2,650,000, and the further provision in favour of the plaintiffs of $708,000, and the costs of $356,000 are deducted, the value of the estate, if Garry retained sole ownership of Hillcrest, would be a deficit of $523,000.
The position adopted by Garry is reflected in pars 33 to 37 of his written submissions, which were as follows: 35. As has been said, Garry has $392,601 sitting in his solicitor's trust account, being his share of the net proceeds of sale of "Leighton". Out of that amount, he will need to pay $97,010 to the estate, representing the deceased's two-thirds partnership interest. That $97,010 is included in the figure of $860,994 referred to [33]. This leaves $295,591 for Garry. If orders for provision were made totalling between $410,000 and $705,590 (being $410,000 plus $295,591), but say $705,000, Garry ought to be given a reasonable opportunity to satisfy those orders out of the estate assets and his assets. 36. If orders for provision are made exceeding $705,000 by any substantial amount, then the likelihood is that "Hillcrest" will need to be sold, unless Garry can obtain an alternative source of funds (for example, by borrowing against "Hillcrest") to meet any excess over $705,000. In that event, Garry ought to be given a reasonable opportunity to see whether he can do that. 37. The balance of these submissions are directed towards the ultimate proposition that orders exceeding $705,000, should not be made.

Credibility of the witnesses

Garry, Vicki, Susan and Kim gave evidence and were cross-examined. Linda's son, Cameron Riley, provided an affidavit which was read but he was not required for cross-examination. A former employee of the Deceased, Aubrey Langham, gave evidence for the plaintiffs and was cross-examined.
The plaintiffs submitted that Vicki's, Susan's and Kim's evidence should be accepted, as they made appropriate concessions and presented as reliable witnesses.
I am satisfied that the evidence given by these witnesses was reliable, although, in the ordinary way, due care must be taken about generally expressed evidence given in brief terms about events long in the past.
Garry did not challenge the credibility of the evidence given by these witnesses, although he submitted, at par 10 of his written submissions, that each of the plaintiffs, in Linda's case through Kim, has exaggerated the difficulties of their circumstances.
Mr Langham's evidence was called by the plaintiffs in order to challenge Garry's claim that he had for many decades worked conscientiously in the farming partnerships with his parents. The substance of Mr Langham's evidence, in his 10 October 2022 affidavit, was that he worked part-time for the Deceased from the early seventies to around 1996 on weekends and during his holidays, and full-time during the apple-picking season. Mr Langham denied that Garry worked as hard on the farms as he claimed in his affidavits. He said that, on numerous occasions, the Deceased and Garry would have intense arguments about the lack of work that Garry was putting in on the farms. These fights got worse when Garry took on the job as night manager of the motel in Orange. Mr Langham said that he had numerous conversations with the Deceased and Thelma in which they said that they wished Garry worked harder and that he was more committed to the farm and did not work at the motel. Mr Langham said that routinely Garry would go to bed in the morning when he returned from his night shift and he would not do any work on the firm until well into the afternoon, if at all.
The plaintiffs submitted that the Court should accept Mr Langham's evidence on the basis that he was "independent". Garry responded that he may well have been independent, but his memory generally in the witness box was so poor that his evidence should not be relied upon. Garry also submitted that there was a difficulty with Mr Langham's evidence because Mr Langham recalled Garry working "nearly every night" at his motel job and would not accept that Garry worked only two nights per week at that time. That submission was based upon Garry's evidence that he did not start working for five nights a week until 2003.
I accept Garry's submission that Mr Langham's recollection was to some extent muddled as to events that occurred decades ago, when Mr Langham was working for the Deceased and witnessed the personal interactions between the Deceased and Garry. However, I am prepared to accept the substance of Mr Langham's evidence concerning the exchanges between the Deceased and Garry concerning the conscientiousness of the work done by Garry on the farm. This is the sort of interaction which I believe would tend to be remembered by persons who witnessed it on a regular basis. In any event, however many nights Garry was working off the properties, it is probable that interrupted sleep would have affected his capacity from time to time to work on the farms at a level that was satisfactory to the Deceased.
The plaintiffs submitted that Garry's evidence should not be accepted unless against interest or corroborated by documentary evidence. They further submitted that Garry's recollection about historical matters was wholly unreliable.
The plaintiffs relied upon examples such as that the evidence given by Garry that the number of the cattle on the property in October 2014 was roughly 50 was incorrect, and when confronted with contrary documentary evidence, he said, "I got a lot of figures in my head, and I couldn't say." The plaintiffs also relied upon Garry's evidence that he provided $12,000 for the purchase of Leighton from his wages working for his grandfather. The plaintiffs submitted that that evidence was incredible, as Garry had given evidence that he had been working full-time for one dollar per hour for three years, and previously he had worked for $0.20 per hour. The plaintiffs submitted that it would have been virtually impossible for Garry to have saved the amount of $12,000.
The plaintiffs also relied upon the fact that there was evidence that about $55,000 had been diverted from partnership debtors to Garry's own personal bank account. Garry accepted in cross-examination that much of that money was paid into an account ending in 6832 that Garry called his "progress saver account" for personal use. Notwithstanding the service upon Garry of a notice to produce, no bank account statements for any account ending in 6832 were produced to the plaintiffs.
Although elements of Garry's evidence were not entirely satisfactory, I am prepared to accept that, in broad terms, he gave his evidence honestly to the best of his recollection. It would be unwarranted for the Court to decline to accept Garry's evidence unless it was against interest or corroborated by documentary evidence. I think it is likely that the affairs of the two partnerships were conducted in a somewhat informal way and that the financial statements of the partnerships were prepared by the partnerships' accountants after the event. Garry spent his working life as a farmer and for some time he supplemented his income working in a factory and later he worked as a night manager and security officer at a motel. I mean no disrespect to Garry by observing that he did not appear to be financially sophisticated. He may have forgotten details of financial matters, and it may be that he muddled some partnership money with his personal finances. It appeared to my observation that during the course of his evidence Garry became emotionally distraught, which I attribute to his fear of losing the inheritance of Hillcrest.
Given the nature of the issues that the Court must take into consideration when determining applications for further provision under s 59 of the Succession Act, which usually do not depend upon precise findings of fact as to the relevant historical circumstances, I am satisfied that the Court should accept Garry's evidence generally on the issues that matter.

Connection of the parties with Hillcrest

At the time of the hearing, Garry was aged 63, Linda was 61, Vicki was 55 and Susan was 53.
All of the children grew up on Hillcrest. The plaintiffs each contributed to farm work until they left home. There was evidence that in Vicki's case she worked on the farm well after she ceased to live there. Vicki and Susan also assisted with bookkeeping in more recent times, and Linda, apparently made some mortgage payments for a time in the 1980s.
Apart from a time when Linda was apparently estranged from her parents, as noted above, from the time her children were born, her difficulties with her parents resolved and she has had a satisfactory relationship with them.
The evidence did not establish when Linda left Hillcrest. Vicki left the farm in 1992, aged 22. Susan married in 1994, which I understand is connected with her ceasing to reside on the farm.
There was no direct evidence as to why Garry continued to work the farm in partnership with his parents, while the daughters left to make new lives off the farm with their husbands. Leighton had been purchased in the name of the Deceased, Thelma and Garry in 1978, while the three plaintiffs were still living on Hillcrest. That suggests that the Deceased and Thelma were applying a now culturally outdated principle that the family farm would be taken over by their only son. In any event, there were only two residences available, one on Hillcrest and one on Leighton. It may have appeared natural to the parents that a young man would be a more effective farm worker than any of the daughters.
It is also reasonable for the Court to infer that the parents were motivated by a desire to continue the Selwood family ownership of Hillcrest into the fourth-generation and beyond.
There is no basis in the evidence for the Court to conclude that the plaintiffs moved off the farm to make new lives elsewhere with their husbands other than because there was no serious possibility that they would have been given a choice in the matter.

Garry's circumstances

Garry's case was that it was not for him to establish need, but he accepted that his circumstances were relevant to the consideration of what was "adequate" and "proper" in respect of the fact that no provision had been made for any of the plaintiffs in the Deceased's will.
Garry has a daughter and a son by his second marriage. He has a second son by his third marriage, called Garry Jr, who is two and half years old.
In relation to his connection with the farming properties, Garry's evidence was that, other than for a period of about four months during his first marriage, Garry has lived his whole life on either Hillcrest or Leighton. He has been involved in farming Hillcrest since around the age of six. He now lives on that property, having sold his former place of residence at Leighton. He wants to keep Hillcrest and, in the fullness of time, to bequeath it to his younger son, Garry Jr, thus continuing the Selwood family tradition, which has a history of more than 150 years.
Garry said that he worked full-time on the farm (with no other employment) from 1975 until 1988. In 1988, Garry started another factory job to supplement his income. He worked mornings on the farm, then he had the afternoon shift at the factory. Later, he shifted to working days on the farm, then the "graveyard shift" at the factory. This job lasted until around 1990. Garry then worked only on the farm and had no other job until November 1993, when he started work as a night manager and security officer at a motel for two nights a week. Garry said at par 18 of his 4 October 2022 affidavit: "At around this time the farms began to do it tough financially so I stopped taking payment for my work." In 2003, Garry's shifts at the motel increased to alternating weeks of four, then five nights a week. Garry said, however, that he continued working on the farm during the day.
Garry gave evidence that when he was 25 his grandfather said to him words to the effect: "You are your parents' only son. One day Hillcrest will be yours". Garry said that he was not being paid as much as he should have been for the work that he was doing, but he was happy to keep doing it because of what his grandfather had said to him.
I have recorded above the effect on the evidence given by Mr Langham about exchanges between the Deceased and Garry concerning the conscientiousness of the work performed by Garry on the farm. Given the nature and timing of the work that Garry was doing off the farm for most of this period, it might be expected that Garry may not always have been fit enough to satisfy the Deceased's requirements concerning the standard of the work that Garry was to do around the farm.
The position is that the plaintiffs, as the Deceased's daughters, were effectively denied the possibility of continuing in a substantial way to contribute to the operation of the farm.
Garry was given the opportunity to do so as a partner with his parents. It is now a matter beyond realistic proof whether Garry was in a position from his own funds to make a significant contribution to the purchase price of Leighton. It is also unrealistic to expect that the Court can make any sound judgment about the value of the work that Garry contributed to the operation of the farm. Over the years, whatever that value was, the Deceased in fact accepted it, irrespective of whether from time to time the Deceased complained to Garry that his contribution was not adequate.
It is an objective fact that Garry has had the benefit of having Leighton or Hillcrest as his residence for almost the whole of his life. That is a neutral matter, because the evidence does not permit the Court to make any fair judgment about whether, having regard to the amount of farming work that Garry did, and whatever may have been the income that he received for his efforts, the fact that he was able to live rent-free was some advantage that he had not earned.
Garry said that now that he is working on Hillcrest by himself, he finds it difficult to continue with his job at the motel. He would like to be able to give up that job so that he can spend more time with his family.
Apart from his one third share in the sale proceeds of Leighton, Garry said that he has superannuation of $60,000. He said that his net assets were worth $715,346.41, although that was on the basis that his share in Leighton was worth $500,000, but the amount realised from the sale of the property was significantly less than that amount.
Garry said that as of 4 October 2022 his income was approximately $1,407 per fortnight and his outgoings were $1,192.
Garry was diagnosed with type 2 diabetes in 2018 for which he takes medication. He is also treated for asthma and hay fever and has been told that he has a double hernia for which he will need an operation.

Viability of Hillcrest as a farming operation

The evidence given by Garry concerning his historical involvement in the partnership farming operations is significant to the issue of the ongoing viability of Hillcrest as a single farming operation.
The valuation report that established the value of Hillcrest at $2,650,000 for the purpose of these proceedings contains the following statement as to the basis upon which the valuers determined the value of the property: … Property comprises 104.48 ha rural lifestyle property that is gently undulating in nature and is predominantly cleared. The site also includes a small vineyard (approx 5 ha) which is not considered income producing. Soils on the property vary but include mainly basalt soils. The property features multiple fenced paddocks and 4 spring fed dams. Fencing on the property ranges from fair condition in most areas to poor in some. The subject property is considered a rural lifestyle property and any agricultural uses are considered secondary to the residential use of the property. The primary focus of any proposed purchaser would be on its suitability as a place to live rather than its suitability for any agricultural use. [Emphasis added].
As noted above, Leighton was purchased in 1978. As the partners were required to borrow money for the purpose of purchasing Leighton, I infer that they made a judgment that the farming operation conducted on the two properties would be more viable than that previously conducted solely on Hillcrest.
On the evidence, the Court must infer that the farming operation was sufficient to support the Deceased and Thelma, but there is no historical evidence concerning the income earned by the farming operation for the period when Thelma was a partner.
Garry's evidence was that he took work off the farm in 1988 to supplement his income, and that, from November 1993, Garry always worked at a second job. From that time, Garry ceased taking payment for his farm work, and by 2003, his shifts at the motel had increased from two nights a week to alternating weeks of four, then five nights a week.
The available financial statements for the partnership between the Deceased and Garry show that it made a loss of $41,692 in financial year 2016, $18,373 in financial year 2017, $40,483 in financial year 2018, $45,888 in financial year 2019, $59,489 in financial year 2020 and $48,767 in financial year 2021. The financial accounts for the 2022 year show that the partnership made a profit of $110,143 on the back of cattle sales of $170,022. Ninety seven cattle were sold during that financial year, which was substantially more than in previous years. There was a natural increase in that year of 66 cattle, which was also substantially more than in previous years. Garry did not give any evidence that would support a finding that the 2022 result could be repeated consistently.
Every year since 2014, which is the earliest year for which financial accounts are available, the net assets of the partnership have been shown to be in deficit in amounts over $100,000, the highest being a deficit of $265,827 in the 2021 financial year. However, the deficit was principally caused by the debt to Elders Rural Bank being treated as a debt of the partnership.
As Leighton was sold on 20 January 2023, there was no evidence concerning the likely effect of the sale of that property on the financial viability of continuing farming operations on Hillcrest. The interest expense was in the order of $15,000 per year, which is an expense that will now be saved. However, if the loss-making trend of the farming operation had continued, it may have been possible to partially fund losses by increasing the debt secured on Leighton.
The partnership losses were funded in part by an increase on the mortgage over Leighton of about $95,000 between 30 June 2018 and 30 June 2019.
The income requirements of the Deceased were supplemented because he drew an aged pension but did not take drawings from the operation of the partnership.
It is fair to say that Garry is desperate to retain sole ownership of Hillcrest, and, as explained above, for that purpose, he will contemplate applying his share in the value of Leighton, if necessary, to supplement any further provision that the Court determines should be made in favour of the plaintiffs. As also explained, Garry is prepared to investigate the possibility of raising money on the security of Hillcrest, if that is necessary to meet the further provision that the Court determines should be made out of the Deceased's estate in favour of the plaintiffs.
By an affidavit made on 28 September 2023, Garry made a somewhat belated and simplistic attempt to demonstrate how he could farm Hillcrest profitably into the future if he received it from the Deceased's estate.
Garry accepted that the 10 acres of 80 year old apple trees on Hillcrest were no longer producing a viable crop. That is consistent with the partnership's financial statements, which show no income from fruit sales after 2017 except for minor sales of $8,041 in 2019. Garry said that he would keep the 10 acres of five year old apple trees and that he intended to cover at least parts of the apple orchard to prevent birds and bats ruining the crop.
Garry said that he would crop between 30 and 50 acres each year with oats to be cut and then bailed to be fed to the livestock over the winter when there is less feed for them to eat from the pastures. He would use the remaining acres to run cattle.
Garry asserted that this farming operation would be enough for him to keep his family on the farm, regardless of the performance of the apple crop.
I accept that Garry's aspiration to continue to farm Hillcrest is earnest, but his claim that the operation would be financially viable was mere assertion. Garry provided no financial evidence to support his claim, although he made a number of broad assertions that were not admitted into evidence because the basis of his opinions was not established.
If Garry receives the title to Hillcrest from the Deceased's estate, in circumstances where the whole of the balance of the estate, and all or part of Garry's own share of the value of Leighton is applied to meet orders for further provision in favour of the plaintiffs, it seems clear that Garry will not have any capital to operate the farm, and will not be able to absorb any continuing losses that are consistent with the recent results of farming operations, unless he can borrow on the security of Hillcrest. That difficulty will plainly be exacerbated if Garry has to borrow money on the security of Hillcrest to supplement orders for further provision made in favour of the plaintiffs.
If Garry does not have capital to defray continuing losses, or if he needs to borrow ever more money on the security of Hillcrest to do so, it is probable that his financial circumstances will oblige him to sell Hillcrest relatively soon.
It is relevant to the viability of Garry's aspiration that he will farm Hillcrest until he can leave it to Garry Jr that Garry was aged 63 at the time of the hearing, and he cannot expect much help from his son in working the farm for many years.
It is not surprising, therefore, that in Garry's case there has been no exploration of any possible alternative outcome, if the consequence of the orders made by the Court is that it is necessary for Hillcrest to be sold. If that is the outcome, then Garry will have the benefit of the whole of the Deceased's estate after satisfying the orders for further provision in favour of the plaintiffs, and meeting such costs of the proceedings that the Court might order should be paid out of the estate. The Court has no evidence from Garry as to what his circumstances would be in that situation.
The plaintiffs' case on this issue was that the evidence establishes, on the balance of probabilities, that Garry is not in a position to work Hillcrest to support his family and that he cannot operate it viably. Instead, Garry would be adequately provided for if he had sufficient funds to purchase an unencumbered residence valued in parity with the homes of the plaintiffs, in the range of $600,000-$700,000, together with a lump sum equivalent to his wages into the future. The plaintiffs referred to evidence that the life expectancy of a man of Garry's age was 21 years. They submitted that a sum of $685,000 would be sufficient to provide the equivalent of $1,000 per week, which is almost double his current wages, until Garry turned 85.
I conclude that it will be realistic for the Court to act upon the basis that, more likely than not, it will not be viable for Garry to continue to farm Hillcrest on a profitable basis over the long term.
That still leaves the possibility that, if Garry inherits sole ownership of Hillcrest without any significant debt, he will be able to use the property as his residence for the indefinite future, even if he is unable to carry on any significant farming operation. He may be able to continue to farm the property at a level that does not incur significant losses.
That outcome would be a legitimate aspiration for Garry to have, but it would at least diminish Garry's case that a persuasive reason for the Court to make orders that had the effect that Garry inherited the sole ownership of Hillcrest, is that that would satisfy the Deceased's supposed testamentary aspiration that Hillcrest would remain in the Selwood family as a farming operation into the indefinite future. Once it must be accepted that Hillcrest is a lossmaking farm, it is likely only to be a matter of time until some owner decides to realise the value of the property, in order to deploy that value more appropriately.

Linda's case

Linda lives with her husband, Kim. Their adult children have left home and she has no caring responsibilities.
Linda was diagnosed with early onset dementia in 2016, and is currently non-verbal. She needs full-time care and cannot be left unattended. Although Linda is able to mobilise independently, she requires full assistance with feeding, showering, dressing, and requires constant care, guidance and supervision.
Kim submitted on behalf of Linda that her needs are for security of tenure in a nursing home. The costs of nursing home care are closely regulated by the Aged Care Act 1997 (Cth) and rules, such as the Fees and Payment Principles 2014 (No 2) (Cth) (Fees Principles), made pursuant to s 96-1 of the Aged Care Act. Certain amounts referred to in the Aged Care Act and the Fees Principles are gazetted; the Commonwealth publishes a summary, the most recent edition of which was in evidence at Supplementary Court Book (Exhibit PD2), page 788. The components of the fees are: (a) the accommodation payment; and (b) resident fees.
Maximum accommodation payments are set by legislative instrument. The current maximum refundable accommodation deposit (RAD) is $550,000, although it is possible to obtain a suitable room for Linda for $475,000. Instead of a RAD, a resident may choose to pay a daily accommodation payment (DAP). The amount of the DAP is set by s 20 of the Fees Principles, which state that the DAP amount is the RAD amount multiplied by the maximum permissible interest rate (MPIR) (currently 8.15%) and divided by 365 days. The DAP is set on the day of entry as part of the accommodation contract.
Kim submitted on behalf of Linda that the current breakeven point between the RAD and the DAP is 12.3 years. A further advantage to the use of a RAD, rather than a fund from which the DAP is paid, is that it is not counted as an asset toward the pension assets test, or the means testing asset test, due to the operation of s 1118 of the Social Security Act 1991 (Cth).
The resident fees are set by s 52C-3 of the Aged Care Act as the standard contribution plus a means tested care fee (and, if Linda resides in an 'extra service status' room, 'extra service fees').
The standard contribution is set by s 52C-4 as a gazetted amount which is currently $60.86 daily. That is 85% of the aged pension.
Kim, on behalf of Linda, submitted that the means tested fee is set through the interaction between s 52C-3, s 44-21, and s 44-22. Utilising the income and assets disclosed by Kim, the means tested amount would be approximately $107.30, calculated in accordance with s 44-22, and thus the means tested fee would be up to approximately $40.36, given that the 'maximum accommodation supplement amount' in s 44-21(6) is gazetted at $66.94.
Section 44-21(7) and (8) subject the means tested amount to a yearly and lifetime cap. The lifetime cap is currently $78,524. On the above analysis, according to Kim's submissions, this will be reached in just over 5 years.
In summary, if a DAP is chosen, the cost of Linda's residence in a nursing home may be approximated at $75,537 per year for the first 5 years, and $60,806 per year thereafter.
Linda also has medical expenses of $1,800 per year, currently, and Kim submits that it may reasonably be expected that these will continue and increase.
There is no evidence of Linda's life expectancy. Median further life expectancy of a woman of Linda's age is 26.5 years.
Kim provided in par 86 of the plaintiffs' submissions a table that sets out, before vicissitudes, Linda's financial needs until death, assuming that it is in 5, 10, 15 or 20 years, approximated as follows: Age at death DAP RAD of $475,000 66 $386,685 $668,720 71 $704,584 $793,654 76 $1,017,614 $913,719 81 $1,330,644 $1,033,784

Linda's current financial resources are her superannuation of $176,894 and any ability of Kim to provide for her. Kim has 5 years left until pension age, and assuming he works until the age of 67, he will, subject to the need to accommodate Linda, be able to retire with superannuation and savings of approximately $800,000.
Kim submitted that Linda is patently in need of provision. He submitted that $600,000 would, in broad terms, result in Kim and Linda living out their final years, Linda being supported in a nursing home, with contribution to the expenses thereof being provided by Kim, with the couple being able to live thereafter free of mortgage debt and with reasonable provision for their older age.
Garry's response to these submissions was to note that Linda and Kim live at a residential property in Orange which they jointly own and which is unencumbered. Linda and Kim have two adult children, who have left their parents' home and are not dependent on them.
Linda and Kim's house is a three bedroom, one bathroom, freestanding home which has been appraised at a value of $600,000-$660,000. Garry submitted that because of escalating house values, the appropriate value to accept is $660,000.
Garry accepted that Linda was first diagnosed with dementia in around 2015 and that she has not worked since her diagnosis. She is now obviously unable to work and has no earning capacity.
Garry noted that Linda presently receives Australian Government "funded supports" of around $310,000 per year and that there is some evidence that she will be entitled to the aged pension when she turns 67. There was no evidence of whether Linda would be eligible for some other sort of government assistance, if she moves into a care facility before she turns 67, as Kim's evidence was that he had not looked into that possibility.
Garry noted that Linda has superannuation of approximately $176,000, and that Linda and Kim have approximately $28,000 in cash.
Garry's submissions then turned to an examination of Kim's financial position. Kim works as a cardiac sonographer. He earns approximately $104,000 per annum, and $5,665 dollars net per month. Kim's evidence was that Kim and Linda's expenditure is around $3,264 per month. On that basis, there is a monthly surplus of around $2,401 per month (or around $28,800 per year). Garry submitted that one of Kim's expense line items is $500 per month for "out-of-pocket care", which he could not explain in cross-examination, and which, Garry submitted: "he accepted could be disregarded".
I interpolate that I will not disregard the expense item, even though in the witness box Kim could not precisely verify it. Given the health position of Linda, it is easy to accept that there would be sundry out-of-pocket care expenses.
Garry also relied upon Kim's acceptance in cross-examination that another expense line item of $1,000 per month for food will be halved if Linda goes into a care facility. Garry therefore submitted that, if Linda ever goes into a care facility, Kim will have a monthly surplus that will increase to around $3,401, or around $40,812 per annum.
Garry's submissions then noted that Kim has superannuation of approximately $613,000.
Garry conceded that Linda needs full-time care, either at home or in a care facility.
Garry argued that, while Linda remains at home, she has no financial needs which are not being met by the Australian Government, or which cannot be very comfortably met by herself and Kim. That is because she has permanent approval to receive Australian Government subsidised aged care which includes "Permanent Residential Care" and "Residential Respite Care at a High Level." Linda's full time at home care costs are met by the NDIS, and she receives "funded supports" of around $310,000 per year.
If Linda survives to aged pension age, while she remains being cared for at home, that will also be another source of income for her. Her superannuation fund, Garry argues, provides a further substantial buffer for contingencies.
Garry submitted that while Linda continues to be cared for at home and her needs are being met by her NDIS package and the substantial contributions made by Kim, all her current needs are being met, and that her case is not dissimilar to that in Maria Oliveira v John Antonia Oliveira [2023] NSWSC 1130 (Oliveira's case). I will consider the effect of that authority below.
Garry submitted that there is no certainty - not even a quantifiable likelihood - that Linda will ever go into a care facility. He submitted that, contrary to Kim's submissions, Dr Butler's letter of 31 August 2022 (at Court Book Volume 1, page 59) does not express the opinion that "Linda will need to go into care soon." He points out that Dr Butler says that: "[Kim] would like to continue looking after Linda for as long as possible, but is aware that placement might be needed at some point". Garry relied upon Kim's evidence that he wants to keep Linda at home for "as long as [he] possibly could", and that at present, "… we can still look after her." Kim accepted that a move to a care facility was only "a possibility in the future." Garry submitted that whether that possibility ever becomes a reality is a matter for speculation. Further, the timing and the cost of Linda going into care is also speculative.
Garry relied upon the limited nature of the medical evidence concerning the likelihood and timing of Linda requiring to go into care.
Garry submitted that there were issues that ought to have been addressed by the evidence, such as whether Linda would be eligible for Australian Government subsidised aged care if she was required to move into a care facility. There was no evidence of Linda's life expectancy. Linda has recently lost a significant amount of weight. Garry submitted that Linda bears the onus to prove her claim and that medical evidence ought to have been led to establish the prospects of her mortality as a result of her recent weight loss, but that evidence was not lead. He submitted that the Court should not find that Linda's life expectancy is a further 26.5 years, given the state of the medical evidence, the fact of Linda's dementia and her recent unexplained weight loss.
Finally, Garry suggested in his written submissions a possible approach to Linda's claim. That was on the basis that while she remains at home Linda has no current financial need. Garry then explored the possibility of Linda moving into a care facility.
On that case, on Linda's evidence there would be two options. The first option involved the payment of an "accommodation payment" in the form of a RAD of $475,000, and "resident fees" comprised of Standard Daily Charges of $60.86 per day or $22,213.90 per annum, and, theoretically, a Means-Tested Fee of $40.36 per day, or $14,731 per annum, subject to a lifetime cap of $78,524. That would be reached if Linda was in the care facility for 5.33 years. Garry submitted that there was no evidence that the proposed care facility would charge a Means-Tested Fee or that if it did, the full amount of $40.36 would be charged.
The second option would involve an "accommodation payment" in the form of a DAP of $106.06, or $38,712 per year, together with the same "resident" fees for the first option.
Garry noted that the RAD option ends up being cheaper (in terms of cash outlay) than the DAP option if Linda lives for more than 12.3 years in the care facility. Garry then formulated his suggested approach to Linda's claim on the basis that the RAD option is chosen.
Garry submitted that if Linda is admitted into a care facility, Kim's monthly income will exceed their expenditure by around $3,401, or $40,812 per year. Kim and Linda's home is unencumbered. In money terms, Linda's admission into a care facility will "save" Kim around $12,000 per year.
Garry submitted that Linda's application for further provision should be dealt with on the basis that any "Means-Tested Fee" (if charged) should be paid by Kim, as it will be the value of Kim and Linda's assets which cause any Means-Tested Fee to be charged in the first place, so that those assets should be applied to pay the fee.
Garry then submitted that up until the time that Linda turns 67 and becomes eligible for the aged pension, half of the "Standard Daily Charges" of $22,213 per annum (being $11,106) should be paid by Kim, reflecting his primary responsibility as a spouse and the fact that the approach proposed by Garry does not involve Kim contributing to the RAD, even though he is likely to get the benefit of any RAD refund. Garry submitted that Kim can comfortably meet payments of $11,106 per annum (plus, if it is charged, the $14,731 Means-Tested Fee out of his surplus income of $40,812 per annum). Linda will turn 67 in six years, after which point any further "Standard Daily Charges" can be paid out of her pension (as the legislature has capped the charges at 85% of the pension).
Garry's position was that the estate of the Deceased should only be required to meet half of Linda's Standard Daily Charges, being $11,106 per year, for the six years up to the time when Linda turns 67, when those charges will be met out of her pension.
The mechanism suggested by Garry to achieve the estate's contribution to the Standard Daily Charges was that the Court should impose a trust over $67,000 of the estate's assets, on terms that: (1) the trustee is Garry, and the beneficiaries are Linda and Garry; (2) if Linda goes into a care facility, Linda is to be paid $11,106 out of the fund; (3) Linda is to be paid a further $11,106 each anniversary date until she turns 67, or she dies (whichever occurs sooner); and (4) if there is any money remaining in the fund when Linda turns 67, or she dies (whichever occurs sooner), that amount should be paid to Garry.
Garry's submissions then turned to how the RAD of $475,000 should be paid, if Linda is admitted into a care facility.
Garry submitted first that the whole of Linda's superannuation entitlement of $176,892 should be applied towards the RAD. He submitted that that was appropriate because the RAD is refundable. (I interpolate that, as Linda has not yet reached pension age, it is not clear whether she will be entitled to apply the whole of her superannuation towards payment of the RAD).
As to the remaining balance of around $300,000, Garry submitted that the Court should impose a trust over $300,000 of the estate assets, on terms that: (1) the trustee is Garry and the beneficiaries are Linda and Garry; (2) if Linda goes into a care facility, the money is paid to her by applying it towards the RAD; and (3) if Linda dies without having gone into a care facility, the money is paid to Garry.
Garry supported this mechanism for providing for a contribution by the Deceased's estate to any costs incurred by Linda if she goes into care by submitting that this mechanism would leave Kim and Linda's house entirely unencumbered. That would be for Kim's benefit because otherwise Linda could fund the RAD herself out of her own assets, which presumably means that Linda and Kim's house would have to be sold. Kim would retain all of his superannuation for his own benefit, and he would likely receive the benefit of the refund of the RAD. Garry submitted that the trust mechanism proposed is the preferable one for delivering the payments to Linda, because Kim does not hold an enduring power of attorney for Linda, and he is not subject to the duties which an attorney would owe. (I interpolate that Exhibit P1 is an appointment of an enduring guardian made by Linda in favour of Kim on 16 May 2016).
Kim's response to these submissions on behalf of Linda was to submit that Garry's submission that Linda has no present need for further provision, and that need will only arise if, in the future, she needs to go into a care facility, is misconceived and contrary to contemporary community standards.
Kim submitted that the proposed trust was unworkable and that it would have the uneven effect of giving no provision to Linda if she were to remain at home but would result in a payment to Kim, by way of a refund of the RAD on Linda's death, if she took up residential care.
Kim accepted that Linda does not have any immediate financial need while she remains at home, but contested the submission that there is no quantifiable likelihood that Linda will go into a care facility. On the contrary, Kim submitted that the Court should find that on the probabilities such an eventuality is around the corner any day, despite Kim's desire for Linda to stay with him. There is evidence of a 'moderate to severe' burden on Kim, who gave evidence of it becoming increasingly difficult as Linda deteriorates to maintain a full-time job. There is indirect evidence of a deleterious effect on Kim's health, with a "very limited window in which Kim can sleep", and an unhealthy diet with high caffeine and alcohol intake.
Kim submitted that, contrary to Garry's submission, there is no basis for a finding that Linda will be entitled to the age pension. Kim submitted that although it was his understanding when he gave evidence that Linda would be entitled to a pension, the effect of the Social Security Act was that Linda would become "qualified for an age pension" upon reaching the age of 67, but the issue of whether she would actually receive the age pension would depend on the application of the "Rate Calculator" in s 1064 of the Social Security Act.
Kim submitted that although his financial circumstances are relevant considerations under s 60(2)(e) and (l) of the Succession Act, there is no basis in authority for the Court to entertain the intricately detailed submissions made by Garry concerning how Linda's care needs should be funded.
In particular, in relation to the appropriateness of the proposed trust, Kim relied upon authority as to the general undesirability of annuities and life estates: see Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 at [139]-[144].
Kim submitted that, if the Court determined that any order for further provision in favour of Linda should include the creation of a trust, then the appropriate trustee would be either Kim, or Linda's son, Cameron.

Vicky's case

Vicky's circumstances are that she is 55 years old. She married Michael Aveyard in May 2002, but they divorced in August 2011.
Vicki owns a four bedroom, one bathroom freestanding home. The home was appraised by an agent appointed by Garry at $560,000-$610,000, and by an agent appointed by Vicki at $480,000-$520,000. The property is mortgaged to the NAB to secure a loan of around $272,000. Vicki's mortgage payments are $1,733 per month.
Vicki has superannuation of approximately $125,000 which she cannot currently access because of her age.
Vicki has a son, Jack, aged about 21, who is in the fourth year of a carpentry apprenticeship, which will end in January 2024. Jack still lives with Vicki and does not contribute to household expenses, although he earns $760 net per week, which is expected to increase to $860 per week when he starts working as a qualified carpenter. Vicki pays for Jack's car insurance and supports Jack financially. Vicki proposes that Jack will continue to live with her, and she will not ask Jack to contribute to household expenses.
Vicki also had a daughter, Karlie, who died by suicide in February 2022. Since 2019, Vicki has been the sole guardian and provider for Karlie's daughter, Marlee, now aged 8.
Vicki works as a property manager with Belle Orange. The evidence was that she earns $4,164 net per month. She also receives a Centrelink Allowance of $585 per month, and a Family and Community Services payment of $1,319 per month, both referable to her guardianship of Marlee. Vicki's total net monthly income is therefore around $6,068. Vicki's monthly expenditure exceeds her monthly income by around $100, although that deficit would cease if Vicki ceased supporting her adult son.
Vicki's case is that although they are not currently disabling, she has multiple chronic medical conditions for which she takes long-term medications. These may reduce her ability to work in the long-term.
Vicki gave evidence of various asserted future financial needs in par 73 of her affidavit made on 8 July 2022, being: I have the following future financial needs; i) Helping my son with attaining further Trade qualifications; ii) Schooling and UNI education for my Granddaughter; iii) mental Health Care for my Granddaughter; iv) Dental needs for granddaughter; v) Ongoing medical treatment for myself as my COPD and rheumatoid arthritis health conditions worsen; vi) Ongoing treatment for optometrist and audiology needs; vii) Full dentures/dental implants required for myself; viii) Due to being full-time carer for my Granddaughter, I need to take on the responsibility of Motherly duties and will need to reduce my weekly working hours to attend schooling/sporting activities along with Mental Health appointments; ix) Early retirement due to my deteriorating health conditions and the responsibility that comes with being a full-time carer/Grandmother; x). Replacement of family vehicle.
As to Vicki's aspiration to help Jack to obtain future trade qualifications, Garry submitted that there was no evidence that this was a realistic likelihood, and that in any event, in principle, the Court would not make an order for further provision in favour of Vicki if the purpose was to provide for a third party such as Jack. Garry submitted that government funding was provided for Marlee's needs. He further submitted that there was no evidence to substantiate the need for and the cost of the other future financial needs suggested by Vicki.
Garry submitted in response to Vicki's claim that each case must be considered on its own merits, and there is no basis in principle to order provision for each sister in the same terms so as to provide "parity of provision" for each sister.
Garry submitted that an order for further provision in the sum of $273,000 in Vicki's favour would enable her to pay off her mortgage debt, giving her security of accommodation, and thereby freeing up $1,733 of her income per month to establish a financial buffer against other contingencies as they arise. Alternatively, Vicki could use that amount to substantially pay down the mortgage (say, down to $50,000), and retain the remaining $50,000 as a buffer. Garry submitted that an order in that amount would amply address Vicki's claim.

Susan's case

Susan is currently 53. She is married with three children who still live with her.
Susan jointly owns her family home with her husband which is worth slightly over $700,000. Their liabilities are approximately $100,000. Those liabilities have increased by some $65,000 in just over a year.
Susan has diabetes and some joint pains and degeneration.
Susan married her husband, Damien, in 1994. In 2005, Damien was injured in a motor vehicle accident in which his car rolled over three times causing, among other things, "extremely severe traumatic brain injury". This caused "an area of gliosis, likely to be traumatic in nature". This subsequently led to blindness in Damien's right eye, deafness in his left ear, and other sequelae of brain injury. At the time of leaving hospital, Damien had "significant word finding difficulty and ma[de] use of swear words as fillers." Three years later, he had ongoing "substantial problems with intellectual and functional impairment…resulting in a loss of independence and occupational function".
At present, Damien is holding down a job and Susan accepts there is no present reason to suppose that Damien will need to stop working soon. Susan's case is, however, that having regard to Damien's medical history and present condition, a significant level of uncertainty exists as to Damien's ability to continue contributing to the finances of the family and to continue in health without the need for ongoing hands-on support from Susan.
Susan presently works as a medical administrator at a general health practice. Her salary is around $3,911 net per month. Damien works as a panel fabricator. His net salary is around $3,252 per month. Their monthly income exceeds their monthly expenditure by around $1,896. Susan has superannuation of around $146,000. Damien has superannuation of around $183,000.
Garry responded to Susan's claim that she anticipated that Damien will need future eye surgery by saying that the evidence does not disclose any likely cost of this. Garry submitted that there is nothing in the evidence to suggest that Damien is unable, or will become unable, to work. Garry referred to the opinion of a Dr Perera in 2011 that Damien had done remarkably well over the last three and a half years, and in August 2012, that Damien was thoroughly enjoying working as a casual employee, mowing lawns for the council. Garry further referred to a statement made by Dr Perera in September 2012 that Damien remained very stable in terms of his endocrine health. Garry relied upon there being no evidence of Damien having medical consultations since 2016.
Garry submitted that Susan had not made out a case that the effect of no provision having been made for her in the Deceased's will was that adequate provision had not been made for her proper maintenance. He submitted that no order should be made in Susan's favour. However, if the Court considered that an order was warranted, Garry submitted that the order should not exceed the estate paying what would be required to pay off the mortgage debt, being $68,000.
Susan's case is that she has a need for security of accommodation and a buffer against the potential reality of her husband's precarious health and income earning capacity to worsen. Susan has a need to renovate her house, including boundary fencing, a larger water tank to more effectively ride out future periods of reduced rainfall, roofing and doors.
Susan said that she will be unable to access the age pension for another 14 years, and to access her superannuation, if she retires, for another two.

Legal principles

Section 59 of the Succession Act contains the statutory basis of the Court's jurisdiction to make orders for further provision for applicants out of the estates of deceased persons, and relevantly provides: 59 When family provision order may be made (1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that - … (c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both. (2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
Section 60 of the Succession Act contains a non-exhaustive list of matters that may be appropriate for the Court to consider in exercising the jurisdiction vested in it by s 59. Matters that may be of particular relevance to the present applications are set out below: 60 Matters to be considered by Court (1) The Court may have regard to the matters set out in subsection (2) for the purpose of determining - (a) whether the person in whose favour the order is sought to be made (the applicant) is an eligible person, and (b) whether to make a family provision order and the nature of any such order. (2) The following matters may be considered by the Court - (a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship, … (c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate, (e) if the applicant is cohabiting with another person - the financial circumstances of the other person, (f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated, (g) the age of the applicant when the application is being considered, … (l) whether any other person is liable to support the applicant, … (p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
In Tarbes v Taleb [2023] NSWSC 565, Meek J has set out in a comprehensive way the modern attitude of the Court about the principles upon which the jurisdiction granted by s 59 of the Succession Act should be exercised. I respectfully adopt his Honour's observations, and will set out the parts of his reasons that are significant for the purposes of the present applications: The statutory scheme … [196] The scheme under the Ch 3 Succession Act, as with those under earlier Acts, allows flexibility for the judicial function to be exercised over time as society evolves and community standards change: eg Gorton v Parks at 10G -11A; Ikonomou v Panagopoulos [2017] NSWSC 1805 (Ikonomou) at [93] per Parker J. [197] The exercise of power to make a family provision order is conditioned on the Court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements of the judicial task in s 59(1)&(2) are in a sense described in s 60(1)(b) as being (a) whether to make an order and (b) the nature of any such order. Section 60(2) provides a detailed body of considerations for the task in s 59: Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 (Andrew v Andrew ) at [6] per Allsop P. [198] The Court may make a family provision order if it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made: s 59(1)(c) Succession Act. [199] The Court: (1) must be so satisfied at the time when the Court is considering the application: s 59(1)(c) Succession Act; and (2) have regard to the facts known to the Court at the time the order is made: s 59(2) Succession Act. [200] The adjective "adequate" derives its meaning in context. The adjective generally conveys the meaning of something being equal to or fully sufficient to the particular requirement or occasion: Macquarie Dictionary, online ed. Within s 59(1)(c), the adjective "adequate" qualifies the noun "provision". [201] The adjective "proper" derives its meaning in context. Generally, the word conveys the notion of something being fit or suitable or appropriate to the particular purpose or circumstances being addressed: Macquarie Dictionary, online ed. Within s 59(1)(c), the adjective "proper" qualifies the expression "maintenance, education or advancement in life" (emphasis added). [202] "Adequacy" is concerned with the form and or quantum of provision, whereas what is "proper" is concerned with the standard of the maintenance, education and advancement in life of the applicant for relief: Verzar v Verzar [2012] NSWSC 1380 (Verzar v Verzar) at [127] per Lindsay J. [203] The composite expression "maintenance, education or advancement in life" is a way of describing types of provision. An order for provision operates as a codicil to a Will (or a Will in the case of intestacy) unless the Court orders otherwise: s 72(1) Succession Act. … [208] Once one understands the above, that assists in understanding the generalised way in which the Court in dealing with family provision claims refers to "maintenance, education or advancement in life". Invariably, the Court describes these terms in ways which give a generalised indication of their nature but allow flexibility for types of provision to be filled by content from the facts of each given case and to adapt to changes in society and how life is generally lived over time. [209] For example, one sees in the caselaw descriptions indicating that: (1) "provision" covers the many forms of support and assistance which one individual can give to another: Mallitt v Gow [2022] NSWSC 1012 at [187] per Hallen J citing Diver v Neal at [34] per Basten JA (Allsop P and Ipp JA agreeing); (2) "maintenance" includes provision over and above a mere sufficiency of means upon which to live but is clearly not confined to that: Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 (Vigolo v Bostin) at 228-229 per Callinan and Heydon JJ; and (3) "advancement" goes beyond the need for education and maintenance. In a proper case, it will extend to a capital payment designed to set a person up in business or upon marriage: Bartlett v Coomber [2008] NSWCA 100 at [50] per Mason P (Hodgson JA agreeing) citing McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82 at 575 per Dixon CJ and Williams J; Stiles v Joseph (Supreme Court (NSW), Macready M, 16 December 1996, unrep); Mayfield v Lloyd-Williams [2004] NSWSC 419 . The evaluative task [210] What is clear is that there is an interaction between the expressions "adequate provision" and "proper maintenance, education and advancement in life" in s 59(1)(c). Thus, one must have some conception of what is proper maintenance, education and advancement in life for an applicant, in order to be able to assess whether the provision made, if any, is adequate: Sgro v Thompson [2017] NSWCA 326 (Sgro v Thompson) at [86] per White JA (McColl JA at [1] and Payne JA at [2] agreeing). [211] What is "proper" is not limited by some fixed concept or defined content. It requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances: ss 59(1)(c), 60(2); Sgro v Thompson at [86] per White JA (McColl JA at [1] and Payne JA at [2] agreeing). [212] Whilst what is "proper" provision is largely informed by the facts of each given case, the Court is left to form opinions as to what is "proper" on the basis of its own general knowledge and experience of current social conditions and standards: Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31 (Goodman v Windeyer) at 502 per Gibbs J (as his Honour then was) (Stephen and Mason JJ agreeing). In each case, the Court applies a standard appropriate to all the circumstances of the case: Estate Grundy; La Valette v Chambers-Grundy [2018] NSWSC 104; (2018) 17 ASTLR 64 (Estate of Grundy) at [95] per Lindsay J; Steinmetz v Shannon at [41] -[42] per White JA, at [132] per Brereton JA. [213] Lindsay J described this element of the Court being left to form opinions on the basis of its own general knowledge and experience of current social conditions and standards as "making due allowance for current social conditions and standards": Estate of Grundy at [97]. [214] The fact that there is an element of the Court making an assessment of what is "proper" provision upon the basis of its own general knowledge and experience of current social conditions and standards is undoubted: Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 at 211 per Mason CJ, Deane and McHugh JJ; Goodman v Windeyer at 502 per Gibbs J. This is acknowledged by Gummow and Hayne JJ in their dissent in Vigolo v Bostin at [74] -[75] . [215] The current position is that the High Court has recognised that in the assessment of the Court of what is "proper" in any given case a judge will consider what a judicious person would do in the circumstances of each given case, by reference to contemporary community standards or current social conditions and standards described as "moral duty" or "moral obligation": Vigolo v Bostin at [2] -[25] per Gleeson CJ, and at [109]-[121] per Callinan and Heydon JJ. This has been acknowledged by White JA in Steinmetz v Shannon at [40] . [216] How a Court makes due allowance for current social conditions and standards is somewhat elusive and has prompted discussion both in caselaw and extrajudicially as to concepts of moral duty and community standards and their application to any given case. [217] Conventionally, making due allowance for current social conditions and standards is something that is left to the knowledge and experience of each individual judge that determines family provision cases. It is not something that is susceptible to some form of external proof: Steinmetz v Shannon at [40] -[46] and especially at [42] per White JA; Gorton v Parks at 11A -C per Bryson J (both his Honour and White JA in Steinmetz v Shannon) referring to comments of Mahoney JA (dissenting) in Kearns v Ellis (Court of Appeal (NSW), Glass, Mahoney and McHugh JJA, 5 December 1984, unrep) at 7-8. [218] Thus, what is proper will vary in each case. … Approaches to large estates [223] Mr Price made submissions regarding the approach to be taken to determining family provision claims in respect of large estates. He cited observations of Brereton JA and White JA in Steinmetz v Shannon respectively at [100]-[105] and [47]-[48], [51]. [224] The same approach to family provision proceedings in addressing the questions outlined above in respect of whether adequate provision has been left for an applicant, and, if not, the nature of any order applies to all family provision proceedings. The application of the approach and the evaluative assessment depends upon the facts of each particular case. [225] The statutory provisions do not suggest any different approach specifically because an estate happens to be large. [226] In large estate cases, the limited scale of resources available in most estates and the competition for satisfaction of financial needs out of such limited resources cease in fact, to be limiting considerations in the Court's overall assessment of what is adequate provision for the proper maintenance and advancement in life of the applicant. [227] Thus, it has been said that the Court is free to make a more liberal assessment of what is proper provision in the sense that competition for limited resources is much reduced or eliminated and unqualified by competing claims. …
In par 26 of his written submissions, Garry referred to the comment made by Meek J at [226] concerning the Court's approach to large estate cases, and submitted that the present case has no similarity with the usual large estate case. He submitted that the appropriate characterisation of this case is not that of a large estate, but rather an estate with one reasonably substantial item of real property, which the deceased did not wish to see divided and which the beneficiary does not wish to sell, for reasons which are understandable and reasonable. However, at [10], Meek J referred to the tendency within succession law to make reference to estates as being: (1) "a relatively large estate", "a reasonably large estate" or "a moderately large estate" when the estate size is estimated at approximately $2M to $5M; and (2) "a large estate" once the net size exceeds about $5M, with that description still holding when the estate is valued at $14M (see schedule to this judgment).
Consequently, the Deceased's estate in the present case would be treated as a reasonably large estate and is not a large estate. Further, as I have explained above, although it may be reasonable to infer that when the Deceased made his will in 1984, he was motivated in part by a desire to keep Hillcrest in the male line of the family, there is no direct evidence of that intention. As I have also explained, it is significant that the Deceased left all of his estate to Garry. This issue loses much of its significance, however, because of the finding I have explained above that it is more probable than not that Hillcrest is no longer a sufficiently viable farming operation for Garry to continue to farm it into the indefinite future.
In Taylor v Farrugia [2009] NSWSC 801, Brereton J (as his Honour then was) said, in observations that have been followed many times in subsequent cases: [57] 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]. [58] 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. [59]1 The court's attitude to the eligibility for means tested pension benefits of eligible persons and beneficiaries varies, depending on the circumstances of the case. Ordinarily, a testator makes a will and provides for those who have a claim on the testator without regard to the claimant's eligibility for a pension. However, in a small estate where there are competing claims, a testator, and this court on an application under the Act, may take into account the eligibility of a claimant for a pension as a means of deciding how such limited benefits as are available from the estate should be shared between claimants, and how those benefits might be structured. But this qualification to the principle that the burden of support should be borne in the first instance by an estate rather than by social security arises mainly, if not exclusively in smaller estates [Parker v Public Trustee (1988) NSWSC, Young J, 31 May 1998; Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J unreported); King v Foster (Court of Appeal, 7 December 1995 unreported); King v White [1992] 2 VR 417 at 424; Shah v Perpetual Trustee Co [1981] 7 Fam LR 97 100; Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151; Chan v Tsui [2005] NSWSC 82].
In respect of the approach of the Court to the claims of adult children, Hallen J has set out the generally accepted principles in many cases, one of which is Chapman v Ingold; Estate of the Late Eleanor Merle Ingold [2015] NSWSC 1604, where his Honour relevantly said: [115] In relation to each Plaintiff's claim, being a claim by an adult child, the following principles are useful to remember: … (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. 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 [2009] NSWSC 801, at [58]; Smith v Johnson [2015] NSWCA 297, at [92]. (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, 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 that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons: Re Buckland, Deceased, at 411; Kleinig v Neal (No 2), 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; Hawkins v Prestage (1989) 1 WAR 37, at 45 (Nicholson J). (f) An 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, at [179]-[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 are 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) An 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. [116] A very similar statement of the principles which I set out in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275, at [111], was cited with approval in Chapple v Wilcox, at [21] (per Basten JA); at [65]-[67] (per Barrett JA) and was referred to, with no apparent disapproval, in Smith v Johnson, at [62].
I return now to Oliveira's case. Relevantly, Kunc J said: [1] Counsel for both parties described the circumstances attending this application for family provision as very sad. They were right to do so. That is because the Court must weigh the respective positions of the plaintiff - a 52-year-old non-verbal severely disabled woman - and her mother - an 82-year-old woman now living in a nursing home and suffering from Alzheimer's Disease. That being said, and it is important that it be said, the Court must nevertheless apply legal principle rather than yield to natural human sympathy. Without disrespect, I shall refer to the parties and others by their given names. … [4] It was common ground that all of Maria's current needs are being met by her NDIS package and Commonwealth pension. The case was argued for Maria on the sole basis that provision for contingencies - ultimately quantified by an open offer at $125,000 - should be made for Maria from the Estate. [5] Maria's claim will be dismissed. In summary, this is because it fails at every stage due to Maria's circumstances. She is a person who will spend her whole life in care. Even on the most generous view of what an allowance for contingencies might cover, the Court is not satisfied that there is or will be anything in Maria's life that will require such a fund or that cannot be adequately dealt with by recourse to the sources referred to in [15] below. … Contingencies [7] Because it was central to the arguments, and is dispositive of every aspect of Maria's case, it will avoid repetition if I address the issue of an allowance for contingencies at the outset. [8] It is not uncommon for awards of further provision under the Act to contain an allowance for contingencies. The concept is also familiar from assessments, for example, for common law damages. Butterworths Australian Legal Dictionary (Butterworths, 1997, p 260) defines a contingency (albeit in tort, but I see no relevant difference from this aspect of succession law) as "an event which may be described as part of the ups and downs or vicissitudes of life, which is not specifically predictable but acknowledged as likely to occur at some time in the lives of most individuals". [9] In answer to my question during his opening, Mr Morahan put Maria's claim as being for $220,000. When I asked him how this had been determined he said it was something of a "stab in the dark". He made reference to whether or not the NDIS would always be available. Subsequently, he made an open offer that his client would accept $125,000, but was again unable to justify the figure beyond informing the Court that it was an amount proffered in the interests of settlement. In making these observations I intend no criticism of Mr Morahan. [10] During the course of his cross-examination, I asked Ivo what were the things he was worried about for his sister that might require such a fund. While he said her future needs were very difficult to predict, he referred to the possibility of her needing urgent medical treatment, something to which I return in [14] below. He then went on to speculate, in my view and with no disrespect intended, somewhat fancifully about what might happen if, given the increase in extreme weather events, the house in which Maria lives were to be flooded or the roof blew off. The house is in Padstow. [11] It may be accepted that specific proof of the likelihood and nature of vicissitudes is rarely required. In the torts field of discourse (where it is often discussed in the context of deductions) the assessment for vicissitudes or contingencies has been described as quasi-discretionary or intuitive: see, for example, Nestle Australia Ltd v McDougall [1998] NSWCA 158 . Nevertheless, as the product of the exercise of judicial power, it must be determined rationally and for a proper purpose. [12] There must be a demonstrable basis both as a matter of reason and evidence for making an allowance for contingencies. In my respectful view, in most cases that is provided by an inference that the Court draws by accepting as not reasonably open to question and common knowledge (see Evidence Act 1995 (NSW), s 144) that the unexpected does happen in the course of life which may require expenditure. Putting it colloquially, it is analogous to "rainy day" savings that a prudent person tries to maintain if they can. So understood, this also explains why, in the absence of specific potentialities being established by proper evidence, such allowances are generally not large and rarely in six figures (although the size of the available estate will always be a matter to be taken into account in making any such award). [13] In this case I accept Mr Mackay's submission that, even allowing for the hypothetical and largely indeterminate basis of any specific award of additional provision for contingencies, Maria's circumstances do not justify as a matter of principle or on the evidence such an allowance being made. This is because Maria is in full-time care and will remain so for the rest of her life. All her current needs are being met and there is no reason to think that that will change. There is certainly nothing in the evidence upon which I could find the slightest adverse risk concerning the continuation of her NDIS package or her Commonwealth pension and, in particular, whether either of those may in the future become inadequate or disappear. … The Facts - the Estate [16] On 2 September 2015 Luis and Felicidade made mirror wills. The effect of those wills in the events which have happened is that Felicidade took the entire Estate. However, Luis having predeceased Felicidade, the effect of Felicidade's mirror will is that the entirety of her estate will, after payment of a $20,000 specific legacy to Maria, be divided equally between the other siblings. It was common ground that Felicidade no longer has capacity to change her will. [17] The Estate comprises approximately $558,000, $550,000 of which was Luis' refundable accommodation bond from the nursing home in which he was living at the time of his death. His only other asset was cash of approximately $730,000 of which he was joint tenant with Felicidade and which passed to her on survivorship. It was accepted by the parties that no issue of notional estate arose in this case even if the Court were disposed to accede to Maria's application for further provision for contingencies. The facts - Maria [18] Maria is 52 years old. She has a particularly severe form of Down's Syndrome (trisomy 21) and is non-verbal. She lives with a number of other comorbidities, including autism, epilepsy, intellectual disability and alopecia. She lives in a supported share home and has full-time care in that home. She has approximately $26,000 in cash under the management of TAG and all her daily needs are met by her NDIS package and her Commonwealth pension. The facts - Felicidade [19] Felicidade is now 82 years old and lives in a nursing home. She has been diagnosed with Alzheimer's Disease and a number of other comorbidities. John gave evidence that Felicidade is mobile, able to feed and care for herself, showers with assistance and is sometimes able to conduct conversations. [20] Insofar as her financial situation is concerned, I infer from the evidence that when it became apparent to the family that Luis and Felicidade needed to move into nursing home care in or about 2019, two properties were sold which were held jointly by Luis and Felicidade. The first was the matrimonial home at Marrickville which I was told sold for approximately $1.1 million. From this amount, the $550,000 refundable accommodation bonds were paid for both Luis and Felicidade. Another property at Budgewoi was also sold for approximately $630,000 and it is that sum, with interest and other amounts, that comprised the $730,000 I referred to in paragraph [17] above. [21] Felicidade has received under Luis' will the $550,000 refund of his accommodation deposit and the cash on survivorship. From that combined fund her annual expenses of approximately $48,000 are being met, being her daily care fees and related matters. The evidence is that if Felicidade lives for another ten years she would require approximately $480,000 to meet her expenses, although that estimate was given without allowing for an increase that might occur as her needs increase over time. The evidence was also that if she lived for another 20 years she would need approximately $969,000 on the same basis, again, not allowing for any increase in her needs over time. Whatever the accuracy of those assessments, there can be no doubt that Felicidade will require an income stream to meet her expenses no matter how long it is that she may live, and there is a realistic prospect that with age and the progress of Alzheimer's Disease her care needs will increase. …
In my view, Oliveira's case is distinguishable from the present. In that case, the care required by the plaintiff was fully funded indefinitely by the NDIS, and the only issue was whether an order for further provision should be made out of her father's estate to provide a relatively small sum for contingencies. Counsel for the plaintiff could not explain what those contingencies might be. Kunc J was not satisfied that the plaintiff had established that adequate provision had not been made for her proper maintenance. It was significant to his Honour that the competing claim was that of her mother who had been the deceased's wife of more than 50 years. His Honour was influenced by the small value of the estate, at approximately $558,000.

Consideration

I am satisfied that each of the plaintiffs has established that, at the present time, adequate provision for their proper maintenance, education or advancement in life has not been made by the will of the Deceased, and that an order should be made for further provision in favour of each plaintiff out of the Deceased's estate.
Although each plaintiff is an adult child of the Deceased, each in a different way and with different degrees of seriousness has fallen on hard times, and there are assets available, which in my view would lead the community to expect the Deceased to have provided a significant buffer to each of the plaintiffs against contingencies, and to make an appropriate level of provision for their financial circumstances during the last period of each of their lives. Put another way, I consider that it was the moral duty of the Deceased not to have disinherited the plaintiffs, but to have made reasonable provision for them in his will.
Before I set out my reasons for reaching this conclusion and explain the orders for further provision that I consider should be made for each of the plaintiffs, I will deal with the submission made by the plaintiffs that it would be appropriate for the Court to make orders for further provision in favour of each of the plaintiffs in the same amount, being $600,000 in each case. The plaintiffs did not really explain the basis of this submission, save to somewhat loosely suggest that it was appropriate that the plaintiffs, as the Deceased's daughters, be treated equally in relation to their shares in his estate. As noted above, Garry's response was that it would be contrary to principle for the Court to proceed upon the basis suggested by the plaintiffs. It is clear that the Court must apply s 59 of the Succession Act separately in respect of the claims of each of the plaintiffs according to its terms, which requires the Court to assess the adequacy of the provision made for each plaintiff, and if adequate provision has not been made, to determine what provision ought to be made, on the basis of the circumstances that are relevant to each plaintiff in the context of all of the persons who have a genuine call on the deceased's estate. As fairness of testamentary disposition is not per se a relevant consideration, fairness as between siblings will not be relevant, unless it happens that objectively the provision that would be adequate for the siblings' proper maintenance, education or advancement in life is the same in each case.
The Deceased made his will in 1984 and left the whole of his estate, in the events that have occurred, to Garry to the exclusion of the plaintiffs. If the deceased intended to achieve the result that Hillcrest would remain in the Selwood family indefinitely by primogeniture, that intent is subsumed in the gift of the whole of his property to Garry. Garry intends to leave Hillcrest to his second son, and did not explain why he would not leave it to his first. In my view, modern community attitudes do not support a testamentary policy of leaving all of a testator's estate to a testator's firstborn child, his son.
There is no effective evidence that the Deceased gave any thought to his daughters' calls on his testamentary bounty after he made his will, particularly in response to the adversities that each of them has suffered in their lives in relatively recent times. The evidence does not in this case require the Court to give significant weight to the Deceased's own judgment as to what testamentary dispositions would satisfy his moral duty as the father of all of his children. Although Susan's husband suffered his accident in 2005, Linda was not diagnosed with dementia until 2016, and Vicki has only been the sole guardian of Marlee since 2019. As the Deceased died at the age of 85 on 22 October 2021, there is a real likelihood that the Deceased did not give any proper or considered attention to the issue of whether he had a duty to make a reasonable provision for each of the plaintiffs out of his estate.
Due respect must be given to the testamentary intentions expressed by the Deceased in his will, even though it was made in 1988, and it may have been reasonable for the Deceased to have preferred his only son as the inheritor of Hillcrest so that the property would pass to a new generation of the Selwood family, if the residue of his estate was sufficient for him to have made adequate provision for the proper maintenance, education and advancement in life of the plaintiffs. Even if the Court makes the assumption that the deceased did have that testamentary intention, even though he gave all of his estate to his son, the significance of that intention must be diminished if the evidence shows that the viability of Hillcrest for farming operations is not sufficient to sustain the intention, and that the reality is that it will be necessary for the property to be sold. As I have explained above, I consider that it is very likely that Garry would find it necessary to sell Hillcrest if he remains the sole owner of that property, even if he battles on for a few years trying to make a go of it. Garry will not have the capital to sustain any significant ongoing losses from the continuation of the farming operation.
Furthermore, for the reasons that follow, I consider that the total amount of the further provision from the Deceased's estate that is warranted to satisfy the plaintiffs' claims is sufficiently large, even if the Court adopts a reasonably conservative course in determining the further provision that should be ordered, as to make it impracticable for Garry to receive the sole ownership of Hillcrest. I do not accept that it would be a proper outcome for the further provision to be restricted to the amounts and in the form suggested by Garry in his submissions.
If the Deceased's distributable estate after the payment of the costs of these proceedings is about $3,135,000, the balance, after deducting the value of Hillcrest of $2,650,000, is $485,000. The total amount of the further provision in favour of the plaintiffs contended for by Garry is $708,000. The shortfall is $223,000. If Garry made up the shortfall from his $392,601.88 share in the net sale price of Leighton, there would be a notional excess of $169,601.88. That outcome assumes that what I have assessed as the $70,000 value of the Deceased's interest in the partnership with Garry has been realised, when realistically, if Garry were to continue to conduct a farming operation on Hillcrest, he would need the assets represented by the Deceased's interest in the partnership. As I understand Garry's submissions, he would also have to pay two thirds of the value of the partnership to the estate from his share of the proceeds of sale of Leighton. The outcome propounded by Garry may well 'work' on these figures, but only just, and the result would be that Garry would be left with virtually no capital other than Hillcrest itself.
Given my finding that it is probable that Garry would find it necessary to sell Hillcrest sooner rather than later, there is no justification in the Court reducing what it would otherwise consider to be adequate further provision for the proper maintenance, education and advancement in life of the plaintiffs in order to satisfy Garry's aspiration to be the sole owner of Hillcrest.
Against that, I bear in mind that Hillcrest is Garry's only home, he has worked to some degree in the family farming partnerships for virtually the whole of his life, he has had a reasonable expectation that he would inherit Hillcrest to carry on the family tradition, and he has probably sacrificed his salary to continue working on the farm. He has relatively inconsequential superannuation of $60,000. His income of $1,407 per fortnight is relatively low and the nature of his employment is such that it is insecure. His only asset of substance other than his superannuation is his $392,601.88 share in the net sale price of Leighton. That sum is inadequate to fund the purchase of a home for Garry and his family comparable in value to the homes owned by the plaintiffs. I infer that Garry would find it difficult, if not impossible, to obtain a home loan to purchase his own house. Most importantly, however is the fact that Garry is the sole beneficiary of the Deceased's will.
However, as I have explained above, Garry did not lead any evidence to substantiate an alternative case to his claim that any orders for further provision that are made in favour of the plaintiffs should leave Garry as the sole owner of Hillcrest. That has made it difficult for the Court to properly balance the claims of the parties, even allowing for the need to give as much effect to the Deceased's testamentary wishes as can properly be done having regard to the proper application of s 59 of the Succession Act.
As to Linda's claim, I am persuaded on the evidence that it is close to inevitable that Linda will have to go into care, and that it is likely that it will be necessary for arrangements for that to happen shortly. I have frankly been astounded by the evidence of the lengths to which Kim, as Linda's husband, has been prepared to go to keep her in the matrimonial home. His efforts do him the highest credit. Having regard to the evidence, I do not understand how he could keep going, and he is likely to do himself significant harm if he attempts to do so. While it is impossible to determine its likelihood, I consider that there is a substantial chance that, if Kim persists with the effort that it takes to care for Linda in their home for too long, it will cause him long-term harm in relation to his health and his earning capacity.
Linda and Kim have a home worth $660,000 and cash of $28,000. Kim has superannuation of $613,000 and Linda's superannuation is $176,898. They will not be able to access that superannuation for some years. While it is necessary for the Court to determine Linda's application on the basis that Kim has a primary obligation to care for her financially, Linda's needs are so great that I do not think that the satisfaction of Kim's obligation should require him to sell the family home to satisfy Linda's RAD. In my view, Kim has already demonstrated a willingness to provide Linda with as much financial and emotional care as he is able to do, but prevailing community attitudes would not require Kim to satisfy all of Linda's extreme needs.
I have given careful consideration to the submissions made by Garry concerning the detailed and contingent orders for further provision that could be made in favour of Linda. I do not think that it is appropriate for the Court to frame its orders in that manner. It is wholly impossible for the Court to forecast Linda's future. Other than to have a firm view that it will be necessary for Linda to go into care shortly, the Court has no rational basis for making a finding as to Linda's lifespan or what her prognosis is.
A child does not lose the right in the community's expectations to adequate parental testamentary care by reason of acquiring dementia, and Garry has not made a submission to the contrary. Garry's submission is that the Court should make a relatively complex order that will operate contingently on the occurrence of certain events, on the basis that Kim will be required to make substantial financial contributions to Linda's care, and the contributions from the Deceased's estate will be made through the vehicle of a trust of which Garry will be the trustee. The result would be that in one event the estate's contribution to Linda's RAD would return to Garry, and in another event, it would go to Kim.
It is not, in my view, appropriate for the order for further provision that the Court will make in favour of Linda to be made in the form suggested by Garry. Linda's case presents special difficulty because of the exceptional level of uncertainty of her remaining lifespan. Although I have rejected Garry's submission that the order for further provision in favour of Linda should involve the two trusts and the relatively complicated provisions proposed by Garry, I acknowledge the force in his submission about the uncertainty of the duration of Linda's needs and the reality that if she is given a substantial lump sum and passes away in the relatively near future, the money from the Deceased's estate will pass to Kim, who is in a relatively sound financial position, subject to the burden on his finances that arises from the need to take care of Linda. In my judgment, the appropriate way to deal with these difficulties is to approach the matter in a broad brush way and to determine an appropriate lump sum further provision to be made to Linda, on the basis that half of it will be paid to Kim for Linda as her guardian as a legacy and half will be paid out of the Deceased's estate, if and when Linda goes into care, on the basis that it is paid towards her RAD, and is refunded to the Deceased's estate when the RAD is refunded.
I have had judicial experience that practical problems can arise where an order for further provision is made out of the estate of a deceased person in the form of an order that the executor pay the RAD for the applicant, on the basis that it will be repaid to the estate when the RAD is refunded: see Baggaley v Richards [2023] NSWSC 1262. The outcome will depend upon the form of contract required by the aged care provider, and whether the aged care provider will insist upon refunding the RAD to the estate of the client rather than to the executor of the estate out of which the RAD is ordered to be paid. The precise arrangements that are required may only be able to be determined when the terms of the contract with the aged care provider are known. Consequently, it may be necessary for the Court to make an order in general terms that will require some amount of cooperation between Garry and Kim when it comes to the precise arrangements that should be made to ensure that when the RAD is refunded, the amount paid out of the Deceased's estate is repaid to Garry as expeditiously as possible. If a general order is made, it will be necessary also to give the parties leave to apply to the Court if it is necessary to seek further relief to ensure that the objective of the Court's order is achieved.
Vicki has a home worth, say, $500,000, with a mortgage of about $272,000. She has superannuation of $125,000. Her income is presently about $50,000 net per annum. It appears that Vicki provides some minor financial indulgence to her son, but the likelihood is that, within a number of years, he will leave home to make his own life. Vicki is 55 years of age, and is unlikely to be able to provide for her financial security in the balance of her working life. She may not be able to pay off her mortgage, and her superannuation is unlikely to be a great deal more than the amount that she has at the present. This is all before her need, at her age, to be a proper substitute mother for her granddaughter, Marlee. While it is true that Vicki receives financial support for Marlee, that is only likely to continue during her minority. The Court does not know how robust Marlee is emotionally, although it notes the reference made by Vicki in her evidence to the need to provide mental health care to Marlee. What has happened to Marlee is a tragedy, and hardly less so to Vicki. It will have long-term unpredictable consequences. Those consequences are unfortunately most likely to manifest in the form of placing substantial burdens on Vicki. Those burdens may well be lifelong. There is no reason to think that they will cease when Marlee reaches adulthood. In the ordinary experience of humanity, the increased burdens that are likely to fall on Vicki may impinge upon her health and diminish her earning capacity.
I am satisfied that the Deceased's moral duty extended to making a lump sum gift to Vicki to cushion the effects of the suicide of his granddaughter so that Marlee lost her mother in perhaps the worst of circumstances, and the burden has been thrust on Vicki to become a mother again in her middle years and into the indefinite future.
Susan is more financially secure than Vicki, as she has a home worth $700,000 and liabilities of $100,000, which includes a mortgage of $68,000 on her home. Susan has limited superannuation of $146,000, and her husband Damien has superannuation of $183,000. Susan's net income is about $47,000 per annum. The position therefore is that Susan and Damien are relatively secure in their residential situation, but their financial circumstances are not very sound. Although Damien has been able to continue in some form of employment, the injuries that he suffered as a result of his car accident are obviously very serious. While the future cannot reliably be foreseen, it is reasonable to fear that, over the balance of Damien's lifetime, his earning capacity will be significantly reduced and there must be an increased risk that he will become unemployable or forced into early retirement.
I am satisfied that Susan's circumstances warrant further provision from the estate of the Deceased in the form of a lump sum that goes further than enabling her to repay the balance of her mortgage, but which also provides her with a fund to augment her relatively small superannuation to provide an appropriate cushion against the vicissitudes of life.
I will bear in mind that, even though the value of the deceased's estate has been estimated on the basis that the whole of the plaintiffs' costs of the proceedings will be paid out of the estate, in fact, the usual order to be made in favour of the plaintiffs is that their costs be paid out of the estate on the ordinary basis. Although it appears to me that the plaintiffs' cases have been conducted efficiently, the result is likely to be that they have to bear some part of their own legal costs.
The determination of the amount of the lump sum further provision from the estate of the Deceased that is appropriate in the case of each of the plaintiffs is a matter for judgment and evaluation having regard to all of the relevant circumstances. It is not a matter that is truly explicable as a matter of detailed reasoning: see Grey v Harrison [1997] 2 VR 359 at 366-367 per Callaway JA, (with whom Tadgell and Charles JJA agreed), where his Honour said: There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight.
In my judgment, orders for further provision should be made in favour of the plaintiffs as follows, on the assumption that Hillcrest can be sold for $2,650,000: 1. Linda: $600,000 - divided into a lump sum payment of $300,000 and a repayable payment of $300,000 towards Linda's RAD. 2. Vicki: $450,000 as a lump sum payment. 3. Susan: $300,000 as a lump sum payment.
The result of those orders being made is that Garry will be entitled to receive $1,785,000 out of the Deceased's estate, but at some time in the future, he will receive a refund of the $300,000.
If the result of these proceedings is that Garry, as the Deceased's executor, is required to make payments of $1,300,000 for the benefit of the plaintiffs, it is unrealistic to expect that Garry will be able to make financial arrangements that would enable this amount to be paid in a way that he could retain sole ownership of Hillcrest and still be in a financial position to be able to farm the property and support his family into the indefinite future.
However, as it would take some time to market Hillcrest in a way that will generate the best sale price, and as Garry has asked for the opportunity to try to arrange finance in order to retain sole ownership of Hillcrest, there will be no harm in giving him that opportunity, to be exercised in the period before Hillcrest is sold.
The viability of the orders that the Court proposes to make depends upon the timing of the sale of Hillcrest and the net price that is achieved. The first consequence is that the Court should not make an order for interest to run on the lump sum payments if they are not made within a time that is only appropriate if the estate has assets in cash that enable the lump sums to be paid quickly. Garry must be given an appropriate time in which to market Hillcrest for the best price that can reasonably be obtained.
The second consequence is that even though the amounts of the lump sums that I have decided are appropriate to be paid by the plaintiffs have been arrived at as a matter of broad judgment, the process of their determination has assumed that Hillcrest will be sold for a price of $2,650,000. Neither the plaintiffs nor Garry should have to bear a risk of the property being sold for a price that is significantly more or less than the value placed on the property by the expert valuation witnesses.
The evidence does not suggest that there is an urgent need for the payment of the lump sums to the plaintiffs, except possibly for the need for the Deceased's estate to contribute the $300,000 towards the payment of Linda's RAD, if she needs to go into care soon. That suggests that, if it is practically necessary for Hillcrest to be sold, it would be preferable for the parties to cooperate with the timing of the sale to facilitate the best price being obtained. I will give the parties leave to apply to the Court for the making of appropriate practical orders to deal with the expeditious sale of Hillcrest. I will do that because the Court only received evidence of the formal valuation of Hillcrest, and has been given no evidence about the content of an appropriate marketing campaign for the sale of the property.
As a practical matter, if Garry was able to fund the payment of the lump sums to the plaintiffs, the appropriate amounts would be the lump sums set out above in relation to each plaintiff. However, if it is necessary for Hillcrest to be sold, as appears to be most likely, the amounts of the lump sums payable to the plaintiffs should be adjusted, so that none of the parties will gain or lose unfairly as a result of the price for Hillcrest that is actually realised. The Court has decided these proceedings on the basis of evidence that the value of the Deceased's estate after the payment of costs will be about $3.15 million: see [32] above. I will make an order that, in the event that Hillcrest is sold, the lump sums payable to the plaintiffs will be adjusted according to the following formula, where X is the value of the estate after the sale of Hillcrest (where the only variable is to be the net price of Hillcrest, and the value of the other assets in the estate are to be taken as stated in these reasons): Final lump sum = (X divided by $3,150,000) times (lump sum stated at [200])

Orders

The orders of the Court are: Proceedings No 2022/00206247 1. Subject to order 15, order that the plaintiff be paid a lump sum legacy of $300,000 out of the estate of the Deceased. 2. By way of further provision for the plaintiff out of the estate of the Deceased, order the defendant to pay into a controlled monies account in the name of the plaintiff's solicitor within 28 days of the date of this judgment the further sum of $300,000, so that 1. if the plaintiff at any time goes into a nursing home, that sum may be paid to the operator of the nursing home before the beginning of the plaintiff's tenure towards the plaintiff's refundable accommodation deposit (RAD) on the basis that when the RAD is refunded, the $300,000 will be repaid to the defendant; or 2. if the plaintiff dies before she goes into a nursing home, that sum will be repaid by the plaintiff's solicitor to the defendant. 1. Note that the plaintiff by her husband as enduring guardian and next friend of the plaintiff in these proceedings and the defendant are directed to cooperate with each other and the operator of the nursing home for the purpose of making practical arrangements for the expeditious repayment of the $300,000 to the defendant after the plaintiff's RAD is refunded (including, if required by the operator of the nursing home, for the expeditious grant of probate or administration of the plaintiff's estate, so that if the $300,000 is refunded to the plaintiff's estate, it can be paid by the administrator of the estate to the defendant). 2. Order that the plaintiff's costs on the ordinary basis be paid out of the estate of the Deceased. 3. Order that the defendant's costs on the indemnity basis be paid out of the estate of the Deceased. Proceedings No 2022/00206172 1. Subject to order 15, order that the plaintiff be paid a lump sum legacy of $450,000 out of the estate of the Deceased. 2. Order that the plaintiff's costs on the ordinary basis be paid out of the estate of the Deceased. 3. Order that the defendant's costs on the indemnity basis be paid out of the estate of the Deceased Proceedings No 2022/00206216 1. Subject to order 15, order that the plaintiff be paid a lump sum legacy of $300,000 out of the estate of the Deceased. 2. Order that the plaintiff's costs on the ordinary basis be paid out of the estate of the Deceased. 3. Order that the defendant's costs on the indemnity basis be paid out of the estate of the Deceased. All proceedings 1. Order that the defendant may satisfy the orders for the payment of lump sum legacies to the plaintiffs in orders 1, 6 and 9 by causing the amounts stated in those orders to be paid to the plaintiffs within three months of the date of this judgment, in which event, save for the defendant's obligation to comply with order 2, and the orders for the payment of the plaintiffs' costs in orders 4, 7 and 10, the defendant will have discharged his obligations under these orders and will be free to retain as beneficial owner the balance of the estate of the Deceased. 2. If the defendant does not satisfy the orders made in favour of the plaintiffs by orders 1, 6 and 9 in accordance with order 12, order the defendant to take all reasonable steps to sell the property in the estate of the Deceased known as Hillcrest as expeditiously as reasonably possible to achieve the best price reasonably obtainable. 3. Order that, if the property known as Hillcrest is sold to enable the defendant to satisfy the orders made in favour of the plaintiffs in orders 1, 6 and 9, the amounts of the lump sums payable to the plaintiffs will be varied in accordance with the following formula: Final lump sum = (X divided by $3,150,000) times (lump sum stated in order 1, 6 or 9 as the case may be) - where X is the total value of the estate of the Deceased after the payment of the parties' costs, calculated by adding the net price received for the sale of Hillcrest and the value of the other assets in the estate as determined in these reasons for judgment. 1. Order that no interest is to be paid on the lump sum, if it is paid within 6 months of the date of this judgment, otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), on unpaid legacies, is to be paid from that date until the date of payment of the lump sum. 2. Grant leave to the parties to apply to the Court by notice of motion on seven days' notice to seek any order that may be necessary or desirable to give effect to the intent of these orders, including orders to ensure, if it be necessary to do so, that the property in the estate of the Deceased known as Hillcrest is sold expeditiously for the best price that is reasonably obtainable. 3. Grant leave to the parties to apply to the Court by notice of motion on seven days' notice to make any variation to these orders that the parties wish the Court to make by consent.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 February 2024

At a glance

Court

Decision date

Before

Source

Judgment (16 paragraphs)

Legislation Cited (5)

Cases Cited (39)

Cited By (1)