Eligibility
8As the plaintiff was still married to the deceased at the date of his death, she is an eligible person. It was suggested that the arrangement made at the time of the separation amounted to an informal property settlement and as a result, the submission was that the plaintiff was not owed any moral duty having regard to that property settlement.
9Justice Ward summarised some of the authorities in this area in Scott v Scott [2009] NSWSC 567. At paragraphs 130 to 141, she said the following:
"130 In Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639, Kirby P noted the public policy underlying the finality of settlements of property disputes and agreed with what had been said by Young J (as his Honour then was) in O'Shaughnessy v Mantle (1986) 7 NSWLR 142 (at 149) that in most cases the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Kirby P noted (at 652) nevertheless that:
[P]ublic policy, important though it is, must adapt itself to the new provisions of the Act, with its reforming inclusion of a specific entitlement of a former spouse to claim. That provision contemplates there will be cases where such a claim will succeed, notwithstanding the public policy [of finality of property settlement].
131 Similarly, in Dijkhuijs' case, Mahoney JA said that it was inherent in the Family Provision legislation that, special cases apart, an order was only to be made if the deceased had defaulted in the performance of a duty which he owed to the particular plaintiff. His Honour said (at 657):
That does not mean that, if the plaintiff establishes a financial need within the section and if on taking into account the consideration referred to in s 9(2) (the discretionary considerations) there be nothing to the contrary, an order must be made. The statute assumes that the deceased, in what he has done during his life and by his will, has failed to discharge a duty which he owed to the plaintiff (the moral duty). Thus, a plaintiff may be a former spouse who, on dissolution of the marriage, received what on any view she was entitled to have and there may have been no further relationship between them so that none of the factors in s 9(3)(a) to s 9(3)(c), are of relevance. But, at the deceased's death, she may have a financial need. In such circumstances, the fact that the plaintiff has established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s 9(3)(d), the deceased had a duty to her which involved that he should have provided for her financial need (my emphasis).
132 In Smith v Smith [1986] HCA 36; (1986) 161 CLR 217, however, the High Court pointed out that there was a very real difference between settling financial affairs between living persons under the Family Law Act and the position of persons entitled to make an application under a statute such as the Family Provision Act.
133 Bryson J in Mulcahy v Weldon [2001] NSWSC 474 noted (at [22]), "According to general community standards a former spouse who has been accorded all rights under a property settlement and does not have any continuing entitlement to maintenance, adjudicated or not, is not generally regarded as a natural object of testamentary recognition. Although such testamentary recognition does occur, it is, in my understanding, regarded as altogether exceptional and remarkable when it occurs".
134 In Ernst v Mowbray [2004] NSWSC 1140, Young CJ in Eq (as his Honour then was) considered what he had said in O'Shaughnessy v Mantle in relation to the effect of the Family Law Act on an application by a divorced spouse. His Honour noted (at [32]) that the ex-spouse might obtain an order under "limited circumstances" under the Family Provision Act such as where the parties had not finally settled all their property dealings at the time of the divorce or where there was continued financial dependency after the divorce.
135 Here, no final property settlement orders were made, nor was there a binding financial agreement for the purposes of the Family Law Act. The parties were not divorced. Nevertheless, accepting that financial need of some degree is established by Mrs Scott, the question still remains what would be regarded as adequate provision for her in all the circumstances. Those circumstances must take into account both the fact of her separation from the deceased and the fact that, as between themselves, a division of their assets appears to have already been effected (albeit predicated on a 50:50 basis for all assets, as opposed to the 75:25 split required (in the absence of particular agreement) for the Long Jetty property).
136 What then is the position of a spouse, separated from her husband, in circumstances where an informal division of assets has taken place and where it would seem the marital relationship is to all intents and purposes at an end?
137 Considering the above authorities, it seems to me that, while Mrs Scott remained the deceased's wife even after their separation, and hence was a person for whom the community might expect the deceased to have made some provision for her continued support and maintenance in life (in recognition of the long marriage and her contribution to the building up of their joint assets and to his welfare in life), the community might also consider that a testator in the deceased's position had done "the right thing" by effecting an amicable division of their assets prior to his death and had limited, if any, further moral duty to support his widow.
138 In Kalmar v Kalmar [2006] NSWSC 437, White J noted (at [50]) that the bond of matrimony, prima facie, gave rise to a testamentary obligation, citing Re Clissold (deceased) [1970] 2 NSWR 619 at 621, and that it could not be assumed that that obligation would come to an end on the parties separating without their being divorced at least where there had been no disentitling conduct by the claimant (again citing Re Clissold, as well as Re Mercer deceased [1977] 1 NZLR 469 at 472-473 which had been cited with approval in Palmer v Dolman [2004] NSWCA 361 at [118]).
139 In Armstrong v Sloan [2002] VSC 229, Harper J in the Supreme Court of Victoria, noted (at [43]) that:
[A]rrangements made by a husband during his lifetime which on his death leave his widow in comfortable financial circumstances would ordinarily discharge his moral duty to make in his will adequate provision for her proper maintenance and support. That would (again, generally speaking) only not be so if, although comfortable, her circumstances did not allow her as a widow to maintain a standard of living comparable to that which she enjoyed as a wife.
140 His Honour noted that a settlement reached under the Family Law Act does not necessarily preclude a claim by a former spouse for family provision but that in those circumstances different considerations come into play.
141 In Armstrong v Sloan, Harper J considered that Mrs Armstrong's position was as close to that of a divorcee as could be in the absence of a divorce. There, his Honour considered that Mrs Armstrong was not left by the deceased without adequate provision for her proper maintenance and support but that, if she was, he would have exercised his discretion against the claim for further provision stating (at [56]) that 'by giving effect to the settlement, Mr Anderson discharged his moral duty to his wife, and thereby removed the "legislative justification to abridge freedom of testation': Grey v Harrison [1997] 2 VR 359 at 365 per Callaway JA."
10What was said by Young J in O'Shaughnessy v Mantle [1986] 7 NSWLR 142 at 147-8 was as follows:
"Whilst again emphasising that this list is non-exhaustive and is no more than guidelines, it would seem to me that the following cases would clearly be ones where there would be factors warranting the court considering the application:
(1) Except where the Family Court itself gives relief, cases where there has been a divorce and a spouse has died before property matters have been resolved by the Family Court;
(2) Cases where the husband and wife have not finally settled all their property dealings at the time of the divorce;
(3) Cases where maintenance was being paid to the ex-spouse as at the date of the deceased's death and the orders for maintenance were inadequate to provide for the ex-spouse after death of the paying spouse;
(4) Cases where despite the divorce there was some dependency on the deceased as at the date of death. An example of this would be where some years after the divorce the present plaintiff fell grievously ill and because of a residue of affection the now deceased spouse provided moneys for medical treatment or living expenses."
11It was submitted that when the deceased and plaintiff separated in May 2004 they entered into an informal property settlement by which the deceased agreed to give to the plaintiff the following:
(a) Airfare to London$2,600
(b) A redesign of her ring$2,200
(c) From his St George Bank Account$5,000
(d) 15" Apple Laptop$5,300
(e) Nikon D 100 Camera$4,100
(f) Nikon AF 20-200 Lens$3,298
12It was also noted that the deceased in correspondence at the date of separation referred to the fact that he gave the plaintiff gold, diamonds, and rubies worth $30,000.00 together with a Jaguar car during their relationship.
13There is no doubt that the deceased paid for the plaintiff's airfare to return to London after the separation of $2,600.00. The payment for the redesign of her ring had actually occurred during the relationship. The payment of the $5,000.00 was a payment on account for commission due to the plaintiff. The computer referred to was given to the plaintiff, but it was not a laptop, it was a desktop model. The Nikon camera and lens were also given to the plaintiff, but they had been in use for some years and were not new.
14So far as jewellery the plaintiff's position was that she did receive some rubies, which were presently with her brother, who had them appraised and valued for 800 pounds-sterling. Other than that there is no other substantial items. I accept the plaintiff's evidence on this aspect. There also seems that there was a car given during the course of the relationship, but that seems somewhat separated from what might have been a property settlement after separation.
15However, in order to consider the submission it is necessary to see what was the situation with the parties and their assets as at the time of separation. The plaintiff and the deceased carried on the photography business through a company called Icon Images Pty Ltd. That company was acquired as Shelf Company in 2001. The plaintiff was appointed a director on 25 June 2002 and she remained in that position until 27 February 2006.
16The plaintiff after the marriage of the deceased worked within this business and took an active role in converting the deceased's business from film to digital. The plaintiff also set up appropriate systems, which would enable better sales of the deceased's collection. This involved her scanning many old photographs, which were still of value and indexing them in a library allowing them to be accessed over the Internet. Although she did not scan the whole of the deceased's library, she did scan many thousands of images and converted them to this new medium as a means of helping the business.
17Although the plaintiff did all the bookkeeping for the business, it was the deceased, who controlled the money. They normally each drew about $1,400.00 each month from the business. As a result of this work and of course the deceased's photography, the business grew and between 2002 and 2004 there was sufficient money to enable the plaintiff and the deceased to have holidays to various locations around the world. The success of the business at the time before separation is borne out by a number of items of evidence. The tax return for the company 30 June 2003 shows a turnover of $375,597.00 and the taxable profit, after allowing for wages paid and depreciation of $26,718.00 was $21,768.00. In the year ended 30 June 2004 the turnover was $517,266.00 and after payment of wages and depreciation of $31,817.00 the profit was $49,422.00. In 2004 the company's bank account consistently had a balance in excess of $100,000.00 up until May that year. For the previous year 2003, the balance was normally in excess of $66,000.00.
18All this indicates that the business was going well and one would anticipate that, given the role played by the plaintiff in the business, any property settlement, which might have been ordered by the court after separation would not have been minimal. One would have expected it would be in excess of $50,000.00. Putting to one-side matters that occurred during the relationship the benefits given by the deceased to the plaintiff after separation total at most $15,298.00.
19Having regard to these matters, I do not think one could regard the parties as having an informal property settlement such that there is no longer any moral duty owing to the plaintiff.
20In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two-stage approach that a court must take. These comments were equally applicable to claims under the Succession Act. At page 209 it said the following:
"The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
21However, as a result of Andrew v Andrew [2012] NSWCA 308 the situation is, somewhat different. In that case, Barrett JA said that the two stage approach adapted under the Family Provision Act still applied to claims under the Succession Act. Basten JA held that a two stage approach was not necessary. The President thought it was an analytical question of little consequence. In the circumstances of this uncertainty, I will consider it on both bases.