_Freeman v Jaques_

Judgment (77 paragraphs)

[1]

[1] MULLINS J: On 16 July 2003 Ms Sheryl Ann Freeman commenced this proceeding seeking an order pursuant to s 41(1) of the Succession Act 1981 ("the Act") that adequate provision be made from the estate of Leone Amillda Freeman ("the deceased") for her proper maintenance and support. The deceased died on 13 January 2003 at the age of 84 years.

[2]

[2] The deceased was married to Mr Robert Noel Freeman who was the father of Ms Freeman and who had died on 23 September 1998 at the age of 76 years. The siblings of Ms Freeman who also survived the deceased have joined in the application pursuant to s 41(6) of the Act. The applicants for provision out of the deceased's estate are Sheryl Ann Freeman, Leonard Thomas Freeman, Robert Warren Freeman, Derinda Joyce Smerdon, Denise Gay Hancock, Lynell Coral Nicol and Rhonda Kay Rettke ("the applicants"). The applicants are the children of Mr Freeman from his first marriage. The applicants are therefore the stepchildren of the deceased: see s 40A of the Act.

[3]

[3] Mr Freeman met the deceased when he was in Greenslopes Hospital, upon his return from the war. They became close friends in the late 1960's. Mr Freeman subsequently separated from his first wife in or about 1972, paying his first wife $17,000 by way of property settlement, and their marriage was dissolved in 1976. After separating from his first wife, Mr Freeman resided with the deceased. They were married in 1984.

[4]

[4] By his last will made on 14 August 1987, Mr Freeman gave the deceased a life interest in the income from his investments, and, thereafter, the whole of the estate was to be divided equally amongst his surviving children or their issue per stirpes.

[5]

[5] In June 1999, the deceased applied under s 41 of the Act for further provision out of Mr Freeman's estate which had a value of approximately $1.1m. Those proceedings were settled on 14 May 2001 with the result that the deceased received an additional sum of $150,000 (without legacy interest) and the costs of all parties were paid out of Mr Freeman's estate.

[6]

[6] There was never any familial relationship between any of the applicants and the deceased. The applicants were the deceased's stepchildren in name only.

[7]

[8] The deceased's last will ("the will") was made on 6 October 1998. Probate of the will was granted to Heather Evelyn Jaques ("the respondent") as sole executrix of the will on 17 April 2003. Under clause 2 of the will the deceased devised and bequeathed the whole of her estate to the respondent, if the respondent survived her for 30 days, which the respondent did. The respondent was a friend of the deceased who acted as her carer during the latter years of the deceased's life and particularly after Mr Freeman's death.

[8]

[9] As a threshold or jurisdictional requirement, each of the applicants needs to show that the deceased failed to make adequate provision from her estate for his or her proper maintenance and support: s 41(1) of the Act. This raises the issue of whether a stepmother who has no established relationship with any of the stepchildren is under a moral obligation to those stepchildren by reason of the fact that her estate comprises some assets or funds sourced to some extent from the father of those children which may otherwise have found their way to them. A subsidiary issue that arose during the hearing was the extent to which the assets that comprised the deceased's estate could be attributed to Mr Freeman.

[9]

[10] If any of the applicants can satisfy the threshold requirement, the issue then is whether any provision ought to be made for that applicant: see Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, 208 ("Singer").

[10]

[11] According to the affidavit sworn on 6 June 2000 by the deceased in support of her application for family provision out of Mr Freeman's estate, when their relationship commenced, the deceased owned her home at Red Hill, had funds in the bank and worked as an administrative assistant for doctors. At this stage Mr Freeman was working as a farm manager at Warwick and would visit the deceased on weekends. The deceased sold the house at Red Hill and those funds were used by Mr Freeman and her to purchase a property at Dululu. After they disposed of that property, they purchased a cane and small crops property at Yandaran where they both worked the farm. They had that property for a substantial time. The deceased did not deal in her affidavit with how that property was owned. I infer from the fact that Mr Freeman gave the deceased a life interest in the Yandaran property under his last will, which was made when they still resided at the Yandaran property, that the title was registered in his name. The Yandaran property was then sold and in about 1989 they purchased a farm at Goodwood Road, Bundaberg as joint tenants. On that property they had fruit trees and grew orchids and sweet potatoes. They sold orchid supplies such as fertilisers, mulch etc. They conducted a business partnership whilst at the Goodwood Road farm, which generated a small income from these activities.

[11]

[12] From about August 1987 Mr Freeman had opened an account with sharebroker Mr Raymond Harbert. Mr Harbert was able to say that an account in the deceased's name was opened with him in about July 1991. He recalled that almost all of his dealings with Mr Freeman and the deceased were instructions to deal rather than giving advice. He said that Mr Freeman came to his office about once per month or once every second month and that the deceased regularly accompanied him. He recalled that when they attended together upon him on business, Mr Freeman did most of the talking and was the one who gave the instructions. That is consistent with the deceased's description that Mr Freeman exercised direct control over their financial matters.

[12]

[13] Mr Colin Lunn was a friend of Mr Freeman. They shared a mutual interest in orchids and would travel together on trips organised by the Bundaberg and Childers Orchid Society. Mr Lunn observed that Mr Freeman and the deceased lived frugally, but Mr Freeman had told him that he had made a lot of money selling sweet potatoes while working the Yandaran property. After Mr Freeman passed away, the deceased expressed to Mr Lunn "I don't know what I am going to do for money". Because Mr Lunn had inspected the deceased's bank security box, he told the deceased that she would have no worries regarding money, because she had considerable moneys in her own right.

[13]

[14] According to the deceased's affidavit sworn on 13 November 2000 in support of her application for family provision out of Mr Freeman's estate, she had a share portfolio to the value of $560,000, her leasehold unit in a retirement village at Bundaberg which she valued at $50,000, cash of $60,000 and a motor vehicle valued at $20,000. Although the Goodwood Road property was owned by the deceased and Mr Freeman as joint tenants and the deceased succeeded to the whole of that property by survivorship, it appears that she received only one-half of the proceeds from the sale of that property, namely about $88,000, which she used to purchase her leasehold unit. The deceased was annoyed when she discovered that Mr Freeman had quarantined part of their assets by placing them in his name, which allowed him to benefit his children under his last will.

[14]

[15] When the deceased died she had about $80,000 in the bank, shares worth about $910,000 and a motor vehicle valued at $12,000. She still owned her unit, that was subsequently sold and the net proceeds of sale were $61,000. The respondent therefore values the deceased's estate at the date of her death in the sum of $1,063,675.

[15]

[16] Ms Sheryl Freeman was born in 1951 and is unemployed. She has 3 children who are self-supporting. She was visited on one occasion by her father soon after his separation from her mother. The next and last occasion on which she saw Mr Freeman was at his mother's funeral in late 1974. The shares she received from Mr Freeman's estate were sold for $102,000. After paying capital gains tax of $35,000, the sale proceeds were rolled over into a superannuation policy that was worth approximately $66,000 at the time she swore her affidavit in July 2003. The only other asset that Ms Freeman had at that time was a motor vehicle worth approximately $6,000.

[16]

[17] Mr Leonard Freeman was born in 1944. He and his wife own their own home which is valued at approximately $150,000 and is free of encumbrances. They also own a motor vehicle that he values at $16,000. They have $48,000 on deposit with the bank and he has approximately $30,000 in superannuation. Mr Leonard Freeman is employed and earns $577 gross per week. He still holds the shares he received from his father's estate which he values at approximately $112,000.

[17]

[18] Mr Warren Freeman was born in 1945. He has a disability that resulted in his having an artificial leg from 1959. He and his wife own a property near Miles which he values at approximately $175,000 and is free of encumbrances. Although they have worked the property in the past, they now do not earn any income from it. Mr Warren Freeman and his wife receive a disability support pension. They have some old farming equipment which he values at approximately $4,000 and a motor vehicle which he values at approximately $17,000. Their adult daughter who lives with them suffers from an intellectual disability and receives a disability support pension. Mr Warren Freeman has shares (which I infer he received from his father's estate) that he valued at approximately $100,000 at the time he swore his affidavit on 24 November 2003.

[18]

[19] Mr Warren Freeman deposed to an offer made to him by his father at the time of Mr Warren Freeman's marriage to assist him in purchasing a home. Mr Warren Freeman saw his father on one occasion soon after his parents separated and then did not see him again until the funeral of his grandmother in 1974. In 1975 Mr Warren Freeman wished to take up his father's offer to assist him in buying a home and contacted his father's solicitor; his father contacted him as a result. Mr Warren Freeman wanted to borrow $8,000 from his father for a short term. At that stage his father told him that he was "broke" and could not help.

[19]

[20] Mr Warren Freeman sent his father birthday and Christmas cards in 1975 and 1976. In February 1977 Mr Warren Freeman wrote to his father at Dululu advising that he would call to see him when travelling at Easter. Mr Warren Freeman received a letter from the deceased dated 11 March 1977 which she stated was written at the request of Mr Freeman to advise that he would be absent from the farm over Easter and that visitors were not permitted. The letter also referred to Mr Freeman being "most embarrassed and angry when he received your tgram (sic) to phone urgently only to learn you wanted a loan of $8,000".

[20]

[21] Mr Warren Freeman continued to send Christmas and birthday cards to his father until 1984.

[21]

[22] Mr Warren Freeman had a close relationship with his father's parents. At his father's father's funeral in 1984, Mr Warren Freeman ascertained that his father had not received the birthday and Christmas cards that he had been sending him. His father said to him "don't bother contacting me again, I will contact you as it causes too much friction for me at home". Mr Warren Freeman did not send cards to his father from that time. Mr Warren Freeman's aunt informed him that Mr Freeman received about $22,600 from his father's estate which was calculated after taking into account the total amount of $57,500 that Mr Freeman had borrowed from his father in the 1970's to use at the Yandaran property.

[22]

[23] In October 1989 Mr Warren Freeman telephoned his father. The deceased answered the telephone. Mr Warren Freeman asked if he could speak to his father and the deceased said to him "I wrote to you and informed you that you are not to contact us". Mr Freeman came to the phone and Mr Warren Freeman gave him his new address and telephone number. Mr Warren Freeman subsequently telephoned his father in 1992 and 1993 in order to advise him on each occasion of his new address and telephone details.

[23]

[24] Mrs Derinda Smerdon was born in January 1947. She is a real estate agent. Mrs Smerdon and her husband own their own home which she values at approximately $160,000. It is mortgaged to secure a loan of $300,000 that was used to purchase a rural property near Gympie. Mrs Smerdon and her husband own another property which is free of encumbrances that she values at $130,000. They also own another property with their son with their interest in that property valued at $90,000. Mr and Mrs Smerdon own other assets worth in the vicinity of $30,000 and they earn about $50,000 gross per year from the real estate business. When Mrs Smerdon swore her affidavit on 6 November 2003, her husband had been ill and she estimated their medical costs were $60,000. Mrs Smerdon had occasional contact with her father that was verified by Mr Lunn. Mr Lunn could recall that on at least 3 occasions, when he was with Mr Freeman on an Orchid Society trip, Mr Freeman went to visit Mrs Smerdon. Mrs Smerdon stated that every time the deceased answered the telephone when she tried to contact her father, she would hang up. In order to convey on one occasion a message to her father about Mr Warren Freeman's leg operation, Mrs Smerdon had her husband telephone, so that Mrs Smerdon could get the message through to her father.

[24]

[25] Mrs Denise Hancock was born in 1949. She and her husband own an unencumbered farm property worth approximately $85,000. Their gross income from growing vegetables has been approximately $13,000 annually. Mrs Hancock received approximately $20,000 in cash from her father's estate and shares worth approximately $140,000. She still has shares worth approximately $75,000. She has been selling the shares, as she and her husband have been living off the proceeds from those sales. After the separation of her parents, she may have seen her father on one occasion, but had no other contact.

[25]

[26] Mrs Lynell Nicol was born in 1952. She is employed as a doctor's receptionist and earns about $200 net per week. She and her husband own their own home which she values at approximately $150,000. This property is subject to a mortgage under which about $85,000 is owed. She and her husband have other assets that she values at about $10,000. They have 3 sons who reside at home and are supported by them. Mrs Nicol received shares worth about $130,000 from her father's estate. She has been selling the shares to pay expenses and at the time she swore her affidavit on 12 November 2003, she still had shares worth about $100,000. Mrs Nicol saw her father on two occasions after he had separated from her mother. She tried to telephone her father a number of times before his death, but the deceased intercepted the telephone calls and made it difficult for her to speak with him.

[26]

[27] Mrs Rhonda Rettke was born in 1956. She is employed on a casual basis with a government department and earns about $24,000 per annum. Mrs Rettke and her husband own land that she values at about $55,000 which is unencumbered. She and her husband also own a motor vehicle in which their equity is about $7,000. On one occasion her husband spoke to her father and invited him to visit them, but her father declined. Mrs Rettke still has the shares that she received from her father's estate which she valued at approximately $137,000 when she swore her affidavit on 12 November 2003.

[27]

[28] At the date of the hearing the respondent was 87 years old. Her parents were friends of the parents of Mr Freeman. The respondent had a friendship with the deceased that lasted in excess of 30 years and commenced when Mr Freeman and the deceased relocated to the Bundaberg region in or around 1972 or 1973.

[28]

[29] After Mr Freeman died suddenly at home, the deceased moved into the respondent's home and stayed there for about 8 months until the Goodwood Road property was sold and she was able to move into the retirement village unit. During that period the respondent assisted the deceased in cleaning out the Goodwood Road property and looking after the thousands of orchids that were at that property until they were sold.

[29]

[30] Thereafter the respondent visited the deceased a number of times each week at her unit in the retirement village. The respondent would take the deceased on outings and to her appointments with doctors, lawyers and accountants. The deceased had made the respondent her attorney and the respondent conducted dealings on behalf of the deceased in relation to her shares and management of her money.

[30]

[31] Section 41(1) which is found within part 4 of the Act provides:

[31]

"(1) If any person (the "deceased person") dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person's spouse, child or dependent, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant."

[32]

[32] What is involved in the jurisdictional question was described in the joint judgment of Mason CJ, Deane and McHugh JJ in Singer at 209-210:

[33]

"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."

[34]

This approach remains good law after being considered by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 79 ALJR 731 at paragraphs [22] and [75].

[35]

[33] The definition of "child" for the purpose of part 4 of the Act is that "child" means, in relation to a deceased person, any child, stepchild or adopted child of that person. The applicants contend that in determining whether the threshold requirement under s 41(1) of the Act is satisfied in respect of each of them, it is relevant that some part of the deceased's estate was derived from Mr Freeman. The respondent contends that differential provision should apply to an application under s 41(1) of the Act by a stepchild, in comparison with a natural child, where there are special circumstances, relying on the following statement made in de Groot, JK and Nickel, BW Family Provision in Australia (2nd ed, Butterworths, 2001) at paragraph [3.48]:

[36]

"A step-child is not necessarily treated in the same footing as a natural child in all cases. It is a factor to be taken into account in determining the moral obligation of the deceased to an applicant. Depending on circumstances, including for example:

[37]

•

the age at which the relationship was assumed;

•

the extent of other existing provision for the applicant;

•

the actual degree of dependence;

•

the extent to which responsibility for maintenance and advancement has been assumed by the deceased;

[38]

the step-relationship may justify differential provision by the court between classes of children." (footnote omitted)

[39]

[34] The expression "differential provision" was used in In re Lockwood [1960] TASStRp 11; [1960] Tas SR 46. Prior to that case, the definition of "child" in the Tasmanian family provision legislation was amended to include stepchild. Crisp J expressed the view that the effect of the amendment was more to remove the disqualification that previously applied to a stepchild than to lay down a positive principle that a stepchild should in all respects be considered as on the same footing as a natural child. Crisp J then stated at p 48:

[40]

"The step-relationship is obviously a factor which may affect, in degree according to the circumstances, the moral obligation of the testator on which jurisdiction to make an order depends. Hypothetically, it may justify differential provision both by the testator and the Court between classes of children, though of course whether this should be done in any given case will depend on such matters as the respective ages at which the relationship was assumed, the extent of other existing provision for step-children, the actual degree of dependence, the extent to which responsibility for maintenance and advancement has been assumed by a step-parent, and a host of other factors. No principle as to the weight to be assigned to it can be laid down, it is simply a factor to be taken into account and I so regard it."

[41]

[35] Although the decision in Re Trackson (Deceased) [1967] Qd R 124 was overruled by Re Burt [1988] 1 Qd R 23 on the issue of whether the relationship of stepchild and stepparent continues to subsist after the termination of the marriage which created it, it was not necessary for Re Burt to deal with the issue of what principles apply to determining a family provision application by a stepchild. It was suggested in Re Trackson at 126 that in deciding whether or not to grant relief on an application by a stepchild, the court should apply the ordinary general principles laid down in regard to granting relief under the provision that was the predecessor of s 41(1) of the Act.

[42]

[36] Under the legislation that was applicable in England at the time of Re Callaghan (deceased) [1984] 3 All ER 790 and Re Leach (deceased) [1986] Ch 226, a stepchild could apply for family provision if the stepchild could establish that he or she was "any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage". The applicant stepson in Re Callaghan established that he was in that category. In determining whether financial provision as would be reasonable in all the circumstances had been made for him by the deceased, Booth J took into account that the origin of the assets comprising the deceased's estate derived from the applicant's mother and from the property which was the gift to her of the applicant's paternal grandfather.

[43]

[37] The deceased in Re Leach had failed to make a will favouring her stepdaughter, after expressing an intention to do so. Their relationship was affectionate and the applicant established that she fell within the category of being treated by her stepmother as a child of the family in relation to the marriage between her stepmother and the applicant's father. The trial judge inferred that the applicant's father had contributed to the purchase of the leasehold of property that ultimately was part of the stepmother's estate. The Court of Appeal found it unnecessary to consider whether this inference should have been drawn on the evidence, as in the circumstances of that case, even if the supposed contribution by the applicant's father to the purchase of the leasehold was disregarded, there was ample evidence to find that the law relating to intestacy was not such as to make reasonable financial provision for the applicant out of her stepmother's estate. It was implicit, however, in how the Court of Appeal dealt with this matter, that it accepted that in an appropriate case the acquisition of property by the stepparent using funds derived from the stepchild's natural parent could be relevant to the issue of whether reasonable financial provision had been made for the stepchild out of the stepparent's estate.

[44]

[38] Counsel for the respondent relied on statements made by Cohen J in Graziani v Graziani (unreported, Sup Ct (NSW), Eq 2678 of 1985, 20 February 1987) ("Graziani"). The plaintiffs applied for family provision from their stepfather's estate. The defendants to the application were the 3 children of the marriage between the stepfather and the stepchildren's mother who had been left the whole of the estate. The plaintiffs made their application on the basis that they were within the definition of "eligible person" in the New South Wales legislation governing family provision, which applies to a former dependant of the deceased person. This required the plaintiffs to satisfy the court that there were factors which warranted the making of the application. Unless the court was satisfied that those factors existed, the court was required to refuse to proceed with the determination of the application. Cohen J made the following observations on what needed to be shown by a stepchild to establish that there were factors that would warrant the making of the family provision application:

[45]

"In order to look at the factors which warrant an application in the case of a plaintiff who establishes that he or she is an eligible person under par (d) of the definition, it is necessary to look not only at the nature of the relationship, but the quality of it. The Court should consider the circumstances in which it arose and to some extent it must also look at the weight of the application which might lead to the finding that the plaintiff has been left without adequate provision for his or her proper maintenance, education or advancement in life. The circumstances must vary in every case and it would be foolish to seek to limit them in any way. Where, however, the plaintiff has established a position as a stepchild of perhaps a foster-child then there would be a number of relevant matters in my opinion which the Court should consider in deciding whether factors exist. These include the closeness of the relationship, that is whether it was one which might be properly described as parent and child, whether the plaintiff was brought up as a permanent member of the family, what was the age of the plaintiff when he or she became a member of that family, and the extent to which the plaintiff was supported by the deceased, whether it be financially, educationally or emotionally.

[46]

If a consideration of these matters leads the Court to the opinion that the plaintiff was brought up and treated as a child of the testator and if all of the other circumstances show that there may have been a moral duty on the part of that testator to provide for the plaintiff then there are factors which would warrant the making of the application. The presence of only some of these factors, or of others which have not been listed might also justify the Court's coming to the same opinion. The potential for inclusion in that part of the definition of 'eligible person' as is contained in par (d) is enormous. The range of persons who may be admitted is very great and it includes not only stepchildren but also parents, brothers and sisters, temporary foster children and many others who may have formed part of the household and for a period have been partly dependent upon the deceased. Accordingly it seems to me that those who were raised as part of the family as stepchildren would have less difficulty in establishing factors which warrant their application than would those at the other end of the spectrum who may have been members of the family for only a brief period and with only limited dependence."

[47]

[39] In Graziani the amount available in the estate for distribution was in the vicinity of $103,000. The nature of the relationship between each of the plaintiffs and their stepfather differed, as did their circumstances at the time of his death. Cohen J concluded that one plaintiff should receive a legacy of $8,000 and that the other plaintiff should receive a legacy of $5,000.

[48]

[40] It was submitted on behalf of the respondent that the approach outlined by Cohen J in Graziani should be followed in determining whether an application by a stepchild satisfies the jurisdictional requirement under s 41(1) of the Act. Although Cohen J was considering an additional question that was required to be determined under the New South Wales legislation before the application could proceed to the jurisdictional question, as a matter of common sense the sorts of factors that Cohen J referred to would also be relevant in determining whether adequate provision had been made from the estate of the stepparent for the proper maintenance and support of the stepchild.

[49]

[41] Another New South Wales case in which the issue of whether a stepson could show that factors existed which warranted the making of a family provision application in respect of his stepmother's estate was considered was Re Fulop Deceased (1987) 8 NSWLR 679. One of the factors that was identified in favour of the stepson was that the only substantial asset in his stepmother's estate was acquired from funds derived to a substantial extent directly or indirectly from moneys earned by the stepson's father.

[50]

[42] The applicants rely on recent Victorian cases where family provision has been sought by a stepchild from the estate of a stepparent. There is an important difference between the legislation governing family provision applications in Victoria and Queensland. Under the Act a person must fall within the specified categories of applicant, in order to be eligible to make an application for family provision. Since 1997, under s 91(1) of the Administration and Probate Act 1958 (Vic), the court has been empowered to make a family provision order "for the proper maintenance and support of a person for whom the deceased had responsibility to make provision". Under s 91(4) of that Act, the court is required to have regard to the list of factors specified in paragraphs (e) to (p) of that subsection in determining both the issue of whether or not the deceased had responsibility to make provision for the applicant and whether or not the distribution of the estate of the deceased does make adequate provision for the proper maintenance and support of the applicant.

[51]

[43] The applicants refer to McKenzie v Topp [2004] VSC 90 ("McKenzie") and James & Anor v Day [2004] VSC 290 ("James"). In McKenzie, Nettle J accepted up to a point the proposition that was set out in paragraph [56] of the reasons in the following terms:

[52]

"...where a man who has children from an earlier marriage leaves to his second wife the entirety of his estate, and thereby deprives the children of his first marriage of the provision which they might otherwise have expected, it falls to the second wife as a matter of moral responsibility to make adequate testamentary provision for those children."

[53]

[44] Nettle J described the point of principle as one of "modest proportions" and stated at paragraph [60] of the reasons:

[54]

"If children of a first marriage have stood aside in order that their father might make adequate provision for the widow of a second marriage, and upon her death there are assets in her estate, the amount left by their father to the widow maybe relevant to the question of whether she is responsible to provide for them."

[55]

[45] In McKenzie the stepmother had left her estate to her nephew. Nettle J found that the amount of money left by the stepson's father to the stepmother was a relevant consideration in the determination of whether the stepson was a person for whom his stepmother had a responsibility to provide.

[56]

[46] In James, the father who had two children from his first marriage left the entirety of his estate to his second wife who survived him. On her death, she left her estate to two nephews and a niece. In that case Cummins J stated:

[57]

"[35] In the present case, it would be wholly inadequate to consider the question of the responsibility of the deceased to make provision for the plaintiffs in isolated concentration upon her circumstances at the immediate time of her death. The question of her responsibility to make provision, in the circumstances of this case, must be approached holistically and historically. When so approached, it is apparent that the genesis of her Estate was the father of the plaintiffs. Rightly, he provided for his wife by joint ownership of the major asset, the house, which passed to her by survivorship. It matters not that the plaintiff did not seek to make a claim upon his death because they did not wish to disturb his widow's last years or whether they did not because there was little in his estate. The question of the deceased's responsibility to make provision for her step-children necessarily in this case bears an historical aspect.

[58]

[36] In my view, by reason of the derivation of the deceased's financial position, she did have a responsibility to make provision for the proper maintenance and support of each of the plaintiffs."

[59]

[47] The decisions in McKenzie and James were applied in Keets v Marks [2005] VSC 172. That was also a case where the natural parent had left her estate entirely to her second husband who chose by his will not to benefit the natural son of his wife. It was held that the mother had a responsibility to make provision for her son and that responsibility transferred itself to her husband on the receipt by him of her money upon her death. The provision that was made for the son out of his stepfather's estate in that case equated to an amount equivalent to that derived by his stepfather from his wife.

[60]

[48] I conclude from this survey of relevant cases that the notion of "differential provision" is relevant only where an application requires a comparison of the respective relationships of the stepchildren and natural children to the same parent. The notion of "differential provision" is not a matter of principle, but merely a shorthand way of acknowledging that in some instances the circumstances of the stepchild's relationship with the stepparent may be different from the relationship of the natural child with the same parent in ways that are relevant for the purpose of determining the jurisdictional issue in a family provision application.

[61]

[49] The ordinary principles that apply for determining the jurisdictional issue of any applicant are the starting point for determining the jurisdictional issue in relation to a claim for family provision by a stepchild against the estate of a stepparent. The circumstances of the step relationship itself may affect the application of these principles, for example, the degree of dependence of the stepchild on the stepparent may be affected by the living arrangements for the stepchild or when the relationship commenced. An additional matter that may be relevant in determining the jurisdictional issue in the step relationship situation, by virtue of that relationship, is whether the stepparent's assets have been derived in part from the funds or resources of the natural parent of the stepchild. See Re Callaghan at 794, Re Fulop at 683 and McKenzie at paragraph [60].

[62]

[50] The submissions made on behalf of the applicants in this proceeding recognise that the applicants would fail in their claim at the jurisdictional issue, but for the possibility of being able to show that the deceased's assets were to some extent derived from Mr Freeman.

[63]

[51] I infer from the facts that Mr Freeman arranged for some share purchases to be solely in his name and for others to be solely in the deceased's name and from the contents of his last will, that Mr Freeman was cognisant of the competing claims on his bounty by both his children and the deceased. In advance of his death, he made some attempt at dividing up the matrimonial assets so that the deceased would be left with some assets, but others could be left by Mr Freeman to his children under his will.

[64]

[52] There is no suggestion in the material that Mr Freeman left his first marriage with any assets. The indications are the opposite. That means that the assets that comprised his estate and the deceased's estate were built up from the assets held by the deceased at the commencement of their relationship together, Mr Freeman's borrowings and inheritance from his father, the moneys earned from the hard work of both Mr Freeman and the deceased during their relationship and the provident investments in property and shares which they made. It is a matter of speculation on the material as to the extent to which each of Mr Freeman and the deceased worked in the sense of undertaking income producing activities during their relationship. It may be that Mr Freeman undertook the labouring activities on their farm properties, but the deceased performed less arduous tasks and the homemaker chores to enable Mr Freeman to undertake those activities. The division of assets at Mr Freeman's death suggests that he considered that he was entitled to a greater share of their matrimonial wealth than the deceased, but there is no way of verifying whether that was an accurate reflection of their respective contributions to their wealth. The comparison of Mr Freeman's estate with the deceased's assets (after allowing for the adjustment that resulted from the deceased's successful family provision application) was the sum of $1.1 million compared with the sum of $740,000.

[65]

[53] The submission was made on behalf of the applicants that the ultimate source of the substantial part of the deceased's assets was Mr Freeman. Because of the lack of detailed material on this issue, it is not possible to make any precise finding about what part of the sum of $740,000 was sourced from Mr Freeman. Having regard to the length and nature of the relationship between Mr Freeman and the deceased and the sources of their wealth and the fact that some division of their wealth was made between Mr Freeman and the deceased, I am not satisfied that the finding can be made that the ultimate source of the substantial part of the deceased's assets was Mr Freeman. I can find that the source of the substantial part of the deceased's assets was the joint efforts of Mr Freeman and the deceased during their relationship. The division of assets that was made by the date of Mr Freeman's death means that it is difficult to make any finding other than that Mr Freeman contributed to some extent (significantly less than half) to the assets that the deceased had in her name after his death. The position may have been different if Mr Freeman had not quarantined the major portion of their jointly produced wealth into his name.

[66]

[54] This matter can be distinguished from those cases such as Re Callaghan, McKenzie and James where the natural parent had left his or her entire estate to the stepparent, so that it was reasonable in those circumstances to expect the stepparent to benefit the stepchild who had missed out on benefiting directly from the parent's estate.

[67]

[55] In determining the jurisdictional issue, it is also relevant that, apart from the applicants, there were no persons who could be described as having legitimate claims upon the deceased's bounty, in the sense that those obligations are understood in this area of the law. It is also relevant that the deceased's estate is not insignificant in size.

[68]

[56] The fact that the executor of Mr Freeman's estate compromised the deceased's family provision application, so that a payment of $150,000 was made from Mr Freeman's estate to the deceased, does not preclude the applicants who were the beneficiaries of their father's estate from seeking to establish their own claims against the deceased's estate on the basis of obligations which they claim were owed by the deceased to them as their stepmother. What the applicants received from their father's estate is relevant to determining the jurisdictional issue in respect of their claims, but does not necessarily dispose of it.

[69]

[57] Although there was no familial relationship at all between the deceased and the applicants and the deceased was annoyed about the way in which Mr Freeman's children benefited under his will, the question arises whether in all the circumstances some provision should have been made by the deceased for one or more of the applicants. Even without a familial relationship with stepchildren, a stepparent who has benefited financially from his or her spouse should consider the plight of those stepchildren who have real need of support.

[70]

[58] A wise and just stepmother in the deceased's position whose assets were contributed to some degree by Mr Freeman (although not the major extent when the division of matrimonial assets prior to Mr Freeman's death is taken into account) would be expected to consider making some provision for at least the children of Mr Freeman who remained in extremely modest and necessitous circumstances, despite benefiting their from father's estate.

[71]

[59] In the written submissions made on behalf of the both parties there is reference to additional material relevant to the financial position of some of the applicants that was not disclosed in the affidavits relied on by the applicants or their oral evidence. This additional material does not alter the view which I have formed on the evidence, that Ms Sheryl Freeman and Mr Warren Freeman were in the most necessitous circumstances of all the applicants, so as to place them in a category which should have attracted the support of the deceased. Ms Freeman has no other significant asset, other than her superannuation policy, no income apart from social security and no real prospects. Apart from the shares that he still holds that came from his father's estate, Mr Warren Freeman has an asset in the sense of the rural property on which he and his wife reside, but it is not income producing, he has a disability and he and his wife have the responsibility of an intellectually disabled adult child. The extreme need of each of these applicants can be contrasted with the comfortable circumstances of Mrs Smerdon and the slightly better circumstances of the other siblings than the circumstances of the applicants.

[72]

[60] The jurisdictional issue is satisfied only by Ms Sheryl Freeman and Mr Warren Freeman.

[73]

[61] It is therefore necessary to proceed with the second stage of the process of determining what provision should be made out of the deceased's estate to provide adequate provision for the proper maintenance and support of each of Ms Sheryl Freeman and Mr Warren Freeman. There is no disentitling conduct. The quantum that is allowed for provision for these applicants should be relative to these findings which I have made about the degree to which the deceased's assets should be treated as having been derived from Mr Freeman. It is not a matter of precise mathematical calculation. I do not consider that their relative needs are materially different. I would order the same provision for each of them. In all the circumstances, it is proper that a lump sum of $100,000 should be provided for each of Ms Sheryl Freeman and Mr Warren Freeman out of the deceased's estate in order to afford them adequate provision for their proper maintenance and support as stepchildren of the deceased.

[74]

1. That further provision be made for the proper maintenance and support of Sheryl Ann Freeman out of the estate of Leone Amillda Freeman deceased by payment of a lump sum of $100,000.

[75]

2. That further provision be made for the proper maintenance and support of Robert Warren Freeman out of the estate of Leone Amillda Freeman deceased by payment of a lump sum of $100,000.

[76]

3. The claims by Leonard Thomas Freeman, Derinda Joyce Smerdon, Denise Gay Hancock, Lynell Coral Nicol and Rhonda Kay Rettke be dismissed.

[77]

[63] I will hear submissions on the question of what costs orders should be made.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (77 paragraphs)

Parties

Cases Cited (3)