12 August 2010
Phillip HASTINGS v John William HASTINGS
Judgment
1 McCOLL JA: I agree generally with Basten JA. As Campbell JA (with whom Young JA agreed and Handley AJA generally agreed) concluded in Clifford v Mayr [2010] NSWCA 6 (at [74]) after reviewing relevant decisions, the "correctness of the judge's decision on the jurisdictional question must be reviewed in accordance with the standards applicable to discretionary judgments". The appellant did not establish any error of the nature of that required by House v The King (1936) 55 CLR 499 (at 504-5) which would warrant this Court's intervention. I agree with the orders Basten JA proposes.
2 BASTEN JA: This appeal concerns a claim under the Family Provision Act 1982 (NSW), brought by an adult son seeking a payment from the estate of his deceased mother. The value of the estate is in the order of $700,000 (disregarding costs of these proceedings). The deceased left a will by which she appointed her other living son (the respondent) as executor and sole beneficiary. The appellant seeks provision in an amount of $140,000.
3 Despite the limited amount of the claim, the trial was heard by White J in the Equity Division: Hastings v Hastings [2008] NSWSC 1310. His Honour dismissed the claim for a combination of reasons, which may be summarised as (a) the claimant's limited contact with the deceased; (b) his criminal conduct and character having brought shame on the family; and (c) his financial needs being due to his criminal conduct, which resulted in forfeiture of his property.
Principles to be applied
4 The Family Provision Act 1982 was repealed by the Succession Amendment (Family Provision) Act 2008 (NSW), s 5, which commenced on 1 March 2009. The legislation inserted a new Ch 3 in the Succession Act 2006 (NSW), which applies in relation to the estate of a person who dies on or after the commencement of the new provision: Succession Act, Schedule 1, Pt 3, cl 11. The deceased having died on 29 February 2008, the Family Provision Act, as applied by the primary judge, continues to apply.
(a) powers of court
5 The key concepts in the Family Provision Act were succinctly identified by Gleeson CJ in Vigolo v Bostin [2005] HCA 11; 221 CLR 191 at [4], discussing similar language in the Western Australian Act:
"The power of a court to make an order under the Act is enlivened by the formation of an opinion that the disposition of the deceased's estate effected by will, or the law relating to intestacy, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of [an eligible person]. The court is empowered, at its discretion, to order that such provision as the court thinks fit is made out of the estate of the deceased for that purpose."
6 The definition of "eligible person" in s 6(1) encompasses spouses and those living in a domestic relationship with the deceased person, children, former spouses and dependants who were grandchildren or otherwise members of the household of the deceased person at a relevant time. The appellant is an eligible person, because he is the son of the deceased.
7 In the case of a child, it is not necessary that the person be a dependant at the time of the deceased's death in order to be an eligible person. It may be accepted that a child will generally have some claim on the estate of the deceased, despite lack of dependency. Where a son or daughter is adult and able-bodied, difficult questions can arise as to whether the person is someone for whom provision "ought" be made from the estate for his or her "maintenance, education or advancement in life": s 7. The court is required not to make provision unless satisfied that such provision as has been made (if any) is "inadequate for the proper maintenance, education and advancement in life of the eligible person": s 9(2).
8 The term "proper" supports an assessment that more may be required than that which is sufficient as a matter of bare necessity to avoid penury: Goodman v Windeyer [1980] HCA 31; 144 CLR 490 at 496-497 (Gibbs J), citing Bosch v Perpetual Trustee Co [1938] AC 463 at 476. Nevertheless, unless an adult child can establish that his or her resources are indeed "inadequate" in the relevant sense, it seems unlikely that he or she will succeed. As explained by Gibbs J in Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; 143 CLR 134 at 147:
"It is well settled that these general principles apply to the case of an adult son as well as to other cases. The age of an applicant is however material and if a son is mature, able-bodied and capable of supporting himself he may in those circumstances be in no need of maintenance or support."
9 One further aspect of the statutory provision needs to be borne in mind: although under earlier legislation, it was said that the test of adequacy of provision was to be applied "on all the facts that existed at the date of the death of the testator, whether the testator knew of them or not, and all the eventualities that might at that date reasonably have been foreseen by a testator who knew the facts" (Gibbs J in Hughes at 148), s 9 requires that the assessment be made "at the time the court is determining whether or not to make such an order": s 9(2).
10 If the inadequacy of provision is established, the Court is vested with a discretion to order that provision (or further provision) be made from the estate. At that point, sometimes described as the second stage of the inquiry (see Singer v Berghouse [1994] HCA 40, 181 CLR 201), the factors set out in s 9(3) become relevant, although at least in some circumstances they will also be relevant at the first stage of inquiry, which itself requires consideration of "the totality of the relationship between the applicant and the deceased", as well as the needs of the applicant: Singer, p 210. (Whether that would be so in every case is unclear.)
11 The structure of equivalent provisions around the country is not identical, but the structure of the Family Provision Act, s 9, which was the subject of consideration in Singer, indicates the basis for the two stage process, although the test of inadequacy and of proper provision are not directly conditioned by the consideration of factors set out in sub-s (3). Nevertheless, it is clear on the basis of Singer that similar considerations will apply at the first stage and accordingly his Honour was not in error in determining the matter on the basis of a consideration of the first stage of the inquiry.
(b) approach on appeal
12 The next question concerns the proper approach for this Court to take on the appeal. In Hughes, the High Court considered an appeal in relation to the Victorian law, as then in force, in a matter in which the trial judge had dismissed an application on the basis that the applicant did not have any "moral claim" to provision and that he was disentitled to the benefit of the section, by reason of his conduct. Murphy J noted (at p 158):
"The Full Court of the Supreme Court of Victoria … dismissed his appeal … and dealt with it as if it were a discretionary judgment. It was not a discretionary judgment; it was based on a determination of matters of fact or mixed fact and law (that is, whether the appellant was left without adequate provision, whether he established a moral claim to provision, and whether his conduct disentitled him to any provision) and cannot be regarded as a discretionary judgment unless the concept is extended to encompass almost all judgments. Dunn J. did not reach the stage of exercising any discretion under s 91. It is unnecessary therefore, to consider the nature of a true appeal from a judgment which involves an element of discretion except to observe that the concept of discretionary judgments must not be allowed to undermine the appellate process."
13 In Singer, Mason CJ, Deane and McHugh JJ noted (referring to Hughes, but not specifically to the judgment of Murphy J) that the question at the first stage was "strictly one of fact, notwithstanding that it involves the exercise of value judgments": p 210. Their Honours accepted that there was an element of artificiality in separating the exercise into two stages and continued (at 211):
"Strictly speaking, however, the jurisdictional question, though it involves the making of value judgments, is a question of objective fact to be determined by the judge at the date of hearing. This conclusion may have consequences in terms of what an appellant needs to demonstrate on appeal, an issue that will be considered shortly."
14 Their Honours returned to the issue on the following page, noting that in this Court, Kirby P had held that "the principles that govern appellate review of discretionary decisions should apply" in relation to the first stage, known as the "jurisdictional question": referring to Hunter v Hunter (1987) 8 NSWLR 573 at 576. The joint judgment in Singer continued:
"In this respect we should express our agreement with the following comments of [Kirby P] in Golosky v Golosky [[1993] NSWCA 111, URJ, p 8 (45)]:
'Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision-makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be bought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged.'"
15 This Court has accepted that there is a special rule to be applied in relation to evaluative judgments in such matters and applied Singer: see, eg, Clifford v Mayr [2010] NSWCA 6 at [67]-[76] (Campbell JA, Young JA agreeing and Handley AJA agreeing generally).
16 It follows that the task for the appellant in the present case was to establish some error of principle in accordance with House v The King [1936] HCA 40; 55 CLR 499 at 505.
(c) the relevant standard for ordering provision
17 As noted by Gibbs J (Stephen and Mason JJ agreeing) in Goodman v Windeyer [1980] HCA 31; 144 CLR 490 at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
18 This test is by no means easy to articulate and apply. After referring to the second reading speech of the Attorney-General introducing the Bill which became the Testator's Family Maintenance Act 1916 (NSW) Gleeson CJ noted in Vigolo at [10]:
"The references to the rights of a wife or a child to maintenance after the death of a husband or father were not references to legal rights. The necessity for the legislation arose from the absence of such legal rights. The statute did not confer new rights of succession. It did not respond to the mischief identified by re-instating a right akin to dower, or otherwise by creating legal rights of inheritance. It preserved freedom of testamentary disposition, but subjected that freedom to a new qualification. The statute gave courts a discretionary power to make orders which would have the legal effect of altering the provisions of wills. …
The mischief to which the original legislation was directed was the possibility of unjust exercise of testamentary capacity resulting in inadequate provision for a family member, typically a widow."
19 Limited to such clear cases, the purpose and effect of the legislation may be readily understood. When a claim is made by an adult able-bodied son in respect of the estate of his mother, the identification of the relevant standard is more difficult. As explained by Windeyer J in Stott v Cook (1960) 33 ALJR 447 at 455 (in a passage quoted by Gummow and Hayne JJ in Vigolo at [60]:
"Questions of duty, when not determinable by the fixed criteria of law, become questions of casuistry. Standards and principles may be stated. But their application to a particular case can seldom be beyond all debate even when all the facts are known."
20 Whether there is any generally held social view as to the existence of a moral or natural obligation to adult able-bodied children, sufficient to deprive a parent of the unfettered right of testamentary disposition, may be open to doubt. Almost certainly views would differ. There can, in such circumstances, only be a legitimate range of views available to judges called upon to administer the legislation. Further, because the standard cannot be identified with precision, the application of an appropriate standard to particular circumstances may also give rise to a range of legitimate outcomes.
Approach of primary judge
21 Pursuant to s 9(3)(b), the primary judge was entitled to take into account "the character and conduct of the eligible person". Under an earlier legislative scheme, misconduct and evidence of bad character were colloquially referred to as "disentitling" conditions. Although they used to be identified as providing a legitimate basis for refusing to order provision, it was never entirely correct to describe them as "disentitling" factors. Further, counsel for the appellant fairly objected to the use of that language in respect of the conduct of the appellant, the Family Provision Act containing no express term to that effect. Nevertheless, the appellant's criminal conduct, which his Honour held brought shame on the deceased and the family, together with his very slight contact with his mother during his adult life, were factors legitimately taken into account in denying an order for provision: at [43]. Although his Honour recognised that the appellant had financial needs, he found that his lack of resources was due to his own fault, namely his criminal conduct which led to the confiscation of his property in the United States: at [39]. This factor did not mean that his financial need could be disregarded, but it was a factor which could properly be taken into account as diminishing, if not removing, financial need as a basis for a claim on the estate.
Challenges to findings of fact
22 The best case which could be made for the appellant was that the power to order provision was engaged, because his mother had made no provision at all for him in her will (having given the whole of her estate to his brother) and his own financial circumstances demonstrated that he was without adequate or proper provision in respect of his own maintenance and advancement in life. However, even if that were considered the only available conclusion (consistently with Singer) the factors relied upon to deny a favourable exercise of the discretion remained and the appeal would therefore fail.
23 The appellant more particularly attacked the judgment below on the basis that the primary judge had made erroneous findings of fact, which may be summarised as follows: