Marquis v McNamara

Supreme Court of NSW|2024-10-02|Before: Kunc J

Solicitors: AE Dunne Solicitor (Plaintiff) McNamara & Associates (Defendant) File Number(s): 2023/324779

Summary

The thoughtful exercise of testamentary freedom does not always satisfy even the most honourable of testamentary expectations. This is an example of such a case. Without disrespect, I shall refer to the parties and other protagonists by their given names.
The plaintiff, Craig Marquis, is the 69 year old only child of the late Alfred Marquis, who died in July 2023 at the age of 97. The defendant, Mr Philip McNamara is a solicitor appointed under Alfred's will, made on 20 June 2022, as executor of Alfred's estate.
The estate is not large and primarily consists of Alfred's home at Nowra (the property).
There was no dispute that Craig was a loving and devoted son until the day Alfred died. Nor was there any dispute that, during his life, Alfred was a generous and loving father to Craig. Alfred was also a generous grandfather to Craig's children.
Craig expected that he would receive the whole of his father's estate. Instead, Alfred chose to leave most of his estate in equal shares to Craig and Craig's four children (Alfred's grandchildren) Nicholas, Dominic, Monique and Kyle.
Craig brings these proceedings for additional provision under the Succession Act 2006 (the Act). For the reasons which follow, the Court will make a family provision order in favour of Craig to ensure that he receives from the estate an amount which will enable him to discharge the mortgage over his home.

The facts

No material facts were in dispute, nor were the applicable legal principles. I will next set out the facts, which represent the Court's findings, under headings which are familiar in matters of this kind.

The will and the estate

Under the will, Alfred disposed of the estate in this way: 1. A specific gift of $20,000 to Craig's ex-wife, Deborah. 2. The proceeds of a fixed deposit [$41,761.58] and the property [having an agreed value for the purposes of these proceedings of $550,000] to Craig, Nicholas, Dominic, Monique and Kyle in equal shares. 3. The residue of the estate to Craig, after payment from the residue of all Alfred's debts, funeral and testamentary expenses.
After the property and the fixed deposit, the balance of estate comprised a motor vehicle valued at $1,500 and cash of $5,607.39.
The parties accepted that the residue would not suffice to pay the estate's debts and testamentary expenses, such that there would have to be a rateable reduction in the size of the specific legacies. Taking this into account, it was common ground (save as to one matter) that the Court should proceed on the basis that on due administration after payment of debts, funeral and testamentary expenses each specified beneficiary would receive: Deborah - $17,662 Craig - $101,900 Kyle - $101,900 Nicholas - $101,900 Dominic- $101,900 Monique - $101,900 In addition, Craig would receive repayment of two small loans to the estate totalling $1,829 and Alfred's car, valued at $1,500. The one disputed matter was whether given the inadequacy of the residue, Deborah would still receive her legacy. The Court prefers Mr Glissan's analysis of the statutory order of administration such that she does, but rateably reduced as set out above.
The figures in the preceding paragraph take into account payment of the estate's costs of these proceedings on the indemnity basis of $96,000 (rounded). The figures will be slightly understated because the evidence assumed a two day hearing when only one was required, so the saving will be available for distribution.
Significantly for present purposes, the figures in [11] above do not allow for the payment out of the estate of Craig's legal fees. The evidence was that those costs were $140,000 (rounded) on the indemnity basis (and involving a deduction by the Court of $10,000 from the figures in the evidence to allow for the reduced hearing time) and $95,000 on the ordinary basis (a deduction of $15,000 from the figures in the evidence).

Alfred's will making

Craig presented as an entirely honest and straightforward witness, who readily accepted in cross-examination that he had commenced these proceedings out of a sense of hurt and what he saw as the unfairness of Alfred's decision not to leave him (Craig) the entire estate. There was a faint attempt in Craig's case to cast some doubt over Alfred's capacity in an attempt to explain why, there being no falling out or any other controversy, Alfred might have done what he did. To the extent any finding is necessary, I reject that suggestion. Mr McNamara, who prepared Alfred's last will (and some of its predecessors), was cross-examined. His evidence, which I accept, was that Alfred presented as a lucid testator who understood what his assets were and who his potential beneficiaries might be.
Alfred was a conscientious will maker: 1. Will made on 6 June 1999: This will left his entire estate to Alfred's wife, Margaret, and in default to Craig. 2. Will made on 9 August 2000: This will left the whole of his estate to Margaret and in default left the property to Craig, and specific gifts of money in a bank account and/or shares to each of Kyle (in a greater proportion than to the other grandchildren), Nicholas and Dominic upon each of them attaining 21. 3. Will made on 11 August 2008: This will left the whole of the estate to Margaret and in default left Kyle shares and $20,000 in cash; $20,000 in cash to each of Nicholas, Dominic and Monique (she also receiving some jewellery); and the residue of the estate (including the property) to Craig. Each of the grandchildren had to reach the age of 21. 4. Will made on 28 March 2019: This will left the whole of the estate to Margaret and in default $50,000 to each of Kyle, Nicholas, Dominic and Monique, with the residue (including the property) to go to Craig. However, a codicil to this will made on 21 May 2019 gave Kyle a six-month option to purchase the property at market value as determined by an independent valuer. If the option was not exercised within six months, then the property would fall into residue. Nevertheless, from Craig's point of view, the effect of the codicil was either to leave Craig with the property or a sum of money representing its market value. 5. Alfred made his penultimate will on 15 April 2021. This left the entire estate to Margaret and in default $10,000 to Deborah; $30,000 to be divided equally between Kyle, Nicholas, Dominic and Monique; the property to Craig, Kyle, Nicholas, Dominic and Monique as joint tenants in equal shares; and the residue to Craig.
Margaret died on 1 November 2021. As I have already recorded, the will was made on 20 June 2022.

Craig

Craig is now 69 years old and his wife, Veronika, is 63. Craig is employed as a senior integrated logistic support practitioner on a gross salary of $135,000 per annum. He also receives a Department of Veterans Affairs (DVA) pension of $1,387.68 per month.
Veronika is retired but works one day a week in a local shop earning a nominal rate of $29 per hour.
Out of his total income, Craig salary sacrifices $1,000 per month into his superannuation. His recurrent expenditure is $8,157 per month (inclusive of the superannuation contribution of $1,000 per month), and this consumes the entirety of his monthly income.
Craig and Veronika own a home at Yerrinbool with a value of $800,000. The current balance of the mortgage on Craig and Veronika's home is approximately $189,000 with a monthly mortgage payment of $2,800. Craig and Veronika's combined superannuation balance is $404,000. Their only other significant asset is a car, with an estimated market value of $32,000.
Veronika suffers from thyroid gland problems.
Craig suffers from epilepsy, which is successfully controlled with medication, and has had his prostate removed due to cancer. Nevertheless, the medical evidence is that his overall prognosis is "excellent".
Craig and Veronika wish to sell their Yerrinbool property and move to Wagga Wagga (where Monique lives). They have identified, as an example, a four bedroom, two bathroom, double garage home in Wagga Wagga which in May this year was for sale for $1,150,000.
There was no dispute that throughout Alfred's life up to his dying day, Craig was a loving and attentive only child. There was no suggestion of any dispute or falling out between them.
Craig put that he needed further provision over the estimated $101,900 he would receive, primarily because he was still working at the age of 69 and paying off a mortgage. He was at an age and point in life where he wished to retire and live in unencumbered, secure accommodation with adequate funds for his retirement.
Craig accepted in cross-examination that his father was a generous man who treated everyone in the family fairly and generously. In that regard, he accepted that his father had made the following gifts to him: 1. $4,000 to pay his family law legal fees in connection with his divorce from Deborah; 2. $50,000 towards his mortgage and other expenses while he was unemployed before taking up his current employment; and 3. $20,000 for a car in March 2023.

Kyle

Kyle is a 38 year old, single, self-employed carpenter. There is no doubt, as evidenced by Alfred's pattern of will making (see [15] above), that Kyle enjoyed a special relationship with his grandfather.
Kyle was estranged from Craig. Kyle was six years old when Craig and Deborah separated. Kyle's evidence was that Alfred became like a father to him in the absence of Craig.
Kyle earns approximately $8,500 per month, which is slightly more than his regular expenses. He has approximately $70,000 in assets comprising a vehicle worth $10,000, work tools of $20,000, and superannuation of $40,000. He has $35,000 in liabilities. He currently lives in rented accommodation.
Kyle's evidence was that he would like to start a family, which would be assisted if he could grow his business with the money he receives from Alfred's estate. He would like to work towards a deposit for a house. He also deposed that his vehicle was very old and would need to be replaced, but there was no evidence as to what a replacement vehicle might cost.
Kyle was cross-examined. Mr Locke suggested that Kyle had not been completely forthcoming in disclosing his financial affairs. To the extent there may be merit in that criticism, it is immaterial for present purposes. The essential elements of Kyle's financial position were clear to the Court.

Nicholas

Nicholas is 30 years old, single, and employed as a public affairs officer with the Australian army. He does not own any real property.
As at May 2024 he owned two motor vehicles, had savings of about $10,000, a bank loan of $83,000, a HECS debt of $63,455 and a credit card debt of about $4,275.
Nicholas' salary is approximately $109,000 per annum. While he receives rental assistance through defence housing, he contributes approximately $1,050 per fortnight from his salary towards his current rent.
Nicholas was not cross-examined. His affidavit evidence was that he had a close relationship with Alfred. He would like to apply his legacy towards paying off his debts and assisting him in having a deposit to enter the housing market.

Monique

Monique was not cross-examined. She is married with a now one year old baby. She and her husband own a home in Wagga Wagga as joint tenants with a mortgage debt of $833,488.
Monique is a registered nurse who is usually employed part time, but at the time of deposing her affidavit in May 2024 was on six months unpaid maternity leave. Her usual income from her employment was approximately $860 per week.
Currently, Monique's husband is their sole income provider and earns approximately $1,327 per week after tax. Their weekly living expenses are approximately $1,116.
Monique's evidence was that she also enjoyed a good relationship with Alfred. He had given her money at birthdays and Christmas, $2,000 at the time of her engagement and $5,000 at the time of her wedding. Her evidence was that Alfred was generous to her and her siblings when any of them asked for help.

Other beneficiaries

There was no evidence concerning Deborah's circumstances.
Nor was there any evidence from Dominic. He lives with Craig and Veronika at the Yerrinbool property.

Legal principles

There was no dispute about the applicable legal principles. Mr Glissan drew attention to this summary in the judgment of the Court of Appeal (Bell P; Leeming and Payne JJA) in Bassett v Bassett [2021] NSWCA 320 which I respectfully adopt and apply: 78 Before an order for provision can be made in favour of a child of the deceased (who is an "eligible person" within the meaning of s 59 of the Succession Act), the Court must be satisfied that "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": Succession Act, s 59(1)(c). 79 Satisfaction in this regard is "jurisdictional" insofar as it is a prerequisite to the Court exercising its discretionary power to make an order for provision pursuant to s 59(2): see, for example, as to the use of the description "jurisdictional", White v Barron (1980) 144 CLR 431 at 456; [1980] HCA 14; Singer at 208-210; Hampson v Hampson [2010] NSWCA 359; (2010) 5 ASTLR 116 at [69]-[72]. Care must, however, be taken when answering this jurisdictional question not to confine the relevant consideration to an applicant's financial or material needs; the language of "proper maintenance, education or advancement" involves more than simply a question of financial needs: see Sgro v Thompson [2017] NSWCA 326 at [68]-[74] (Sgro). 80 Once the level of satisfaction referred to in [78] has been reached, the Court has a broad discretion, "having regard to the facts known to the Court at the time the order is made" (emphasis added), to make such order for provision out of the estate as ought to be made "for the maintenance, education or advancement in life of the eligible person": Succession Act, s 59(2). 81 In considering both whether to make a family provision order and the nature of any such order if the threshold required by s 59(1)(c) is satisfied, the Court is entitled to consider the broad range of matters specified in s 60(2) of the Succession Act. The breadth of the matters that may be considered under s 60(2) does not, however, authorise the making of an order which is for a purpose other than "the maintenance, education or advancement in life of the eligible person". Nor does it relieve the Court of the need to make the order "having regard to the facts known to the Court at the time the order is made" (emphasis added). 82 The primary judge's summary of relevant principles, as noted at [59] above, was not challenged. It is convenient to add a reference to McCosker v McCosker (1957) 97 CLR 566 at 571-572; [1957] HCA 82 (McCosker), in which Dixon CJ and Williams J observed that: "The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v. Perpetual Trustee Co. (Ltd.) [1938] NSWStRp 3; [1938] AC 463; (1938) 38 SR (NSW) 176 the word 'proper' in this collocation of words is of considerable importance. It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent." 83 Kitto J's observations in the same case at 579 are also of note: "The testator has shown by the terms of his will that he did not fail to consider what he ought to do for the several members of his family and that it was his deliberate judgment that some of them, including the respondent, had been adequately provided for by assistance he had given them. His opinion on the subject is, of course, by no means conclusive. But there is nothing to suggest that he was under any misapprehension, or that he was in any way prejudiced against the respondent; and the case seems to me to be one of those in which the testator is much more likely to have formed a correct conclusion on the subject of the moral obligations he owed to his family than a court can well hope to be." 84 In Singer at 208-209, the majority held, in the context of broadly equivalent provisions under the predecessor Family Provision Act 1982 (NSW), that: "It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'. That description means no more than that the court's power to make an order in favour of an applicant under s.7 is conditioned upon the court being satisfied of the state of affairs predicated in s.9(2)(a)." 85 More recently, in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [122] (Vigolo), Callinan and Heydon JJ observed, in relation to the corresponding Western Australian legislation, that the questions which the Court has to answer in assessing such a claim do not "necessarily always divide neatly into two" and that: "Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors." 86 Vigolo is also significant because three of the five justices (Gleeson CJ, Callinan and Heydon JJ) supported the continuing utility in this field of discourse of notions of moral obligation and duty. Thus, Gleeson CJ (at [25]) observed that: "In explaining the purpose of testator's family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text." See also Callinan and Heydon JJ at [121], cf Gummow and Hayne JJ at [63]-[73]. 87 It is also relevant to note that in Sgro at [83], White JA (with whom McColl and Payne JJA agreed) repeated what he had earlier said in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] as follows: "In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and s 59(2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will." These observations bear a close affinity with those of Kitto J in McCosker, noted in [83] above. Sgro was a case where, as Payne JA explained at [3], one sister's claim "was founded upon what all members of the family understood as her claim to the Greystanes property upon her parents' death, Rosa [another sister] having earlier received the Merrylands property in a way all members of the family understood as comprising an early inheritance." At [76]-[78], White JA relevantly held that: "76 [T]he primary judge did err in principle in his assessment of the significance of Rosa's having been given the Merrylands property in 1985 as her early inheritance. There is no doubt that the primary judge took that transaction into account as one of the material considerations. His Honour did so in considering the provision made for the applicant by the deceased during the deceased's lifetime … and as evidence of the deceased's testamentary intentions … In the section of his reasons headed 'DETERMINATION' the primary judge referred to the deceased's having made generous provision for Rosa during her lifetime by, amongst other things, giving her an unencumbered house … His Honour then went on to say that the level of provision made during the lifetime of the deceased could not alone determine what was proper on the deceased's death, albeit it was one of the matters to be taken into account in determining what is 'proper'. 77 But in considering Carmela's competing claim on the estate, the primary judge said (at [133]) that: 'Her competing claim is not founded upon any competing financial need, but on her contributions to the deceased, both financially and in other ways, during the deceased's declining years.' 78 Carmela's competing claim was not founded only on her contributions to the deceased during the deceased's declining years. Fundamentally, it was founded upon what all members of the family recognised as her moral claim to the Greystanes property upon her parents' death because her sister had received an early inheritance of the Merrylands property." 88 In relation to the approach to be taken to a claim for provision by an adult child, reliance was placed by Merilyn and Bruce upon the following summary of principles by Hallen AsJ (as his Honour then was) in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111] as follows: "(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. (b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801. (c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia. (d) 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) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45. (e) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 149. (f) Although some may hold the view that equality between children does not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court's determination of an applicant's case."
In addition to the passage from Bowditch referred to by the Court of Appeal, Mr Locke drew attention to what Hallen AsJ (as his Honour then was) had said in that case about claims by grandchildren, which he submitted was applicable by analogy in relation to considering the competing claims of grandchild beneficiaries who had put their circumstances in issue: 113 In relation to a claim by a grandchild, the following general principles are, in my view, relevant and should be remembered: (a)As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased's testamentary recognition. (b)Where a grandchild has lost his, or her, parents at an early age, or when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes in loco parentis, these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. The fact that the grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Even then, it should be demonstrated that the deceased had come to assume, for some significant time in the grandchild's life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild's support and welfare, or else that the deceased has undertaken a continuing and substantial responsibility to support the applicant grandchild financially or emotionally. (c)The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created in a particular case by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent. (d) Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence. (e)The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act. (f)It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.

Craig's submissions

Mr Locke submitted that what is referred to as the "jurisdictional question" should be answered in Craig's favour. He submitted that the limited provision in the will, having a value of $101,900 (but not taking account of his legal expenses if these were to be paid out of the estate) was in all the circumstances not adequate for Craig's proper maintenance or advancement in life. This was said to be by reason of his personal and financial circumstances, his age and health, his close relationship with Alfred, the relatively small size of the estate and the nature of the competing claims on the estate (being those of grandchildren over a child of the deceased).
Mr Locke submitted that in lieu of Craig's entitlement under the will, provision in an amount of $320,000 would be adequate and proper having regard to what was said to be Craig's requirements, being: 1. to pay down the balance of his mortgage; 2. to pay down the balance of his car loan; 3. to meet the future cost of aged care accommodation; 4. recurring living expenses; 5. future medical and hospital expenses; and 6. capital sum for future contingencies.
While the mortgage payout figure of $189,000 was easily identifiable from the evidence, I enquired of Mr Locke how he justified on behalf of Craig the balance of the figure of $320,000. Mr Locke contended that the balance could be justified on the basis of the Court's instinctive synthesis that a man in Craig's position needed a buffer for contingencies at his time of life.

Mr McNamara's submissions

Mr Glissan submitted that, in all the circumstances, proper provision had been made for Craig, not least because Craig and Veronika were not in any particular need. Having regard to: Alfred's generosity to Craig during Alfred's lifetime; Craig and Veronika's adequate financial and housing position now; the competing needs of the other beneficiaries; and the small size of the estate, the Court could not conclude the jurisdictional question should be answered in Craig's favour.
There were three matters on which Mr Glissan laid particular emphasis.
First, he relied heavily on a concession which he had obtained from Craig in cross-examination to the effect that he (Craig) and his wife would be "comfortable" on the assumption that he received at least $100,000 from the estate and applied that together with some of his superannuation to eliminate their mortgage. In order to appreciate that submission it is necessary to set out the relevant part of the transcript (Tcpt, 2 October 2024 pp 33(29)-34(50): HIS HONOUR: Yes. But how much are you asking him to assume he will receive? GLISSAN Q. Well I want you to assume there's going to be at least $100,000. At least? A. That's not going to pay my mortgage. Q. It's going to substantially reduce it though, isn't it? A. I can - I - I - and I said before, Mr Glissan, I - I would still have to work. I am not - I'm not at the stage where I can go away comfortable and say I retired and - and - and think that my father looked after me when you know. And I've got - I've got four children that are now contesting this will. And then they're expecting me when I pass away to have my will. So is that not double-dipping? Q. Let me come at it in a different way. Can you look again at your affidavit at tab E and in particular have a look at paragraph 10. You said there that you were 68-- A. Yeah. Q. --years of age when you swore that affidavit? A. That's right. Q. You're now 69, aren't you? A. That's correct. Q. You're old enough to access your superannuation, aren't you? A. I don't want to be - yeah. That's - that's correct. But I don't want to be accessing my superannuation to - to pay off my mortgage and just leave me with nothing. I mean, you know, I - I think this is-- Q. But you won't be left with nothing. If you access your superannuation, even putting aside what you're going to receive under the will, you will be able to repay your mortgage, and you and your wife will still have superannuation, and you will have a house unencumbered worth about 800 thousand. Is that right? A. Depending on the price, I suppose. Q. You will be comfortable? A. But well should I-- Q. And you will continue to receive your DVA pension? A. I'll always receive that. Q. Yes. You will be comfortable. And if you have to go into a nursing home-- HIS HONOUR: Well don't start asking another question, Mr Glissan. Q. Do you agree that on that hypothesis you would be comfortable, sir? A. If I - if - if I had to access my superannuation to pay for things, it would leave me with nothing. But yes, I would be comfortable. So if I - if I don't have - the super is there for when you retire. Not to be paying your bills to pay off your house and access that to - to retire. That's not how - I would never have believed it to work. And I - forgive me if I'm - if I'm being naive or silly. But I don't think that that's what - that's what I was provisioning it for, to - to use that as my mortgage. Otherwise, if that was the case, when I had 180 or whatever thousand it was before, I could have paid it off a couple of years ago. But why would I access my super for that? That's - that's not what I would do. It's - I'm - I'm here to look after my kids. And, you know, I would do the same thing for my kids. I would - I would put them in my will. But, I mean, you know, my father did it for 34 years with the first three wills. Had me as the executor. And - and I was the - and I was the sole beneficiary of the whole estate. And then all of a sudden it changes. That's - that's - I don't know why, how or what - what reason caused him to do that. And he changed - changed law - law firms when I don't even know whether he remembers he had wills with another law firm. I can't remember even if they were still - and they were still active.
Second, Mr Glissan drew attention to the financial assistance which Alfred had provided to Craig during Alfred's lifetime (see [26] above).
Third, Mr Glissan referred to Alfred's pattern of will making. He submitted that in each of his wills, culminating in the will, Alfred had given careful thought to the division of his estate. The will was rational and wise. He submitted this a case on all fours with that postulated by White JA in Sgro (quoted in [41] above) that "respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate… if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed". As it is of relevance in this case, I also record that White JA indicated that a qualification to the approach he had described was the Court having to decide any application by reference to the facts at the time of hearing.

Consideration

It will be apparent from the parties' submissions that the primary focus of their attention was whether or not s 59 (1) (c) of the Act had been satisfied. This provides: "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."
I have referred in [14] above to Craig's frank acknowledgment of how hurt he feels by what he perceives to be the injustice of the will. In approaching this matter, I have borne firmly in mind that the family provision jurisdiction does not exist to mend hurt feelings or to rewrite a will which someone perceives (understandably or otherwise) to be unfair.
Mr Glissan relied on what was said by the High Court in McCosker (see [41] above) as to the meaning of "proper". While under the Act the various matters set out in section 60(2) are not in terms required to be considered in relation to s 59(1)(c) (see s 60(1)), the matters in s 60(2) are all examples of matters that can be relevant to addressing what constitutes "adequate" provision and "proper" maintenance. As the summary of authorities in [41] above makes clear, while the financial analysis of the amount of provision and the plaintiff's needs, together with those of others with claims on the testator's bounty are important, the adequacy of provision is not solely determined by a financial calculus. Both the adequacy of provision and what is required for proper maintenance, education or advancement in life requires a more holistic assessment of all the plaintiff's circumstances, the size and nature of the estate, the relationship between the plaintiff and the deceased, and the relationship between the deceased and others who have some claim for testamentary recognition.
In my respectful opinion, Mr Glissan's argument gave far too much primacy to a financial analysis alone. Mr Glissan's essential point was that Craig and Veronika had approximately $400,000 in superannuation which they were able to access. With the approximately $100,000 that Craig would receive from the estate and $89,000 from their superannuation, Craig and Veronika could pay off their mortgage. This would leave them with a house worth $800,000 and superannuation of $311,000, and would leave them, as Craig accepted in cross- examination "comfortable". While there was very little evidence about the price of homes in Wagga Wagga, Mr Glissan submitted that $800,000 could buy a suitable home in Wagga Wagga. While ultimately not relevant to the outcome, the Court accepts Mr Glissan's submission that the evidence did not support Craig and Veronika needing a four bedroom home. However, they have demonstrated a need for a three bedroom home because Dominic currently lives with them and they would like to have a spare bedroom for visits from other family members.
There are difficulties both of principle and, in this case, practice in the approach urged upon the Court by Mr Glissan.
It is common in family provision cases for plaintiffs to be cross-examined with a view to eliciting a concession that if they were to receive $X then they would accept that they would be "comfortable" or a word to similar effect. Such evidence will always be relevant in addressing questions of whether provision is "adequate" and "proper". However, too frequently such concessions are presented in argument as dispositive against the plaintiff's case. In some cases, they may be.
However, such an answer does not absolve the Court from considering all of the relevant circumstances, of which such a concession will only be one such circumstance. As was observed in Vigolo (quoted in [41] above) "adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably" (emphasis added). Just as the operation of the Act does not favour the grasping claimant, nor does it exclude the stoic. In other words, I accept Mr Locke's submission that even where a plaintiff, who to their credit may just be stoic, accepts that a particular amount of provision may leave them "comfortable", that plaintiff's subjective assessment does not automatically answer the Court's enquiry on both "adequate" and "proper" unfavourably to the plaintiff.
Apart from this difficulty in principle, there is a practical difficulty with the assumptions underlying the cross-examination which I have set out in [49] above. As the parties acknowledged, the Court must make its assessment of both "adequate" and "proper" at the time of the hearing by reference to the facts then known. Among the facts known to the Court are the consequences for the parties of the legal costs that have been incurred. The first step in Mr Glissan's analysis is that Craig will receive approximately $100,000. That will only occur if he fails in these proceedings. He will then necessarily be left with the liability to meet his own legal fees ($150,000) together with, almost certainly, a liability to pay the estate's costs on the ordinary basis (which the Court estimates at $65,000 given indemnity costs were deposed to be $96,000 with a two day hearing).
Assuming the combined superannuation of approximately $400,000 supplemented by the $100,000 from the estate, from that $500,000 would have to be deducted a liability for his own ($150,000) and the estate's ($65,000) legal fees totalling $215,000. This would leave $285,000 in combined superannuation. Following the of logic Mr Glissan's submission, if Craig were to pay off his mortgage ($189,000), he and his wife would be left with a combined superannuation balance of $96,000. Alternatively, Craig would still be left paying off a mortgage of $189,000 (which would entail continuing to work) and have combined superannuation of $285,000. Either outcome demonstrates, in my respectful opinion, that approximately $100,000 was not adequate provision for Craig's proper maintenance and advancement in life as a faithful 70 year old only son, including when the claims of the other beneficiaries are taken into account.
In reaching this conclusion I have weighed the following factors: 1. Craig was a loving and attentive only child to Alfred throughout the latter's life. 2. The fact that Craig is having to work past retirement age (taking that to be 67 for present purposes having regard to aged pension requirements) in order to continue to pay off his mortgage or is otherwise confronted with the dilemma of using his superannuation in order to discharge that mortgage. I accept as correct Craig's observation (see [49] above) that superannuation is generally intended to be available as a source of income for maintenance in retirement, not as a fund to make substantial capital payments. This fact demonstrates that Craig, as an adult child, has not been able to accumulate sufficient provision for his retirement (which for present purposes would mean funds to pay out his mortgage) and, while not large, the estate is of sufficient size to supplement Craig's legacy to achieve that result. 3. The extent of Craig's interest in his family home and the amount of superannuation currently available to him and Veronika. While that amount is not insignificant, nor is it especially large for a couple of their respective ages. 4. Alfred's generosity to Craig during Alfred's lifetime. While in many cases a testator's generosity in life to a plaintiff may derogate from a plaintiff's claim, in this case it does not have that effect because Craig was Alfred's only child. I regard it as a neutral factor. In many cases such generosity occurs in preference to other possible recipients. Not only was Craig the only child, but no question of preferential treatment arises because Alfred either did, or expressed willingness to, benefit his grandchildren when they needed during his lifetime. He was, in short, generous to all his family. 5. Closely related to the preceding point, Alfred's warm relationship with the other beneficiaries under the will and his desire to benefit them. 6. Alfred's carefully considered will making including with a view to benefit his only child and grandchildren substantially equally. This is an important matter, but one which can still be honoured to some extent even if additional provision is ordered for Craig. 7. As I have noted in [43] above, a grandparent does not generally have a responsibility to make provision for a grandchild, laudable as that may be. While Alfred had, in particular, a special relationship with Kyle, and accepting that Kyle may have thought of Alfred as a father figure, that does not, in this case, rise high enough to warrant any special consideration by the Court for Alfred's intentions in relation to Kyle. In any event, Kyle is treated equally with the other beneficiaries as to the largest part of the estate. 8. The financial circumstances, such as they have been proven, of the other beneficiaries. None of them has demonstrated what might be referred to, without disrespect, as any particular need. Understandably, they all wish to enjoy the benefit of whatever they receive under the will. As I set out below, they will still do so if additional provision is made for Craig. 9. The position in life of the grandchildren when compared to Craig. They are in the early to mid stages of their working lives without any evidence to suggest that they have anything other than many years of employment ahead of them. Craig is at a stage in life where he has a reasonable expectation of being able to retire with a modicum of security and comfort commensurate with the life he has led over the years. Their respective different positions in life give Craig a greater moral claim to the testamentary bounty of his father.
As is often the case, the same factors which have satisfied the Court that the jurisdiction to make a family provision order has been engaged are relevant to what provision should be made (noting the non-prescriptive list in s 60(2) of the Act). Having regard to the size of the estate and the desirability of attempting, as far as possible, to respect Alfred's intention to benefit his grandchildren, I do not accept Mr Locke's submission that a total amount of provision of $320,000 should be made for Craig's maintenance and advancement. It will be apparent from the preceding paragraphs, in particular by reference to the factors I have identified in [61] above, that the Court concludes that the provision which ought to be made for Craig, and which Alfred ought to have made as a wise and just testator, is such that will allow Craig to discharge his mortgage without recourse to his superannuation. This will enable him to retire with secure unencumbered accommodation and maintain the superannuation which he has with his wife to fund their retirement, including to meet any contingencies. In reaching this conclusion I have also taken into account that he will continue to receive his DVA pension. This outcome should also enable them to sell the Yerrinbool property and buy an unencumbered 3 bedroom home in Wagga Wagga if they wish to do so.
Accordingly, the Court is of the view that Craig should receive that amount of further provision from the residue of the estate as would give him $189,000. This outcome assumes that Craig's costs on the ordinary basis will be borne by the estate and that provision over and above what he would otherwise receive from the residue to achieve $189,000 will be borne rateably by the other beneficiaries including Deborah.
This outcome should leave an amount available for Deborah and each of Alfred's grandchildren. By way of example (with rounded figures for simplicity), using the figures currently available to the Court, this can be demonstrated in three stages by reference to the following table (using rounded figures). A B C Deborah $17,662 $14,480 $10,100 Craig $101,900 $83,537 $189,000 Kyle $101,900 $83,537 $58,267 Nicholas $101,900 $83,537 $58,267 Dominic $101,900 $83,537 $58,267 Monique $101,900 $83,537 $58,267

A is the distributions agreed for the purposes of the hearing after a rateable reduction to reflect the fact that the residue will be insufficient to meet Alfred's debts, testamentary expenses and administration costs. B is the distribution after a rateable reduction to reflect the estate paying Craig's legal costs of $95,000 on the ordinary basis (including from Craig's share) (see [13] above). C is the distribution after an amount of $105,463 required to bring Craig's legacy to $189,000 is borne rateably by the other beneficiaries.

Costs

During the course of argument I raised with counsel whether there was any authority for how, if at all, the impact of a plaintiff's costs on the available distributable estate might be relevant to answering the jurisdictional question. While this judgment was reserved, Mr Glissan helpfully drew the Court's attention to the judgment of Hallen J in Page v Hull-Moody [2020] NSWSC 411 at [62] to [79]. That judgment has some similarity to the case at bar, including a plaintiff who had received benefits in the testator's lifetime and under the will, and involving the testator's children and grandchildren.
The matter which concerned his Honour in that case was the amount of costs incurred by each party in what was a small estate. His Honour's concern was exacerbated by the fact that counsel sought additional provision for his client of $50,000 when the parties' joint legal expenses were $150,000. His Honour expressed the view (at [77]) that it would be "a wholly unsatisfactory outcome" if the legal costs incurred in the proceedings were three times the amount of provision to be ordered.
The Court makes five observations with the benefit of Page.
First, a critical part of his Honour's reasoning in that case in dismissing the plaintiff's claim was: [254] The provision that was made for Julie-Anne, but for these proceedings and any costs orders that are made, by the Will of the deceased, would enable her, when the estate is able to be converted to cash, to pay off her debt secured by the mortgage on her property. That would increase her disposable income and also provide an additional sum for the exigencies of life.
That is not this case. The agreed figures in column A of the table in [64] above include a rateable reduction representing the estate's costs of these proceedings of $96,000. If these are added back in, Craig's legacy would increase to $120,456. This amount would still not allow Craig to discharge his mortgage debt without depleting his joint superannuation. It is for that discharge without recourse to superannuation which the Court has concluded a wise and just testator in Alfred's position ought to have provided.
Second, experienced counsel, in response to the Court's enquiry before the hearing as to the amount of provision for which Craig contended having regard to counsel's view as to the amount which was properly maintainable, advocated for total provision of $320,000. In a notoriously discretionary area such as family provision, it cannot be said that was not open to Craig, notwithstanding that he has not succeeded to that extent.
Third, I respectfully agree with, and share, Hallen J's concern about both the absolute amount of costs incurred by parties in family provision cases and the issue of the proportionality of those costs to the result achieved. Especially in cases where a plaintiff does receive something under a will it is essential that some effort is made before proceedings are commenced to consider how much more, and at what cost personally and usually to the estate, a plaintiff is likely to receive if proceedings are prosecuted to their conclusion. However, I also accept that in many family provision cases this is more easily said than done.
Fourth, in my respectful view, the costs of both parties in this case are at the upper end of what I would, prima facie, consider appropriate in a dispute over an estate of this size, with affidavits easily accommodated in one lever arch folder, and a hearing of one day. However, I express this view tentatively because much happens entirely properly in the reasonable preparation of cases which the Court does not see. In the absence of an application for a cost capping order, the remedy available to the parties in relation to costs is assessment of inter partes costs or assessment of their own solicitor client costs.
Fifth, given both the prima facie view expressed in the preceding paragraph and the fact that the Court has taken into account (as is usual in these cases) the likely costs outcomes in reaching its conclusion, I urge the parties to do whatever they can to minimise further legal expenditure by endeavouring to agree the costs orders to be made in these proceedings.

Conclusion

The parties will be given an opportunity to bring in short minutes to give effect to these reasons and to make any submissions as to costs to the extent that issue cannot be agreed.

Amendments 21 October 2024 - Correction to word "prostrate" to "prostate" par 22 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: 21 October 2024

Family Provision Act 1982(NSW)

At a glance

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Judgment (18 paragraphs)

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Cases Cited (20)

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