2010/41379 O'LEARY v O'LEARY & ECCLES
JUDGMENT
1 HIS HONOUR: The Plaintiff, who is the widow of Roy Granville O'Leary ("the deceased") applies for a family provision order under Chapter 3 of the NSW Succession Act 2006 ("the Act"), which applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 ("the former Act"), which has been repealed, effective from 1 March 2009. A family provision order is an order made by the court, under Chapter 3, in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life, of an eligible person.
2 The Plaintiff commenced the proceedings by Summons filed on 16 February 2010, that is, within the time prescribed by s 58(2) of the Act (not later than 12 months after the date of the death of the deceased). She sought leave to file an amended Summons at the commencement of the hearing, in which she sought an order for the joinder of the deceased's son, Wayne Roy O'Leary ("Mr O'Leary"), and his daughter, Gayle Marie Eccles ("Mrs Eccles"), as Defendants. The grant of leave was unopposed.
3 There is no question, in the present case, of any provision being sought out of notional estate of the deceased.
Background Facts
4 The following facts are uncontroversial.
5 The deceased died on 25 September 2009. He was aged 77 years.
6 The deceased left a Will that he made on 17 October 1989, probate of which was granted, on 23 April 2010, by the Supreme Court of New South Wales, to Mr O'Leary, and to Mrs Eccles, the executors appointed under the Will. They are not the children of the Plaintiff and the deceased. Mr O'Leary is the child of the deceased's second marriage to Joan O'Leary, whilst Mrs Eccles is a child of the deceased's first marriage to Alice Irene Shaw.
7 There was another child of the deceased's first marriage, being, Denise Irene Lee ("Mrs Lee"), who is the oldest of the deceased's three children.
8 The Plaintiff and the deceased married on 25 November 1983. It was the third marriage of each. They remained married to each other until the deceased's death, although there were two periods of separation, each for a few months in the late 1980's and, again, in the early 1990's.
9 By the deceased's Will, the whole of his estate was left, upon trust, to pay debts, funeral and testamentary expenses and then to be divided, equally, between Mr O'Leary, Mrs Eccles and Mrs Lee.
10 No provision at all was made for the Plaintiff in the Will of the deceased. I shall return to the deceased's explanation for the fact that no provision had been made for her.
11 In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, value of $340,000. The estate was said to consist of real property at Long Jetty, New South Wales upon which a home was built ("the Long Jetty property"), which had been owned by the deceased prior to his marriage to the Plaintiff. It was in the Long Jetty property that the deceased and the Plaintiff lived throughout their marriage.
12 In an affidavit sworn by the Defendants' solicitor on 19 November 2010, the value of the Long Jetty property is said to be between $330,000 and $370,000. The Plaintiff's evidence, as tendered, revealed that the Long Jetty property had a value of between $360,000 and $380,000.
13 The Defendants, in the joint executors' affidavit, referred to an amount of $6,039.68, being cash in bank, held by the deceased at the date of his death. It appears that this amount may have been used, at least in part, to pay for the funeral expenses of the deceased.
14 At the hearing, the parties agreed that the gross distributable value of the estate should be estimated to be $362,500. If the Long Jetty property is sold, there would be costs and expenses of sale, which the parties jointly estimated to be no less than about $12,500. In addition, there were costs of obtaining probate, which costs have not been paid, of $3,535. Finally, there were two amounts to be reimbursed to Mrs Eccles, totalling $3,842.
15 Subject to the burden of costs of these proceedings, the value of the net distributable estate is estimated to be about $342,623.
16 In calculating the value of the estate finally available for distribution, the costs of the present proceedings should also be considered, since, unless the overall justice of the case requires some different order to be made, the Plaintiff, if successful, normally, will be entitled to an order that her costs be paid out of the estate of the deceased, whilst the Defendants, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs be paid out of the estate.
17 The Plaintiff's costs of the proceedings, calculated on the indemnity basis, have been estimated to be in the order of $49,500 (inclusive of GST and upon the basis of a one day hearing). The costs and disbursements of the Plaintiff, including counsel's fees, calculated on the ordinary basis, are said to be the same. In this regard, the Plaintiff's solicitor was cross-examined. In summary, he appeared to accept that the reasonableness of his estimate of costs, ultimately, will be a matter for a costs assessor. However, he maintained that on whichever basis the Plaintiff's costs were calculated, they were the same.
18 The Defendants' costs and disbursements of the present proceedings, including counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a one day hearing), have been estimated to be about $38,500.
19 If one uses the estimates of costs as a guide, the net distributable estate, after the payment of costs is estimated to be $254,623.
20 The first wife of the deceased, Alice Irene Shaw, is alive and is aged 84 years. She and the deceased were married for about 6 years. They were divorced in the 1950's. She married again and there were two other children of that marriage. She is married and her husband is still alive. It is her third marriage. Mrs Lee gave evidence that her mother is aware that these proceedings are occurring, but neither Mrs Eccles, nor Mrs Lee, has gone into detail about the proceedings with her.
21 The second wife of the deceased died on 6 November 2004.
22 The persons described as eligible persons, within the meaning of the Act, are the Plaintiff, Mr O'Leary, Mrs Eccles and Mrs Lee. Each of the children of the deceased has sworn at least one affidavit in the proceedings. There is evidence that the form of the prescribed notice was served on Mrs Lee.
23 However, the first wife of the deceased, who is also an eligible person, was not served with a prescribed notice. Both parties requested me, pursuant to s 61(2)(b) of the Act, to determine that service of the prescribed notice upon Mrs Shaw is unnecessary in the circumstances of this case. I am prepared to, and do, so determine.
24 None of the eligible persons who have been served with a notice, or who have participated in the proceedings, has made a claim under the Act.
The Statutory Scheme - The Act
25 I shall discuss the statutory scheme that is relevant to the facts of the present case.
26 The wording of the Act is similar to the wording of the former Act. However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law. Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916. That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by "the widow, husband or children of such persons". There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
27 Whilst the relevant amendments made by the Act are not as significant to those made by the former Act, it remains necessary to bear his Honour's warning in mind in construing the statutory framework. In doing so, a construction that promotes the purpose, or object, of the Act is to be preferred to a construction that would not promote that purpose or object. In my view, the principles applied by the courts to the former Act continue to apply, except to the extent that the Act otherwise requires.
28 The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the testator's power of disposition by his, or her, will. It is only if the statutory conditions are satisfied, that the court is empowered, under the Act, to alter a testator's disposition to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.
29 The key provision is s 59 of the Act. The court must consider, first, whether the applicant is an eligible person within the meaning of s 57 (s 59(1)(a)). There are six categories of persons by, or on whose behalf, an application may be made. In the case of an applicant who falls within s 57(1)(d), (e) or (f), the court must next consider whether the court is satisfied that there are factors which warrant the making of the application (s 59(1)(b)). Then, if those considerations are satisfied, the court must determine whether adequate provision for the proper maintenance, education and advancement in life of the applicant has not been made by the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is only if it is satisfied of the inadequacy of provision, that the court considers whether to make a family provision order (s 59(2)). It may take into consideration, then, the matters referred to in s 60(2) of the Act. In this way, the court carries out a two-stage process.
30 Other than by reference to the provision made in the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) leaves undefined the norm by which the court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.
31 It was said in the Court of Appeal (per Basten JA) in Foley v Ellis [2008] NSWCA 288 at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment".
32 Importantly, there no longer appears to be any sanction to consider, in s 59(1)(c) of the Act, the provision made by the deceased during his, or her, lifetime for the applicant (see, s 9(2) of the former Act).
33 Under both s 59(1)(c) and s 59(2) of the Act, the time at which the court gives its consideration to the question is the time when the court is considering the application.
34 "Provision" is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA 54 at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
35 Neither are the words 'maintenance' and 'advancement in life' defined. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at [115], said, of the words 'maintenance', 'support' and 'advancement':
"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."
36 In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77 King CJ said:
"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang (1960) 104 CLR 124, per Dixon CJ at 128."
37 In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J noted at [114]:
"In the context of the Act the expression "advancement in life" is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. ( McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase "advancement in life" has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the "maintenance and support" of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."
38 The word 'adequate' connotes something different from the word 'proper'. 'Adequate' is concerned with the quantum, whereas 'proper' prescribes the standard, of the maintenance education and advancement in life: Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 at [72] and at [77] per Buss JA.
39 Each of the words was considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
40 Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word 'proper', that:
"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 if life must be considered in the light of 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."
41 In Goodman v Windeyer (1980) 144 CLR 490, Gibbs J said 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."
42 In Vigolo v Bostin at [114], Callinan and Heydon JJ said:
"[T]he use of the word "proper"…implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here…The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
43 The first stage of the process provided for by s 59(1)(c) has been described as "the jurisdictional question": Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant.
44 Whether the applicant has a 'need' is a relevant factor at the first stage of the enquiry. It is an element in determining whether 'adequate' provision has been made for the 'proper' maintenance education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 [42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).
45 Tobias JA said:
"42. There can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focused. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.
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