Penfold v Perpetual Trustee

Penfold v Perpetual Trustee - [2002] NSWSC 648 - NSWSC 2002 case summary — Zoe

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Mr M J Neil QC with him Mr G L Turner (Plaintiff) COUNSEL : Mr M A Ashhurst (First Defendant) Mr T A Alexis with him Ms F A L Rogers (Second to Fifth Defendants) Graham Molloy & Associates (Plaintiff) SOLICITORS : Kemp Strang (First Defendant) Cole Butler (Second to Fifth Defendants) CATCHWORDS : FAMILY PROVISION Application by former spouse for provision out of former husband's estate - Marriage in 1957, divorce in 1968, and the former husband died in 1999 - Little or no relationship between the former spouse and the deceased - Section 9(1) of the Family Provision Act - Is the former spouse a person who would be regarded as a natural object of testamentary recognition? If the former spouse is one of that class of persons, with regard to the circumstances, should the deceased have made provision for the former spouse in his will? - WILL - PUBLIC POLICY - whether a provision in will void as against Public Policy - Whether clause which prevents remaindermen from taking their interest in possession until - death, burial or cremation - of their mother, should be excluded because that clause has the tendency to cause the children to hate their mother and wish her dead LEGISLATION CITED : Family Provision Act 1982 s7, s9 Family Law Act 1975 Brown v Faggotter (NSW CA unreported 13 November 1998) Burke v Public Trustee (1997) 69 SASR 557 Church Property Trustees Diocese of Newcastle v Ebbeck (1960) 104 CLR 394 Churton v Christian (1988) 13 NSWLR 241 Curtis v Curtis (1825) 3 ADD 33; 162 ER 393 Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 In Re Ellis; Perpetual Trustee Company Limited v Ellis (1929) 45 WN (NSW) 146 CASES CITED : In Re Fulop deceased (1987) 8 NSWLR 679 Mulcahy v Weldon [2001] NSWSC 474; [2002] NSWCA 206 O'Shaughnessy v Mantle (1986) 7 NSWLR 142 Permanent Trustee Company Ltd v Fraser (1995) 36 NSWLR 24 Ramsay v Trustees Executors & Agency Company Ltd (1948) 77 CLR 321 Re Adams [1967] VR 881 Re Cutts [1969] VR 254 Saunders v Vautier (1941) 4 Beav 115; 49 ER 282 Re N [1950] VLR 139 DECISION : See paragraph 59

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4823/00 NERIDA MARIE PENFOLD V PERPETUAL TRUSTEE COMPANY LIMITED & ORS JUDGMENT Outline 1 This judgment deals with claims of the plaintiff, a former wife of the deceased, (1) for an order that certain words be struck out or deleted from the will or probate of the will of the deceased or declared void as against public policy and; (2) for an order for provision under s7 of the Family Provision Act 1982. Base facts 2 John Norman Penfold, the deceased, was born on 2 October 1928 and died on 5 June 1999. He married twice. The first marriage was to the plaintiff, Nerida Marie Penfold on 8 December 1957. There were four children of the marriage being, the second defendant namely Merran Margaret Woollard, born 20 July 1958, Angus John Lawrie Penfold, born 5 January 1960, Brent Norman Lindsay Penfold, born 6 June 1962 and Sarah Fern Penfold, born 23 July 1963. A decree nisi for dissolution of marriage on the ground of cruelty was pronounced on 29 October 1968 to become absolute after twenty-one days. 3 The deceased's second marriage was to Dorothy Mary Penfold. This took place in 1972 or 1973. There were no children of that marriage. Dorothy Penfold survived her husband. 4 The last will of the deceased is dated 15 May 1999. Probate of that will was granted to Perpetual Trustee Company Limited, the executor named in it on 26 August 1999. Under his will the deceased released his wife from any debt owing by her, gave her a legacy of $100,000 and the contents of the home at 1 Glen Street, Port Macquarie. The will purported to give directions as to the sale of the Port Macquarie property and the disposition of the proceeds of sale, but as the property was held by the deceased and his wife as joint tenants she took by survivorship and these provisions of the will were of no effect. 5 The will provided the remainder of the estate after payment of debts and testamentary expenses was to be held so as to pay one quarter of the income to the widow for life and in clause 9 provided the balance of income was to be accumulated and added to residue until ultimate distribution which was to take place in accordance with the following provisions of the will: 10. After the death and burial or cremation of my former wife, NERIDA MARIE PENFOLD the following provisions shall apply (a) I GIVE to my son BRENT NORMAN LINDSAY PENFOLD the sum of Five Hundred Thousand Dollars ($500,000.00); (b) I GIVE DEVISE AND BEQUEATH the rest and residue of my Estate including all accumulated income to such of my children MERRAN MARGARET WOLLARD, ANGUS JOHN LAWRIE PENFOLD and SARAH FERN PENFOLD as shall survive me and if more than one in equal shares as tenants in common. (c) NO capital is to be paid to or received by any of my children until after the death burial or cremation of their mother my first wife, NERIDA MARIE PENFOLD. (d) ALL income to be paid to or received by any of my children hereunder shall be used exclusively for the benefit of themselves their spouses or indirectly for the benefit of their mother the said NERIDA MARIE PENFOLD. (e) SHOULD any child of mine marry or live in a de facto relationship with any person who is not of white Caucasian ancestry or should any of my said children have children by any such person then tat [sic] child of mine shall thereafter not any child of that union entitled to any benefits. (f) SHOULD none of my children survive me and take a vested interest under my Will then I DIRECT that my Estate shall be held UPON TRUST for the children of my brother WILLIAM FREDERICK PENFOLD excluding MELISSA PENFOLD on the same terms and conditions as are herein provided for my children, but the restriction that no capital is to be paid to my children under after the death of NERIDA MARIE PENFOLD shall not apply in such case. 6 I have ordered the will be rectified by deleting the word "or" where it appears between "spouses" and "indirectly" in clause 10(d) and inserting in its place the words "and not". 7 The will included additional clauses giving some additional explanations, powers and directions. These included a request that the deceased's shares in W.C. Penfold Limited be kept as long as possible; a statement that his wife was well provided for; a direction that loans to the children be set off against their capital interest; a request that the estate pay for the wedding of Sarah; and a direction that Brent never be an executor or trustee of the will. 8 The estate of the deceased at death as listed in the inventory of property attached to the probate consisted of the following: Bank Accounts $ 325,569.57 Life Insurance Policies $ 184,005.20 Shares in listed companies $1,503,824.59 Shares in unlisted companies (nominal) $ 2.00 Investments in unit trusts and common funds $1,397,933.00 Debts owing by children $ 701,255.90 Motor vehicle $ 11,000.00 Medical Benefits refund $ 800.00 Taxation credit $ 71,166.00 Other cash assets $ 24,085.88 Other assets (nominal value) $ 2.00 Total $4,216,644.62

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(e) The opening words of Clause 10 are words of disposition. It is true that if the attempt to postpone entitlement is valid, the children of the plaintiff may be kept out of their otherwise vested interests for many years. That of course is the position with many remainder interests consequent upon life estates. It does not follow that remaindermen will wish a life tenant dead or hate the life tenant for being alive. In this case it does not follow that an interest postponed until the death of another has the tendency to cause those entitled to the postponed interest to hate the person whose existence prevents their taking or to wish that person dead. Even if the words had that tendency that would not cause them to be void. Improper feelings, if caused by testamentary disposition, are not on their own sufficient to strike down the provision. It could not be said that the provision encourages murder. Its obvious intention is to prevent the former wife from benefiting indirectly from the estate of her former husband, the testator. That in no way brings it within the principles of In Re Ellis; Perpetual Trustee Company Limited v Ellis (1929) 46 WN (NSW) 146 and Church Property Trustees Diocese of Newcastle v Ebbeck (1960) 104 CLR 394. It is desirable that a child love his or her mother; the Commandments may require this, but the law imposes no such obligation. The majority of judges in Ramsay v Trustees Executors & Agency Company Ltd (1948) 77 CLR 321 make it clear that a provision providing a temptation to commit a crime is not itself sufficient to avoid such provision. There must be an estimation of the risk. Latham CJ said at p327: The question whether a case falls within the prohibited class must be determined by a consideration of its general tendency, as Lord Atkin said, to provide a temptation and an estimate of the risk that persons would yield to that temptation. This question must be decided without evidence: In re Wallace; Champion v. Wallace (1920) 2 Ch, at pp 302-303. There is no doubt that in the case of some persons a gift of this character would have a tendency to bring about a divorce. In exactly the same way there is no doubt that in the case of some persons the gift of property to A for life and then to B would lead B to kill or to try to kill A so as to accelerate his interest. But normal human beings do not kill others to get property, and it has never been held that gifts coming into operation upon the death of a person are unlawful as providing encouragement to murder.

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Litigation 16 The plaintiff was born on 26 August 1935. As I have said she married the deceased on 8 November 1957. The plaintiff commenced divorce proceedings in 1967 and was granted a divorce in 1968. Custody of the four children was granted to the plaintiff. The decree became absolute on 20 November 1968. The plaintiff and the deceased arranged access to the children. There were no problems about this. 17 Further orders relating to property and maintenance were made on 12 November 1968. Mrs Penfold was given the right to occupy the home at Turramurra until further order with the deceased being responsible for outgoings. The deceased was ordered to pay maintenance of $60.00 per week to the plaintiff and $10.00 per week for each child. In addition the deceased was to pay all the medical, hospital and dental expenses, it later being made clear that these were expenses for the children rather than for the plaintiff. Paragraph 8 of the orders of 12 November stated "that no final orders be made in respect of property settlement". While the orders are not entirely clear without reference to the judgment, they included a term that the deceased pay private school fees for the children at secondary level and so far as the property settlement was concerned the reason for the order in paragraph 8, which I set out, appears in the judgment from which it is apparent that Allen J considered that the Turramurra property should be sold and from the proceeds of sale $25,000 should be applied towards the purchase of a suitable home for the plaintiff and the children and together with an additional $1,000 for furniture and that the home be held by trustees upon agreed trusts. The orders gave liberty to apply generally but this was not in conformity with the judgment which gave liberty to apply on access or on the form of order in relation to the property settlement proposed. The judgment envisaged that the trustees would be the petitioner and the respondent, but supplementary orders were made on 12 December under which it was agreed that the trustees would be Mrs Penfold and Mr Dwyer. Later Mr Dwyer was replaced as a trustee by a trustee company, but nothing turns on that. As a result of these arrangements property No 20 Church Street, Pymble was purchased in the name of the trustees on the trusts in a deed giving Mrs Penfold the right to occupy the property until her death or re-marriage and upon the happening of either event the property was to be held on trust for the children in equal shares. There was power to sell and purchase substitute homes from time to time, upon the same trusts. 18 Variation orders were made on 29 November 1972, the most important being that maintenance for the children was increased to $15.00 each per week and the deceased was ordered to pay private school fees for all the children two of whom were still at primary school. It was accepted that the means of the deceased allowed this. 19 Further orders were made on 6 April 1977 which provided for increased maintenance for the children. By this time the Family Law Act 1975 had come into force. An application for an order giving to the plaintiff a partial interest in the home at Wollstonecraft, then held by the trustees upon the same trusts did not proceed, the judge stating that there was no power to make such an order as there was no specific order to be varied but in any event he did not consider that such an order would be justified. An order was made that the deceased pay the costs of this particular application, including an application made to a vacation judge. The deceased appealed against the costs order. On 16 September 1977 the appeal was allowed, the effect of this being that the parties were to pay their own costs. The plaintiff, with the financial assistance of her solicitor, Mr Molloy, appealed to the High Court of Australia, which unanimously allowed the appeal and restored the original costs order. This order was made in February 1980 and was the end of the litigation extending over twelve years. The complete background of all this is not known and is probably not of great relevance but it can at least be discerned that the deceased paid nothing to the plaintiff that he was not required by order to pay.

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The homes 20 The Pymble property was sold in 1972 and property 27 Gillies Street, Wollstonecraft purchased by the trustees in its place. This was more central as the children's schools were spread from Pymble to Bellevue Hill. Mrs Penfold expended some of her own moneys on the Pymble property and the Wollstonecraft property amounting to $10,802 which the trustee acknowledged by deed was payable out of the trust property. Gillies Street was sold in 1978 and property 2/3-9 Lamont Street, Wollstonecraft purchased in its place. This again was sold in 1979 and property 7/92 Bay Street Waverton acquired. The plaintiff paid 25% of the purchase moneys for this last property so that title was taken as to three one-fourth shares in the name of the trustees and a one-fourth share in the name of the plaintiff. This property was sold for $210,000 in 1987 under arrangements whereby the plaintiff released her occupation rights - described as a life interest - whereupon the children directed the property be sold and their shares paid to them and the children then gave their share of the proceeds of sale to their mother. There is no doubt that the plaintiff told her children that she felt she was entitled to this and they may have agreed with that. In any event Mrs Penfold became entitled to the whole of the proceeds of sale of that property. By that time all of her children had left home and embarked on their own careers. 21 The plaintiff then lived at various places usually as a result of her employment. She purchased the property where she now lives in 1996 and a further investment property in 1997, which has since been sold. I will return to these matters. Plaintiff's employment 22 Prior to her marriage the plaintiff was a trained nursing sister working at the Royal Prince Alfred Hospital. She returned to the hospital in 1969 working as a recruitment officer and careers counsellor in nursing and remained there until 1975. She then, on advice, trained for a certificate in psychiatric nursing. This meant that she lost the benefit of some continuity of superannuation payments. The plaintiff worked at Rozelle Hospital for some years, obtaining her psychiatric nursing certificate in 1977. She returned to Royal Prince Alfred Hospital in an administrative position and remained there until 1980 or 1981. After that the plaintiff worked in the drug and alcohol unit at the Mosman District Community Hospital and remained in that work until 1984 when she joined the Probation and Parole Service of the Department of Corrective Services, where she remained until retirement. She worked in various positions, first at Bankstown, then at Cessnock for two years and later at Port Macquarie for two years. She then transferred to Newcastle and worked there between 1989 and 1991. From 1991 until 1995 the plaintiff worked as a residential parole officer at Moree. Her last full time position was at Armidale as office manager of the District Office of the Department of Corrective Services from which position she retired in May 1996. By this time she said that she was feeling tired and worn out. Thereafter the plaintiff obtained some casual work through the Parole and Probation Office in various country towns or cities up until the end of 1997. The plaintiff's financial position 23 It is obvious that the plaintiff's position after divorce was far more difficult than was that of her former husband who seems to have retired to Port Macquarie in 1976 at the age of 48. By then the one half remainder interest in the estate of his father had fallen into possession, although the evidence so far as it goes in Exhibit D does not indicate this was of great value. The remainder interest in the estate of his uncle W.E. Penfold did not fall into possession until the life tenant widow died in 1984. In spite of her lesser income, the plaintiff was able to maintain herself and save some funds at least by the time the Bay Road property was purchased. In 1995 the plaintiff received about $55,000 from her mother's estate and when she retired from the Department of Corrective Services in 1996 she received about $31,000 in long serve leave and annual leave entitlements and at that time she became entitled to access to her superannuation moneys. 24 When she went to Moree the plaintiff thought that she would be able to do without the $60.00 per week maintenance payments. There is some strange evidence about bringing these to an end, but I am satisfied this did not happen because the cost of accommodation at Moree was more than had been expected. 25 While it is necessary to consider the financial position of the plaintiff at the present time it is in the present case relevant to look at her position at the time these proceedings commenced or at least the time when she filed her first affidavit on 7 May 2001. At that time the assets of the plaintiff were as follows:

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The Junction property $290,000 Contents $ 10,000 Motor vehicle $ 12,000 Allocated pension $100,191 State Superannuation $ 978 Funds held in trust account of Molloy & Co $ 32,500 Bank accounts $ 13,986 30 When she paid off all moneys due to Westpac Banking Corporation after sale of the Charlestown property the plaintiff retained what is called a mortgage redraw facility with Westpac Banking Corporation up to a maximum of $190,140. She had drawn on that amount up to $30,000 at that stage and that sum was included in the moneys in the solicitor's trust account. Since then she has drawn further amounts against that facility in the sum of $145,000 which she has paid to her solicitor towards the cost of these proceedings. In paragraph 19 of her affidavit of 9 May the plaintiff said that costs incurred from 5 September 2001 to 30 April 2002 were in the order of $22,000 excluding experts' fees. It follows, I think, that up to that time the costs had come to about $28,000. In addition she stated that she had been informed by her solicitor the costs of the proceedings from 30 April until conclusion for a three day case, but not including experts, if any, would be in the order of $145,000. I do not understand how that could possibly be the position, but that is the evidence. Oral evidence of the plaintiff was that this amount had been drawn against the redraw facility and paid to the solicitor. On the latest affidavit the plaintiff's income from her allocated pension is $14,986 and the evidence now is that she is entitled to a Centrelink pension of $328.00 per fortnight which would bring about a gross income from that figure of $8,528, bringing about a total income of $23,514, some of which may be liable to income tax. The outgoings of the plaintiff are at least that amount and perhaps a little more, although on the list of outgoings included with the affidavit, some of the matters are not necessarily recurrent annual expenditures. The plaintiff has set out a list of things she would like to do if she had the money, including some improvements to her unit and various other purchases none of which could be said to be extravagant, but which is in some ways a wish list. Plaintiff's health 31 It is clear that the plaintiff has worked hard for most of her life since the divorce. She said that by the time she left Moree in 1995 she was feeling very stressed from pressures of her job and was suffering from high blood pressures. Although she received advice to take some long service leave she did not do so and remained at Moree until a transfer to Armidale was available for her. She did this to preserve her superannuation and long service leave entitlements. Her blood pressure problem seems now to be under control, but she is suffering from mild depression. To a large extent this depression has resulted from the breakdown of her relationship with her children which has been brought about as a result of these proceedings. That is perfectly clear from a report of Dr Skinner, to the plaintiff's general practitioner Dr Newling dated 2 February 2001. There are in evidence medico-legal reports from Dr Westmore, psychiatrist and Dr Lawson, specialist physician. While these reports are admissible in a case such as this, reports from treating doctors are far more valuable as these specialists had not seen her before their one consultation and not since. Dr Westmore thought that the plaintiff had a depressive condition as a result of rejection of her children and the stress in relation to this action. Dr Lawson thought that the plaintiff was at some increased risk of cardio-vascular complications as a result of hypertensive blood pressure disease, but once again he considered that at least some of the problems resulted from the stress of the present action and the relationship with the children. These are matters which should be taken into account in some general way but not on some speculative basis as to future possibilities or even probabilities to bring about some arithmetically calculated lump sum. The children 32 There is no doubt that the plaintiff bore most of the responsibility for the care and upbringing of the children. Two of them were at boarding school from time to time but nevertheless they were mostly at home with her and looked after by her. Two had learning difficulties. During most of this time the plaintiff was working more or less full time as well. This does not mean that the deceased took no interest in his children. He did and it is apparent that he was generous with them, at least so far as assisting them in purchasing homes, but he did not have them during holidays or for any extended access visits. What this means is that during their younger years, the plaintiff was responsible for their close care. All of the children seem to have got on reasonably well with their mother, at least up to the time when their father died. They have all become estranged from her as a result of her bringing this action. The daughters were quite emotional while giving their evidence and it was clear that in their view it was quite wrong for their mother to take these proceedings and to rake over matters which had to some extent torn the family apart many years ago. There is conflicting evidence as to some of the conversations which took place between the plaintiff and the four children after the date of death and when it became apparent that the plaintiff was seeking a copy of the deceased's will. Their evidence was that they could just not believe that their mother could think that she had any claim on the estate, having been divorced for thirty years prior to their father's death. Financial position of the children of the deceased 33 None of the children is particularly well off at the present time, but none of them is in difficult circumstances. Even taking into account their liabilities to the estate, they are of course entitled to substantial but postponed benefits from it, although Brent substantially less than his brother and his two sisters. It is not necessary to go into this any further. As I said at the commencement it is accepted that if an order should be made in favour of the plaintiff, then the financial circumstances of any of the children do not prevent an order being made and are not stated to bear upon the amount of any order. Plaintiff's relationship with the deceased 34 It is clear from the recital which I have given of the various court proceedings between the plaintiff and her former husband, that there was no ongoing relationship of any cordial kind between them. They were able to speak and make appropriate arrangements for access to the children and to some extent concerning their children's education and welfare, but that is all. In fact the evidence was that from the time the children became teenagers there was virtually no communication. Mrs Penfold did not accept that but it is clear that is the position from the following passage that appears in the transcript in her cross-examination at page 46: Q. Can I suggest this to you, that over the period of about 25 years or so prior to his death in June 1999, the number of occasions that you saw the deceased one could count on one's hand? A. That's correct.

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Q. Would you agree also that as the children grew older and their demands on you decreased, you got on with your life both in a working sense and in a personal sense? A. More or less, yes. 35 Angus was married in 1989. The plaintiff did not see the deceased or speak to him after that. 36 There was some evidence that the plaintiff formed some relationships over a period of years but none of them was lasting. What is clear is that she had no lasting relationship of any kind with the deceased. The times when she saw the deceased referred to in the passage set out would have included times when they were present at the weddings of three of the children. One of the matters which has most upset the plaintiff is that Sarah was married after her father's death and she did not tell her mother of this. That is because the relationship had completely broken down as a result of her mother bringing these proceedings. 37 There is no doubt that the plaintiff considers that she was unfairly treated in the divorce. There is, I think, also no doubt that she discussed this from time to time and was considering the question of bringing a claim after death. When she discussed this with Mr Molloy after the deceased's death, he gave very clear advice to her about the risks of any such action. I should add it is not the task of this Court to go behind the orders made in the Family Law Division of the Court. There is no basis for the court to consider the provision was unfair. In particular the plaintiff agreed to the trust under which she did not receive an absolute interest in the home. But had she not done so and if she had been given the benefit of an order giving her the home outright that would have been at the expense of the children and in the long run she got that benefit by agreement, but at their expense. Financial result of these proceedings 38 While the evidence is not entirely clear I think that it indicates that the sum of about $28,000 had been spent on the proceedings up until the time when the balance in the Molloy trust account was settled at $32,500. The evidence was that until shortly before the proceedings, leaving aside fees for experts reports and the like an additional amount of $22,000 costs would have been incurred, making a total of $50,000 plus fees for experts. After that it appears that a further $145,000 was drawn against the redraw facility and paid to the solicitor. If all that money is expended on these proceedings - which I find to be almost unbelievable - the fact is that the plaintiff's financial position has deteriorated by $205,000 as a result of bringing these proceedings if she is unsuccessful even on the basis that if unsuccessful she is not ordered to pay the costs of the defendants. That amount I should say is in my view in excess of any order which the plaintiff could reasonably have hoped to obtain as a result of these proceedings. That is in no way a determining matter, but it points in stark reality to the risks which Mr Molloy was so careful to point out. The reason I find the $145,000 unbelievable is that, apart from experts' fees, which it seems were for medical examinations and reports and some further reports and some real estate valuations that amount was for the costs of a three day hearing. The admissible evidence was quite small in compass. I cannot see how the total costs could come to $100,000, let alone $195,000 or $205,000. This only means that I do not accept that all moneys paid to Mr Molloy for costs are lost to the plaintiff. The Law 39 The plaintiff, as a former wife of the deceased, is an eligible person within paragraph (c) of the definition of "eligible person" under the Family Provision Act 1982. It follows that s9(1) of the Act applies to the plaintiff, that section being as follows: 9(1) Where an application is made for an order under section 7 by an eligible person who is such a person by reason only of paragraph (c) or (d) of the definition of "eligible person" in section 6 (1), the Court shall first determine whether, in its opinion, having regard to all the circumstances of the case (whether past or present), there are factors which warrant the making of the application and shall refuse to proceed with the determination of the application and to make the order unless it is satisfied that there are those factors. 40 The general principles upon which the court should proceed are in my view clearly set out in the case of In Re Fulop deceased (1987) 8 NSWLR 679. In that case McLelland J, after explaining why in most cases it would be inappropriate to determine the preliminary question until the close of evidence, went on to say at p 681:

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Secondly, the subsection appears to be premised upon a distinction between 'factors which warrant the making of the application' on the one hand, and circumstances which would justify the making of an order granting the application, on the other; otherwise the subsection would be pointless. This means that in a particular case the Court might determine that there are 'factors which warrant the making of the application' within the meaning of the subsection, and yet go on to decide that the application should fail. Since the subsection applies only to certain classes of applicants, it suggests that those classes of applicants need to demonstrate some basis for their claims additional to that required of other classes. The difference between the two sets of classes of applicants, in broad terms, seems to be that the classes not affected by s9(1) (lawful and de facto spouses and children) are as such generally regarded as natural objects of testamentary recognition by a deceased (of the Wills Probate and Administration Act 1898, s61B), whereas the classes affected by s9(1) (former spouses, and some time dependent grandchildren or household members) are as such not generally so regarded. This suggests that the 'factors' referred to in the subsection are factors which when added to facts which render the applicant an 'eligible person' give him or her status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased. That the subsection is directed at a plaintiff's status as applicant in some such sense as this perhaps finds some support in the statutory direction to the Court, in the event that it determines the preliminary question adversely to the plaintiff, not to go on to determine the application, but 'refuse to proceed with the determination of the application. 41 In Churton v Christian (1988) 13 NSWLR 241, the Court of Appeal approved this statement. Priestley JA at page 252, after setting out and approving the statement, added:

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That distinction accords with the principle which, in my opinion, is inherent in the legislation, viz, that, special cases apart, an order is to be made only if the deceased has made default in the performance of a duty which he owed to the particular plaintiff. I do not think that this case requires a final analysis of the basis of applications under the Act: It will be sufficient to refer to this matter in general terms. But the Act authorises the court to order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person (s7). That does not mean that, if the plaintiff establishes a financial need within the section and if on taking into account the considerations referred to in s9(2) (the discretionary considerations) there be nothing to the contrary, an order must be made. The statute assumes that the deceased, in what he has done during his life and by his will, has failed to discharge a duty which he owed to the plaintiff (the moral duty). Thus, a plaintiff may be a former spouse who, on dissolution of the marriage, received what on any view she was entitled to have and there may have been no further relationship between them so that none of the factors in s9(3)(a) to s9(3)(c), are of relevance. But, at the deceased's death, she may have a financial need. In such circumstances, the fact that the plaintiff has established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s9(3)(d), the deceased had a duty to her which involved that he should have provided for her financial need. This will be so a fortiori where the basis for the eligibility of the plaintiff is alleged to be within par (d) of the definition of eligible person. Importantly, it can be seen that the question of need is a separate matter and factors warranting are something different from that. 43 There was discussion in Dijkhuijs of the decision of Young J in O'Shaughnessy v Mantle (1986) 7 NSWLR 142 mainly relevant to the procedure which Young J had stated should be adopted in determining s9(1) questions. That procedure was not approved. However in O'Shaughnessy at p147 which was an early case on s9(1) Young J put forward a list, which he expressed as not being exhaustive, and not more than guidelines, but: "it would seem to me that the following cases would clearly be ones where there would be factors warranting the court considering the application:

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(3) Cases where maintenance was being paid to the ex-spouse and the order of the deceased's death and the orders for maintenance were inadequate to provide for the ex-spouse after death of the paying spouse". (4) Cases where despite the divorce there was some dependency on the deceased as at the date of death. An example of this would be where some years after the divorce the present plaintiff fell grievously ill and because of a residue of affection the now deceased spouse provided moneys for medical treatment or living expenses. 44 The type of guideline suggested by Young J to some extent overlaps with the considerations relevant to former spouses in those jurisdictions where such applicants are not faced with a preliminary hurdle such as s9(1) imposes. Cases such as Re Adams [1967] VR 881; Re Cutts [1969] VR 254. Burke v Public Trustee (1997) 69 SASR 557 set out some considerations relevant to determining whether a testator ought to have made provision in such a case such as culpability, length of separation, the course of the two lives, the upbringing of children and whether maintenance ended on death of the testator. 45 While the matters listed are of course matters for consideration and to be taken into account I do not think the existence of one or more of the matters listed requires a positive conclusion under s9(1). Kirby P said in Dijkuhuijs at page 652: It is clear that his Honour affirmed the "guidelines" contained in his decision in O'Shaughnessy . But to the extent that the categories listed in O'Shaughnessy purport to harness the discretion stated in the wide terms of s 9(1) of the Act, I consider that they impede rather than help the performance of the task assigned to the Court by Parliament. 46 What has to be decided is whether the particular listed matter in association with all other relevant matters, puts the applicant within the class of persons referred to in Re Fulop. 47 While I am bound to accept that expression of a claim in terms of failure to discharge a moral duty is not appropriate: see Permanent Trustee Company Ltd v Fraser (1995) 36 NSWLR 24, the change in expression to something like failure to recognize and provide for a legitimate claim, so far as I can see generally brings about the same result with judges and masters taking great care not to use the disapproved words upon which cases were determined from 1916 to 1995 and where no one questions the correctness of the decisions made which are continually referred to as authorities at the present time. Sheller JA in Fraser appears to accept that no different result is likely to be reached but greater attention will now be directed to the statutory words. 48 To some extent these statements and principles may be thought to have been thrown into disarray by the decision of the Court of Appeal in Brown v Faggotter (unreported 13 November 1998). This was an appeal from a decision of mine dealing with a claimant under paragraph (d) of the definition of "eligible person". An appeal from my decision was allowed because the court found that I was wrong in my view that s9(1) of the Act involved "a reasonably strict test". However, in his judgment in that case with which Sheller JA and Sheppard AJA agreed, Fitzgerald AJA said: The requirement that an application is warranted is fulfilled if the application has reasonable prospects of success. It need not be demonstrated for the purpose of s9(1) that the application is entitled to succeed; that is that an order in favour of the applicant is warranted. 49 It is, I think, necessary to set out the passage from the judgment of Fitzgerald AJA which include those words and which commences on page 12 as follows: Subsection 9(1) is considered difficult to implement in practice. As Priestley JA pointed out in Churton v Christian' in most cases it is very difficult to see how the Court could comply with the command that it should first' determine whether there were factors which warranted the making of the application having regard to all the circumstances of the case (whether past or present)' until all the evidence that any party wished to put before it concerning the case was before the Court and the Court had had an opportunity to have regard to the circumstances shown by that evidence. There may be cases where the executor thought the applicant would have no chance of succeeding because the criteria in s6(1)(c) or (d) of the definition of "eligible person" in s6(1) were not satisfied as in the case, for example, where the applicant was neither wholly nor partly dependent upon the deceased person at any particular time or never a member of a household of which the deceased person was a member. Such might be a discrete issue suitable for a preliminary hearing and not requiring an investigation of other circumstances such as the applicant's need. Provided its operation is appropriately limited to unwarranted applications, subs9(1) has a potentially useful operation in ensuring that estates are not wasted on futile proceedings.

[29]

Section 9(1) applies only to applications made by persons claiming to be eligible persons pursuant to s6(1)(c) and (d) of the definition of "eligible persons" in 6(1), being persons `who would generally be regarded as a natural object of testamentary recognition by a deceased's or when circumstances of their relationship with the deceased are set out [would] immediately be seen to be persons who would be regarded by most observers as, in their particular circumstances, natural objects of testamentary recognition'. An application might be unwarranted for any one of a number of reasons; e.g., because the criteria of eligibility were not met, adequate provision was made for the applicant by the deceased, the applicant is not in need of provision for his or her maintenance, education or advancement in life, or because the deceased had no testamentary obligation to the applicant. Many of the prior decisions on subs9(1) of the Act are primarily concerned with the latter issue. 50 This seems to indicate a somewhat different approach from that which was taken before that decision and, I think, a different approach from that which has been taken since, perhaps because Brown v Faggotter has not been reported. With the greatest respect it seems to me that the prior approach is the correct one, and one which must be followed by me. To say that the requirements of s9(1) are fulfilled if the application has reasonable prospects of success is somewhat circular and appears contrary to the legislative intent and the legislative demand. The matters listed as being cases where an application might be unwarranted have no particular relevance to Category (c) and Category (d) applicants, but rather are relevant to all applicants for provision. The first and second sentences of the last paragraph quoted seem to be inconsistent with each other. I should say that the only reason for referring to this matter in any detail is because counsel for the plaintiff placed some reliance on the decision in Brown v Faggotter which seems to have escaped further attention at appellate level, although it is referred to from time to time by the Masters in this Court who hear the majority of Family Provision Act applications and who then attempt to deal with matters before them on both bases, presumably coming to the same result. If the decision in Brown v Faggotter held that some test different from that expressed in In Re Fulop deceased as approved in Churton v Christian and I think, accepted in Dijkhuijs applied then in my view that would be contrary to those decisions but could not be taken in any way as overruling them. For the reasons I have stated I deal with this case on the basis of the principles referred to in the other cases. I should add that this was the approach accepted by Bryson J in Mulcahy v Weldon [2001] NSWSC 474 an appeal from which decision was dismissed by the Court of Appeal a few weeks ago [2002] NSWCA 206. 51 The matters which the plaintiff's counsel claimed should lead the court to determine that there were factors which did warrant the making of the application are there was a continuing maintenance order operating up to the date of death of the deceased; that on one basis there was no final property settlement; that orders for maintenance and property adjustments prior to the Family Law Act 1975 were not based on the desirability of a final separation of the interests of the parties enabling them to go their own way; that the plaintiff had borne the responsibility of the upbringing of the children; that she had worked continuously from the time of the divorce up until the death of the deceased and thereafter and needed to do so in order to live: that as against this the deceased had retired at the age of forty-eight and was clearly able to live in comfortable circumstances; that the deceased in contesting each claim made by the plaintiff in the divorce and maintenance proceedings, wore the plaintiff out so that she was not prepared to take any further proceedings to better her situation during the lifetime of her former husband and that the plaintiff is nearly 67 and not in good health. In addition the plaintiff's counsel referred to the fact that there can be no doubt that the deceased's financial position improved greatly after the divorce, whereas the plaintiff's financial position did not improve to anything like the same extent and finally that he left a large estate. In other words, while the deceased may not have been in a position to do much more than he did for the plaintiff when the divorce took place, he was clearly in a position to be far more generous to her at a later date. 52 As against this it is put by the defendants that a period thirty years is a long one and after that time it is just not sensible to think that there could be any suggestion that a former wife would and should remain within the contemplation of a former husband in circumstances when there has been no continuing relationship whatsoever; and in circumstances where the parties have met on fewer than five occasions over twenty years and have not even spoken to each other on all those occasions, and have not seen or spoken to each other in the ten years prior to the death of the deceased; and in light of the clear expressions of dislike and distrust in the will. 53 It has usually been thought, in the case of claims by former spouses, that where there has been a divorce and a property settlement pursuant to the Family Law Act 1975, and there has been no further relationship between the parties, it would be unlikely that there would be factors warranting the making of an application, but of course there was a continuing maintenance order. 54 I consider that the provisions made under the trust for a home for the plaintiff were in the nature of a final order for property settlement. I am by no means satisfied that had the 1975 Act been in force in 1968 any different result would have come about. Nor do I consider it established that had the plaintiff applied after 1968 for increased maintenance for herself she would have obtained an order. It must be borne in mind that in the various applications made after 1968 for increased maintenance for the children, none was made for the plaintiff. The fact that the plaintiff was fatigued by the litigation does not establish that without fatigue she could have benefited from further application. In fact, as she was self-supporting it is quite unlikely that she would have done so. The submissions about ill health were not made out so as to influence the decision. 55 The question is this: would right minded members of the community consider the plaintiff properly falls among those persons who were natural objects of the bounty of the testator, assuming as required by the Act that he had died at the time of the hearing. If they would have so considered, then the application would be warranted. 56 I have come to the conclusion that the requirements of s9(1) have not been met. I found my conclusion upon the following matters:

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Cases Cited (10)