Sergent v Glass

Background Facts

1. The deceased died on 2 July 2016. Relevantly, he was survived by his second wife, Sandra Shin ("Sandra"), by his former wife, Michelle Otter, and the two children of her marriage to the deceased, namely, Thomas and William.
2. The deceased was born in May 1970. He married Michelle Otter in April 1997. Thomas was born in April 1999 and is 19 years old and William was born in October 2001 and will be 17 later this year.
3. These proceedings were commenced by Thomas, and by Clive Raymond Sergent ("Clive"), who is the deceased's father, and the grandfather of the Plaintiffs, as the tutor for William.
4. For ease of reference, I shall refer to the parties, and other family members, by his, or her, first name.
5. The deceased's marriage to Michelle was dissolved in December 2010, following a separation in September 2008. Despite the dissolution of the marriage, the deceased continued to have a relationship with his two children. Usually, they spent every second weekend, and some holidays, with him, and he complied with his legal obligation to pay child support in respect of each of them.
6. On 12 January 2013, the deceased married Sandra. The Marriage Certificate, a copy of which is in evidence, reveals that her given name was "Ngan"; that she was born in Shaanxi, China, in April 1972; that her occupation was that of a "Freelance Artist"; and that she was "never validly married".
7. There were no children of the deceased's marriage to Sandra.
8. Clive describes his observations of the deceased's relationship with Sandra as "tumultuous". William, who did not provide an affidavit, is said to have told Clive that, often, there were arguments between Sandra and the deceased, and, there was sometimes some violence between them. (Sandra was said to have thrown things at the deceased, as well as pushing the deceased over when he had a broken leg thereby causing an additional injury.)
9. In about March 2014, Sandra left the deceased and moved from their home, in Sydney, apparently, to Hong Kong. Her address there was not known. As will be demonstrated, the evidence reveals that she has not returned to Australia.
10. There is a series of email correspondence passing between the deceased and Sandra, in February 2016, the substance of which is that Sandra said that she wished to obtain a divorce from the deceased, to which he agreed. The last email between them stated that the deceased left it to Sandra to "organise" the divorce "as you left me".
11. There is no evidence, subsequently, of the deceased having been served with any formal application for the dissolution of their marriage. Whilst not quoting the contents of the emails passing between the deceased and Sandra, it is fair to say that the tone of each is quite vitriolic, on both sides. There can be little doubt that, by the time these emails passed between them, the marriage had irretrievably broken down. The parties have proceeded upon the basis that she was the spouse of the deceased at the date of his death.
12. It will be necessary to identify the steps taken to locate Sandra since the commencement of the proceedings, to which I shall return later in these reasons.
13. The deceased died intestate. An "intestate" is defined in s 102 of the Act as "a person who dies and either does not leave a will, or [who] leaves a will but does not dispose effectively by will of all or part of his or her property". In this case, the evidence establishes that the deceased did not leave a Will.
14. Clive has given evidence that the deceased's estate consists of the proceeds of superannuation (approximately $5,000) and the proceeds of a term Life Assurance Policy (about $449,000). (I have omitted, and shall continue to omit, any reference to cents in amounts to which I refer. This will explain any apparent mathematical miscalculations.)
15. In an affidavit sworn on 5 October 2017, by Mr Glass, the estate was said to have a value of $462,470 at the date of the deceased's death. There were debts, and other liabilities, of the deceased, at that time, of $20,540. There were testamentary, and other, expenses ($8,475), which were paid out of the estate. (The amounts paid have not included $15,189, paid by Clive, for funeral and interment expenses for the deceased. He has stated that he does not seek reimbursement of these expenses, and that if they are repaid to him, he would gift the amount received from the estate to Thomas and William.)
16. Mr Glass estimated the value of the distributable estate, omitting the costs of these proceedings, at the date of the affidavit, to be $432,560.
17. As the deceased died intestate, and in view of the value of his estate, there is no dispute that, under the Act, the whole of the deceased's estate passes to Sandra, by virtue of s 113 of the Act, coupled with the statutory legacy calculated by the formula set out in s 106 of the Act. (The statutory legacy, alone, was estimated to be $453,579.)

The Proceedings

1. The proceedings were commenced by Summons filed on 29 June 2017. There was no Defendant named in the Summons. On the first return date, the Court simply noted that the matter was being adjourned "as the Plaintiff[s] are seeking the consent of legal representatives to act for the estate".
2. On 11 August 2017, the Court, with his consent, appointed Mr Glass, pursuant to Uniform Civil Procedure Rules 2005 (NSW), rule 7.10(2)(b), as a representative of the deceased's estate for the purposes of the proceedings. UCPR rule 7.10(3) provides that any judgment, or order, subsequently entered, or made, in the proceedings, binds the deceased person's estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings.
3. The proceedings next came before Ward CJ in Eq, in the Family Provision List, on 6 October 2017. Her Honour made a direction that any application for a limited grant of letters of administration, in favour of Mr Glass, for the purpose of defending the proceedings, be filed by 12 October 2017, and be made returnable before the Family Provision List Judge on 13 October 2017.
4. The Notice of Motion was filed, and her Honour dealt with it on 13 October 2017. In a comprehensive, ex tempore, judgment, which bears the medium neutral citation Sergent v Glass [2017] NSWSC 1446, her Honour made orders, including that special letters of administration of the estate of the deceased be granted to Mr Glass, until an unlimited grant of administration of the estate is made, or until further order of this Court, limited (a) to defending the proceedings and (b) to compromising the proceedings. Her Honour also dispensed with (a) publication of notice of intention to make the application for administration; (b) the need for an administration bond or sureties; and (c) the further requirements of the Probate Rules in relation to the Defendant's application for the orders. Finally, her Honour ordered that, to the extent that service of the Notice of Motion, or any other documents in the proceedings, was required to be effected on Sandra, the documents would be taken to have been served on her, if emailed to an identified email address, and sent by Facebook messenger to an identified Facebook page.
5. That Sandra had a Facebook page was clear on the evidence. On 5 July 2017, an employee of the Plaintiffs' solicitor had searched Facebook for "Sandra Shin". That search returned a Facebook page for a "Sandra Shin", which included a photograph of the person. The Plaintiffs, and Clive, confirmed that the person in the photograph was Sandra.
6. (Service of documents by email is hardly controversial any more. No doubt, her Honour was well aware of the international reach of Facebook, which, as I understand it, is a social networking website and service that provides an electronic medium for the acquisition, and dissemination, of information. It is available to anyone who can access it. Facebook users can access the information on Facebook pages and can then contribute to the page by posting material on it. For someone to post on Facebook, he, she or it, must also have a Facebook account.)
7. At the request of the parties, I held a judicial settlement conference on 22 November 2017. On that occasion, Ms T Catanzariti of counsel appeared for the Plaintiffs, and Ms R Bianchi of counsel, appeared for the Defendant.
8. The matter was resolved, in principle, by the parties at the judicial settlement conference. However, in order to ensure that Sandra was given notice of the proposed resolution, the matter was adjourned until 21 February 2018.
9. Since then, the proceedings have been before this Court on three occasions, on the last of which, at the request of the parties, I referred it to Chambers for consideration.
10. There was no dispute that even though Mr Glass, as Defendant, has the power to compromise the proceedings, as provided for in the orders of Ward CJ in Eq, it has been necessary to ensure, since any compromise will result in the diminution of Sandra's entitlement to the deceased's estate (to the point of extinction), that she has the opportunity to consent, or to persuade the Defendant (or if appropriate, the Court) that the Defendant was not adequately representing her interests: Bartlett v Coomber at [74].

The evidence of service

1. As stated earlier, there was electronic communication passing between Sandra and the deceased in about 2016. There was an email address, for Sandra, stated in the emails sent by her.
2. Mr Glass also deposed that Sandra had been identified as the person depicted in photographs upon a Facebook page styled: "Sandra Shin. Lives in Hong Kong. From Hong Kong."
3. The following correspondence, both before, and after the orders made by Ward CJ in Eq, was sent to Sandra's email address: 1. On 5 July 2017, the Plaintiffs' solicitor emailed Sandra at that address, requesting her contact details; 2. On 21 August 2017, the Plaintiffs' solicitor sent an email informing Sandra that proceedings had been commenced in the NSW Supreme Court, and attached a copy of the Short Minutes of Order made on 11 August 2017; 3. On 25 September 2017, an employed solicitor of Mr Glass sent an email to Sandra, attaching a Notice of Claim; 4. On 12 October 2017, an employed solicitor of Mr Glass sent an email to Sandra, attaching a copy of the notice of motion, filed on 12 October 2017, and a copy of the affidavit of Mr Glass. A delivery receipt for that email was received on that same day; 5. On 19 October 2017, an employed solicitor of Mr Glass sent an email to Sandra, attaching a copy of the orders made by Ward CJ in Eq on 13 October 2017.
4. To none of the email correspondence was a response received. Whilst not stated explicitly, there is no suggestion that a "bounce-back message" or a "Non-Delivery Report" or "Non-Delivery Receipt" in respect of any email was received. (That type of message is an automated one informing the sender of a previous email message that the email message has not been delivered.)
5. There is also evidence that the deceased's brother, David Adam Sergent, who attended the ceremony of the deceased's marriage to Sandra, and whose relationship with her was said, by him, to be "relatively good", sent an email to her "using two email addresses I had previously used to send emails to her".
6. The content of the email, which is dated 27 November 2017, and which is in respectful and polite terms, confirmed the death of the deceased, that each of Thomas and William "have obviously been very affected by this emotionally", and that lawyers had been trying to contact her in regards to them receiving "whatever funds possible from [the deceased's] life insurance". David then made a request that she acknowledge receipt of the email.
7. David received no response to the email sent to each email address. He "received no bounce-back message" or a "Non-Delivery Report" or "Non-Delivery Receipt", in respect of either email.
8. In addition, the following attempts were made to contact Sandra by Facebook: 1. On 11 July 2017, a private message was sent to Sandra via Facebook, requesting her contact details. No response was received. 2. On 26 September 2017, an employed solicitor of the Defendant sent a message asking Sandra to read, and consider, the letter sent to her email address (which was stated). 3. On 12 October 2017, the Defendant sent a message in which he referred to the notice of motion filed on 12 October 2017 and that documents had been sent to her email address (which was stated).
9. There is no evidence of a reply to any of the Facebook messages.
10. This is not a case in which the "evidence … did not establish, other than by mere assertion, that the Facebook page was in fact that of [Sandra] and did not prove that a posting on it was likely to come to [her] attention in a timely fashion": Flo Rida v Mothership Music Pty Ltd [2013] NSWCA 268 at [38]. To the contrary, I consider the evidence clearly establishes that it is more probable than not, that the email correspondence, and the Facebook messages, have reached Sandra, even though she has not acknowledged any of them.
11. There were also various other searches carried out: 1. On 24 October 2017, the Defendant conducted what is described as a "Skiptrace" search by engaging POLO CPI, a private company, to undertake searches to locate Sandra's whereabouts. Those searches included Google searches, an online search of the Hong Kong telephone book, and social media profiles. An employee of that company, namely Mr Jeff Sellick, contacted individuals who had previously "liked" photographs on Sandra's Facebook account. He received a response from one Daniel Brako. Mr Sellick telephoned Mr Brako, who stated that he knew Sandra and would get a message to her to contact Mr Sellick. However, Mr Brako was unwilling to help further and was not convinced that it was a genuine enquiry. 2. On 16 January 2018, one of the Defendant's employed solicitors sent an email to Mr Greg Crichton of Oldham Li & Nie, Lawyers, in Hong Kong, to ask for assistance in locating Sandra in Hong Kong. A response was received on 2 February 2018, to the effect that privacy regulations in Hong Kong are extremely strict, and that the cost of engaging a private detective agency to locate Sandra would be in the order of HK$20,000 - HK$30,000 (approximately $4,000 - $5,000 AUD). 3. On 28 February 2018, a subpoena was issued to NSW Registry of Births Deaths and Marriages to which reference has earlier been made. 4. On 2 March 2018, an advertisement was placed in the South China Morning Post, a Hong Kong English language newspaper, on page 3. Details obtained from the Certificate of Marriage, about Sandra, were included in the advertisement. The advertisement also requested anyone who knew of the whereabouts of Sandra to contact the Defendant. 5. The information from the Certificate of Marriage was also provided to the Hong Kong Lawyers. 6. On 16 March 2018, a subpoena was issued to the Department of Home Affairs. Documents were produced on 12 April 2018 and have been inspected. The documents reveal that Sandra has not returned to Australia.
12. There does not appear to have been any responses to any of the searches. In fact, Mr Glass deposes that he has "not been contacted by Ngan (or Sandra) Shin, or by any other person, in response to any email, or letter, that I have sent to her; nor have I received any response to the advertisement that was placed in the South China Morning Post".
13. It is difficult to know whether Sandra's failure to respond is due to indifference as to the outcome of the proceedings, or due to some other reason. Her failure to engage with Mr Glass defies logic.
14. In the circumstances, I am satisfied that the Plaintiffs' solicitors and the Defendant have done all that they can do to bring the proceedings and the documents that have been sent, to the notice, and attention, of Sandra. I am unaware of any other steps that could practically be taken to bring the proceedings to her attention in order to enable her to participate in them, either by agreeing to the proposed orders, by seeking to replace Mr Glass as the proper contradictor, or by otherwise giving notice of her opposition to the Plaintiffs' claim and/or the resolution of their claim. For these reasons, I was prepared to deal with the matter as requested by the parties.

The other evidence

1. There cannot be any dispute that the Plaintiffs commenced the proceedings within the time prescribed by the Act (not later than 12 months after the date of the death of the deceased): s 58(2) of the Act.
2. Section 57(1) of the Act provides that "eligible persons" may apply to the Court for a family provision order. It is not in dispute that, each Plaintiff, as a child of the deceased, is an eligible person within s 57(1)(c) of the Act. The language of the sub-section is expressive of the person's status, regardless of age, as well as her, or his, relationship to the deceased.
3. The only eligible persons are Thomas and William, Sandra and Michelle. There is evidence that Michelle has been served with a notice of the Plaintiffs' application and of the Court's power to disregard her interests, in the manner and form prescribed by the regulations or rules of Court. Michelle acknowledged, in writing, receipt of the notice, on 5 October 2017. No proceedings have been commenced, subsequently by her.
4. It is unnecessary to serve a notice on each of Thomas and William as each has brought proceedings.
5. There is sufficient evidence of attempts at service of the notice on Sandra. As stated, I am satisfied that she has been informed of the proceedings.
6. A family provision order may be made in relation to property that is not part of the deceased person's estate, but is designated as "notional estate" of the deceased person by an order under Part 3.3 of the Act: s 63(5). There is no evidence of any property that could be designated as notional estate.

The Circumstances of the Plaintiffs

1. Clive has given evidence by affidavit, sworn 28 June 2017, of the financial and material circumstances of each Plaintiff. He stated that: 1. Neither Thomas nor William has any assets. 2. Both live in rented premises, with Michelle. 3. Michelle receives a carer's pension of $1,300 per fortnight for caring for Thomas. The family's expenditure, including rent is about $5,000 per month. 4. Michelle has no other assets, apart from a small amount of money in the bank, and the furniture and furnishings in the premises in which they all live. 5. Michelle has medical problems, including diabetes, failing eyesight and mobility issues; she has no working capacity as it is unlikely that she will ever be able to work again. 6. Thomas had a quad-bike accident, approximately 6 years ago, which resulted in bleeding of the brain. He has had a drainage shunt to his brain. He was always academically behind at school, and on finishing school later this year, he will not sit the Higher School Certificate. 7. Thomas receives a disability support pension, plus mobility allowance, of $505 per fortnight. 8. William is a slow learner and receives academic assistance at school. He has been assessed as having microdeletion syndrome, which is a genetic disorder.
2. In an affidavit sworn 20 February 2018, Clive updated the position of the family members: "3. On Saturday, 17 February 2018 William's mother, Michelle Sergent, was admitted to Westmead Hospital in an incoherent state of mind and has been undergoing tests to determine whether she had a stroke. At this stage, the results of the tests have not been received. 4. Michelle remains at Westmead Hospital for ongoing tests. … 5. On 30 January 2018, Michelle was about to go to another hospital appointment for a lumbar puncture test on her spine, and Thomas became quite aggressive. 6. Later that day, my wife and I took Thomas to his local general practitioner and he was admitted to the Concord Centre for Mental Health where he spent a week. He had previously attended this hospital. 7. The Concord Centre for Mental Health recommended that Thomas attend The Hills Centre as a live-in psychiatric patient for a period of three weeks, from Wednesday 7 February to Wednesday 28 February, 2018. Fortunately, the Deceased's former employer had continued to pay the family's NIB health insurance, and NIB agreed to the admission, and Thomas is presently rehabilitating at The Hills Centre. 8. My wife and I saw Thomas on Sunday, 18 February, 2018 and he was in good spirits and showing signs of improvement. 9. It may be that I will need to be appointed as Thomas' tutor to finalise these proceedings."
3. No tutor for Thomas has been appointed and there has been no additional evidence as to his current condition.

The Defendant's Role in the Proceedings

1. I turn next to the role of the Defendant in proceedings brought for a family provision order.
2. In Bartlett v Coomber, Hodgson JA wrote, in relation to the duty of the executor or administrator, at [70] - [71]: "The parties to proceedings for such an order are generally just the applicant for the order and the legal personal representative of the deceased person: Re Lanfear (1940) 57 WN (NSW) 181; Re S J Hall [1959] SR (NSW) 219; Vasiljev v Public Trustee [1974] 2 NSWLR 497. These cases were decided under the legislation that preceded the Act, but are still applicable. According to these authorities, the duty of the legal personal representative is either to compromise the claim or to contest it and to seek to uphold the provisions of the will (or the distribution on intestacy); and to that end, to put before the court evidence made available by beneficiaries that is relevant to the issues. The beneficiaries may be joined as parties, but generally only if it appears that the legal personal representative is not fulfilling this duty to represent their interests, or there is some other reason justifying this unusual course."
3. Consequently, it is the duty of Mr Glass, as the Defendant representing the intestate estate, to compromise the proceedings, as he wishes to do, or to uphold the distribution on intestacy. In either case, he has an obligation to put before the Court such evidence as he has, or that is otherwise available from the beneficiaries, relevant to the issues to be determined.
4. I am satisfied Mr Glass has satisfied his obligations as the representative of the deceased's estate.

The Court's Role in the Proceedings

1. In Hore v Perpetual Trustee Co Ltd (Supreme Court (NSW), Windeyer J, 8 June 1995, unrep) the Court referred to the provisions of the Family Provision Act 1982 (NSW), and wrote, at 11-12: "Those provisions give the basis for exercise of jurisdiction by the court. Parties are absolutely entitled of course to make any rearrangement of the terms of a will they wish, if all beneficiaries are of age and absolutely entitled. That has nothing whatever to do with the jurisdiction under the relevant Act. Section 7 and s 9(2) raise jurisdictional questions. This has been described in various ways, sometimes making it appear discretionary, but there is no doubt now that for the court to assume jurisdiction, the provisions of s 9(2) must be satisfied. See Singer v Berghouse (1994) 181 CLR 201 and White v Barron (1980) 144 CLR 431. As the power to make orders is governed by s 9(2) and s 7, the court cannot by consent, assume a wider jurisdiction. Parties cannot by consent, confer power upon the court to make orders which the court lacks power to make. See Thomson Australian Holdings Pty Ltd v The Trade Practices Commission (1981) 148 CLR 150 at 163. Settlements of claims under the Family Provision Act are, of course, very common. It is obviously in the interest of the parties and the court to encourage settlement and in any week the Masters and Equity Division may be asked to make a number of orders agreed between the parties in such actions. In such matters, in my experience, the court looks quickly at the evidence, and is informed of the relevant facts by counsel or solicitor, and if the matter appears to be reasonable makes the orders. No detailed consideration of jurisdiction takes place as long as the plaintiff appears to have a proper basis for his or her claim. In cases where the interests of infants or unascertained classes of persons may be affected by the orders, then the proposed orders are considered in more detail, not usually on the jurisdictional question, but more often on relevant terms of the orders themselves, and the extent of the benefit provided by them. On occasions the court refused to make the orders proposed, but this is unusual."
2. In Schaechtele v Schaechtele [2008] WASC 148, Le Miere J, in the Supreme Court of Western Australia, wrote, at [18]: "This Court cannot make an order giving effect to the proposed settlement unless the Court thinks that such provision should be made out of the estate of the deceased for the proper maintenance or support of the plaintiff. But that does not mean that the Court is in effect to hear the matter as if it were it a contested application and then to give or withhold orders to give effect to the settlement by comparing the settlement with the judgment which the Court would have given. The Court must give proper consideration to the evidence before it. The Court should be aware of the risks of litigation in an area in which reasonable people can reasonably reach different conclusions and give proper weight to the fact that the parties wish to effect the settlement. If the Court is satisfied that the settlement falls within the bounds of a reasonable exercise of discretion then the Court should make orders to give effect to that settlement."
3. The same principles apply in respect of the Act.
4. In relation to the Court's power to make an order, by agreement of the parties, Mason P wrote in Bartlett v Coomber, at [37] - [39]: "In the context of claims under the Act, one often encounters references to the court's 'jurisdiction' to make a particular order in a particular estate. Thus, to give an example of present relevance, de Groot & Nickel, Family Provision in Australia 3rd ed, Lexis Nexis Butterworths, Chatswood, 2007 at 8.7 states that: 'The court's jurisdiction depends not upon the agreement of the parties but upon the court's view of the question whether the deceased has made adequate provision for the applicant.' The learned authors cite three authorities which support this proposition and do so in the language of 'jurisdiction' (Mudford v Mudford [1947] NZLR 837 at 838; Re Archibald [1950] QWN 3; Re Julso [1975] 2 NZLR 536 at 538). In my opinion, 'jurisdiction' and 'power' are concepts that should not be blurred or subjected to ecthlipsis in the present context (see, Harris v Caladine (1991) 172 CLR 84 at 136). Macready AsJ had undoubted jurisdiction to entertain the application before him. The critical question in the appeal relates to the scope of his Honour's power to reject the settlement. In McMahon v McMahon (New South Wales Supreme Court, Young J, 2 August 1985, Young J said: 'An order [under the relevant NSW Family Provision Act] does not follow just because all the parties to the proceedings have agreed between themselves that such an order should be made. Whilst in general if a Court is asked by consent of all parties to make an order it will make an order, as I said in my judgment in Kalyk v Whelan 31 July 1985 where the legislature casts on the Court the duty of seeing that an order is only made in appropriate circumstances the Court is not bound to make any order tendered by all the parties by consent. Because of this it is necessary for me to look into the facts and circumstances of the plaintiffs and the defendant so far as they are relevant to a possible claim under the Family Provision Act.'"
5. On this topic, Hodgson JA, in the same case, wrote at [72]: "As with other types of proceedings, agreements to compromise are possible, and indeed are to be encouraged. Such an agreement may be made by the parties to the proceedings, and the court will generally give effect to it. However, the court will need to be satisfied that the pre-condition in s 9(2) of the Act is fulfilled, and that the order agreed on is one which ought to be made in terms of s 7 of the Act. Because of the agreement, the court will generally be satisfied of these things without the need for any significant investigation of the evidence."
6. Bryson JA wrote, at [79] and at [84] - [86]: "The agreement between Mrs Stott the executrix of the late Mr B.G. Thomas and the first respondent Katherine Coomber a minor, acting through her mother and solicitors, was an agreement which Mrs Stott was empowered to make under her power of compromise in s 49 of the Trustee Act 1925. Mrs Stott made the agreement on the advice of her solicitors and also of counsel. She was acting within the limits of her power; exercising the power of compromise in good faith for the purpose for which it was conferred and not for any ulterior or improper purpose. ... The agreement could only be given effect by an order made by the Court, and the Court could only act in exercise of the power in s 7 of the Family Provision Act 1982. If claimants and executors agree to settle a Family Provision claim their agreement cannot have effect unless the Court exercises its power under s 7 and orders provision in accordance with the agreement. Whatever their agreement says, obtaining an order of the Court is impliedly a condition of its effectiveness. If the Court simply accepted the agreement of the parties and ordered the provision for which the agreement provides without considering exercise of its power under s 7 the Court would act in error; it would in substance fail to exercise its power. An order for provision always adversely affects property rights in estate assets which somebody would otherwise have. Alterations of property rights of this kind are authorised by law only if the Court makes a decision under s 7; not otherwise."
7. In relation to the Court's power to not make a consent order, Mason P, in Bartlett v Coomber, wrote, at [56] - [60], and [65]: "I accept that the court's power to reject a compromise reached in proceedings under the Act is available both where the sum to be provided is too low or too high. Either extreme might indicate, for example, that the proceedings were being conducted through to completion for a purpose foreign to that of the Act and/or that some fundamental mistake vitiated the settlement process. But it must be borne in mind that litigation under the Act takes place in an adversary context in which the active parties to the particular litigation are usually expected to be the best judges of what is in their own interests. The policy of Australian law encourages the settlement of disputes (see eg Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 9 per Gleeson CJ and Uniform Civil Procedure Rules 2005, Part 20). Our legal system would collapse were it not for the fact that most disputes are resolved by agreement. One of the principles giving effect to this policy is the principle that a valid compromise gives effect to an agreement that effectively supersedes the antecedent rights of the parties. The possibility of greater success and the risk of greater failure is transposed into an arrangement that frees the litigants and witnesses of the risks, costs and toils of further disputation. This principle is not displaced in the context of proceedings under the Act, although for reasons already outlined, the court may decline to give effect to a settlement if doing so failed to effectuate the specific policies of the Act, amounted to an abuse of process or otherwise offended public policy in a demonstrable way. The compromise agreement in the present case suffered from none of these difficulties. It was reached in circumstances where the deceased's executrix availed herself of the advice of solicitor and counsel. It was also reached with the concurrence of the appellant, albeit given with a qualification about no claim being made on Mrs Thomas' estate. When determining whether or not to translate a binding agreement into an order, a court proceeds in the full knowledge that it lacks full knowledge about the rights and wrongs of the yet to be litigated dispute. Allegations are necessarily undeveloped and untested. … Naturally, there will be situations where a court can be sufficiently satisfied that the proffered compromise agreement lies outside the range of possible outcomes and to such a degree that the proposed order should be regarded as giving effect to some purpose extraneous to those within the Act. But much more is required than that one party to the compromise has repented of it, a fortiori a non-party like the present appellant."
8. In Affoo v Public Trustee of Queensland [2012] 1 Qd R 408; [2011] QSC 309, Dalton J wrote, at [24]: "…The final disposition of a family provision application calls for the exercise of the Court's discretion, it cannot be achieved by an agreement or deed … When parties to a family provision application make an agreement as to the final orders they believe ought to be made in the proceeding, a court will have regard to that agreement as a factor, usually a significant factor, in deciding what order to make in the exercise of its discretion.
9. This statement was approved by the Court of Appeal in Abrahams v Abrahams (2015) 13 ASTLR 406; [2015] QCA 286, at [30].
10. It is relevant also, that s 98(3) of the Act contemplates the making of consent orders. It provides: "98 Mediation, orders with consent and costs (3) The Court may make a family provision order in terms of a written agreement (a consent order) that: (a) is produced to the Court by the affected parties in relation to an application after mediation, or on the advice of a legal practitioner, and (b) indicates the parties' consent to the making of the family provision order in those terms."
11. It is not the role of the Court asked to approve a settlement or compromise to decide whether the outcome of the settlement or compromise is the one that it would have made, but, rather, whether it (as a settlement or compromise) ought to be approved. The Court is requested by the parties to exercise its independent judgment on the question whether or not to approve the proposed compromise or settlement. The purpose of court approval is, principally, to protect the person under legal incapacity.
12. Consequently, the role of this Court is to consider the terms of the proposed orders. The Court must be satisfied, on the evidence available before it, that such an order for provision is one that ought to be made. This, of course, involves a consideration of whether adequate provision has been made to the Plaintiffs. Without such a consideration, the Court does not have jurisdiction to make an order.
13. Where someone opposes the approval of the settlement, her, or his, reasons for opposition may provide "a convenient focus" (see, Jessup J in Darwalla Milling Co Pty Ltd v F Hoffman La Roche Ltd (No 2) (2006) 236 ALR 322; [2006] FCA 1388, at [39]), by reference to which the Court will consider whether to approve the settlement. Similarly, that no one opposes the settlement, in the interests of the person under the legal incapacity, may, in some circumstances, also be relevant.
14. Where the interest of the sole beneficiary on intestacy has been compromised whether to the point of extinction as in this case, or otherwise, in favour of the Plaintiffs, the Court must consider whether the terms of the agreement fall outside the range of possible outcomes, if the matter were determined at hearing. In doing so, it considers whether the compromise agreement has failed to effectuate the specific policies of the Act, including, as mentioned, whether adequate provision has been made for the proper maintenance, education and advancement in life of the Plaintiffs.
15. The Court also considers whether the compromise agreement amounts to an abuse of process, or, whether it, otherwise, offends public policy in a demonstrable way: Bartlett v Coomber at [58]. If such a failure occurs, the Court must reject the compromise agreement.

The Statutory Scheme

1. There can be no dispute about the relevant principles that apply to a claim for a family provision order.
2. In this case, the pre-ordained scheme for distribution of the deceased's estate is not according to the wishes of the deceased as expressed in a Will, but according to the regime established by statute. It was written in NSW Law Reform Commission, Report 116 Uniform Succession Laws: Intestacy, (April 2007) at [1.23]: "The rules of distribution on intestacy are, at the most general level, the community's view of what should be done with the estate of a person who has died intestate. The parliaments of the various Australian jurisdictions, as representatives of their communities, have established and amended the rules from time to time. One of the purposes of this Report is to determine the extent to which any proposed scheme of distribution meets the collective requirements of the Australian community (Footnotes omitted)".
3. In In the Estate of Bridges (1975) 12 SASR 1, at 5, Bray CJ noted: "In the case of an intestacy, as much as in the case of a will, it seems to me that Parliament has indicated its intention that the scheme of things set up by a testator in his will, or by the law of the State in the event of intestacy, shall be interfered with so far as is necessary to make adequate provision for the proper maintenance, education and advancement of the claimants specified in the Act, but no further. It is true that when the persons entitled on intestacy are the surviving spouse and legitimate children of the deceased as opposed to collateral relations the speculation that the deceased may have intended to die intestate may have more cogency, but nevertheless I repeat that I think the correct approach is as I have said. I think that Parliament no more intended to grant an unlimited liberty to recast dispositions resulting from the law of intestacy on moral grounds than it did to give a similar liberty to recast dispositions made by will."
4. In Kossert v Ruggi As Executor of the Will of Korps (No 2) [2012] WASC 191, at [38], Kenneth Martin J, after referring to the passage in Re Estate of Bridges, noted: "So, in going about the task of resolving this Inheritance Act application ... I must respect the effect of the intestacy laws of the day in terms of the result they would deliver ..."
5. I respectfully agree with what Bergin CJ in Eq wrote (omitting transcript references), in In the Estate of the late Marras [2014] NSWSC 915, at [116] - [117] and [124] - [125]: "It was submitted that s 113 of the Act is just one of the mechanisms that the legislature has used to protect the interests of a surviving spouse. ... It was submitted that it was also notable that the formula in s 106 in respect of the statutory legacy provides an adjustment based on the Consumer Price Index (CPI) and also makes interest payable after one year at a rate which is 2% higher than the last relevant cash rate published by the Reserve Bank of Australia. It was submitted that the previous applicable provisions in the Probate and Administration Act 1898 contained similar protections for the surviving spouse. At the outset of his final submissions Mr Mantziaris contended that the statutory regime on intestacy provides a very definite intention to preserve the real value of what he referred to as the 'minimum irreducible portion of the estate for the surviving spouse'. It was submitted that if the Court is to make orders for provision under s 59 of the Act for any of the applicants then it should not do so by interfering with that so called 'irreducible minimum'. Mr Mantziaris submitted that the intention of s 113 of the Act is that the statutory legacy (the irreducible minimum) is protected from the Court's interference, where the value of the estate exceeds the statutory legacy. However in submissions in reply Mr Mantziaris clarified his position. He said that he did not suggest there was an 'absolute prohibition on going into the statutory legacy'. ... I am of the view that Mr Mantziaris' submissions in this regard should be rejected. The intestacy provisions of the Act may be viewed as though the deceased had made a will whereby he directed that his estate should be distributed as on intestacy. The fact that such distribution is statutory does not assume any particular importance: Re Russell [1970] QRWN 55 at 56. Just as there is no basis for cocooning any aspect of a testator's proposed distribution of the estate under a will as an irreducible minimum, if the Court reaches the view that it is necessary to interfere with the distribution to ensure adequate provision is made, there is no basis for cocooning any particular part of the distribution under the statutory provisions on intestacy. I am not satisfied that a reasonable reading of the Act leads to the conclusion that a Court may not interfere with the statutory legacy of a surviving spouse, if in all the circumstances the provision under the rules of intestacy in respect of the children of the deceased is inadequate. The Court is able to interfere with the statutory regime, including the statutory legacy, in so far as it is 'necessary to make adequate provision' to any applicant under s 59 of the Act: In the Estate of Bridges (deceased) at 5-6. Whether such interference is justified will depend upon the circumstances of the particular case."
6. In dealing with the application by the Plaintiffs under s 59(1) of the Act, the question under s 59(1)(c) and (2) is, in substance, whether adequate provision was made for the proper maintenance, education or advancement in life of each of the Plaintiffs as a result of the operation of the rules of intestacy. In this case, no provision is made as a result of the intestacy rules. Whether the provision is inadequate requires an assessment of the financial position of each of Thomas and William, respectively, the size and nature of the deceased's estate, the relationship between each and the deceased, as well as the relationship of Sandra and the deceased, as a person who has a legitimate claim upon his bounty: Tobin v Ezekiel (2012) 83 NSWLR 75; [2012] NSWCA 285, at [70]; McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82, at 571-572; Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, at 210; and Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11, at [16], [75], [112].
7. The question is whether some provision should be made for each applicant's proper maintenance, education or advancement in life, and if so, the next question that would arise under s 59(2) is what order for provision, if any, should be made.
8. Section 60(2) sets out the matters that the Court may consider when determining whether, amongst others, to make a family provision order and the nature of such order: s 60(1). None of the matters listed in s 60(2) is necessarily decisive. None is given, by the section itself, any primacy. In the present case, almost all of the matters identified in s 60(2) are relevant and should be considered.
9. The question of the inadequacy of the provision is determined at the time the Court is considering the application under s 59(1)(c).
10. The content of what is adequate provision is flexible, and reflects what is considered to be right and proper according to contemporary accepted community standards.
11. In Sgro v Thompson [2017] NSWCA 326, White JA (McColl JA agreeing), at [71] - [72], noted that: "An applicant's financial needs and the financial needs of other persons with claims on a deceased's testamentary bounty are important, and often highly important considerations, but as Basten JA said in Chan v Chan [2016] NSWCA 222 at [22]: '… [I]t is important not to elide the distinction between needs and adequate provision; the former is but one indicator of the latter. The adequacy of provision is not to be determined by a calculation of financial needs.' The question is whether adequate provision was made for the proper maintenance, education or advancement in life of an applicant."

Determination

1. In this case, Sandra is the sole beneficiary entitled on intestacy. The Court is not entitled to disregard her interests and I do not do so.
2. However, bearing in mind the shortness of the marriage before she left the deceased (about 14 months); the fact that there is no evidence of any contribution made by her towards the acquisition, conservation and improvement of the estate of the deceased, or to his welfare; that it is not suggested that she contributed to the welfare of the family of the deceased; that nothing at all is known about her financial resources (including earning capacity) and financial needs or about any physical, intellectual or mental disability from which she might suffer; that she appears to have wished to have a complete break from the deceased, and has maintained that approach by not, apparently, wishing to participate in the proceedings; and despite the numerous efforts to involve her, I am satisfied that the Court should regard her as having virtually no competing claim on the bounty of the deceased.
3. I am also satisfied that the relationship of each of Thomas and William, and the deceased, was a reasonably close one. The same cannot be said for his relationship with Sandra, to whom he was married and living with for about 14 months, and from whom he was separated for more than two years before his death. I am of the view, taking into account all the circumstances of the case, that there was no requirement for the deceased to have made any provision for her.
4. That there is no provision made for either Plaintiff, each of whom is a child of the deceased, out of the deceased's estate by operation of the rules of intestacy does not, automatically, mean that each will have satisfied the jurisdictional threshold. A person may fail to satisfy the description of being "left without adequate provision" even though no, or little, provision is made for him or her by Will or by operation of the rules of intestacy.
5. Yet, judged by quantum, and looked at through the prism of Thomas' and William's financial and material circumstances, respectively, adequate provision for the proper maintenance or advancement in life of each could be seen as not having been made. As stated, the test established by s 59 of the Act has regard not only to what is "adequate" by reference to the applicant's needs, but also to what is "proper" in all the circumstances of the case.
6. In all the circumstances, I am satisfied that there is a basis for the Plaintiffs making the application. No provision was made for either. The deceased, on intestacy, failed to provide adequate and proper provision for each. There is no doubt that each has a need for provision for his maintenance, education and advancement in life. In the circumstances, the requirements of the Act have been made out, and the jurisdiction of the Court has been enlivened.
7. I am satisfied, in this case, that the Defendant, as the person appointed to represent the deceased's intestate estate, has given serious, and proper, consideration to the entitlement of Sandra as the sole beneficiary on intestacy. In addition, he has been advised by junior counsel with experience in the conduct of these matters, which adds to his own significant experience. Both consider that the orders ought to be made.
8. It is also clear that Clive, as William's tutor, considers that it is in William's best interests, and beneficial to William, to resolve the proceedings in the manner proposed. He has consented to the orders. I am satisfied that he and his legal advisors have acted appropriately, understanding their significant duty to protect the interests of William. I am also satisfied that the compromise, so far as it relates to him, is in William's best interest and is appropriate in all the circumstances.
9. Furthermore, Mr Glass has acted within the limits of his power to compromise and appears to have exercised his power to compromise in good faith and for the purpose for which it was conferred by Ward CJ in Eq. It could not be suggested that he has done so for any ulterior, or improper, purpose.
10. Nor is there any evidence that Mr Glass has not formed an honest judgment that it would be in the best interests of the estate to resolve the Plaintiffs' claims at the judicial settlement conference, rather than to incur the further costs, expenses and delay in defending their claim for provision: McGrath v Troy [2010] NSWSC 1470 at [55] per White J (as his Honour then was). Clearly, the small size of the estate and the extent to which it would be depleted by further legal costs if the Plaintiffs' claims were defended in contested proceedings are important considerations.
11. Having considered the matters I am required to consider, I am satisfied that the Defendant is entitled to come to the view that the deceased did not make adequate provision for the proper maintenance, education and advancement in life of each of Thomas and William by operation of the rules of intestacy and is entitled to resolve the proceedings on the terms that he considers appropriate.
12. Section 77(2) of the Civil Procedure Act provides that money recovered in any proceedings on behalf of a person under legal incapacity, is to be paid into court. However, s 77(3) empowers the Court to order that the whole, or any part of, such money not be paid into court, but be paid instead to such person as the Court may direct, including, if the person is a protected person, to the manager of the protected person's estate.
13. In the present case, the parties have requested that the lump sum payable to William be paid to his tutor, who is not only his grandfather, but also a retired Chartered Accountant with considerable experience in investment, and to David Arnold Klein, a Business Manager. Each has consented to act as Trustee and has signed a Deed of Trust, pursuant to which they have agreed to hold the lump sum for William until he attains the age of 18 years (on XX October 2019).
14. I have read affidavits of fitness of Clive and of Mr Klein, and I am satisfied that they may be appointed as the trustees of the lump sum payable to William. Pursuant to s 77(3) of the Civil Procedure Act the lump sum should be paid to them to be held by them on the terms of the Deed of Trust for William.
15. So that Sandra may be made aware of these reasons for judgment and the orders and notations set out hereunder, I order that a copy of these reasons be provided to her, in PDF form, sent to each of the email addresses known to the Defendant, and notification, by private message, of the Court's orders, be given to her by Facebook message.
16. The orders and notations are not to be entered into the Court's computerised record system until 14 days after the Defendant has filed an affidavit of service, in admissible form, deposing to service of the documents. This will allow Sandra an additional opportunity to contact the Defendant.
17. Finally, it is to be noted that the appointment of Mr Glass as an administrator ad litem is limited. The parties will have to give consideration to obtaining a grant of administration so that the estate may subsequently be distributed in accordance with the orders of the Court.

Orders

1. In the circumstances, the Court: 1. Orders that the settlement of the claim by the second Plaintiff, who is a person under a legal incapacity (a minor), be approved pursuant to s 76(4) of the Civil Procedure Act 2005 (NSW). 2. Orders pursuant to s 59 of the Succession Act 2006 (NSW) that the first Plaintiff receive by way of provision out of the estate of Andrew Paul Sergent ("the deceased"), a lump sum equating to 50% of the net estate of the deceased. 3. Orders pursuant to s 59 of the Succession Act that the second Plaintiff receive by way of provision out of the estate of the deceased, a lump sum equating to 50% of the net estate of the deceased. 4. Orders that the lump sum payable to the second Plaintiff, be paid to Clive Sergent and David Arnold Klein, as trustees, to be held by them on trust, on the terms set out in the Trust Deed dated 21 June 2018, a copy of which is Ex. A, until the second Plaintiff attains the age of 18 years. 5. Makes no order as to the Plaintiffs' costs, to the intent that they will bear their own costs of the proceedings. 6. Orders that the Defendant's costs, calculated on the indemnity basis, of the proceedings, be paid, or retained, as the case may be, out of the estate of the deceased. 7. Orders that, within 7 days of these reasons for judgment being published, the Defendant is to serve on Sandra Shin, a copy thereof, including these orders and notations, by sending it to her, in PDF form, by email, addressed to her at each of the email addresses known to the Defendant and by informing her, by Facebook messenger sent to her Facebook page, that reasons for judgment and a copy of these orders and notations have been sent to her by email. 8. Orders that these orders and notations not be entered into the Court's computerised record system until the 15th day after the Defendant files an affidavit of service with the Associate to Hallen J. 9. Notes the agreement of the parties that: 1. The application was made within time; 2. Each Plaintiff is an eligible person; 3. The Plaintiffs have served a notice identifying all other eligible persons on the administrator at the time of serving the Summons; 4. The administrator has filed the administrator's affidavit; 5. The administrator has filed an Appearance; 6. The second Plaintiff's tutor and his legal advisers consider that the compromise reached to be beneficial in all the circumstances of the case.

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: 18 July 2018