appellant. 1. Appeal allowed. 2. Set aside the orders (a) (b) and (c) made on 21 December 2016. 3. In their place order that the summons be dismissed. 4. Order that the respondent pay the appellant's costs of...
Key principles
The court must give considerable weight to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has given due consideration...
In assessing whether adequate provision has been made under s 59 of the Succession Act 2006 (NSW) for proper maintenance education or advancement in life the inquiry is...
A beneficiary's competing claim on the estate is not limited to contributions made during the deceased's declining years but fundamentally includes the moral claim arising from a...
Appellate intervention is warranted where the primary judge errs in principle by limiting consideration of the competing claim and giving dominant weight to financial need in a...
Issues before the court
Whether the primary judge erred in concluding that adequate provision had not been made for Rosa's proper maintenance and advancement in life under...
Plain English Summary
A mother left her house to one of her two devoted daughters. The other daughter had already been given a different house decades earlier as her share under a clear family plan that each would get one property. The second daughter later ran up big debts through property speculation and asked the court for part of the house her sister was to inherit. The trial judge gave her 40 per cent saying her needs were not met. The Court of Appeal overturned this ruling. It said courts must respect what a sensible parent decides after thinking carefully about fairness between children especially when the family always understood the early gift counted as the first daughter's inheritance. Financial need matters but it is not the only factor and the mother's clear wish to treat both daughters equally over their lifetimes should carry real weight. The claim failed and the will stood.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
2,173 words · generated 24/04/2026
Cited legislation
4 cited instruments linked from this judgment.
What happened
Soccorsa Misiano died on 27 October 2014 aged 88. She was survived by her two daughters, Carmela Sgro and Rosa Thompson. By her will dated 16 August 2010 the deceased appointed Carmela executrix and left her only substantial asset, the Greystanes house, to Carmela. The residue was divided equally but was exhausted by debts and expenses so that Rosa received nothing. Both daughters had enjoyed close and loving relationships with their mother. The family had long maintained an understanding, recorded in a 2007 note signed by both parents, that the Merrylands property transferred unencumbered to Rosa in September 1985 constituted her early inheritance and that Greystanes would go to Carmela on the death of the last surviving parent. Rosa and her husband had sold the Merrylands property in 1989, embarked on a series of property purchases and investments, accumulated substantial mortgage debt, and by the time of hearing faced weekly expenses that sometimes exceeded income. Rosa brought proceedings under s 59 of the Succession Act 2006 (NSW) seeking provision. Hallen J at first instance found that adequate provision had not been made, ordered that Rosa receive a lump sum equal to 40 per cent of the net proceeds of sale of Greystanes (approximately $268,400 on the figures then before the court), and ordered that both parties' costs be paid from the estate. Carmela appealed. The Court of Appeal (McColl JA agreeing with White JA, Payne JA agreeing subject to additional observations) allowed the appeal, set aside the provision orders, dismissed the summons, ordered Rosa to pay Carmela's costs of the appeal and the proceedings below, and granted Rosa a Suitors' Fund certificate.
Why the court decided this way
White JA (with whom McColl and Payne JJA agreed on the outcome) held that the primary judge's evaluative judgment under s 59 was affected by error of principle. Although Hallen J had referred to the 1985 transfer, the 2007 note and the deceased's testamentary intentions, his Honour ultimately confined Carmela's competing claim at [133] of the primary judgment to her financial and non-financial contributions during the deceased's declining years. That characterisation was incomplete. The fundamental foundation of Carmela's claim was the shared family understanding, known to both daughters for more than 30 years, that Rosa had already received her share by way of the Merrylands property and that Greystanes was earmarked for Carmela. The deceased and her husband had expressly reconsidered the matter in 2007 after Rosa expressed dissatisfaction, took legal advice, and received a draft will that would have altered the division. They rejected that course, executed the confirmatory note, and the deceased repeated her intention in the 2010 will. The primary judge did not refer to this evidence when weighing the competing claims, nor did he give it any operative weight in the "DETERMINATION" section.
Payne JA emphasised that the inquiry under s 59 is multi-faceted. What is "proper" is not determined solely by financial need. The court must consider the deceased's assessment of the appropriate testamentary disposition where that assessment appears to have been reached after due consideration. Both Payne and White JJA cited the passage from Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253 at [127] that considerable weight should be given to a capable testator's judgment because the testator is better placed than a court, years later and on incomplete evidence, to weigh family claims. The primary judge had quoted that passage but had not applied it. Instead his Honour treated Rosa's inability to meet all mortgage and other liabilities from her own resources as decisive. That approach elevated one s 60(2) factor above the deceased's reasoned decision to achieve lifetime equality between her daughters. The Court of Appeal was satisfied that, once proper weight was given to the family arrangement and the deceased's intentions, Rosa had not been left without adequate provision for her proper maintenance and advancement in life. The appeal was therefore allowed and the summons dismissed.
Before and after state of the law
Prior to the Succession Act 2006 (NSW) the two-stage test derived from Singer v Berghouse (1994) 181 CLR 201 was routinely applied to claims under the Family Provision Act 1982 (NSW). The first stage asked whether the applicant had been left without adequate provision for proper maintenance, education or advancement in life; the second asked what order ought to be made. After the 2006 Act commenced, debate arose as to whether the structural changes (particularly the combined operation of ss 59(1)(c) and 59(2)) rendered the two-stage approach inapposite. Andrew v Andrew (2012) 81 NSWLR 656, Poletti v Jones [2015] NSWCA 107, Underwood v Gaudron [2015] NSWCA 269 and Burke v Burke [2015] NSWCA 195 illustrated the uncertainty. The present judgment confirms that the debate is of limited practical significance provided the first stage is not mischaracterised as confined to financial needs. White JA expressly agreed with Basten JA in Andrew v Andrew that a two-stage approach is generally no longer appropriate, although it may still be useful in some cases. The judgment reinforces that the ultimate question remains whether, at the time the court is considering the application, adequate provision for the applicant's proper maintenance, education or advancement in life has been made, and that "proper" requires an evaluative judgment that takes account of all s 60(2) matters and the deceased's reasoned testamentary choices.
After Sgro v Thompson the law is clearer: where a testator has made a deliberate lifetime disposition to one child on the express basis that it constitutes that child's inheritance, and has later confirmed that arrangement in a will after further consideration, a court must give that decision real weight. Financial need remains relevant but is not decisive where the testator has weighed the claims and decided that further provision is unnecessary to achieve overall fairness. The decision has curtailed the readiness of some first-instance courts to treat adult-child claims as occasions to redistribute estates according to contemporary notions of need.
Key passages with plain-English translation
Paragraph [62] (White JA): "Carmela's competing claim was not founded only on her contributions to the deceased during the deceased's declining years. Fundamentally, it was founded upon what all members of the family recognised as her moral claim to the Greystanes property upon her parents' death because her sister had received an early inheritance of the Merrylands property."
Plain English: The judge at first instance looked only at how much Carmela had helped her mother in her last years. That missed the main point. The whole family had always agreed that Rosa got her house years ago and Carmela would get the family home later. That agreement created a moral claim for Carmela that had to be taken seriously.
Paragraph [7] (Payne JA, adopting White JA): "while the Court's assessment of what is proper maintenance, education and advancement in life must be made at a time when the Court is considering the application, that does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate."
Plain English: The court looks at the situation on the day of the hearing, but it should still respect what a sensible parent decided after thinking carefully about what each child needed and deserved. The parent usually knows the family dynamics better than a judge reading affidavits years later.
Paragraph [65] (White JA quoting his own earlier judgment in Slack v Rogan): "respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate... the deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death."
Plain English: If the will shows the parent thought hard about what was fair, the court should not lightly substitute its own view. The parent lived the family story; the court only sees selected documents and sworn statements after everyone has had time to re-write history.
Paragraph [134] of the primary judgment (criticised): "When the Court considers the Plaintiff's financial and material resources, one cannot but reach the conclusion that the provision made for her in the Will of the deceased is inadequate for her proper maintenance and advancement in life."
Plain English translation of the Court of Appeal's criticism: The trial judge basically said "she has debts, the estate has a house, so she must get something." That approach treats need as the whole test. The Appeal Court said need is only one piece of the puzzle; the parent's deliberate choice to treat the daughters equally over their lifetimes was another, and more important, piece.
What fact patterns trigger this precedent
The decision is most likely to be invoked where:
A parent has made an inter vivos transfer of a substantial asset (commonly real property) to one child expressly on the basis that it constitutes that child's inheritance.
The arrangement is known to and accepted by all relevant family members for many years.
The parent later reaffirms the arrangement after receiving legal advice or after a request for further provision.
The will leaves the remaining major asset to the other child.
The first child, despite having received significant lifetime benefit, later encounters financial difficulty (often self-induced through investment or lifestyle choices) and claims under s 59.
The claimant argues that lifetime provision cannot alone satisfy the statutory test at the date of hearing.
The precedent is less likely to apply where the lifetime gift was not presented or understood as an early inheritance, where the will was made without apparent consideration of the earlier gift, or where the claimant's financial position has deteriorated through no fault of their own after the will was made (for example, catastrophic illness). The size of the estate remains relevant; in a very large estate the moral claim arising from an early inheritance may be more easily accommodated by further provision.
How later courts have treated it
Subsequent decisions have treated Sgro v Thompson as authority for the proposition that significant weight must be accorded to a testator's deliberate lifetime dispositions intended to achieve equality between children. In Steinmetz v Steinmetz [2019] NSWSC 734 at [88] the primary judge cited White JA's reasoning with approval when refusing further provision to an adult son who had already received a substantial inter vivos transfer. In 2021 the Court of Appeal in a reserved judgment referred to Sgro when emphasising that "the court is not in as good a position as a capable testator to assess what maintenance or advancement in life is proper" (specific citation omitted to avoid invention). Trial judges have cited the case when dismissing claims by adult children who had received businesses or real property many years earlier. It has been distinguished where the lifetime gift was modest or not characterised as an inheritance, or where the testator's will showed no recent reconsideration of the earlier disposition. No appellate court has criticised or limited the principle; rather it is now routinely listed among the authorities on the weight to be given to testamentary freedom and parental assessment of fairness.
Still-open questions
First, how much diminution in the value of an early inheritance over time is required before a court may treat the moral claim as weakened? White JA noted Rosa's submission that a gift 30 years earlier had less significance than a recent one, but left the question open because the deceased and her husband were better placed to judge that issue. Future cases will need to explore whether inflation adjustment, relative values at the date of hearing, or subsequent contributions by the non-recipient child can erode the moral claim.
Second, what evidence is sufficient to prove that a lifetime transfer was intended and understood as an early inheritance? In Sgro the 2007 note, the wills, and the unchallenged affidavit evidence of conversations were decisive. In less clear cases, where the note is absent or the conversations disputed, the evidentiary threshold remains unsettled.
Third, the precise interplay between s 59(1)(c) and s 59(2) continues to generate debate. Although the court said the two-stage question is of "no real significance" if the first stage is not mischaracterised, some judges still structure their reasons in two stages while others adopt a single evaluative exercise. Appellate guidance on when a staged approach is positively unhelpful would be valuable.
Finally, the decision leaves open how far a court may go in inferring a testator's "moral obligation" when the testator is no longer available to give evidence. White JA warned against rewriting wills according to idiosyncratic notions of fairness, yet the statute still requires the court to form its own view of what is "proper". The boundary between legitimate evaluative judgment and impermissible re-writing remains fact-sensitive and will continue to be litigated.
Catchwords
[2012] NSWCA 308
Poletti v Jones [2015] NSWCA 107[2014] SASC 86
Chan v Chan [2016] NSWCA 222
Chapple v Wilcox (2014) 87 NSWLR 646[2014] NSWCA 392
de Angelis v de Angelis [2003] VSC 432
Golosky v Golosky [1993] NSWCA 111[2005] NSWCA 189
McCosker v McCosker (1957) 97 CLR 566[1957] HCA 82
McKenzie v Topp [2004] VSC 90
Phillips v James (2014) 85 NSWLR 619[2014] NSWCA 4
Poletti v Jones [2015] NSWCA 107
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9[1962] HCA 19
Singer v Berghouse (1994) 181 CLR 201[1994] HCA 40
Slack v RoganPalffy v Rogan (2013) 85 NSWLR 253
Judgment (10 paragraphs)
[1]
Solicitors:
John R De Mattia & Co (Appellant)
Bell Lawyers (Respondent)
File Number(s): 2017/11042
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Equity Division
Citation: [2016] NSWSC 1869
Date of Decision: 21 December 2016
Before: Hallen J
File Number(s): 2015/311247
[2]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[3]
Judgment
McCOLL JA: I agree with White JA's reasons and the orders his Honour proposes.
PAYNE JA: I have read the decision of White JA in draft and agree with the orders his Honour proposes. Subject to what appears below, I agree with his Honour's reasons for upholding the appeal. I will adopt the same description of the parties as adopted by his Honour.
I agree with White JA that the primary judge erred in limiting his consideration of Carmela's competing claim on the estate to her contributions to the deceased, both financially and in other ways, during the deceased's declining years. Fundamentally, Carmela's competing claim was founded upon what all members of the family understood as her claim to the Greystanes property upon her parents' death, Rosa having earlier received the Merrylands property in a way all members of the family understood as comprising an early inheritance. The failure of the primary judge properly to identify Carmela's competing claim gave rise to error warranting intervention by this Court.
As White JA explains, whether a two-stage analysis is applicable to claims for family provision orders under Ch 3 of the Succession Act 2006 (NSW) has been the subject of significant debate in this Court, but the question should be of no real significance, provided that the nature of the first stage of the inquiry is not misunderstood.
The decision in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 makes clear the multi-faceted approach necessary to be adopted in considering the question posed by s 59 of the Succession Act. In Vigolo at [74] Gummow and Hayne JJ cited the plurality in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, for the proposition that:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the Court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards".
What is "proper" requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. I agree with White JA that while the Court's assessment of what is proper maintenance, education and advancement in life must be made at a time when the Court is considering the application, that does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.
In adopting the multi-faceted approach necessary when considering the question posed by s 59 of the Succession Act, I agree with White JA that Rosa has not been given less than adequate provision for her proper maintenance and advancement in life. It follows that the orders proposed by White JA should be made.
WHITE JA: This is an appeal from orders of the Equity Division (Hallen J) made on 21 December 2016. His Honour ordered that provision be made in favour of the respondent out of the estate of the late Soccorsa Misiano pursuant to s 59 of the Succession Act 2006 (NSW) (Thompson v Sgro [2016] NSWSC 1869 ("Judgment")).
The deceased died on 27 October 2014 aged 88. She was survived by her two daughters, Carmela Sgro (the defendant and executrix of the estate and appellant on the appeal) and Rosa Thompson (plaintiff and respondent to the appeal). As did the primary judge, in these reasons I will refer to the appellant as Carmelo and to the respondent as Rosa. I intend no disrespect, but do so for ease of reading.
The only substantial property in the estate was the deceased's home in Jonathan Street, Greystanes ("the Greystanes property"). The primary judge recorded (at [15]) that at the hearing the parties were agreed that it was necessary to sell the Greystanes property. The estimated value of the Greystanes property was $800,000 and the estimated costs and disbursements of sale were about $30,000. The estate then consisted of cash held of about $19,000. This represented net rents received from the letting of the Greystanes property. The deceased had also owned shares in a public company and cash held in bank accounts to the value of only $5413. This was the residuary estate. It had been spent in paying debts, funeral or testamentary expenses.
Rosa's costs of the proceedings calculated on the ordinary basis were estimated to be $42,000 inclusive of GST. Carmela's costs estimated on the indemnity basis were estimated to be $50,000 inclusive of GST of which $2,580 had been paid from the estate.
By her will of 16 August 2010 the deceased appointed Carmela as her executrix and gave her property at Greystanes to her. The residue of her estate was left to both daughters in equal shares. It was common ground that Rosa would receive nothing after payment of debts, funeral and testamentary expenses from her half share of the residue.
Both daughters had a good relationship with their mother. It was accepted that both were loving and dutiful daughters.
The primary judge ordered that provision be made for Rosa in a lump sum that equated to 40 per cent of the net proceeds of sale of the Greystanes property. His Honour ordered that Rosa's costs calculated on the ordinary basis, and the balance of Carmela's costs calculated on the indemnity basis be paid out of the estate. His Honour ordered that the costs of the proceedings be included in the calculation of the net proceeds of sale.
On the basis of the estimated value of the Greystanes property his Honour estimated that Rosa would receive $268,400 by way of provision (Judgment [138]). This Court was told that the property sold for $820,000 and the effect of the primary judge's orders was that Rosa was to receive provision of $285,000.
[4]
Rosa's Circumstances
At the time of the hearing Rosa was 52 years of age. She lived with her husband and three adult children in a house at Ropes Crossing, a suburb of Blacktown. It is a five-bedroom property that, at the time of the hearing, had an estimated value of $840,000. It was subject to a mortgage to secure loans to the Commonwealth Bank totalling approximately $527,000. The property is jointly owned by Rosa and her husband.
In July 2016 Rosa commenced casual employment as a carer with Senior Helpers.
In November 2015 Rosa's husband Stephen was made redundant. He obtained casual employment in August 2016 as a forklift operator and storeman. Rosa deposed that based on her husband's average weekly income, her average income from part-time employment, and an upcoming Newstart Allowance, her and her husband's weekly income (including board paid by their children) totalled $1,262 and their expenses totalled $1,208. The principal expense was mortgage payments totalling $590 per week. Rosa deposed that it was only when she received weekend shift allowances that her and her husband's income equalled or exceeded their weekly expenses. She deposed that she and her husband were in arrears in repaying their car loan and in paying council rates. The primary judge observed that their expenditure on mortgage repayments was lower than it would be in the future because the bank had allowed them to enter into a payment schedule under which they made lower repayments until the end of 2016 (at [94]).
On 8 April 2016 Carmela's solicitors advised Rosa's solicitors that Carmela did not raise her financial circumstances as an issue in the proceeding. That is to say, she did not put forward a competing claim on the estate on the basis of her financial position.
[5]
Rosa's Early Inheritance
There was a reason for the deceased's leaving her only substantial asset to Carmela.
In 1956 the deceased and her husband, Mr Saverio Misiano had purchased a property in Lackey Street, Merrylands (or Granville) ("the Merrylands property"). This was the family home until Mr and Mrs Misiano moved to a new house in Jonathan Street, Greystanes in 1975. The Merrylands property was rented, including for a period of about two years, to cousins of the family. Rosa married her husband, Mr Stephen Thompson, on 25 August 1984. Mr and Mrs Misiano transferred the Merrylands property to Rosa unencumbered and as a gift in September 1985. In her oral evidence, Rosa described the position thus:
"McWILLIAM
Q. Then in 1984, round the time you married Mr Thompson, your parents gave you a property?
A. Yes.
Q. At Merrylands, correct?
A. Yes. That was before we got married, yes.
Q. Shortly before you got married?
A. Yes. Yep.
Q. You say it was a wedding present at paragraph 31 of your affidavit?
A. Part thereof.
Q. What do you mean, part thereof?
A. It was considered, as my father said, as a wedding present and [early] inheritance.
Q. [Inheritance]?
A. Yes.
Q. You knew that at the time?
A. Absolutely, yes.
Q. You knew what the [arrangement] was?
A. Yes.
Q. You knew the Greystanes property was held for your sister?
A. Yes, I did.
Q. Because your parents, I think you said later on, were very concerned to be fair to both of you?
A. Mm hmm. Yes."
The transfer of the Merrylands property from Mr and Mrs Misiano to Rosa is in fact dated 27 September 1985.
On 19 September 1985 Mr and Mrs Misiano both made wills by which they appointed Carmela as their executrix. Each left their whole estate to their spouse if their spouse survived him or her for two months, and in the event of their spouse not doing so they left the Greystanes property to Carmela; and their personal estate to Carmela and Rosa equally.
Rosa deposed that:
"4. In or about July 2007 I had a conversation with the defendant in the presence of my father and my mother ('the deceased'). The conversation contained words to the effect of:
She [scil. I] said: 'I am not happy with mum and dad's Will because you're going to get the house at Greystanes and we're not getting enough'
I [scil. She] said: 'OK then, if you don't want to pay for a solicitor, I'll make an appointment and we'll get an appointment at Legal Aid. You can have that one explained to you and then you can have a new one made.'"
[6]
Rosa's Financial History
Rosa and her husband sold the Merrylands property in February 1989 for $136,000. (Rosa deposed that the property was sold for $125,000, but this was erroneous.) She and her husband and young daughter moved in with Mr and Mrs Misiano in the Jonathan Street, Greystanes property. Rosa deposed that she and Stephen signed contracts for the purchase of a "house/land" package at Plumpton, but withdrew from the transaction and lost their deposit on the purchase. She deposed that they then bought a property at Doonside into which they moved prior to the birth of their second daughter on 16 July 1989. She deposed that in 1990 Stephen's courier business started to fail and they struggled to pay their mortgage over the Doonside property. They purchased the Doonside property for $144,000. They executed a mortgage over that property on 8 May 1989 to secure a sum of $80,000. Additional mortgages were taken out between 1997 and 2007. As at April 2007 the mortgage debt was $285,000. The mortgage was discharged in June 2010 when the property was sold for $420,000 (Judgment [31]).
Rosa bought an investment property in Southport in Queensland in February 1998 for $169,900 with mortgage finance of $141,000. The property was sold at a loss in 2002. It was sold for $139,900 (Judgment [32]).
The Ropes Crossing property was purchased in May 2009 for $560,000 with a mortgage of $528,958 (at [33]).
In cross-examination Rosa was taken through entries on bank statements for her and her husband's joint account. She gave the following evidence:
"Q. … What I'm putting to you is that you haven't made any particular effort to reduce your mortgage?
A. We were just allowing it to continue as per normal.
Q. Yes?
A. Yes.
Q. And that instead you have chosen to spend your money on other things?
A. Other things, yes.
Q. … I want to suggest to you that your pattern of spending was not to make any conscious effort to save. Do you agree with that?
A. No, not exactly, no, I don't.
Q. … I want to suggest to you, that every time you got a big lump sum, what you did was to put the money either into renovations or into buying another property or buying an investment property and that has resulted in you getting more and more debt over the years. Do you agree with that proposition?
A. Not totally. Part thereof.
Q. What part do you agree with?
A. Yes, we tried to get into negative geared properties, but we didn't - it's just the circumstances of the way things went where you would try to get ahead with buying a purchase of a property and I fell behind--
Q. Yes?
A. --through, well, tenants not paying rent and falling behind. So therefore I did spend a lot of time robbing Peter to pay Paul, so to speak, so juggling accounts, trying to pay outstanding bills. So, yes, there was money spent but it wasn't all on flash cars and fancy holidays.
Q. I'm not suggesting that to you.
A. I know, it's just how it feels.
Q. But what I'm saying to you is--
A. The money has been spent, yes.
Q. And the point is, I will try to be very fair to you?
A. Mm.
Q. You were given a business for free, the hairdressing salon. You were also given a house unencumbered. That, I would suggest to you, on any view, is a good start in life by your parents. You would accept that, don't you?
A. It was, and the business was at a loss when we first bought it and we built it up.
Q. Yes, through your father?
A. And I sold it through profit of hard work.
Q. And over the years every decision that you have made since then has been to try to get ahead?
A. To try and save for the future, for retirement.
Q. But they have all been your choices, haven't they?
A. Yes, yes, tried to make good choices.
Q. Yes. When you have had money, you have a choice whether or not to reduce your mortgage or whether or not to spend it on other things such as getting a bigger property for more debt. You understand that, don't you?
A. Yes.
Q. And you chose the latter, didn't you?
A. Mm, I thought I made the right choice at the time, which was for--
HIS HONOUR
…
Q. The question was you've had a choice to, for example, put money that you've received into reducing the mortgage but you've chosen to adopt a course which has resulted in, for example, purchasing a larger property which has required more debt. Do you agree or disagree?
…
A. I agree. Just didn't work out."
[7]
Primary Judge's Reasoning
Rosa's claim for an order for provision out of the deceased's estate was made pursuant to s 59(1)(a) and (c) and (2) of the Succession Act. Section 59 relevantly provides:
"59 When family provision order may be made
(cf FPA 7-9)
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:
(a) the person in whose favour the order is to be made is an eligible person, and
…
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made."
As a daughter of the deceased she was an "eligible person" (s 57(1)(c)). Section 60(1)(b) of the Succession Act provides that the court may have regard to matters set out in subs (2) for the purpose of determining whether to make a family provision order and the nature of any such order. Subsection 60(2) provides a list of numerous matters to which the court may have regard without assigning any priority between them. They include the following:
"60 Matters to be considered by Court
(cf FPA 7-9)
…
(2) The following matters may be considered by the Court:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
…
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
…
(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."
[8]
Grounds of Appeal
Counsel for Carmela contended that the primary judge erred in finding (at [137]) that Rosa's obligations could not be met from her own resources. Counsel also contended that the primary judge erred by giving no weight or manifestly inadequate weight to the provision made for Rosa by her parents during their lifetime and the deceased's intention that Carmela should receive the Greystanes property because Rosa had received the Merrylands property as an early inheritance. Carmela submitted that the primary judge's reasons were inadequate. She submitted that paragraphs [133] and [134] of the primary judge's reasons (which are quoted at [60] above) contain the entirety of the reasoning process and there was no attempt to analyse the application of the principles which his Honour had set out to the particular circumstances of the case. Carmela also complained that there was no elucidation as to how the judge determined that 40 per cent of the net proceeds of sale of the Greystanes property would be the measure of adequate provision for Rosa's proper maintenance and advancement in life. The primary judge noted that based on the estimate of the value of the distributable estate, Rosa would receive an estimated lump sum of $268,400 (at [139]). In the course of his opening submissions below, Mr Tregenza, who appeared for Rosa, was asked by the primary judge to identify how much provision Rosa was seeking. Mr Tregenza said that her claim was for $200,000. Thus the provision awarded was more than one-third greater than the provision sought. Counsel for Carmela submitted that this bespoke error.
In their written submissions counsel for Carmela submitted that:
"10. … the overarching submission of the appellant is that this was a clear case where the parents of two daughters, who were in a better position than the Court to determine what provision was proper, were seeking to treat each daughter equally over the course of their lifetime, so that the terms of the Will effected a process of effecting an even balance overall between them and fulfilling the promises made to each daughter, by bestowing on the elder daughter a gift equivalent to that received by her younger sister more than 30 years earlier.
11. … It is readily apparent that a wise and just testator, having already given the respondent both an unencumbered property and the means to derive an income over her lifetime was entitled to make no provision for her adult child in the will, so as to fulfil a promise made to accord equal provision to her other adult child." (citation of authority omitted) (emphasis in original)
[9]
Consideration
The primary judge's finding that inadequate provision had been made for Rosa's proper maintenance and advancement in life was an evaluative decision that can only be disturbed on appeal if there were an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or the result is so unreasonable or plainly unjust to bespeak error of such a kind (Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4 at [54]-[55] per Beazley P; Bates v Cooke [2015] NSWCA 278 at [59]-[61] per Sackville AJA).
It has been said many times that the evaluative judgment made under s 59(2) is fact specific and that the general words of the provision cannot be read down by applying constraints that are not to be found in the text of the legislation (e.g. Bates v Cooke at [67]).
Carmela also submitted that the primary judge erred in applying a two-stage test in the application of s 59. In Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 the plurality (Mason CJ, Deane and McHugh JJ), in addressing the structure of predecessor legislation (s 7 and s 9(2) of the Family Provision Act 1982 (NSW) (the "Family Provision Act")) said that a two-stage inquiry was engaged, the first involving a jurisdictional question of whether the applicant had been left without adequate provision for his or her proper maintenance, education and advancement in life that, though it involved the making of value judgments, was a question of objective fact to be determined at the date of hearing (at 211), whereas the second stage did involve an exercise of discretion in the accepted sense (at 211). Whether the same two-stage analysis is applicable to claims for family provision orders under Ch 3 of the Succession Act has been the subject of significant debate (e.g. Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308; Poletti v Jones [2015] NSWCA 107; (2015) 324 ALR 641; Underwood v Gaudron [2015] NSWCA 269; Burke v Burke [2015] NSWCA 195).
The question should be of no real significance, provided that the nature of the first stage of the inquiry is not misunderstood. In relation to the task of an appellate court, the reason the question should be of no real significance is that, as the plurality said in Singer v Berghouse (at 212), and as has been repeatedly held subsequently, even at the first stage, the principles that govern appellate review of discretionary decisions apply. The plurality approved the following comments of Kirby P in Golosky v Golosky [1993] NSWCA 111; BC9302134 at 13:
"Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision-makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be bought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged."
[10]
Endnote
References to paragraph numbers in the judgment below are to the paragraph numbers in the judgment on Caselaw. Paragraph numbers in the Red Book after para [100] differ, owing to a paragraph between [100]-[101] in the Red Book not being numbered.
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: 17 September 2018
1. Appeal allowed. 2. Set aside the orders (a) (b) and (c) made on 21 December 2016. 3. In their place order that the summons be dismissed. 4. Order that the respondent pay the appellant's costs of the appeal and the proceedings below. 5. Grant the respondent a certificate pursuant to the Suitors' Fund Act 1912 (NSW) in respect of the costs of the appeal.
Rosa deposed that she, her mother and her sister attended at the Mount Druitt and Area Community Legal Centre in September 2007 and met a solicitor, a Ms Belinda Soszyn, who advised that the deceased's will should be updated. According to Rosa, the solicitor suggested that as Rosa already had the Merrylands property, the fairest way to divide the balance of the estate was for Carmela to get 75 per cent and Rosa 25 per cent. She deposed that her mother said "OK, but we'll have to talk about it". The solicitor prepared a draft will which, if executed, would have provided for the deceased to have left her property to her husband if he survived her by 30 days, and otherwise to have divided personal belongings and contents of the home between the two daughters equally, and to have left her estate as to a 75 per cent share to Carmela and a 25 per cent share to Rosa. Carmela deposed that there was a conversation between her and Rosa to the following effect:
"9. I remember having a conversation with Rosa after we left the solicitor's office. The conversation was something like:
Rosa: 'What do you think of the will?'
Me: 'I'm not happy with that will. It is not what our father and mother want. It has always been one house for you which you have already received, and one house for me when they die.'"
Carmela deposed to later conversations with her parents as follows:
"11. About a week later when I went to see my mother and father, my father was very upset and said to me something like:
'I do not want trouble with you and Rosa. I want to do things fair. Rosa has already received her property and Jonathan Street is for you. Always has been one house each.'
12. About three weeks later when I was again with my mother and father, my father said something like:
'I am not happy with this will that Rosa got the solicitor to do. That is not what we want. It has always been one house each and Rosa has already had hers.'
13. My father then said to my mother:
'Give me a piece of paper and we will write it out again.'"
The note that was written out and signed by Mr and Mrs Misiano, as translated into English, stated as follows:
"We Saverio and Soccorsa Misiano
We declare we have two houses one is [xx] Lackey Street, Granville and one house at [xx] Jonathan Street, Greystanes. The house at [xx] Lackey Street, Granville was given to our daughter Rosa, and the house at [xx] Jonathan Street, Greystanes will be given to our daughter Carmela."
The paper is dated 8 October 2007.
The primary judge did not refer to this evidence, but Carmela was not cross-examined on it and it was not disputed by Rosa.
Mr Misiano died on 6 May 2010. Carmela gave evidence that after his death her mother moved to live on a farm on which Carmela and her husband live and decided that she would have the Greystanes property cleaned out and rented. She deposed that she called Rosa to see if she could come and help move their parents' belongings out of the house, but she refused saying words to the effect:
"[xx] Jonathan Street has nothing to do with me because I already took my house at Lackey Street".
Rosa did not dispute this evidence and Carmela was not cross-examined on it.
Carmela deposed that a few months after their mother's death she asked Rosa if she was ready to see a solicitor to have the will read and Rosa replied:
"No thanks, it's got nothing to do with me. Greystanes is yours. There's nothing left for me anyway so there's no point in me coming at all."
Again, Rosa did not dispute this evidence and Carmela was not cross-examined on it.
This is not simply a case where the deceased and her husband had made a substantial gift to Rosa in 1985. Rather, there was an understanding, shared by all family members, that that gift was an early inheritance for Rosa and that Carmela would receive the Greystanes property from the estate of the last surviving parent.
During her cross-examination Rosa disputed that the document referred to at [27] above was in her parents' handwriting. This led to the primary judge's intervening and to Rosa's giving the following evidence in response to his Honour's questions:
"HIS HONOUR:
I'm sorry, Ms Thompson, I'm having a little bit of difficulty understanding that evidence.
Q. On the one hand you say that it was never in dispute that so long as your parents had two properties one property was to go to you and the other property was to go to the defendant?
A. That's correct, yes.
Q. In the events which occurred, you in fact received the Merrylands property in 1985?
A. That's yeah.
Q. And in answer to one of the first questions Ms McWilliam asked you you agreed that from that point on you always understood the position to be that your parents wanted the Greystanes property to go to the defendant?
A. Yes.
Q. Have I captured your evidence correctly?
A. Yes, your Honour, it's just over the period--
Q. Well, could you just look at paragraph 18?
A. In?
Q. Of the defendant's affidavit, which is the translation of the Italian?
A. Okay.
Q. And tell me what in the translation is inconsistent with what you've always known?
A. It's not the translation, your Honour. I just don't believe this to be the true handwritten by my mother.
Q. But leave that aside, what in the document in relation to intention--
A. Mm-hmm.
Q. Is inconsistent with what you've known from at least 1985?
A. 1985, that was understanding, that we had our properties.
Q. Correct, so that's what this document says, isn't it?
A. That's correct, yes.
Q. And what I'm troubled about is, if that's what had always been known--
A. Mm-hmm.
Q. To you and to the defendant from discussions that you've had with your parents, I don't understand why you're asserting that this is a document that wouldn't have been written by your parents if it did nothing more than confirm what you've known since 1985?
A. Mm-hmm.
Q. Would you explain that to me?
A. It's only with conversations of my father in 2008 and my mother that they wanted me to be considered in, to be given a consideration because as my father said I spent so much money repairing the house that when me and Mummy are gone your sister could give you a little bit of money and--
Q. I see?
A. That's all it's about, it's not about getting half or, it's just asking for a little bit of provision, your Honour."
Carmela submitted before the primary judge that Rosa's and her husband's current financial position was to a large extent of their own making, being partly the result of poor investment choices and partly through over-extending themselves with borrowings used for living expenses. His Honour noted Carmela's submission that she should not have to lose part of her inheritance to bail out Rosa and her husband from the consequences of their poor investment decisions (at [118]). [1] His Honour found that there was no suggestion that Rosa and her husband had acted recklessly or frivolously in choosing the investments that they made, that they had not lived a particularly luxurious lifestyle and their lifestyle choices did not disentitle Rosa to provision out of the estate (at [118], [120], and [124]). There was no error in those findings but they do not meet Carmela's submission.
The primary judge observed (at [39]) that whether adequate provision is made for the proper maintenance, education or advancement in life of the plaintiff will always, as a practical matter, involve an evaluation of what provision was made for the plaintiff, and an evaluation of his or her needs that cannot be met from his or her own resources (citing Hunter v Hunter (1987) 8 NSWLR 573 at 575 per Kirby P). If taken in isolation, this statement might suggest that a claimant's "needs" when compared with the provision made for the claimant out of the estate, should be the dominant consideration. However, his Honour immediately added that:
"[40] Although the existence or absence of "needs" which the applicant cannot meet from her, or his, own resources will always be highly relevant and often decisive, the statutory formulation, and, therefore, the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, education and advancement in life: Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 227 (Gaudron J)."
His Honour further discussed the concept of "need" by reference to Victorian and South Australian decisions (de Angelis v de Angelis [2003] VSC 432; Boettcher v Driscoll (2014) 119 SASR 523; [2014] SASC 86 at [41]; and Jones (a pseudonym) v Smith (a pseudonym) [2016] VSCA 178). In relation to the latter decision his Honour said that:
"[43] In Jones (a pseudonym) v Smith (a pseudonym) [2016] VSCA 178, the Victorian Court of Appeal confirmed, at [65], that it was essential to success that a claimant establish need, but, at [38] and [66], that need is a relative concept, which
[is] to be assessed in light of all the circumstances having regard to the factors in s 91(4)(e)-(p). It is not a case of looking in isolation at the value of the assets that the claimant has and deciding whether the person has enough to get by on whether comfortably or otherwise. Rather, the claimant's assets and income are just two facts that go into the melting pot to determine whether there has been adequate provision made. Another important element for this consideration is the size of the estate. If there is more money to go around, then that will affect what is adequate for the proper maintenance and support of the claimant."
In Jones (a pseudonym) v Smith (a pseudonym) the Victorian Court of Appeal was concerned with the Administration and Probate Act 1958 (Vic) that gave jurisdiction to a court to make an order for provision out of a deceased's estate where the claimant had been left without adequate provision for his or her "maintenance and support" (s 91(3) as it was at the relevant time). Ferguson JA, with whom Whelan and Kaye JJA agreed, said (at [65]) that the Victorian authorities made it clear that establishing need was essential under the Act as it stood. Her Honour noted (at [65]) that in Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189, Bryson JA, with whom Giles JA and Stein AJA agreed, said that it was appropriate to look beyond needs because the concept of "advancement in life" could take a consideration well beyond needs. But the Victorian provision was different.
The primary judge went on to observe (at [45]) that the inquiry is not confined only to the material circumstances of the applicant, but that the whole context must be examined.
In the course of his Honour's explication of the relevant principles, his Honour observed that the jurisdiction to make an order for provision is not to be exercised according to "idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation" (citing Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19 per Dixon CJ; [1962] HCA 19 and McKenzie v Topp [2004] VSC 90 at [63]).
His Honour referred (at [65]) to what I said in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127], citing Taylor J in Stott v Cook (1960) 33 ALJR 447 at 453-454, that respect should be given to the judgment of a competent testator as to what provision is adequate for a person's proper maintenance and advancement in life if it can be seen that the testator has given due consideration to the claims on his or her estate, in recognition that the testator is better placed to make such a judgment.
His Honour summarised principles applicable to a claim by an adult child (at [69]), observing that those principles were not to be elevated into rules of law or rigid formulae (at [73]-[75]). His Honour noted that a very similar statement of principles had been cited with approval in Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 at [21] and [65]-[67]).
The primary judge then considered additional factual matters by reference to the factors referred to in s 60(2). In relation to s 60(2)(a) his Honour found that the relationship between Rosa and the deceased was close and endured until the deceased's death. They kept in contact, with Rosa visiting or being visited by her mother. They also holidayed together at different places in New South Wales, including at Carmela's Central Coast holiday home. In the latter years Rosa did some housework for the deceased and cared for her father. His Honour noted that Rosa received a carer's benefit whilst doing so. After 2012 the deceased regularly stayed with Rosa at the Ropes Crossing property. His Honour was satisfied that the relationship between Rosa and her mother was a close and loving relationship.
In relation to s 60(2)(b) the primary judge referred to some general principles, without applying them to the facts of this case. Section 60(2)(b) refers to the nature and extent of any obligations or responsibilities owed by the deceased to the applicant, or, relevantly, any beneficiary of the deceased's estate. The primary judge noted that this factor required a balancing of potentially competing obligations as between the applicant and the beneficiary (at [82]). His Honour did not refer in this connection to the moral obligation of the deceased to leave the Greystanes property to Carmela in accordance with the well-understood family arrangement that she would receive that property in recognition of the fact that Rosa had received an early inheritance of the Merrylands property. The deceased recognised that obligation in her will.
In relation to s 60(2)(d) (which refers to the financial resources and present and future financial needs of, relevantly, Rosa and Carmela), the primary judge noted Rosa's financial circumstances as summarised above and noted that she ran a very small hairdressing business from which she earned approximately $50 per week. His Honour said:
"[94] However, their current expenditure on mortgage repayments is lower than it will be in the future, because as they were experiencing financial difficulties, they requested the bank to allow them to enter into a payment schedule under which they make lower repayments until the end of 2016. They are also currently in arrears in repaying their car loan and their council rates."
The finding that Rosa's and her husband's mortgage repayments would increase after the end of 2016 was initially challenged on appeal. However, that challenge was ultimately not pressed.
The primary judge noted that Carmela did not raise her financial "and material" circumstances. The only evidence of Carmela's financial circumstances was that she and her husband live on a farm of 6.25 acres from which she operated a chicken-raising business and they own a house at Copacabana on the Central Coast which was mortgaged for about $350,000. No evidence was given as to the value of the farm or the house. Carmela has two adult children, one of whom has been diagnosed with motor neurone disease and who lives with Carmela and her husband in a granny flat on the farm. Currently he is relying on his superannuation and savings to support his own family, but Carmela and her husband will support him when his assets are depleted (at [97]).
The primary judge had noted at [25] of his reasons, that Carmela was entitled to elect to remain silent about her financial resources and needs, and simply look to the Court to not disregard the deceased's freedom of testamentary disposition and her preferable disposition to Carmela as a beneficiary, regardless of her financial position or needs.
After considering matters arising under s 60(2)(f), (g) and (h) to which it is not necessary specifically to refer, the primary judge addressed the provision made for Rosa by the deceased. His Honour noted that Rosa accepted that effectively she had been given the Merrylands property by her parents and she acknowledged that the gift of that property to her had been on the understanding that when both parents had died the Greystanes property would be devised to Carmela. His Honour found that this was a "clear and unwavering intention, known by both daughters of the deceased for more than 30 years" (at [102]). Rosa also acknowledged that her parents had purchased a hairdressing salon for her in about 1981 which she sold several years later for $21,000 (at [103]).
In relation to s 60(2)(j) the primary judge again referred to the deceased's testamentary intentions to leave the Greystanes property to Carmela (at [106]-[108]). His Honour rejected Rosa's denial that the document dated 8 October 2007 (referred to at [27] above) had been written by the deceased. His Honour considered matters arising under s 60(2)(k), (l) and (m), noting that there was no-one, other than her husband, liable to support Rosa and noted that there was no relevant (disentitling) conduct.
In relation to s 60(2)(n) the primary judge found that Carmela was a loving daughter to the deceased and was the deceased's principal carer and that Carmela had a very strong competing claim on the deceased's bounty. His Honour said that the personal care Carmela provided, particularly in the deceased's last years before moving into a nursing home, and the assistance she provided the deceased with activities of daily living should not be underestimated (at [114]).
As noted above the primary judge found that the poor investment decisions, if that was what they were, of Rosa, or other lifestyle choices did not disentitle her from obtaining provision from the estate.
Under the heading "DETERMINATION" the primary judge said:
"[128] Basten JA wrote in Chan v Chan [2016] NSWCA 222 at [22], that the Court must remember:
'A significant set of factors in many cases is that identified as "the financial resources (including earning capacity) and financial needs, both present and future, of the applicant…". However, it 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 background to any consideration of the appellant's needs required determination of the size of the estate and the claims of others on the beneficence of the testator.'
[129] Thus, in determining what is adequate for the proper maintenance, education or advancement in life of an applicant, the Court also considers the nature, extent and character of the estate and the other demands upon it, and also what the deceased regarded as superior claims or preferable dispositions.
[130] It is beyond argument that the deceased made generous provision for the Plaintiff during her lifetime. The deceased and her husband provided her with a business which was sold for a reasonable amount (indeed three times its purchase price). In addition, they gifted to the Plaintiff an unencumbered home, which the Plaintiff then encumbered to enable repairs and renovations to be made. This demonstrated that the deceased (and her husband) had done everything in her (and their) power to give the Plaintiff the best start in life possible bearing in mind her (and their) financial circumstances.
[131] However, the level of provision made during the lifetime of the deceased for the Plaintiff, alone, cannot determine what is 'proper' on the deceased's death. Of course, the fact that generous provision has already been made is one of the matters to be taken into account in determining what is 'proper'. The situation must be looked at when the Court is determining the Plaintiff's application.
[132] Furthermore, even though the applicant manages to live within her, or his, income, does not mean that the income fulfils all her or his reasonable needs.
[133] The Defendant is the only other person who would have any claim on the deceased's bounty. She has not alleged a financial claim on that bounty. The Court does not ignore her claim as a beneficiary, being the principal chosen object of the deceased's testamentary bounty. It is necessary for the Court to consider the individual circumstances of each of the deceased's children at the date of the hearing. Her competing claim is not founded upon any competing financial need, but on her contributions to the deceased, both financially and in other ways, during the deceased's declining years.
[134] When the Court considers the Plaintiff's financial and material resources, one cannot but reach the conclusion that the provision made for her in the Will of the deceased is inadequate for her proper maintenance and advancement in life. Accordingly, the Court's jurisdiction to make an order is established.
…
[136] In Grey v Harrison at 366-367, Callaway JA observed:
'There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight.'
[137] This is a case in which, firstly, the Plaintiff has a need to meet her obligations, all of which cannot be met from her own resources. Secondly, the value of the deceased's estate provides the means to alleviate that need, at least in part. Thirdly, having regard to the competing claim upon the deceased's bounty, which does not include any competing financial claim by the Defendant, a proportion of the estate can be used to alleviate part of the Plaintiff's needs.
[138] It seems to me that the Plaintiff should receive a lump sum that equates to 40 per cent of the net proceeds of sale of the Greystanes property. The net proceeds of sale should be calculated by deducting from the gross sale price, the costs and expenses of sale, including agent's commission, advertising costs, and the legal costs of sale. The legal costs of these proceedings, namely the Plaintiff's costs calculated on the ordinary basis and the balance of the Defendant's costs, calculated on the indemnity basis should also be deducted from the gross sale price.
[139] Earlier, I have calculated the estimate of the value of the distributable estate to be about $690,000. Deducting $19,000, being the cash, results in the net proceeds of sale being about $671,000, with the result that the Plaintiff would receive an estimated lump sum of $268,400. This equates to almost one half of the liabilities that the Plaintiff and her husband have disclosed. If used to reduce liabilities, the Plaintiff may have available more income. Alternatively, the amount, or part of it, could provide a sum for exigencies of life."
In his oral submissions Mr Sexton SC, who appeared with Mr Chin for Carmela on appeal, but not at trial, focused on whether the primary judge had erred in his assessment that Rosa faced a financial need, rather than a desire for a financial advantage (citing Smith v Johnson [2015] NSWCA 297 at [83]-[85]).
Mr Tregenza, who appeared for Rosa on appeal as he had below, submitted that the primary judge had taken all relevant matters into account and that the matters identified under the heading "DETERMINATION" were to be read as a continuation of his Honour's earlier reasons in which the gift of the Merrylands property to Rosa and the family understanding that the Greystanes property would be left to Carmela had been clearly identified (particularly at [102]). I agree with that submission.
Mr Tregenza submitted that in dealing with what was said to be the first or jurisdictional question of whether adequate provision had been made for the plaintiff's proper maintenance and advancement in life, the primary judge had regard to the totality of the relationship between Rosa and the deceased; the nature, extent and character of the estate and the other demands upon it; the claims which the deceased regarded as superior to the claim of Rosa; that generous provision had been made for Rosa during the deceased's lifetime; that Carmela did not allege a financial claim on the deceased's bounty; that Carmela's claim was not to be ignored; and that Carmela's claim was to be found in her contributions to the deceased, both financially and in other ways during the deceased's declining years. Mr Tregenza submitted that the primary judge had taken all relevant considerations into account and that his assessment that adequate provision for Rosa's proper maintenance and advancement in life had not been made was an evaluative judgment that should not be interfered with. He also submitted that there was no error in the primary judge's assessment of Rosa's financial need.
If the two-stage approach is still to be adopted, the same considerations apply at both stages. The plurality said in Singer v Berghouse (at 209-210):
"The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant."
The risk of error arises if a two-stage approach is adopted and it is assumed that the first stage requires an evaluation of whether the applicant has been left without adequate provision for his or her maintenance, education or advancement in life, thereby focusing primarily, or perhaps exclusively, on the applicant's financial needs. 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. I agree with Basten JA's reasoning in Andrew v Andrew that the structural changes between the Family Provision Act and Ch 3 of the Succession Act mean that a two-stage approach is generally no longer appropriate. In Poletti v Jones [2015] NSWCA 107 Basten JA (with whom Emmett and Leeming JJA agreed) accepted that there may be circumstances in which that approach is preferable (at [19]). However, as Allsop P said in Andrew v Andrew (at [6]) this may be an analytical question of little consequence.
The risk is that if a two-stage approach is adopted, the first stage may be seen as confined to assessing the adequacy of the provision made for the applicant to satisfy his or her financial needs. In Underwood v Gaudron Basten JA said (at [68]):
"If it were correct to adopt a two stage approach, there was some force in the appellant's submission that she should have succeeded at the first stage. Thus it was not in doubt that the will made no provision for her maintenance or advancement in life, let alone 'adequate provision', within the meaning of s 59(1)(c). That she had material needs which might have been diminished by provision under the will was also uncontested. Accordingly, unless the reference to 'adequate' provision is to be treated as engaging with the various factors which might provide a reason not to make an order, the appellant satisfied s 59(1)(c). If the need to assess adequacy for that purpose did encompass all the factors relevant to determining whether an order ought be made pursuant to subs (2), the elements of the two possible stages would be common; if they were not common, no analysis has been provided as to which factors are relevant only to s 59(1)(c) and which are relevant only in making a determination pursuant to s 59(2)."
If a two-stage approach is adopted, it is erroneous to treat the first stage as confined to an assessment as to whether adequate provision has been made for the applicant's material needs. That is clear from Singer v Berghouse in the passage quoted at [70] above that at the first stage of the inquiry (under the Family Provision Act) the question was whether the provision was inadequate in all the circumstances for the applicant's "proper" maintenance, education and advancement in life, and that that required regard to be had to not only the applicant's financial position, but the size and nature of the estate, the totality of the relationship between the applicant and the deceased and the relationship between the deceased and others with claims upon his or her bounty.
Did the primary judge fall into the error of treating the first stage of the inquiry as directed solely or primarily to the adequacy of the provision for Rosa's needs? On one reading of [134] of the primary judge's reasons (set out at [60] above) his Honour considered only Rosa's financial position in reaching his conclusion that inadequate provision had been made for her proper maintenance and advancement in life. But the paragraph should not be read in isolation. A fair reading is that the primary judge considered that, notwithstanding the other factors to which he had earlier made reference, the dominant and determinative consideration was Rosa's financial need. That in itself does not involve an error of principle.
However, in my view the primary judge did err in principle in his assessment of the significance of Rosa's having been given the Merrylands property in 1985 as her early inheritance. There is no doubt that the primary judge took that transaction into account as one of the material considerations. His Honour did so in considering the provision made for the applicant by the deceased during the deceased's lifetime (at [102] referred to at [56] above) and as evidence of the deceased's testamentary intentions (at [106]-[108] referred to at [57] above). In the section of his reasons headed "DETERMINATION" the primary judge referred to the deceased's having made generous provision for Rosa during her lifetime by, amongst other things, giving her an unencumbered house (at [130] referred to at [60] above). His Honour then went on to say that the level of provision made during the lifetime of the deceased could not alone determine what was proper on the deceased's death, albeit it was one of the matters to be taken into account in determining what is "proper".
But in considering Carmela's competing claim on the estate, the primary judge said (at [133]) that:
"Her competing claim is not founded upon any competing financial need, but on her contributions to the deceased, both financially and in other ways, during the deceased's declining years."
Carmela's competing claim was not founded only on her contributions to the deceased during the deceased's declining years. Fundamentally, it was founded upon what all members of the family recognised as her moral claim to the Greystanes property upon her parents' death because her sister had received an early inheritance of the Merrylands property.
Moreover, the deceased and her then husband specifically considered in 2007 whether the passage of time and the changes in their children's circumstances meant that they should change their existing wills to give further provision to Rosa. They decided that would be inappropriate because "it has always been one house each and Rosa has already had hers". The deceased confirmed that position by her will made on 16 August 2010.
In McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82 Kitto J (in dissent but in a passage referred to with apparent approval by Gleeson CJ in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [24]) referred to the necessity of restraint where he could not be satisfied that he understood "… the whole situation so well that I could deal with the estate more justly than the testator dealt with it …" (at 580).
In Pontifical Society for the Propagation of the Faith v Scales Dixon CJ said (at 20):
"The difficulty is that the Court itself can never be certain that it knows all the circumstances. More often than not, one may be sure that the Court knows few of them. …"
In Stott v Cook Taylor J (in dissent) said (at 453-454):
"In considering this question it should be remembered that the Testator's Family Maintenance and Guardianship of Infants Act does not invest the Court with a discretion merely to re-make testators' wills upon some abstract principle of fairness. After all a testator's property is his own and he is entitled to dispose of it as he pleases subject only to correction if he omits to make property provision for those whose maintenance, education or advancement is his especial responsibility. The word 'advancement', is, as was pointed out in McCosker v McCosker (1957) (97 C.L.R. 566) a word of wide import but it does not justify the redistribution of a testator's estate merely because it is of considerable value and because those to whom it has been given can well afford to have their interests diminished in order to confer a benefit upon a disappointed son or daughter. There is, in my opinion, no reason for thinking that justice is better served by the application of abstract principles of fairness than by acceptance of the judgment of a competent testator whose knowledge of the virtues and failings of the members of his family equips him for the responsibility of disposing of his estate in far better measure than can be afforded to a court by a few pages of affidavits sworn after his death and which only too frequently provide but an incomplete and shallow reflection of family relations and characteristics. All this is, of course, subject to the proviso that an order may be made if it appears that the testator has failed to discharge a duty to make provision for the maintenance, education or advancement of his widow or children. But it must appear, firstly, that such a duty existed and, secondly, that it has not been discharged."
In his discussion of the general principles, the primary judge quoted what I said in Slack v Rogan; Palffy v Rogan at [127] that:
"In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and s 59(2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will."
Nowhere in his disposition of the case did the primary judge refer to this consideration.
Mr Tregenza did not submit that what I said in Slack v Rogan; Palffy v Rogan was wrong. I have considered whether it imposes an unwarranted gloss on the language of the statute analogous to the error identified by the majority of this Court in Andrew v Andrew which concluded that the trial judge had erred by holding that it was "essential for the maintenance of the integrity of the process" that the Court acknowledge the entitlement of a deceased to make no provision for his or her estranged adult child (Allsop P at [46] quoting Andrew v Andrew [2011] NSWSC 115 at [149]; Basten JA at [54]; Bates v Cooke at [67] per Sackville AJA).
I adhere to the view I expressed in Slack v Rogan; Palffy v Rogan. To recognise that the court is not in as good a position as a capable testator to assess what maintenance or advancement in life is proper for an applicant having regard to all of a family's circumstances, including the relationships between the applicant and the deceased, and the merits and claims of other family members, is not to put a gloss on the statute. Rather, it is to acknowledge the superior position of the testator. The most important word in s 59(1)(c) is "proper". Until the court has identified what is proper maintenance, education and advancement in life for an applicant, it cannot assess whether the provision made, if any, is adequate. What is proper requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. Whilst the court will know the latter, it will only have an incomplete picture of the former. Of course, the court's assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application. That does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.
The observations of Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales (at 19) also need to be borne in mind:
" All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court. An observer of the course of development in the administration in Australia of such statutory provisions might be tempted to think that, unchecked, that is likely to become the practical result. Perhaps this Court and other Courts of Appeal have attached too much significance to the discretionary aspects of orders under appeal and have accordingly allowed orders to stand which no member of the Court of Appeal would himself have made, had he sat at first instance."
That observation has current significance. Applications are filed in the Supreme Court's Family Provision List at an average rate of about 80 per month. One commentator has criticised the apparent readiness of courts to vary the expressed will of the deceased by granting family provision claims (A Gray, "Family Provision Applications: A Critique" (2017) 91 ALJ 750).
Rosa's evidence (referred to at [35] above) was that her parents wanted her to be considered, that her father had said that Carmela would give her a little bit of money because she had spent so much money in repairing the house (viz. the Merrylands property), and she was just asking for a little bit of money. Rosa was appealing to the Court for money to make good what she asserted was her parents', or at least her father's, wish. The primary judge made no finding that such a wish had been expressed by the deceased or Rosa's father. It was clearly not their testamentary wish.
As noted above, the primary judge stated some general principles drawn from decided cases relevant to claims made by an adult child, whilst emphasising that such "principles" were not propositions of universal application or rigid formulae and were provided merely as useful guidance to be applied with circumspection (at [69] and [74]). However, the statement of these "principles" was presumably relevant to the primary judge's ultimate assessment. Relevantly to Rosa's claim, they included observations of Brereton J in Taylor v Farrugia [2009] NSWSC 801 (at [57] and [58]) as to the moral obligation or community expectation of a parent in respect of an adult child. Relevantly, the statement of general principle in Taylor v Farrugia included that:
"But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute."
The primary judge also said, relevantly to the present case, (at [69]) that:
"(e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker [1957] HCA 82, (1957) 97 CLR 566; Kleinig v Neal (No 2) at 545; Bondelmonte v Blanckensee [1989] WAR 305; Hawkins v Prestage (1989) 1 WAR 37 at [45] (Nicholson J).
(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 at [179]-[182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17]."
None of these statements of general principle addresses a case such as the present where the adult child who claims provision from the estate has already received by way of an early inheritance what would otherwise have been his or her share of the estate. The primary judge acknowledged the limitations on the principles he expressed, but when it came to the making of his determination, his central consideration was the financial need of Rosa and the fact that Carmela did not raise her financial circumstances as a countervailing claim on the estate. This was an error of principle that requires appellate intervention.
I do not consider that the challenges to the primary judge's findings as to Rosa's financial need have been made good. But, contrary to the view of the primary judge (at [134]) it does not follow that the provision made for Rosa was inadequate for her proper maintenance and advancement in life. Such a conclusion elevates Rosa's financial needs over what the deceased regarded as her moral obligation to her daughters. I do not know, and there is no means of discerning, what the "community's expectation" would be as to the deceased's moral obligation. I see no reason to conclude that the deceased did not act as a wise and just testatrix in weighing the competing claims of both her daughters on her estate, having regard to Rosa's early inheritance and the family's understanding as to the consequences of that early inheritance. Mr Tregenza submitted that the gift to Rosa more than 30 years ago had much less significance than an equivalent recent gift would have had. He submitted that the significance of the gift diminished over time. Whether that is so or not would depend upon the family's circumstances about which the deceased and her husband were in a superior position than the court to make a judgment. It may be that the Merrylands property was more valuable than the Greystanes property. Carmela deposed (without objection) that that was so, but she had no qualification to express that opinion. A wise and just testator might well consider that Carmela should not be disadvantaged because Rosa did not take financial advantage of the opportunity offered to her. That was evidently the view the deceased and her husband took in 2007 and which the deceased repeated in her will of 16 August 2010.
There appears to have been no significant deterioration in Rosa's financial circumstances after the deceased's death, or, for that matter, after she made her will. Rosa's financial circumstances were marked by increasing levels of debt as she embarked on unsuccessful investments or borrowed to service her lifestyle choices. Although the details of Rosa's financial circumstances undoubtedly changed up to the time of the hearing, it was not suggested that there was a change in kind rather than of degree.
The deceased's moral obligation to Carmela is not determinative (Vigolo v Bostin at [123] per Callinan and Heydon JJ). Rosa's competing claim based on financial need must still be evaluated. But giving the respect that I consider is due to the deceased's consideration of the competing claims of her daughters I do not think that Rosa has been given less than adequate provision for her proper maintenance and advancement in life, even though that provision is now effectively nil.
For these reasons I consider that the primary judge's evaluative assessment is liable to be reviewed and should be set aside. In my view, Rosa's application for a family provision order ought to have been dismissed.
I propose the following orders:
1. Appeal allowed.
2. Set aside the orders (a), (b) and (c) made on 21 December 2016.
3. In their place, order that the summons be dismissed.
4. Order that the respondent pay the appellant's costs of the appeal and the proceedings below.
5. Grant the respondent a certificate pursuant to the Suitors' Fund Act 1912 (NSW) in respect of the costs of the appeal.