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[2019] ACTSC 2
Supreme Court of the ACT
2019-01-29
McWilliam AsJ
Original judgment source is linked above.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
FAMILY PROVISION - whether extension of time should be granted - where 19-month delay - whether adequate provision for the proper maintenance, education or advancement in the plaintiff's life is available under the will - where the circumstances include a modest estate, the testator's apparent intention was for equality among beneficiaries, and the plaintiff receiving an extra $10,000 under the will - claim dismissed
WILLS - whether executors paid the plaintiff her full entitlement in accordance with the contents of the will - where executors entered into subsequent agreement with plaintiff as to specific amount - whether amount equates to entitlement under the will - application allowed
Bankruptcy Act 1966 (Cth) ss 5, 58, 77
Family Provision Act 1969 (ACT) ss 7, 8, 9
In the Estate of Southwell [2017] ACTSC 154
Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306
Re Guskett [1947] VicLawRp 28; [1947] VLR 212
Roberts v Stern [2017] ACTSC 182
Sgro v Thompson [2017] NSWCA 326
Slack v Rogan [2013] BSWSC 522; [2013] NSWSC 522; 85 NSWLR 253
Smith v Public Trustee of the Australian Capital Territory [2012] ACTSC 4; 6 ACTLR 126
Kerry Anne Staite and Mark Edward Southwell as executors of the estate of the late Shirley Southwell (Defendants)
1. This proceeding concerns the estate of the late Shirley Southwell (deceased), who died on 8 June 2014, leaving a will executed on 5 December 2008 (Will).
2. The plaintiff is one of the daughters of the deceased. The defendants, Ms Kerry Staite and Mr Mark Southwell, are two of her siblings who were appointed executors of the Will, and probate was granted to them on 25 September 2014. The deceased had five children in total, the other two being estranged from her for many years, including prior to the execution of the Will.
3. The plaintiff's complaints relate to Clause 3 of the Will. It relevantly provides:
I GIVE the whole of my estate to my Trustee on trust equally for those of my children MARK EDWARD SOUTHWELL (MARK), KERRY ANNE STAITE (KERRY) and KRISTI JACQUELINE SOUTHWELL (KRISTI) who survive me but if one of my children dies before me...
4. The remainder of the clause is immaterial as all three of the deceased's named beneficiaries survived her. Under the Will, the plaintiff also had the option to purchase the primary asset of the estate, the deceased's home in Kambah at market value. This was where she was living at the time the deceased died. The plaintiff did not avail herself of that option, and the Kambah property (Property) was sold on 14 March 2016 for approximately $420,000.
5. As will be seen, the sale of the Property brought the total asset pool to $452,251.81 (as calculated below) before disbursements and legal expenses. The size of the estate is thus modest.
6. The estate has also largely been distributed. On 11 May 2016, the defendants paid $60,000 to the plaintiff. They did this out of personal funds, and pursuant to an agreement that is now disputed in this proceeding, because the plaintiff was at the time unable to afford to move out of the Property without financial assistance.
7. The plaintiff commenced the proceeding in this Court on 20 October 2016. After the plaintiff commenced this proceeding, the defendants made a distribution of $164,500 each to themselves on 18 April 2017, and a further $19,412.45 each to themselves on 20 July 2017. The purpose for each of these distributions was described as "Beneficiary under the Will and/or reimbursement of expenses." Part of that reimbursement is the $60,000 the executors paid to the plaintiff in advance.
8. Ms Staite had also withdrawn $5000 from the deceased's bank account after she died and before probate had been granted (which I have found below was intermeddling and to be treated as part of the distribution to the second defendant). Accordingly, as at the hearing, a total of $432,824.90 has been distributed.
9. The plaintiff proceeded to hearing on a Further Amended Application filed 10 November 2017. The plaintiff has two main complaints:
(a) She has not been paid her one third share of the residue under the Will; and
(b) Due to her financially straitened circumstances, she requires further provision out of the deceased's estate than the one third share gifted to her in the Will.
10. As to the first matter, the plaintiff seeks an order pursuant to s 57 of the Administration and Probate Act 1929 (ACT) (Administration Act) that the Will be administered according to the contents thereof by the defendants.
11. Section 57(c) of the Administration Act is the material paragraph on which the plaintiff relies. It provides, in summary, that if an executor, after written request, neglects or refuses to pay or hand over to the person entitled any legacy or residuary bequest, the person may apply to the Supreme Court, calling on the executor to show cause why he or she should not comply with the request, and this Court may make any order in the matter it considers appropriate.
12. As to the second matter, the plaintiff seeks an order pursuant to s 8 of the Family Provision Act 1969 (ACT) (FP Act) for family provision out of the deceased's estate. The plaintiff requires, and has sought, an extension of time in which to bring such an application (pursuant to s 9 of the FP Act), because the application is made more than 6 months after probate was granted to the defendants in respect of the Will.
13. In addition, the plaintiff seeks an order that a signed document titled "Acknowledgement of Acceptance of Terms of Offer" (the terms of which are set out below) be set aside.
14. The defendants say that they need not comply with s 57(c) of the Administration Act, because the plaintiff agreed to limit her claim in terms of an offer which they put to her, and which she accepted. The defendants rely on the terms of the offer as set out in the "Acknowledgement and Acceptance of Terms of Offer" and submit that she has settled her entitlement under the Will. They say that at the time they made the agreement with the plaintiff, the payment to be made to her under it equated broadly to a third share of the estate.
15. In relation to the claim under the FP Act, the defendants submit that the plaintiff commenced proceedings in this Court 19 months out of time, with such a lengthy delay favouring the dismissal of any application to extend the time in which to bring such a claim. The defendants further submit that the prospects of the application succeeding are slim, that there was no satisfactory explanation for the delay, and that there is prejudice to the defendants, given more time and money has now been spent on this proceeding.
16. It will be apparent from the plaintiff's claims and the defendants' response to them that the following issues arise for determination:
(a) The effect of any agreement by the plaintiff to accept an offer made by the defendants;
(b) Whether the plaintiff has received her share of the residuary bequest as set out in the Will;
(c) Whether the plaintiff ought to be granted an extension of time in which to bring a claim for family provision;
(d) Whether family provision ought to be made for the plaintiff out of the deceased's estate; and
(e) Costs of this proceeding.
17. There was a further issue discussed during the hearing, which was the fact that the plaintiff was an undischarged bankrupt at the time the Acknowledgement was signed. It has been considered as part of the first issue listed above.
18. Each of the plaintiff and the two defendants gave affidavit evidence in the proceedings and were cross-examined. Their evidence is discussed in more detail in relation to the family provision aspect of the proceeding.
19. The plaintiff also relied upon two further affidavits. The first was affirmed by Ms Kim Mesman, the plaintiff's other sister, who was estranged from the deceased. The second was affirmed by Mr Carl Bargas, the plaintiff's former de facto partner. Neither were required for cross-examination.
20. In addition to their affidavits, the defendants relied upon the affidavit evidence of Mr Basem Seif, the solicitor for the defendants, largely documenting the history of correspondence that have passed between the parties and the expenses of the estate. He was briefly cross-examined and I have accepted his evidence.
21. Aside from the Will, the key documentary evidence relevant to the issues in dispute was the defendants' alleged settlement offer which the plaintiff is said to have accepted, discussed in detail below.
The alleged agreement to settle the plaintiff's entitlement
22. It must first be determined whether an agreement was made. On 23 December 2015, the defendants' legal representatives sent a letter to the plaintiff. It stated (emphasis in original):
We are instructed by the executors of the estate, your brother and sister, that you have agreed to the below offer with respect to vacating the property and settling your entitlements in the estate.
The terms of the offer are:
Please see and sign the enclosed acknowledgement of the above offer and return it to us as soon as possible.
Upon receiving your agreement to the proposal we can prepare the necessary deed and have the funds made available to our trust account within a week. The funds will then be paid to you upon signing of the deed.
23. Although that letter refers to a 'deed', there was no deed in evidence, nor any suggestion that there was an additional document created by the parties. I have inferred that the reference was meant to be to the document that was enclosed with the letter, described here as the Acknowledgement.
24. There was a signed "Acknowledgement of Acceptance of Terms of Offer" in evidence, which the defendants' solicitor says was received by their office on 26 February 2016. It states (emphasis in original):
I Kristi Southwell of ...Kambah...hereby acknowledge receipt of an offer of settlement dated 23 December 2015 received from Symons Phillips Lawyers.
I further acknowledge my acceptance of the terms of that offer in the following terms:
25. The initials KS were then signed. The plaintiff has received the $60,000, but not the further $10,000 once the Property was sold.
26. There was some resistance by the plaintiff to that document bearing her signature. In the witness box, she denied that the document was signed by her. However, I reject that evidence. Both the executors testified to recognising the signed initials as the handwriting of their sister. There were signatures of the plaintiff in evidence but none were of the initials only. I consider it at least open to the Court to draw the inference from the face of the document that the signature is either hers, or signed on with her authority. There was no expert evidence on the point, although there was no suggestion of any forgery by anyone else. The plaintiff was unable to offer any explanation as to who signed the document if it was not her.
27. More significantly, the plaintiff was the only person to benefit from signing the document. The plaintiff agreed that she received the letter of offer to which the Acknowledgement referred, and 'vaguely' remembered reading the Acknowledgement that was attached to that letter of offer. Furthermore, she admitted that she attended the offices of the solicitors for the executor defendants and that she signed for two cheques for amounts of $30,000 (with that signature also in evidence and plainly matching the signatures on her affidavit), and further that she received and later cashed the cheques. Given that such cheques were only to be paid to the plaintiff after she signed the Acknowledgement, the evidence points strongly to the finding that, on the balance of probabilities, the plaintiff was the person who signed the document.
28. On one view, it is not necessary to make such a finding. The plaintiff's conduct just described is consistent with the plaintiff's acceptance of the offer in the terms recorded in the letter and that is the critical point. An agreement can be evidenced in writing, or by conduct, or both. The opening words of the letter were: "We are instructed by the executors of the estate, your brother and sister, that you have agreed to the below offer...". Taking those words at face value, the letter merely reflects an apparently oral agreement already made between the parties, and the plaintiff's conduct in attending to receive payment accords with that agreement. In that event, it is of perhaps less importance whether the plaintiff subsequently confirmed the agreement by signing her initials on the Acknowledgement or not.
29. However, the letter is ambiguous, because the words of the Acknowledgement then refer to the offer having been made by the letter of the defendants' solicitors. The letter of offer also refers to the money only being paid 'upon the signing of the deed'.
30. Whether one relies upon the plaintiff's conduct in accepting and cashing the two cheques totalling $60,000 or the signed Acknowledgement, in all the circumstances it is clear on the evidence that there was an agreement by the plaintiff to the terms of the offer that are recorded in the letter of 23 December 2015.
31. The plaintiff argued that she did not have legal capacity to make any agreement with regard to the benefit to be paid to her under the Will, because at the time, she was an undischarged bankrupt. She had entered into bankruptcy on 13 November 2013.
32. I was taken to no authority to support the proposition that because the plaintiff was an undischarged bankrupt, she was in some way prohibited from making an agreement with the executors in relation to payment of an entitlement to her under a will.
33. It was suggested that s 58 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) founded such a submission. That section is in the following material terms (emphasis added):
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) The property of the bankrupt, not being afteracquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b) afteracquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
(2) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.
(3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
(4) After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.
(5) Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.
(6) In this section, afteracquired property, in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt.
34. Section 58(5A) concerns maintenance agreements or orders and is immaterial here.
35. On the plain words of the above section, the payment of money to the plaintiff was 'after-acquired property' as defined in s 58(6). As such, once the plaintiff received the $60,000, the payment vested in the trustee in bankruptcy pursuant to s 58(1)(b).
36. The plaintiff relied upon Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306 (Schultz) and I accept that the right to due administration of the Will also vested in the Official Trustee (trustee) as soon as it vested in the plaintiff, since it was clearly "property" as defined in s 5(1) of the Bankruptcy Act: see Schultz at 314.
37. However, there does not appear to be anything in s 58 of the Bankruptcy Act requiring the trustee to authorise or approve how a legacy is to be paid under a Will, or more importantly depriving the plaintiff of legal capacity to make an agreement with the executors about the receipt of money.
38. The position under the Bankruptcy Act is simply that when the plaintiff received the amount owing to her under the Will, it automatically became the property of the trustee to be paid over to creditors. Section 77(1)(f) of the Bankruptcy Act is consistent with that construction, imposing an obligation of discovery on the bankrupt to inform the trustee as soon as property is acquired by her before her discharge, being property divisible among her creditors.
39. Whether or not the trustee actually received the money in the present case and whether the trustee may pursue remedies against either the plaintiff or the defendants is not the present concern of this Court. The agreement as between the plaintiff and the defendants continues to have legal effect, subject perhaps to the following matter.
40. The defendants contended that the agreement limited any entitlement under the Will. To that extent, it may be that the plaintiff was making an agreement to give up money that could have been used to pay her creditors. The plaintiff argues that she did not accept the sum of $60,000 (and presumably the extra $10,000 yet to be paid) in lieu of her entitlement under the Will, but rather as an interim distribution.
41. The modest nature of the estate renders it unnecessary to deal with that argument because, as seen from the reasons that follow, a one third share of the residue is unlikely to exceed $70,000.
42. The result is that there is no basis established to set aside the agreement. The corollary of that finding is that the agreement must be carried out. To date, the executors are in breach of that agreement in failing to pay the additional $10,000. It may also be that if the copper plaque has been retained by the plaintiff, she must return it in accordance with the agreement, unless the executors now agree otherwise.
Whether the plaintiff has received her entitlement under the Will
43. In order to determine whether the plaintiff has been paid her entitlement in accordance with clause 3 of the Will, it is necessary to work out the quantum of the residue of the estate.
44. The proceeding was adjourned part-heard because owing to the size of the estate in dispute, it was critical to know the value of the residue. Further, the evidence as to the costs of the proceedings for the parties was not before the Court. The parties subsequently filed evidence and made brief submissions about amounts that should or should not be included in the value and residue of the estate. I make the following findings.
45. The assets arising from the sale of the Property and bank accounts were $447,251.81. That amount was agreed.
46. After the death of the deceased, Ms Staite withdrew from the deceased's bank account amounts of $1000 on each of 10-13 June 2016 and a further amount of $1000 on 26 June 2014 - a total of $5000. She said this was a repayment of a 'loan' she had made to the deceased during her lifetime, or reimbursement of expenses. However, there was insufficient evidence to establish that either was the case. Such monies may well have been properly characterised as a gift to the deceased if they were indeed spent on specific items for the deceased. There was no evidence of the precise nature of the expenses or loan, when they were paid or on what terms such monies were to be repaid. Ms Staite gave a summary of a conversation with her mother, in general terms and with no specific time reference, to the effect that her mother indicated that she would repay Ms Staite $5,000 in consideration for the moneys she had expended on her mother's behalf. I have doubts about whether a conversation in those terms occurred, but in any event the vague nature of the evidence is of such little weight that I consider it insufficient to establish any legal entitlement to such sum.
47. Bearing in mind the family relationship of mother and daughter, I am not satisfied on the scant evidence before the Court that there was any intention to create legal relations in respect of that $5000 sum, such that Ms Staite was entitled to be repaid it out of the estate as if she were a creditor of the deceased. The legal consequence of that finding is that Ms Staite has intermeddled with the estate and must be personally liable for that sum. Given the present state of affairs and the fact that distributions have been made, I have included the sum as part of the assets and the payment to Ms Staite will be deemed as a distribution.
48. That increases the total gross liquid asset pool (that is, excluding furniture which is considered separately) to $452,251.81.
49. There was ultimately no dispute that the disbursements (excluding estate legal fees) amounted to $103,851.62. The subsequent filing of a proper affidavit as to the accounts has removed amounts that were initially disputed by the plaintiff.
50. Under the agreement, the plaintiff was entitled to keep whatever household items she chose, apart from a copper plaque. There was at one stage during the hearing an estimate of the copper plaque having an $8000 value. However, the updated evidence filed by the executors does not include any household items of any particular value as part of the estate assets and I am not satisfied on the bare assertion of a party that the copper plaque was of such value as to warrant it being taken into account in that manner. Given that there is not now any intention to value any household items for the purpose of having them included in the value of the estate, I have not included the monetary value of any furniture as part of the residue to be distributed among the parties.
51. The legal costs for the estate have to date amounted to $72,342.77. There was an estimated further $19,900 for the cost of filing an affidavit of accounts which was filed after the hearing was adjourned and for preparation and appearance fees at the conclusion of the hearing, although I note that such estimates appear to be on the basis of a day hearing, rather than the one hour that was specifically allocated.
52. The plaintiff argued that $4,271.10 of those fees was for an unsuccessful application to the ACT Civil and Administrative Tribunal, seeking to have the plaintiff evicted from the Property when she was not a tenant and the Tribunal did not therefore have jurisdiction. While it does appear that the entire application to the Tribunal was misconceived, the plaintiff did not plead any impropriety in the Claim before the Court and I do not consider it appropriate to embark upon an enquiry as to the reasonableness or otherwise of the payment of those costs by the executors to their solicitors.
53. The defendants argued that a previous costs order made by Burns J against the plaintiff should also be taken out of the plaintiff's entitlement. However, those costs are yet to be assessed and as the plaintiff points out, they are not yet due and payable until the conclusion of these proceedings, nor has a bill of costs been received by the plaintiff. Further, the amount of the estate's legal costs for the application before Burns J has already been included as part of the estate's paid legal costs. If the estate does not have to pay those costs, then that increases the monetary value for division among the three beneficiaries. Depriving the plaintiff of any additional amount would only result in double counting for the purposes of assessing the available residue.
54. The plaintiff sought to revisit the costs order made by Burns J during the substantive hearing, however I saw no basis for vacating the order which was the product of a reasoned decision by his Honour that was not affected by the issues now being ventilated: see In the Estate of Southwell [2017] ACTSC 154.
55. It is relevant to consider the plaintiff's own legal costs. If she is successful in this proceeding, she would ordinarily be entitled to her costs being paid by the estate (apart from those costs attributable to the application to amend). The plaintiff's costs on a solicitor client basis were said to be approximately $58,000. However, this included costs of approximately $12,000 for which the estate is not liable, being the costs of the application before Burns J. The costs of the plaintiff on the ordinary basis may be in the order of approximately $36,000 inclusive of counsel's fees and GST, although this figure is in no way to be taken as any fetter on the parties in agreeing costs or on the discretion of any subsequent costs assessment, particularly as it is based on assertions in an affidavit by the plaintiff's solicitor, rather than with the benefit of any detailed review of a bill of costs.
56. Doing the best I can to draw these figures together, and assuming the plaintiff's legal costs of this proceeding were to come out of the estate, there is likely to be a further reduction in the estate of approximately $130,000 to $135,000 attributable to legal fees. As part of that sum, I have made allowance for the estate not having to pay its costs of the application before Burns J and a further $5,000 for each of the parties, as further work will be necessary upon the delivery of this judgment in the parties finally resolving the costs.
57. With the assets amounting to $452,251.81, the disbursements amounting to $103,851.62 and joint recoverable legal fees of approximately $135,000, the available residue for distribution to each of the parties is likely to be no more than $213,400, and depending on the final legal fees, it could be slightly less. A one third share of that figure is similarly no more than $71,133.
58. In the absence of these proceedings, the amount payable to the plaintiff in accordance with the terms of the Will would have been more than she has presently received and it would have been necessary to determine whether the agreement to pay the plaintiff $70,000 operated to limit her entitlement.
59. As it has transpired however, the $70,000 agreement does appear to closely correlate with what will transpire to be the plaintiff's entitlement in accordance with the terms of the Will. The defendants have not yet paid the extra $10,000 to the plaintiff. Whether the payment is to be made pursuant to the legally enforceable agreement or pursuant to the plaintiff's entitlement under the Will, it is appropriate to order that the defendants pay a further $10,000 to the plaintiff.
The claim for family provision out of the estate
Whether an extension of time ought be granted
60. The plaintiff sought an extension of time in which to commence proceedings. The power to extend time under s 9(2) of the FP Act is discretionary. The applicant bears the onus of showing sufficient cause for an extension of time to be granted: Roberts v Stern [2017] ACTSC 182 at [12]. It is necessary to satisfy the Court that the circumstances are such as to make it unjust for her to be penalised for being out of time. Moreover, as she is seeking an indulgence, the application for an extension of time should be made promptly: Re Guskett [1947] VicLawRp 28; [1947] VLR 212 at 214 per Herring CJ.
61. While the discretion is unfettered, it is to be exercised judicially. Considerations for the Court to weigh in the balance are likely to include the sufficiency of the explanation for the delay, the strength of the case if an extension of time were granted, and any prejudice to other beneficiaries which might arise from the delay: Smith v Public Trustee of the Australian Capital Territory [2012] ACTSC 4; 6 ACTLR 126 at [16].
62. The plaintiff first filed an originating application seeking an extension of time on 20 October 2016. If an extension of time is granted, it is required from the date 6 months after the grant of probate on 25 September 2014, namely from 25 March 2015, until the date of commencement of proceedings. I accept that is a delay of 19 months. The application was certainly not made promptly, and the delay is lengthy.
63. The plaintiff's explanation for the delay appears to have been based on an emotional state of severe stress and a general inability to cope. She did not obtain legal advice until late 2016. However, the evidence as to any proper or satisfactory explanation was somewhat lacking.
64. I do not consider the defendants have suffered any prejudice particularly as they caused distributions to be made after they were on notice that this proceeding and an application for family provision had been commenced. The fact that they have had to defend proceedings is not a prejudice relevant to the exercise of the Court's discretion to extend time.
65. The plaintiff is plainly an eligible person under the FP Act. Her evidence was that she is suffering hardship and she was living with the deceased at the time the deceased died. With the family home now being sold, her financial position has deteriorated due to a lack of accommodation. I accept the claim under the FP Act is an arguable one. Whether it is sufficient to make it unjust for her to be penalised for being out of time is of fine balance, but given that full argument was heard on this aspect of the claim, I have decided that it is appropriate to extend the time in which to bring the application and to deal with the question of its merit on a substantive basis rather than on a threshold or summary basis.
Whether in all the circumstances, adequate provision is available under the Will
66. The Court may only make an order for provision out of the estate if satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant is not available under the Will: s 8(2) of the FP Act.
67. That assessment is to be made having regard to the considerations in s 8(3) of the FP Act. I have read those criteria against the affidavit evidence of the parties. The main criterion relied upon by the plaintiff is that she is in financially straitened circumstances. She has two daughters, although one is over 18 and neither daughter lives with the plaintiff. I accept that the plaintiff is in a poor financial position and that her prospects for advancement are limited. I also accept that the defendants have not made a competing financial claim on the estate.
68. However, that does not mean that their entitlements under the Will are to be disregarded. The fact that one sibling is in a worse financial position than the other two beneficiaries is not determinative when the Court is considering whether in all the circumstances adequate provision was made under the Will. It is but one factor.
69. The testator's intention is also a relevant factor. In Sgro v Thompson [2017] NSWCA 326, White JA stated at [86] (adhering to reasoning in his Honour's earlier decision in Slack v Rogan [2013] NSWSC 522; 85 NSWLR 253):
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 [the equivalent NSW provision] 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. ...
70. The testator's clear intention by the terms of the Will was that the three children with whom she was still in contact were to benefit equally. The testator knew that the plaintiff was in a poor financial position when she died. The plaintiff has been in that position for a number of years. She had been living with her mother since 1988 and had taken on a formal carer's role for her mother in 2009. Yet the deceased did not make any greater provision for the plaintiff either under the Will or through later amendment. What the deceased did do in her Will was to allow the plaintiff the opportunity to purchase the family home if she was able to do so. However, even then, the deceased's intention was that it would be purchased at market value. The clear inference to be drawn is that the deceased was trying to be equal and fair to each of the three beneficiaries.
71. Further, the plaintiff's evidence was equivocal on the claim for family provision. Her affidavit sworn 20 February 2017 indicated that she no longer wished to pursue the claim. Yet the claim was pressed in closing submissions. At its highest, the plaintiff's counsel indicated that the plaintiff was seeking an extra $20,000 by way of family provision. This was no doubt in recognition of the size of the estate but when such small amounts are involved, it does suggest an element of tinkering with the terms of the Will rather than any particular inadequacy. That submission was also premised on the plaintiff not receiving the extra $10,000 to which I have found she is entitled.
72. The defendants faintly raised an argument about the plaintiff having the benefit of living in the Property for two years and suggested an occupation fee might be payable. However, the defendants did not raise that by way of any defence, and led no evidence to support the submission. In particular, there was no evidence that the defendants had been deliberately shut out of or excluded from living in the Property. Without more, I do not accept it is an argument that would defeat the plaintiff's claims in these proceedings, either at law or on the facts before the Court.
73. The fact that the plaintiff lived with the deceased for years before she died is a factor that I consider to be relevant. There was evidence that the plaintiff cared for the deceased and contributed financially to the household, but there was also evidence that the deceased cared for the plaintiff and for the defendants through giving them money. When their father died, money given to the parties was used to pay down the mortgage over the Property and Ms Staite was dealing with the deceased's financial affairs before she died, which in itself is a contribution to the welfare of the deceased. In total, the evidence does not establish that the plaintiff's individual contribution to the welfare of the deceased during her lifetime was of such significance as to warrant a finding that it has gone unrecognised so that there ought to be some adjustment in the circumstances.
74. I have had particular regard to the modest size of the estate (being the financial resources of the deceased). The circumstances of the beneficiaries are that each is a child of the deceased, where the intention of the deceased under the Will was that each of those children benefit equally. Having read the evidence, I do not consider that any child has contributed to a greater or lesser extent to the welfare of the deceased while she was alive. I note the plaintiff's poor financial circumstances will be improved in some small way by the findings of the Court above, a matter of which I can take account because the circumstances the Court considers are "as at the date of the order" (s 8(2) of the FP Act).
75. In all of those circumstances, I am not satisfied that provision under the Will for the plaintiff's proper advancement, education or maintenance was inadequate. Accordingly, I must decline to make any order under the FP Act.
76. The plaintiff has been partially successful. She was not successful in respect of the claim for family provision, however that issue occupied substantially less hearing time and it was not a clearly severable issue either in terms of the written or oral evidence, or the submissions. Accordingly, I consider that costs ought to follow the event unless there are matters presently outside the knowledge of the Court that either party wishes to raise.
77. I will stay the costs order for 7 days. Any party wishing to apply for an alternative costs order must do so through notifying my associate within that time.
78. For the above reasons, I make the following orders:
1. The defendants are to pay the plaintiff a further $10,000.
2. Pursuant to s 9(2) of the Family Provision Act 1969 (ACT), the time for the plaintiff to apply for provision out of the estate of the late Shirley Southwell is extended to 20 October 2018.
4. The defendants are to pay the plaintiff's costs on the ordinary basis.
I certify that the preceding seventy-eight [78] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam.
Southwell
Staite [2019] ACTSC 2
(1990) 170 CLR 306