Watts v The Public Trustee of Queensland

Succession Act 1981 (Qld), s 41

Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201

Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191

Hore v Perpetual Trustee Co Pty Ltd (unreported, NSWSC, 8 June 1995)

Hadley v McNamara re the Estate of Mary Anne McNamara (unreported, NSWSC, 7 December 2005)

Schaechtele v Schaechtele [2008] WASC 148

Official Solicitor for the Public Trustee of Queensland

[1] By an Originating Application filed on 18 November 2009, the applicant sought further provision from the Estate of Neta May Bruigom ("the testatrix") pursuant to the provisions of s 41 of the Succession Act 1981 (Qld).

[2] The applicant is the lawful daughter of the testatrix and was 62 years of age at the time of the testatrix' death. The testatrix was survived also by a son, Gordon Bruigom, who was 64 years of age at that time. They were the only beneficiaries of the estate. Their father had died in 2003.

[3] By her will dated 3 September 2008, the testatrix appointed the respondent as her executor and trustee of her will. She left her estate to be distributed equally between her two surviving children.

[4] The estate was a modest one, containing her home at Rockhampton valued at $475,000, and investment account of $105,000 and savings of approximately $900.

[5] The modest size of the estate resulted from the fact that much of the real property previously held by the testatrix and, before his death, her late husband, had been gifted to the applicant's brother Gordon. He was able with the further help of the testatrix to subdivide the land receiving what the applicant alleges to have been substantial profits. By contrast the applicant in this period received gifts of cash payments of approximately $100,000.

[6] The applicant, who has the benefit of tertiary education, works part-time as an accountant. She is not well placed financially. She has currently sufficient income and assets in reserve to get by on but she is worried that she does not have sufficient assets to maintain her standard of living after retirement. She is particularly concerned that despite having work consistently she does not own, nor have sufficient assets to acquire her own home. She is presently finalising property settlement proceedings with her former de facto partner.

[7] The applicant also meets a moral obligation to support an adult son who suffers bipolar disorder and to care for his child, who is currently eight years old.

[8] The applicant and her brother, being the sole beneficiaries under the will, have agreed on terms which are acceptable to their disposal of the application. They and the executor ask the Court to order that the will of the testatrix be varied by deleting the clause 7 of the will which provides for the beneficiaries to take equally the net proceeds of the estate and substituting therefore a new clause 7 in the following terms:-

(b) As to the remaining 25% of my estate, to GORDON CHARLES BRUIGOM."

[9] Section 41(1) of Succession Act provides:-

"(1) If any person (the deceased person) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person's spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant."

[10] Notwithstanding the parties' consent to this outcome, the Court can only make such orders if it has jurisdiction to act at all under the terms of the statute.

[11] This Court's jurisdiction to make an order will only arise if it is of the opinion that the disposition of the deceased's estate effected by her will is not such as to make adequate provision from her estate for the applicant. This is in accord with the approach to claims of this kind as determined by the High Court in Singer v Berghouse[1] and confirmed in Vigolo v Bostin[2] In the former case the High Court was dealing with the provisions of the New South Wales legislation which provide the equivalent relief to that under s 41 of the Succession Act (Qld). From the joint judgment of Mason CJ, Deane and McHugh JJ the following passage appears (at p 208):

"It is clear that, under these provisions, the Court is required to carry out a two stage process. The first stage calls for a determination of whether the applicant has been left without adequate provisions for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'. That description means no more than that the Court's power to make an order in favour of an application under s 7 is conditioned upon the Court being satisfied of the state of affairs predicated in s 9(2)(a)."

[12] Following this decision, the New South Wales Supreme Court in two unreported decisions in 1995 dealt with the question in circumstances where the parties had settled claims under the family provision legislation. In the first case Hore v Perpetual Trustee Co Pty Ltd (unreported, NSWSC, 8 June 1995) Windeyer J referred to the Court's jurisdiction in these terms:-

"Those provisions give the basis for exercise of jurisdiction by the court. Parties are absolutely entitled of course to make any rearrangement of the terms of the will they wish, if all beneficiaries are of age and absolutely entitled. That has nothing whatever to do with the jurisdiction under the relevant Act. Section 7 and s 9(2) raise jurisdictional questions. This has been described in various ways, sometimes making it appear discretionary but there is no doubt now that for the court to assume jurisdiction, the provisions of s 9(2) must be satisfied.

As the power to make orders is governed by s 9(2) and s 7, the court cannot by consent, assume a wider jurisdiction. Parties cannot by consent, confer power upon the court to make orders which the court lacks power to make."

[13] In the second case Hadley v McNamara re the Estate of Mary Anne McNamara (unreported, NSWSC, 7 December 2005) Young J pointed to the change wrought by the decision of the High Court, he said:-

"In former times the court used to look at these applications as if they were discretionary matters and seek to work out whether the court had jurisdiction. It is now clear that that is the wrong approach under the Family Provision Act and that if the parties agree to settle proceedings under the Family Provision Act, and there is no other interest involved, ordinarily the court should merely make the orders in accordance with the terms of settlement. There will, of course, be the odd exception where it clearly appears on the face of it that there is no jurisdiction in the sense that the plaintiff has no need of provision."

[14] The point was further considered by the Supreme Court in Western Australia in Schaechtele v Schaechtele[3] where Le Miere J considered (at para 18):-

"This Court cannot make an order giving effect to the proposed settlement unless the Court thinks that such provision should be made out of the estate of the deceased for the proper maintenance or support of the plaintiff. But that does not mean that the Court is in effect to hear the matter as if it were it a contested application and then to give or withhold orders to give effect to the settlement by comparing the settlement with the judgment which the Court would have given. The Court must give proper consideration to the evidence before it. The Court should be aware of the risks of litigation in an area in which reasonable people can reasonably reach different conclusions and give property weight to the fact that the parties wish to effect the settlement. If the Court is satisfied that the settlement falls within the bounds of a reasonable exercise of discretion then the Court should make orders to give effect to that settlement."

I respectfully agree with this approach to the question.

[15] Once the court is of the view that the jurisdictional question has been satisfied then the issue arises as to the effect of the parties' agreement. Obviously considerable weight must be given to the agreement of the parties. The inquiry thereafter is limited. The circumstances would be unusual indeed for the court to override the agreement of the parties who are of full age and where there is no evidence of undue influences at work in the reaching of the agreement.

[16] Having regard to the relativity of the applicant's financial position to that of her brother and to the history of benefits which her brother received from the testatrix and her husband during their lifetimes, I am satisfied that adequate provision has not been made for the proper maintenance and support of the applicant. The testatrix expressed the intention to treat the children equally. Looking at that treatment in a global sense including the inter vivos gifts, that object was not achieved. I am satisfied the Court has jurisdiction to make the orders sought. I am satisfied also that the settlement reached between the parties is an appropriate one and that the will ought to be varied in the manner proposed. I make the following orders:

1. Further provisions out of the estate of Neta May Bruigom (the "Deceased") for the Applicant be made such that the will of Neta May Bruigom ('the Deceased's Will') of 3 September 2008 be read and construed as if paragraph 7 of the Deceased's will read:-

(b) As to the remaining 25% of my estate, to GORDON CHARLES BRUIGOM."

2. Subject to the applicant complying with paragraph 3 herein, the distribution of the 75% share to the Applicant shall consist of real property situated at 2 Farm St, Kawana in the State of Queensland, being more particularly described as Lot 1 on TRP 606944, Parish of Murchison, County of Livingstone (the "Farm St property").

3. Within 30 days upon service of the order by the Respondent on the Applicant, and upon the Applicant paying to the Respondent the sum of $55,741.30, the Respondent shall transfer the Farm St property to the Applicant.

4. Upon the finalisation of the Deceased's estate, the Respondent shall determine the net value of the Deceased's estate, after payment of all administration costs and charges including all legal costs set out in paragraphs 6, 7 and 8 herein, and make any adjustments necessary to distribute the Deceased's estate as to 75% to the Applicant and 25% to Gordon Charles Bruigom. Any such adjustment shall be made by payment by the Respondent to the Applicant or by further payment by the Applicant to the Respondent within 14 days of any such notification by the Respondent to the Applicant.

5. If the transfer of the Farm St property is not effected in accordance with paragraph 3 herein, including circumstances where the Applicant does not pay the sum of $55,741.30 to the Respondent, then the Respondent shall sell the Farm St property on whatever the terms the Respondent considers appropriate and distribute the estate in accordance with paragraphs 1 and 4 herein.

6. Administration fees, charges and outlays of the Respondent are to be paid out of the estate.

7. The costs of the Respondent, including the costs of and incidental to the preparation and execution of the Settlement Deed are to be paid out of the estate on an indemnity basis.

8. The Applicant's legal costs in the sum of $12,800.00 (inclusive of GST and outlays) are to be paid out of the estate.

9. The parties shall be otherwise bound by the settlement deed as executed by the parties on 13 August, 2010.

[1] [1994] HCA 40; (1994) 181 CLR 201

[2] [2005] HCA 11; (2005) 221 CLR 191

[3] [2008] WASC 148