On 8 April 2016 Her Honour Justice McMillan of the Victorian Supreme Court handed down this judgment which is the first decided under the newly amended Part IV legislation.
The Deceased died on 10 January 2015 (meaning the new legislation applies) at age 69 and was survived by her three adult children, her husband having predeceased her.
The Deceased’s eldest son was the executor and trustee and the sole beneficiary of her estate according to her Will made in August 2014. In her Will, the Deceased provided an explanation as to why she had made no provision for her two other children (a daughter and a son) as follows: “I direct that I have not made any bequests to my children … as I have no meaningful relationship with them”.
The Deceased’s daughter issued proceedings under Part IV of the Administration and Probate Act 1958 as amended by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014. As a child of the deceased, she was classified as an eligible person under s 90A(1) of the Act and not required to satisfy any dependency requirements.
The Defendant executor conceded that the Deceased had a moral duty to provide for her daughter’s proper maintenance and support and that she failed to made adequate provision. Accordingly, the question left to be determined was quantum.
Her Honour stated that “the distinction between ‘adequate’ and ‘proper’ in the traditional authorities … still applies to the amending legislation as the word ‘adequate’ remains in ss 91(2)(d) and 91(4)(b) of the Act: the Court can only make an order for further provision in favour of the applicant where, inter alia, it is satisfied that the deceased failed to make adequate provision for them” and referred to the judgment of Lord Romer in Bosch v Perpetual Trustee Co Ltd.
The test remains one of moral duty.
Whilst Her Honour acknowledged with applications made after 20 July 1998, the Court may accept evidence for not making proper provision whether or not the evidence is in writing, it is not intended that such evidence will take on a higher status and evidence can be adduced to show that the reasons given by the Deceased were incorrect or misconceived.
Her Honour summarised the factors to be taken into account when making an order under s 91A(2) and determining quantum under s 91(4) and (5) of the Act.
This case serves as an important warning in relation to one’s financial position, which will be before the Court in cases such as these. The Defendant adduced evidence that he was separated from his wife whilst living under one roof, sharing parenting of their three children (aged 18 months, 9 years and 14 years) and but that he did not contribute to the financial upkeep of their children. His wife’s financial position was not disclosed, but evidence was adduced that she had received a sole parent pension for 10 years (the Defendant denied any knowledge of this). Her Honour commented that the fact his wife had been receiving the sole parent pension for 10 years when two of their children were born within that 10 year period suggests that the Centrelink assessment may have been made on incorrect information. Evidence was also given at trial that the Defendant had received an income working as a plasterer between 2013 to 2015 for which he had been paid cash and was not deposed to when stating his gross income. Accordingly, the Defendant was found not to be a credible witness and Her Honour referred the reasons for the judgment to the Deputy Commissioner of Taxation, the ATO and the Minister of the Department of Human Services to review the Defendant’s affairs.
The evidence adduced in relation to the Plaintiff daughter’s case related to issues such as: the whole estate of the children’s father passed to the Deceased by survivorship; the Deceased was cared for by her daughter during her illness with cancer; there was a dispute as to the extent of the relationship; and there was a dispute as the amount expended on funeral and mausoleum costs of both the Deceased and her late husband (the children’s father) and upkeep of the Deceased’s property including bills and rates.
Her Honour stated that “[t]he Court’s function is not to ensure a fair distribution of the testator’s estate or to achieve equality amongst various claimants”: Re Hodgson (dec’d) (1955) VLR 481; “[t]he Court’s role goes no further than making adequate provision for the proper maintenance and support of an applicant”.
An additional issue concerning executor’s commission was raised however Her Honour determined that the proper time to deal with such claim would be when the administration of the estate had been finalised. However, Her Honour commented that the executor’s claim would unlikely be significant as it was primarily based upon resisting two Part IV claims and the costs claimed by the executor’s solicitor suggested that most of the work had been done by them, not the executor personally.
The net value of the estate was said to be $356,763 (bearing in mind that expenses were disputed – see below), with the major asset of the estate being the Deceased’s home worth an estimated $775,000 and an insurance claim of $22,093.
The legal costs claimed were $146,539.68 (of which $4,894.30 had been paid). Her Honour appeared not to be satisfied with the level of detail provided in that the Affidavit filed setting out the legal costs and no costs agreement were tendered. Importantly, Her Honour noted that the costs did not appear to attempt to ensure that the costs are reasonable and proportionate to the issues in dispute.
Ultimately Her Honour was satisfied that the Plaintiff daughter shared a close, loving and meaningful relationship with her Deceased mother despite some difficulties (contrary to what was stated in the Will). An order was made that provision be made for the Plaintiff daughter out of the Estate of the Deceased in the sum of $170,000 and the Plaintiff daughter was entitled to have her costs paid out of the Estate.