TESTATOR’S FAMILY MAINTENANCE CLAIMS IN TASMANIA

Testator’s Family Maintenance Claims in Tasmania

Introduction

1. This topic seems to engender an endless fascination. There have been two previous papers given to Young Lawyers, that by Mr (now Justice) Robert Pearce in 2010 and that by Mr Philip Welch a couple of years ago.

2. It seems pointless to repeat their work when their papers are still relevant and available, and so I will just exhort you to read those and only outline the basics of the claim and provide some additional resources and recent cases, as well as some thoughts on the approach to the prosecution or defense of a claim.

3. These areas are coming to prominence, particularly because:

(a) We have an aging society;

(b) Relationship break up and re-partnering has become so much more common.

4. The oldest of the baby boomers are well into retirement. What is almost becoming the classic TFM Application is a contest between the children of the first relationship and the second female partner who is much younger than the deceased Testator and has outlived him. It is regrettable that so many family relationships end in this way, and the only consolation is that for every dispute we litigate, there are many many hundreds more where the parties have been able to successfully integrate.

Tasmanian Law

5. The first thing that must be noted is the danger of utilising decisions from other States directly as authorities in applying the Testator’s Family Maintenance Act 1912 (“TFM Act”) of Tasmania. The legislation in other States differs, sometimes markedly.1 I warn against automatic and unthinking application of mainland decisions to our Act. I also emphasise that most of the cases in TFM matters are uniquely tuned to their own facts. Furthermore, in appellate decisions it can be dangerous to look at the facts and the result and assume that militates against your case. For instance in the important High Court decision of Singer v Berghouse [1994] HCA 40 the majority in the High Court (of 3 in a 3/2 decision) only refrain from upsetting the decision at first instance and in the Court of Appeal because it was a discretionary decision and, while sympathetic to the position of the Appellant, they found themselves unable to say that it was so wrong that no reasonable tribunal properly applying the law could have possibly come to that decision. Similarly beware of decisions governed by defects in the presentation of the case. In Dodge v Blissendon [2009] TASSC 16 (18 December 2009) Chief Justice Blow dismissed the application, but specifically because insufficient evidence had been put before him. 
  
There is no substitute for a thoughtful and analytical reading of the Act supplemented by a reading of the texts and applicable cases. 

Social Purpose

6. Most legal systems, for example Roman and Scots law set aside a proportion of the Estate that cannot be willed away from the family. Mediaeval England was no exception, but the protection of the law then given to widows and children gradually disappeared under the influence of individualism.  

7. By 1646, all children could be deprived of land inheritance. Widows were protected by the law of dower and widowers by courtesy, but these were abolished in the 19th century. “The notion of total testamentary freedom was a construct of the 19th century, an offshoot of the style of English laissez-faire liberalism that was fashionable at the time. However, it was recognized late in the 19th century that testamentary freedom of this type allowed some testators to ignore their responsibilities to close family, particularly spouses and children. This was a problem in the then newly developing, but wealthy, dominions of Australia, New Zealand and Canada, and was fanned by an indignant press which reported several notorious cases of wealthy men dying and leaving their widows and children unprovided for).2 

8. The lack of restriction enabled testators to benefit strangers at the expense of their family. While Tasmania seems to have been the first jurisdiction to bring in an Act for the maintenance of deserted wives and children (8 Will IV, No. 9, 1837) New Zealand seems to have been the first to bring in a form of Testator’s Family Maintenance legislation. An 1877 Act enabled so called “illegitimate” children to apply for maintenance out of the estate of deceased parents. In 1900 this was broadened by the passing of that country’s Testator’s Family Maintenance Act which is a model for our Tasmanian Act. It was a private member’s bill, introduced by a Mr Robert McNab who argued that “a man was obliged to maintain his wife and children in his lifetime, and the object of the Bill, is to do for them after a testator’s death what the Destitute Persons Act did in his lifetime”.3

9. So the rationale of the legislation was the moral duty to maintain and provide for family members. There has been some suggestion that it was to prevent people from being a burden on the State, but this seems on the balance of the evidence to be incorrect. ‘The Courts are not empowered merely to make such provisions for an Applicant as would rescue the Applicant from destitution. The legislative power is to make “proper” provision. (Vigolo v Boston (2005) 221 CLR 191, at 191-200) (Gleeson CJ).

10. Accordingly, the legislation is remedial and entitled to the well known beneficial interpretation.  

Who Can Make a Claim?

11. Eligible claimants are listed in S.3A and are:

(a) A spouse;4
(b) A child; 5
(c) Only if there is no spouse or children, a parent; 
(d) A former spouse entitled to receive maintenance from the deceased on death.

When is an Application to be made?

12. S.11 limits the time for an Application to 3 months from the date of grant of probate of the Will or the grant of letters of administration.

13. The Court may grant an extension of time, but although there is no temporal limit, if any part of the Estate has been distributed before the Application, it cannot be “clawed back”. 6 Extensions are granted on the same basis as in other areas of the law, i.e. an unfettered discretion bearing in mind the reason for the length of the delay, whether there is an arguable case on the merits, and whether the extension would significantly prejudice the respondent. (See for example De Compo v Dawson [2015] WASC 233).

Why is a Claim Granted?

14. The answer to this query is disarmingly simple. It is because an Applicant is “left without adequate provision for his or her proper maintenance and support”. However, like most apparently simple legal issues, these simple words are the wellspring of so many cases and so much uncertainty and doubt. Like the criterion for the quantum of the award, which is “such provision as the Court or Judge having regard to all the circumstances of the case thinks proper”, a broad discretion is conferred with a very generous ambit which has given rise to what has been called in other contexts a “wilderness” of decisions and a mass of verbiage intended to “explain” the meaning of the words.

15. Our State Courts, our High Court and Courts of England, Canada and New Zealand have all “explained” the meaning of these words and both of my predecessors, Mr Justice Pearce and Phil Welch have extracted relevant passages that anyone hoping to practice in the jurisdiction ought to be aware of.

16. I think instead of redoing that, I will attempt to explain in fewer words than the sum total of those in the authorities, but rather more than those in the statute, the core of the issue. 

17. S.3(1) should be quoted in full. It reads:

“(1) if a person dies, whether testate or intestate, and in terms of his Will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a Judge may, in its or her discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or Judge, have in regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or Judge thinks fit”.

18. There are two stages to the S.3(1) criterion. The first is the enquiry as to whether the provision made is proper. If it is not proper, the second is to what provision would be proper in all the circumstances. 

19. That core issue is the question of what is “proper”. It is a multi-headed hydra insofar as there are numerous potential relevant circumstances. It is indeed the great assessment problem that all of the relevant circumstances can interact to affect what is “proper”. This includes the potential for each circumstance to conflict with each other. Because of this jostling and interplay, outcome prediction is notoriously difficult.
 
20. The issue of what is “proper” permeates all of S.3(1) encompassing both the first stage and the second stage. The first stage has been said to be a question of fact, but it involves a clear value judgment by the use of the word “proper”. Early cases such as Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 476) drew a distinction between “adequate” and “proper” pointing out that “adequate” meant something along the lines of “barely sufficient” whereas “proper” connoted more a sense of appropriateness to an Applicant’s station in life. However the more modern approach is that the words are interrelated entirely, and “proper” controls the meaning of “adequate”. In Vigolo v Bostin (2005) 221 CLR 191, at 231 the High Court held that “adequacy of the provision that has been made is not to be decided in a vacuum” and what is adequate and what is proper have to be considered together in the light of all relevant circumstances. The word is to connote what is fitting, appropriate, or suitable.  

21. The first stage has been called a jurisdictional question. In Singer v Berghouse [1994] HCA 40 the High Court said at paragraph 20:

“Although the precise nature of the jurisdiction of question has been the subject of some debate, the correct view is that the question is strictly one of fact, notwithstanding that it involves the exercise of value judgments… the evaluative character of the decision stems from the fact that the Court must determine whether the Applicant has been left without adequate provision for his or her proper maintenance, education and advancement of life”. 

22. The second stage is a repetition of the adequacy enquiry because, if a Court has found that provision was not proper, it is bound to make provision that is proper (McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566; White v Barron [1980] HCA 14; (1980) 144 CLR 431; Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490).

23. Of course if there is a finding that the provision was already proper, the second enquiry as to making a proper provision is clearly otiose and need not be considered. (Singer v Berghouse, supra, 209-2010).

Some Relevant Circumstances

24. The case law provides examples of circumstances arguably relevant. For instance, the High Court held in Vigolo (supra) said at paragraph 21:

“Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the Applicant enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made for the Applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors”. 

25. The Victorian Legislation contains what is in effect a codification of the case law. There are no limits on eligible Claimants in Victoria, save and except that the deceased must have had a “responsibility to provide for the Applicant”. In determining the existence of that responsibility the Court must consider 12 circumstances set out in S.91(4)(e)-(p) of the Administration and Probate Act 1958. In many ways this smorgasbord of factors, while reflecting the aggregated case law on relevant circumstances, has many similarities to S.75(2) of the Family Law Act 1975, the Section dealing with spousal maintenance. Indeed some subparagraphs use the exact same wording. Almost identical circumstances are contained in the New South Wales and ACT Legislation. The list is not closed, as they all end with “any other matter the Court considers relevant”.

26. In my view, all of these may be relevant circumstances within the meaning of S.3(1) of the TFM Act. I set them out below and have annotated them with case references where they have been considered as relevant circumstances in other jurisdictions with the same wording as S.3(1). 

Family Relationships

27. Any family or other relationship between the deceased person and the Applicant, including the nature of the relationship and, where relevant, the length of the relationship. 

Spouses

27.1 “as a broad general rule, and in the absence of special circumstances, the duty of the testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secured in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen circumstances” (Luciano v Rosenblum (1985) 2 NSWLR 65 at 69 -70; approved in the Court of Appeal in O’Laughlin v O’Laughlin [2003] NSWCA 1999). This is at least the expectation where it has been a long relationship. 

27.2 It is arguable that a mere right of residency is an inadequate provision for a widow in those circumstances (“it seems to that for a widow of a 30 year marriage who has lived in the house for some time and who continues to wish to live there, the expectation in the community would be that a wise and just testator would have left her the house in fee simple”’. Hertzberg v Hertzberg [2003] NSWCA 311 at para 34 and following”)

27.3 However it is probably otherwise in the case of a short relationship. (Singer v Berghouse (supra) – 11 months; Golosky v Golosky – 30 week relationship. Strangely, Golosky is said to be the “leading case” but remains unreported. An all database search of Austlii brings up 161 citations! In the New South Wales Court of Appeal alone there are 22. The TFM Act does not distinguish between married and de facto spouses which of course includes same sex partners. 

27.4 A stream of New South Wales cases have said that if the claims of the widow and the adult children cannot all be fully accommodated by the estate, the claim of the widow will be given precedence. (CEG v Cropley and Cropley [2002] NSWSC 349 at 56).

27.5 However this can be mildly criticised as heresy. The obligation of Judges is to apply the statute, not graft new doctrines that are not in the statute. Bryce JA put it well in Bladwell v Davis [2004] NSWCA 170 at paragraph 18 where he said:

“[18] in my respectful view there is an inconsistency between an approach, and the context of competing claims, to the claims of widows as paramount, and the application to the facts and circumstances of each case of Section 7, and the approach established by Singer v Berghouse. Preconceptions and predispositions are likely to be the source of inadequate consideration of the process required by the Family Act 1982”. 

27.6 In paragraph 12 of the same decision Bryce JA said succinctly ‘widow takes all’ is not a rule which has been or could be established by judicial decisions: the Court cannot resign the functions which it has under S.7 of the Family Provision Act 1982” in favor of rules of thumb. A rule which was once followed which practically prevented an order in provision for an adult son who was fit to work has been abandoned”. 


Binding Financial Agreements

28. These are not binding on the Court, although they are admissible as part of the financial history of the parties and to show what they thought was fair at the time they signed it. (Singer v Berghouse supra)). (Gigliotti v Gigliotti [2002] VSC 279. However the finding on the question of adequacy of provision always remains the determinant no matter what they parties previously thought. (Downing v Downing [2003] VSC 28 at 25; the benefits received under it will always be relevant and sometimes determinative. (Milillo v Konnecke [2009] NSWCA 109 – claim of widow dismissed). A failure to disclose financial resources or assets by the deceased may be a relevant consideration in an application (Dolman v Palmer [2005] NSWFC 327). 

Family Relationships – Children

29. Minor children are the obvious case where there may be a claim. Of course it depends on all of the circumstances at the time of the testator’s death, but it is often hard for a self sufficient adult child to be successful. Historically, merely being born to the testator was a necessary but not a sufficient condition for a successful claim, because the circumstances must show inadequate provision. (Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; 107 CLR 9; - 50 year old child deserted with his mother at the age of 4; claim dismissed and Coombes v Ward [2004] VSCA 51 – son given up for adoption as a young child with intermittent contact only made application at the age of 72. It was dismissed predominantly because there was a stronger claim by a daughter who had cared for the deceased for nearly 20 years before death and there was only a home which was needed by her in the estate. (Vigollo v Bostin [2005] HCA 11) testator’s resentment of success of his oldest son who resulted in complete relationship break down and failure of son’s application).

30. The older cases display a negative view towards the claim by an adult child who was basically abandoned in childhood, but that view has been criticised as involving “a view of the moral obligations of a parent which differs I would think from the almost universal view of the Australian community; the view involved seems to have been the moral obligations of a parent can be limited, and can possibly be escaped, by steadfastly maintained repudiation or evasion”. (Gorton v Parks (1989) 17 NSWLR 1 at 9-10). The modern approach places greater weight on the shirking of the parental duty. (See Doddridge v Badenach [2011] TASSC 34).

31. Adult children fared little better: the notion started in ReFuller (1917 17 SR (NSW) 348 that adult sons were in a special class prima facie disentitled to the benefits of the Act. It continued at least until 1979 when the very conservative Barwick CJ said “he was an able-bodied adult able to fend for himself. For my part, the fact that he had long trespassed on the indulgence of his parents gave him no claim on their continuing bounty” (Hughes v National Trustees [1979] HCA 2; at 139.
 
32. Then the progressive Justice Kirby in Hunter v Hunter (1987) H NSWLR 573 castigated it as a “now discarded categorisation”, saying “there is no warrant for it in the Act. It limits, in an unnecessary and artificial way, the consideration of all of the circumstances of the case. It frustrates the object of the statute. It diverts attention from the focus which the Act requires upon the proved means of the Applicant and the comparison of those needs with a provision made by the Will”.

33. There was a conservative reaction by Orminston J in Anderson v Teboneras [1990] VicRp 47; [1990] VR 527, but the view of Kirby P has prevailed. (Morse v Morse [2003] TASSC 103; Coulston v Tasmanian Perpetual Trustees [2010] TASSC 22, at para 33 and 34. That approach is that there are no rigid rules, no a priori assumptions, and every case has to be approached anew bearing in mind the relevant circumstances). See also Koukias v Koukias below. But see on the other hand, Trumbull-Ward v Michell and Haley [2012] TASSC 67 where notwithstanding a completely fractured relationship resulting in exclusion from the Will, the eldest daughter was given 20% or so of the estate. 

34. The core issue of adequate provision at both stages of the enquiry is at its most difficult and perplexing in the case of claims by adult children. It is impossible really to summarise any principle evolving from the cases because each turn entirely on their own facts. If you can find one where the facts are on all fours you may have a strong argument, but the views of Judges as to what is adequate, or what moral duty requires vary from Judge to Judge. The “wilderness of first instance decisions” is out there and all you can do, if at first glance you feel there is a claim, is hack through the jungle to see if you can find one pretty close to yours. Some Tasmanian examples are:

- Morse v Morse [2003] TASSC 103 (application by two sons in good employment with assets, in good health, estranged from their father for many years before death and making no contribution in the last decade to his well being dismissed; subordinated to a disposition to a younger son who had returned to the farm and made contributions to its conservation and improvement and the welfare of the testator). 

- How v How [2015] TASSC 4 (17 February 2015), (summarised in Appendix 2: Son’s Application dismissed; subordinated to disposition in favour of grandchildren); 

- Coulston v Tasmanian Perpetual Trustees [2010] TASSC 22 (summarised in Appendix 2. Son of 73 with virtually no relationship with testatrix from the age of 18 received about 15%. Claim subordinated to disposition to a cancer charity). 

35. A good summary of the conundrum the Judges have is that of Brereton J in Taylor v Farrugia [2001] NSWSC 801 a paragraph 57 where he said:

“[57] these are claims by adult children. It is impossible in this area to describe in terms of universal application the moral obligation of community expectation of a parent in respect of an adult child. I think, however, it can be said that ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life – such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and relationship between the parties is such to justify it, there might be such an obligation… 

[58] generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. 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 contingency; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement or otherwise they would be left destitute. It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent”. 


Family Relationships - Stepchildren

36. The interstate cases on stepchildren seem to indicate no departure in principle from “all the circumstances” assessment. However the degree to which the applicant’s stepparent has benefited from the estate of the applicant’s natural parent has been significant. For instance in James v Day [2004] VSC 290 the father of the stepchildren married their stepmother after their mother’s death. Their father used his superannuation to payout the mortgage on the family home; sold it, used the proceeds to buy a new house and when he died left it entirely to his second wife. The stepchildren testified that they did not wish to upset their stepmother by making a TFM claim in respect of their father’s Will. Clearly the stepmother had benefitted almost to the whole extent of her estate from their father, and yet she left nothing to them. Each of the two applicants received a quarter of the stepmother’s estate, and the three named beneficiaries shared the other half. That factor played a part also in McKenzie v Topp [2004] VSC 90; and Keets v Marks [2005] VSC 172


Family Relationships - Grandchildren

37. Please just note that in Tasmania grandchildren are not eligible claimants. They are in all other jurisdictions and one may be forgiven for thinking that Tasmania is out of step in this regard.

Other Responsibilities

38. Any obligations or responsibilities of the deceased person to the Applicant, any other Applicant and the beneficiaries of the estate. (Morse v Morse [2003] TASSC 103 - Two adult sons who had supported themselves for many years were unsuccessful). Whenever the Court increases the provision for one beneficiary, it has to reduce the shares of other beneficiaries. The issue that then arises is the reduction to be equal or different, or from some but not others and by what fractions in each case. See Hope v Tasmanian Perpetual Trustees Ltd [2006] TASSC 13 (10 March 2006); Mother of two adult children left nothing to them and all to a two year old grandchild – Contencin v Tasmania Perpetual Trustees Ltd [2010] TASSC 3 (24 February 2010); Koukias v Koukias – see below). 

Estate Size

39. The size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject. Where the estate is insufficient to meet all competing claims, obviously there is going to be a very difficult adjustment exercise in ordering priorities. Where the estate is large there is no such difficulty. On the other hand when the estate is colossal – worth $1 billion, the only issue becomes how much is too much? (Mead v Lemon [2015] WASC 71; Koukias v Koukias [2012] TASSC 85 -$140,000.00 estate – fairly needy eldest daughter given nothing and Court refused to intervene as balance went to disabled middle son and his carer the youngest brother). 

Financial Circumstances

40. The financial resources (including earning capacity) and the financial needs of the Applicant, of any other Applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future. These are relevant in every case (-Application of reasonably comfortable son dismissed in view of high financial needs of sister - Howe and Howe 2015 TASSC 4; (Responsibility for young family – Leyden v McVeigh; Rodgers v Tasmanian Perpetual Trustees Limited [2013] TASSC 73 – daughter in difficult financial circumstances preferred two nephews in Europe). 

Disability

41. Any physical, mental or intellectual disability of any Applicant or any beneficiary of the estate. Costigan v Norton [2005] VSC 208 - non disabled children got nothing and disabled son got balance of estate after widow; Hizak v Henjak [1999] VSC 78 – Applicant widow with severe long term psychiatric illness given whole of small estate in lieu of nephews in Croatia to whom it had been completely left. 

Age

42. The age of the Applicant. This is relevant in every case, not in and of itself, but because it is usually a marker for the stage of life that has been reached. That stage usually impacts on income earning opportunities, length of time until death during which provision may be needed etc. 

Contributions

43. Any contribution (not for adequate consideration) of the Applicant to building up the estate or to the welfare of the deceased or the family of the deceased. See Morse v Morse [2003] TASSC 103 – younger son returned from the mainland and worked the farm the way the testator wanted was granted it entirely to the exclusion of two other sons; Chapman v Chapman [2001] QCA 465 – Applicant daughter ran away from home at 15 years of age and lived a separated life; other daughter beneficiary devoted a good deal of her life to caring for her parents and made financial contributions which were reflected in the value of the estate; she received 2/3 the other 1/3; but see also Vigollo v Bostin [2005] HCA 11 – where the Applicant’s son made substantial contribution to the welfare of the family business over many years, but his father took a dislike to him because of his success, the relationship deteriorate and as a result his contribution was basically negated. 

Prior Benefits

44. Any benefits previously given by the deceased person to any Applicant or to any beneficiary. In Estate of Guthrie; Guthrie v Crane (1983) 32 SASR 86 at 96. However if all children receive like amounts the significance of inter vivos gifts during the lifetime reduces. Bowyer v Wood [2007] SASC 37 at 51. 

Dependents

45. Whether the Applicant was being maintained by the deceased person before that person’s death either wholly or partly and where the Court considers it relevant, the extent to which and the basis upon which, the deceased had assumed that responsibility. (See Draskovic v Bogicevic [2007] VSC 36 – long divorced spouse who relied on maintenance from the testator given provision). 

Other Resources

46. The liability of any other person to maintain the Applicant. The spouse of an Applicant may sometimes be liable to support the Applicant. That is a relevant circumstance to be taken into consideration in the overall scheme (Foye v Foye [2008] NSWSC 1305 at para 14 and 15).

Conduct

47. The character and conduct of the Applicant or any other person. Section 8 of the TFM Act specifically refers to this as a “case in which the Court or a Judge may refuse the application” if it is of the opinion that the conduct should “disentitle” him or her to the benefit of any provision. A son who dishonestly took the benefit of sales of stock and produce from his deceased father’s farm, during his father’s lifetime, was found to be disentitled in Re Hardgraves [1955] St R Qd 601. A daughter who refused contact with her father after the end of her parents’ marriage, and continued that stance well into adulthood, failed in a claim against his estate in Dollman v Palmer [2005 NSWSC 327

48. Any other matter the Court considers relevant. This allows the Court to take account of other logically relevant circumstances. Just as the categories of negligence are never closed, neither are the categories of relevant circumstances. Some further circumstances that have arisen in cases are dealt with below.

Other Matters

Timing of Assessment of Adequacy of Provision

49. The investigation of adequacy must date from the date of the testator’s death, looking forward and taking into account the reasonable foreseeability of eventualities which may affect beneficiaries and potential beneficiaries. (Prosser v Twiss [1970] VR 225; Pannozo v Worland (2009) VSC 206; Hope v Tasmanian Perpetual Trustees Ltd (2006) TASSC 13). 

Timing of Assessment of Award

50. In determining what is “proper” the Court exercises its discretion as at the date of making the order. (Mead v Lemon [2015] WASC 71 (26 February 2015 at para 10 and cases there cited). 

Judicial System and Method

Moral Duty

51. Given the fact that the Act was passed in 1912, it is perhaps not surprising that terms like “moral duty” and “moral obligation” have been used to express the policy or social purpose behind the Act. This has cause somewhat of a judicial “storm in a teacup”. There is a full description by Underwood CJ in Hope v Tasmania Perpetual Trustees Ltd [2006] TASSC 13 at paragraphs 9 to 18. There is a lot of law involved, but it is somewhat akin to the sterile argument about how many angels there are on the head of a pin. I suggest you steer entirely away from it and indeed the expression “the wise and just testator” and apply the plain words of the Act which invite enquiry into adequacy of provision.7 

52. In multicultural Australia there may well be over 200 different approaches to what moral duty or moral obligation require in any given circumstance, and I suggest you just adhere to the words of the Act. 

“Rewriting” the Will

53. It has been said that the legislation “does not entitle a Court to re-write the Will of the Testator in order to better accommodate it to the Court’s individual view as to how the Testator should, or might have exercised his testamentary power”. (Grey v Harrison (1997) 2 VR 359, at 363. This seems to have been said with righteous indignation and reflects a view expressed in other cases that Courts will give particular weight to the right of a person to dispose of their estate as they see fit (Leyden v McVeigh [2009] VSC 164 per Kaye J at paragraph 30).  

However this so called right to freedom of testation does not appear in this, or indeed any other Act as far as I am aware. If this seems to be an articulation of a reaction to some prior decision where the Will of the Testator was substantially departed from. It is not a principle, is not in the statute and really has no application. Some Judges have attempted to graft it onto the statute, but it simply is not there. It is an assertion of a laissez- faire attitude that cannot prevail in the face of the clear words of the statute. It is reactionary philosophy being appealed to limit the plain and ordinary meaning of the words in the statute. It is literally incorrect, because in a successful application what is undoubtedly exactly that – a re-write of the Will. S.9 (“Contents of Order”) specifies with precision and particularity what will be in an Order under the Act, and subsection 3 provides:

“(3) Subject to this Act, every provision made under this Act operates and takes effect – 

(a) in the case of the estate of a person who dies testate, as if it had been made by a codicil to the will of a deceased person executed immediately before his death; or

(b) In the case of the estate of a person who dies intestate, as a modification of the provisions of the Intestacy Act 2010”. 

54. For example, see the final paragraphs of Contencin (supra) where His Honour Holt As J specifically sets out the re-write of the Will which he considers appropriate, using the words “the estate is to be distributed as if, in lieu of clause 3, the Will contained the following provision:

“3 Any executors will hold my estate on trust;

 3.1 subject to any contrary provision later expressed, to apply it first in the payment of my debts and other liabilities inclusive of all testamentary and funeral expenses;

 3.2 to give my motor vehicle and $5,000.00 to my brother, GRAHAM R WILLIAMS if he survives me;

3.3 to give my son, STEVEN JAMES CONTENCIN the sum of $120,000.00;

3.4 to give my daughter, NICOLE MAREE SANDERSON (NEE CONTENCIN) the sum of $240,000.00;

3.5 to give the remainder of my estate to my grandson, THOMAS JAMES CONTENCIN if he survives me and attains the age of 25 years, but if he does not survive me to attain a vested interest, then to divide the remainder equally between such of my grandchild (excluding THOMAS JAMES CONTENCIN) living at the date of my death who survived to attain the age of 25 years”. 


The Ultimate Issue

55. It is a nice jurisprudential question whether Judges deciding that moral duty or community expectations require that provisions made by a testator are “adequate” or “inadequate” is really applying law or making law. They are really mixed questions of fact and values that are influenced by Judges’ individual predilections. You could expect a Lionel Murphy and a Sir Garfield Barwick to come to completely opposite conclusions on the same facts. While the Full Court has oversight, it can only interfere in the well known limited circumstances in discretionary decisions amounting to error of law. It cannot simply rehear the case because it would have come to a different conclusion. This is reflected a lot in the reasoning employed by Judges making the decisions because it is, understandably, and with respect, somewhat sparse. There is usually a “eureka” paragraph when a Judge says “yea” or “nay”. No matter how many prior decisions are quoted it is difficult to characterise the decision as being anything other than what the Judge felt was a fair thing at the time. 

56. For instance, in Morse v Morse [2003] TASSC 203, Slicer J at para 28 and 29 recited the facts. In para 30 he gave his judgment: “[30] accordingly, both applications are dismissed”.

57. In Contencin v Tasmanian Perpetual Trustees Ltd [2010] TASSC 3 at para 23 – the learned Associate Judge recites the facts and says “I find that, notwithstanding the other features which I have mentioned, the indirect benefit derived by the son from the bequest to his child was insufficient to amount to adequate provision for his proper maintenance and support”. 

58. The Judge coming to an opposite conclusion in either of these cases could only have done exactly the same thing, that is recite the facts, and then say something to the effect of “accordingly I uphold the applications and make these orders…”. 

59. The reality is that at crunch point there is really nothing else Judges can say apart from “this is my opinion”. Different Judges are going to have different opinions and when you want to advise a client you will have to predict those opinions without a lot to go on. In many ways it all boils down to an instinctive decision, which is assisted only by similar factual circumstances and assertions that this is what the community expects. The Judges are the guardians of the community in these cases and Parliament has given them a challenging and difficult job. You as advisors have an even more challenging and difficult job because while you may be aware of those points of law that are readily available in the literature and such similar cases as may be in the reports, the core task of assessment of adequacy is somewhat of a mysterious “dark art”. You have to read the cases and attempt to adopt the same mindset – as the Judge who is going to hear the matter, because there is no immutable touchstone as to adequacy other than what the Judge will decide the community expects. 

60. The expression “adequate provision for proper maintenance and support” cannot be defined any better than those words themselves. Resort to different words probably does not help. It akin to the notion of “reasonable doubt” Courts have said repeatedly should not be paraphrased but should be left to the good sense of the jury. Parliament has left this issue to a good sense of Judges. There is some parallel with the concept of a “just and equitable” property settlement under the Family Law Act which also has a discretion of generous ambit. 

Conclusion

61. In TFM Law the enquiry is about what is adequate and proper provision, and if the testator has not made it, then the Court will. Predicting precisely what is adequate and proper, is fraught with difficulty because it is the exercise of a discretion of enormous breadth. In the ultimate it is not capable of deductive reasoning and depends on the individual opinion of the Judge hearing the case, taking into account all relevant circumstances, as the representative of society. Because of the risk of costs substantially depleting the estate, sensible compromise is strongly recommended. 


Dated this 16th day of July 2015 


S.P. Bishop

Footnotes

1. Family Provision Act 1969 (ACT); chapter 3 of the Succession Act 2006 (NSW;;Family Provision Act 1970 (NT); part 4 of the Succession Act 1981 (Qld); Inheritance, Family Provisions Act 1972 (SA); part 4 of the Administration and Probate Act 1958 (Vic); Inheritance (Family and Dependents) Act 1972 (WA). For example, while the class of Applicants is limited to spouses, children, parents and former spouses in many jurisdictions, in Victoria any person for whom the deceased had a responsibility to provide can make a Claim. For example, in Subasa v State Trustees Ltd [2007] vsc 399 a 31 year old step grandson made a successful claim. 

2. McIntosh, Limitations on Free Testamentary Disposition and the British Empire (1930) 12 1 (Journal of Comparative Legislation and International Law (3rd Series), 13, 13; reproduced in Family Provision Claims by Adult Children (Part 1) Hearsay, the electronic journal of the Association of Queensland.

3. www.teara.govt.nz/en/1996/family-protection 
        (1966 Te Ara Encyclopedia of New Zealand)

4. “Spouse” includes a person with whom the Testator was in a significant relationship on death, within the meaning of the Relationships Act 2003; (S.2 TFM Act; see Ratcliffe v Cleary [2004] TASSC 154); Blow J held that “de facto spouse” in the TFM Act as it was before the Relationships Act was to be determined upon ten criteria established by case law but being virtually identical with those in the Relationships Act.  

5. “Child” includes an adopted child, a step-child and a surrogate child (S.2(1) TFM Act; Basterfield v Gay [1994] TASSC 120; (1994) 3 Tas R293; Connors v Tasmanian Trustees Limited [1990] TASSC 126 (a person ceases to be a step-child upon the death of the natural parent);

6. Re: Claverie (deceased) [1970] 2 NSWR 380 in which an Application was granted despite a delay of 16 years and In the Estate of Barry, (1974) 9 SASR 439 in which an application was granted despite an 18 year delay; but see Lazenby & McDermott [2000] TASSC 121 (31 August 2000) in which an Application was not granted after a delay of 30 years. See also there the unresolved submission in para 28 as to the meaning of “a final distribution of the estate”.

7. To do otherwise may require you to take sides in interminable, pointless, linguistic, and semantic debates such as whether “moral duty” or “moral obligation” should be understood as amounting to a gloss on the statutory language and, if so, whether the term “gloss” is being used “in its milder sense of epexegetical comment or explanation, or using it in the sense of a paraphrase which is apt to mislead”. (Vigollo (supra) at page 710 and 711). Perhaps the most helpful comment is that of Ormiston J in Collicoat v McMillan [1999] 3 VR 803 of 818 that “‘moral duty’ may often have been used as a convenient shorthand expression intended to do no more than invite attention to the questions presented by the relevant legislation”.

Testator’s Family Maintenance

Appendix 1

RECENT TASMANIAN DECISIONS 

In his 2010 paper Justice Pearce gave in closing a “Handy list of cases”. Below is a list of cases decided in Tasmania since that time: 

1) How v How [2015] TASSC 4 (17 February 2015)

2) Calvert v Badenach [2014] TASSC 61 (24 November 2014)

3) Rodgers v Tasmania Perpetual Trustees Limited [2013] TASSC 73 (6 December 2013)

4) Koukias v Koukias [2012] TASSC 85 (12 December 2012)

5) Trumbull-Ward v Michell and Haley [2012] TASSC 67 (16 October 2012)

6) Doddridge v Badenach [2011] TASSC 34 (8 July 2011)

7) Coulston v Tasmanian Perpetual Trustees Limited [2010] TASSC 67 (7 May 2010. 

Testator’s Family Maintenance

Appendix 2

SUMMARIES OF RECENT CASES


How v How [2015] TASSC 4 (17 February 2015) 

FACTS:

1. Eileen How (dec. 1998) and Ronald How (dec. 2011) produced four children, Roger (dec. 2008), Jennifer (65), Stephen (60) and Brian (55). Ron’s estate was worth about $260,000.00. He left Jennifer a life estate in the house with the remainder to be distributed equally between his grandchildren. The residue was to be divided equally between the children, but because the estate was so small and the estate expenses large there was no residue for distribution. 

2. Stephen made application, claiming the provision was of nothing was inadequate provision for his proper maintenance and support. He was a Contract Technician with Telstra working three days a week for approximately $55,000.00 gross, and his wife worked part time three days a week for approximately $24,000.00 gross; they had a net worth of about $1,102,000.00. Both were in reasonable physical health.

3. Jennifer was in poor health and unable to work until she turned 65 when she became entitled to an aged pension. The expectation was she would be on that for the remainder of her life; she had no savings, no investments, no superannuation, no house or land, an old car and some personal property. She lived with the testator from 2007 to 2011. Although he was relatively independent she lived with him to assist him, and was of significant importance to him as he was dying from prostate cancer in the months before his death. He was not easy to live with and was set in his ways, and medication affected his mood from time to time. She gave up opportunities for employment to care for him. 

HELD: 

Stephen was not left without adequate provision for his proper support. 

REASONS:

1. His financial circumstances. 
2. The strength of Jennifer’s claim. 

DISCUSSION:
 
1. Stephen did not ask for the house to be sold and accepted that Jennifer needed it to live in during her life. However as compared to the grandchildren he argued he should have a share in the estate because it is when he is old that he will need that maintenance and support. Given that actuaries are now saying $1,200,000.00 for a superannuation fund is needed to provide a decent income in an aging population, is it proper to favour the grandchildren over this child? 

2. Is that issue assisted by an appeal to the “right of testation”? 

3. What if Stephen and his wife’s net worth was nil? Where is the line in the sand?

4. Stephen argued that his father gave his brother Brian a property at Mole Creek and then his sister a life estate while he got nothing, and so he should get something. Justice Pearce said that (para 37) the Court should refrain from weighing up what has been given to children during their lives and trying to create equality in the Will. How does this sit with the law that all relevant circumstances are to be taken into account, and that the requirement for “proper maintenance and support” imports value judgments such as equality? 

5. If weight was given to the inter vivos gift to Brian, would this be “rewriting the Will”?


Rodgers v Tasmanian Perpetual Trustees Limited [2013] TASSC 73 (6 December 2013)

Decision of Holt AsJ 

FACTS:

The testator was aged 77 years and had one child, the Applicant, and a brother and a sister in Hungary. The total value of the estate was approximately $465,000.00. He left his daughter a life interest in the entirety of the estate. The daughter was aged 50, was single, without children, in poor health, unable to work and receiving a disability pension. She lived in a one bedroom Housing Department unit at Glenorchy. She had no assets of substance, no savings, and suffered from chronic back, joint and neck pain, psoriasis, hypertension, asthma, anxiety, depression, and a stage 1 kidney disease. In addition to being disabled from work she had a restricted ability to perform household tasks. She was a spendthrift. The testator wanted her to have a better quality of life, but was concerned she would waste his estate, and he wanted his family in Europe to ultimately benefit as well. She wanted an absolute interest instead of a life interest, and the overseas family wanted to preserve their remainders. 

HELD:

1. The provision for her was not adequate for her proper maintenance and support. 

2. Proper provision required that the daughter receive a capital sum of $50,000.00 to replace her 1978 motor vehicle, and provide herself with some modest luxuries such as holidays and have the comfort and security of a capital fund to cover unexpected and unbudgeted expenses (note that she was entitled to the income on the balance of the estate).


Koukias v Koukias [2012] TASSC 85 (12 December 2012) 

Decision of Holt AsJ 

FACTS:

1. The testatrix died leaving three children, Catherine (53), a middle child (unnamed in the judgment) (51) and the younger brother (unnamed in the judgment) (47). The estate had an approximate value of $140,000.00. At the date of death, Catherine seemingly had no employment, and no dependents, an entitlement for about $55,000.00 from her father’s estate, and a HECS debt of about $17,000.00. There were foreseeable possibilities of her suffering from ill health or being unemployed, and both had occurred at the time of hearing. She suffered from depression and her sole source of income was a disability pension. She lived in rental accommodation. She did not have a close relationship with the testatrix, and indeed the testatrix had received legal advice to obtain a Restraint Order against her. Catherine did not provide any financial support to the testatrix and gave her no affection.

2. The middle son suffered from schizophrenia for many years. Prior to the death of the testatrix she looked after him entirely. She resisted her husband’s efforts to have him institutionalised and had a close relationship with him. He lived on a disability pension. Following the death of the testatrix he was totally dependent on his younger brother for his day to day care. He also had an entitlement to about $55,000.00 out of his father’s estate. 

3. After the death of the testatrix the younger brother received a carer’s payment. He had cash and chattels of about $20,000.00. He had a partner who was a freelance music teacher with an average income of about $800.00 a week. He too had an entitlement to $55,000.00 out of the father’s estate. He had provided much support for the testatrix and the middle brother. Shortly after he finished his studies in Sydney he abandoned his career in music and returned to Tasmania to provide support for the two of them. 

HELD:

Catherine had not been left without adequate provision for her proper maintenance and support. 

REASONS: 

1. The small size of the estate. 
2. The strength of the claims by the other two sons. 
3. The lack of a close relationship with the testatrix.


Turnbull-Ward v Michell and Haley [2012] TASSC 67 (16 October 2012)

FACTS:

1. The testatrix died a widow aged 81 years leaving three daughters. The Applicant eldest daughter was left nothing but two small bequests of $15,000.00 and $10,000.00 were left to her two children. The balance of the estate was left in equal proportions to the second and third daughters. 

2. The Applicant was aged 59 years and was married. She had no dependent children or stepchildren. She and her husband had a combined net worth of about $700,000.00. They were each in employment earning between them more than $100,000.00 per annum. The value of the testatrix’s estate was $276,000.00 at the time of the hearing.

3. The relationship between the eldest daughter and the testatrix had broken down irretrievably. The judgment contains a sad and sorry saga of a failure to keep disagreements in perspective to the point where the Applicant was bitter and twisted and the testatrix pleaded with her by letter “in my last few remaining years leave me in peace and quiet. I want no more abuse to myself or the rest of my family” and there was hardly any contact between them for the last seven years of the testatrix’s life. The Applicant either made or attempted contact several times a year but the testatrix shut her out. She also shut her out of her Will, putting a statement of reasons in clause 8 of the Will and in a document executed by her at the same time and kept with the Will. 

4. The middle daughter was aged 57 years and had been married for 38 years. Together with her husband their net worth was about $489,000.00, consisting mainly of their home worth approximately $400,000.00. She did not work but her husband earned approximately $70,000.00 per annum and was 61 years old. He expected he would have to work for at least another five years in order to make adequate provision for retirement.

5. The youngest daughter was aged about 48 years and had been in a relationship for several years. She and her partner had a net worth of about $493,000.00 and a joint income of about $80,000.00 per annum.

6. The testatrix died of cancer over about four years, and it involved painful chemotherapy treatment, lots of hospitalisation, sometimes for periods up to a month and then living and recuperating at the Devonport home of her middle daughter. She needed to be driven to medical appointments in Launceston and in Burnie, and in November 2008 the middle daughter gave up work to provide fulltime care for her.

7. The youngest daughter provided less assistance as she lived farther away but kept in close contact, frequently visited her and regularly took her to her home. On one occasion she accompanied her to Melbourne. The testatrix enjoyed much support and affection from these two daughters in the final years of her life. 

HELD:

1. Inadequate provision had been made for the proper maintenance and support of the Applicant. 

2. Proper provision consisted of 20% of the net estate (including within that the bequests of $25,000.00 to her daughters), with the other two daughters getting 40% each of the net estate. 

REASONS:

1) It is proper to take into account the possibility of the Applicant or her husband suffering ill health or losing employment. Remembering that this assessment is made as at the date of death, it was noted that the Applicant had in fact ceased employment because of ill health and was getting a disability pension, and the Applicant’s husband had lost his employment for a period of fifteen months, and just obtained fulltime employment for a contract period of six months. 

NOTES:

It is instructive to note that the variation effected by the decision (taking into account that all parties had agreed that the bequests to the two daughters of the Applicant were to be taken from her share, was a movement of $30,200.00. The value of the estate had depreciated significantly because of change in values of housing and so on but was $276,000.00. The rough original provisions and provisions under the order work out as follows:
Of course these figures take no account of the depletion in the value of the estate as a result of legal costs. 

Coulston v Tasmanian Perpetual Trustees [2010] TASSC 22

Decision of Tennent J 

FACTS: 

1. The testatrix left the entirety of her estate to the Holman Clinic. The Applicant was her first born child who was aged 73 (69 at the date of death) at the time of the case. She had one other surviving child, Carole who was aged 63. The estate had a value of approximately $220,000.00. He was separated from his wife aged 70, a matter about which he attempted to deceive the Court, but was in a caring relationship with her. She was suffering from cancer. The Applicant owned no real estate, had no investment or shares, had been in receipt of a disability pension and an aged pension for many years, and basically had no assets at all. He was living in a caravan with the wife. Their life savings had been spent on treating his wife’s cancer. Mrs Coulston had some minor assets only and had also been a pensioner for many years. 

2. The Applicant’s relationship with his mother was never a close one. He described an unhappy childhood and being “kicked out” of home at the age of about eighteen following an altercation with her male friend. There was little evidence as to whether the fracture in the relationship was ever repaired and there was no ongoing relationship and no level of support. 

HELD: 

1. The Applicant was left without adequate provision for his proper maintenance and support. 
2. Proper support would be the sum of $25,000.00 (that is about 11% of the estate before deduction of costs. If costs are guessed at about $50,000.00, it would be about 15% of the estate). 

Dodderidge v Badenach [2011] TASSC 34

Decision of Evans J 

FACTS:

1. A testator of 78 years of age at death and his estate had a net value of $612,000.00 approximately. He left the complete estate to the son of his deceased partner. 

2. The Applicant was the only child of the testator’s former marriage. Her parents separated when she was about 3 years of age and after separation she resided with her mother and, save for one chance meeting, had no contact with her father. He abandoned his daughter emotionally and physically and made only one contribution to her maintenance in his lifetime. She was no drain on his resources and thereby assisted him to accumulate his estate. At the time of death she was aged 41 and had a net worth of $1,100,000.00 approximately. However this mainly comprised her residence worth about $600,000.00 but in need of maintenance estimated at $83,000.00 which she could not afford, and superannuation of about $500,000.00 which she could not access. Her net salary was about $40,000.00 per annum. She had never married and lived alone since the death of her mother. She suffered from Crohn’s Disease, epilepsy and depression. Her disease impacts on her capacity to work, which has impacted negatively on her career prospects, and her performance of daily domestic chores. It is a longstanding incurable condition and she cannot obtain income insurance. 

3. Roger Calvert, as the son of the testator’s deceased partner was a good friend of the testator. He was virtually a stepson to him, shared business interests and hobbies such as clay bird shooting and sports shooting. They each contributed to the two major properties in the estate. The testator was an integral part of the family and referred to by his children as “poppy”. The testator agreed to leave his estate to Roger or his children if he predeceased the testator. He was 64 years old and his net worth was about $650,000.00. His wife owned property in Queensland at about $250,000.00. 

HELD:

1. The Applicant had been left without adequate provision for her proper maintenance and support. 
2. Proper maintenance and support was the sum of $200,000.00 out of the estate, being approximately 1/3 thereof. 

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