Testator s Family Maintenance Claims: General Principles. Kieren Mihaly Barrister

Transcription

1 Testator s Family Maintenance Claims: General Principles Kieren Mihaly Barrister

2 1. The point of a will is for a person to dictate how they want their assets divided on their death. And just as a person can choose who to gift their assets to while they are alive, it would be expected that that control continues after their death through a will. That assumption is largely correct and a Will still provides the best and easiest way for a person to dictate the final disposition of their assets, but that right is not constrained. In Part IV of the Administration and Probate Act 1958 ( Act ), a regime exists for any person to bring a claim on a deceased estate and, if they are successful, obtain more than the deceased intended to give them. 2. Historically, applications on estates were limited to defined classes of people: children, spouses, etc. 1 But since 1998, any person can now bring a claim on an estate if they could show that a deceased had a responsibility to provide for that person yet the will of the deceased did not make adequate provision for the proper maintenance and support for them Thanks to the large amount of litigation in this area, each aspect of that test has received considerable judicial comment. This paper distils many of the critical aspects of the test. Freedom of Testation 4. The starting point of any application is that, despite the regime contained in Part IV of the Act, a testator retains freedom of testation. Grandiosely, Callaway J described that freedom as a badge of a society that has graduated from primitive conditions and a notable human right. 3 More practically, Part IV of the Act is said to preserve that freedom because the court has not been given the power to re-write a will, 4 but rather only a limited jurisdiction is conferred to interfere with the freedom of testation. 5 Given this, the intention of the deceased is relevant, whether to explain the will or because the will was no longer consistent with the wishes of the deceased, although such intention cannot override the regime in the Act. 5. To override a testator s freedom, an applicant must satisfy the test in s 91 of the Act, which involves three stages: 6 a. First, did the deceased have responsibility to make provision for each plaintiff; b. Secondly, if yes to the first, did the distribution of the estate make adequate provision for the proper maintenance and support of that plaintiff; and c. Thirdly, if no to the second, what further provision (if any) should the court order for that plaintiff? 1 Forsyth v Sinclair [2010] VSCA 147, [56] 2 Administration and Probate Act 1958, s 91(1) and (3) 3 Grey v Harrison (1997) 2 VR 359, 363, with whom Tadgell and Charles JJA agreed 4 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19, [6] 5 MacEwan Shaw v Shaw [2003] VSC 318, [213] 6 Boyd v State Trustees Ltd [2008] VSC 18, [44], cited in Robertson v Koska [2010] VSC 134, [77]; Busuttil v DeGabrielle [2013] VSC 215, [26]; Morris v Smoel [2014] VSC 31, [30]

3 6. In this test, it is the applicant that bears the onus of proof, 7 as would be expected. Further, given the inherent problem in determining the intentions of the deceased, for a court to determine adversely to an accused that they abused their freedom of testation, it must be satisfied according to the standard in Briginshaw v Briginshaw (1938) 60 CLR 336, 362, 368-9, 8 namely, with regard to the gravity of the facts to be proved, and formulated variously as involving a high degree of satisfaction, very sure, reasonable satisfaction and comfortable satisfaction. 9 Responsibility 7. The first hurdle in an application attempting to overrule the freedom of testation is to show that a deceased had a responsibility to provide for an applicant. Currently, only children and spouses are almost presumed to be owed a responsibility, although that is not to say that those relationships cannot deteriorate to the point that any responsibility ceases to be owed The legislation offers considerable guidance on the question of responsibility by providing a list of factors in s 91(4)(e)-(p) of the Act, which must be taken into account. However, as those factors include in subparagraph (p) any other matter the Court considers relevant, the list does not constrain the matters that can be brought to the Court s attention. In practice, though, the judgments of the Court habitually are structured around the list of factors and address each one in turn before concluding whether a responsibility existed The factors themselves need not be repeated save to note that they are intentionally guided to the question of responsibility. Through the factors the Court is able to ascertain the closeness of the relationship between the applicant and the deceased, the level of obligation that the deceased had to the applicant and others, and the needs of the applicant and other beneficiaries. 10. In answering the question of whether a responsibility existed, the Court assumes that the deceased was a wise and just testator fully aware of all the relevant circumstances. 12 But, it is clear that the just testator is not necessarily loving For that reason, fairness is not a factor that the Court is to take into account. 14 The irrelevance of fairness can be seen to stem from the freedom of testation; a deceased 7 Morris v Smoel [2014] VSC 31, [35] 8 Morris v Smoel [2014] VSC 31, [35] 9 The Legal Practitioner v Council of the Law Society of the Australian Capital Territory (No 2) [2014] ACTSC 9, [483]- [487] 10 Morris v Smoel [2014] VSC 31, [70] 11 And for that reason, it is often advisable for affidavits and submissions to similarly address the factors plainly. Such an approach is usually preferable to reciting the facts without identifying how those facts address the factors. 12 Re Allen (deceased) [1922] NZLR 218, Blair v Blair [2004] VSCA 149, [13], [30], [41] 13 In re Allardice (1910) 29 NZLR 959, , as cited in Scarlett v Scarlett [2012] VSC 515, [71] 14 Downing v Downing [2003] VSC 28, [42]

4 has no obligation of equality of treatment, 15 meaning that a court will not interfere where one side of a family has been preferred over the other Notwithstanding their irrelevancy, claims relying in part on fairness are not uncommon. For example, reliance may be placed on the fact that a fixed bequest, at the time the will was executed, represented a higher proportion of the estate than at the time the will is to be enforced. Alternatively, reliance may be placed on the disentitling conduct of another beneficiary on the basis that the deceased ought have given them less and the applicant more. Such arguments overlook the fact that at the time of executing their will, the deceased by definition intended it exactly as it was drawn; arguing that the effect of the will was not as intended is therefore inherently implausible. Adequate and Proper Provision 13. If responsibility has been shown, it next falls for the court to determine whether the deceased made adequate provision. This, in itself involves consideration of two separate concepts. The first is the proper maintenance of the plaintiff and the second is the adequacy of the provision, 17 where adequacy is to be measured against accepted community standards. 18 In Whitehead, Bell J explained at this step as follows: The courts have frequently emphasised that the provision must be both adequate and proper, that proper is something different to adequate and both words must be given their full value. The question is not merely adequacy or sufficiency but whether the distribution has measured up to the obligations which the statute imposes on a testator. The station in life of the parties and their reasonable expectations must be considered, being those reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future. What is adequate and proper must always be relative and will depend on all the circumstances of the case. (citations omitted) 14. In this case, proper is not akin to compensation where an applicant need show their specific need. Instead, like the synthesis involved in assessing the value of a personal injury claimant s pain and suffering, what is proper will be viewed globally, taking into account a claimant s present and future needs. 15 Scarlett v Scarlett [2012] VSC 515, [100] 16 Blair v Blair (2004) 10 VR 69, and confirmed in Hosburgh v White [2006] VSC 300, [47] 17 Whitehead v State Trustees [2011] VSC 424, [53]- [55] 18 Collicoat v McMillan [1999] 3 VR 803, 818

5 Specific Scenarios 15. It is likely that any scenario that comes before the Court has already been considered in one form or another. While each case will turn on their facts, most conceivable relationships have been considered as have a variety of entitling and disentitling conduct. The range of scenarios therefore makes it impossible to recount them all. 16. That being said, the following observations can be made: Conclusion a. Where the applicant s need is the result of their own fault, a Court may be less inclined to consider their need as an entitling factor; 19 and b. The larger the estate, the more likely a deceased had a responsibility towards an applicant. The greater the pool, the more likely it is that a deceased would be expected to look beyond their immediate family and provide for extended family and relations. 17. Claims on an estate are now well regulated through the Act and precedential authority. The cases therefore offer considerable guidance on how a given application is to be decided. But, beyond the platitude that all cases turn on their facts, there is enough variance between the cases that no two will be alike. Each application, therefore, will likely be decided by reference to the factors contained in s 91 of the Act and an overall impression of whether the deceased ought have better provided for the applicant. 18. From that general statement, there are principles that apply to specific relationships. Additional papers are available in relation to those that have attracted more commentary from the Courts. 16 July 2014 K Mihaly Owen Dixon Chambers West 19 McKenzie v Topp [2004] VSC 90, [39]