This was a recent decision of Hallen J in the New South Wales Supreme Court (Equity Division) concerning a family provision claim brought by a de facto partner under Part 2 of the Succession Act 2006 (NSW) ("the Act"). The decision highlights the extent of Court power to interfere with the testamentary will of a deceased in family provisions claims by surviving de facto spouses.
The deceased passed away on a date between 31 May and 1 June 2013. He had previously been married until September 1999 when his marriage was dissolved.
The deceased left a will made on 2 June 1978 ("the Will"), leaving the whole of his estate to his then wife, but with provision that if she predeceased him, the estate would pass to his children which survive him and attain the age of 20 years.
By operation of Section 15A of the former Wills Probate and Administration Act 1898 (NSW), (replaced Section 13 by the Succession Act 2006 (NSW)) which applies to wills made before 1 March 2008, the subsequent dissolution of the deceased's marriage meant that the Will took effect as though the former spouse had predeceased the testator. The family provision claim was therefore brought against the deceased's two sons who were the beneficiaries and administrators of the estate. The Applicant making the claim, was the de facto partner of the deceased who had been living with him for some sixteen-and-a-half years prior to his death.
Whilst, as in his previous family provisions decisions, Hallen J provides a very thorough discussion of the statutory scheme of the Act (paras 49-115), it is His Honour's application of the legal principles to the de facto relationship context that is of particular note. For a good summary of the statutory scheme of the Act discussed by Hallen J in another case, see our article on Shakespeare v Flynn.
Hallen J considered the first requirement for a family provision order under Section 59(1)(a), namely which provides that the person in whose favour a family provision order may be made must be an eligible person with regard to Section 57 of the Act.
At the outset, Hallen J indicated that that of the Applicant was an eligible person pursuant to Section 57(1)(b) which relevantly provides that an eligible person includes in the list of persons eligible to apply for a family provision order:
Accordingly, Section 59(1)(a) was satisfied and the de facto spouse was entitled to make the claim.
The remaining consideration for the Court was under Section 59(1)(c), whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased.
In making the determination about eligibility of a person to bring a claim, whether to make a family provision order as well as the nature of any such order, the Court may have regard to matters enumerated in Section 60(2) of the Act. For the full list of factors see here.
In considering the application of the factors in Section 60(2) of the Act to the de facto Applicant, Hallen J observed that:
"whilst the distinction between married and de facto relationships has narrowed considerably over time, there also remains binding authority which gives greater weight to the claims of parties who have entered "a formal and binding commitment to mutual support""(at 140).
But His Honour also noted that these principles as above are not elevated into rules of law when applying the statutory considerations which require a case by case approach (at 143). His Honour then proceeded to make the following findings in relation to some of the relevant statutory factors available to him for consideration under Section 60(2):
"(a) [Was there] any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship?" (S60(2)(a))
Hallen J noted at the time of the deceased's death, the two had been in a de facto relationship and living together for some 16-and-a-half years. The two had made mutual decisions in binding their lives together such as purchasing a home as joint tenants and contributing their joint expense and travelling together extensively both within Australia and overseas.
When, in his later years, the deceased had suffered from ill health, the Applicant displayed significant care and support, taking three months off work to provide care. There was therefore no indication that the relationship would not continue indefinitely had the deceased remained alive.
"(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant..." (S60(2)(b))
Once again, there is no statutory definition is provided for the above terms: "obligations" or "responsibilities", but Hallen J indicated there is clear recognition of the obligation and responsibility towards a de facto as for example in Forsyth v Sinclair [2010] VSCA 147 where the de facto partner was living with the deceased at the time of death as was the case here.
"(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant" (S60(2)(h))
This has long been regarded as a significant factor, and Hallen J noted that the care and companionship provided by the Applicant to the deceased as well as the joint financial acquisition of their home were satisfactory to indicate a significant contribution by the Applicant to the welfare of the deceased, notwithstanding that there was also a level of financial independence with respect to separate individual bank accounts and investment properties.
Taking into account all the above statutory factors as well as matters specific to the relationship, including the de facto nature of the relationship and the length and quality of the relationship, Hallen J determined that the deceased did not in his Will make adequate provision for the proper maintenance of the Applicant as his de facto partner.
Hallen J also mentioned that the fact that the Applicant was given no provision in the Will was highly relevant but not determinative of inadequacy, that is, a court will not automatically rule that inadequate provision has been made merely because a Will makes no provision at all.
At the same time, making some provision or a minor provision in the Will will of course also not be a bar to a family provision order being made upon a finding of inadequacy the gift made under a Will.
Accordingly Hallen J considered what provision ought to be made under Section 59(2) of the Act and ruled that the Applicant was to receive a lump sum of $350,000 paid out of the residuary estate. The net value of the residual estate which available for distribution was about $1,124,547. The Applicant therefore received approximately 32% of the distributable estate. In quantifying this sum, Hallen J pointed to the adequacy of this sum in repaying the debt on the Applicant's real property, immediately reducing her monthly expenditure with the balance, if invested at about 3.5% per annum increasing her monthly income by some $935.
The successful claim by the Applicant provides a useful guide on the treatment of the family provision claim brought by a de facto partner under the Act. It also expands on the now familiar observation made in relation to family provisions claims, that given the extent of Court powers to alter and adjust the testator's testamentary wishes, care must be taken in will-drafting to ensure all relationships of the testator are taken into account and attempt to make, as far as possible, an adequate provision so as to limit the likelihood of a redistribution following a successful family provision claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
