Key Words: Blended Families – Adult Child Family Provision Claim – Quantum of Claim – - Court’s discretion to award an eligible person - section 60(2) Succession Act
Summary:
The New South Wales Supreme Court considers the application brought by an adult child of the deceased. The deceased died intestate, although a Will had been drawn up for execution. Notably, the parties agreed that the Plaintiff was entitled to provision but were not in agreement over the sum of that provision. The Court considered the balancing needs of a young-adult child, and that of a now, young widow with a toddler. The Court considered its discretionary power when considering FP claims, and in particular, the guiding role of section 60 of the Succession Act.
Facts:
Gavin Stokes (the Deceased) died intestate on 25 February 2021. He was 38 years old.
At the time, the Deceased was survived by:
1. his adult (19 y.o.) daughter Chloe (Plaintiff);
2. his wife (35 y.o) of 7 years, Kayla Lee (Defendant); and
3. his infant (2 y.o.) son, Jack.
The estate was wholly comprised of the deceased’s residence at Hoxton Park, worth $750,000, which was encumbered for $67,000. In accounting legal costs, general Estate costs, the view was that the net value of the estate sat between $650,000 and $700,000.
A Family Provision Claim for $220,000 was filed by Chloe nearly two years after the deceased’s death.
Kayla Lee consented the Plaintiff’s claim being timed out, and largely to her claim.
The case was on to determine the quantum sum of the claim.
The (agreed) case for provision
The parties agreed:
the Plaintiff was an eligible person to make a family provision claim;
regard to the net distributable amount of the estate, the Plaintiff would likely not receive any amount by way of her entitlement under the rules of intestacy;
in those circumstances, adequate provision has not been made by the operation of the intestacy rules for the proper maintenance, education or advancement in life of the Plaintiff;
accordingly, the jurisdictional requirements for the making of a family provision order under s 59 of the Act are met; and
the Court should exercise its discretion to make such an order in favour of the Plaintiff in lieu of any entitlement that she has on intestacy.
The case for cash
In approaching the relevant sum to be awarded to Chloe, Nixon J considered the following:
1. Notional Estate
there were assets as at the deceased’s death which were theoretically capable of being designated as notional estate:
a superannuation death benefit from BT Super ($427,941.59); and
proceeds of a life insurance policy with ANZ Life Insurance ($702,045.01).
In accordance with nominations made by the deceased, each of those amounts has been paid to Kayla.
2. Entitlement to Provision
While it was undisputed that Chloe was an eligible person, the Court noted the recent decision in Wild v Meduri & Ors; Meduri & Anor v Neal & Anor; Meduri v Meduri & Ors [2023] New South Wales Supreme Court 113 at [1004], wherein Hallen J noted that the Act does not stipulate any automatic entitlement to provision when the jurisdictional requirements of s 59 are satisfied and, accordingly, it is clear that the Court has a discretion whether to make an order and as to the amount of any order that is made: “the Court is empowered to order such provision from the deceased’s estate as the Court thinks fit, but the Court is not empowered to award more than what is ‘adequate’ provision for the applicant’s ‘proper’ maintenance, education or advancement in life”.
3. Matters which may be considered by the Court
The Court provided a detailed analysis of the considerations made under s60(2) of the Succession Act, notably addressing:
a. The financial resources and financial needs, both present and future, of the applicant or any beneficiary (s60(2)(d)):
The Applicant’s circumstances:
Trainee hairdresser, net income of $900 p/w;
Living with partner’s parents while saving for a house;
The Applicant’s future needs:
Chloe deposed that her future needs include:
a replacement motor vehicle in the amount of $30,000;
a house deposit of at least $80,000 (representing 10% of an anticipated purchase price of $800,000);
the cost of a wedding, in the event that she is married, which she estimated as being in the order of $10,000; and
an amount of around $80,000 to assist her in the future in meeting the costs of having children, which would include a reduction in income and an increase in expenses.
The Defendant’s circumstances:
Due to her husband’s illness and death, Kayla took on a role which allowed her to look after Jack as the sole carer and guardian, with a net income of approximately $1,250 p/w.
Since the deceased’s death, Kayla’s assets were valued at approximately $1,012,367, with liabilities in the realm of $67,800.
Kayla deposed that she had a new boyfriend since early July 2022.
The Defendant’s future needs:
repaying the mortgage over the Hoxton Park Property ($67,000);
making further repairs, as well as undertaking renovations to and maintenance of the Hoxton Park Property ($90,000);
updating her car ($60,000);
Jack’s school fees ($100,000); and
funds to support herself and Jack in the future.
In addition, she is considering purchasing an investment property and using the rental income as a substitute for the loss of the deceased’s wage.
b. Nature and duration of the Plaintiff’s relationship with the deceased (s60(2)(a))
Chloe maintained a good relationship with the deceased.
The deceased had separated from Chloe’s mother, when she was about two years of age, but he saw Chloe regularly during contact periods. The deceased paid child support payments for Chloe while she lived with her mother, albeit relatively small fortnightly amounts.
In August 2018, Chloe left her mother’s home, and moved into the Hoxton Park Property to live with the deceased and Kayla. At this time, she was 15 years old. She remained living with the deceased until the time of his death in February 2021.
c. The nature and extent of any obligations or responsibilities owed to the applicant or to any other person (s60(2)(b))
In Xiang bht Cao v Tong [2021] NSWSC 44 at [361], Hallen J observed that there are no special rules or principles applicable to the claims of an adult child; nor is there any presumption in favour of, or against, there being an obligation to make provision for an adult child: citing Towson v Francis [2017] NSWSC 1034 at [108] per Hallen J;
Kayla was the surviving spouse with an infant son. The obligations owed by the deceased to her are much stronger than those owed to Chloe. This was acknowledged by Chloe in submissions.
The Court accepted the “broad general rule” found in Luciano v Rosenblum – being the duty of a testator to his widow, but also noted the competing claim of an adult child from a previous relationship – Stone v Stone [2016] NSWSC 605
The Court accepted that the deceased plainly recognised - by the steps that he took in the final weeks of his life - that he owed a very substantial obligation to his wife and infant son to ensure that they had sufficient funds for their maintenance, education and advancement in life, including all the costs of raising Jack to adulthood.
d. Testamentary intentions of the deceased (s60(2)(j))
The deceased was diagnosed with terminal cancer in November 2020, just two weeks after Jack was born.
The Cancer Council would cover the costs of preparing a will. He spoke to a representative of the Cancer Council on 8 February 2021 and gave instructions that he wanted his entire estate to be left to Kayla. These instructions were passed on to Marsdens Law Group, in order to enable his will to be prepared.
On 18 February 2021, Marsdens Law Group sent a draft will to the deceased. In accordance with the deceased’s instructions, this left his entire estate to Kayla. The deceased confirmed to Kayla that he had reviewed the will and intended to sign it. However, he died just days later, without having done so.
Conclusion
In consideration of the Court’s discretionary powers to award any quantum sum in the face of an eligible applicant, Justice Nixon ordered that the Plaintiff receive, by way of provision out the deceased’s estate, a lump sum of $100,000, with costs reserved.
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