REFERENCE SERIES
101 Succession Answers for NSW
Including Appointments of Enduring Guardian, Powers of Attorney, Wills, Probate and Administration and Family Provision
Contents
ENDURING GUARDIAN ...... 4 Administration ...... 22 Generally ...... 4 Administration bond ...... 23 Application of the legislation ...... 5 Administrator ...... 23 Appointment ...... 5 Administrator – Commission...... 23 Appointor ...... 6 Administrator – Duties ...... 23 Appointee ...... 6 Application for a grant of probate or letters of Capacity ...... 7 administration ...... 24 Corporations ...... 7 Application to revoke a grant of probate or letters of administration ...... 26 Execution ...... 8 Application with the will attached ...... 26 Financial management ...... 8 Functions of a guardian ...... 8 Assets – Transfer or Transmission of assets ...... 27 Assets of the estate ...... 28 General principles ...... 9 Beneficiaries ...... 31 Guardians ...... 10 Benjamin orders ...... 37 Interstate and international guardians ...... 12 Bequests ...... 37 Joint guardians ...... 12 Legislation ...... 13 Burials, cremations and funerals...... 37 Capacity ...... 38 McKenzie friends ...... 13 Caveats ...... 39 Medical and dental treatment ...... 13 Resignation ...... 14 Codicils ...... 41 Co-executors – Authority to act ...... 41 Review ...... 14 Revocation ...... 14 Commission ...... 41 Contested will matters ...... 43 Suspension ...... 15 Construction of the will ...... 44 Tribunal ...... 15 Witnesses ...... 15 Contracts entered into or completed before probate or administration is granted ...... 44 ESTATES ...... 18 Court – Power over wills and estates ...... 46 Accounts ...... 19 Crisp orders ...... 47 Ademption ...... 21 Death ...... 47
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Death of joint executor ...... 49 Extension of time ...... 112 Death of single executor ...... 49 Factors warranting ...... 113 Delegation by executor ...... 49 Family law orders ...... 114 Disclosure ...... 51 Grandchildren ...... 114 Executors ...... 51 Interim provision ...... 117 Grants ...... 52 Intestacy ...... 119 Hotchpot...... 53 Legislation ...... 120 Gifts to charities ...... 54 Matters to be considered by the court ...... 120 Informal wills ...... 54 Notional estate...... 122 Injunction ...... 55 Orders ...... 127 Intermeddling ...... 56 Release of rights ...... 129 Intestacy ...... 56 Testamentary freedom ...... 130 Judicial advice ...... 59 Widows ...... 131 Joint mortgage responsibilities ...... 59 POWERS OF ATTORNEY ...... 135 Joint ownership ...... 59 Generally ...... 136 Larke v Nugus letters ...... 60 Application of the legislation ...... 136 Legislation ...... 61 Appointment ...... 137 Letters of administration ...... 61 Attorney ...... 137 Life estates and similar interests ...... 61 Capacity ...... 138 Life tenancy ...... 62 Corporations ...... 138 Litigation ...... 63 Death ...... 139 Missing will ...... 64 Delegation ...... 139 Personal liability of executor ...... 66 Directions ...... 140 Property of the estate ...... 66 Directors ...... 140 Rectification of a will ...... 66 Enduring power of attorney ...... 141 Renunciation as executor ...... 67 Execution ...... 142 Replacement or removal of executor ...... 68 Executor ...... 142 Resignation of executor ...... 68 General power of attorney ...... 142 Revocation ...... 68 Incommunicate ...... 142 Small estates ...... 68 Insolvency ...... 143 Subpoenas, notice to produce and disclosure ...... 69 Interstate powers ...... 143 FAMILY PROVISION ...... 70 Irrevocable power of attorney ...... 144 Generally ...... 71 Joint attorneys ...... 144 Adequate provision ...... 72 Legislation ...... 144 Adult children ...... 77 Limitations...... 145 Adult child under a promise ...... 82 Liquidator ...... 145 Adult stepchild ...... 83 Management of the estate ...... 145 Affidavits ...... 86 Medical decisions – Enduring guardianship ...... 145 Application for grant not required ...... 89 Overseas powers ...... 146 Attempts to expressly disinherit eligible persons ...... 92 Prescribed power of attorney ...... 147 Bare paternity ...... 93 Principal ...... 148 Close personal relationship ...... 94 Registration ...... 148 Costs ...... 95 Review ...... 149 Crisp orders ...... 98 Revocation ...... 149 De facto partner ...... 99 Trustee ...... 150 De facto partner – Same sex ...... 101 Vacancy in the office of attorney ...... 150 Dependency ...... 103 Witnesses ...... 150 Disclosure ...... 106 WILLS ...... 154 Eligible persons...... 108 Generally ...... 155 Estrangement ...... 109 Administration ...... 156
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Administrator ...... 156 Living wills ...... 176 Alteration ...... 157 Making a will ...... 176 Beneficiaries ...... 157 Marriage and domestic relationships – Effect on Burials, cremations and funerals ...... 160 existing will ...... 176 Capacity ...... 161 Minimum age of will maker ...... 177 Charities...... 163 Minors – Court may authorise minor to make, alter or Construction of will ...... 163 revoke ...... 177 Contracts to make wills ...... 163 Multiple wills ...... 177 Court made wills ...... 163 Mutual wills ...... 178 Dispensing with requirements for execution, Negligence – Solicitor’s duty of care ...... 180 alteration or revocation of a will ...... 164 Promises to make a will or a bequest ...... 185 Disposition of estate property...... 164 Property that can be dealt with in a will ...... 185 Divorce or annulment of marriage ...... 165 Rectification ...... 186 Dual or multiple wills ...... 166 Revocation ...... 186 Execution ...... 166 Self-made wills ...... 187 Executor ...... 167 Solicitors ...... 187 Extrinsic evidence to construe will ...... 169 Statutory wills ...... 188 Foreign wills...... 170 Survivorship ...... 188 Homemade wills ...... 170 Superannuation ...... 189 In contemplation of marriage ...... 171 Suspicious circumstances ...... 191 Incorporation by reference ...... 171 Testamentary capacity ...... 192 Informal wills ...... 171 Testator ...... 192 Informal wills and solicitors’ duties ...... 174 Testator’s family maintenance ...... 193 International wills ...... 175 Who can inspect the will of a deceased person ...... 193 Legislation ...... 176 Witnesses ...... 194
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Generally ...... 4 Application of the legislation ...... 5 Appointment ...... 5 Appointor ...... 6 Appointee ...... 6 Capacity ...... 7 Corporations ...... 7 Execution ...... 8 Financial management ...... 8 Functions of a guardian ...... 8 General principles ...... 9 Guardians ...... 10 Interstate and international guardians ...... 12 Joint guardians ...... 12 Legislation...... 13 McKenzie friends ...... 13 Medical and dental treatment ...... 13 Resignation ...... 14 Review ...... 14 Revocation ...... 14 Suspension ...... 15 Tribunal ...... 15 Witnesses ...... 15
Generally
An appointment of enduring guardian by instrument under the Guardianship Act 1987 allows a person, the appointor, to appoint another person, the guardian, to make medical and lifestyle decisions for them should they become incapable of doing so themselves. It is an entirely separate and distinct power from a Power of Attorney, which allows an attorney to make financial and administrative decisions.
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The same person can act as both guardian and attorney for someone. Where separate people hold the appointments they will usually need to work together – a fact which should be taken into account by any client appointing people to these offices.
The Act includes, at s 4, eight general principles relating to the duties of everyone exercising functions under the Act with respect to persons who have disabilities – which, per force, is everyone who ever needs to exercise their role as an enduring guardian. These should be brought to the attention of anyone who is appointed.
Application of the legislation
Part 2 of the Guardianship Act 1987 allows a person to appoint guardian for themselves.
Part 3 of the Act also allows the Guardianship Tribunal, a division of the NSW Civil and Administrative Tribunal, or the Supreme Court to appoint a guardian on a person’s behalf.
Part 3A of the Act allows the Tribunal to make financial management orders for people who are incapable of managing their financial affairs.
A guardianship order under Part 3 may be made in respect of someone who is already a patient within the meaning of the Mental Health Act 2007, and the fact that a person under guardianship becomes a patient within the meaning of the Mental Health Act 2007 does not operate to suspend or revoke the guardianship.
However an appointment under Part 2 or an order under Part 3 in respect of a person who is, or later becomes, a patient within the meaning of the Mental Health Act 2007 is effective only to the extent that the terms of the appointment or the order are consistent with any determination or order made under the Mental Health Act 2007 in respect of the patient.
In effect then, the Mental Health Act 2007 prevails over the Guardianship Act 1987.
Appointment
To be effective an appointment of enduring guardian must be in the form prescribed by Schedule 1 of the Guardianship Regulation 2016 and must be executed in accordance with the provisions of the Act: s 6C Guardianship Act 1987.
An appointment under the Act only has effect when a person needs a guardian and it continues to have effect, unless revoked or suspended, through all such periods.
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Further, the guardian may only resign when the appointor is not in need of a guardian, unless with the approval of the Tribunal, and must do so in writing in the prescribed form, which must be witnessed. See Revocation below.
An appointment can be reviewed by the tribunal, or the Supreme Court, either on its own motion or at the request of anyone it considers has a genuine concern for the welfare of the appointor. The appointment can be suspended pending any such review: s 6J Guardianship Act 1987.
Appointor
Any person over the age of 18 who has capacity can appoint a guardian by an instrument in writing under the Act.
The Guardianship Act uses the term ‘appointor’ for the person making the appointment. This is defined in s 3 of the Act as the person who has appointed an enduring guardian under Part 2 of the Act.
‘Person under guardianship’ is defined in the Act, but the definition is broader than appointor, being ‘a person who has a guardian within the meaning of the Act’ – which includes a guardian appointed not only by a person, but on their behalf by a court or tribunal.
An appointment of enduring guardian is not effective unless and until signed by the appointor and also witnessed by an eligible witness. See Witnesses below.
Appointee
Section 5 of the Guardianship Act 1987 defines the term ‘appointee’ as a person appointed as an enduring guardian under Part 2 of the Act.
The term ‘guardian’ is also used, although that technically includes a person who is appointed by an order of the tribunal or court under Part 3 of the Act.
An appointment of enduring guardian is not effective for use by a particular appointee, unless and until that person acknowledges that they accept the appointment by signing the document in front of an eligible witness.
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An appointee can only resign if the appointor has capacity and must do so by instrument in writing executed in accordance with the same requirements as apply to the appointment, that is, signed in the presence of an eligible witness. See Witnesses below.
Capacity
The appointor must have capacity to validly appoint a guardian.
Although the appointer’s treating doctors and perhaps even expert medical practitioners can, and often should, be consulted, the question of capacity is not strictly a medical question, it is a matter about which the lawyer witnessing and certifying the instrument must satisfy themselves.
The Law Society of NSW provides guidelines for assessing capacity: When a client’s mental capacity is in doubt: A Practical Guide for Solicitors.
Careful notes should always be made and retained and any other precautions taken and evidence obtained; for example, lawyers might consider whether to video the conference when the document is explained to the client and when they acknowledge their understanding of the document.
Subject to the Law Society guidelines and the lawyer’s enquiries about and/or any prior knowledge of the principal, if the lawyer is in any doubt as to capacity then it is prudent to obtain a medical opinion before accepting instructions to act, or to refuse to act.
On the separate question of whether a person was in need of a guardian at any given time, as opposed to whether they had capacity at the time the instrument was executed, s 6N of the Guardianship Act 1987 provides that the certificate of a medical practitioner to the effect that the person was wholly or partially incapable of managing their person at that time is evidence of the fact the person was in need of a guardian. Prudently, a client exercising power under an appointment of enduring guardian should obtain such evidence, although it could equally be obtained later if required in most cases.
Corporations
The Act applies to natural persons, not corporations.
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Execution
See Witnesses below.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
Financial management
Part 3A of the Guardianship Act 1987 provides for the tribunal to make financial management orders for persons who cannot manage their own financial affairs. This is separate and distinct from the ability of a person to appoint an enduring guardian for themselves, or from the tribunal’s power to do so for them.
The functions of an enduring guardian appointed under Part 2 of the Act do not include financial management. A Power of Attorney can be appointed to that effect, although not unless a person has capacity; if a person who has lost capacity had previously appointed an enduring Power of Attorney then they would probably not need a financial management order. See Powers of attorney below.
Functions of a guardian
The functions of a guardian are set out in s 6E Guardianship Act 1987 and also in the prescribed form. These are:
(a) deciding the place, such as a specific nursing home, or the appointor’s own home, in which the appointor is to live,
(b) deciding the health care that the appointor is to receive,
(c) deciding the other kinds of personal services that the appointor is to receive, for example, household cleaning, or hairdressing,
(d) giving consent under Part 5 of the Act to the carrying out of medical or dental treatment on the appointor,
(e) any other function relating to the appointor’s person that is specified in the instrument, which should be considered and specified if necessary by the appointor at the time of making the appointment.
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However, the instrument appointing the guardian may limit or exclude any of these.
Careful consideration should be given by the appointor at the time of making the appointment as to what functions they wish their guardian to have and how they wish them to be exercised. Some people have very strong views, religious or otherwise, about this, especially item (d) relating to medical treatment.
For example, regarding the type of medical treatment that a person can receive, if the appointor is a Jehovah’s Witness they may wish to specify that they are not to receive a blood transfusion.
Similarly, many people wish to specify that their life should not be artificially prolonged if they are in a persistent vegetative state. While euthanasia is not legal in NSW, the decision to switch off life support is one that a guardian can and must make. It is a controversial issue and appointors should be encouraged to consider it carefully. Directions and limitations can be put in the document on the appointor’s instructions, such as requiring a medical practitioner – or two, or ten! medical practitioners – to certify that there is no realistic prospect of recovery, before such a decision can be made.
To take such directions further, a detailed document often called an Advance Medical Directive, can be attached to the instrument and the guardian directed in the instrument to have regard to its provisions when making any decision about what medical treatment should be provided to the appointor.
Alternately, where the appointor is appointing a close and trusted family member, with whom they have discussed their beliefs and wishes in detail, there may be no need for any direction of limitation in the instrument and the guardian should be left to do what they think best at their absolute discretion.
The tribunal can authorise a guardian to override the appointor’s objection to treatment if it is manifestly in the patient’s best interests to do so: s 46A Guardianship Act 1987.
General principles
Section 4 of the Guardianship Act sets out the following general principles:
(4) It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles:
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(a) the welfare and interests of such persons should be given paramount consideration,
(b) the freedom of decision and freedom of action of such persons should be restricted as little as possible,
(c) such persons should be encouraged, as far as possible, to live a normal life in the community,
(d) the views of such persons in relation to the exercise of those functions should be taken into consideration,
(e) the importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,
(f) such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,
(g) such persons should be protected from neglect, abuse and exploitation,
(h) the community should be encouraged to apply and promote these principles.
It is suggested that a copy of these general principles be provided to any person appointed as a guardian.
Guardians
Age requirement for a guardian
A guardian must be over the age of 18 years: s 6B.
Choice of guardian
Appointors should be encouraged to think carefully about whom they will appoint; given the nature of the duties of a guardian, it should not only be someone whom the appointor trusts to carry out their wishes, but someone who can reasonably be expected to know and respect those wishes. If more than one guardian is to be appointed then the appointor should consider whether those people might have conflicting views about their duties and the appointor’s wishes, in which case specific direction and/or limitations should be included in the instrument.
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Consideration should also be given to granting one of the joint guardians a ‘casting’ vote, or to requiring the intervention of a third party, for example a medical practitioner, in the event of any deadlock about joint decisions.
Further, the appointor should consider the need for guardians to work together with anyone holding power of attorney so that treatment and services can be funded, and ensure that persons appointed can work together.
Ineligible guardians
Section 6B Guardianship Act 1987 provides that some people are not eligible to be appointed as guardians, effectively those who might have a conflict of interest, namely if:
(a) the person is, in a professional or administrative capacity, directly or indirectly responsible for, or involved in, the provision of any of the following services for fee or reward to the person making the appointment:
(i) medical services (whether provided in a hospital, at home or otherwise),
(ii) accommodation,
(iii) any other services to support the person making the appointment in his or her activities of daily living, or
(b) the person is the spouse, parent, child, brother or sister of a person of the kind referred to in paragraph (a).
However, if a person who is validly appointed as an enduring guardian becomes responsible for, or involved in, the provision for fee or reward of a service to the appointor of the kind referred to in subsection (2)(a), the appointment does not lapse.
More than one guardian
More than one guardian may be appointed, either jointly or severally: s 6D Guardianship Act 1987.
See also Joint guardians below.
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Substitute guardians
A substitute guardian or guardians may also be appointed: s 6DA Guardianship Act 1987. Substitutes have and exercise functions only if the original guardian dies, resigns or becomes incapacitated.
Interstate and international guardians
An instrument validly appointing a guardian in another state of Australia, certified by an Australian legal practitioner, has effect in NSW, but only to the extent that any functions it confers can also be conferred under the NSW Act: s 6O Guardianship Act 1987.
A guardian appointed under the law of another country can apply to the tribunal for recognition of their appointment in NSW, but if granted, the guardian may only exercise functions which could have been conferred under the NSW Act: s 48B Guardianship Act 1987.
Joint guardians
Two or more guardians may be appointed, either jointly, severally, or jointly and severally: s 6D Guardianship Act 1987.
If guardians are appointed to act jointly, then all guardians must act together.
If guardians appointed severally they can also be assigned separate functions.
If they are appointed to act jointly and severally, then they can do so at their discretion subject to any limitation of direction in the document.
If one guardian vacates office, then the remainder continue, unless the document provides otherwise. The tribunal may confirm the appointment of a remaining joint enduring guardian.
Where a client is appointing joint guardians, they should be advised to consider carefully whether those persons will be able to work together and make joint decisions. Where necessary, the appointor should consider making provision in the document for one of the guardians to have a casting vote, or a third party, for example a medical practitioner, to be consulted in the event of a deadlock.
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Legislation
Guardianship Act 1987
Guardianship Regulation 2016
McKenzie friends
A McKenzie Friend is someone who assists an unrepresented person in court. They can sometimes be a lawyer, but usually not – and they are not intended to be a substitute for a lawyer. A McKenzie Friend, even if they do happen to be a lawyer, may not address the court; they can take notes, organise papers, whisper quietly to and generally assist the litigant. The basis for allowing a McKenzie Friend is fairness – allowing an unrepresented person to have basic assistance at the bar table when presenting their case.
McKenzie v McKenzie (1970) 3 WLR 472 was a family law case and McKenzie Friends are more common in family law and guardianship matters, but they may be permitted in any court where an unrepresented person needs assistance to ensure fairness.
See also: Hayes v Pioneer Credit Acquisition Services Pty Ltd [2019] FCA 1260 (13 August 2019.)
In guardianship hearings before the NSW Civil and Administrative Tribunal, where there is no right of representation, a McKenzie Friend will often be permitted to assist people appearing before the tribunal.
Medical and dental treatment
Part 5 of the Guardianship Act 1987 provides for consents in relation to medical and dental treatment.
Section 33A sets out the hierarchy of the persons responsible to give consent for a person to receive treatment. At the top of that hierarchy is a guardian, provided that the instrument or order by which they are appointed provides for them to carry out the function of giving consent to medical and dental treatment.
Any appointee who is considering deleting this function from the standard form of appointment should be referred to s 33A and advised to consider the hierarchy and its possible effect upon them.
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When considering the provisions of s 33A, reference must also be had to the definitions of a person ‘having the care of another person’ in s 3D and the definition of ‘close friend or relative’ in s 3E.
Resignation
A duly appointed guardian, including a substitute guardian, can only resign if the appointor has capacity and must do so by instrument in writing, executed in accordance with the same requirements as apply to the appointment, that is signed in the presence of an eligible witness. See Witnesses below.
Review
The tribunal may review the appointment of a guardian. It may suspend the appointment while that review is occurring. Upon review the tribunal may revoke or confirm the appointment, even where the instrument has not been correctly executed. Further, the tribunal may treat the review as an application under Part 3 of the Act and make orders appointing a guardian, rather than confirming the appointment: s 6K Guardianship Act.
The Supreme Court may also review a guardianship order and make such orders as it sees fit: s 6L Guardianship Act 1987.
Revocation
By the appointer
A person who has appointed an enduring guardian for themselves may revoke it in writing, but only subject to the same execution requirements which apply to appointments, that is certification by an eligible witness and only if they have capacity. See Witnesses below.
By the Tribunal
Upon reviewing an appointment pursuant to s 6J Guardianship Act 1987 the tribunal can revoke an appointment of enduring guardian at the request of the appointor, or if the tribunal is satisfied that it is in the best interests of the appointor to do so: s 6K Guardianship Act.
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By marriage
An appointment of enduring guardian is automatically revoked if the appointor marries after the date of the appointment, except if they marry the person already appointed as guardian.
This provision is often overlooked and clients should be reminded of it. It particularly arises where a parent appoints their adult child as guardian, then later remarries.
Suspension
Any guardianship order made by the tribunal or the Supreme Court under Part 3 of the Act has the effect of suspending any appointment of enduring guardian under Part 2 of the Act for the duration of the order.
Tribunal
The Guardianship Division of the NSW Civil and Administrative Tribunal has jurisdiction, with the Supreme Court, over guardianship matters under the Guardianship Act 1987.
The tribunal may review the appointment of a guardian. See Review above.
Witnesses
Who can be a witness?
An Appointment of Enduring Guardian can only be witnessed by an ‘eligible witness’ as defined in s 5 Guardianship Act. This includes a lawyer.
What is required of an eligible witness?
The eligible witness must not only be present, watch the appointor sign and then sign the document themselves, they must also certify that they explained the effect of the document to the appointor and that the appointor appeared to understand the effect of the document. This must be done before the eligible witness signs the document.
This requires the appointor to read the document, or that the document to be read to them. It further requires a conversation or other communication between the appointor and the
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eligible witness which allows the eligible witness to be satisfied that the appointor understands.
If the validity of the appointment is ever challenged, the eligible witness may be required to give evidence about the execution. For that reason, a file note should be kept which will assist the eligible witness to recall the circumstances of the execution, in case it is ever necessary. Such a note should be made and retained as a matter of course and a confirmatory letter sent to the client after execution of the document. The Letter to Client Finalising Matter in the Wills, Powers of Attorney, Appointments of Enduring Guardian and Advance Care Planning matter plan is recommended.
What is required of an eligible witness where appointor blind, deaf, unable to read/understand?
There is no provision on the signing section of the prescribed enduring guardian form to record any additional or alternate information when the appointor is unable to see/read, or hear, or speak/understand English; there is only the certification itself.
It is therefore a matter for the lawyer witnessing and certifying the document to make and retain a proper file note recording the way the document was witnessed and, specifically, the manner in which the lawyer satisfied themselves that the appointor understood what they were signing.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
After the execution of the document, the usual letter which is sent to the client recording the fact of the execution of the document should also detail the manner of the execution, if it was in any way unusual. The Letter to Client Finalising Matter in the Wills, Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning matter plan is recommended.
Section 6C of the Guardianship Act 1987 provides that the person signing can instruct someone else to sign on their behalf, which could apply in the instance of a blind or disabled person. If that occurs, the witness must still certify that the appointor appeared to understand the effect of the instrument and, if the instrument is signed for the appointor by an eligible signer, then the witness must also certify that the appointor, in the witness’s presence, instructed the signer to sign the instrument for the appointor. That certification is contained in the prescribed form for appointment of enduring guardian.
Again, the lawyer needs to make and retain a proper file note of the exact manner in which the document was executed and exactly how the lawyer satisfied themselves that the
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appointor understood the document and also how the appointor directed the signer to sign for them. Again, a confirmatory letter should detail the manner of execution.
Given that the onus is on the legal practitioner as sole witness to the document, there is very little guidance available for lawyers in this regard. The NSW Law Society of NSW provides Guidelines for Solicitors Preparing an Enduring Power of Attorney, but not for an Appointment of Enduring Guardian.
While the guidelines might generally assist with enduring guardian documents too, they are silent regarding blind people, or non-English speakers. They simply say a lawyer should only complete a certificate if the lawyer has explained the effect of the document to the donor directly. The explanation should be made directly to the donor and not to third parties purporting to act on the donor’s behalf, that is not to the person signing an Appointment of Enduring Guardian under direction of the appointor.
It is not sufficient for the lawyer to simply explain the effect of the document to the appointor. The lawyer must also be satisfied that the appointor appeared to understand the explanation about the effect of the document before the lawyer can sign the required certificate.
The keeping of sufficient file notes and sending a confirmatory letter is the bare minimum that should be done to ensure evidence exists of the execution, if the validity of the document, or the execution, is ever called into question. Such evidence might be required if the appointment is challenged by a relative or friend of the appointor after they lose capacity, or reviewed by the NSW Civil and Administrative Tribunal, or to defeat any claim against the lawyer for alleged negligence in the preparation or execution of the document.
If the circumstances of the particular matter warrant greater precautions being taken, for example the parlous state of the client’s health, controversial care directives in the document, disagreements amongst family members or medical practitioners as to care options, then legal practitioners should consider having another person, perhaps a staff member or another lawyer, as an additional witness to the execution of the document – not to sign the document, but to record and confirm the manner of its execution – or videoing the conference where the document is explained and executed, with the consent of the client.
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Accounts ...... 19 Ademption ...... 21 Administration ...... 22 Administration bond ...... 23 Administrator ...... 23 Administrator – Commission ...... 23 Administrator – Duties ...... 23 Application for a grant of probate or letters of administration ...... 24 Application to revoke a grant of probate or letters of administration ...... 26 Application with the will attached ...... 26 Assets – Transfer or transmission ...... 27 Assets of the estate ...... 28 Beneficiaries ...... 31 Benjamin orders ...... 37 Bequests ...... 37 Burials, cremations and funerals ...... 37 Capacity ...... 38 Caveat ...... 39 Codicils...... 41 Co-executors – Authority to act ...... 41 Commission ...... 41 Contested will matters ...... 43 Construction of the will ...... 44 Contracts entered into or completed before probate or administration is granted ...... 44 Court – Power over wills and estates ...... 46 Crisp orders ...... 47 Death ...... 47 Death of joint executor ...... 49 Death of single executor ...... 49 Delegation by executor ...... 49 Disclosure ...... 51 Executors ...... 51 Grants ...... 52 Hotchpot ...... 53 Gifts to charities ...... 54 Informal wills ...... 54
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Injunction ...... 55 Intermeddling ...... 56 Intestacy ...... 56 Judicial advice ...... 59 Joint mortgage responsibilities ...... 59 Joint ownership ...... 59 Larke v Nugus letters ...... 60 Legislation...... 61 Letters of administration ...... 61 Life estates and similar interests ...... 61 Life tenancy ...... 62 Litigation ...... 63 Missing will ...... 64 Personal liability of executor ...... 66 Property of the estate ...... 66 Rectification of a will ...... 66 Renunciation as executor ...... 67 Replacement or removal of executor ...... 68 Resignation of executor ...... 68 Revocation ...... 68 Small estates ...... 68 Subpoenas, notice to produce and disclosure ...... 69
Accounts
Duty to keep accounts
An executor or administrator has a duty to keep records, or accounts, of how the estate is administered and to make the accounts available to the beneficiaries. For most estates it is not necessary for the accounts to be filed at the court, or for them to be approved or ‘passed’ by the court. There is no prescribed form for accounts – estates where the executor engages a solicitor for the probate and administration would usually rely on the solicitor’s trust account records. Sometimes it may be necessary to engage an accountant to keep or reconcile accounts, depending on the complexity of the estate.
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Filing, verifying and passing of accounts
Passing of accounts is a process by which the court checks the accounts and verifies that they accurately reflect how the executor or administrator has managed the estate and that they have done so in accordance with the will, if applicable, and/or the relevant law.
Probate accounts can be filed at the court and will be placed on the court file where they can be inspected by the beneficiaries. There is no filing fee for simply filing the probate accounts and no prescribed form.
The accounts can be verified by the executor or administrator swearing an affidavit that the accounts are true and correct.
Pursuant to s 85 of the Probate and Administration Act 1898 the court may order that verified probate accounts be filed at court in a number of circumstances, including where:
− the executor or administrator is a creditor of the estate of the deceased; or
− the executor or administrator is the guardian of a minor who is a beneficiary; or
− the whole or a substantial part of the estate passes to one or more charities or public benevolent institutions; or
− the court otherwise determines that it is appropriate that accounts should be filed in a particular case.
It may also be prudent for an executor or administrator to file probate accounts if there is expected to be a dispute in relation to how the estate has been managed.
In addition to ordering that verified probate accounts be filed, the court can also make an order that those accounts be passed. As a matter of practice, the court does not usually require accounts to be passed unless there has been a request by a beneficiary, or the executor or administrator is applying for commission.
An order for the filing of verified accounts can be made at the time a grant of probate or letters of administration is made. If such an order is made, a notice that verified accounts need to be filed, or filed and passed, will be sent out at the time the grant is sent to the executor or administrator.
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Time to file accounts
The normal time to file accounts is within 12 months of the grant being made. In most simple estates it is expected that the estate will be fully administered within this 12-month period, ‘the executor’s year’, although this will depend on the nature of the estate and the terms of the will.
The court can make orders extending the time to file accounts or, if appropriate, extend the time to file accounts till further order of the court. The court can also dispense with the need to file further accounts.
The court can also make an order for the filing, or for the filing and passing, of accounts after a grant has been made. This would usually only be done on the application of a beneficiary.
Ademption
The term ‘ademption’ refers to the situation where a specific gift to a named beneficiary in a will is defeated – adeemed – because the property which is the subject of the gift no longer exists. This might apply where a testator makes a specific gift of a property to a beneficiary, but then after making the will sells that property. The question arises as to whether the gift should survive, in the sense that the sale proceeds, technically comprising some part of the assets of the estate, should still go to the named beneficiary to satisfy the specific bequest.
There is no simple answer to that question. The Supreme Court has said that it turns on the issue of whether the specifically given asset has changed in substance. In the case of a property sold before death, it has certainly changed in substance, but if the proceeds had been kept separate by the deceased on the basis that it was to satisfy the specific bequest, then the sale may not defeat the gift.
Another example might the specific bequest of shares in a company, where the company later changes its name, but otherwise remains the same trading entity, in which case there might be no ademption of the gift of the shares in that entity, because the asset specifically given has not changed in substance.
However, the change in the nature of the asset might be more nuanced – if the company in which shares have been gifted has not just changed its name, but also changed its structure and, for example, diluted or changed the structure of its shareholding, then there could be ademption.
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In NSW Trustee & Guardian v Bensley & Ors [2012] NSWSC 655 the court discussed ademption and decided that the sale of a specifically gifted real property had defeated the gift of that property in the will. The court in that case cited with approval the majority judgement in RL v NSW Trustee and Guardian [2012] NSWCA 39, which stated:
... the only circumstance in which it is legitimate for the proceeds of sale of a specifically given item of property to pass to the intended donee of that property, other than where the sale has been effected without authority or in some other fashion wrongfully, is where the specifically given asset has not been changed in substance.
Administration
Administration is defined in s 55 of the Succession Act 2006. Both an executor, in relation to probate, and an administrator, in relation to letters of administration, administer an estate. This means getting the assets in, paying the debts and distributing the estate according to the will or the rules of intestacy.
Following a grant of probate an executor has the right to deal with the assets of the estate in accordance with the will, at which point the executor is said to have the administration of the estate.
Following the grant of letters of administration by the court, a person to whom the letters have been granted, the ‘Administrator’, has the right to deal with the estate, to either carry into effect the provisions of any informal will which was attached to the grant, or pursuant to the rules of intestacy as set out in Chapter 4 of the Succession Act 2006.
‘Administration’ is defined in the Succession Act 2006 at s 55.
‘Administration’ is defined in the Probate and Administration Act 1898 at s 3 as follows:
Administration includes all letters of administration of the real and personal estate and effects of deceased persons whether with or without the will annexed, and whether granted for general, special, or limited purposes, also exemplification of letters of administration or such other formal evidence of the letters of administration purporting to be under the seal of a Court of competent jurisdiction as is in the opinion of the Court deemed sufficient.
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Administration bond
This is a surety equal to the value of the estate which an administrator is required to lodge upon letters of administration being granted.
See Application for a grant of probate or letters of administration below.
Administrator
An administrator is defined in s 3 of the Probate and Administration Act 1898, which is the same definition adopted by s 3 of the Succession Act 2006:
"Administrator" includes the NSW Trustee and any other person to whom administration as hereinafter defined is granted.
Note that the term ‘administratrix’, which is technically the female version of administrator, does not appear in the acts at all. It is therefore neither necessary nor correct to use that term; a female administrator is still the ‘administrator’ as per the definition in the acts.
In the case of an intestate estate, the persons entitled to a grant of letters of administration are set out in s 63 of the Probate and Administration Act 1898, being the spouse or one or more of the next of kin, or the spouse and one or more of the next of kin jointly, otherwise whomever the court thinks fit.
Note that the legal guardian of an entitled minor may apply for the grant.
Administrator – Commission
See Commission below, which applies to executors and administrators.
Administrator – Duties
An administrator is obliged to disclose to the court all assets and liabilities of the deceased. This is done by way of the inventory of assets and liabilities which is annexed to the affidavit in support of the application for grant of either probate or letters of administration: s 81A Probate and Administration Act 1898.
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The administrator may not deal with any asset that has not been disclosed to the court: s 81B Probate and Administration Act 1898.
An administrator, once appointed, has the following duties:
− ‘get in’ the estate; that is to collect and consolidate the estate’s assets, including to liquidate them where appropriate;
− to keep estate accounts;
− to maximise the estate’s assets, by leasing real property for example;
− to pay the deceased’s debts and the estate’s liabilities with due diligence;
− to manage and, if possible, compromise any claims against the estate;
− to file, verify and pass estate accounts if required in accordance with s 85;
− to distribute the estate in accordance with ss 92-94 to the persons entitled, pursuant to the will or the rules of intestacy.
Application for a grant of probate or letters of administration
Any need to apply
A grant of either probate where there is a valid will, or letters of administration where there is no will or no valid will, is not always required. There is no legislative requirement to apply for a grant in every case.
Whether a grant is necessary will depend upon the assets in the estate. If the assets include land, or registered securities, then a grant will be necessary. However, if the estate is small and/or the banks or other institutions which hold the assets are willing to release them without a grant, then one may not be necessary.
Eligibility to apply
An executor, or multiple executors, named in a will can apply for a grant of probate by right.
On intestacy the persons to whom a grant of letters of administration may be made are set out in s 63 Probate and Administration Act 1898. See Administrator above.
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Where the will is invalid, due to being wrongly executed, or is irregular because it is a copy or a video, or where the named executor is unavailable and no substitute is appointed, then an application for probate or letters of administration with the will attached needs to be made. Most commonly in this scenario the applicant is one of the beneficiaries under the will, but it can also be the attorney or guardian of the beneficiary if the circumstances require.
Applications for a grant of either probate or administration must be made to the Supreme Court. There is helpful information on the court’s website under the Probate tab.
Requirement for an administration bond
Section 64 Probate and Administration Act 1898 provides for anyone, except the NSW Trustee, to whom a grant of administration is made to lodge a surety guarantee, known as an administration bond.
The amount of the bond is nominally equal to the value of the estate, however under s 65 of the Succession Act 2006 the court can vary the amount or dispense with the bond all together. A bond will always be required if there are infant beneficiaries. There is also authority for the proposition that an administration bond should not be dispensed with where the grant is ad litem – for the purpose of litigation: In the Estate of Coe [2013] NSWSC 968.
Section 67 allows the court to assign the bond to anyone if any condition in the bond has been broken and that person is entitled to sue for the breach as if the bond had been given to them. This protects the beneficiaries and creditors and provides them with a remedy for the default of an administrator.
Time to apply
Rule 78.16 of the Supreme Court Rules 1970 specifies that an application for a grant should be filed within six months from the date of death of the deceased. If it is filed any later an explanation must be given to the court explaining the delay. This can be done by either including an explanation in the affidavit of the applicant or lodging a separate affidavit of delay.
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Application to revoke a grant of probate or letters of administration
An application may be made to the Supreme Court to revoke a grant of probate, although there is no specific provision in the Probate and Administration Act to that effect.
In O'Brien v McCormick [2005] NSWSC 619 the court noted:
When an application is made to the Court to revoke a grant of probate, it is an application for the Court to exercise its inherent jurisdiction: Bates v Messner (1967) 67 SR(NSW) 187; Mavrideros v Mack (1998) 45 NSWLR 80.
51 The appropriate test for revocation of a grant has been stated by Sheller JA (with whom Priestley and Beazley JA agreed) in Mavrideros v Mack (1998) 45 NSWLR 80 at 108, as being:
“...whether the due and proper administration of an estate had either been put in jeopardy or had been prevented either by reason of acts or omissions on the part of the executor or by virtue of matters personal to him, for example, mental infirmity, ill health, or by virtue of the proof of other matters which established that the executor was not a fit and proper person to carry out the duties he had sworn to perform. His Honour applied a far too rigid test by saying that one had to get close to the position of the grant being useless. In this, in my opinion, his Honour erred. Further his Honour did not expressly take into account the degree of delay and inefficiency.”
The Probate and Administration Act 1898 does provide specifically for revocation of a grant of letters of administration for an intestate estate: s 66.
The Act also prescribes the effect of revocation of a grant of either probate or letters of administration: s 40D.
For an example of a successful application to revoke a grant of probate, with a substituted order granting probate of an earlier will see Dickman v Holley; Estate of Simpson [2013] NSWSC 18 and (No. 2) [2013] NSWSC 198.
Application with the will attached
Where a deceased leaves a will and the rules of intestacy do not apply, but the will is invalid, due to being wrongly executed, or is irregular because it is a copy or a video, or where the named executor is unavailable having become incapable, or simply being unwilling, and
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where no substitute is appointed, then an application for probate or letters of administration with the will attached needs to be made. Most commonly in this scenario the applicant is one of the beneficiaries under the will, but it can also be the attorney or guardian of the beneficiary if the circumstances require.
The will is, literally, attached to the application for letters of administration. Affidavit evidence is filed with the application, setting out the reasons and basis for the order sought.
See also Incapacity of executor and Renunciation below.
Assets – Transfer or Transmission of assets
Real Property
Notice of death
Any property held as joint tenants automatically goes to the survivor and is not part of the estate. However, a notice of death is necessary to transfer the title into the name of the surviving proprietor.
From estate to beneficiary – transmission
To transfer real property directly from the name of the deceased to a beneficiary, that is without it being transferred first to the executor or administrator, there is no need to complete a transfer and registered conveyance, but merely to lodge a transmission application with NSW Land Registry Services supported by ‘such evidence as the Registrar General may require’, which would normally be the grant of probate or letters of administration and ‘accompanied by the consent of the executor or administrator’: s 93(2) Real Property Act 1900.
From estate to executor or Administrator – transmission
To transfer an estate property to themselves as trustee, there is no need to complete a transfer and registered conveyance, but merely to lodge a transmission application with NSW Land Registry Services supported by ‘such evidence as the Registrar General may require’, which would normally be the grant of probate or letters of administration: s 93(2) Real Property Act 1900.
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From executor or administrator to beneficiary – transfer/conveyance/s.83 acknowledgement
Once the property is transferred to the executor a registered conveyance and transfer is required. Section 46E Probate and Administration Act 1898 provides that real estate vested in an executor or administrator cannot be transferred to another person, whether beneficiary or trustee, other than by:
1. For Torrens title land – compliance with the provisions of the Real Property Act 1900, which means by way of a registered conveyance and transfer; or,
2. For old system land – conveyance, or s 83 Probate and Administration Act 1898 which allows an executor or administrator to sign an acknowledgement in a form prescribed by the Rule Committee, that the person is entitled to the real estate. ‘Rule Committee’ means the committee established under s 123 of the Supreme Court Act 1970, or the Uniform Rules Committee established under s 8 of the Civil Procedure Act 2005.
Personal Property
The title of a beneficiary entitled to personal property from an estate is not complete without some act of the executor or administrator to give effect to the gift: Re Greene (dec’d); Greene v Greene [1949] Ch 333.
For personal property such as shares, securities, animals or motor vehicles which require transfer and registration, the executor or administrator will need to complete the appropriate documentation. For other items, such as household goods, the executor making arrangements for their collection or delivery is sufficient, but prudently for all parties a receipt or email or other written record should be created and retained.
Assets of the estate
Beneficiary in possession of estate property
It is the duty of the executor or administrator to get in the estate, including any property held by beneficiaries. If the beneficiary wants to retain the property it can be transferred to them in specie, as part of their entitlement under the will, but not if the property is subject to a specific bequest to another beneficiary and not if its value is greater than their entitlement – unless they are prepared to pay the estate the difference. Issues of valuation then arise. The executor would need to obtain a formal valuation of the property or reach
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agreement with the purchasing beneficiary. The executor would be wise to obtain the agreement of the other beneficiaries to any such arrangement.
There is often great angst in families over certain items of property after the death of a parent, with some items being taken from the deceased’s home by family members who feel an entitlement regardless of the provisions in the deceased’s will. The technical position is that an executor can recover any estate property from whomever holds it, but the practical position is that it is usually not viable to do so, especially where the item is only of sentimental or unassessable value.
If recovery is viable and the executor or administrator wishes to recover the item, then an application must be made to the court for a declaration and a writ of possession.
The same will apply where a beneficiary is in occupation of real property owned by the estate without permission and refuses to vacate. See Beneficiaries below: In possession of estate property – Can a beneficiary be evicted?
Disclosure of assets
An executor or administrator is obliged to disclose to the court all assets and liabilities of the deceased. This is done by way of the inventory of assets and liabilities which is annexed to the affidavit in support of the application for grant of either probate or letters of administration: s 81A Probate and Administration Act 1898.
The executor or administrator may not deal with any asset that has not been disclosed to the court: s 81B.
Additional assets after grant
Because the obligation to disclose is a continuous one, any assets not previously disclosed in the initial affidavit must be disclosed to the court by way of further affidavit: r 78.91 Supreme Court Rules.
If an asset has come to light after the grant has been finalised then an Affidavit of Additional Assets needs to be filed.
If an updated copy of the grant is required, an Application for Exemplification also needs to be filed. An exemplification is a certified and sealed copy of a grant. The Inventory of Property does not need to be amended.
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Provide the following when applying for an updated grant at the Supreme Court:
1. original grant;
2. Application for Exemplification;
3. application fee;
4. Affidavit of Additional Assets, form 148;
5. original Inventory of Property; and
6. additional lodgement fee if required due to the new gross value of assets.
The Affidavit of Additional Assets and the Application for Exemplification are available on the Probate and Letters of Administration matter plans.
Joint ownership of assets
If the deceased owned real property as joint tenant then the property passes to the other tenant by right of survivorship and no part of the property is an asset of the estate nor subject to the will.
The same applies if any personal property is owned as joint tenant, but it is more difficult to establish such ownership, unless there is a written agreement and/or registration under the Personal Property Securities Register.
If the deceased owned real or personal property as a tenant in common, then the deceased’s share of such property is an asset of the estate and subject to the will.
This applies to any business the deceased owned. Subject to any shareholders agreement or partnership agreement, it may be necessary for the executor or administrator to participate with any business partner of the deceased in running the business.
The sale of any jointly held asset will require the consent of the co-owner. For real property, an executor or administrator who seeks to sell but cannot obtain the consent of the co- owner may make an application under s 66G Conveyancing Act 1919.
Superannuation as an asset
See Superannuation in the Wills section above.
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Also note Burgess v Burgess [2018] WASC 279 for a discussion on potential conflicts where the legal personal representative seeks to claim superannuation benefits for themselves instead of the estate, and provisions which might be included in the will.
Beneficiaries
Claims by a beneficiary
A beneficiary who believes there is a problem with the will, such as a contention that the deceased did not have capacity when the will was made, should be advised by the estate solicitor to seek independent advice.
The executor should be notified promptly of any prospective challenge to the will and/or a caveat should be lodged by the person proposing to challenge.
If all parties are in agreement about the challenge, for example they agree that the deceased did not have capacity, then an application for probate or letters of administration with the will attached could be made in relation to a prior will, or else a deed of family arrangement could be executed providing for probate to be sought of the disputed will on the basis of an agreed adjustment to its terms.
The executor is in a dilemma where a beneficiary raises issues with the will’s validity, but does not commence any proceedings to challenge it. There is often a ‘stand-off’ whereby the executor does not want to apply for probate in view of the prospective challenge, but the beneficiary does not want to incur the cost and risk of proceedings. The size of the estate will be a significant factor in the way such a stand-off is resolved. Ultimately, the executor must either apply to the court or compromise the claim.
Beneficiaries who do not have any issue with the validity of the will, but who consider that inadequate provision has been made for them in the will, can make a claim under Chapter 3 of the Succession Act 2006 for greater provision – see Family provision below. Such a claim does not give grounds for the lodgement of a caveat and should not delay any application for probate.
Death of a beneficiary
Where a beneficiary named in the will dies before the testator then the terms of the will govern what happens to that beneficiary’s share.
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Where a beneficiary named in the will dies more than 30 days after the testator then the beneficiary’s estate is entitled to the bequest under the testator’s will and it is treated as property of the deceased beneficiary.
However, if the beneficiary is a deceased child of the testator, then the entitlement under the will passes to the children of the deceased beneficiary, that is, grandchildren of the testator, provided that they attain 18 years: s 41 Succession Act 2006.
Debts to the estate
If a beneficiary is personally liable for a debt owed to the estate, then the rule in Cherry v Boultbee (1839) 4 Myl & Cr 442; 41 ER 771 applies. The beneficiary is not entitled to participate in the distribution of the estate without paying their debt first. How the executor decides to deal with such a debt regarding final distribution is up to them.
See In the matter of Anglican Development Fund Diocese of Bathurst (receivers & managers appointed) [2015] NSWSC 440 at [22]-[30]; Smith v Smith [2017] NSWSC 408 at [467]-[469]; and Kritsidimas v Dimitrakakis [2019] VSC 704 at [62]-[80].
There is no right of set-off for the beneficiary.
Difference for beneficiaries between an estate with and without a will
Where there is a will the beneficiaries are most likely named or clearly defined and, to the extent at least of any specific bequests, their entitlement is clearly understood. Assuming their contact details are known or can be found, the beneficiaries can be contacted and notified of the bequest.
Where the deceased did not have a will then the rules of intestacy will apply – see Intestacy below. In that case it may not be immediately clear who the beneficiaries are, or what their entitlements may be. Even if the persons entitled under intestacy are known they may not be readily able to be contacted, for example estranged adult children, and searches may have to be performed, or advertisements taken out to find them.
Distribution – when will beneficiaries receive their bequest?
Beneficiaries need to be given a clear understanding of the likely time frame involved in administering and distributing the estate. That time frame will depend upon such factors as:
− whether there is a will;
− whether any will meets the formal requirements for execution;
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− whether an application for a grant of either probate or letters of administration needs to be made;
− whether there is any dispute over who should make any application;
− the logistics of preparing any application, for example overseas executors;
− the nature and extent of assets and liabilities;
− the level of difficulty of getting in the estate and liquidating any assets;
− the statutory restrictions on distribution – not earlier than 6 months from date of death;
− any claims upon the estate, especially family provision claims – 12 months from date of death.
All of these and other factors impact upon how long it will take before beneficiaries receive their entitlement from the estate. It is unwise for the estate solicitor to specify any period for distribution of the estate. It is prudent to explain the process in the context of what is known about the estate and keep the beneficiaries updated as the administration of the estate progresses. Good communication is the key.
Entitlement for beneficiaries to see the will
Beneficiaries, and in fact anyone named in the will or in a previous will of the deceased, are entitled to see the will: s 54 Succession Act 2006.
In possession of estate property – Can a beneficiary be evicted?
In Kennedy v Kennedy [2018] NSWSC 1087 Davies J struck out a defence and granted liberty for the executors to obtain default judgment and issue a writ of possession where one of five adult beneficiaries had been residing in the deceased’s house for about two years since the date of death, despite being requested by the executors to vacate. His Honour observed that:
[7] In my opinion the defences filed by the defendant do not disclose any defence to the claim by the executors. Where there is no lease in place, except if a claim was made in the nature of some form of constructive trust, it is doubtful if there could be any defence to the right of the executors to get in all of the estate property including by obtaining possession of the land.
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Insufficient money to meet a bequest to a beneficiary
See Insolvency below.
Repayment to the estate by beneficiaries
If there has been an error in calculation of their entitlement resulting in an overpayment a beneficiary can be required to repay the overpayment. This would be enforceable as a liquidated debt by the executor or administrator against the beneficiary if necessary.
Where the executor or administrator has chosen to distribute the estate prior to the expiration of the minimum period for claims against the estate, which is six months from the date of death, and/or without publishing the requisite 30 days notice, then the executor can be personally liable for the debt, but there is no provision for the executor to recover the funds from the beneficiaries.
If the executor has chosen to distribute the estate prior to the expiration of the 12 month period for family provisions claims to be made against the estate, and a claim is then made, it is possible for the court to order the beneficiaries to repay money to the estate, or to pay money directly to a successful claimant.
If the estate has made a loan to a beneficiary then it must be repaid, but it can be deducted from the share of the estate which is distributed to the beneficiary, together with any interest as agreed. If part of the beneficiary’s share has been provided to them in advance of a final distribution it is not repayable.
If probate or administration is granted on presumption of death only the court may order that any distribution of the estate be conditional upon the beneficiaries providing security in case the grant is subsequently revoked, in which case they may have to repay any benefit received: s 40B Probate and Administration Act 1898.
Responsibility of beneficiaries for the payment of any estate debts
Beneficiaries do not have any personal liability for debts of the estate. It is the executor or administrator’s responsibility to discharge the estate’s debts. If there are insufficient assets in the estate to meet the estate’s debts, the beneficiaries will not receive their entitlement, however they can never be required to contribute to pay the debts.
Funeral and testamentary expenses are paid first, then any secured creditors are discharged, either from estate funds if mortgaged property is to be retained or on sale of the property, then any unsecured debts are paid.
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Only then, assuming sufficient funds remain in the estate, do the beneficiaries receive their entitlements under the will or intestacy.
If there is a will, then any specific bequests are paid first and the remainder, the ‘residual estate’, is distributed to the beneficiaries according to the will.
If there is no will, then the estate is distributed according to the rules of intestacy. See Intestacy below.
If the estate does not have sufficient assets to meet its debts, it is insolvent. See Insolvency below.
Solicitors dealing with beneficiaries
When acting for the estate, on the instructions of the executors or administrators, a lawyer should take great care to properly manage the relationship with the beneficiaries. The beneficiaries are not the client, although the lawyer may have a duty of care to them in certain circumstances
The beneficiaries generally just want their entitlement, as soon as possible.
Often a beneficiary will be dissatisfied, or wish to take some issue, with how the estate is being administered. They may be concerned at the length of time taken to distribute the estate. They may disagree with decisions made by the executors, particularly when it comes to the distribution of discretionary items like personal effects and furniture, or with the investment and use of estate assets. They may also be dissatisfied with the estate solicitor, whom they blame for any delay, or resent for charging to administer the estate.
The key to managing beneficiaries when acting for an estate is clear communication.
Beneficiaries must be given to understand from inception that the lawyer acts for the estate, on the instructions of the executors, not for them. They should be given a copy of the will as soon as possible and the process of applying for probate or letters of administration should be clearly explained to them, including the approximate time frame.
If beneficiaries are causing trouble, it might be helpful to point out to them that every time they contact the solicitor the estate will be charged for it and therefore the value of their own entitlement will reduce; this can be a two-edged sword though, as a beneficiary might take perverse delight in costing the estate money by contacting the estate solicitor frequently.
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In that context and generally, the beneficiaries should also be told that the estate solicitor is neither able nor required to give them advice about their rights and, if they have any issues with the estate they are liberty to seek their own independent legal advice, at their own cost.
Survivorship of beneficiaries
A beneficiary usually must survive the testator by 30 days to take an interest under the will: s 35 Succession Act 2006.
However, if the beneficiary is a deceased child of the testator, then the entitlement under the will passes to the children of the deceased beneficiary, that is the grandchildren of the testator, provided that they attain 18 years: s 41 Succession Act 2006.
Vesting of interest in beneficiaries
From the date of death to the date of any grant of probate or letters of administration, the property of the deceased vests in the NSW Trustee: s 61 Probate and Administration Act 1898.
A beneficiary has no legal right or title to property of the estate until the executor or administrator transfers it to them following a grant of probate or letters of administration. Until then it is held in trust for them, either generally, or subject to any specific terms of trusts in the will. If the beneficiary’s interest is conditional, for example upon them reaching a certain age, then the condition must be met before the gift can vest.
A beneficiary can apply to the court to have their interest vest earlier than provided for in the will. The rule in Saunders v Vautier provides such a mechanism.
Rule in Saunders v Vautier
The High Court set out the modern formulation of the rule in Saunders v Vautier in CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53 at [47]:
Under the rule in Saunders v Vautier, an adult beneficiary (or a number of adult beneficiaries acting together) who has (or between them have) an absolute, vested and indefeasible interest in the capital and income of property may at any time require the transfer of the property to him (or them) and may terminate any accumulation.
If the beneficiaries are ascertained, have capacity and all consent then ‘they may put an end to the trust by directing the trustee to transfer the interest in the estate to themselves, notwithstanding any direction to the contrary in the trust instrument’: Krstic v State
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Trustees Ltd [2012] VSC 344 at [15]. See also Beck v Henley [2014] NSWCA 201 at [32]-[37] and Re Tracey [2016] QCA 194 at [7] to [10].
For a case where the rule was not upheld due to the beneficial interest being classed as contingent, see Arnott v Kiss [2014] NSWSC 1385. This case also suggests that a gift over clause may defeat application of the rule.
Accordingly, whether there is any reason for the executor to resist the application would depend upon there being any terms of the will that might support such a position. If the executor is in any doubt then the trustee can and should seek judicial advice.
Executors have particular obligations when an estate is faced with the prospect of litigation. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 the majority determined that a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings. Any application on behalf of executors for judicial advice should also seek orders as to the payment of the costs of that application from the estate.
The Probate matter plan provides a Deed of Family Arrangement precedent that can be modified to suit any consensual resolution, including the usual releases and indemnities.
Benjamin orders
See – Death – Presumption of Death, below.
Bequests
A bequest is a gift or legacy under a will. See Gifts and bequests below.
Burials, cremations and funerals
It is quite common for a will to include some directions as to how the testator wishes their remains to be disposed of, or even their detailed wishes for the conduct of a funeral service.
Such statements are non-binding. At common law a direction in a will about the funeral, burial or cremation is considered declaratory only. A statutory exception is any statement in the will against cremation – a person must not cremate the body of a dead person if the
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person is aware that the proposed cremation would be contrary to a written direction left by the dead person: r 77 Public Health Regulation 2012.
Further, in practical terms, it is frequently the case that an executor – and almost certainly an administrator – will not even see the will until after the funeral, by which time it is too late. At common law an executor has a right of possession of the deceased’s body, whereas an administrator does not.
Executors who are in possession of the will with sufficient time to consider any statements of the deceased’s wishes in this regard are at liberty to follow the deceased’s wishes regarding their body and funeral if they can and wish to, or not.
In the absence of any specific provision having been made in the will, the cost to the estate should be considered – the executor has a duty to the beneficiaries not to waste the estate.
At common law the executor is entitled to the possession of the deceased’s body for the purpose of arranging a funeral appropriate to the estate. If there is no executor this falls to the next of kin. Funerals are generally arranged by family members rather than an executor.
If, as is usually the case, family or friends pay for the funeral they may seek reimbursement from the estate once probate or letters of administration have been granted, however excessive, unauthorised costs may be rejected at the executor’s or administrator’s discretion. Reimbursement for the cost of any wake is entirely a matter for the executor’s or administrator’s discretion. The leading authority on reimbursement of funeral expenses and whether the amount claimed is reasonable is Smith v Tamworth City Council and Ors [1997] NSWSC 197. See also Michael Zannetides v Tracey Spence [2013] NSWSC 2032 at [21] – [23].
The situation is slightly different if a specific trust has been created in the will to pay for specific funeral arrangements. One way this is sometimes achieved in a will is by way of a conditional bequest to the executor, or another person, of funds to pay for the implementation of the testator’s wishes in that regard. Such a clause still does not mandate the testator’s wishes, but it makes it far easier for an executor to carry out the intention, as the money is set aside to pay for it and there can be no criticism of the executor for doing something which might otherwise seem extravagant.
Capacity
Challenges to a will on the grounds that the executor lacked capacity are rarely successful.
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The authoritative case on capacity is Banks v Goodfellow (1870) LR 5 QB 549, which stated:
It is essential to the exercise of [a power to make will] that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bringing about a disposal of it which, if the mind had been sound, would not have been made.
In Zorbas v Sidiropoulos (No. 2) [2009] NSWCA 197 at [65], the Court noted that:
…whilst medical evidence may be highly relevant to a determination of testamentary capacity, the criteria in Banks v Goodfellow are not solely medical questions and sometimes the most compelling evidence is reliable evidence of a detailed conversation with the deceased at the time of the will that displays the deceased’s understanding of his assets and the effect of the will, and his ability to weigh claims on his testamentary bounty.
See also Bull v Fulton [1942] HCA 13; Carr v Homersham [2018] NSWCA 65 [5]-[6] and [41]- [46]; In the Matter of the Will and Estate of Joyce Helen Greer, deceased [2019] VSC 592; Croft v Sanders [2019] NSWCA 303; Re Estates Brooker-Pain and Soulos [2019] NSWSC 671; Bell v NSW Trustee & Guardian; Estate of William Anthony Hickey [2020] NSWSC 1164; and Re Jones [2021] VSC 273.
Caveats
Section 144 of the Probate and Administration Act 1898 provides that any person may lodge in the registry of the Supreme Court a caveat against any application for probate or administration, at any time before probate or administration is granted.
Such a caveat might be lodged if someone intended to challenge the will – although not merely if they have a claim against the estate, including a family provision claim. The lodging of the caveat has the effect of preventing anyone being granted probate or administration without the caveator being notified in advance. It does not stop someone applying.
The person lodging the caveat must provide an address for service.
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Like a caveat lodged on property, there may be potential costs consequences where caveator’s actions in lodging a caveat against the granting of probate of a will are unreasonable: see Perpetual Trustees WA Ltd v Rinshed [2010] WASC 115.
The NSW Supreme Court website states, regarding caveats:
A person who is concerned about a pending or current application in a particular estate may, if they have a legitimate interest, for example, they are an executor or beneficiary under a different Will which they claim is the last valid Will of the deceased, file a caveat which prevents a grant being made until the caveat lapses or is withdrawn. A caveat remains in force for 6 months from the date on which it is filed. The caveat must be served on any known applicants or potential applicants for a grant of probate or administration of the estate. See Part 78 Division 10 of the Supreme Court Rules 1970 for the rules on caveats.
The applicant for probate may file a notice of motion for the caveat to cease to be in force if they believe that the caveator does not have a legitimate interest in the proceedings.
Creditors, persons with a legitimate family provision claim and persons with a court order touching on the deceased, for example a Family Court order, are not interested persons for the purpose of the probate proceedings as their claims are not affected by which Will is admitted to probate or whether the deceased is intestate. Their interest is limited to ensuring that the estate is properly administered and any claim they have would be in a different jurisdiction of the Court.
If an application for probate is made by an executor named in a will, after a caveat has been lodged, then the applicant can also lodge a notice of motion in the probate application matter, seeking that the caveat be set aside. If the application for probate has not been filed then the prospective applicant can make the same application via a summons: r 71 Supreme Court Rules 1970.
Before filing any document at court to defeat a caveat, however, the prospective applicant should first ask the caveator to withdraw the caveat, perhaps on an undertaking that protects their claimed interest, so that an application for a grant can be made and the administration of the estate proceed with minimal cost and delay.
It is worth noting that a claim under the Succession Act 2006 does not give rise to a caveatable interest over property and therefore is not a defence to a claim for possession: Dodd v Dodd [2020] NSWSC 1094.
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Codicils
A codicil is a document that amends, rather than replaces, a previously executed will. The will and codicil will need to be read together to determine if the testator appointed an executor, and if so who the executors and any substitute executors are, and what the terms of the will are.
If the testator has made a codicil, or codicils to the will, the application for a grant will need to be for administration with the will and codicil annexed.
Any family provision orders made under Chapter 3 of the Succession Act 2006 take effect as if they were a codicil to the any will. See Family provision below.
Co-executors – Authority to act
The office of executor is regarded as being individual and therefore the authority of multiple executors is joint and several, so that any one of them can act alone and bind the estate. This is reflected in the provision under s 41 Probate and Administration Act whereby one executor can apply for a grant of probate leaving others to prove separately later.
However, there are exceptions to this, requiring all of the executors to participate where the estate is dealing with real property – sale, lease or mortgage: s 153(4) Conveyancing Act 1919; or engaging in litigation: Latch v Latch (1875) LR 10 Ch 404; Scurry v Morse (1724) 9 Mod 89; 88 ER 333.
Commission
The Supreme Court of NSW website states the following in relation to commission:
An executor or administrator is generally entitled to apply for commission to compensate them for the time and effort (or "pains and trouble") involved in administering an estate. An executor who receives a legacy under the will as a condition of taking on the role may not be entitled to apply for commission. Generally, if there is more than one executor or administrator, the executors or administrators will make a joint application for commission, however, an application can be made by one of several executors or administrators. If an application is made to the Court for commission, the accounts for the period for which commission is being applied for must be passed.
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Executors and administrators who believe that they are entitled to apply for commission are encouraged to consult with the beneficiaries who may be affected if commission were to be allowed. There is no need to get approval from the Court for an executor or administrator to be paid a fair amount for their time and effort, if all the affected beneficiaries (normally the residuary beneficiaries) are able to agree that the executor or administrator should be paid an amount by way of commission. If an executor or administrator is required to apply to pass the accounts, and for commission, then the proper legal costs incurred, which can be substantial, will normally be paid from the estate, reducing the residual beneficiaries' share of the estate.
The process of applying for commission will take some time, both for the executor or administrator in preparing the relevant documentation, and for the Court to consider the application. This may delay the final distribution of the estate. As such, it will generally be in the interest of both the executor or administrator and the beneficiaries if the issue of commission can be resolved without having to apply to the Court.
Section 86 Probate and Administration Act 1898 allows an executor to claim commission for their ‘pain and trouble’ of administering the estate. The amount must be ‘just and reasonable’ and is usually no more than 2%.
An application for commission must be filed at the Supreme Court and supported by an affidavit of the executor setting out the specific pain and trouble they have taken, that is exactly what they were required to do to administer the estate.
There is no absolute right to executor’s commission – it is a matter for the court’s discretion, even if the will specifies that the executor may seek commission. Generally the court will allow commission unless the executor has failed in their duties or has engaged in some form of misconduct.
Commission may only be paid to the executor by an order of the court or by all residuary beneficiaries consenting. Note that a minor beneficiary would be unable to consent
Quantum of commission is also a matter for the court’s discretion. It is generally awarded as a percentage of capital and income, usually between 1.5% and 3% of capital and between 3% and 5% of income. A trustee company or other professional executor is more likely to receive closer to the top end of the percentages than an individual. Where an executor has had the assistance of agents, solicitors and accountants in administering the estate, paid for by the estate, that fact will be taken into account in assessing the appropriate amount of commission. See Ghidella, In the will of [2005] QSC 106, which dealt with the previous UCPR
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rule, and Peter Henry Atkins as Executor of the Estate of Robert Charles Godfrey v Godfrey [2006] WASC 83.
Contested will matters
An interested person can oppose an application for a grant of probate or letters of administration by seeking to impugn the will which is the subject of the application.
There are five ‘standard’ grounds for challenging a will:
− absence of due execution;
− absence of testamentary capacity;
− absence of knowledge and approval;
− fraud;
− undue influence, or coercion.
See Re Estates Brooker-Pain and Soulos [2019] NSWSC 671 at [60], which also includes the observations:
(k) … An allegation that execution of a will was attended by ‘suspicious circumstances’ is not an independent ground of challenge to a will, but an allegation that informs consideration of the standard grounds of challenge, particularly ‘knowledge and approval’ …
(l) A challenge to “testamentary capacity” is commonly accompanied by a challenge to “knowledge and approval”. An allegation of a want of “knowledge and approval” is not uncommonly used as a vehicle for an allegation of “suspicious circumstances” as a means of displacing a presumption of validity arising from due execution of a will.
To be ‘interested’ a party must show that they have rights which will be affected by the disputed grant of probate or administration: Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 at [49].
See Micallef v Linney – Estate of Hope Marie Minney [2020] NSWSC 898 as to lack of knowledge and approval.
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See Bracher v Jones [2020] NSWSC 1024 as to undue influence.
See also Capacity, above and Litigation, below.
Construction of the will
Part 2.3 of the Succession Act 2006 deals with the construction of wills, including wills made under foreign law and international wills.
The Supreme Court may be requested to rule on the construction of a will and, when doing so, may admit extrinsic evidence: s 32 Succession Act 2006.
See also Rectification of a will below where it is noted that the Supreme Court has held that a suit for construction and a suit for rectification of a will may be decided in the one proceedings.
Contracts entered into or completed before probate or administration is granted
Ability of executor to intermeddle
In some circumstances it may be advantageous for the estate if a contract is entered into before the formal grant of representation is obtained. An executor may elect to do so, which would constitute ‘intermeddling’ with estate assets and is perfectly permissible. Note however that once an executor intermeddles with estate assets, they lose the right to renounce the executorship and they may be personally liable for any detriment to the estate.
Contracts for sale of land
An executor may enter into a contract for sale of the deceased’s real property which is conditional upon the vendor obtaining a grant of probate, with settlement scheduled for a certain time after a grant of probate is obtained. This is an example of intermeddling and occurs frequently.
However, it is not possible for an administrator to enter into such a contract, as a person is not the administrator until the appointment is made, unlike the executor, who is nominated in the will and merely formally approved by way of the grant of probate.
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Completing existing contracts
Should either the vendor or the purchaser die during the course of a contract for sale of land, the legal personal representative of the deceased is obliged to complete the contract, unless the contract otherwise provides, which in residential conveyancing the contact usually does.
The By Lawyers Contract for Sale of Land allows a party to rescind if one of them dies prior to settlement. The purchaser’s right to rescind is set out in clause 20(a)(ii) of the By Lawyers contract and the vendor’s right to rescind is set out in clause 20(g)(ii).
The Law Society Contract for the Sale and Purchase of Land is silent on the death of a party and it is dealt with by way of a special condition. Sometimes this condition allows one party to rescind only if the other party dies, sometimes the condition is the same as in the By Lawyers contract.
Obtaining official recognition as the legal personal representative by way of a grant of probate, or letters of administration if there is no contention about who will apply, necessarily takes some time and where the contract provides, an extended settlement period will be required while this occurs.
If the contract does not provide for this and the other party issues a rescission notice, the legal personal representative can apply for what is effectively an urgent, temporary grant of representation, known as a grant ad colligendum bona.
Where the death of a party occurs very close to settlement and all preparations, including signed documents, are in place it is tempting and convenient to simply proceed to settlement, leaving until after settlement the task of taking the death into account. This is particularly convenient if the deceased was the vendor, as the legal personal representative can then easily account to the beneficiaries for the proceeds of sale.
However, the correct legal approach is to treat the death of a party as removing the ability for anyone to conduct the affairs of the party until a grant of representation has been obtained. See Re Stevens [1897] 1 Ch 422 at 430 and Voumard: The Sale of Land [4240]
In exceptional circumstances there may be no one able to complete a contract. In such cases an application is made for a vesting order under s 71 Trustee Act 1925.
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Court – Power over wills and estates
The Supreme Court has jurisdiction, both by virtue of the legislation and as part of its inherent jurisdiction, over wills and estates.
For small estates, the Local Court has limited power to act as a ‘district agent’ for the registrar of the Supreme Court. See ss 98-106 Probate and Administration Act 1898 and Small estates below.
The court has power to grant probate of a will or administration of an estate pursuant to s 40 Probate and Administration Act 1898.
The court has inherent power to revoke a grant it has previously made. See Application to revoke a grant of probate or letters of administration above.
The court has power to require the executor or administrator to file, verify and pass the estate accounts. See s 85 Probate and Administration Act 1898 and Accounts above.
The court can make orders as to the disposal of money in the hands of the executor or administrator, or as to the residue of the estate: s 89 Probate and Administration Act 1898.
The court can order production to the court of any instrument purporting to be testamentary: s 150 Probate and Administration Act 1898.
An executor is a trustee. As such, executors have fiduciary obligations and are subject to the provisions of the Trustee Act 1925. Part 3 of that Act provides for the Powers of the Court over trustees.
Executors have particular obligations when an estate is faced with the prospect of litigation. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of the Macedonian Orthodoc Diocese of Australia and New Zealand [2008] HCA 42 the majority determined that a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings. Any application on behalf of executors for judicial advice should also seek orders as to the payments of the costs of that application from the estate.
See also: Gregory Joseph Mills as trustee v Julie Elizabeth Mills and Ors [2018] NSWSC 363 for an example of the considerations courts apply when giving judicial advice and determining construction issues on testamentary trusts.
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Crisp orders
See below under Family Provision.
Death
Causes of action survive death
The general rule is that death does not affect the legal rights and obligations of the deceased, see s 2(1) Law Reform (Miscellaneous Provisions) Act 1944, which extends to all causes of action except defamation, some matrimonial causes and claims under the Property (Relationships) Act 1984. However, s 2(2) of that Act limits the damages which can be recovered in any action for the benefit of the estate and excludes exemplary damages and damages for pain and suffering, physical or mental harm or curtailment of expectation of life for the period after death.
The legal personal representative of the deceased steps into the shoes of the deceased and is entitled to enjoy the rights and satisfy the obligations of the deceased in exactly the same way as the deceased. The legal personal representative will be the executor named in the deceased’s will, or the person entitled to apply for a grant of letters of administration if there is no, or no effective, will.
Where litigation is on foot at the date of death, the matter will need to be stood over to allow a grant of probate or letters of administration to be applied for and granted before the legal personal representative will be in a position to proceed with or resolve the case.
Presumption of death
When a death cannot be proved the court may order a presumption of death after the person has been missing for a period of seven years, if satisfied on the balance of evidence that it is likely the person has died. See Re Ryan [1990] 3 NZLR 91; Heynatz, Re [2006] QSC 173.
This might apply to a missing testator, on an application for a grant, but also to a missing beneficiary.
Of course, it may be more likely that a person does not want to be found rather than they are dead and even after the period of seven years the court may refuse to draw the presumption. See Axon v Axon [1937] HCA 80, Estate of Howard (1996) 39 NSWLR 409 and Re Application for Grant of Presumption of Death; Ex Parte Jenkins [2008] WASC 49.
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The court can also make what is known as a Benjamin Order, from the case Re Benjamin [1902] 1 Ch 723, where a distribution order was made without any finding that the person, a beneficiary in that case, was dead, preserving the possibility that the person may return. See also Re Mas; Weston and Donaldson [2018] VSC 405; Application of NSW Trustee & Guardian; Estate of Dudley Keith Vaughn [2019] NSWSC 850 and In the Estate of Hansie Hart [2019] ACTSC 317.
Section 40B Probate and Administration Act 1898 provides that a grant of probate or administration can be made on the basis of a presumption of death, however if that occurs, the estate may not be distributed without an order of the court and the court may order security to be given by any person to whom the estate is distributed in case the grant is later revoked.
Proof of death by inference
A court may determine that a missing person is dead regardless of whether the presumption of death is met. The effect of this is that an application for probate or letters of administration may be sought without a death certificate, before the seven-year period has been met.
Hallen J in The Estate of Alan Bruce Beeby [2020] NSWSC 1512 at [53] explained:
…an inferred death is one where, although a body is not found or recovered, the death can be inferred from the surrounding circumstances, and where it can be inferred that it is more probable that the person has died, rather than that he, or she, is living.
Mr Beeby was believed to have perished at sea, however a body was never recovered. In making the declaration that Mr Beeby had died, the court inferred death from the surrounding circumstances, including Mr Beeby’s son’s evidence of what he had seen and heard on the night, that Mr Beeby had not been in contact with any of his family members since the incident and had no reason not to be in contact with them, that there was no indication that he had absconded and there was no compelling motive for him to disappear because he had sufficient assets to meet his liabilities.
Each case will turn on its facts. In Chard v Chard [1956] P 259 Sachs J at [270] described the process of proving death by inference as:
…a matter in each case of taking the facts as a whole and of balancing, as a jury would, the respective probabilities of life continuing and having ceased.
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Death of joint executor
If one executor dies before a grant is made then, unless the will says otherwise, the surviving executor can and should proceed.
An executor, once appointed as legal personal representative, will undertake executorial duties in the first instance and then, if the will creates a trust, will be a trustee. If one trustee dies the surviving trustee may perform all trustee functions.
If more than one executor is registered on title to real property, which should always be as joint tenants, then the surviving executor will lodge a survivorship application to become registered on title as proprietor.
Death of single executor
Where the testator has made no provision in the will for an alternate or substitute executor and the executor named in the will dies before a grant of probate is obtained, the position is the same as if no executor had been appointed. A beneficiary can then apply for a grant of letters of administration with the will annexed.
If the executor dies after a grant of probate is made, then the deceased executor’s legal personal representative becomes the executor of the testator’s will.
Delegation by executor
An executor may delegate administrative functions relating to the administration of an estate but cannot delegate executorial duties. The executor may appoint a solicitor to represent the estate and apply for a grant of representation in the name of the executor and may appoint accountants to assist in administration. However, the executor cannot appoint another person, either by power of attorney or otherwise, to assume the executor’s responsibilities. The executor can only renounce – and then only if they have not intermeddled with the estate.
Duties of executor
An executor is obliged to disclose to the court all assets and liabilities of the deceased. This is done by way of the inventory of assets and liabilities which is annexed to the affidavit in support of the application for grant of either probate or letters of administration: s 81A Probate and Administration Act 1898.
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The executor may not deal with any asset that has not been disclosed to the court: s 81B Probate and Administration Act 1898.
An executor, once appointed, has the following duties:
− ‘get in’ the estate; that is to collect and consolidate the estate’s assets, including to liquidate them where appropriate;
− to keep estate accounts;
− to maximise the estate’s assets, by leasing real property for example;
− to pay the deceased’s debts and the estate’s liabilities with due diligence;
− to manage and if possible compromise any claims against the estate;
− to file, verify and pass estate accounts if required in accordance with s 85 Probate and Administration Act 1898;
− to distribute the estate in accordance with ss 92-94 Probate and Administration Act 1898, to the persons entitled pursuant to the will or the rules of intestacy.
Incapacity of executor
Before grant
If an executor named in the will has lost capacity and is unable to apply for a grant of probate or administration and there is more than one named executor, then the co- executor should apply, either solely if their appointment is joint and several, or by seeking an order that they be appointed as sole executor if necessary, with an affidavit evidencing the co-executor’s incapacity in support of the order sought. In that case the right can be reserved for the co-executor to apply later, if they regain capacity.
If there is only one executor and no substitute named, then an application should be made for a grant of administration with the will attached by someone else – usually a beneficiary.
If there is no co-executor but the will provides for a substitute executor, then the substitute executor named in the will should apply for a grant.
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After grant
If an executor loses capacity after a grant is made, then it will be necessary to apply to the court for revocation and substitution of another person as executor or administrator.
No delegation
In either case, the office of executor cannot be delegated. This means that where the executor who loses capacity has appointed an attorney pursuant to an enduring power of attorney, the attorney cannot act as an executor on the principal’s behalf.
Disclosure
See Subpoenas, notices to produce and disclosure below.
Executors
Application for probate by executor
An executor named in a will is entitled as of right to a grant of probate.
If more than one executor is appointed by the will any one may apply for a grant with leave being reserved for the others to prove at a later time: s 41 Probate and Administration Act 1898.
Where there are multiple executors, they can and should all apply for a joint grant. However, applications should not be made by more than four executors, unless there is a good reason to do so.
Executors may be allocated specific roles in the will, with one executor to perform specific functions and another to attend to all other matters. For instance, a literary executor may be appointed to attend to administration of the copyright and royalty rights of the estate, or a business executor may be appointed to deal with a business operated by the testator. If this is specified, the application for probate should seek appropriate orders.
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Application for judicial advice by executor
An executor is a trustee. As such, executors have fiduciary obligations and are subject to the provisions of the Trustee Act 1925. Part 3 of that Act provides for the Powers of the Court over trustees.
Executors have particular obligations when an estate is faced with the prospect of litigation. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 the majority determined that a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings. Any application on behalf of executors for judicial advice should also seek orders as to the payment of the costs of that application from the estate.
See Kenneth Leslie Read as executor of the estate of the late Brenton Glynn Brenton v Kenneth Read beneficiary of the estate of the late Brenton Glynn Peters [2019] WASC 254; a short, helpful judgement particularly as to when it is appropriate to make such an application and as to the form of orders that might be sought.
See Gregory Joseph Mills as trustee v Julie Elizabeth Mills and Ors [2018] NSWSC 363 for an example of the considerations the court applies when giving judicial advice and determining construction issues on testamentary trusts.
See also Re Perpetual Trustee Company Limited as a trustee for the Joseph Babington Davis Settlement [2020] NSWSC 1574.
Executors – Commission
See Commission, above, which applies to administrators and executors.
Executors – Costs
See Nobarani v Mariconte [No 2] [2018] HCA 49 and Spatt v Benson; Benson v Spatt [2019] NSWSC 1195 especially [63] – [71] regarding costs in proceedings to remove executor and for judicial advice as to whether executor should defend.
Grants
There are three main types of grant of representation:
− grant of probate in relation to a will;
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− grant of letters of administration on intestacy where there is no will;
− grant of letters of administration cum testamento annexo – with the will annexed – where the will is invalid or named executors are unavailable.
In addition, there are a variety of special grants of letters of administration that can be made where necessary, including:
− ad colligendum bona, meaning to collect the estate, which is a temporary grant designed to allow the estate’s assets to be protected: see Application of Penhall and Dutton; Estate of the late Kylie Anne Dutton [2021] NSWSC 79;
− ad litem, for the purpose of litigation;
− pendente lite, while litigation is pending;
− durante minore aetate, during minority of the executor.
Hotchpot
A hotchpot clause is used to take account of inter vivos gifts or loans, usually, to the deceased’s children, so that when combined with the gifts to those children under the will, they all end up with the same benefit.
In Re Tennant Mortlock v Hawker [1942] HCA 3 Dixon J said:
When a disposition requires that a fund should be distributed equally among a class and then goes on to provide that those members of the class who have received advancements should bring them into hotchpot, the effect is to qualify the statement that the shares in the fund shall be equal and to direct a method of calculation which may be expected to result in some other proportions. The purpose of directing the hotchpot commonly is to ensure that children obtain from their parent by advancement and under his will equal portions or equality of benefit (487).
For detailed consideration of a hotchpot clause in the construction of a will see Prichard v Prichard [2015] WASC 170.
The doctrine of hotchpot has been abolished in NSW in relation to intestacy, but it is still possible for a will to use such a clause.
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Gifts to charities
Clauses making bequests to charities often try to specify how the bequest is to be used. Most charities prefer a general bequest that allows them discretion as to how the gift is applied, according to their operational requirements.
In practical terms, even with specificity in a clause, once such a bequest is paid to the charity it is out of the executor’s control and unlikely that there will ever be any further reference to the terms of the will – particularly given that most clauses for charitable bequests release the executor upon acceptance of the bequest. In that sense there is no real difference between a specific clause and a general one, unless the charity itself, or an unusually diligent executor, chooses to apply to the court regarding the construction of the will.
The exception would be if a testator who really wants to specify how the funds are used has established, or directed the establishment of, a specific testamentary trust, detailing and defining the terms of the bequest, appointing a trustee to be responsible for administering the bequest and ensuring compliance with the terms of the trust.
Informal wills
The court can grant administration of an informal will.
Section 8 Succession Act 2006 provides that the court may dispense with the usual requirements for the making of a will, altering a will, or revoking a will, if the court is satisfied that the document purports to state the testamentary intentions of the deceased, and that the deceased intended for the document to form, alter or revoke a will.
In Re Estate of Wai Fun CHAN, Deceased [2015] NSWSC 1107 (7 August 2015) Lindsay J stated:
In the modern administration of the Court’s probate jurisdiction a premium is placed upon substance over form in ascertaining the testamentary intentions of a deceased person, and in seeing that his or her beneficiaries get what is due to them. This is consistent with the governing purpose of the jurisdiction: the due and proper administration of a particular estate, having regard to any duly expressed testamentary intention of the deceased and the respective interests of parties beneficially entitled to his or her estate: In the Goods of Loveday [1900] P 154 at 156; Bates v Messner (1967) 67 SR (NSW) 187 at 189 and 191-192; Estate Kouvakis; Lucas v Konakis [2014] NSWSC 786 at [211].
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In Re: Nichol; Nichol v Nichol [2017] QSC 220 the court found that an unsent text message, created about the time that a person committed suicide, listing his assets and purporting to bequeath them to family members, constituted an effective will.
The Supreme Court of NSW’s website states in relation to applications for a grant of administration of an informal will:
− If an application is being made in relation to an informal will the summons, UCPR Form 111, must include an additional claim for an order, in addition to the grant of letters of administration with the will annexed, that the court make a declaration under s 8 of the Succession Act that the informal will constituted the last will of the deceased.
− The affidavit of applicant will need to disclose if there is an earlier will that would take effect if the informal will is held not to be operative. If there is no earlier will that would take effect the affidavit of applicant will also need to set out who would be entitled under intestacy. If the people that would be entitled under intestacy are different to the beneficiaries under the informal will then it will be necessary to either obtain the consents of those persons who will be adversely effected if a grant is made in relation to the informal will, or to prove that they have at least been served with notice of the application. See r 78.14 and Division 6 Supreme Court Rules 1970 and UCPR form 134.
See also Missing will below
Injunction
Apart from the ability of any dissatisfied beneficiary or claimant upon an estate to lodge a caveat in the registry they also retain the right to seek an injunction from the Supreme Court to restrain the legal personal representative from dealing with estate property and particularly from selling real property.
As with any applicant for injunctive relief, the applicant must give the usual undertaking as to damages if the basis for the injunction is not ultimately upheld. For that reason, any beneficiary or claimant on the estate who considers filing for an injunction should first receive comprehensive legal advice as to the merits and risks of same.
For discussion of the issues applicable to the granting of an injunction against an executor see for example Matejka & Ors v Hodge [2009] VSC 580 and Yang v De Bortoli as executor of the estate of the late Frank Ceh [2010] NSWSC 1437.
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Intermeddling
Intermeddling means a named executor dealing with the estate’s assets before a formal grant is made. There is nothing inherently wrong with this. It is not provided for in legislation – it is a common law concept, long recognised.
See also Contracts entered into or completed before probate or administration is granted above.
There exists in probate law an office called executor de son tort, which is a person who behaves like an executor but is not the executor – although they may become the executor once a grant is made. Such an office was generally permitted to protect the assets of the estate prior to a grant being made, however the executor de son tort was made liable by the court for his actions in the office: Parker v Kett (1701) 1 Ld Raym 661; 91 All ER 1338. In McGee v Yeomans [1977] 1 NSWLR 273 at 281 the court noted that ‘the executor de son tort, by a process akin to estoppel, is treated as if he had been formally appointed’.
The result of the emergence of the executor de son tort was the rule that once a person, be it the executor de son tort or the actual executor, has dealt with the estate’s assets – intermeddled with the estate – the executor is precluded from being able to renounce as executor, without an order of the court.
For discussion of when intermeddling might deprive an executor of the right to renounce, see Mulray v Ogilvie (1987) 9 NSWLR 1 and Re Abat [2020] VSC 560.
In Minicozzi v Starr [2019] SASC 55 a solicitor executor intermeddled but was then allowed to renounce because the steps taken were all protective in nature, necessary and appropriate for the interests of beneficiaries, with creditors being paid and no adverse effects upon the estate or the interests of the beneficiaries. Further, all beneficiaries agreed with the executor renouncing.
Intestacy
An intestate is a person who dies and either does not leave a will or leaves a will but does not dispose effectively by will of all or part of their property: s 102 Succession Act 2006.
Disclaiming rights on intestacy
It would appear that just as it is possible to disclaim the benefits of a gift, it is possible to disclaim the benefits of intestacy: Re Gulbenkian (No. 2) [1970] Ch 408.
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Distribution of intestate estate
Chapter 4 of the Succession Act 2006 deals with intestacy and sets out what happens to an intestate estate. There are numerous convolutions and possibilities, depending on the surviving family that the intestate has. Ultimately if there are no family members to inherit, the estate defaults to the Crown, which is probably the best reason to have a will!
In summary, estate of a person who dies without a valid will passes to:
− the spouse or domestic partner, where the intestate leaves no children, or leaves children who are all also the spouse or domestic partner’s children;
− then spouse and the children if the intestate leaves children who are not all the spouse’s children, in which case the spouse or domestic partner is entitled to the first $350,000 – this amount is to be CPI adjusted – called the ‘statutory legacy’, plus one half of the remainder. If the intestate leaves more than one spouse or domestic partner then they share the entitlement, subject to any agreement or orders of the court otherwise;
− then children;
− then grandchildren;
− then parents;
− then siblings;
− then nieces and nephews;
− then grandparents;
− then uncles and aunts;
− then cousins;
− and then by default, to the Crown, that is the state government.
Domestic partnership on intestacy
For the purpose of intestacy, ‘domestic partnership’ is defined in s 105 of the Succession Act 2006 as a registered relationship, or a de facto relationship which has been in existence for a continuous period of two years, or which has resulted in the birth of a child.
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Whether there has been such a relationship will be for the court to determine on a case by case basis. Keeping separate residences, sleeping separately and even keeping the relationship secret may be no impediment to establishing that a relationship existed: Estate of the late Shirley Joan Violet Gardner; Bernengo v Leany [2019] NSWSC 1324.
Family provision claims on intestacy
Any eligible person can bring a claim for provision under Chapter 3 of the Succession Act 2006 against the estate of any deceased person. This includes an intestate estate.
See Family provision below.
Indigenous persons’ estates on intestacy
Part 4.4 of the Succession Act 2006 makes provision for determining distribution of an intestate estate of an indigenous person who dies intestate. Upon application of the legal personal representative, or a person claiming to be entitled to a share of the estate under the laws, customs, traditions and practices of the Indigenous community or group to which the intestate belonged, the court can make an order which displaces the usual rules of intestacy.
In Re Estate Jerrard, deceased [2018] NSWSC 781 the court was required to consider an application for distribution under Part 4.4 where there were competing claims on the bounty of a deceased indigenous person made by the parents of the deceased within the deceased’s Indigenous community. The court determined that the applicant, the deceased’s mother, who had raised him as a sole parent albeit with community support, should receive about 80% of his estate rather than the 50% she would have received under the rules of intestacy.
This was only the third time the Supreme Court has dealt with a claim under Part 4.4. The other two cases are Re Estate Wilson, deceased [2017] NSWSC 1; 93 NSWLR 119 and The Estate of Mark Edward Tighe [2018] NSWSC 163.
Minors on intestacy
The entitlement of a minor to an interest in an intestate estate vests immediately, that is, it is not deferred until the minor reaches majority or marries.
Multiple claims permitted on intestacy
Relatives may be entitled to take more than one share in different capacities: s 132 Succession Act 2006.
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Spouse’s preferential right to acquire property on intestacy
The spouse has the right to purchase property from the estate: s 115 Succession Act 2006. Unless the spouse is the administrator, the spouse must be given notice of the right and then has 30 days in which to elect to exercise it. The price is the market value at date of death: s 119 Succession Act 2006.
Statutory legacy on intestacy
If the intestate leaves a spouse or domestic partner and children who are not all the spouse or domestic partner’s children, the spouse or domestic partner is entitled to the personal effect, plus a statutory legacy being currently $350,000 – this amount is to be CPI adjusted – and half of the balance of the estate.
If there are multiple spouses or domestic partners, then they share the statutory legacy.
If the statutory legacy is not paid, or not paid in full to the spouse within one year of the intestate’s death, interest is payable on the outstanding amount from the date of first anniversary to the date of payment. The interest rate is 2% above current Reserve Bank cash rate: s 106 Succession Act 2006.
Judicial advice
See – Executors, above.
Joint mortgage responsibilities
Although upon the death of a joint proprietor the proprietary interest is lost to the surviving joint tenant, together with the obligation to contribute to the mortgage, the estate may remain liable under any personal covenants of a mortgage.
Joint ownership
See also Assets – Joint ownership of assets above.
Two or more co-owners of land may own as either joint tenants or as tenants in common: s 100 Real Property Act 1900.
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A disposition of the beneficial interest in Torrens title land, with or without the legal estate, to two or more people beneficially and without specifying that they are to take the property as joint tenants is deemed to be made to them as tenants in common and not as joint tenants, unless by the terms of the instrument they are executors, administrators, trustees or mortgagees: s 26 Conveyancing Act 1919.
The presumption of a tenancy in common may be reversed: Rule and 1 Ors v Mallon and 3 Ors [2000] NSWSC 346.
On the death of a joint tenant the interest of that joint tenant in the land ceases and the other joint tenant automatically own the whole of the land. This is known as the doctrine of survivorship. For this reason, property which the deceased owned as joint tenant does not form part of the estate and cannot be dealt with by the legal personal representative.
Quite reasonably, survivorship does not apply if the surviving joint tenant killed the deceased joint tenant. This is known as the forfeiture rule. See Article (1995) 69 ALJ 682.
Conversely, on the death of a tenant in common their interest passes to their estate and must be dealt with by the legal personal representative.
Where the order of death is uncertain, the law presumes the younger to have survived the older: s 35 Conveyancing Act 1919.
The presumption of survivorship in s 35 also covers property such as joint bank accounts and investment accounts. The definition of property in s 7 provides:
"Property" includes real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest.
See NSW Trustee and Guardian v State of New South Wales [2015] NSWSC 1121 at [31].
Larke v Nugus letters
Re Estates Brooker-Pain and Soulos [2019] NSWSC 671 at [82] discusses the English Court of Appeal decision in Re Estate of Moss, deceased; Larke v Nugus [2000] WTLR 1033, stating:
…a person involved in the preparation or execution of a will, or charged with responsibility as an executor for administration of a deceased estate, may have an obligation, when called upon to do so, to make timely disclosures about the circumstances in which a will was prepared or executed.
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This is often done by one of the parties to actual or prospective proceedings over the validity of a will, sending a so-called ‘Larke v Nugus’ letter to the solicitor who prepared the will.
In Re Estates Brooker-Pain and Soulos [2019] NSWSC 671 the court called this practice into question and indicated it should be dealt with by way of case management orders of the court rather than informally between the parties, including as to the costs of responding to such a letter. See the discussion at [82] – [110].
Legislation
− Succession Act 2006;
− Probate and Administration Act 1898;
− Conveyancing Act 1919;
− Trustee Act 1925.
Letters of administration
See Applications for a grant of probate or letters of administration above
See also Administrator, Distribution and Grants above.
Life estates and similar interests
A life estate is a proprietary interest in real property, capable of being registered on title. Such a right entitles the proprietor to lease the estate to a tenant and retain any such rent. A ‘right of occupancy’ or similar is a conditional personal right, not capable of being registered and requires the person to personally reside in the property.
In either case the question arises as to whether the estate or the beneficiary is liable for the outgoings associated with the property.
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The distinction will always depend upon the wording in the will. In Re Keenan; Ford v Keenan (1914) 30 WN (NSW) 214 at 215 AH Simpson, CJ in Eq, said:
Upon principle I should have said that the question whether [a person in the position of the present plaintiff] has only a right to occupy one of the cottages [on land the subject of those proceedings], or has a right to let it during her life, turned on the words of gift. If the words used, or anything in the Will, imply that a personal right only is given, the gift must be confined to that. A direction that a person may reside or live in a house prima facie confers a personal right for a man cannot reside by deputy. But a right to use and occupy, or to occupy only, stands on a different footing for a man can ' occupy' by himself or a tenant. ...
As a matter of construction, there is often some ambiguity or dispute about whether a provision in a will is intended and/or sufficient to create a life estate or not. For an example of this see Estate of JA Gilmore deceased [2014] NSWSC 1263, where the court noted that:
…each case must be determined on its own facts and that the deceased's Will must be read as a whole, and with regard to its structure.
See also Life tenancy below.
Life tenancy
A life tenancy, or life estate, is a proprietary interest in real property, capable of being registered on title.
In the context of a trust creating a life tenancy, the party who holds the property is known as the trustee and the beneficiary is known as the life tenant. In addition to these two parties there are two other interested parties. The first is the party who previously owned the land and created the trust, who is known either as the settlor or testator. The second is the party who will be entitled to the land on the death of the life tenant, who is known as the remainderman.
There are two ways in which a life estate can be relevant to an estate. Either because one of the estate assets is real property which is subject to a life tenancy pursuant to an already existing trust, where the life tenant may or may not also be a beneficiary under the will, or because the will establishes a trust for a life tenancy in favour of a certain beneficiary.
If the trust is created during the life of the person creating the trust, then that person is known as the settlor and the trust is an inter-vivos trust. If the trust is created in a will and
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therefore only comes into effect on the death of the person making the will, then that person is referred to as the testator and the trust is a testamentary trust.
A life tenant has wider ranging rights in relation to the land than a tenant at will, or a person with mere right of residence, subject to the terms of the trust.
The definition of settled land potentially extends to all land left to a trustee for the benefit of a beneficiary, but it excludes land left to the trustee on trust to sell and to distribute the proceeds. Most wills specify that the trustee is to sell the testator’s land and distribute the proceeds and, whilst a discretion to postpone the sale is usually also included, this is sufficient to remove such land from the definition of settled land. A trust benefiting a life tenant does not create a trust for sale and therefore creates settled land: Royal Melbourne Hospital & Ors v Equity Trustees Ltd & Ors [2007] VSCA 162.
See Application for a grant of probate or letters administration above.
See also Executors and Gifts and bequests above.
Litigation
One of the duties of an executor or administrator of an estate is to manage and, if possible, compromise any claims against the estate. That can be an onerous duty, involving a difficult balancing exercise between the merits and likelihood of success of the claim on the one hand and the necessity of minimising the impact of any claim upon the estate’s assets. Ultimately this reflects the fiduciary position of the executor or administrator, as trustee, with regard to the beneficiaries. It is their interests that the trustee must primarily consider.
In Finnegan & Anor v Garner & Ors [2019] QSC 100 the estate faced claims which if they were resolved by litigation then most if not all of the balance of the estate would have been consumed by legal costs. The court noted, at [10], that:
It is the duty of trustees of the estate not to embark upon expensive litigation which will have the effect of depleting the estate. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand Gummow ACJ, Kirby, Hayne and Heydon JJ said that:
“a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings.”
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The most common type of claim against an estate is a family provision claim. That is not litigation upon which the trustees might ‘embark’, in that the estate is inevitably the defendant in such cases. While the comments of the High Court above technically apply to family provision claims, it would in practice be unusual for an executor or administrator to seek judicial advice before defending such a claim where compromise had proven impossible. The exception might be where the estate was very small. Even then, because family provision claims tend to be carefully managed by the court, mediation required and costs controlled, an application for judicial advice might be seen as redundant – and could, in any event, be made in the case if considered appropriate.
Another possible form of estate litigation is a challenge to a will where an interested person opposes an application for grant of probate or letters of administration of the impugned will. For a detailed exposition of the considerations regarding such proceedings see Re Estates Brooker-Pain and Soulos [2019] NSWSC 671.
See also Administrators – duties and Executors above.
Missing will
It is possible – and not entirely uncommon – to obtain a grant for administration based only upon a copy of a missing will. See In the Will of Valerie Eve Robson (deceased) [2020] QSC 52 and also Williamson v Pay [2020] QSC 66.
In this regard the NSW Supreme Court’s website states:
If the original will cannot be found but there is a copy of a will, which is believed to be the last will of the deceased then you may still be able to apply for Letters of Administration with a Copy of the Will Annexed. The actual copy of the will needs to be filed with the application.
The affidavit of applicant will need to explain where the copy of the will was found and set out all the searches that have been made for the original will (that the copy is of) or any later will that the deceased may have made. Such searches must at least include searches through the deceased’s personal papers and effects, searches at any solicitors the deceased may have used, any banks used by the deceased and the NSW Trustee & Guardian. If the copy shows that the original will was prepared by a solicitor then enquiries should be made with the relevant firm of solicitors to check that they do not have the original will, and as to what their usual practice was when wills were prepared for their clients (i.e. whether they normally held the originals in safe custody or gave the original to the client). If the will was last held by a solicitor then an affidavit
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by the solicitor or somebody in that solicitor’s firm should be provided as to the searches that they have undertaken for the original will. If the evidence suggests that the original will was last in the possession of the deceased then there is a presumption that the deceased revoked the will by destroying the original will. To rebut this presumption the application will need to be supported by evidence (which can be included in the affidavit of applicant to the extent that the applicant can provide this evidence) that goes to prove that the deceased did not intend to revoke the will. Such evidence can include conversations the deceased may have had in relation to his or her will, but could also include evidence as to there being no substantial change of circumstances since the will was originally made that may have led to an expectation that the deceased may have changed their will.
The affidavit of applicant will also need to set out who would be entitled under intestacy (i.e. if there was no will). If the people that would be entitled under intestacy are different to the beneficiaries under the copy will then it will be necessary to either obtain the consents of those persons who will be adversely effected if a grant is made in relation to the copy will, or to prove that they have at least been served with notice of the application. For information about who is entitled under intestacy see the separate information sheet in relation to Applying for Administration.
A grant of Administration with a Copy of the Will Annexed is a limited grant. Although in most cases the original will is unlikely to be found the grant is limited until the original will is found and an application for a grant in relation to the original will is made. In the summons for Letters of Administration with the Will Annexed (UCPR form 111) this is to be included in the “relief claimed” section of the form:
Qualifications or limitations on the grant: Until the Original will is found and proved.
Similarly, this should appear on the draft grant of Letters of Administration with the Will Annexed (UCPR form 112) as the basis of grant:
Administration with a Copy of the Will Annexed; Limited until the original will is found and proved.
In the affidavit of applicant the applicant should include an additional paragraph giving an undertaking to produce the original will to the Court if it is found and to apply for a grant in relation to the original will if the estate has not been fully administered.
The Supreme Court of Victoria dealt with a copy will in Bubko v Zimmermann [2001] VSC 137. The level of detail that was before the court in respect of the evidence of how the will and the copy was made is notable.
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The South Australian Supreme Court admitted a copy will to probate in Kunnen (Deceased) [2019] SASC 53.
See also Informal wills above.
Personal liability of executor
Section 92 Probate and Administration Act 1898 provides that an executor or administrator of an estate is protected from personal liability for claims by beneficiaries or creditors of the estate if they distribute more than six months after the date of death and more than 30 days after giving the required notice.
An executor or administrator of an estate where there is no possibility of a claim, for example spouse of deceased with no children, will often elect to take the risk and distribute earlier. In practical terms there is no problem doing so, but the estate solicitor must warn the client of the theoretical risk if they choose to do so that they may be personally liable if a later claim against the estate cannot be met from estate funds because they have been distributed.
If probate or administration is granted on presumption of death only, the court may order that any distribution of the estate be conditional upon the beneficiaries providing security in case the grant is subsequently revoked. In that case, the executor or administrator cannot obtain the protection under s 92 Probate and Administration Act unless and until the conditions are complied with: s 40B Probate and Administration Act 1898.
The matter of Sadri v Samian (No 3) [2010] VSC 251 at 127-128 dealt with assessment of an executor’s personal liability.
Property of the estate
See Assets above.
Rectification of a will
Section 27 of the Succession Act 2006 provides the court may make an order to rectify a will if the court is satisfied that the testator’s intentions would not be carried out due to either a clerical error or that the will does not give effect to the testator’ instructions.
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Applications for an order to rectify must be made within 12 months of the date of death although the court may extend this period if the court considers it necessary, or if the final distribution of the estate has not been made.
In Lockrey v Ferris [2011] NSWSC 179 the Supreme Court of NSW considered the court’s task of rectifying a will and agreed with the views of the Victorian Supreme Court in ANZ Trustees Limited v Hamlet & Ors [2010] VSC 207 that:
…the power in provisions such as s 31 of the Act does not remove the need for the proper construction of a Will and is not an optional alternative for the proper construction of the terms of a Will. Indeed, it is a condition precedent to the exercise of the power in s 31 [of the Victorian legislation] that the court be satisfied that the Will does not carry out the testator's intentions and that this satisfaction be based on one of two specified reasons namely, either that a clerical error was made or that the Will does not give effect to the testator's instructions. The existence of the second of these conditions requires the Will to be construed and to be found upon its proper construction not to give effect to the instructions of the testator.
In Lockrey v Ferris the court Hallen AsJ also noted that,
Although, there is distinction between a suit for construction, and a suit for rectification, of a will, and there have been cases in which it is suggested that they should be dealt with separately (e.g. Estate of Max Frederick Dippert [2001] NSWSC 167 (at [20]), I am of the view that, since the Civil Procedure Act 2005, both matters may be decided in the one proceedings.
In ANZ Trustees the court not only rectified the will but made an adverse costs order against the will drafter.
Renunciation as executor
There is no compulsion upon someone to accept the role as executor. The named executor, or one of multiple named executors, may renounce their office before any application for a grant is made.
If however the executor has intermeddled with the estate then they may lose their right to renounce. See Intermeddling above.
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If the will makes provision for a substitute or alternate executor then the renunciation will trigger the appointment of that person, otherwise an application of letters of administration with the will annexed will be necessary.
Replacement or removal of executor
An application may be made by any person interested in the estate, or by the NSW Trustee or a trustee company, or by a creditor of the estate, to have someone other than the named executor appointed, if the executor has neglected to apply for probate: s 75 Probate and Administration Act 1898.
This section can also be used by one executor to seek the replacement of a co-executor.
Resignation of executor
An executor cannot resign once probate has been granted but may apply to the court for the grant to be revoked: s 66 Probate and Administration Act 1898.
If the executor has intermeddled with the estate removal may not be permitted.
An executor may renounce the office before applying for a grant. See Renunciation above.
Revocation
See Application to revoke a grant of probate or letters of administration above.
Small estates
A small estate is one with assets not exceeding $15,000, or such other amount as is prescribed. In such an estate application for a grant of probate may be made to the registrar of the Supreme Court in the normal way, or to the registrar of a Local Court, which acts as district agent for the registrar of the Supreme Court: ss 98-106 Probate and Administration Act 1898.
Usually probate of a small estate would be unnecessary – most banks and other institutions would release funds from an account, or allow dealing with personal property, without the need for a grant.
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Subpoenas, notice to produce and disclosure
The considerations regarding disclosure of documents and information in contested probate proceedings are comprehensively discussed in Re Estates Brooker-Pain and Soulos [2019] NSWSC 671, where the court highlighted Practice Note SC Eq 11 and strongly indicated a preference for dealing with the issues via case management orders. However usual principles applying to subpoenas and notices to produce, such as the need for there to be a legitimate forensic purpose, still apply. See 101 Subpoena Answers for more information.
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Generally ...... 71 Adequate provision ...... 72 Adult children ...... 77 Adult child under a promise ...... 82 Adult stepchild ...... 83 Affidavits ...... 86 Application for grant not required ...... 89 Attempts to expressly disinherit eligible persons ...... 92 Bare paternity ...... 93 Close personal relationship ...... 94 Crisp orders ...... 98 De facto partner ...... 99 De facto partner – Same sex ...... 101 Dependency...... 103 Disclosure ...... 106 Eligible persons ...... 108 Estrangement ...... 109 Extension of time ...... 112 Factors warranting ...... 113 Family law orders ...... 114 Grandchildren ...... 114 Interim provision ...... 117 Intestacy ...... 119 Legislation...... 120 Matters to be considered by the court ...... 120 Notional estate ...... 122 Orders ...... 127 Release of rights ...... 129 Testamentary freedom ...... 130 Widows ...... 131
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Generally
The starting point for making wills is the idea of freedom of testamentary intention; that is the idea that a person should be able to leave their estate to whomever they choose – and to exclude as a beneficiary whomever they choose. In Banks v Goodfellow (1870) LR 5 QB 549, at 564, Cockburn CJ said:
… the power of disposing of property in anticipation of death has ever been regarded as one of the most valuable of the rights incidental to property … The English law leaves everything to the unfettered discretion of the testator, on the assumption that, though in some instances, caprice, or passion, or the power of new ties, or artful contrivance, or sinister influence, may lead to the neglect of claims that ought to be attended to, yet, the instincts, affections, and common sentiments of mankind may be safely trusted to secure, on the whole, a better disposition of the property of the dead, and one more accurately adjusted to the requirements of each particular case, than could be obtained through a distribution prescribed by the stereotyped and inflexible rules of a general law.
In Fenwick, Re; Application of J.R. Fenwick & Re Charles [2009] NSWSC 530 at [13]-[14] the court noted that:
The “unfettered discretion” which the law [in the past] gave to a testator with testamentary capacity was jealously guarded as “one of the most efficient means which (a man) has in protracted life to command the attention due to his infirmities” – a sentiment one might have attributed to Dickens’ cynical attorney, Mr Tulkinghorn, in Bleak House but which was, in fact, expressed by Chancellor Kent in Van Alst v Hunter (1821) 5 Johns Ch 148, at 159, and repeated with gloomy approval by Cockburn CJ in Banks.
Indeed, so strong was the conviction that the individual testator was the best person in all the world to dispose of his testamentary bounty that the exercise of the freedom of disposition had, by the mid-19th century, become not only a right but a duty which the testator could not delegate to anyone else, such as by a power of appointment of testamentary beneficiaries (other than charities). In b. Smith (1869) LR 1 P&D 717, Lord Penzance said:
“… a testator cannot confide to another the right to make a will for him …”
However ‘family provision’ legislation, first the Testators Family Maintenance Act and now Chapter 3 of the Succession Act 2006, has in effect severely curtailed testamentary freedom, in favour of the idea that a testator has an obligation to provide for their family. Or, to put it
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another way, as Gleeson CJ observed in Vigolo v Bostin [2005] HCA 11 at [10], the legislation:
…preserved freedom of testamentary disposition, but subjected that freedom to a new qualification.
Chapter 3 of the Succession Act 2006 creates categories of ‘eligible persons’ – a current or former spouse/partner, children and grandchildren or others who have been members of the deceased’s household and who have been financially dependent upon the deceased – who may claim against the estate for greater provision than they have been left in the will.
There is no doubt that family provision is a difficult area of law in which to practice and especially in which to predict the outcome of cases, for precisely the reasons referred to by His Honour Allsop P in Andrew v Andrew [2012] NSWCA 308 at [1]:
The difficulty arises from the need to apply a statutory test couched in evaluative language embodying human values and norms of conduct deeply personal to those involved and often incapable of clear expression. The human expression of will concerning the disposition of property flowing from considerations of emotion (including love and disappointment), reason and societal and family obligation cannot often be fully understood.
Adequate provision
Pursuant to s 59(1)(c) an order can only be made if:
at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
This is determined according to a two-stage test as propounded by the majority of the High Court in Singer v Berghouse [1994] HCA 40 and reaffirmed in Vigolo v Bostin [2005] HCA 11 albeit both in relation to the test under the previous legislation.
In Verzar v Verzar [2012] NSWSC 1380 Lindsay J cast doubt on whether the two-stage process applied under the current act and this doubt continued with cases being decided either way. See Keep v Bourke [2012] NSWCA 64 and Andrew v Andrew [2012] NSWCA 308.
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In Oldereid v Chan [2013] NSWSC 434 Ball J at [53] expressed the view that whether or not the two-stage process applied did not much matter:
However it is analysed, though, it is clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60. Whether those steps should be seen as separate stages that must be followed or as convenient steps in undertaking what is required by the legislation does not matter for present purposes.
However, in Franks v Franks [2013] NSWCA 60, a unanimous decision of the Court of Appeal, the two-stage test was applied.
That decision has been followed since, including by Hallen J in Wheat v Wisbey [2013] NSWSC 537, where His Honour said:
It seems to me, with great respect to those who disagree, that the amendments introduced by the Act do not require, or justify, a different approach.
His Honour restated his position in that regard, following another analysis of the provisions and the cases, in Curnow v Curnow [2014] NSWSC 896.
The two-stage process
First, the Court must consider whether or not the provision made in favour of the claimant by the deceased either during the deceased’s lifetime or out of the deceased’s estate was ‘inadequate for the proper maintenance, education and advancement in life of the eligible person’.
Secondly, the Court must consider ‘what provision (if any) ought to be made in favour’ of the claimant, taking into consideration the matters outlined by s 60: Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520.
Matters to be considered
Section 60(2) sets out the matters that may be taken into account by the court in determining both whether the applicant is an eligible person and whether or not to make a
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family provision order – what His Honour Hallen J in Curnow v Curnow [2014] NSWSC 896 called ‘the discretionary question’. These are:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(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,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
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(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
The provisions of s 59 and the two-stage process, together with the matters referred to in s 60 and their importance to the court’s determination, were considered at length by His Honour Hallen J in Wheat v Wisbey [2013] NSWSC 537 at [60] – [115], including an exhaustive analysis of the case law on the meanings of the various words used in the sections, including ‘maintenance, education and advancement in life’, ‘financial resources’ and ‘earning capacity’.
Following that detailed consideration His Honour noted that:
[122] … in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, Young J, 17 May 1996, unreported); Vigolo v Bostin at 199 and 204; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59. How those community expectations or standards are determined cannot be explained other than by reference to the Act: Andrew v Andrew at [36]; 664.
[123] In all cases under the Act, what is adequate and proper provision is necessarily fact specific.
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[124] The Act is not a "Destitute Persons Act", and it is not necessary, therefore, that the applicant should be destitute to succeed in obtaining an order: In re Allardice, Allardice v Allardice (1910) 29 NZLR 959 at 966.
[125] Where the Court is satisfied that provision ought to be made, then it is no answer to a claim for provision under the Act that to make an order would be to defeat the intentions of the deceased identified in the Will. The Act requires, in such circumstances, the deceased's intention in the Will to be displaced: Kembrey v Cuskelly [2008] NSWSC 262, per White J, at [45].
[126] All of the financial needs of an applicant have to be taken into account and considered by reference to the other factors referred to in the Act and in Singer v Berghouse. What is proper provision is not arrived at by adding up all of the identified financial needs: Hyland v Burbidge [2000] NSWSC 12 at [56]. Nor does it follow that if the Court decides it is inappropriate to make a specific provision in respect of one identified head of claim that any identified financial need, even a contingent need, in relation to that claim becomes irrelevant to the final assessment: Mayfield v Lloyd- Williams, at [89].
[127] The size of the estate or notional estate is a significant consideration in determining an application for provision. However, its size does not justify the Court in rewriting the will in accordance with its own ideas of justice and fairness: Bowyer v Wood [2007] SASC 327; (2007) 99 SASR 190, per Debelle J at [41]; Borebor v Keane [2013] VSC 35 at [67].
Perhaps of most practical importance, and as a final word on the fraught legislative concept of what constitutes ‘adequate provision’, His Honour also noted at [132] and [133] that:
As Lindsay J said in Verzar v Verzar, at [131]:
Whatever guidance one might draw from analogous cases all analogies, and any guidelines drawn from a pattern of similar cases, must yield to the text of the legislation, the duty of the Court to apply that text to the particular circumstances, and the totality of material circumstances, of each case. Preconceptions and predispositions, comforting though they may be, can be the source of inadequate consideration of the jurisdiction to be exercised: Bladwell v Davis [2004] NSWCA 170 at [12] and [18]-[19]."
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I respectfully agree with the statement of White J in Slack v Rogan, at [126]:
"The question of whether the provision, if any, made for an eligible applicant is adequate for his or her proper maintenance, education or advancement in life is to be assessed having regard to the facts and circumstances of each individual case. The assessment involves a broad evaluative judgment which is not to be constrained by preconceptions and predispositions (Bladwell v Davis). This really means that there are no definite criteria for the exercise of the "evaluative judgment".
His Honour repeated these comments in Charlwood v Charlwood [2017] NSWSC 1033.
In Re Estate McNamara [2018] NSWSC 1661 Lindsay J considered section 60(2)(j): ‘any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person’.
In McNamara the deceased provided an extensive and clear direction in her will that her adult child not receive provision out of her estate. Notably, the adult child was still awarded $75,000, though that sum was severely limited. Lindsay J commented at [55]:
Upon an examination of the facts of the case from that perspective, and viewing the totality of the relationships between the deceased and her sons and their respective families, the deceased’s testamentary disclaimer of an intention to benefit the plaintiff is not an absolute bar to the making of a family provision order in his favour.
Although a consideration for the court, any express testamentary intention to not provide provision to a beneficiary does not bar an eligible person from applying for and receiving provision out of an estate. Indeed, in Steinmetz v Shannon [2019] NSWCA 114 at [2] the court determined that:
Section 59 of the Succession Act is to be applied according to its terms, and not confined by notions of reluctance to interfere with freedom of testation.
Adult children
Claims by adult children against an estate are perhaps the most common type of claim under Chapter 3.
In Megerditchian v Khatchadourian [2019] NSWSC 1870 the court said at [177]:
…It is well established that an infant child prima facie has a claim to be maintained and supported, but an adult child capable of maintaining and supporting himself or herself
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usually does not: Hughes v National Trustees, Executors and Agency Co of Australasia [1979] HCA 2; (1979) 143 CLR 134 at 147.
Where there is a surviving spouse of the testator, any claim by adult children will face a greater hurdle, especially where the size of the estate is insufficient to provide sufficiently for all. In Michael Zannetides v Tracey Spence [2013] NSWSC 2032 His Honour Young AJA rather acutely summarised the position of adult children as follows:
The authorities show a wise and just testator must think more of his widow in ill health rather than his able-bodied children, even though he might love them.
In Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney (No. 2) [2013] NSWSC 1566 (Peipi No 2) Slattery J noted at [9]:
The Court needs no persuasion of the importance in the testamentary intentions of a deceased person in accordance with accepted legal principle that a spouse be provided with a house to live in after the deceased's death. This is regarded as the standard by which family provision claims in this area are judged: Luciano v Rosenblum (1985) 2 NSWLR 65 and Crouch v Zelichowski [2002] NSWSC 681.
However, the question of adequate provision must still be answered in the usual way and can overturn this dictum. In Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520 (Peipi No 1) at [89] a profoundly disabled adult daughter of the deceased was awarded 65% of the estate, where the other plaintiff was found to be the defacto partner of the deceased and entitled to the statutory legacy on intestacy – see Adequate provision above.
In Wheat v Wisbey [2013] NSWSC 537 Hallen J stated:
[128] In relation to a claim by an adult child, the following principles are useful to remember:
(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. 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, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it
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might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
(c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary 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 a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute: Taylor v Farrugia, at [58].
(d) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86].
(e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2) at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37, per Nicholson J at 45.
(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [179] - [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an
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increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164, at [17].
(g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd, at 149.
(h) Although some may hold the view that equality between children requires that "adequate provision" not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court's determination of an applicant's case.
(i) There is no obligation on a parent to equalise distributions made to his or her children so that each child receive benefits on the same scale as the other: Cooper v Dungan at 542.
In Blore v Lang [1960] HCA 73 Fullagar and Menzies JJ said at [135]:
“The measure to be applied is not what has been given to one, but what the other needs for his or her proper maintenance, giving due regard to all the circumstances of the case... The ... legislation [is] for remedying, within such limits as a wide discretion would set, breaches of a testator's moral duty to make adequate provision for the proper maintenance of his family - not for the making of ... a fair distribution of ... [the] estate ... Equality is not something to be achieved by the application of the Act, although in some cases equality may set a limit to the order to be made - for instance, where there is not enough to provide proper maintenance for all entitled to consideration whose need is the same.”
[129] Relevantly to each Plaintiff's claim, Menzies and Fullagar JJ in Blore v Lang, at 135, also commented, in respect of "a married woman with a healthy husband in satisfactory employment who supports her in reasonable comfort", "her need is not for the bread and butter of life, but for a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit".
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[130] Even more vividly, but to similar effect, is the approach in Worladge v Doddridge (1957) 97 CLR 1 at 12, in which Williams and Fullagar JJ approved the following statement, from In Re Harris (1936) 5 SASR 497 at 501:
“Proper maintenance is (if circumstances permit) something more than a provision to keep the wolf from the door - it should at least be sufficient to keep the wolf from pattering around the house or lurking in some outhouse in the backyard - it should be sufficient to free the mind from any reasonable fear of any insufficiency as age increases and health and strength gradually fail.”
See also:
− Curnow v Curnow [2014] NSWSC 896 – especially [186] – [194] where Hallen J again considered the position of adult children in detail;
− Charlwood v Charlwood [2017] NSWSC 1033 – where Hallen J, in the context of a claim by an adult child, analysed the requirements for determining ‘adequate provision’ – see ‘Adequate provision’ and also Wheat v Wisbey, above;
− Towson v Francis [2017] NSWSC 1034 – which especially dealt with estrangement between an adult child and a deceased parent – see also Estrangement below;
− Steinmetz v Shannon [2019] NSWCA 114 – where the Court of Appeal allowed an appeal by a widow who had been left only a relatively small annuity from her husband’s large estate which had otherwise been left to the adult children of his previous marriage, granting the appellant a substantial legacy on top of the annuity – see also Widows, below;
− Vasey v Henry [2019] NSWSC 996 – where three adult children claimed provision out of their father’s estate. The claim failed for several reasons, one being that the deceased and the deceased’s spouse made ‘mirror wills’, which would result in the plaintiffs receiving provision out of the spouse’s estate upon death. At [147] Robb J explains:
The arrangement that he [the deceased] made with Dianne [the spouse] for the couple to make ‘mirror wills’ for the purpose of the remaining assets of the couple at the time of the death of the survivor being shared equally between the couple’s six children was a proper arrangement that would, in my view, be regarded by the general community as a proper provision for the children, given the limited nature of the couple’s collective assets and the fact that, as Dianne
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was retired, those assets would be needed to provide a secure home for Dianne and a fund to provide an income and a buffer against contingencies.
The claim failed and the plaintiffs were ordered to pay the defendant’s costs of the proceedings on an ordinary basis.
− Koellner v Spicer [2019] NSWSC 1571 – where an adult child with a medical condition and meagre financial resources was awarded a 35% legacy from a reasonably small estate even though the deceased had expressly excluded him on the basis they had no relationship. See also the general discussion at [151] – [160] regarding the position of adult children bringing family provision claims.
− Cowap v Cowap [2020] NSWCA 19 where the court of appeal considered the competing interests of a disabled adult son who had a ‘severe and permanent disability, including cognitive impairment’ [59] and the elderly widow of the deceased with ‘strong claims on the testator’s bounty arising out of her long marriage and occupation of the former matrimonial home, to which [she] had significant emotional attachment’. The Court of Appeal dismissed the appeal by the widow against the first instance decision to make provision for the son which resulted in the widow having to sell the former matrimonial home to fund that provision. However, she was left with sufficient funds to purchase a new, smaller property and the sale did not affect her income. The court also thought it appropriate to consider that the 91-year-old widow would inevitably leave the property at some stage in any event.
Adult child under a promise
In Vigolo v Bostin [2005] HCA 11 the High Court considered, under the Western Australian legislation, the effect of a purported promise by the deceased that his son, from whom he became estranged, would inherit the deceased’s farm on his death. The court did so in the context of the relevance of the deceased having a moral duty to the son.
See also Adequate provision and Adult children above.
The case of Pizimolas v Pizimolas & Zannis [2010] SASC 158 dealt with an unsuccessful claim for a greater entitlement by adult child under a revocable promise by the deceased, where all children were left an equal share. See Pizimolas v Pizimolas & Zannis (No 2) [2010] SASC 209 regarding costs.
In Neale v Neale [2014] NSWSC 965 the Court of Appeal dismissed with costs an appeal by a widow against a decision of Lindsay J to make provision for the deceased’s adult children,
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from a previous marriage, because of the deceased’s promise to them that they would inherit from him on his death. In that case the promise was given when the children agreed to forego any claim on their grandmother’s estate and entered into a deed of arrangement to that effect, so they had acted to their detriment in reliance on the promise.
Adult stepchild
In Spata v Tumino [2018] NSWCA 17 the Court of Appeal dismissed an appeal by the adult stepson of the deceased who had failed at first instance on the basis that the court below did not accept that he was an eligible person in that he was not dependent upon the deceased. The court at first instance also found that, although the claimant was ineligible, there were otherwise factors warranting an award and that inadequate provision had been made, so that if he could have established his eligibility on appeal he would have been awarded $300,000.
Spata v Tumino effectively proceeded on the basis that the legislation quite deliberately puts stepchildren in the same category as any other claimant seeking to establish their eligibility claim on the basis of dependency. The decision includes the following passage:
59. In Lodin v Lodin [2017] NSWCA 327, Sackville AJA at [69]-[84] traced the history of Chapter 3 of the Succession Act and noted a number of curious features. The legislative history provides some assistance in understanding the relevant features of the Succession Act and, in this case, the relationship between the key provisions governing a Succession Act claim by an adult stepchild.
60. The first legislation in New South Wales to provide for family provision claims was introduced over 100 years ago in the Testator’s Family Maintenance and Guardianship of Infants Act 1916(NSW). The legislation permitted the Court to make an order for the provision of the widow, husband or children of a deceased person out of that person’s estate.
61. In 1977, shortly after the enactment of the Family Law Act 1975 (Cth), the New South Wales Law Reform Commission (NSWLRC) reviewed the law relating to family provision in New South Wales. The NSWLRC recommended that the class of persons eligible to apply for provision be enlarged. As the NSWLRC said in its Report on the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (Report 28, 1977) at [1.7]:
“at present, where a person leaves a will, eligible persons are the widow, widower and the children of the deceased person and, where a person does not
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leave a will, eligible persons are the widow, children and some grand children of the deceased person. We recommend, whether the person concerned does, or does not, leave a will, that a person should be an eligible person if he or she is –
(a) the widower or widow of the deceased person;
(b) a child of the deceased person; or
(c) a person –
(i) who was, at any time, wholly or partly dependent upon the deceased person;
(ii) who was, at any time, a member of a household of which the deceased person was a member; and
(iii) who was a person whom the deceased person ought not, in the opinion of the Court, to have left without adequate provision for his proper maintenance, education or advancement in life.”
62. In its report the NSWLRC gave close consideration to the position of adult stepchildren. The NSWLRC said at [2.6.25]:
“It is argued, in relation to stepchildren, that an adult child whose parent remarries may never live in the household of his stepparent. And yet, if the parent leaves everything to the stepparent and, in turn, the stepparent leaves everything to a stranger, the stepchild is without rights under the Act. As we see it, in this particular case, any injustice is the result, not of section 6, but of the child’s failure to exercise his right to apply for an order out of his parents estate. There may, of course, be cases where this simple answer is inapt; cases where section 6 may operate too restrictively in its application to stepchildren. Nonetheless we are reluctant to propose the encroachment on testamentary freedom which would result from equating, in all cases, stepchildren with children. The relationship of a parent and a child is always a special relationship. The relationship of a stepparent and stepchild may develop into a special relationship but it will not always do so. If it does do so, the conditions of section 6 may sometimes disadvantage stepchildren. But, in our view, these cases will be far fewer than the cases where the relationship of stepparent and stepchild does not develop into a special relationship of the kind which the new Act seeks to protect.”
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63. As Sackville AJA explained in Lodin, the Family Provision Act as enacted followed some but not all of the NSWLRC’s recommendations. In relation to stepchildren, s 9(1) of the Family Provision Act, the precursor to s 59(1)(b) of the Succession Act, adopted the criterion of eligibility recommended by the Commission.
64. In 1991, the Standing Committee of Attorneys-General approved the development of uniform succession laws in Australia. The Queensland Law Reform Commission (QLRC) was asked to coordinate the project and in 1997 reported to the Standing Committee. Except for people with “automatic” eligibility (being children and spouses of the deceased at the time of his or her death) the QLRC favoured an approach where eligibility to apply for family provision orders (other than by spouses and children) turned “not on membership of some arbitrary class of persons” but on the establishment of a “special responsibility” on the part of the deceased person towards the applicant. New South Wales Law Reform Commission, Uniform Succession Law: Family Provision (Report 110, May 2005).
65. The NSWLRC report Uniform Succession Law: Family Provision (Report 110, May 2005) about uniform succession laws essentially adopted the approach proposed in the model provisions whereby a person could apply for a family provision order if the deceased person had a “special responsibility” to the person to provide maintenance, education or advancement in life. The draft legislation specified 14 matters that could be considered by the court in determining whether the deceased person had a responsibility of the relevant kind to the claimant. The same matters could be considered in determining whether to make a family provision order and, if so, the nature of any order made.
66. The Succession Act as originally enacted in New South Wales did not deal with family provision orders. The provisions now in Chapter 3 of the Succession Act were introduced by the Succession Amendment (Family Provision) Act 2008 (NSW). This legislation did not follow the model bill proposed by the QLRC and the NSWLRC in relation to a family provision claim made by a person other than a spouse, a person with whom the deceased was living in a domestic relationship and a child of the deceased. The second reading speech explained why:
“… The model bill did not adopt the eligibility requirements for an application for family provision that are currently in place in the New South Wales Family Provision Act. Currently the Family Provision Act provides that the following people are automatically entitled to apply for provision: the spouse of the
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deceased, a person with whom the deceased was living in a domestic relationship and the adult or non-adult child of the deceased. Former spouses of the deceased and other dependents, including grandchildren, are also entitled to apply, but the Act requires the court to determine whether there are factors which warrant the making of the application before going on to consider an application.
The model bill restricts the list of those who are automatically entitled to make an application for provision to spouses, de facto partners and non-adult children of the deceased. It then contains a catch-all category of claimant permitting anyone “to whom the deceased person owed a responsibility to provide maintenance, education or advancement in life” to apply to the court for a family provision order. Such a change may lead to a flood of new claims being made on estates from people who are not currently entitled to apply in New South Wales. Adult children would be forced to demonstrate the requirement of the deceased’s responsibility to them. This may lead to more lengthy and expensive litigation, as adult children seek to prove they meet this requirement.
The bill before the House therefore does not adopt the model bill eligibility provisions. It retains the approach in the current Act with one modification: the current Act provides that those who were living in a “domestic relationship” with the deceased are automatically entitled to eligibility. The model bill’s restriction of this entitlement to de facto partners is sensible and thus the new bill replaces “domestic relationship” with “de facto relationship” and creates a new category of applicant – a person in a “close personal relationship” with the deceased.…”
67. It is against this background that the construction of s 57(1)(e) of the Succession Act must be addressed.
See also Curnow v Curnow [2014] NSWSC 896 and Busuttil v DeGabriele [2013] VSC 215, for examples of successful applications by adult stepchildren.
Affidavits
Evidence in family provision cases is by affidavit – see Supreme Court Practice note SC EQ 7.
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In Megerditchian v Khatchadourian [2019] NSWSC 1870 the court considered in some detail the requirement that the plaintiff file an affidavit at the time of filing their summons:
[153] The Practice Note requires (cl 6(a)) that at the time of making the application the plaintiff file an affidavit in support of the application adapted from a prescribed form (annexure 1). Annexure 1 is a pro forma affidavit which contains a series of headings which correspond with the factors listed in the Succession Act, s 60(2)(a) to s 60(2)(o), as factors the Court may take into account.
[154] For present purposes, there are two relevant parts of the pro forma affidavit. The first corresponds with s 60(2)(d):
the financial resources (including earning capacity) and financial needs, both present and future, of the plaintiff
10. Annexed hereto and marked “###” is a summary of my assets and liabilities (including superannuation).
11. Annexed hereto and marked “###” is a summary of assets that I hold with another person.
12. My current gross monthly income is $###. My current net monthly income is $###.
13. Annexed hereto and marked “###” is a summary of my (or my family’s) monthly expenditure.
14. I shall produce documents sought by the administrator.
15. I purchased or sold the following real estate in the last 3 years:
16. I purchased or sold the following shares in public companies in the last 3 years:
17. I made the following gifts of amounts of $1,000 or more in the last 3 years:
18. I sold the following property for $1,000 or more in the last 3 years:
19. I have the following interests in the following companies or trusts:
Insert details
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20. Annexed hereto and marked “###” is a diagram that shows my ownership and control of the companies and trusts referred to in the previous paragraph and their underlying assets.
21. Insert details of needs both present and likely future needs of the plaintiff.
[155] The second relevant part corresponds with s 60(2)(e):
If the plaintiff is cohabiting with another person-the financial circumstances of the other person
22. Insert details
[156] Before considering the counsel’s submission in detail, I make three preliminary observations. The first is that the Practice Note does not have the status of a statute or a rule which the Court is required to follow. It is only a guide to the exercise of the Court’s case management powers.
[157] The second observation is that the s 60(2) factors listed in the pro forma affidavit are only matters which the Court “may” take into account. Once the Vigolo v Bostin threshold is crossed, their relevance and weight will vary from case to case.
[158] The third preliminary observation is that the pro forma affidavit is designed to be filed in support of the plaintiff’s claim at the beginning of the proceedings. This is usually before the factual issues in the application have crystallised. Furthermore, some of the factors which the affidavit is required to address may not be within the personal knowledge of the plaintiff and, to that extent, it may not be possible to put the affidavit in admissible form. Documents may also be required to support some of the statements in the affidavit; the pro forma affidavit acknowledges this by containing an undertaking to produce documents sought by the administrator of the estate.
[159] In my view an affidavit under the Practice Note may be compared with the affidavit required in support of an application to set aside a statutory demand (Corporations Act 2001 (Cth), s 459G(3)(a)). Such an affidavit is required to identify the grounds of the set-aside application, but need not necessarily be in admissible form: First Equilibrium Pty Ltd v Bluestone Property Services Pty Ltd [2013] FCAFC 108 at [21]. In the same way, the purpose of the affidavit prescribed by the Practice Note is to identify, in broad terms, the plaintiff’s evidence concerning the factors enumerated in s 60(2) which may bear on the application. It will not necessarily be exhaustive, or all in
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admissible form, and it may be supplemented by further evidence as the case moves towards hearing.
See also Disclosure, below.
In Estate of Joan Esme Little and the Succession Act 2006 [2015] NSWSC 1913 the court emphasised the importance of affidavits in family provision cases containing only evidence that is relevant. His Honour Young AJA said:
Before leaving the witnesses, I must say something about the way in which Susanne and Leonie’s affidavits were prepared. In particular, Susanne’s is the worst example. Susanne goes back to her childhood and we even have a story of how she was carried on by the school bus and so missed a day of school for which she received a belting from her father. It is almost impossible to see how that incident could have the slightest bearing on what I have to decide in this case. It may well be that it was therapeutic for Susanne (and for corresponding details, Leonie) to get out of her system something that had been troubling her for years, but that is no reason why the Court should be burdened with excess semi-irrelevant details. That is one of the reasons why the costs in this relatively small estate are over $250,000. It is to be hoped that solicitors acting for plaintiffs will employ their professional skills when these affidavits are prepared, not just to put in affidavit form the client statement but only to put forward such details as are really relevant to the decision that has to be made.
Application for grant not required
It is not necessary for an application for a grant of probate or letters of administration to be made at or before the time an application for family provision is made.
Section 58(1) of the Succession Act 2006 specifically provides that an application for a family provision order may be made whether or not administration of the estate of the deceased person has been granted.
However, administration may be granted for the purposes of an application for a family provision order under s 91.
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Section 91 provides:
Grant of probate or administration to enable application to be dealt with
(1) This section applies if an application is made by a person for a family provision order, or notional estate order, in respect of the estate of a deceased person, or deceased transferee, respectively, in relation to which administration has not been granted.
(2) The Court may, if it is satisfied that it is proper to do so, grant administration in respect of the estate of the deceased person or deceased transferee to the applicant for the purposes only of permitting the application concerned to be dealt with, whether or not the deceased person or deceased transferee left property in New South Wales.
(3) The granting of administration under the Probate and Administration Act 1898 does not:
(a) prevent the Court from granting administration under this section, or
(b) unless the Court otherwise orders, affect any previous grant of administration under this section.
(4) The provisions of the Probate and Administration Act 1898 apply to a grant of administration under this section, and to the legal representative of the estate, in the same way as they apply to a grant of administration under that Act and the legal representative of any estate for which such a grant has been made.
In Wheat v Wisbey [2013] NSWSC 537 the court examined the provisions of ss 58 and 91 and, after referring to Hitchcock v Pratt [2010] NSWSC 1508 where Brereton J compared those provisions with the requirements under the previous act, noted:
37. Respectfully, I agree that a grant of administration is not required at the time an application for a family provision order is made. Section 58(1) of the Act specifically provides that an application for a family provision order may be made whether or not administration of the estate of the deceased person has been granted (my emphasis). (However, there is a note to s 58(1) that administration may be granted for the purposes of an application for a family provision order under s 91.) […]
39. Thus, under s 91, the Court may, if it is satisfied that it is proper to do so, grant administration in respect of the estate of the deceased person for the purposes
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only of permitting the application concerned to be dealt with (my emphasis). The application referred to is for a family provision order or for a notional estate order.
40. Section 91 does not provide for the making of a grant for the purposes of an application for a family provision order or for a notional estate order before such an application is made.
41. Importantly, s 91 is different from s 41A of the Probate and Administration Act 1898, which provided for a grant to be made "in order to permit an application to be made under the Family Provision Act 1982".
42. Thus, it seems to me that the Act differentiates between "when an application is made" (the date of the filing of the Summons) and "when the application ... is dealt with" (the date of making a family provision order or notional estate order, whether by agreement of the parties, or following a contested hearing).
43. The common prerequisite for the section to apply, at either date, is that there is an estate of a deceased person, or deceased transferee, respectively, in relation to which administration has not been granted.
44. The use of the word "permitting" in the section, in my view, is important. The word usually means "authorising", "allowing" or "not preventing". What follows in the sub-section avoids the need for there to be real and personal estate which the deceased died seized or possessed of, or entitled to, in New South Wales, a pre-requisite to the Court having jurisdiction to grant administration: s 40 Probate and Administration Act.
45. The Court is not given any guidance about how to exercise the power in s 91. Not unnaturally, the section does not provide any criteria by reference to which the Court should be satisfied. No requirements are prescribed by the Act to assist the Court to determine if it is proper to grant administration in respect of the estate of the deceased or deceased transferee, to the applicant, solely for the purpose of permitting the application concerned to be dealt with.
46. Nor is it useful to purport to lay down an exhaustive list of the criteria by reference to which an application ought to be determined. Whether or not the court is satisfied that it would be proper will be fact specific and determined on its own merits.
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47. It seems to me, however, that there are several matters that might be relevant at the time the application under s 91 is being considered, namely: whether a family provision order or notional estate order in favour of the applicant is to be made; whether administration is required to facilitate dealing with the real and personal estate which the deceased dies seized or possessed of or entitled to in New South Wales, or the property the subject of the notional estate order to give effect to the family provision order which is to be made; and whether there is consent of any other party in the proceedings to the making of an order under s 91(2).
48. Section 91 would be an unnecessary inclusion in the Act if a grant were not required for the purposes of the application that has been made being dealt with. Yet, the discretion given to the Court ("may, if it is satisfied that it is proper to do so") should be noted. The discretion suggests that there may be cases when it would not be proper to do so.
49. I have considered whether the Court could be satisfied that it would be "proper to do so" if there were only property of the deceased that could be the subject of a notional estate order. There may be such occasions since s 91 applies to both an application for a family provision order or for a notional estate order.
Attempts to expressly disinherit eligible persons
Section 60(2) of the Succession Act 2006 sets out the matters that may be taken into account by the court in determining whether or not to make a family provision order. Section 60(2)(j) provides that the court may consider any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person.
In Re Estate McNamara [2018] NSWSC 1661 the deceased provided an extensive and clear direction in her will that her adult child not receive provision out of her estate. At paragraph 26 Lindsay J noted:
The deceased’s testamentary disclaimer of any intention to benefit the plaintiff is not without foundation in fact. The fact that the plaintiff disputes the correctness of aspects of the deceased’s statement does not detract from the observation (here made) that, viewed from the deceased’s perspective, her observations were reasonably grounded in fact. She was entitled to offer an explanation for her testamentary dispositions, or lack thereof, and to have her views respected, subject to the due operation of the Court’s family provision jurisdiction.
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It is clear that the deceased intended that the plaintiff receive no benefit from her estate, and the court takes this intention into account when considering a family provision order.
However, the deceased’s express testamentary intention is not absolute, and the court is not restricted in its power to grant a family provision order. The court is only required to consider the testamentary intention in its decision.
In McNamara the plaintiff was still awarded $75,000 out of the estate, though that sum was severely limited. Lindsay J commented at [55]:
Upon an examination of the facts of the case from that perspective, and viewing the totality of the relationships between the deceased and her sons and their respective families, the deceased’s testamentary disclaimer of an intention to benefit the plaintiff is not an absolute bar to the making of a family provision order in his favour.
Bare paternity
In Harris v Carter [2020] NSWSC 196 the thrust of the defendant’s submissions was that the relationship between the deceased and the plaintiff was nothing more than bare paternity, that is, there was a biological relationship only. The plaintiff was a 13-year-old son who had never had any contact with the deceased father.
Hallen J at [155] cited the Court of Appeal in Nicholls v Hall [2007] NSWCA 356 that it was ‘plainly wrong’ to dismiss a claim simply on the basis that there was only bare paternity. Counter to that, the Court of Appeal stated that just because there is a biological connection does not create a right to a family provision claim. The jurisdictional question still had to be satisfied that there was inadequate provision for proper maintenance, education, or advancement in life.
His Honour also cited Robb J in Lado Causillas v NSW Trustee and Guardian [2015] NSWSC 1204 at [337]:
“The entitlement to an appropriate family provision order does not, however, flow from the mere fact of a parental relationship. All relevant circumstances must be taken into account ...”
His Honour added at [158]:
Yet, just because a child has been neglected during the joint lives of the parent and the child, the Court should not, necessarily, right the wrong thereby done, by granting an
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order for provision out of the parent’s estate without reference to the requirements of the Act. …
In Harris Hallen J dismissed the plaintiff’s claim as there was a ‘substantial financial foundation established’ as a result of the death of the deceased. No further provision was warranted.
Close personal relationship
Note: this is different from a de facto relationship. See De facto partner below.
There are two categories of eligible persons which require that the claimant satisfy the court they were in a ‘close personal relationship’ with the deceased:
− s 57(1)(e)(ii) requires that the claimant was at any particular time, wholly or partly dependent on the deceased person and living in a close personal relationship at the time of the deceased person’s death; and
− s 57(1)(f) requires that the claimant was a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death.
‘Close personal relationship’ is defined in s 3 as:
a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.
In Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos [2017] NSWSC 666 the court examined the question of ‘close personal relationship’ against the authorities, as follows:
[773] In relation to the identically worded Property (Relationships) Act 1984, s 5(1), Macready AsJ found in Dridi v Fillmore [2001] NSWSC 319 at [102] – [104]:
‘the definition calls for two different links. The first is that the parties are "living together". The second is that "one or each of whom provides the other with domestic support and personal care".
So far as the first requirement is concerned since we are not concerned with concepts applicable to couples; the requirement would be met if the parties shared accommodation together. For example, a boarder in an elderly widow's home would
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qualify. It may not be necessary for there to be a sharing of food or eating arrangements together. In the present case this is not important as it seems that the parties ate together when they were both at home.
The second requirement is cumulative. There must be both domestic support and personal care. In this case there is evidence of domestic support as the defendant provided for the plaintiff free accommodation and meals, which he cooked for the plaintiff when the plaintiff was at home. There are other matters, not present in this case, which could be domestic support, eg, shopping for both parties, washing clothes etc’
[774] The scope of the concept of “living together” has been the subject of judicial authority. Brereton J in Sharpless v McKibbin [2007] NSWSC 1498 at [71] affirmed Macready AsJ in Fridi v Fillmorethat the reference to persons “living together” in the Property (Relationships) Act 1984, s 5(1) was not an attempt to impose concepts applicable to couples onto a “close personal relationship”. His Honour found that a “close personal relationship” may cover a wide range of relationships, and did not typically involve a “practical union of lives and property”: Jurd v Public Trustee[2001] NSWSC 632 at [22]-[24] per Macready M; Harkness v Harkness [2011] NSWSC 1421 at [41] per Hallen AsJ.
[775] Further, in Hayes v Marquis [2008] NSWCA 10 McColl JA at [78] held that the statutory language did not require full time cohabitation, and that it would be satisfactory if there was sufficient shared residence. McColl JA also held at [76] that the reference to the term “domestic” in collaboration with the phrase “living together” carried connotations of “matters relating to a household”, and that in turn the definition contemplated that “the facts permit of the conclusion that the two adults are living as a household”.
For a successful claim regarding a close personal relationship under the previous legislation – Family Provision Act 1982 – see Smith v Daniels & Anor [2010] NSWSC 604.
Costs
The usual position that costs follow the cause is not necessarily the case in family provision litigation. Sometimes a claimant will be unsuccessful but will have their costs paid out of the estate. The plaintiff may be required to pay the estate’s costs where the claim has no merit, or the estate is too small to bear the costs. The defendant, usually the executor, will always have their costs paid out of the estate, usually on the indemnity basis.
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In Koellner v Spicer [2019] NSWSC 1571 Hallen J noted at [48] that:
…s 60 of the Civil Procedure Act, which applies equally to a claim for a family provision order, refers to "the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute.
His Honour also observed at [47]:
The Court, on many occasions, has emphasised the necessity for parties to bear in mind the proportionality of costs, the importance of making appropriate settlement offers, and that if one wishes, or both wish, to adopt an approach that may have the effect of reducing the value of the estate, then they should not proceed on the basis that all of the costs and disbursements will necessarily be borne by the estate: Geoghegan v Szelid [2011] NSWSC 1440 at [21]-[24].
See also Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843, where the court criticised disproportionate costs.
As is evident from the requirement of the Practice Note costs are heavily regulated in family provision matters and both sides must disclose their costs at various stages of the proceedings – commencement, mediation and hearing.
In Curnow v Curnow [2014] NSWSC 896 Hallen J noted:
Practice Note SC Eq 7, which applies to claims for a family provision order, currently provides, in Clause 24, that "[o]rders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less than $500,000". (Of course, this is only one basis upon which costs may be capped. See, for example, s 98 of the Civil Procedure Act 2005 (NSW). Also, see Baychek v Baychek [2010] NSWSC 987.)
The court has the power to cap costs in family provision matters where it is satisfied that costs are excessive. See the comments of Slattery J in Detheridge v Detheridge [2019] NSWSC 183 at [174]-[177].
In Harkness v Harkness (No 2) [2012] NSWSC 35, Hallen AsJ (as he then was) went to some lengths to review the principles of costs in family provision claims. His Honour dismissed the plaintiff's claim because she was not able to come within the relevant definition of eligibility but went on to describe in detail why her claim was morally meritorious. He declined to make a costs order against her and made one against the estate only.
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See Smoel v Morris [2013] VSC 291 regarding a costs application consequent on the resistance to sale of assets to pay liabilities, and interesting coverage of general costs principles.
See also Vasey v Henry [2019] NSWSC 996 where the plaintiffs were ordered to pay the defendant’s costs on the ordinary basis.
See Megerditchian v Khatchadourian (No 2) [2020] NSWSC 112 which dealt with the applicability of Calderbank letters and offers of compromise under Part 42 of the Uniform Civil Procedure Rules in family provision claims.
Overall justice of the case
In Singer v Berghouse [1993] HCA 35, at [6] Gaudron J said:
Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the Act which, in s 33, makes special provision in that regard, costs in family provision cases generally depend on the overall justice of the case.
In Salmon v Osmond [2015] NSWCA 42 at [174] Beazley P reaffirmed this modern approach to costs which considers the overall justice of the case.
In Shelley v Prager (No 2) [2020] NSWSC 1553 at [18], Williams J provided that the following factors may be relevant in assessing the overall justice of the case:
− whether one party has engaged in unreasonable conduct in the commencement or maintenance of the proceedings which has resulted in the other party (or parties) to the proceeding incurring unnecessary costs;
− whether an applicant’s claim for provision out of an estate is frivolous, vexatious or made without reasonable prospects of success;
− whether an applicant’s claim, although unsuccessful, was otherwise reasonable, meritorious or borderline; and
− the relative size of the deceased estate.
Tutor’s liability for costs
In Harris v Carter [2020] NSWSC 196 Hallen J considered whether the plaintiff’s tutor, Ms Usherwood, should be held personally liable to pay costs. The defendants had made a valid offer of compromise under the UCPR which was not accepted by the plaintiff’s tutor.
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The plaintiff’s claim was dismissed. In ordering that the plaintiff had to pay the defendant’s costs on the ordinary basis up to the date of the offer and on the indemnity basis from the day after, His Honour stated:
207. Ms Usherwood, even though strictly, not a “party”, as the Plaintiff’s tutor, is, nonetheless, to be regarded as a party for the purpose of making costs orders …
208. … The Defendants, if they desire to do so, may enforce the costs order directly against her since the Plaintiff is a person under a legal incapacity …
209. Naturally, I considered that it might be thought to be unfair for Ms Usherwood to be liable for costs as she did not stand to personally benefit from the proceedings and only consented to act as tutor because the Plaintiff was under a legal incapacity. But that could be said for nearly every tutor. …
210. When the potential costs implications if the Plaintiff were unsuccessful was raised at the beginning of the hearing, senior counsel for the Plaintiff informed the Court that Ms Usherwood was aware that “she will be personally liable for any order for costs that is made against the plaintiff in bringing these proceedings” …
Crisp orders
The effect of a Crisp order is well described by Hallen J in Dimic v Djekovic [2014] NSWSC 1502 at 172 as follows:
What is described in the cases as a “Crisp order” is an order of the kind made by Holland J in Crisp v Burns Philp Trustee Co Ltd (Supreme Court (NSW), Holland J, 18 December 1979, unrep) … Such an order gives an applicant an interest for life in real property, or in an interest in real property, with the right to it (should the need arise) for the purposes of securing, for the applicant’s benefit, more appropriate accommodation. That type of order is intended to provide flexibility, by way of life estate, the terms of which could be changed to cover the situation of the applicant moving from her own home to retirement village to nursing home to hospital. The flexibility provided by such an order underlies the notion that a “Crisp order” confers a “portable life interest”: Court v Hunt (Supreme Court (NSW), Young J, 14 September 1987, unrep) …
See also William Bkassini v Sonya Sarkis [2017] NSWSC 1487, which cites Dimic v Djekovic and Rapaich v Rapaich [2021] NSWSC 992.
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De facto partner
Note: this is different from a ‘close personal relationship’ – see Close personal relationship above.
A category of eligible persons includes de facto partners – s 57(1)(b).
When determining whether a plaintiff is an eligible person under s 57 the court can have regard to the non-exhaustive list of matters under s 60 (2) but retains discretion whether to make an order or not having regard to these or other matters.
A de facto relationship can exist, for the purposes of the Succession Act, even if one of the persons in it is married to someone else: s 21C(2) Interpretation Act 1987.
An order for family provision as the de facto partner of the deceased under s 57(1)(b) only requires an applicant to establish the fact of their relationship ‘at the time of the deceased person’s death’ for them to be an eligible person. It does not require, as does intestate succession under ss 104 and 105, that a de facto domestic partner claiming against an estate must show a relationship for a continuous period of at least two years.
In Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos [2017] NSWSC 666, in which the court also noted that:
[745] To determine the existence or otherwise of a de facto relationship, the Court must consider all of the circumstances of the relationship, including any appropriate matters listed under s 21C(3). Section 21C(3) provides:
“(1) Determination of “relationship as a couple” In determining whether 2 persons have a relationship as a couple for the purposes of subsection (2), all the circumstances of the relationship are to be taken into account, including any of the following matters that are relevant in a particular case:
(a) the duration of the relationship,
(b) the nature and extent of their common residence,
(c) whether a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and
(e) any arrangements for financial support, between them,
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(f) the ownership, use and acquisition of property,
(g) the degree of mutual commitment to a shared life,
(h) the care and support of children,
(i) the performance of household duties,
(j) the reputation and public aspects of the relationship.”
In Thompson v The Public Trustee of New South Wales [2010] NSWSC 1137 at [78], Hallen AsJ held that collectively the matters listed within s 21C(3) Interpretation Act 1987 ‘all suggest a continuing course of conduct and behaviour, not a fixed point in time’. Earlier in the judgment, His Honour also stated at [74]:
Whilst the concept of a de facto relationship is complex and diverse, such a relationship can, and should, be distinguished from the relationship of two people, who live apart, but who have a sexual relationship, and who sleep over at one another's house; and also from the relationship of two people, who share a house, but who do not have a romantic commitment to each other and who have other sexual partners. The fact that one provides the other, on occasions, with financial, or other, assistance, such as accommodation, to alleviate hardship does not mean that they are in a de facto relationship. In this way, a de facto relationship is different from friendship, or courtship, which has not matured into the commitment where there is a merging of lives so that there is a mutual commitment to a shared life. It is also different from simple companionship.
In Marando v Rizzo [2012] NSWSC 739 His Honour Hallen AsJ expounded further on his comments in Thompson, at [52]:
... in assessing the degree of mutual commitment to a shared life, it is not essential that there be entire harmony, entire fidelity, entire satisfaction with the relationship, or entire commitment; the degree of commitment may be high even though there are qualifications. Dissatisfactions, infidelities, expressed complaints, and grievances, and less than entire commitment are often found in personal relationships, including marriages, and are not inconsistent with a relationship of two parties having a relationship as a couple living together, but not married to one another.
The question of whether a plaintiff was in a de facto relationship with a deceased is always a matter for evidence on a case by case basis.
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See Peipi v Peipi as Administrator of the Estate of the late Ashoor Hilaney [2013] NSWSC 1520 for an example of how the court analysed the detailed evidence of the different aspects required to establish a de facto relationship, including such evidence as messages written in birthday, anniversary and Valentines Day cards, observations of neighbours, photographs and pooled finances.
That case establishes that more is generally required than just evidence of conversations between the deceased and a plaintiff. In Peipi, Slattery J refers to [the]
…well known legal authority cautioning that conversations between deceased persons and living witnesses, which only the deceased could have denied, should be scrutinised with extreme care: Plunkett v Ball (1915) 19 CLR 544, at 548-9 (Isaacs J), Clune v Collins Angus and Robertson Publishers Pty Limited (1992) IPR 246, at 253, and Ashton v Pratt (No. 2) [2012] NSWSC 3 at [18].
However, His Honour found that:
…the de facto claimant relied on much more than conversations with the deceased. Some authorities suggest that corroboration is desirable though not legally required in such circumstances: Re Hodgson (1886) 31 ChD 177 and Weeks v Hrubala [2008] NSWSC 162 at [20] per Young CJ in Eq. But here there is substantial corroboration of Ms Peipi's story in the silent evidence afforded by the various cards and notes from the deceased, and in the oral evidence of neighbours...
De facto partner – Same sex
For the purposes of s 57(1)(b) Succession Act 2006 there is no difference between a same sex de facto relationship and any other de facto relationship, except in the practical sense that same sex relationships are sometimes kept secret and therefore evidence of them may be more difficult to adduce. Plaintiffs who claim such status effectively have three ways to make their claim: as a de facto partner under s 57 (1)(b), or as a dependent under s 57(1)(e), or on the basis of a ‘close personal relationship’ under s 57(1)(f). Such claims are often brought on all three grounds, in the alternative.
For an unsuccessful application made by a plaintiff who alleged a lengthy but undeclared same sex partnership and the considerations relevant to same, on the basis of all three grounds see: Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos [2017] NSWSC 666 at par 737 – 760.
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See also the Victorian case of Estrella v McDonald & Ors [2012] VSC 62, in which the plaintiff asserted that his relationship with the deceased commenced in 1978 and that he was a domestic partner of the deceased from 1985 until his death in 2008, notwithstanding that at the time the deceased died the parties did not live together on a full-time basis. He sought an award equalling approximately 36% of the net estate.
The defendants said that the plaintiff and the deceased did have a relationship, but that they were friends only; when the plaintiff resided in the deceased’s home he did so as a boarder or lodger; and that the deceased did not have a responsibility towards the plaintiff. In response to this, the plaintiff said that the nature of his relationship with the deceased had been concealed by both parties, but they had in fact been domestic partners.
Extensive evidence was submitted for the consideration of the court, with the court further considering not only relevant Victorian case law – including Forsyth v Sinclair [2010] VSCA 147 and Unger v Sanchez [2009] VSC 541 – and the factors in s 91(4) of the Administration and Probate Act 1958 (VIC), but also relevant aspects of the Relationships Act 2008 (VIC).
Included in the court’s findings were the following:
− The deceased supported the plaintiff’s application for resident status in 1986, and immigration interview records showed that they both confirmed their relationship at that time.
− The parties were domestic partners for more than 10 years from 1985 to 1996.
− Although the plaintiff travelled extensively for work purposes in later years, and did not reside with the deceased whilst doing so, the parties nonetheless had a close relationship.
− The relationship was significant to both parties.
− Although the plaintiff and the deceased ceased to be domestic partners by at least December 2004, they both intended to resume that relationship at the time the deceased died.
− The parties had a close relationship for 30 years.
− It had been the deceased’s intention, in the period before his death, to buy a business in which the plaintiff could work, and over time acquire equity in it.
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The judgment states:
I have not accepted the plaintiff’s case that at the time of the deceased’s death he was his domestic partner, although I have found that he was in the past, and he and the deceased intended to resume that form of relationship.
That analysis accords with the provision of s 57(1)(b) Succession Act 2006 (NSW) only requiring an applicant to establish the fact of their relationship ‘at the time of the deceased person’s death’ for them to be an eligible person. However, note that a claim under s 57(1)(e) on the basis of ‘dependency’ can be ‘at any particular time’.
Dependency
See also Adult stepchild above.
Section 57(1)(e) requires a claimant to show not only that they are a grandchild of the deceased or were a member of the deceased’s household at any time, but also that they were wholly or partly dependent on the deceased.
In Spata v Tumino [2018] NSWCA 17 the Court of Appeal analysed at [53] – [81] the requirements for ‘dependency’ in detail and found that the adult stepson of the deceased was not dependent upon her.
In Calokerinos, Executor of the Estate of the late George Sclavos v Yesilhat; Yesilhat v Calokerinos, Executor of the Estate of the late George Sclavos [2017] NSWSC 666 at 762 – 766 the court summarised the law on dependency as follows:
[762] In Ball v Newey (1988) 13 NSWLR 489, which was cited with apparent approval in Spata v Tumino, Samuels J at 491 held that:
“Dependent”, in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed. In determining whether that relationship exists, it is relevant to bear in mind what was said by Sankey LJ in Lee v Munro (1928) 98 LJKB 49 at 53; 21 BWCC 401 at 408, that in “deciding whether or not there is dependency the factors to be considered are past events and future probabilities”. While it is true that here we are concerned with financial dependence and not emotional dependence, the whole relationship between the appellant and the deceased must be examined in the light of that statement in order to exclude situations which might present the simulacrum but not the substance of dependency.”
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[763] The applicable law in relation to dependence has been defined in authority to embrace concepts of both material and financial dependence as well as emotional dependence. These cases start with Petrohilos v Hunter (1991) 25 NSWLR 343 and their course is well summarised in Hallen AsJ’s recent decision in Drury v Smith [2012] NSWSC 1067. In Petrohilos v Hunter, a case under the former legislation Family Provision Act, s 6, Hope AJA, Clarke and Sheller JJA agreeing, explained at 343 the width of the concept of dependence embracing, as it does, more than material dependence:
“I would respectfully disagree with the master. The word "dependent" is an ordinary English word, and whether a person is or has been wholly or partly dependent upon another is a question of fact. No doubt one of the commonest forms of dependence is a financial one, in the sense that the dependence flows from the fact that accommodation, food, clothing and other necessities or amenities of life are provided by the person who owns or is otherwise entitled to the accommodation and pays for the other things. But I do not think that the word, as used in the statute or otherwise, has this very limited meaning. In ordinary parlance, young children are properly and commonly said to be dependent on their mother as well as their father, regardless of where the money comes from. A contrary view, that young children are not dependent on their mother if she has no independent means, seems to me to be a misuse of language.
This accords with what Samuels JA said in Ball v Newey (1988) 13 NSWLR 489 at 491, that "'Dependent' in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed". If the correct view were that the context of the statute requires a limitation of the word to "financial or material" matters as McLelland J said in Re Fulop Deceased or to "other forms of dependence analogous to but distinct from financial dependence" as Samuels JA suggested in Ball v Newey (at 491), then surely a mother's services to a young child satisfy the test. The child could not survive without the provision of those services; he or she needs them. To suggest that, in a money sense, they are valueless, is simply wrong. If the provision of accommodation by a father for a young child, that is, having the child live in a house which he owns and lives in, can make the child partly dependent upon the father, as it undoubtedly can, I am unable to see why the provision by a mother to her children, living with her, of the services essential for their well-being does not make them partly dependent upon her. In my opinion it does. The same considerations apply to a step-child or his or her step-mother, when the child lives with the step-mother and is looked after by her. I appreciate that a different view has been taken by others, as for example, by Powell J in Dunn v Public
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Trustee (Powell J, 1 June 1989, unreported), but I would respectfully disagree with that view. In my opinion the plaintiff was partly dependent upon the deceased, certainly for many years of her childhood and probably until her marriage, although no doubt her dependence diminished in the latter years of this period."
[764] Furthermore, as Campbell J explained in Amaca Pty Ltd v Novek (2009) 9 DDCR 199; [2009] NSWCA 50 at [44] citing earlier authority, a legal duty to maintain can exist independently of dependence in law:
"In my view, the law remains accurately stated by the joint judgment of Sugerman P, Jacobs and Mason JJA in Middleton v Kiama District Hospital [1970] 3 NSWR 136. Their Honours said, at 138:
'Dependency is, moreover, a complex question of fact, which may involve the consideration of many elements, including both past events and future probabilities. It is not necessarily correlative with a legal duty to maintain. A person may in fact be dependent upon another who is under no legal duty to maintain him; and may be so dependent even though there is also in existence one who has legal duty to maintain, eg a husband his wife. On the other hand there may be no dependency in fact upon a person who is under a legal duty to maintain. The existence of the legal duty is, however, one of the many elements to be taken into account in deciding upon a question of dependency in fact. Dependency and actual support are not necessarily correlative. There may be dependency although for the time being there is no actual support. And it seems to us to be possible to figure cases in which there may have been a provision of support, or of some measure of support, at least for a short time or for some special purpose, which did not amount to dependency. The definition of "dependants" does not merely refer to one who was in fact supported by the deceased worker at the time of his death; a "dependant" is a member of the workers' family who was "wholly or partly dependent for support upon the worker at the time of his death". Dependency refers to a state or condition of being dependent, to having been in this relationship to the deceased. As to all the above matters see Hodges v Scotts' Provision (Wholesale) Pty Ltd [1963] WCR 161 and cases there cited.'"
[765] The question of whether an applicant was a member of the deceased’s household is, as was expressed by Young J in Markulin v Drew (1993) DFC 95-140, “a question of fact in each case”. In Kingsland v McIndoe [1989] VR 273, Gobbo J stated
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that the concept of membership of a household connoted a degree of continuity and permanency of living arrangements and a form of special familial relationship.
[766] In Benney v Jones (1991) 23 NSWLR 559, Young J found that the requirement to be a member of the same household did not mean that the applicant must have been a member of the deceased’s household at the time of his death, but rather, it had to be shown that at some time both the deceased and the applicant were members of the same household.
Disclosure
In Megerditchian v Khatchadourian [2019] NSWSC 1870 at [145] the court noted that:
It is well established that, in some circumstances, where a plaintiff in a family provision application fails to make full and proper disclosure of his or her financial position, the Court will refuse the application.
The importance of full and frank disclosure in family provision matters, particularly as required by Practice Note SC Eq 7, was emphasised in Gail Patricia Stone v Michael John Stone [2019] NSWSC 233. The applicant’s claim therein was dismissed by Hammerschlag J for lack of such disclosure. In doing so his Honour said:
… she failed to meet the repeatedly stressed requirement that an applicant for such an order must fully and frankly disclose details of her or his financial and material circumstances as they are at or about the time of the hearing. In this case, the failure was material, in breach of directions of the Court and, I find, deliberate.
See also Wright v Burg [2018] NSWSC 595.
However, in Megerditchian, when counsel for the estate argued that the plaintiff’s purported failure to comply with the disclosure requirements of the Practice Note was grounds for the court to dismiss the application, Parker J considered that submission to be an ‘overstatement’ of the position. The court explained that:
[148] The Act does not impose any such condition on the grant of relief. Nor do the provisions of the Rules (or the Practice Note). For the Court to fetter the exercise of its statutory power by imposing such an additional requirement would not be legitimate.
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[149] While, as I have stated, the requirement for disclosure is well established, I think it operates at an evidentiary level, rather than being a separate rule of law. There are two evidentiary principles which may be involved.
[150] The first is the rule in Jones v Dunkel. The means of a plaintiff are a relevant factor in deciding whether the provision for that plaintiff is “adequate” for his or her “proper maintenance, education or advancement”. If the plaintiff fails to lead full evidence of his or her financial position, the Court may infer that such evidence would not have assisted his or her case: Foye v Foye [2008] NSWSC 1305 at [14]-[15]. The same may apply to a defendant where the allegedly competing needs of another beneficiary are put forward as a defence to the plaintiff’s claim.
[151] Of course this only means that the Court may draw an adverse inference; it is not obliged to do so. But where a party’s financial position is in issue it is usually a very important factor in the Court’s decision and, in the ordinary case, non-disclosure would be a good reason to draw the adverse inference. Especially is this so, if it is proved at trial that the plaintiff’s evidence on the question is actually false or incomplete.
[152] In the case of a plaintiff there is another evidentiary principle at work. The onus lies on the plaintiff to prove his or her case. Usually the plaintiff cannot succeed in obtaining provision if he or she already has enough for his or her proper maintenance, education or advancement: Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 at 231 [123]-[124] per Callinan & Heydon JJ. If the plaintiff fails to lead sufficient evidence about his or her financial position, this may have the result that the onus of demonstrating that he or she lacks enough financial resources for his or her proper maintenance, education and advancement, has not been discharged: Collings v Vakas [2006] NSWSC 393 at [66]-[67]. In this event, the Court does not have the choice it has about whether to draw a Jones v Dunkel inference. The claim must fail if the plaintiff has not discharged his or her onus.
The court also noted, at [156] that:
…the Practice Note does not have the status of a statute or a rule which the Court is required to follow. It is only a guide to the exercise of the Court’s case management powers.
It follows that, while inadequate disclosure might not be fatal to the plaintiff’s application, or indeed the estate’s defence, any strategic decision not to disclose any potentially relevant details – especially financial details relating to need and whether provision is adequate or not – should be approached with extreme care.
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See also Affidavits, above.
Eligible persons
For an order to be made for provision the court must be satisfied that the applicant is an ‘eligible person’ in accordance with s 57(1) of the Succession Act 2006:
(1) The following are "eligible persons" who may apply to the Court for a family provision order in respect of the estate of a deceased person:
(a) a person who was the wife or husband of the deceased person at the time of the deceased person’s death,
(b) a person with whom the deceased person was living in a de facto relationship at the time of the deceased person’s death,
(c) a child of the deceased person,
(d) a former wife or husband of the deceased person,
a person:
(e) who was, at any particular time, wholly or partly dependent on the deceased person, and
(i) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member,
(ii) a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death.
(f) a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death.
Note: Section 60 sets out the matters that the court may consider when determining whether to make a family provision order, and the nature of any such order. An application may be made by a tutor, within the meaning of the Civil Procedure Act 2005, for an eligible person who is under legal incapacity. See Adequate provision above and Wheat v Wisbey [2013] NSWSC 537 as to the s 60 considerations.
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Note: ‘De facto relationship’ is defined in s 21C of the Interpretation Act 1987.
Estrangement
See also Adult children above.
Towson v Francis [2017] NSWSC 1034 dealt with estrangement between an adult child and a deceased parent. His Honour Hallen J in that case referred to his own previous decision as follows:
In Underwood v Gaudron [2014] NSWSC 1055 at [234] – [245] I dealt with the relevant principles in some detail. An appeal in that matter was dismissed: Underwood v Gaudron [2015] NSWCA 269, with the summary of principle not disturbed on appeal. That summary of the principles was also referred to by Ward JA (as her Honour then was) (and with whom Meagher JA agreed) without any dissent, in Burke v Burke [2015] NSWCA 195 at [95]. It was also referred to, more recently, in Nicholas v Tubb [2016] TASSC 53 at [21], and by Robb J, with approval, in Toscano v Toscano [2017] NSWSC 419 at [90].
Whilst it is not necessary to repeat all that I wrote in Underwood v Gaudron [2014], I should restate the following passage:
“(a) The word 'estrangement' does not, in fact, describe the conduct of either party. It is merely the condition that results from the attitudes, or conduct, of one, or both, of the parties to the relationship. Whether the claim of the applicant on the deceased is totally extinguished, or merely reduced, and the extent of any reduction, depends on all the circumstances of the case.
(b) The nature of the estrangement and the underlying reason for it is relevant to an application under the Act… In Palmer v Dolman, Ipp JA, after a review of the cases, observed, at [110], that:
"... the mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act."
(c) There is no rule that, irrespective of a Plaintiff's need, the size of the estate, and the existence or absence of other claims on the estate, the Plaintiff is not entitled to "ample" provision if he, or she, has been estranged from the deceased. The very general directions in the Act require close attention to the facts of individual cases.
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(d) The court should accept that the deceased, in certain circumstances, is entitled to make no provision for a child, particularly in the case of one "who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility".
(e) As was recognised by the New South Wales Court of Appeal in Hunter v Hunter (1987) 8 NSWLR 573, at 574 - 575, per Kirby P (with whom Hope and Priestley JJA agreed):
“If cases of this kind were determined by the yardstick of prudent and intelligent conduct on the part of family members, the appeal would have to be dismissed. If they were determined by the criterion of the admiration, affection and love of the testator for members of his family, it would also have to be dismissed. Such are not the criteria of the Act. The statute represents a limited disturbance of the right of testamentary disposition. It establishes a privilege for a small class of the immediate family of a testator (the spouse or children) to seek the exercise of a discretionary judgment by the Court for provision to be made out of the estate different from that provided by the testator's will."
(f) Even if the applicant bears no responsibility for the estrangement, its occurrence is nevertheless relevant to the exercise of the court's discretion under s 59(2) of the Act to make a family provision order where the jurisdictional requirements of s 59(1) are met. That the applicant had no relationship with the deceased for some years, and that there did not, therefore, exist between them the love, companionship and support present in normal parent/child relationships, during those years, is a relevant consideration.
(g) The poor state of the relationship between the applicant and the deceased, illustrated by the absence of contact for many years, if it does not terminate the obligation of the deceased to provide for the applicant, may operate to restrain amplitude in the provision to be made.
(h) Where the applicant has been estranged from the deceased, the application of the Act requires that the estrangement be appraised and its causes considered. In addition, s 60(2)(m) permits the court to consider the character and conduct of the applicant at the second stage of the process. Care should be taken not to oversimplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a
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different impression than when the events are set in the context of raw emotions experienced at the time.”
See also Soens v Rathborne [2018] NSWSC 302 where the claimant was a daughter estranged from her deceased father for the first 23 years of her life, but where there had been a reconciliation, followed by an unexplained period of no contact which she sought to deny, but which the evidence seemed to establish. Much turned, in that case, on the content and frequency of emails between the parties.
When considering the evidence of contact between the plaintiff and the deceased in Hallen J referred at [102] to Andrew v Blair [2007] NSWSC 1003, where Young CJ in Eq wrote, at [5]:
…in cases where a person is seeking an order under this Act it is customary to put into evidence, as much as one can, the material from which the court can see that there has been a strong bond between the deceased and the child. Where a person has a solicitor acting for him, and he does not do so, the court is at liberty to be suspicious. When the court also sees that it was admitted in cross-examination that there were periods where there was no contact because the plaintiff did not know where his father was, because he had moved, and where one sees in the affidavit of the plaintiff that the deceased said that he could not afford phone calls, one is entitled to discount the material that the plaintiff puts forward as to the extent of the contact.
The facts relating to estrangements, reunions and ongoing relationships in any family provision claim need to be carefully considered and all relevant evidence led accordingly.
Soens v Rathborne also contains at [263] this salient comment by Hallen J, which solicitors taking instructions from potential family provision claimants in circumstances which include periods of long estrangement might do well to draw to their client’s attention:
This is a case where in the first 24 years of their joint lives, there was little more in the relationship between the Plaintiff and the deceased than biological paternity. During these years, apart from complying with his obligations to make payments of child support, he did not make any financial or other contribution to the Plaintiff. However, the Plaintiff's claim for a family provision order is not a vehicle for seeking compensation for any past wrong said to have been committed by the deceased.
Note: Re Estate McNamara [2018] NSWSC 1661 where no provision was made for an estranged adult child, and the deceased’s will expressly excluded provision for that adult child. This case balanced the testator’s express wish that no provision be provided to the adult child with the adult child’s need for provision.
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Notably Lindsay J, at [66], considered that:
Had the plaintiff had a consistent, supportive and loving relationship with his parents, (more particularly, his mother) throughout his life he would have a greater claim to his mother’s bounty than he now has.
Extension of time
Section 58(2) of the Succession Act 2006 provides that:
An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown.
In Michael Zannetides v Tracey Spence [2013] NSWSC 2032 extension of time was refused where the claim was five months out of time and the applicant was found to have known about the deadline.
In that case His Honour Young AJA discussed the grounds on which the court might ‘otherwise order’ and noted (at 15) that:
…the courts have focused on a number of factors, namely:
(a) The excuse for not filing the claim in time.
(b) The knowledge of the plaintiffs of their rights.
(c) The strength of the plaintiffs' case.
(d) Negligence of the solicitor involved.
(e) Prejudice to the defendant.
(f) Any unconscionable conduct.
Claims which were brought just out of time, only two months late, were allowed in Leggett v Jansen (aka Bell) & Ors [2011] VSC 364 and Clark v Burns [2011] VSC 394 but in Stanley v State Trustees Limited [2012] VSC 24, where the applicant had known of the time limit and deliberately failed to apply and also did not avail himself of an extension offered by the defendant, Kaye J refused the application. The applicant also failed to give any proper
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reason for his failure. The short judgement considers all of the nuances of this kind of application, and bears reading in full.
Factors warranting
For certain categories of eligible persons under s 57 of the Succession Act 2006 the court must find that there are factors warranting the making of their application before an order can be made.
These categories are s 57(1)(d), (e) and (f) – that is, all those apart from current or former spouse/partner and children. The meaning of ‘factors warranting’ was addressed by the Supreme Court in Christine Anne Lumsden v Ian Ross Sumner as Executor of the Estate of the Late Dorothy Jean Lawliss [2012] NSWSC 1440, wherein it was found at [86] – [89]:
[86] The question of what are "factors warranting" has bedevilled the Courts since family provision legislation was first passed in this form in 1982. The vagueness of this aspect of the legislation has been much criticised. Despite that legislative defect, the law has become more certain through judicial exposition.
[87] The classic statement explaining what are "factors warranting" is that of McLelland J, as His Honour then was, in Re Fulop Deceased (1987) 8 NSWLR 679: that the factors are, when added to the facts that make the applicant an eligible person, factors which give the applicant the status of a person who would generally be regarded as a natural object of testamentary intention by the deceased. See also: Churton v Christian (1988) 13 NSWLR 241, Diver v Neal [2009] NSWCA 115, Penfold v Perpetual Trustee [2002] NSWSC 648, Evans v Levy [2011] NSWCA 125, Porthouse v Bridge [2007] NSWSC 686 per Bryson J, Drury v Smith per Hallen AsJ, Morgan v Public Trustee [1999] NSWSC 1112 per Macready AsJ and Meers v Permanent Trustee Co Ltd [2000] NSWSC 1108. These authorities indicate that the traditional Re Fulop view of "factors warranting" has been in competition for some years with the Court of Appeal's statements in Brown v Faggoter (unreported, NSWCA, 13 November 2011) which offer another test of "factors warranting": that an application might be warranted if the applicant has reasonable prospects of success.
[88] This conflict has been commented on in the Court of Appeal, in Evans v Levy [2011] NSWCA 125, and in Porthouse v Bridge by Bryson J. I agree with Hallen AsJ's view that the trend of authorities does not favour the view suggested in Brown v Faggoter, although the Court of Appeal has not said that Brown v Faggoter is wrong.
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[89] It seems to me looking at the development of this line of authority and especially what the Court of Appeal said in Evans v Levy, that the aspect of prospects of success, mentioned in Brown v Faggoter as a possible factor warranting, cannot be a decisive factor on its own. The authorities do not suggest that the applicant's prospects of success cannot be taken into account as a factor warranting. This seems to be self- evident from the reasoning of McLelland J in Re Fulop and from Churton v Christian, which both show that there must often be a substantial degree of overlap in practice between (1) the factors warranting, and (2) those matters which must be addressed in determining whether the testator has made adequate provision for the applicant.
Family law orders
Regarding the interplay between family provision claims and previous family law property orders, see for example Dark v Dark [2016] NSWSC 1223, which dealt with a claim by a widow who was separated from the deceased at the time of his death, where a financial agreement made under s 90C of the Family Law Act 1975 (Cth) had been signed in which they effectively agreed to release any right to make a claim against each other’s estates – subject to the approval of the court.
The court did not approve the release and instead made a family provision order for the claimant.
Grandchildren
In Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [113] in a passage approved by the Court of Appeal in Chapple v Wilcox [2014] NSWCA 392, Hallen J said:
In relation to a claim by a grandchild, the following general principles are, in my view, relevant and should be remembered:
(a) As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased’s testamentary recognition
…
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(d) Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent…
(e) The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act.
(f) It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.
That passage was quoted with apparent approval by Young AJA in Estate of Joan Esme Little and the Succession Act 2006 [2015] NSWSC 1913, which dealt with a claim by an eligible adult grandchild, who received the bulk, being 60% of the estate of the deceased, by way of an order for family provision, given his strong financial and emotional dependency on the deceased and his substantial need and given that the other claimants – the deceased’s adult children – had little or no need.
There are some very interesting obiter comments and observations about grandchildren, not so much as claimants, but as objects of testamentary concern, especially in respect of the costs of their education, in McCarthy v McCarthy [2010] NSWCA 103. The interest lies not only in the subject matter, but in the fact that Hallen SC, before his elevation to the bench, was the appellant’s counsel and Young AJA was one of the judges that decided the appeal:
Young AJA: [37] Mr Hallen then refers to a proposition from the judgment of Brereton J in Taylor v Farrugia [2009] NSWSC 801 at [57] and following which he says supports the proposition that, generally speaking, the community does not expect a parent to look after adult children for the rest of the child’s life and a fortiori does not intend that the expenses of educating grandchildren will fall on their shoulders. As to this, it is to be noted that Brereton J does use the words “generally speaking” when he makes these propositions and it would seem to me, that without evidence, there may very well be a considerable proportion of grandparents in the community in the 21st Century who need to give consideration to the education of grandchildren.
[38] That observation has nothing to do really with the decision of this present case, I merely wish to make it clear that one should not accept what Justice Brereton said in that case as necessarily applying to every case. In this particular case, the need put forward by the respondent included education of his children and it would seem to me that in the circumstances of this case, where there were limited claimants, where there were sons and stepsons who were wealthy in a sense in their own right, that there is no
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error in principle in a discretionary judgment which makes some allowance for the education of the deceased’s grandchildren.
[39] There is a heavy onus on a party who seeks to set aside a discretionary judgment, as far as quantum is concerned, this one is. The factual errors made by the primary judge are, to my mind, relatively inconsequential. The award of $400,000 is within the range and can be quite justified. In my view the appeal should be dismissed with costs.
Tobias JA: [40] I agree and would just add the following comments. The appellant, as Young JA has indicated, submitted that it was inappropriate for his Honour to make any allowance for the desire of the respondent to provide for the private schooling of his twins, who at the time of the hearing were aged seven years. Reliance was placed upon what Brereton J said in Taylor v Farrugia to which reference has already been made. I would, however, in that case draw attention to the following sentence in [57] of his Honour’s judgment:
“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.”
41. The respondent, in his submissions, also referred the court to the following passage from the judgment of Gibbs J, with whom Stephen and Mason JJ relevantly agreed, in Goodman v Windeyer (1980) 144 CLR 490 at 498 where his Honour said:
“It was in my opinion a relevant circumstance that the appellant had a child of her own who was dependant upon her. Although the child of a claimant is not himself entitled to relief under the Act, the fact that a claimant has to support and educate a child is one of the circumstances that have a bearing on the question of what is necessary for the claimant’s proper maintenance.”
42. Notwithstanding that grandchildren may now have a right to claim under the Act, in my opinion, what Gibbs J said is still of relevance. Thus in Clifford v Mayr [2010] NSWCA 6 the following was observed by Campbell JA with the general agreement of Young JA and Handley AJA at [92]:
“Unless the Trustees take the extreme step of selling Pinaroo Place, the Appellant would have no source of income from which to pay expenses associated with the children, other than her own earnings. To the extent that there was no other source of provision for the children than the assets and earnings of the Appellant, the Appellant’s own need for maintenance was one that extended to having enough to provide for both herself and the children. She is subject to the clearest
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moral duty to maintain them (which there is no hint of her not performing). The Deceased not only had a moral duty to provide for the ongoing needs of his children, he also had a moral duty to recognise that, to the extent to which he did not provide for the maintenance of the children, the Appellant would be subject to a moral duty to maintain them. To the extent that she expends her personal resources in performing that moral duty, her own need for maintenance is correspondingly increased.”
43. It was suggested by the appellant that, if anything, the moral obligation lay upon the respondent’s mother as the biological grandparent of the respondent’s twins to provide the necessary wherewithal to enable the respondent to properly educate his children. However, as at the date of the hearing, the respondent’s mother was significantly in debt and there was no indication that that was going to end soon. In particular, although she had the two grazing properties at Quirindi and Singleton, they had been running at a significant loss for many years due to the drought and would continue to do so unless and until the drought broke.
44. Her evidence was that she met those losses both from her income as an employee of the local council as well as from a line of credit which was secured upon a house that she apparently owned. Furthermore, she owed $200,000 to an uncle which she had not repaid in respect of her original purchase of the grazing properties.
45. In any event, it seems to me that the fact that there is a biological grandparent who might, in the future, be able to contribute towards the education of a claimant’s children does not militate against the legal and moral obligation of the claimant to support and educate his children, at least whilst they are in their teenage years. That is a need which the claimant has, and which bears upon the question of what is necessary for his proper maintenance.
Interim provision
Pursuant to s 62 Succession Act 2006 it is possible for a plaintiff who seeks provision from an estate as an eligible person under Chapter 3 to make an application for interim provision, before – in fact while awaiting – the final hearing. Success in such applications is however very rare.
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Where such applications are granted, it is usual for the applicant to be required to secure the possibility of the interim payment having to be repaid to the estate where the final hearing goes against them.
Before it can make an order for interim provision, the court must be ‘of the opinion that no less provision than that proposed in the interim order would be made in favour of the eligible person concerned in the final order’.
In Peta Roberts v Rupert James Moses [2015] NSWSC 1504, Kunc J decided that the court must approach the task of determining whether interim provision ought to be made in the same way as it would if it was dealing with a final application, including that the assessment of the applicant’s need should be at the time of the hypothetical future final hearing.
In that case His Honour approved and applied the conclusions previously reached by the court as to how it should determine interim applications in Young v Salkeld (1985) 4 NSWLR 375, which dealt with a similar provision under the previous Act:
(1) Thus the duty of the Court on an interim application is to examine what evidentiary material is placed before it, and to assess on that material the probable outcome of the proceedings.
(2) The next problem that raises itself is at what date must the Court assess the chances of the plaintiff’s success? ... Do I, when considering whether to make an interim order, look at the circumstances as at today’s date, or do I look to see what is likely to be position as at the date when the Court makes its final consideration of the matter? In my view, my task is the latter, because the only time when the Court has to be satisfied of the matters set out in s 9(2) is the time of final hearing.
(3) The remaining theoretical problem is whether I am limited to making only such an order as would give the eligible person sufficient moneys to live on pending the hearing of the application, or whether, if I considered it proper, I could go further ... In my view, the Court may make any interim order that it considers it is proper to make.
(4) However, in the normal case, although the Court has jurisdiction to make a wider order, it would seem to me that the proper order would be to give the eligible person only such a sum as would deal with real needs pending the hearing and then usually only on terms that the moneys could be recovered if the applicant were unsuccessful ... I do not say that the Court could not make an order for a penniless eligible person that she receive either a legacy or a weekly sum for
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living expenses knowing that all these moneys would be dissipated by the time of the hearing. Indeed, I would consider that would be a perfectly proper order. However, generally speaking, if there is the means of protecting the estate by securing the order in some way, then the interim order might be framed accordingly.
See also Steiner v Strang [2017] NSWSC 132, an unsuccessful interim application by a plaintiff in dire need, which includes very cogent discussion of the issues at play when the court is determining such an application.
Intestacy
Pursuant to s 59 the court can make family provision orders ‘in relation to the estate of a deceased person’, which includes intestate estates.
Hallen J dealt with such an estate in Curnow v Curnow [2014] NSWSC 896.
His Honour noted in that matter at [60] – [90], as His Honour has noted in a number of other cases, the definition of ‘deceased person’ in s 3 and the provision in s 91 and determined that there is no requirement for there to be a grant of administration before the plaintiff’s claim can be dealt with. See Application for probate or administration not required before family provision application above.
None of the plaintiffs in Curnow v Curnow had any entitlement under the rules of intestacy. Hallen J noted at [291]:
That is, however, not determinative of the application. Of course, the fact that each is not entitled to receive any provision out of the estate or notional estate of the deceased, may enable the court the more readily to find that inadequate provision has been made: Turner v Perpetual Trustees Australia Ltd [2001] ACTSC 56, per Gray J, at [8]. However, the court is still required to consider all of the circumstances.
In McCarthy v McCarthy [2009] NSWSC 774 the deceased’s estate passed on intestacy to his adult son. The plaintiff was the deceased’s step son from a later marriage. The matter was decided under the previous legislation. The plaintiff was granted provision of $400,000 out of an estate of $3,000,000. This was upheld on appeal – McCarthy v McCarthy [2010] NSWCA 103.
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Legislation
Chapter 3 Succession Act 2006.
Matters to be considered by the court
See also Adequate provision above.
In Wayne Laurence Savage v Rebecca Ferguson [2014] NSWSC 703 Kunc J, having set out the provisions of ss 59 and 60 Succession Act 2006, went on to provide a detailed exposition of the matter which the court must consider – and the way they should be considered – in family provision claims:
[9] West v Mann [2013] NSWSC 1852 at [9]-[11] I explained the reasons for the approach I adopt to applications under the Act. That is how I will proceed in this case.
[10] By reference to the language of the Act, the questions and issues which the Court must take into account are:
(1) Is the person who has applied to the Court for a "family provision order" (as defined in s 3 of the Act) an eligible person under s 57 of the Act? In accordance with s 60(1)(a), the Court may (not must) have regard to the matters set out in s 60(2) in determining whether that person is an eligible person. It is not readily apparent how many of those matters could be relevant to the issue of eligible person, but nothing turns on that observation.
(2) If the answer to question (1) is "yes", has the application been filed in the Court's Registry not later than 12 months after the deceased's death (ss 58(2) and (3))?
(3) If the answer to question (2) is "no", has the eligible person who has brought the application shown sufficient cause for the Court to order otherwise to extend the date for the filing of the application in the Court's Registry (ss 58(2) and (3))?
(4) If the answer to question (2) is "yes" or the Court has otherwise ordered under s 58(2), is the Court satisfied that the person in whose favour the order is to be made (the "applicant") is an eligible person (s 59(1)(a))? In
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reaching the requisite state of satisfaction the Court may (not must) have regard to the matters set out in s 60(2). As a theoretical matter this question admits of the possibility that "the person in whose favour the order is to be made" is not the person who has brought the application (in which case, the latter must also be an eligible person).
(5) If the answer to question (4) is "yes", what provision has been made for the proper maintenance, education or advancement in life of the applicant by the deceased's will or by the operation of the intestacy laws (the "Provision")?
(6) Is the Court satisfied, at the time when the Court is considering the application, that the Provision is not adequate for the proper maintenance, education or advancement in life of the applicant?
(7) If the answer to question (6) is "yes" (i.e. the Court is satisfied the Provision is not adequate for the specified purpose) then the Court's discretion conferred by the chapeau to s 59(1) to make a family provision order in favour of the applicant (the "Discretion") is enlivened.
(8) Once the Discretion is enlivened then, noting s 59(2), what provision, if any, does the Court think ought to be made for the proper maintenance, education or advancement in life of the applicant, having regard to the facts known to the Court at the time the order is made (the "Proposed Provision")? This is an evaluative judgment which arises from the word "ought" and requires examination of the applicant's needs. In making this judgment the Court may (not must) have regard to the matters set out in s 60(2) ("the nature of any such order": s 60(1)(b)).
(9) Having answered question (8), should the Court exercise the Discretion to make an order for the "Proposed Provision"? In deciding whether to exercise the Discretion to make such an order, the Court may (not must) have regard to the matters set out in s 60(2) ("whether to make a family provision order": s 60(1)(b)).
(10) Section 60(2) provides a helpful checklist but it is no more than that. The Court is not obliged to take those matters into account. The extent to which it does (if at all) will depend upon the facts of each particular case.
(11) Section 60(2)(p) confirms the breadth of matters the Court can take into account. Once enlivened, the Discretion is expressly fettered only by the
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requirement in s 59(2) that if an order is made, it must be such order "as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made". The Discretion is otherwise unconfined, which means that in answering question (8) the Court is otherwise constrained only by the need to act judicially, that is to say "not arbitrarily, capriciously or so as to frustrate the legislative intent": Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ. The Court must act rationally and exercise the Discretion for the purpose for which it was conferred.
[11] Having identified what I consider to be the correct approach under the Act to an application of this kind, I will next set out the facts....”.
Notional estate
Definition of notional estate
Section 3 of the Succession Act 2006 provides the following definitions:
“notional estate” of a deceased person means property designated by a notional estate order as notional estate of the deceased person.
“notional estate order” means an order made by the Court under Chapter 3 designating property specified in the order as notional estate of a deceased person.
Section 63(5) provides:
A family provision order may be made in relation to property that is not part of the estate of a deceased person, or that has been distributed, if it is designated as notional estate of the deceased person by an order under Part 3.3.
Orders re notional estate
Part 3.3 of the Act provides for notional estate orders.
The Note at the commencement of Part 3.3 says:
This Part applies where, as a result of certain property transactions, property is not included in the estate of a deceased person or where property has been distributed from the estate of a deceased person. This Part enables the Court in limited
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circumstances to make an order designating property that is not included in the estate, or has been distributed from the estate, as “notional estate” of the deceased person for the purpose of making a family provision order under Part 3.2 in respect of the estate of the deceased person (or for the purpose of ordering that costs in the proceedings be paid from the notional estate).
Property may be designated as notional estate if it is property held by, or on trust for, a person by whom property became held (whether or not as trustee), or the object of a trust for which property became held on trust:
(a) as a result of a distribution from the estate of a deceased person (see section 79), whether or not the property was the subject of the distribution, or
(b) as a result of a relevant property transaction, whether or not the property was the subject of the transaction (see section 80), or
(c) as a result of a relevant property transaction entered into by a person by whom property became held, or for whom property became held on trust, as a result of a relevant property transaction or a distribution from the estate of a deceased person (see section 81), whether or not the property was the subject of the relevant property transaction.
Property may also be designated as notional estate if it is property:
(a) held by the legal representative of the estate of a person by whom property became held as a result of a relevant property transaction or distribution referred to in paragraphs (a)–(c) above and who has since died (known as the deceased transferee), or
(b) held by, or on trust for, a person by whom property became held, or for the object of a trust for which property became held on trust, as a result of a distribution from the estate of a deceased transferee,
whether or not the property was the subject of the relevant property transaction or the distribution from the estate of the deceased person or the deceased transferee (see section 82).
Section 92 enables the Court to replace property in the estate or notional estate of a deceased person that has been, or is proposed to be, affected by a family provision order with property offered in substitution for the affected property.
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In practical terms, the provisions of ss 91 and 92 are rarely required, in that the parties to family provision litigation are generally able to agree to how and from what property any orders for provision are to be met and the court always prefers this approach, usually leaving it to the parties to do so and granting leave to apply if necessary.
Matters to consider re notional estate orders
In Soens v Rathborne [2018] NSWSC 302 Hallen J analysed at [200] – [280] in comprehensive detail the nature of notional estate orders and the considerations for the court when asked to designate property as notional estate and to make notional estate orders.
Of particular note is His Honour’s comment at [258]:
… as has been pointed out by Ball J in Ogburn v Ogburn; Ogburn v Ogburn [2012] NSWSC 79 at [66]:
...it is not possible to divorce the question whether a notional estate order should be made from the question whether a family provision order should be made. A court can only make a notional estate order if and to the extent the order is necessary to satisfy a family provision order. However, one of the matters the court needs to take into account in deciding whether a family provision order should be made is the size of the deceased's estate, including the size of the potential notional estate.
Following His Honour’s analysis, he then applied the principles he identified to Ms Soens claim in that case. Having determined that she was an eligible person and that a family provision order should be made, and that a notional estate order should be made, he left it to the parties to reach an agreement on how the family provision order would be satisfied and the costs paid, with leave reserved to apply if no agreement could be reached. On that basis the court did not need to make the notional estate order or determine over which of the estate property it would apply.
Superannuation as notional estate
Superannuation death benefits do not form part of the deceased’s estate unless the trustees of the superannuation fund have previously been directed by a nomination, or otherwise resolve to pay the superannuation to the estate.
Superannuation death benefits includes assets held by the fund and the payout from any associated life insurance policy.
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Section 63(5) of the Succession Act 2006 provides that a notional estate order can be made in relation to property that is not part of the deceased estate. Section 80 provides that a relevant property transaction can take effect on the date of death. This includes relevant property transactions in relation to joint tenancies, life insurance and superannuation.
Relevant transactions include an omission to make a binding nomination in favour of the ‘personal legal representative’ of their estate or the superannuation trustee resolving to make a payment to a dependant. This means that superannuation death benefits may be declared notional estate.
Note that the requirements, restrictions and protections that are discussed below need to be in place before such a notional estate order will be made. In particular, there first needs to be insufficient assets in the actual estate to cover the family provision order.
Trust assets as notional estate
Assets in a trust can be subject to a notional estate order and therefore available to satisfy family provision claims: s 80(3) Succession Act 2006.
The issues, both factual and legal, which might arise in relation to such a determination can be complicated. For example, see: Sam Wardy v Gordon Salier & Anor; William Wardy v Gordon Salier & Anor; Hassiba Wardy v Estate of late Edmond Wadih Wardy developer and Ch 3 of the Succession Act 2006 & Anor [2014] NSWSC 473.
When notional estate orders may be made
Section 78 of the Succession Act 2006 provides that notional estate orders can only be made for the purpose of a family provision claim or for costs orders.
Section 63(5) enables a family provision order to be made in relation to property designated as notional estate of a deceased person.
Section 99 enables the court to order that costs be paid out of the notional estate of a deceased person.
Section 80 provides that the court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the court is satisfied that the deceased person entered into a relevant property transaction before their death and that the transaction is a transaction to which this section applies.
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The kinds of transactions that constitute relevant property transactions are set out in ss 75 and 76.
Section 80 applies to property transactions which:
− took effect within three years before the date of death if they were wholly or partly intended to deny or limit provision being made out of the deceased’s estate to any eligible person;
− took effect within one year of death where the deceased had a moral responsibility to provide for any eligible person which was substantially greater than the moral responsibility to enter into the transaction;
− took effect, or will take effect, after the date of death.
Further, as Hallen J noted in Soens v Rathborne [2018] NSWSC 302:
Importantly, the power to make a notional estate order does not arise unless the Court is satisfied that (a) the deceased person left no estate, or (b) the deceased person’s estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, or (c) provision should not be made wholly out of the deceased person’s estate because there are other persons entitled to apply for family provision orders or because there are special circumstances (s 88).
Restrictions and protections re notional estate orders
Section 87 provides that the court must not make notional estate orders unless it has considered the following:
(a) the importance of not interfering with reasonable expectations in relation to property,
(b) the substantial justice and merits involved in making or refusing to make the order,
(c) any other matter it considers relevant in the circumstances.
Further, the High Court in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19, at [131], the High Court accepted the submission that ‘where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined’.
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This decision requires that the owners of any property subject to an application for notional estate orders are made parties to any proceedings.
In Smith v Dayman [1994] NSWCA 286, Handley JA had earlier remarked that ‘[a] court could not, ordinarily, make orders designating property as notional estate without the owners being parties to the proceedings’. Both of these decisions were referred to by Gleeson JA, with whom Simpson JA agreed, in Yee v Yee [2017] NSWCA 305, at [196]-[198] and all of these decisions were referred to by Hallen J in Soens v Rathborne [2018] NSWSC 302 at [10].
Orders
Court to be satisfied before making family provision orders
The court may only make orders for provision out of an estate if the court is satisfied that the claimant is an eligible person for whom inadequate provision has been made in the will, or on intestacy, AND there are factors warranting the making of an order.
See Adequate provision, Eligible persons and Factors warranting above.
Effect of orders
Section 72 of the Succession Act 2006 provides that:
(1) A family provision order takes effect, unless the Court otherwise orders, as if the provision was made:
(a) in a codicil to the will of the deceased person, if the deceased person made a will, or
(b) in a will of the deceased person, if the deceased person died intestate.
(2) Without limiting subsection (1), the Court may at the time of distribution of an estate that is insufficient to give effect to a family provision order make such orders concerning the abatement or adjustment of distributions from the estate as between the person in whose favour the family provision order is made and the other beneficiaries of the estate as it considers to be just and equitable among the persons affected.
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Section 72 was considered and applied by Hallen J in Wheat v Wisbey [2013] NSWSC 537, at [53] – [55], where His Honour stated:
Thus, an applicant who obtains a family provision order has the right to seek orders giving effect to the family provision order against the executor or administrator of the deceased's estate to whom probate or administration has been granted because of the effect of s 72. As a person then beneficially entitled to part of the deceased's estate, he or she does not have a proprietary interest in the property which is the subject of the family provision order but possesses a right to have the estate duly administered: Commissioner of Stamp Duties (Q'land) v Livingston [1964] UKPCHCA 2; (1964) 112 CLR 12; (1965) AC 694.
However, as provided for in s 72, the Court has power to make an order that a family provision order not have the effect set out in (a) and (b) of that section. Thus, in a case where an order under s 91 is not sought or made, but where the holder of property that may be designated as notional estate is a party to the proceedings, the Court would need to make an "otherwise order" under s 72, thereby permitting the Plaintiff to proceed against the holder of property designated as notional estate in the event that the family provision order were not satisfied.
Practically speaking, the issue regarding whether an order under s 91 does not arise very often. The cases where there is only notional estate are reasonably rare. Then, an order is made, for the purposes of the proceedings, that the holder of the property sought to be designated as notional estate is joined as a party to the proceedings. Usually, as in this case, it is the holder of the property sought to be designated as notional estate, who is the contradictor in the proceedings. The executor named in the Will to whom probate or administration has not been granted usually does not play any role in the proceedings although he, she, or it, may be named as a defendant.
In Liprini v Liprini [2008] NSWSC 423 Brereton J stated at [14] that a family provision order was unique in that it was not really a judgment or order of the court. He continued:
It has effect not as a court order, but as a codicil to the Will; and is to be enforced not as a court order but as a codicil, by the remedies which a beneficiary has against a defaulting executor. Such an order does not bind the executor, who is a defendant to the [Ch 3 of the Succession Act] proceedings, as an order for payment of money or to do an act or thing, but only in an indirect manner insofar as it imposes a new obligation in the trusts of the Will, to be enforced as such.
Parker J confirmed this in Megerditchian v Khatchadourian (No 2) [2020] NSWSC 112 at [23].
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Variation and revocation
Section 70 of the Succession Act 2006 provides that orders may be varied or revoked to allow provision to be made in favour of another eligible person, but only where that person shows sufficient cause for not having applied for a family provision order previously.
A family provision order is revoked pursuant to s 70(4) if the grant of administration in respect of the estate is revoked or rescinded, unless the court otherwise orders when revoking the grant.
However, note that a grant of administration is not required for a family provision order to be made: s 58(1). See also Application for probate or administration not required before family provision application above.
No caveatable interest
It is worth noting that a claim under the Succession Act 2006 does not give rise to a caveatable interest and therefore is not a defence to a claim for possession: Dodd v Dodd [2020] NSWSC 1094.
Release of rights
Section 95 provides for a person to grant a release of their family provision rights, subject to court approval, as follows:
(1) A release by a person of the person’s rights to apply for a family provision order has effect only if it has been approved by the Court and to the extent that the approval has not been revoked by the Court.
(2) Proceedings for the approval by the Court of a release of a person’s rights to apply for a family provision order may be commenced before or after the date of the death of the person whose estate may be the subject of the order.
(3) The Court may approve of a release in relation to the whole or any part of the estate or notional estate of a person.
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(4) In determining an application for approval of a release, the Court is to take into account all the circumstances of the case, including whether:
(a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and
(b) it is or was, at that time, prudent for the releasing party to make the release, and
(c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and
(d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.
(5) In this section:
“release of rights to apply for a family provision order” means a release of such rights, if any, as a person has to apply for a family provision order, and includes a reference to:
(a) an instrument executed by the person that would be effective as a release of those rights if approved by the Court under this section, and
(b) an agreement to execute such an instrument.
Such releases are often included in financial agreements under s 90H Family Law Act 1975.
The Supreme Court considered such a release in Dark v Dark [2016] NSWSC 1223 at [92] – [115] and determined that the release should not be approved, because in that instance the agreement was neither prudent nor to the plaintiff’s advantage, was not fair and reasonable, she had not had proper legal advice on its consequences and she had been coerced into signing it.
Testamentary freedom
It is often argued in family provision cases that significant weight should be given to the testator’s freedom to dispose of their estate as they choose. In fact, the effect of Chapter 3 of family provision legislation is that testators do not have such freedom; or, to be more
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specific, they have it only subject to the provisions of the Act and their obligations to provide for eligible persons.
In Steinmetz v Shannon [2019] NSWCA 114, Brereton J was succinct about the erroneous degree of importance given by the court at first instance to the deceased’s testamentary freedom, stating at [95]:
… “testamentary freedom” is not one of the factors referred to in s 60(2) of the Succession Act 2006 (NSW).
His Honour went on at [97] to state:
The statutory family provision jurisdiction is not to be exercised on the footing that it must be approached with great caution because of its intrusion on testamentary freedom. Rather, the statute is to be given full operation according to its terms, notwithstanding that it encroaches on testamentary freedom. Testamentary freedom is constrained by the operation of the statutory jurisdiction, insofar as testators are obliged to make provision for those eligible persons for whom according to community standards they are expected to provide.
Widows
Where the estate is sufficient to allow it, appropriate provision for the maintenance and advancement of a surviving spouse will generally be unencumbered accommodation – usually the residence shared with the deceased, or its equivalent – plus a fund to ensure they are cared for and may live in the same style as they were used to when the deceased was alive. Courts have repeatedly held this to be appropriate – in Luciano v Rosenblum (1985) 2 NSWLR 65 at 69-70 Powell J said:
It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure 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 contingencies.
Notwithstanding that ‘broad general principle’, among the most common and certainly the most bitter family provision cases are those between a widow and the adult children of the deceased from a previous relationship. As a rule of thumb, widows win these cases – and even where they lose, they win on appeal. Steinmetz v Shannon [2019] NSWCA 114 is an excellent case on that point.
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In Steinmetz v Shannon [2019] NSWCA 114, Mr Steinmetz had left an estate valued at about $6.65m, but bequeathed it all to his adult children from a previous marriage. His wife at the time of death was not the mother of the beneficiaries, but she and the deceased had been together 28 years, albeit most of them as de facto partners rather than husband and wife. The widow was left only an indexed annuity of $52,000 for life. The widow had her own modest home and reasonable superannuation.
The widow brought a family provision claim against the estate. Pembroke J refused to grant her any greater provision out of the estate.
On appeal, that decision was overturned and the Court of Appeal granted the widow a legacy of $1,750,000 on top of the annuity. White JA found the judge at first instance had made four errors, the examination of which are instructive for practitioners considering the merit of a widow’s potential family provision claim at [16]:
The first is the primary judge’s giving any weight … to the fact that (according to his Honour’s finding) the appellant concurred with the terms of the will.
The will was made in circumstances of extremis, where the deceased was about to undergo surgery which he may not survive. His wife was present and was asked if she agreed with the will he was making. She said she was happy with whatever he did. The appeal court found that she was concerned at that time only for his welfare and could not have made any informed decision about the fairness of his will, particularly as her evidence at trial later disclosed she in fact had no idea of the value of his assets and therefore the ultimate size of his estate. White JA said at [22]:
Her concurrence was not evidence that the deceased had made adequate provision for her proper maintenance or advancement in life.
Further at [23]:
The second error is that the primary judge [decided that] … considerable weight should be given to the testator’s testamentary wishes in recognition of the advantages that the testator has over the court in knowing the details of the family’s relationships.
The court looked at the evidence in the case as to the deceased’s wishes and found at [31] that there was:
…no explanation why, after more years of devoted care, his wife should have been afforded less provision, except the deceased’s statement in clause 8 of his will that he wished to keep his estate intact for his children and grandchildren and that his wife
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could live comfortably without having to dispose of his assets. That shows no proper consideration to his wife’s legitimate expectations.
And at [32]:
A third error in the primary judge’s approach was that his Honour wrongly equated what was adequate provision for the appellant’s proper maintenance with a need for provision of financial necessities…
This is without giving due regard to her needs to relocate away from the small town where the deceased’s adult children also lived and to access health facilities in a larger town.
At [36]:
Fourthly, I agree with Brereton JA that having regard to the size of the estate which is ample to meet all competing claims, the provision of an indexed annuity of $52,000 per annum was manifestly not adequate provision for the appellant’s maintenance, having regard to the appellant’s moral claims on the deceased’s estate when she had been his de facto partner or wife for some 28 years, including 15 years as his carer.
It’s the vibe, Your Honour! This statement emphasises the court’s usual approach that widows are natural objects of testamentary consideration and must always be provided for where possible.
An important point for both applicant’s and respondent’s solicitors to note is that each of those four points was addressed and determined by reference to the evidence in the case, underlining the need to file comprehensive affidavits addressing every relevant aspect of the claim – see also Affidavits, above.
Brereton JA was more succinct and described only one, ‘fundamental error’ with the first- instance judgement at [87]:
In the context of a marriage of this length, in which on any view the appellant had made sustained and substantial contributions to the welfare of the deceased, where there was no-one else responsible for her maintenance, with an estate of this size, and absent any competing claim, provision which did not allow her to retain “the benefits, the security, the holidays, the comforts and the additional financial advantages that she enjoyed during her relationship with the deceased” was not adequate for her proper maintenance and advancement.
His Honour went on at [98] – [109] to examine widows claims under the Act in general and to discuss most of the leading cases. His Honour referred with apparent approval to the
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‘broad general principle’ in Luciano v Rosenblum, which he said was echoed by the Court of Appeal in Golosky v Golosky [1993] NSWCA 111, but he also noted that it and similar such observations in other widows cases at [106]:
…are not rules of law, but guidelines that may give assistance and provide guidance that are not to be elevated to rules of law.
In O'Loughlin v O'Loughlin [2003] NSWCA 99 Davies AJA, with whom Mason P and Meagher JA agreed, opined:
[20] It is undoubtedly true to say that there is no such thing as a “standard widow” and that every case must be determined on its own particular circumstances. However, it has long been recognized that, arising out of the marriage relationship, a testator has a duty to provide support for his widow after his death if she has need of it and if his estate has funds so to provide. Courts give more attention to the needs of a widow than they do to the needs of the children, if the children are adult and well able to support themselves. This point was made clear by the remarks of Lord Romer in Bosch v Perpetual Trustee Company Ltd which I have cited above. There are many dicta to the same effect. In Worladge v Doddridge (1957) 97 CLR 1, Williams and Fullagar JJ said at 11:
It is clear that the claim of a widow, where the estate is of considerable value, and new competing claims of children, should not be disposed of in any niggardly manner. She is entitled to such a provision for her maintenance and support as the court or judge thinks proper and "proper" is a word which, as the Privy Council pointed out in Bosch's Case lets in all the considerations there adverted to.
[21] In Gregory v Hudson [1999] NSWCA 221, Handley JA, with whom Cole AJA agreed, cited with approval the remarks of Powell J in Luciano v Rosenblum which I have mentioned. In Sayer v Sayer, Sheller JA referred to the fourth principle as stated by Stout CJ in In re Allardice, Allardice v Allardice which was referred to by Lord Romer in Bosch v Perpetual Trustee Company Ltd. At paragraph 9, Sheller JA also referred to the remarks of Powell J in Luciano v Rosenblum and expressed the view that, in the case before him, the widow’s claim was “paramount”. These are examples of cases where judges have referred to a need on the part of a widow for maintenance and support and a moral obligation on the part of the testator to provide it.
Another case where the needs of the surviving spouse were put ahead of those of the deceased’s three children is Vasey v Henry [2019] NSWSC 996.
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Generally ...... 136 Application of the legislation ...... 136 Appointment ...... 137 Attorney ...... 137 Capacity ...... 138 Corporations ...... 138 Death ...... 139 Delegation ...... 139 Directions ...... 140 Directors ...... 140 Enduring power of attorney ...... 141 Execution ...... 142 Executor ...... 142 General power of attorney ...... 142 Incommunicate...... 142 Insolvency ...... 143 Interstate powers ...... 143 Irrevocable power of attorney ...... 144 Joint attorneys ...... 144 Legislation...... 144 Limitations ...... 145 Liquidator ...... 145 Management of the estate ...... 145 Medical decisions – Enduring guardianship ...... 145 Overseas powers ...... 146 Prescribed power of attorney ...... 147 Principal ...... 148 Registration ...... 148 Review ...... 149 Revocation ...... 149 Trustee ...... 150 Vacancy in the office of attorney ...... 150 Witnesses ...... 150
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Generally
Granting someone the power to act as an attorney means that they step into the shoes of the grantor, known as the principal, and can do on behalf of the principal anything that the principal can legally do, provided that only they act bona fide in the principal’s interests.
It is common for a person to want or need to appoint another person to represent them either generally or to undertake some specific transaction on their behalf, for reasons of convenience, or discretion, or incapacity. The law has always recognised this arrangement, which is grounded in the law of agency.
The need for the person acting on behalf of another to prove the agency relationship resulted in a document known as a Power of Attorney. By this document one person, the principal, gives to another person, the attorney, the right to represent the principal in a way recognised by the law.
The law relating to powers of attorney in NSW is set out in the Powers of Attorney Act 2003 that came into effect on 16 February 2004.
The Powers of Attorney Regulation 2016 contain at Schedule 2 the prescribed form for a power of attorney – amended since the original forms which accompanied the Act at commencement in 2004.
Section 7 of the Act provides that the common law and equity continue to apply so far as applicable and unless the Act specifically says otherwise.
Application of the legislation
Section 7(2) of the Act states that the Act does not affect powers of attorney created before 2004 and the provisions of Part 3 of the Conveyancing Act 1919 continue to apply to powers created prior to 2004.
The Act does not affect the operation of common law, equity, or Part 3 of the Conveyancing Act, unless the Act provides otherwise: s 7
Part 5 of the Powers of Attorney Act dealing with reviews of powers of attorney by the Guardianship Division of the NSW Civil and Administrative Tribunal and the Supreme Court applies no matter when the power of attorney was made.
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Only the Supreme Court can deal with an application where the principal is incommunicate: s 33.
Appointment
To create a prescribed power of attorney under the Act the forms prescribed by Schedule 2 of the Regulations – or another document to the same effect – must nominate an attorney, or attorneys, and be signed by the principal, who must have capacity.
For a General Power of Attorney (Form 1) the signature of the principal does not need to be witnessed.
However, for the power to be enduring, which means that it continues if the principal later loses mental capacity, then the document (Form 2) must be witnessed by a prescribed witness, usually a lawyer, who must be satisfied as to the principal’s capacity and must certify as to the principal’s understanding of both the nature of the power and the fact that it is enduring: s 19 of the Act.
Further, an enduring power of attorney is not effective unless and until the appointment is accepted by the attorney, which requires the attorney to sign the form: s 20 of the Act. This does not have to occur at the same time as the principal signs; the attorney can sign to accept the appointment at any time after the principal signs, as long as it occurs before the instrument is used.
The appointment of an attorney does not preclude the principal continuing to act on their own behalf and do anything in their own name: s 43 of the Act.
Attorney
The attorney is any person or persons to whom the power is given. There can be more than one and they can act jointly or severally, depending which is specified in the document.
A power of attorney is a potent document – it potentially allows an attorney to buy and sell property on the principal’s behalf, to use and dispose of the principal’s money and assets at will and to literally do anything the principal can lawfully do. For that reason, it is imperative that the principal only appoints as their attorney someone that they can trust, or else that sufficient restrictions are imposed so that the power given to the attorney is checked – for example appointing more than one attorney, or strictly prescribing what the attorney can do.
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Careful and considered advice should be given and instructions received as to whom the principal wishes to appoint as attorney.
Capacity
The principal must have capacity to validly grant a power of attorney.
Although the appointer’s treating doctors and perhaps even expert medical practitioners can, and often should, be consulted, the question of capacity is not strictly a medical question, it is a matter about which the lawyer witnessing and certifying the instrument must satisfy themselves in all of the circumstances.
The Law Society of NSW provides guidelines for assessing capacity: When a client’s mental capacity is in doubt: A practical guide for solicitors.
Careful notes should always be made and retained and any other precautions taken and evidence obtained; for example, lawyers might consider whether to video the conference when the document is explained to the client and when they acknowledge their understanding of the document.
Subject to these guidelines and the lawyer’s enquiries about and/or prior knowledge of the principal, if the lawyer is in any doubt as to capacity then it is prudent to obtain a medical opinion before accepting instructions to act, or to refuse to act.
Corporations
The Act applies to natural persons, not corporations.
A corporation may expressly or impliedly authorise an agent to enter into a contract on its behalf and the corporation has all the powers of a legal person, such as the power to grant a power of attorney recognised by the common law, but not under the Act: ss 124 and 126 Corporations Act.
There are no prescribed forms for company powers of attorney.
A corporation may be appointed as an attorney. A lease, mortgage or loan contract often contains a general power of attorney conferred upon a corporation.
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A trustee company may be appointed by an individual or company to act as an attorney. Those powers are exercised by an officer of that trustee company: s 13 Trustee Companies Act 1964.
See also Directors below.
Death
Of principal
The death of the principal immediately revokes the Power of Attorney and it cannot be used. This is not well understood and it is surprising how often clients who are also the nominated executor of a will, for example for their parent, think they can use a power of attorney to pay bills after the testator’s death and before probate is granted. They cannot!
A third party, for example the bank, who holds a copy of the power of attorney but does not have notice of the death of the principal, is entitled to rely on the document – it is the attorney who will be liable if the power is used after the death of the principal, as long as the attorney themselves had notice of the death and therefore the revocation.
Of attorney
The death of the attorney immediately creates a vacancy in office, s 5 of the Act, and terminates the power of attorney, unless the appointment includes other attorneys, or alternate attorneys and specifies that the power of attorney may continue, in which case it will.
Delegation
An attorney cannot appoint a substitute, sub-attorney or delegate, unless the instrument creating the power expressly provides for the attorney to do so: s 45 Powers of Attorney Act.
A substitute attorney appointed by the principal may act during a vacancy of the specified attorney or a vacancy of a kind specified in the instrument creating the power of attorney: s 45A Powers of Attorney Act.
It is prudent for principals to appoint an alternate attorney in case the first nominee becomes unavailable or incapable.
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Directions
There is no prescribed wording for, nor restriction upon, the directions than may be given in a Power of Attorney document, with the exception of the choices to be made regarding the powers set out at ss 11, 12 and 13 of the Powers of Attorney Act 2003, the wording for which appears in the prescribed form and in Schedule 2 of the Power of Attorney Regulations 2016.
See Prescribed Power of Attorney below.
Directors
Although most company constitutions permit the appointment of an alternate director, it is very unusual that they would permit the appointment of an attorney by a director to perform the director’s duties.
A general power of attorney by a director, that is an appointment under the Act, does not enable the attorney to exercise the principal’s directorial duties. The principal is not empowered to make the delegation.
The company constitution may contain a specific power:
1. empowering a director to delegate their directorial duties which may then be affected by a power of attorney;
2. empowering the directors to resolve that a director may delegate their directorial duties which may then be effected by a power of attorney.
The company may by resolution of directors pursuant to s 198D of the Corporations Act 2001 delegate their responsibility, unless the constitution otherwise provides.
If the constitution does permit a director to appoint an attorney, which is rare, then the attorney cannot affix the company seal in a dual role as director or secretary personally and as attorney for another director/secretary if the constitution requires the seal to be affixed in the presence of two people.
See Equity Nominees Ltd v Tucker [1967] HCA 22 and Mancini v Mancini [1999] NSWSC 799.
If the company is a single-director company and the constitution does permit the director to appoint an attorney, the attorney will have effective control of the single-director company.
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The affixing of the common seal may be undertaken in the presence of just the single director, and the attorney represents that director: s 127(2) Corporations Act.
Corporations may now execute documents without the use of the common seal and any document that could have been executed on behalf of the corporation by a director may be executed by an attorney for the director, provided that the constitution authorises the appointment of an attorney by the director, which is reasonably unusual.
See also Corporations above.
Enduring power of attorney
This is as distinct from a general power of attorney. It is a prescribed power of attorney in, or to the effect of, Form 2 in Schedule 2 to the Powers of Attorney Regulation 2016, as opposed to Form 1.
An enduring power of attorney continues to have effect even if the principal loses mental capacity after the appointment.
Form 2 includes a certification by a prescribed witness – usually a lawyer – that they explained to the principal when signing the appointment that it endures even though the principal may lose mental capacity after the appointment and that the principal appeared to understand that position before signing.
The formal requirements for an enduring power of attorney, reflected in Form 2, are:
− It must state that the principal wants the power to continue after he or she loses capacity.
− The principal’s signature must be witnessed by a prescribed witness being a solicitor, barrister, registrar of the Local Court, licensed conveyancer, or an employee of the public trustee or a trustee company who has completed a course of study approved by the minister.
− The attorney must sign the form to confirm that they consent to act. The acceptance does not have to be witnessed. An enduring power of attorney does not operate until the attorney signs this acknowledgement.
The powers and scope of an enduring power of attorney are otherwise identical to those of a general power of attorney – as to which see Prescribed powers of attorney below.
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Execution
See Witnesses below.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
Executor
The executor or administrator of an estate cannot delegate the functions of their office and therefore cannot appoint an attorney. However, see s 72 of the Probate and Administration Act 1898 where an attorney may apply for a grant where the person entitled to apply for a grant is out of the jurisdiction.
General power of attorney
A general power of attorney that is in, or to the effect of, Form 1 specified in Schedule 2 of the Regulations creates a prescribed power of attorney for the purpose of the Act: s 8 Powers of Attorney Act.
A general power of attorney is the simplest type of power, but it ceases to be enforceable if the donor loses mental capacity.
As to the powers and scope of a general power of attorney see Prescribed power of attorney below.
Incommunicate
Essentially this term relates to the situation where a person cannot communicate in relation to their property or their affairs. See s 4 of the Act as to when a person is incommunicate and s 42 of the Act.
This may because they have a physical and or mental disability that precludes them from expressing themselves or being able to understand others.
It may also be because the person cannot be contacted or located; however in Cox v Goldcrest Developments (NSW) Pty Ltd [2000] NSWSC 763 the court held that being on the high seas and unable to be contacted did not constitute being incommunicate for the
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purposes of a power of attorney, under the Conveyancing Act 1919, and only a physical or mental condition would bring that state about.
Insolvency
Of principal
As a general rule, the appointment of an attorney by an insolvent principal will be ineffective, as the insolvent person has lost the legal ability to control their affairs. Equally, a power of attorney given by a principal who subsequently becomes insolvent will cease to be effective.
Of attorney
The purported appointment of an attorney who is bankrupt will be ineffective and an appointment will be revoked if the attorney becomes bankrupt subsequent to the appointment, as bankruptcy is defined in the Act to be a vacancy in the office: s 5 Powers of Attorney Act.
Interstate powers
An interstate power of attorney is valid in NSW if it is valid under the laws of the state or territory in which it was made, but it does not operate to confer power on an attorney in NSW which cannot be conferred on an attorney under NSW law: s 25 Powers of Attorney Act.
It is possible to rely in NSW on an ordinary power of attorney made interstate if is dated, gives the attorney the power to act for the principal, is signed by the principal, is witnessed by an adult person and is in English or translated into English by a qualified translator.
A NSW power of attorney may be used in other Australian states if the document complies with the requirements of that or state.
For more information see Recognition of interstate powers – Comparative table.
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Irrevocable power of attorney
A power of attorney may be expressed to be irrevocable: s 15 Powers of Attorney Act. There is no provision in the prescribed form to make an appointment irrevocable and it is not possible to do so by simply completing and executing the form.
The critical factor for an irrevocable power of attorney is that it can only be given for valuable consideration.
Such appointments are usually found within loan or franchise or other commercial contract documents, which provide for the lender or franchisor or contracting party to do certain things in the event of the default or death or bankruptcy of the borrower or franchisee or other contracting party and the scope of what can be done is set out in the contract document. For this reason, s 16 of the Act provides that an irrevocable appointment is not revoked or terminated by the death or bankruptcy of the principal.
Only the Supreme Court can terminate and order the cancellation of an irrevocable power of attorney: s 28 of the Act.
Joint attorneys
If attorneys are appointed to act jointly then all the attorneys must sign documents or act together and if one attorney vacates office – as defined in s 5 of the Act – then the power of attorney is terminated, unless the document specifies otherwise and at least one attorney remains in office: s 46 of the Act.
If attorneys are appointed to act jointly and severally, then each attorney may sign or act alone and, if one attorney vacates then the power of attorney is not terminated: s 46 of the Act.
Where a client is appointing joint attorneys, they should be advised to consider carefully whether those persons will be able to work together and make joint decisions. Where necessary, the principal should consider making provision in the document for one of the attorneys to have a casting vote, or a third party, for example the person’s lawyer, to be consulted in the event of a deadlock.
Legislation
Conveyancing Act 1919
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Powers of Attorney Act 2003
Powers of Attorney Regulation 2016
Limitations
There is no prescribed wording for, nor restriction upon, the limitations that may be placed in a power of attorney document.
See Prescribed power of attorney below.
Liquidator
A liquidator may appoint an attorney to act on behalf of the liquidator in the administration of the company. See Australian Guarantee Corporation Ltd v Registrar of Titles (1992) 7 ACSR 577.
Management of the estate
A power of attorney is not terminated by reason of the principal becoming subject to management under the NSW Trustee and Guardian Act 2009, a ‘managed estate’, merely suspended: s 50(1) of the Powers of Attorney Act 2003.
However, that position is subject to the express terms of the document creating the power: s 50(2). If the document specifically states that the power endures in that scenario, then it does – subject to any orders of the Supreme Court.
The Supreme Court may restore, terminate or place any conditions upon any power of attorney suspended under s 50 the Powers of Attorney Act 2003 as the court sees fit: ss 50(7)-(9) Powers of Attorney Act 2003.
Medical decisions – Enduring guardianship
A power of attorney only authorises the attorney to act on financial matters, not medical decisions.
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An enduring guardian can be appointed to make decisions relating to medical treatment, lifestyle and other personal decisions. See Appointments of enduring guardian above.
There is a separate prescribed form appointing an enduring guardian. Both the appointor and the guardian must have their signatures witnessed and the witness must be a lawyer or clerk of the Local Court.
An appointment of a guardian can be revoked by the donor, if they have capacity, by completing a Revocation of Appointment of Enduring Guardian Form, which also has to be witnessed by an eligible witness. The enduring guardian has to be advised in writing that the appointment has been revoked.
From a practical perspective, the same person is often appointed in both the enduring power of attorney and appointment of enduring guardian documents. If this is not the case, then the client’s attention should be drawn to the potential for these positions to come into conflict, that is the guardian may decide certain care is suitable but the attorney may not consider it worth paying for, and careful instructions should be sought as to who is to be appointed and what directions should be given or restrictions applied in the documents.
Marriage automatically revokes the appointment of an enduring guardian.
The Guardianship Division of the NSW Civil and Administrative Tribunal can review and revoke the appointment of an enduring guardian.
An enduring guardian cannot manage finances.
Overseas powers
It is possible to rely in NSW on an ordinary power of attorney made overseas if is dated, gives the attorney the power to act for the principal, is signed by the principal, is witnessed by an adult person and is in English or translated into English by a qualified translator.
A NSW power of attorney may be used in foreign countries if the document complies with the requirements of that country.
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Prescribed power of attorney
Under the Powers of Attorney Act 2003 a prescribed power of attorney confers on the attorney the authority to do on behalf of the principal anything that the principal may lawfully authorise an attorney to do: s 9.
A prescribed power of attorney has effect subject to compliance with any conditions or limitations specified in the instrument creating the power.
Careful advice should be given and instructions received as to the purpose of the appointment – is it intended to operate for a certain period, such as while the principal is overseas, or for a specific purpose, such as to register the principal’s motor vehicle, or for a single transaction, such as the sale of a house. Or is it permanent ‘just in case’ it is required in the future. Or is it enduring, intended to be used as required if the principal ever lacks capacity.
The instructions as to the intended purpose of the document will inform the nature and content of any limitations, restrictions or directions which should be included in the document.
There is no limit or prescription upon what limitations or directions can be placed upon or included in a power of attorney document and no ‘magic words’ to create them. Any limitations and directions should be kept as simple and unambiguous as possible; for example:
This power of attorney is only to be used to sell my residential property at 3 Smith Street Sydney in accordance with my directions.
Or
This power of attorney is only to be used while I am absent from Australia.
Or
This power of attorney is not to be used to buy or sell any real property on my behalf.
When drawing any limitations or directions think about how they will or can be interpreted by a third party reading the document. Remember who the client is – the principal, not the attorney – and balance the duty to protect the client with the duty to ensure the instrument gives effect to their intentions.
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There is no requirement to have any limitations or directions at all, apart from the three specific limitations contained within ss 11, 12 and 13 of the Act. If the principal is appointing someone they trust then it may be best to leave it entirely to the attorney’s discretion. For an enduring power of attorney that will usually be the case, given that the document is intended to be used in the case of unforeseen situations where the principal has become incapable. If restrictions or directions are desired or appropriate then those should be as detailed and specific as necessary, but as unambiguous and clear as possible. When drafting a power of attorney instrument there is much to be said for using the principal’s words precisely, as long as any ambiguity is eliminated.
An attorney cannot make medical or other personal decisions. See Medical decisions – Enduring guardianship above.
An attorney cannot carry out duties as a trustee: s 10 of the Act.
An attorney cannot give gifts on behalf of the principal, take benefits for themselves, or give benefits to third parties unless specifically authorised: ss 11-13 of the Act.
The prescribed forms specifically refer to these sections and allows the principal to grant such authority if desired. The client should be carefully advised and instructions specifically obtained as to these optional powers, which must be ticked on the prescribed form if the principal wants them included. Limitations or directions in respect of any or all of them can be included also. It is helpful to have copies of those sections available when executing a power of attorney to show an appointer who is required to consider them.
Powers of attorney may be reviewed by the Guardianship Division of the NSW Civil and Administrative Tribunal or the Supreme Court.
Principal
The Act defines the person giving the power of attorney as the ‘principal’; terminology which evokes the agency relationship that has always underpinned the law in respect of powers of attorney: s 3 Definitions.
Registration
It is necessary to register the power of attorney at NSW Land Registry Services if it is to be used for a conveyance or other deed affecting land, other than a lease for a term of less than three years. This is done by lodging the power of attorney for registration and paying
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the current registration fee at NSW Land Registry Services. The document will then be a given a registration number, which should be used when the attorney signs a document on behalf of the principal. If the power of attorney is not registered with NSW Land Registry Services then it is ineffective and cannot be used for land transactions. See s 52 Powers of Attorney Act 2003 and Fact Sheet – Powers of Attorney in New South Wales.
It is otherwise not necessary to register a power of attorney, however it may be done and affords some level of protection against misuse or fraud: s 51.
There is no stamp duty on a power of attorney.
Review
A power of attorney can be reviewed by the Guardianship Division of the NSW Civil and Administrative Tribunal or by the Supreme Court: s 26 Powers of Attorney Act 2003.
The principal, an attorney, a guardian or any other ‘interested person’ with genuine concern for the welfare of the principal may apply for review and the tribunal or court may order the joinder to the proceedings of any other person who it considers should be a party: ss 33-37 Powers of Attorney Act 2003.
The attorney may apply to the tribunal or the court merely for advice or directions relating to the scope of the attorney’s appointment: s 38 Powers of Attorney Act 2003.
Only the Supreme Court can:
− order the termination of an irrevocable power of attorney – see Irrevocable powers of attorney above: s 28 Powers of Attorney Act 2003;
− confirm powers and the principal’s understanding of them when the principal’s capacity is in question: ss 29-32 Powers of Attorney Act 2003.
Revocation
A principal may revoke an enduring power of attorney at any time, as long as they have the capacity to do so. There is no prescribed form of revocation of power of attorney, but it must be served on the attorney. There is no obligation to register the revocation however if the power of attorney has been registered then the revocation should also be registered.
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There is no presumption that a later power revokes an earlier power: Collier & Lindsay, Powers of Attorney in Australia and New Zealand, p. 216. So unless the principal intends to have more than one power of attorney on foot – which is permissible and may be convenient, especially if they are to different people and/or for different purposes – then revocation is necessary and prudent. An email to the attorney should be sufficient.
The death of the principal automatically revokes a power of attorney.
If a power of attorney is revoked, terminated or suspended, an attorney or third party who, without knowledge of that termination or suspension, acts under or relies upon the power is entitled to rely on the power in the same manner and extent as if the power had not been terminated or suspended: ss 47 and 48 Powers of Attorney Act. Accordingly, it is not only important to serve a revocation or notice of death, but to be able to show that it actually came to the notice of the attorney. Again, an email should be sufficient.
Trustee
A prescribed power of attorney does not confer authority to act as trustee: s 10 Powers of Attorney Act 2003.
Vacancy in the office of attorney
Section 5 of the Act defines when there is a vacancy in the office of the attorney. This includes if the appointment is revoked, if the attorney renounces, dies or becomes bankrupt or ceases to have the capacity to continue to act as an attorney.
The effect of a vacancy is that the power of attorney is terminated, unless there is more than one attorney and the document provides that the appointment can continue, in which case it does.
Witnesses
Who can be a witness?
The Act does not specify any requirements as to who can witness the execution by the principal of a general power of attorney. Accordingly, any person can be a witness, although common sense, the potential need to be able to prove the execution if necessary and the
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avoidance of any conflict of interest, all suggest that the witness should be a capable adult, who is not the person being appointed.
An enduring power of attorney must be witnessed by a ‘prescribed witness’ as defined in s 19 Powers of Attorney Act 2003. This includes a lawyer, who must also certify that the person signing understands the effect of the document. The prescribed witness must not be the attorney under the document: s 19 Powers of Attorney Act 2003.
What is required of a witness?
A witness to a general power of attorney need do nothing more than be present, watch the principal sign the document and then sign the document themselves.
If the fact of the execution or the capacity of the principal is ever challenged, they may be required to give evidence about the execution. For that reason, it is prudent that a file note be kept which will assist any witness to recall the circumstances of the execution, in case it is ever necessary. If the witness is a lawyer such a note should be made and retained as a matter of course and a confirmatory letter sent to the client after execution of the document. The Letter to Client Finalising Matter in the Wills, Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning matter plan is recommended.
What is required of a prescribed witness?
For an enduring power of attorney, the prescribed witness must not only be present, watch the principal sign and then sign the document and then sign the document themselves, they must also certify that they explained the effect of the document to the principal and that the principal appeared to understand the effect of the document. This must be done before the prescribed witness signs the document.
This requires the principal to read the document, or that the document be read to them. It further requires a conversation or other communication between the principal and the prescribed witness which allows the witness to be satisfied that the principal understands.
Where the prescribed witness is a lawyer, it is not sufficient for the lawyer to simply explain the effect of the document to the principal. The lawyer must also be satisfied that the principal appeared to understand the explanation about the effect of the document before the lawyer can sign the required certificate. Careful consideration should be given to how this can be achieved and recorded.
If the validity of the enduring power of attorney is ever challenged, the prescribed witness may be required to give evidence about the execution. For that reason, a file note should be
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kept which will assist the eligible witness to recall the circumstances of the execution, in case it is ever necessary. Such a note should be made and retained as a matter of course and a confirmatory letter sent to the client after execution of the document. The Letter to Client Finalising Matter in the Wills, Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning matter plan is recommended.
The keeping of sufficient file notes and the sending of a confirmatory letter are the bare minimum that should be done to ensure evidence of the execution exists in case the validity of the document, or the execution, is ever called into question. Such evidence might be required if the power of attorney is challenged by a relative or friend of the principal after they lose capacity, a transaction purportedly entered into by the attorney is reviewed by a court, or to defeat any claim against the lawyer for alleged negligence in the preparation or execution of the document.
The Law Society of NSW website provides Guidelines for Solicitors Preparing an Enduring Power of Attorney.
If the circumstances of the particular matter warrant greater precautions being taken, for example the parlous state of the client’s health, significant wealth or large financial transactions, disagreements amongst family members, then lawyers should consider having another person, perhaps a staff member or another lawyer, as an additional witness to the execution of the document – not to sign the document, but to record and confirm the manner of its execution – or videoing the conference where the document is explained and executed, with the consent of the client.
What is required of a prescribed witness where principal blind, deaf, unable to read/understand?
There is no provision on the signing section of the prescribed power of attorney form to record any additional or alternate information when the principal is unable to see/read, or hear, or speak/understand English; there is only the certification itself.
It is therefore a matter for the lawyer witnessing and certifying the document to make and retain a proper file note recording the way the document was witnessed and, specifically, the manner in which the lawyer satisfied themselves that the principal understood what they were signing.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
After the execution of the document, the usual letter which is sent to the client recording the fact of the execution of the document should also detail the manner of the execution, if
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it was in any way unusual. The Letter to Client Finalising Matter in the Wills, Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning matter plan is recommended.
Given that the onus is on the lawyer as sole witness to the document, there is very limited guidance available for lawyers in this regard. The Law Society of NSW website provides Guidelines for Solicitors Preparing an Enduring Power of Attorney, but they are silent regarding blind people, or non-English speakers. The guidelines simply say a solicitor should only complete a certificate if the solicitor has explained the effect of the document to the donor directly. The explanation should be made directly to the donor and not to third parties purporting to act on the donor’s behalf.
Again, making and keeping proper files notes and sending confirmatory letters is very important.
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Generally ...... 155 Administration ...... 156 Administrator ...... 156 Alteration...... 157 Beneficiaries ...... 157 Burials, cremation and funerals ...... 160 Capacity ...... 161 Charities ...... 163 Construction of will ...... 163 Contracts to make wills ...... 163 Court made wills ...... 163 Dispensing with requirements for execution, alteration or revocation of a will ...... 164 Disposition of estate property ...... 164 Divorce or annulment of marriage ...... 165 Dual or multiple wills ...... 166 Execution ...... 166 Executor ...... 167 Extrinsic evidence to construe will ...... 169 Foreign wills ...... 170 Homemade wills ...... 170 In contemplation of marriage ...... 171 Incorporation by reference ...... 171 Informal wills ...... 171 Informal wills and solicitors’ duties ...... 174 International wills ...... 175 Legislation...... 176 Living wills ...... 176 Making a will ...... 176 Marriage and domestic relationships – Effect on existing will ...... 176 Minimum age of will maker ...... 177 Minors – Court may authorise minor to make, alter or revoke ...... 177 Multiple wills ...... 177 Mutual wills ...... 178 Negligence – Solicitor’s duty of care ...... 180 Promises to make a will or a bequest ...... 185 Property that can be dealt with in a will ...... 185
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Rectification ...... 186 Revocation ...... 186 Self-made wills ...... 187 Solicitors ...... 187 Statutory wills ...... 188 Survivorship ...... 188 Superannuation ...... 189 Suspicious circumstances ...... 191 Testamentary capacity ...... 192 Testator ...... 192 Testator’s family maintenance ...... 193 Who can inspect the will of a deceased person ...... 193 Witnesses ...... 194
Generally
The creation and construction of wills in NSW are covered by the provisions of the Succession Act 2006.
Formal requirements are prescribed for a will to be valid, namely that it must be in writing, signed by a testator who has capacity and also signed by at least two witnesses, both of whom must actually be present and see the testator sign. However, failure to comply with these formal requirements is not fatal and informal wills can be effective – pursuant to s 8 Succession Act 2006 the court can dispense with the formal requirements. The court can also order the making of an statutory will for persons who do not have testamentary capacity: ss 16 and 18 Succession Act 2006.
Note that making a will automatically revokes any prior will, s 11, except in the limited circumstance where a will is explicitly reviving all or part of a previously revoked will. See Revocation below.
Grants of probate, or letters of administration are regulated by the Probate and Administration Act 1898. This Act also authorises the recognition in NSW of grants of probate from foreign jurisdictions, called ‘resealing’: s 107; along with caveats which can be lodged against estates to protect creditors and claimants: s 144.
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Administration
Administration is defined in s 55 Succession Act 2006. Both an executor, by a grant of probate, and an administrator, pursuant to letters of administration, have power to administer an estate, which means getting the assets in, paying the debts and distributing the estate according to the will or the rules of intestacy.
Following a grant of probate an executor has the right to deal with the assets of the estate in accordance with the will, at which point the executor is said to have the administration of the estate.
Following the grant of letters of administration by the court, a person to whom the letters have been granted – the administrator – has the right to deal with the estate, to either carry into effect the provisions of any informal will which was attached to the grant, or pursuant to the rules of intestacy as set out in Chapter 4 of the Succession Act 2006.
‘Administration’ is defined in the Probate and Administration Act 1898 at section 3 as follows:
“Administration” includes all letters of administration of the real and personal estate and effects of deceased persons whether with or without the will annexed, and whether granted for general, special, or limited purposes, also exemplification of letters of administration or such other formal evidence of the letters of administration purporting to be under the seal of a Court of competent jurisdiction as is in the opinion of the Court deemed sufficient.
Administrator
An administrator is defined in s 3 of the Probate and Administration Act 1898 as
…the NSW Trustee and any other person to whom administration as defined under the acts has been granted.
Between the date of death and the date of a grant of letters of administration, the property of the deceased vests in the NSW Trustee.
An administrator does not have the same common law right to the possession of the body of the deceased as does an executor.
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Note that the term ‘administratrix’, which is technically the female version of administrator, does not appear in the acts at all. It is therefore neither necessary nor correct to use that term; a female administrator is still the ‘administrator’ as per the definition in the acts.
Alteration
Alterations to a will are permitted by s 14 Succession Act 2006. By their very nature, alterations are presumed to have happened after execution.
Alterations are only effective if they are executed in the same way that a will is required to be executed under s 6 Succession Act 2006. The witnesses to the will and the amendments need not be the same, but of course when it comes to proving the will the amendments and the names of the witnesses to them will need to be separately dealt with. The signatures can appear in the margin or some other part of the will near the alteration, or by way of a memorandum written on the will and signed by the testator and witnesses.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
Beneficiaries
Age qualification for beneficiaries
A testator may seek to postpone a beneficiary’s right to the bequest until the beneficiary attains a certain age by providing in the will that the beneficiary’s share is to be held in trust until they attain that age. This is often appealing to the parent of a somewhat ‘wayward’ child, who hopes they will mature before coming into their inheritance.
As the age of majority is 18 years, a beneficiary who attains 18 years has a right to call for any property held on trust, thus potentially defeating the testator’s intent. Seeking to postpone the inheritance can result in a dispute, or even litigation. At the very least the testator is setting up the executor for a difficult time when they are required to resist the call of an 18-year-old beneficiary who does not want to wait three or more years for their inheritance.
If a testator is insistent on the point, careful wording of the bequest may successfully postpone the beneficiary’s ability to call for the property, although the applicable considerations are complex. See, for example, Quinton v Proctor [1998] 4 VR 469; Wales v Wales [2013] VSC 569; Michael Victor Henley; In the Estate of Hedy Jadwiga Weinstock and Leo Arie Weinstock [2013] NSWSC 975.
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Definition and eligibility to be a beneficiary
A beneficiary is a person or entity to whom a bequest is made in a will. Where there is no will, it is not strictly correct to call the persons who will inherit by virtue of the laws of intestacy ‘beneficiaries’, but the term is often extended to that effect for convenience.
There is no restriction upon who can be a beneficiary – the basic rule is that everyone has total testamentary freedom to leave their estate to whomever they wish. A beneficiary need not be a person, it can be a corporate entity or charitable association.
However, the practical position is that certain beneficiaries, who are ‘eligible persons’ for the purpose of Chapter 3 Succession Act 2006 may bring a claim against the estate if the testator has failed to provide sufficiently for them in a will. Although it is possible for eligible persons to fail in such a claim, if there has been disqualifying behaviour and they are deemed not to deserve, and/or not to need such provision, the likelihood is that they will receive some provision from the estate if no provision, or inadequate provision, has been made. Accordingly, the testator must consider the eligible persons and either make some provision for them as beneficiaries or be very clear and detailed, in the will and/or in a separate document – often a statutory declaration or affidavit – as to why they have been excluded. It is however important to note that even the express exclusion of an eligible person will not necessarily prevent the eligible person from being awarded a benefit from the estate. See, for example, Re Estate McNamara [2018] NSWSC 1661.
See further Family Provision below.
Charities as beneficiaries
If a bequest is made to a charity it is useful to first contact the charity and ask them to state precisely how they would like the bequest drafted. This ensures that the bequest is effective, in that it accurately names the correct legal entity and goes to the right part of the organisation to achieve what the testator wishes.
For example, unless accurately drafted, a gift to a hospital might be used for general maintenance when really the testator wanted it used for research.
Most charities will gladly provide the relevant details when requested and may even wish to acknowledge the bequest.
Otherwise, see s 43 Succession Act 2006 as to dispositions to unincorporated associations and the limited definition of ‘charity’ therein. This section has the effect of maximising the likelihood that an imperfect bequest to a charity will nonetheless be effective.
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If a testator really wants to specify how the funds are used, it is necessary to establish a testamentary trust, detailing and defining the terms of the bequest, appointing a trustee who will be responsible for administering the bequest and ensuring compliance with the terms of the trust. The trustee of that trust could be the executor, a director of the charity or a professional trustee. This provides oversight and ensures the testator’s wishes are carried out. However, the costs associated with setting up and maintaining such a trust would mean only a reasonably substantial bequest would justify such an approach and a general bequest would usually be preferable.
Corporations as beneficiaries
A gift to a corporate entity requires the same consideration as a gift to an individual. If the corporation no longer exists at the death of the testator, then the gift will fail. Although there are special considerations for the failure of a gift to a charitable entity which no longer exists. For gifts in a will to an entity which no longer exists, see Re Black [2019] VSC 29 and Re Dubberke [2019] VSC 86 in relation to distribution pursuant to a cy-près scheme.
Consideration needs to be given to the difficulty that a corporation, other than one with a sole shareholder/director, will have in obtaining a grant. This may arise where a corporate entity is the major beneficiary and the named executor is no longer able or willing to make the application.
As with a gift to an individual, taxation issues and potential family provision claims may also need consideration in the context of the testator’s overall family and financial affairs.
Minimum 30 days survivorship for beneficiaries
Beneficiaries must survive a testator by 30 days, or by any other period that is stated in the will, failing which the beneficiary is taken to have died immediately before the testator: s 35 Succession Act 2006.
Right of a beneficiary to see the will
Any person named in the will, whether as a beneficiary or not, has the right to see the will: s 54(b) Succession Act 2006.
Solicitor’s duty to beneficiaries
A solicitor may have a duty to a beneficiary when taking instructions upon and drafting a will.
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In Maestrale v Aspite [2012] NSWSC 1420 the court quoted with apparent approval the statement in Hill v Van Erp [1997] HCA 9 that:
… when a solicitor accepts responsibility for carrying out a client’s testamentary intentions, he or she cannot, in my view, be regarded as being devoid of any responsibility to an intended beneficiary. The responsibility is not contractual but arises from the solicitor’s undertaking the duty of ensuring that the testator’s intention of conferring a benefit upon a beneficiary is realised. In a factual, if not a legal sense, that may be seen as assuming a responsibility not only to the testatrix but also to the intended beneficiary.
Great care must be taken by a solicitor, especially where instructions for a will are urgent because the testator is gravely ill.
See Negligence – Duty of care to intended and disappointed beneficiaries below.
Burials, cremations and funerals
An executor has a common law right to possession of the body of the deceased. An administrator does not have the same right. This is consistent with the executor’s burden of burying the deceased, which an administrator does not have. As a practical matter, the distinction probably developed because the executor was known immediately upon death, whereas an administrator might not be appointed until a considerable time after.
It is quite common to include in a will some directions as to how the testator wishes their remains to be disposed of, or even their detailed wishes for the conduct of a funeral service. While this is a perfectly appropriate and potentially useful direction, two issues should be borne in mind:
1. Such statements are non-binding. At common law a direction in a will about the funeral, burial or cremation is considered declaratory only. A statutory exception is any statement in the will against cremation: a person must not cremate the body of a dead person if the person is aware that the proposed cremation would be contrary to a written direction left by the dead person: r 77 Public Health Regulation 2012.
2. It is frequently the case that an executor will not even see the will until after the funeral when they, for example, attend at the deceased’s solicitor’s office to arrange probate, by which time it is too late.
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Clients who are drafting wills and wish to express their wishes as to the disposal of their corporeal remains, or about the nature of their funeral service, should be encouraged to discuss those issues with their family and friends and make their wishes clearly known while they are still alive. They should particularly discuss it with their executor.
If the testator wants to put those directions in a will, they should understand that such provisions are non-binding and that their wishes may not be carried out. Advice should also be given and if appropriate instructions should also be sought to provide a copy of the will to the executor and beneficiaries in advance, so they are all aware of the testator’s wishes.
Further, if the directions for disposing of remains and/or for funeral services are particularly exotic or onerous – and therefore expensive – the testator should be advised to consider making specific provision by way of a conditional bequest to the executor, or another person, of funds to pay for the implementation of their wishes in that regard. Such a clause still does not mandate the testator’s wishes, but it makes it far more likely that someone will carry them out if the money is set aside to pay for it, perhaps even with an additional conditional bequest to the person selected, which only vests if they carry out those wishes.
In Abraham v Magistrate Stone, Deputy State Coroner [2017] NSWSC 1684 the deceased’s mother sought orders for the delivery to her of the deceased’s body for burial in New Zealand, in accordance with Maori traditional rites. The court considered Smith v Tamworth City Council and Ors [1997] NSWSC 197 and ultimately ordered a Maori funeral take place in Sydney, which both allowed most close relatives to attend and avoided cost and delay.
Capacity
If a will is rational on its face and is proved to have been executed and attested in the manner prescribed by law, it is presumed in the absence of evidence to the contrary to have been made by a person of competent understanding. See Timbury v Coffee [1941] HCA 22, however the leading case on whether a testator lacks capacity is still Banks v Goodfellow (1870) LR 5 QB 549, which sets out the tests to be applied.
Although the testator’s treating doctors and perhaps even expert medical practitioners can and often should be consulted, the question of capacity is not strictly a medical question, it is a matter about which the solicitor taking the instructions must satisfy themselves.
The leading case on testamentary capacity, which sets out the criteria to be applied in determining whether a testator has capacity, is Banks v Goodfellow (1870) LR 5 QB 549. See also Estates – Capacity, below, for further detail.
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The attending solicitor must be aware of and have regard to the criteria laid down in Banks v Goodfellow.
Subject to the lawyer’s enquiries about and prior knowledge of the testator, if the lawyer is in any doubt as to capacity then it may be prudent to obtain a medical opinion or to refuse to act.
Any medical practitioner who is asked to express a view on the testator’s capacity should be asked to specifically apply the criteria in Banks v Goodfellow.
Best practice suggests that where the solicitor has any reason to question the capacity of the testator detailed notes should be taken and retained and any other appropriate precautions taken, or evidence obtained; for example, solicitors might consider recording the conference where the will is read and explained to the client, including when they acknowledge their understanding of the document.
See:
− In the Matter of the Will and Estate of Joyce Helen Greer, deceased [2019] VSC 592;
− Croft v Sanders [2019] NSWCA 303;
− Drivas v Jakopovic [2019] NSWCA 218 - where the evidence of an independent, experienced solicitor who took the instructions and drafted the will was preferred over the evidence of treating and expert medical witnesses as to the testator having capacity. The case is notable as the solicitor had no specific recollection or notes regarding the attendance but relied upon his usual practice;
− Black & Anor v Scotson [2019] QSC 272;
− In the Will of Esme Jane Ferris (deceased) [2020] QSC 26;
− Re Sebasio [2020] QSC 247, where the court considered testamentary capacity and the doctrine of suspicious circumstances. It is a useful decision in relation to the court's application of the test in Banks v Goodfellow; the onus of proof for establishing suspicious circumstances where there is a revocation of a prior will and also the making of a new will, both of which are sought to be impugned by the applicant; and the detailed attention paid to the lay and expert medical evidence by the court in determining that the deceased did not have capacity at the relevant time; and
− Re Jones [2021] VSC 273.
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The Law Society of New South Wales provides guidelines for assessing capacity: When a client’s mental capacity is in doubt: A practical guide for solicitors.
Charities
See Beneficiaries above.
Construction of will
Part 2.3 of the Succession Act 2006 deals with general rules about construction of wills and also the construction of particular provisions in wills. These all apply provided there is no contrary intention expressed in the will.
In proceedings to construe a will evidence, including evidence of the executor’s intention, is admissible to assist in the interpretation of the language used in the will if the language makes the will or any part of it, meaningless or ambiguous: s 32 Succession Act 2006.
Contracts to make wills
People are free to enter into contracts to leave property by will. See the precedent Contract to Make Mutual Wills in the Wills matter plan. The deed should be specific as to the reasons for the agreement. Like any other contract, the parties will be held to their agreement, unless there are circumstances, such as fraud, repudiation or equitable estoppel which constitute good reason for the contract to be unenforceable.
In Delaforce v Simpson-Cook [2010] NSWCA 84 the court found an agreement to leave property by will which was noted in family court orders, but not actually the subject of a formal order, was a binding contract that prevented a change in the husband’s will from being effective. The court framed its reasoning on the basis of proprietary estoppel based upon the agreement, rather than any breach of contract as such. It was important that the wife in that case had relied upon the agreement and acted to her detriment as a result.
Court made wills
The Supreme Court has the power on the application of any person, to make, or to alter or revoke, a will on behalf of persons lacking testamentary capacity, including a minor: s 18 Succession Act 2006. Such wills are often known as statutory wills. See Fenwick, Re;
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Application of J R Fenwick & Re Charles [2009] NSWSC 530; Re Will of Jane [2011] NSWSC 624; Sultana, Application of [2010] NSWSC 915, A Limited v J [2017] NSWSC 736 and Small v Phillips (No 2) [2019] NSWCA 268.
Dispensing with requirements for execution, alteration or revocation of a will
Section 8 of the Succession Act 2006 provides that the court may dispense with the usual requirements for the making of a will, altering a will, or revoking a will, if the court is satisfied that the document purports to state the testamentary intentions of the deceased and that the deceased intended for the document to form, alter or revoke a will.
It should never be assumed on that basis that the formal requirements for making a will are not important. Strict compliance with the requirements is always preferable and is a basic professional responsibility of the solicitor, so that any need to later make an application to dispense with those requirements, with its considerable expense and delay, never becomes necessary.
However where appropriate – for urgent instructions where the testator is gravely ill, for example – the solicitor should always consider making an informal will as an interim measure, such as having the testator sign the solicitor’s record of the instructions.
See Informal wills and Negligence below.
Disposition of estate property
Disposition of land
A general disposition of land in a will includes leasehold land, whether or not the testator also owns freehold land, unless a contrary intention appears in the will: s 36 Succession Act 2006. The provisions of any lease agreement may override this provision.
Disposition of real property without words of limitation is to be construed as passing the whole estate or interest of the testator in that property to the beneficiary: s 38 Succession Act 2006. That provision does not, of course, affect the transfer by survivorship of land held as joint tenants.
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Disposition of personalty
A general disposition of all of the residue of the testator’s property or similar in a will includes all of the property of which the testator has power to dispose in their will: s 37 Succession Act 2006.
Dispositions to issue
A bequest to a testator’s children, without limitation as to remoteness, takes effect in accordance with the intestacy provisions. See s 39 Succession Act 2006 and Intestacy below.
Effect of failure
If the disposition of any property in a will is ineffective in whole or in part, then that item of property, or the relevant part of it, reverts to form part of the residuary estate: s 31 Succession Act 2006.
This provision should be kept in mind and discussed with the testator when drafting a will that contains specific bequests for certain items of property which might be, for example, of sentimental value to a particular beneficiary. The section assists where it may not be desirable to have a substituted beneficiary for that item, in that it will simply revert to the residuary estate if the beneficiary dies.
Residuary estate
The residuary or residual estate is the balance of the estate that remains after any specific bequests. It includes all real and personal property and any part of a specific bequest that has failed: s 42 Succession Act 2006.
Divorce or annulment of marriage
If the testator, having made a will while married, then divorces or has the marriage annulled, any appointment of the former spouse as an executor in the will is revoked, unless a contrary intention appears in the will: s 13 Succession Act 2006.
Any beneficial gift to the former spouse is also revoked, unless a contrary intention specifically appears in a will: s 13 Succession Act 2006.
If a gift or appointment in a will is revoked under s 13 by divorce or annulment, the will takes effect as if the former spouse had died before the testator.
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Divorce or annulment does not however revoke the appointment of the former spouse as trustee under the will for any beneficiaries that include the former spouse’s children: s 13(3) Succession Act 2006.
Note that decree nisi for divorce does not become absolute if one of the parties to the marriage dies: s 55(4) Family Law Act 1975.
Dual or multiple wills
It is permissible to have more than one will. This may be the case where the testator has assets in two or more different jurisdictions, typically Australia and another country. In fact, if the assets are substantial, or consist of real property, then a will in each jurisdiction will be required; one will to deal with the assets in Australia and the other with assets outside Australia. It is only necessary to prove the local will in each jurisdiction.
If an Australian will purports to deal with overseas assets, where there is no corresponding will in the overseas jurisdiction, then it may be necessary to seek to have the Australian will recognised, that is admitted to probate or similar local process, in the overseas jurisdiction before the assets in the foreign country can be dealt with.
Execution
Section 6 of the Succession Act 2006 provides for how a will is to be executed, namely that it must be in writing, signed by a testator who has capacity and also signed by at least two witnesses, both of whom must actually be present and see the testator sign. See Witnesses below. Section 8 allows the court to dispense with those requirements and admit a document to probate as an informal will.
Correct execution avoids the necessity to make applications under s 8, involving the estate in expense and delay, or, worse, the possibility of a purported will failing altogether with a resultant intestacy. In the following cases the purported will was not executed in accordance with the requirements of s 6:
− Slack v Rogan & Anor; Palffy v Rogan & Anor [2013] NSWSC 522 – the testator’s signature was witnessed by only one person and the proponent of that will had to rely on s 8 to have it admitted as an informal will.
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− Estate of Johnston [2010] NSWSC 382 – only one witness executed part of the document. Section 8 had to be relied on to dispense with the usual requirements for execution.
− In the Estate of O'Dell [2010] NSWSC 678 – the testator’s home-made will was only witnessed by one person. She also made two subsequent sets of alterations to the original document. None of the versions of the will were dated. The later changes were not signed, initialled or witnessed. The court decided that the alterations to the original will constituted a full revocation and the ‘testator’ was declared to have died intestate.
Note that s 21 Interpretation Act 1987 defines ‘sign’ to include making a mark.
Alternately, if the court directs that a will be made for a minor pursuant to s 16 Succession Act 2006, or for a person lacking capacity pursuant to s 18 Succession Act 2006, then the court can direct how it such a will must be executed.
In Re Estate of Wai Fun Chan, Deceased [2015] NSWSC 1107, the court ordered that a video will be admitted to probate. See Informal wills below.
Executor
Appointment of executor
There is no restriction as to whom a testator may appoint as their executor. It is however important that the testator carefully considers the choice and only appoints someone that they trust and who can do the job properly.
Beneficiaries as executors
It is surprising how many clients believe they cannot or should not appoint their beneficiaries as executor, when in fact not only is it permissible, it is usually the best option.
Beneficiaries who are also executors are looking after their own interests and the estate’s interests at the same time. They are less likely to claim, or be granted, commission for their duties as executor. They cannot complain about their own delay. They will be able to make rapid decisions, freed of consulting anyone but themselves. They are very unlikely to sue themselves.
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If there are a number of beneficiaries, such as the testator’s children, it might be tempting, appropriate and/or convenient to appoint more than one of them as executors. While that may be best to avoid any arguments or achieve perceived fairness, careful consideration should always be given when drawing the will to the desirable goal of maximising the efficiencies of administering the estate. If one child of the testator, for examples, lives interstate or overseas, then the time and cost of them acting as one of the executors is probably disproportionate to the need, as long as the beneficiaries all get on with each other. It may be that one beneficiary is simply too busy, or illiterate, or disorganised to properly and promptly perform the obligations of an executor. In that case it is counter- productive to appoint them as executor simply to achieve ‘fairness’, it is far more sensible to appoint someone who will get the job done.
Testators should always be advised to discuss their proposed appointment of an executor with their family and with their proposed executors. Springing the job of executorship upon an unwilling beneficiary – or worse, someone not otherwise named in the will – is potentially an unkind legacy and may simply result in the person renouncing, potentially causing further cost and delay to the estate.
Joint or multiple executors
A will may appoint one or more executors, to act jointly and/or severally and each, any, all with alternate or substitute executors.
Multiple executors may be allocated specific roles, with one executor to perform specific functions and another to attend to all other matters. For instance, a literary executor may be appointed to attend to administration of the copyright and royalty rights of the estate, or a business executor may be appointed to deal with a business operated by the testator.
See the discussion under Beneficiaries as executors above. Careful consideration should be given to whether more than one executor is necessary and, if so, whether they can co- operate and communicate effectively. If they cannot, it will cause unnecessary expense and delay to the estate.
Professional executors
Where there are complex, difficult or fractured family relationships and beneficiaries might not be able to co-operate or communicate, or where large and complex estates are involved, then it may be appropriate, or even necessary, to appoint an independent executor, or a number of them. Regardless of whether such an executor is a family member or friend who may claim commission, or a professional such as a lawyer or trustee company
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who will charge professional fees or claim commission, the costs of administering the estate will escalate greatly over what they would be if the beneficiaries were the executors.
The testator should always be advised to seriously consider their specific family relationships when deciding whether to appoint a professional executor and to choose the option that is appropriate for them. It is helpful in that context for the testator to be given an understanding of what administering their estate might actually entail. If they propose to appoint a trustee company, or the NSW Trustee, they should contact those organisations and understand what services they provide and how much they will charge the estate, before they put their beneficiaries in their hands.
Renunciation by executors
When considering whom to appoint as executor, the testator should be advised that an executor may refuse to accept the appointment, by renouncing executorial duties. If no substitute is appointed by the will, then an application for letters of administration with the will annexed is made by an appropriate interested person. This will cause increased cost and delay to the estate. Testators should be advised to consider carefully who their executor shall be and to discuss the proposed appointment with the person before appointing them.
Substitute or alternate executors
It is important for an alternative executor to be named in the will. This allows the testator to retain control over who will be administering their estate. If there is no alternate executor named and the executor passes away, then whomever the executor has appointed in their own will as their executor becomes the testator’s executor also. That may be someone that the testator does not even know, or at least does not wish to have administering their estate.
Extrinsic evidence to construe will
In proceedings to construe a will evidence, including evidence of the testator’s intention, is admissible to assist in the interpretation of the language used in the will, if the language makes the will or any part of the will meaningless, ambiguous on the face of the will, or ambiguous in the light of the surrounding circumstances: s 32 Succession Act 2006.
This of course makes the notes that a solicitor takes, and any correspondence between the solicitor and the testator when instructions are provided to draw a will, of critical importance and, where there is any construction issue with the will that needs to be resolved by a court, the solicitor’s records are likely to be the best evidence.
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In Jukka Pekka Kemi v Peter Hedley Wood [2013] NSWSC 180 the court noted:
Given the ambiguity on the face of the will, it is appropriate, as permitted under s 32 of the Succession Act, to look to extrinsic evidence for the purpose of arriving at its proper construction. In this case, the most obvious extrinsic material which may assist in arriving at a proper construction of the will includes previous revoked wills of the Deceased, and notes taken by the solicitor who prepared the will. The judicial debate as to whether a court has the power to look at a previously revoked will or solicitors' instructions in order to resolve an ambiguity in a subsequent will (see discussion in Construction of Wills in Australia by David Haines QC (2007) at [5.11]) appears to now be resolved by s 32 of the Succession Act.
Although the professional responsibility of lawyers in all areas of law to make and retain proper file notes is undoubted, in relation to wills it is of paramount importance.
Foreign wills
See International wills below.
Homemade wills
The Supreme Court of NSW considered a homemade will in Jones v Robinson & Ors [2019] NSWSC 932 and particularly the question of its appropriate interpretation where ambiguity existed. The Court particularly affirmed the ‘well accepted’ principles from Justice Isaacs in Fell v Fell (1922) 31 CLR 268 on the construction of wills. The court in Jones v Robinson noted that:
With any homemade will the language used will often be informal, but the plain meaning of words should not be ignored. Moreover the instrument has to be viewed as a whole. Inaccuracies or inconsistencies should be looked at so as to best preserve a testator’s intention and that approach should be a predominant consideration in the construction of the instrument.
In determining that the testator’s failure to deal with the residuary of her estate did not create an intestacy, the court stated that:
The mere fact that the creator of a homemade will did not contemplate every legal contingency or the potential of residue does no more than highlight that the maker is not a lawyer.
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In contemplation of marriage
A will is revoked by marriage, unless it is made in contemplation of a particular marriage: s 12 Succession Act 2006.
The question then arises, and sometimes needs to be judicially answered, as to whether or not the will was in fact made in contemplation of marriage. See for example Tolson v Hender [2009] WASC 319, being an application to determine the validity of a will.
Incorporation by reference
A document may be incorporated into a will by referring to it. McDonald J stated in Fast and Ors v Rockman and Ors [2015] VSC 337 at [9]:
The doctrine of incorporation by reference
There are three pre-conditions for incorporation of a document into a Will by reference:
(i) the document must be referred to in the Will;
(ii) the reference to the document must be sufficient to identify the document;
(iii) the document must be in existence at the time the Will was made.
The facts of that case established that a document was incorporated into a will by reference, which had significant financial consequences for certain beneficiaries.
Informal wills
Section 8 Succession Act 2006 provides that the court may dispense with the usual requirements for the making of a will, altering a will, or revoking a will, if the court is satisfied that the document purports to state the testamentary intentions of the deceased, and that the deceased intended for the document to form, alter or revoke a will.
Rodny v Weisbord [2020] NSWCA 22 dealt with whether the facts as found by the primary judge justified a conclusion that the deceased intended the second draft of her will to constitute her will, and whether the primary judge properly assessed the evidence in finding
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that the deceased had made statements that she had made a will. The case succinctly sets out the requirements under s 8: see [15] to [24] in particular. Paragraphs 15 and 16 provide:
15. Section 8 is a general dispensing power which allows the Court to admit a document to probate notwithstanding that it has not been executed in accordance with the requirements of the Succession Act. For its operation two matters must be established in relation to the “document” sought to be the subject of a grant of probate. First, it must purport to state the testamentary intentions of the deceased: s 8(1)(a). That is not in issue here in relation to the second typewritten draft will prepared on 15 August 2008.
16. Secondly, the Court must be satisfied that the person intended that the document form his or her will: s 8(2)(a). In determining whether it is so satisfied the Court may have regard to evidence of the testamentary intentions of the deceased person, including evidence of statements made by that person (s 8(3)(b)), as well as any other matters relevant to that question (s 8(4)).
In Re Estate of Wai Fun Chan, Deceased [2015] NSWSC 1107 7 August 2015 Lindsay J stated:
In the modern administration of the Court’s probate jurisdiction a premium is placed upon substance over form in ascertaining the testamentary intentions of a deceased person, and in seeing that his or her beneficiaries get what is due to them. This is consistent with the governing purpose of the jurisdiction: the due and proper administration of a particular estate, having regard to any duly expressed testamentary intention of the deceased and the respective interests of parties beneficially entitled to his or her estate: In the Goods of Loveday [1900] P 154 at 156; Bates v Messner (1967) 67 SR (NSW) 187 at 189 and 191-192; Estate Kouvakis; Lucas v Konakis [2014] NSWSC 786 at [211].
The Victorian case of Re Martin [2019] VSC 424 demonstrates the detailed evidence that is required for a court to be satisfied with an informal will. McMillan J expressed that this evidence should establish the following:
(a) there must be a document
(b) the document must express the testamentary intentions of the deceased; and
(c) the document must have been intended by the deceased to be a codicil to his or her last will.
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This case is particularly interesting given that the court found the testator intended the informal document to be her will when it was created, then subsequently changed her mind about it, but did not effectively revoke it.
The informal document in Re Martin also failed to identify the executor and one of the three beneficiaries, but was still admitted to probate.
In Re: Nichol; Nichol v Nichol & Anor [2017] QSC 220 the court found that an unsent text message, created about the time that a person committed suicide, listing his assets and purporting to bequeath them to family members, constituted an effective will.
Also see the Queensland case of Radford v White [2018] QSC 306 where a video recorded on the phone of a first-time motorcyclist at the insistence of his de facto partner before collecting the new bike was admitted to probate as a will.
Of course, it is always preferable to avoid the cost and delay in having to put before the court evidence of the deceased’s intentions and the circumstances of making an informal will, by complying with the formal requirements and making a will about which there is no question. It should never be thought that the formal requirements for making a will are not important. In Chan (supra) His Honour further stated:
…the interests of all concerned in the administration of a deceased estate (not limited to the deceased and his or her beneficiaries, but extending also to anybody interested in an orderly succession to property) are generally best served by compliance with the formalities prescribed by section 6 for the making of a valid will. They are not intended to be onerous or to do otherwise than to facilitate the orderly administration of probate law.
In this context, see also Fell v Fell [1922] 31 CLR 268 (at 276), where the High Court set out what Issacs J called the ‘incontestable’ principles in the construction of a will.
See also The Estate of Bradley Scott Lyons [2021] NSWSC 197.
Strict compliance with the requirements is not only preferable, it is a basic professional responsibility of the solicitor, so that any need to later make an application to dispense with those requirements, with its considerable expense and delay, never becomes necessary. The failure by a solicitor to comply with the formal requirements may constitute professional negligence. See further Informal wills and solicitors’ duties below.
See also Homemade wills, above.
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Informal wills and solicitors’ duties
Howe v Fischer [2014] NSWCA 286 was a successful appeal from Fischer v Howe [2013] NSWSC 462, in which a solicitor was found negligent for not, inter alia, having ensured the elderly will maker executed an informal will pending finalisation of the execution of her formal will. Damages were awarded to the disappointed beneficiary with their calculation aligned to the difference between the amount the beneficiary would have inherited if the proposed later will, formal or informal, had been executed by the will maker and admitted to probate, and what he actually received under the earlier will duly admitted to probate.
In relation to some of the particular factors which were treated as highly relevant in the court below, the Court of Appeal said:
− In respect to the finding that as the particulars of the will were settled in the conference between the solicitor and the client, there was no impediment to an informal will being executed immediately: the contents of the will were not in fact settled – see the court’s analysis of the evidence at [51], for example – as there was still the question of the executor/s to be decided, and discussions held about a potential claim by another family member being excluded may have caused the will maker to review her wishes further.
− As to the finding that there was a ‘not insignificant risk’ of the will maker dying or losing testamentary capacity before her formal will was finally settled and executed, the proposed time frame being approximately two weeks, given the solicitor’s already planned leave and the will maker’s wish that the solicitor not return until the will maker’s son was able to travel interstate and attend: whilst the will maker’s advanced age was a factor, there was in fact no indication that death or loss of capacity was imminent at the time instructions were taken.
− As to the lower court’s finding of a breach of the solicitor’s retainer to give effect to the will maker’s testamentary wishes and associated duties of care to procure an informal will: in the circumstances there was no breach and ‘any duty to call attention to the possibility of making an informal will would have arisen only if the solicitor was aware that some factor was at work that, as a matter of reasonable foresight, might cause to be frustrated’ the will maker’s objective of making a formal will approximately two weeks later at [75].
Accordingly, on the basis of this appeal case, unless the instructions for the will are concluded and unless there is reason to think the testator is at imminent risk of death, then it appears a solicitor is unlikely to be held negligent for failing to advise about, or to procure,
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an interim will. However each case will turn on its facts and solicitors should take utmost care.
Howe v Fischer was cited in Sanrus Pty Ltd & Ors v Monto Coal 2 Pty Ltd & Ors (No 7) [2019] QSC 241 at [103], as authority for the proposition that:
A suitably qualified professional expert may give evidence of the content of general practices of professionals in his or her field, or to put it another way, evidence about what professionals generally do in stated circumstances.
That is despite the fact that in Howe v Fischer such evidence was not required: see [78] – [81] of the appeal decision.
See also Re Hobbs [2017] VSC 424, Cook v Westwood & Anor [2017] VSC 509; Re Tang [2017] VSCA 171; Re Langley [2018] VSC 623 handwritten will and intention; IMO the estate of Bruce William Standish (deceased) [2018] VSC 629 audio recording; and Re Prien [2019] VSC 47 informal codicil.
The case of Re Prien particularly illustrates the point that the NOTES made by the lawyer at the time of taking instructions, rather than the actual instructions recorded, are critical to the issue of establishing the client’s intention. These are two separate things. Care should be taken to make notes of the observations of the client, their capacity and understanding of the process of giving instructions. These observations must be separately recorded to the instructions.
International wills
International wills are recognised under Chapter 2 Part 2.4A of the Succession Act 2006. A will made in a foreign country is valid in NSW if it is executed in accordance with the requirements of the law of that other country.
Wills made aboard ships and aircraft are also valid if they conform with the law of the country they are in, or closest to at the time.
Schedule 2 of the Succession Act 2006 sets out the Uniform Law on the form of an international will.
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Legislation
Succession Act 2006
Probate and Administration Act 1898
Interpretation Act 1987
Living wills
A ‘living will’ is not a term recognised by Australian law.
In NSW the equivalent document is called an Appointment of Enduring Guardian, which allows a person to appoint someone else to make medical and lifestyle decisions for them if they become incapable.
There is also, in other states, or in NSW as an optional part of an Appointment of Enduring Guardian, an advance medical directive, or advanced care directive, which allows a person to direct their guardian and/or health practitioners to, for example, withdraw life prolonging treatments if the person is terminally ill.
Making a will
A will is not valid unless it is in writing and duly witnessed. See Witnesses below and s 6 Succession Act 2006.
However, these provisions are overridden if a will is made pursuant to s 18 Succession Act 2006, which provides that a will can be made for a person without testamentary capacity at the direction of the court. See Court made wills above.
Further, an informal will can be effective. See Informal wills above.
Marriage and domestic relationships – Effect on existing will
A will is revoked by marriage, unless it is made in contemplation of marriage: s 12 Succession Act 2006.
See Revocation below.
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A decree nisi for divorce does not become absolute if one of the parties to the marriage dies: s 55(4) Family Law Act 1975.
Minimum age of will maker
Pursuant to s 5 Succession Act 2006 a will made by a minor, that is a person under 18 years of age, is not valid. However, there are several exceptions to this rule, namely:
− A minor may make a will in contemplation of marriage, but the will has no effect if the marriage does not occur: s 5(2);
− A minor who is married may make a will: s 5(2);
− A minor can make a will if authorised by a court in NSW: s 16 and see Minors – Court may authorise minor to make, alter or revoke below;
− A validly executed will made by a minor outside NSW which was authorised by a court outside of NSW is a valid will in NSW: s 17.
Minors – Court may authorise minor to make, alter or revoke
A court may authorise a minor to make a will, either on the application of the minor or on the application of someone on behalf of the minor, as long as the court is satisfied that the minor understands the will’s nature and effect, that the will accurately reflects the minor’s intentions and that it is reasonable in all of the circumstances: s 16 Succession Act 2006.
See Fenwick, Re; Application of J.R. Fenwick & Re Charles [2009] NSWSC 530.
Multiple wills
It is possible to have multiple wills in multiple jurisdictions. An overseas will can be valid and effective to deal with the testator’s assets in that other jurisdiction at the same time as a NSW will is valid and effective to deal with the testator’s assets in NSW. Each will deals with the deceased’s property in the jurisdiction where the will was made. See International wills above.
It is not, however, possible to have multiple wills in NSW, except to the extent that a current will may revive aspects of a previously revoked will. See Revocation below and s 15
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Succession Act 2006. Otherwise, a will is revoked by the execution of a later will: s 11 Succession Act 2006.
Mutual wills
What makes wills ‘mutual’, rather than merely ‘reciprocal’, is the inclusion of a term in the agreement that a will shall not be revoked.
In Birmingham v Renfrew (1937) 57 CLR 666 a husband and wife made such an agreement in circumstances where she had inherited money from an uncle and wanted it to go to her nephews after her husband died. She made a will leaving everything to her husband and then her nephews on the agreement that her husband would do the same, which was well understood by them both and duly carried out. The husband revoked the will after the wife’s death and made a new one leaving her uncle’s money to his own family.
Dixon J found that:
The contract bound him, I think, during her lifetime not to revoke his will without notice to her. If she dies without altering her will, then he was bound after her death not to revoke his will at all – emphasis added.
The court found that the express promise not to revoke, which was the consideration for the contract:
…should be understood as meaning that if she died leaving her will unrevoked then he would not revoke his. But the agreement really assumes that neither party will alter his or her will without the knowledge of the other – emphasis added.
The analysis in Birmingham v Renfrew relies on equitable, not contractual rights. The court made this very clear:
The testator cannot be compelled to make and leave unrevoked a testamentary document and if he dies leaving a last will containing provisions inconsistent with his agreement it is nevertheless valid as a testamentary act – emphasis added.
Given that the testators of mutual wills can change their wills while they are both alive and capable, and they have no contractual right to force each other to make wills, the issue of what happens on revocation generally only falls to be determined when third party beneficiaries discover that a will made under an agreement has been revoked after the testator who revoked it has died. In this regard Dixon J in Birmingham v Renfrew noted:
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It has been long established that a contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement.
On the Birmingham v Renfrew analysis, an inconsistent later will makes the testator a constructive trustee and creates a trust when they die in favour of the third parties who were beneficiaries under the original will made pursuant to the agreement. The trust attaches to the property that was the subject of the original will, including the residuary. The terms of the trust are those of the original will. The beneficiaries then have an equitable right to claim their benefit under that trust.
Dixon J in Birmingham v Renfrew described the constructive trust as ‘floating’, in the sense that it does not come into existence until the death of the second testator. That concept of the trust not arising until death flows back to the reason that the testators of mutual wills are allowed to revoke, provided that the other one has notice and can do likewise. As noted in Low v Perpetual Trustees WA Ltd (1995) 14 WAR 35:
During their joint lives either may revoke separately, provided notice of revocation is given to the other party. The other party then acquires the opportunity to change his or her will and the ground on which a trust is raised ceases to exist. The other party must have capacity to act in response.
Gleeson CJ in Aslan v Kopf [1995] NSWCA 26, unreported, after affirming Birmingham v Renfrew, said:
It may, in a particular case, and depending upon the circumstances, be proper to conclude that the parties to an agreement to make mutual wills by implication agreed, unconditionally, never to revoke their wills. Ordinarily, however, and especially when all that is relied upon for the implication is the conduct of the parties in making mutual wills, the proper implication is that neither party will revoke his or her will without notice to the others.
Given that His Honour did not suggest what circumstances might warrant deviation from the ‘proper implication’ and subject to the comments in the Flocas case, below, this statement is currently best understood as simply further confirmation of the general rule that neither party will revoke his or her will without notice to the other.
Although Birmingham v Renfrew is authority for that general rule, there is later authority from state courts in support of mutual wills being able to be made irrevocable, but the same authority creates an unsettled position as to how any such agreement can be enforced.
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Whilst it is possible to enter into a legally enforceable agreement to create mutual wills that will be irrevocable, such an agreement must be proven by ‘clear and satisfactory evidence'.
See Osborne v Estate of Frederick Osborne and Daisy Osborne [2001] VSCA 228, Barns v Barns [2003] HCA 9, Flocas v Carlson [2015] VSC 221 and the article Life (or more so death) after Barns v Barns [2006] UTasLawRw 3; (2006) 25(1) University of Tasmania Law Review 61.
Flocas v Carlson [2015] VSC 221 contains an exhaustive review of the doctrine of mutual wills and all the cases going back to 1769. However, while it sets out four criteria for making a mutual wills agreement binding and enforceable, it objects with the analysis in Birmingham v Renfrew as to how such an agreement operates and is enforced. In essence, Flocas prefers a contractual analysis to an equitable or constructive trust analysis. The court in Flocas says at [192]:
[T]here is to my mind an aspect of [the doctrine of mutual wills] that remains unsatisfactorily unsettled, but need not be resolved for the purposes of this case. It concerns the ‘floating obligation’ suggested by Dixon J …
Flocas upheld an agreement for mutual wills but did so on the basis of specific performance rather than constructive trust.
Negligence – Solicitor’s duty of care
Badenach v Calvert [2016] HCA 18:
− In the circumstances of this case the High Court held that the solicitor did not owe a duty of care to the beneficiary in the will.
− The scope of the duty of care owed by a lawyer to a testator will depend on the circumstances of a case, including the instructions received, the lawyer’s actual or implied knowledge of the testator’s circumstances after the making of necessary enquiries.
− For a duty of care to be owed to an intended beneficiary, the interests of testator and beneficiary must be consistent. That is, the testator is the lawyer’s client, not the beneficiary.
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The background to the matter was:
− In 2009 the solicitor prepared a will for a longstanding client of his firm who had a terminal illness. The testator’s instructions were brief and to the effect that his whole estate was to pass to a sole beneficiary ‘Roger’, who was the testator’s business partner and the son of the testator’s, deceased, long term de facto partner.
− The testator’s estate primarily comprised his interest in two properties, both held as a tenant in common with Roger.
− Two previous wills made in 1984 with the same firm were to the same effect, except that the first included a bequest to the testator’s long estranged daughter.
− The testator passed away shortly after making his March 2009 will.
− Probate of the March 2009 will was subsequently granted, following which the testator’s estranged daughter brought a successful testator family maintenance action.
− Roger then commenced an action against the solicitor, and his firm, on the basis that when taking instructions for preparation of the will and when preparing it, the solicitor owed Roger a duty of care to ensure that the testator’s intentions were given effect; namely, that Roger receive the benefit of the whole estate which existed at the time the will was made, and not the depleted estate as it was following the successful testator family maintenance claim by the testator’s daughter.
− Roger said that the solicitor ought to have discussed the possibility of the estranged daughter making a testators family maintenance, that is a family provision type, claim after the testator’s death and essentially that the daughter’s claim could have been defeated by the testator agreeing to hold the subject properties in joint proprietorship with Roger.
− The solicitor argued there was no evidence that, had any potential claim been discussed with the testator, he would have decided to take any action in respect to the joint proprietorship, that the testator’s instructions in respect to his will dispositions had been consistent since 1984 and that the solicitor had acted for the testator in a number of other matters including the acquisition of the properties in question by the testator and Roger and there had never been any indication that the testator wished the properties to be held other than by way of a tenancy in common.
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− Initially, the Supreme Court of Tasmania held that the solicitor owed the testator a duty of care to enquire as to the existence of any family members, which would have led to the discovery of the existence of the testator’s daughter and a then to advice given regarding the possibility of a claim; but the court was not satisfied that advice given regarding a possible claim would have resulted in an enquiry by the testator as to how to protect Roger’s position.
However, on appeal, the Tasmanian Full Court in Calvert v Badenach [2015] TASFC 8 concluded that:
− A solicitor has a duty to a testator to give proper effect to the testator’s intentions;
− This duty extends to advice about family provision claims by persons not provided for and the means available to minimise the risk of a claim;
− The means available to minimise the risk may include dealing with assets before death;
− There is a corresponding duty to a nominated beneficiary;
− It was also noted that although the solicitor himself may not have had any knowledge of the existence of the testator’s estranged daughter, the firm, joined as a party, did have that knowledge, which was imputed to the solicitor;
− The Full Court then ordered that the judgment made in the court below in favour of the solicitor should be set aside and replaced with an order that there be judgment for Roger against the solicitor for damages to be assessed.
The solicitor then applied to the High Court for special leave to appeal. When applying for leave in Badenach & Anor v Calvert [2015] HCATrans 279 the solicitor argued, inter alia, that:
− The [Tasmanian] Full Court had extended the scope of the duty to the beneficiary well beyond that found in Hill v Van Erp which was a duty to give effect to testamentary intention in the context of compliance with formalities to an area which involved advice with respect to rearrangement of assets inter vivos.
− This concept had not previously been considered by the courts in Australia. The formulation of the duty by the Full Court was inconsistent with Hill v Van Erp because it ‘imposed a duty to the beneficiary which gave rise to conflict or potential conflict with the duty to the testator client’.
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A grant of special leave was made by the High Court. The High Court then handed down its decision on 11 May 2016 – the majority judgment was delivered by their Honours French CJ, Kiefel and Keane JJ; their Honours Gageler J and Gordon J agreeing with the orders proposed, albeit for slightly different reasons – holding that:
The appeal should be allowed with costs and the orders of the Full Court set aside. In lieu thereof it should be ordered that the appeal from the decision of [the judge in the initial Supreme Court action] be dismissed with costs.
Some of the matters considered by the High Court were:
− the extent of a solicitor’s retainer when engaged by a client to prepare a will;
− the application of Hill v Van Erp;
− the extent of a solicitor’s retainer when engaged by a client to prepare a will;
The respondent, Roger, argued that the solicitor should have volunteered advice regarding a potential testator family maintenance claim. See particularly [31]-[32], [40]-[41], [58]-[59].
In the particular circumstances of this case – possibly raising an exception in a case with different facts – where the testator had not seen his daughter since separating from her mother in 1973, apart from one chance encounter, ‘(n)either the solicitor nor the client could have known with any certainty whether the claim would be successful and, if so, the extent of the provision that might be made for the daughter from the client's estate’. The judgment continues:
40. It remains necessary to prove, to the usual standard, that there was a substantial prospect of a beneficial outcome. The respondent has not established that there is a substantial prospect that the client would have chosen to undertake the inter vivos transactions. Therefore, the respondent has not proven that there was any loss of a valuable opportunity.
41. …The onus [of proving causation of loss] is only discharged where a plaintiff can prove that it was more probable than not that they would have received a valuable opportunity. …
58. The duty of care which a solicitor who is retained to prepare a will owes to a person whom the testator intends to be a beneficiary is more narrowly sourced and more narrowly confined. The duty arises solely in tort by virtue of specific action that is required of the solicitor in performing the retainer. The duty plainly cannot extend to requiring the solicitor to take reasonable care for future and
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contingent interests of every prospective beneficiary when undertaking every action that might be expected of a solicitor in the performance of the solicitor's duty to the testator. If the tortious duty of care were to extend that far, it would have the potential to get in the way of performance of the solicitor's contractual duty to the testator. Extended to multiple prospective beneficiaries, it would be crippling.
59. The solicitor’s duty of care is instead limited to a person whom the testator actually intends to benefit from the will and is confined to requiring the solicitor to take reasonable care to benefit that person in the manner and to the extent identified in the testator’s instructions. The testator’s instructions are critical. The existence of those instructions compels the solicitor to act for the benefit of the intended beneficiary to the extent necessary to give effect to them. …
[The duty of the solicitor is] confined to taking reasonable care to benefit the intended beneficiary in the manner and to the extent identified in the testator’s instructions, the solicitor’s tortious duty to that beneficiary is coherent with the solicitor’s contractual and tortious duty to the client, thereby allowing the two to co-exist. The duty is coherent because it admits of no possibility of conflict: the interests of the client and the interests of the beneficiary necessarily coincide completely.
As to the application of Hill v Van Erp see particularly [42]-[49], some of which is reproduced below:
43. The duty recognised in Hill v Van Erp arose in circumstances where the interests of the testatrix and the intended beneficiary were aligned and where final testamentary instructions had been given to the solicitor. The solicitor’s obligation was limited and well defined.
45. The duty for which the respondent contends is not the same as the more limited duty which was recognised in Hill v Van Erp, to give effect to a testamentary intention. It is one, more generally, to give advice as to the client’s property interests and future estate.
46. The duty for which the respondent contends cannot be said to be owed to the respondent as an intended beneficiary. … The advices which the respondent says should have been given in discharge of that duty would have rendered it unnecessary for the client to name the respondent as a beneficiary in his will.
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47. The interests of the client and the respondent as parties to the proposed inter vivos transactions are not the same as those of a testator and intended beneficiary with respect to the execution of final testamentary intentions. The advices and warnings which the solicitor would need to give about such transactions would reflect that their interests are not coincident. For instance, at any point prior to completion of the creation of the joint tenancies or the gift, the client could change his mind despite any promise having been made to the respondent. This is not a circumstance which could arise where a solicitor was merely carrying into effect a testator's intentions as stated in his or her final will.
48. Nor could there be any question of the solicitor advising the respondent about all the matters relevant to his interests, such as the risk inherent in a joint tenancy of predeceasing the client. The solicitor’s duty is one protective of the client and his interests alone.
49. So understood, the duty owed by the solicitor to the client is not different from that to which Brennan CJ referred in Hill v Van Erp. It is the duty generally understood to be owed by a solicitor solely to his or her client. Hill v Van Erp recognised circumstances in which the duty of care to a third party could and did arise. The circumstances which supported the existence of that duty of care are not present in this case.
Promises to make a will or a bequest
A testator may be bound to honour a promise to make someone a beneficiary in their will, or to leave certain property to a certain beneficiary, if the promisee has relied on that promise. See Delaforce v Simpson-Cook [2010] NSWCA 84 and Contracts to make wills, above.
Property that can be dealt with in a will
Any property personally owned by the testator in NSW can be disposed of in a will made in NSW. That extends to property to which the testator’s legal personal representative – executor or administrator – becomes entitled in the capacity of legal personal representative, after the date of the testator’s death. For example, rent on the estate’s property or interest on monies invested.
Property which the testator holds as a trustee cannot be disposed of in a will.
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Property held by a trustee for the testator cannot be dealt with in the testator’s will, unless the trustees have been previously directed, or otherwise agree, to pay that property into the estate. This includes superannuation. See Superannuation below.
Rectification
Section 27 of the Succession Act 2006 provides the court may make an order to rectify a will if the court is satisfied that the testator’s intentions would not be carried out either due to a clerical error, or because the will does not give effect to the testator’ instructions.
Applications for an order to rectify must be made within 12 months of the date of death, although the court may extend this period if it considers it necessary, or the final distribution of the estate has not been made.
The summons should seek rectification of the will, or codicil, setting out the exact wording of the orders sought, and probate of the rectified Will.
There must be clear evidence of what the testator's intentions were at the time of making the will. This evidence is usually found in the solicitor's file notes when taking instructions for the will. An affidavit should be sworn by the solicitor who took instructions for the Will and any person in the firm responsible for drafting it.
See ANZ Trustees Limited v Hamlet & Ors [2010] VSC 207 as to an application for rectification, including adverse costs order against the will drafter.
Revocation
Sections 11-13 of the Succession Act 2006 deal with revocation of a will.
A will is revoked by:
− Marriage, unless the will is made in contemplation of marriage and other than in relation to any gift in the will to a person to whom the testator is married at the date of death, see also In contemplation of marriage above;
− Divorce, to the extent of any gift to the ex-spouse. Note that a decree nisi for divorce does not become absolute if one of the parties to the marriage dies before it is absolute: s 55(4) Family Law Act 1975;
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− A subsequent will or written revocation;
− Destruction of the will with intention to revoke.
A revoked will can be revived via re-execution, or by execution of a new will showing an intention to revive all or part of a revoked will, unless a contrary intention appears in the new will: s 15 Succession Act 2006.
The formal requirements for revoking a will, or reviving a revoked will, are the same as the formal requirements for making a will – see Execution above and Witnesses below. However, like the formal requirements for making a will, the court can dispense with the formal requirements for revoking a will or reviving a revoked will: s 8 Succession Act 2006.
Care should be taken where a client has made previous wills and where sometimes the client may not recall exactly when previous wills were made, or where any such wills might be now held. It is important to avoid there being any ambiguity about which will is the last will of the client, which is why the By Lawyers precedent wills contain an initial statement that all previous wills are revoked.
Self-made wills
See Homemade wills, above.
Solicitors
See also Capacity and Negligence – Solicitor’s duty of care to intended and disappointed beneficiaries above, and Witnesses below.
As executor
It is relatively common for solicitors to be appointed as executor, or alternate executor, in their clients’ wills. There is nothing wrong with that and in many cases it is an appropriate and prudent course. However, the client needs to be properly advised of the implications.
The solicitor is obliged to inform the client that other executors might be appointed who will not charge. See Executor above and r 12.4 Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015.
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A solicitor executor will usually charge at their normal rate to administer the estate, or otherwise claim commission. Any payment made to the solicitor for the performance of executorial duties is regarded as a benefit arising from the will. As with any benefit received by a witness to a will, as per s 10 Succession Act 2006, this benefit will be void if the solicitor witnessed the will, unless the benefit is authorised by the testator and the other beneficiaries at the time of the will being made, or by the court later.
If the solicitor did not witness the will, executor’s commission may be claimed on the same basis that a normal executor can claim commission.
See the article: The solicitor-executor and remuneration clauses (2002) Volume 76(8) LIJ 77, Walker & Ors v D’Alessandro [2010] VSC 15, Re Estate of Zsusanna Gray [2010] VSC 173 and Szmulewicz & Ors v Recht & Anor [2010] VSC 447.
Appointment of particular firm clause
A clause in a will that purports to require an executor to appoint a particular firm of solicitors to act on behalf of the estate is not binding: Foster v Elsley (1881-2) 19 Ch D 518.
Bequests to solicitor
If a testator desires to leave a bequest to a solicitor, the solicitor is obliged to decline to act for the testator in respect of the will: r 12 Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015.
Statutory wills
See Court made wills above.
Survivorship
Most wills are drafted to require that a beneficiary must survive the testator by 30 days. There are several reasons for this. The main one is that s 35 Succession Act 2006 states that beneficiaries to whom a disposition of property is made in a will must survive the testator by 30 days, otherwise they are deemed to have predeceased the testator. However, that section can be overridden by a clear expression in the will that the contrary intention applies, that is the beneficiaries do not need to survive by 30 days. This is rarely done.
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The other reason such clauses are included, which is probably also the basis for s 35 existing in the Act, is practicality. If a beneficiary dies within 30 days of the testator, it is unlikely – and in the case of real property or other substantial assets, effectively impossible – that the disposition of estate property in the will could yet have occurred.
Also, such a clause addresses the situation where the testator and the beneficiary die together, for example in a car accident.
As to that situation, where there is a disposition of property and uncertainty about who died first, the provisions of s 35 of the Conveyancing Act 1919 apply, whereby:
In all cases where two or more persons have died under circumstances rendering it uncertain which of them survived, the deaths shall for all purposes affecting the title to any property be presumed to have taken place in order of seniority, and the younger be deemed to have survived the elder.
Section 107 of the Succession Act 2006 provides that a person does not qualify as surviving an intestate person unless they survive for 30 days.
Superannuation
Are superannuation proceeds dealt with under a will?
Superannuation is not the personal property of the testator, it is held on their behalf by the trustees of their superannuation fund and cannot be disposed of in a will, unless the trustees of the superannuation fund have previously been directed, or otherwise agree, to pay the superannuation into the estate.
Binding nominations
Such a direction is achieved by the client completing a binding nomination form, which they obtain form their super fund and which can often be filled out online, nominating their executor, or ‘personal legal representative’, as their nominee.
This puts the super proceeds into the estate and then the will can dispose of it either specifically, or as part of the residual estate. It is critical to advise clients when making a will to consider their superannuation concurrently.
When the client joined or established their super fund they would have been given the opportunity to complete a binding nomination. Most clients will have little or no recollection
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or understanding of this nomination, so it is important to advise them to check with their super fund as to its status.
In many cases such a nomination may have been made many years ago and the beneficiary nominated might now be inappropriate, such as a deceased parent, or a partner from whom the person is long separated. Also, if a couple have each nominated the other and they die together, there would not normally be an alternate beneficiary nominated and the trustees of the super fund will have to decide what to do with the super, subject to the terms of the trust deed and the relevant legislation.
Even if it contains an appropriate nominee, the binding nomination needs to be updated every 3 years to remain effective. Again, most clients are unaware of this and super funds to a poor job of raising awareness.
If there is no binding nomination then what happens to the proceeds of a super fund on the death of the member is covered by the terms of the trust deed for the fund, or the superannuation legislation. It is not uncommon to have competing claims on super, for example by a 2nd spouse in a marriage of short duration or the deceased’s adult children, which is decided entirely at the trustees’ discretion, whereas if the super had been paid into the estate, the will would have disposed of it according to the testator’s wishes.
There is also the potential for conflict where the legal personal representative seeks to claim superannuation benefits for themselves: see Burgess v Burgess [2018] WASC 279.
However, it is important to note that there are taxation implications which must be considered when drafting the will.
Tax on superannuation
As noted in the Wills (NSW) commentary, leaving superannuation death benefits to an estate requires care. If the only beneficiaries of a deceased estate who can benefit from any superannuation proceeds paid into an estate are people who were tax dependants of the deceased, then the executor of the estate is treated as receiving the superannuation proceeds in the same way as a tax dependant would have received it, that is tax free.
However, if one or more of the beneficiaries of a deceased estate who can benefit from superannuation proceeds paid into an estate are people who were not tax dependants of the deceased, the executor is not treated as receiving the superannuation death benefit as a death benefit dependant would have received it and is liable to 15% tax plus Medicare levy on the taxable portion of the benefits – all of the concessional contributions and earnings.
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In such cases if a deceased wants the superannuation to pass into the estate and not be taxed, then it should not be paid into the estate generally, but into a 'superannuation proceeds trust' established within the will, to quarantine the super proceeds and ensure only tax dependants can benefit from the superannuation proceeds, so they are not subject to tax. An appropriate clause is included in the precedent wills.
Suspicious circumstances
Where a will is executed under apparently suspicious circumstances the onus of proving that there are not suspicious circumstances is borne by the person propounding the will. Probate will not be granted unless the propounder allays those suspicions.
Mekhail v Hana; Mekhail v Hana [2019] NSWCA 197 is an appeal case that addresses the formation of a will and the numerous suspicious circumstances that surrounded it.
The primary judgment concerned claims for provision out of the deceased’s estate by two nephews of the deceased. The nephews challenged the suspicious formation of the will made in the last few months of the testator’s life. The respondent, Ms Georgette Hana, supposed ‘daughter’ of the testator, was found to have overcome the suspicious circumstances surrounding the creation of the will, and it was admitted to probate.
That decision was appealed and, at [147] of the Court of Appeal judgment, Leeming JA lists the suspicious circumstances that the primary judge had failed to consider in their entirety. The suspicious circumstances included the instructions for the will and a power of attorney having not come from the testator/principal, an unexplained variation of the instructions, the description of the executor/beneficiary as the testator's 'daughter' when they were in fact unrelated, the unwarranted urgency and the subsequent transfer of the testator/principal's residential property to the attorney for nominal consideration. The case was also complicated by the attending solicitor's decision to destroy an original file note and create a more detailed version some months later, after having also acted for the attorney regarding the transfer of the property.
The Court of Appeal overturned the judgment as the original judge did not consider all of the suspicious circumstances as a whole, and merely established that some existed. This caused the primary judge to err by not determining the degree of evidence required to rebut the suspicious circumstances.
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The judgment at [159] provides:
Test the point this way. Those propounding the will lied to the solicitor who drafted and witnessed it, and yet seek to rely upon his opinion at the time that the will reflected Nadia’s real intention and true will. That cannot be sufficient. The solicitor gave evidence that he would have undertaken different inquiries had he appreciated that this was not the will of a dying woman leaving the entirety of her estate to her only daughter, but instead was leaving the entirety of her estate to an unrelated friend. His evidence is inherently plausible. The lies told to Mr Liondos by Bishoy prevented those inquiries from taking place. The lies prevented Mr Liondos from investigating why Nadia no longer wished to leave part of her property to the church, with the balance to her deceased husband’s nephews. The lies prevented Mr Liondos from being able to form an opinion that notwithstanding the errors on the face of the will, Nadia was freely leaving all of her property to her unrelated friend, and thereby assist in dispelling the suspicion associated with the execution of the will.
The mechanical treatment of the suspicious circumstances doctrine in this case led the Court of Appeal to offer ‘a preferred approach’ at [164]-[173], although the court observed that the limits of the doctrine ‘can scarcely be regarded as settled’.
Testamentary capacity
See Wills – Capacity above.
See also: Bull v Fulton [1942] HCA 13; In the Matter of the Will and Estate of Joyce Helen Greer, deceased [2019] VSC 592; Croft v Sanders [2019] NSWCA 303; Drivas v Jakopovic [2019] NSWSC 218.
Testator
The term ‘testator’ is not defined in either the Succession Act 2006 or the Probate and Administration Act 1898. The Succession Act does however use the term consistently to describe the person making a will and it is the usual and preferred term in the literature and the cases on wills and probate.
Not surprisingly, the term ‘testatrix’, being the female version of testator, does not appear in the acts either. Given ‘testator’ is not defined, it is not incorrect – although probably unnecessary – to use that term testatrix for a female will maker.
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Testator’s family maintenance
This is the expression, and the name of the Act, which preceded the Family Provision Act 1982, which in turn was superseded by the family provision section of the Succession Act 2006: Chapter 3. It refers to the obligation the modern law places on testators to provide for their family out of their estate. See Family provision below.
Who can inspect the will of a deceased person
Section 54 of the Succession Act 2006 lists the people who are entitled to see the will after the testator has died. These are:
(a) any person named or referred to in the will, whether as a beneficiary or not,
(b) any person named or referred to in an earlier will as a beneficiary of the deceased person,
(c) the surviving spouse, de facto partner (whether of the same or the opposite sex) or issue of the deceased person,
(d) a parent or guardian of the deceased person,
(e) any person who would be entitled to a share of the estate of the deceased person if the deceased person had died intestate,
(f) any parent or guardian of a minor referred to in the will or who would be entitled to a share of the estate of the testator if the testator had died intestate,
(g) any person (including a creditor) who has or may have a claim at law or in equity against the estate of the deceased person,
(h) any person committed with the management of the deceased person’s estate under the NSW Trustee and Guardian Act 2009 immediately before the death of the deceased person,
(i) any attorney under an enduring power of attorney made by the deceased person,
(j) any person belonging to a class of persons prescribed by the regulations.
Note: “De facto partner” is defined in section 21C of the Interpretation Act 1987.
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Solicitors should have careful regard to this list when receiving requests for copies of wills held. The first point to ascertain is that the testator is indeed deceased – if not, the request must be referred to the testator themselves, or to their attorney if applicable.
If satisfied as to the death then the provisions of s 54 govern to whom a copy of the will can be given. If the person requesting the will is unknown to the solicitor, or the solicitor’s client/prospective client, for example the named executor, then care must be taken not just to identify the person but to verify the relationship to the deceased and/or the basis upon which they come within the class of persons listed in the section.
Conversely, when writing to another firm, or person, seeking a copy of the will for a client who may have a claim on an estate, care should be taken and documents supplied to establish that the client is entitled to see the will by reason of the provisions of s 54.
A solicitor’s lien over a client’s documents in respect of unpaid fees does NOT extend to a will: see Hawkins v Clayton (1988) 164 CLR 539.
Purported will
For what may constitute a document purporting to be a will for the purpose of s 54 see Saltmer v Rennick Lawyers Pty Ltd [2018] QSC 307 at [20].
Witnesses
Attending witnesses for execution, revocation, amendments
Section 6 of the Succession Act 2006 provides that there must be two or more witnesses to a will and they must both be present when the testator signs the will, then they must both sign the will attesting to the fact that they saw the testator sign it, although the witnesses need not necessarily sign in the presence of each other.
Having ‘two or more witnesses present at the same time’ when the testator signs, and then those witnesses signing but ‘not necessarily in the presence of each other’, is a fine distinction. It means the witnesses can be there together when the testator signs, then one of the witnesses can leave the room while the other witness signs, then the first witness comes back and signs. This would be fairly unusual and not best practice.
All witnesses and testator present together – evidence of signing
In practical terms it is definitely best practice to ensure that all three, or more, signatures occur at the same time and while all parties are together. Frequently it is suggested that the
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witnesses and the testator should all use the same pen. This is not required, however it may assist in establishing that they were all present together, if required; or conversely, may avoid any suggestion that they were not, which might arise if the signatures are clearly done with three different pens.
Having all witnesses and the testator present and signing at the same time will minimise the risk of any irregularities and maximise the utility of the evidence that can be given by the witnesses about the process of signing the will if it is ever the subject of dispute – which is of course the point of there being witnesses in the first place.
Blind witnesses precluded
The critical thing is that the witnesses must both actually see the testator sign the will. That means a person who cannot see is unable to be a witness: s 9 Succession Act 2006.
Gifts to witnesses
A gift in the will to one of the witnesses, but not the entire will itself, will be void unless there are still two remaining witnesses to whom there is no gift: s 10 Succession Act 2006.
Solicitors as witnesses
It is common for the solicitor who has drawn the will to also be the witness. This is appropriate and even optimal, in that a solicitor makes an excellent witness, unless the solicitor receives a bequest in the will, or is an executor or alternate executor.
If a witness receives any benefit from the will, the will is void to the extent of that benefit, unless there are two more remaining witnesses who have no interest under the will or all other beneficiaries consent to the benefit, or the court approves it on the basis that the testator knew and intended that to be the case.
A payment made to the solicitor, that is legal fees, for the performance of executorial duties is regarded as a benefit arising from the will: Sacks v Gridiger (1990) 22 NSWLR 502.
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Accordingly, the solicitor who witnesses a will in which they receive a benefit, even if that is only because they are the executor or alternate executor, risks losing that benefit unless the client specifically authorises it. The best way to achieve that is to specifically note the testator’s understanding and intention in the will itself.
See r 12.4 Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015.
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