The client was the Executor of her father’s Estate (“the Client“). Under the terms of her father’s Will, she was appointed as the Trustee of a testamentary trust that conferred upon her a discretionary power to control and distribute an Estate valued at approximately $3.5 – $4 million.
Of particular value was a number of apartments that had been operated by the Deceased via a company of which he had been a director and shareholder, the rent derived from which generated a consistent income stream.
The Client’s brother (“the Plaintiff“), who had not been provided for in the Will, commenced proceedings seeking a family provision order varying the terms of the Will in his favour so that he was “adequately provided for“.
There was a significant amount of evidence relied upon by the Plaintiff concerning his relationship with the Deceased. Much of this was challenged by the Client, who identified in her evidence the fact that there had been a falling out between the Plaintiff and the Deceased that had led to a permanent estrangement between over a long period of time.
The fact that the Plaintiff and his wife were quite well-off financially, and that they therefore did not have a financial need of the type that would be recognised under the Act, was also a significant issue in the proceedings.
But for a relatively small mortgage, the Client owned the home that she lived in with her husband but did not have any superannuation or other assets of great value. Her expenses often outweighed her income, and she suffered from a number of health problems.
Competing arguments were advanced by both parties at mediation. The Client’s position, which was supported by a number of cases, was that:
- it is not part of the Court’s function to achieve some kind of perceived equity between the various parties or to correct the hurt feelings or sense of wrong felt by a Plaintiff. Rather, the Court’s role is to, where necessary, make “adequate” provision for the “proper” maintenance, education and advancement in life of a Plaintiff,
- in performing this task the Court should interfere only to the minimum extent necessary to do so (particularly in the case of an independent adult child),
- the onus is on the Plaintiff to show that proper provision was not made for him under the terms of the Will, having regard to all relevant circumstances including the size of the estate and the nature of competing claims,
- the Plaintiff could not demonstrate any significant need which would justify the Court altering the Will to make provision for him out of the estate, particularly when his financial position was compared with the Client’s,
- the Court should accept that a person is entitled, in certain circumstances, to make no provision for a child who has treated their parents callously by withholding, without proper justification, their support and love from them in their declining years,
- where a Plaintiff has no relationship with the deceased for some years, and the love, companionship and support present in normal parent/child relationships did not exist between them during those years, it is a relevant consideration for the Court to take into account in exercising its discretion as to whether or not to grant a Family Pprovision Order, and
- an analysis of the facts in this case justified the reduction by the Deceased of the Plaintiff’s share in the Estate from that which might otherwise have been expected to a largely nominal sum.
The case was ultimately able to be settled at mediation, largely because the submissions made in support of the Client’s case appeared to persuade the Plaintiff and those representing them of the weaknesses in the Plaintiff’s claim and the costs that he would be exposed to in the event that he elected to proceed with the case.
Indeed the Client, in the interests of reaching a practical resolution of the matter, ultimately agreed to pay the Plaintiff an amount that was the equivalent to about 7.5% of the Estate (on the basis that he would also pay his own legal costs).
The Plaintiff’s claim was otherwise dismissed, meaning that the Client’s entitlement under the Will was, for all intents and purposes, preserved and she could continue to derive on ongoing income stream from the apartments that formed part of the Deceased’s Estate.