- Haertsch v Whiteway  NSWCA 133
- Ng v Lau; In the Estate of Ken Kui Yuen Lau  NSWSC 713
- Li v Choi  QCA 131
- Agostino v Pietrobon  SASC 117
- Estate of Lyn Burtonwood  NSWSC 715
- Green  SASC 90
- Adoption of LVH  NSWSC 1902
- Re Gordon (a pseudonym) (No 2); Application to discharge adoption order  NSWSC 673
- Re GRP  NSWSC 710
- Re Estate of Badstuebner  QSC 144
Appellate decision on notional estate
The facts of Haertsch v Whiteway  NSWCA 133 (Meagher JA, Macfarlan and Leeming JJA agreeing) were summarised in Family provision on death of second spouse in a blended family; order for further provision from notional estate, LSJ, March 2020, p100-101. The first instance decision has been overturned on appeal. The Court of Appeal has decided that a notional estate order cannot be made under the Family Provision Act against the executor or beneficiary of an estate of a person who was the beneficiary of the distributed estate for which the notional estate order is sought (at –). Also, an important consideration in extending the time to bring an application for family provision is the prejudice suffered by other beneficiaries by reason of the delay. That prejudice may be suffered by beneficiaries of a deceased beneficiary of the challenged estate (at –).
Cases for and against knowledge and approval
Satisfaction based on solicitor’s evidence
Ken Kui Yuen Lau made a will in 2001, shortly after he married his second wife, Man Ling Ng (who was called Mary). Ken gave real estate at Peakhurst to his only child, Gary, and the rest of his estate to Mary. In 2016, when too ill to travel overseas with Mary, he made a will giving the Peakhurst property to Gary, a life estate in the family home to Mary with remainder to Gary, and the residue to Mary and Gary equally. In 2017 Ken made enduring appointments in favour of Mary. He proposed transferring the family home to Mary. The solicitor advised that that was not necessary given the terms of Ken’s 2001 will. Ken didn’t disclose the later will. He died in 2018.
Mary contested the validity of the 2016 will, suggesting that the circumstances surrounding the giving of instructions for the will and its subsequent execution should excite the suspicion of the Court that the provisions of the will may not have been fully known to, and approved by, the testator. The Court observed that ‘[t]he relevant circumstances are only those that relate to the preparation of the will in question, its intrinsic terms and the circumstances surrounding its preparation and execution. Circumstances both antecedent and subsequent do not have bearing on the determination of whether or not the suspicion is made out’ (Ng v Lau; In the Estate of Ken Kui Yuen Lau  NSWSC 713 (Kunc J) at ). Based primarily on the evidence of the solicitor who took instructions for the will, and his contemporaneous file note, the Court stated that it was ‘well satisfied’ that Ken knew and approved the contents of the 2016 will and that it reflected his testamentary intentions. The Court noted there was no suggestion that someone ‘put up’ Ken to make the changes. He had considered giving Mary a life interest a decade earlier. Ken was active in all aspects of Gary’s life. Mary had her own assets. However, in response to Mary’s application for further family provision, the Court granted Mary a portable life interest in the family home.
No satisfaction where language intervenes
The solicitor prepared Xin Li’s will on instructions from Li’s friend Doris Choi. Li was in hospital. The instructions were given in English and the will was written in English. Li did not speak any substantial amount of English. When the solicitor, Nicole Lloyd, and Choi attended Li that night with the will, the discussion between Choi and Lloyd took place in English. The discussion between Li and Choi took place in Mandarin, a language Lloyd didn’t speak. The draft will left Li’s estate equally to his two daughters and his two sisters. Li said that he wasn’t decided about the division of the estate between the beneficiaries. He wanted the word ‘equally’ deleted. The word was crossed out and the change initialled. However there was no discussion about how deletion of the word would not impact the distribution of the estate.
The trial judge found that Li had not understood or approved that the document provided for an equal distribution to the named beneficiaries. The Queensland Court of Appeal agreed (Li v Choi  QCA 131 (Jackson J; Fraser and Mullins JJA agreeing)). It is not hard to imagine a different outcome if the solicitor had spoken the testator’s language or a qualified translator had been engaged.
No satisfaction based on unexplained suspicious circumstances
In Agostino v Pietrobon  SASC 117 (Stanley J) a will kit document which was purported to be signed by Giuseppina Agostino was propounded as the deceased’s last will. It had the effect of disinheriting her son and her six grandchildren and leaving the whole of her estate to her niece and nephew. In refusing to issue a grant in relation to the document the Court pointed to circumstances which excited suspicion that the deceased did not know and approve of the contents of the alleged last will at the time of its execution. Among other things:
- The document inexplicably excluded persons naturaly having a claim upon the testator, such as the son and grandchildren;
- The alleged last will departed from long-held testamentary intentions of the deceased; and
- There was evidence that cast doubt on the deceased’s mental acuity at the time the alleged last will was ostensibly executed: the deceased was aged 76 years, she had suffered a stroke from which she did not fully recover, she was very forgetful, her physical health was very poor, she withdrew into herself, she did not seem to understand things that were said to her, she was frail, she was sad and cried a lot (at –).
Inference, presumption and proof of death
Lyn ‘Raz’ Burtonwood was last seen surfing at a patrolled beach. The NSW Coroner found that Burtonwood had died at sea. The manner of death was accidental drowning. One of Burtonwood’s children sought administration of an informal will. The Court in Estate of Lyn Burtonwood  NSWSC 715 (Hallen J) considered the precise wording of the grant. The Court observed that ‘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’ (at ).
The Court noted that ss 40A and B of the Probate and Administration Act 1898 referred to ‘presumption of death’. By s 40B, where a grant was made on presumption of death the estate could not be distributed without leave of the court. The Court observed that it was ‘unclear whether the term “presumption of death” in s 40A covers cases referred to as “inferred death”, as well as what can properly be described as a “presumed death”’ (at ). A benefit of an inference of death is that the court can fix a time of death (at ). (This can be important when the sequence of deaths needs to be ascertained, such as with joint tenancy or inheritance by will or upon intestacy.) The Court found that the grant of letters of administration of the testamentary document could be made without including the words ‘on presumption of death’.
Tragically, Rodney ‘Grass’ Green was lost at sea when his boat overturned. Unlike Burtonwood, the SA coroner considered him missing. After considering the evidence the Court ordered that the Registrar of Births, Deaths and Marriages, SA, register the death as having occurred by accidental drowning (Green  SASC 90 (Bampton J)).
Application to discharge an adoption order
In recent years the Supreme Court has dealt with applications for discharge of an adoption order made many years earlier. In Adoption of LVH  NSWSC 1902 the adoption order was made in 1964 and the discharge application filed in July 2013. Re Gordon (a pseudonym) (No 2); Application to discharge adoption order  NSWSC 673 (Hallen J) involved a similar timespan. Gordon was born and adopted in 1965. He applied in 2018 to discharge the adoption order so that he could prosecute an application for further family provision from his birth father’s estate. In Re GRP  NSWSC 710 (Hallen J) the Court decided that the executors of the birth father’s estate were necessary and proper parties to the discharge notice of motion (at ).
The 2020 proceedings involved the determination of the application pursuant to Adoption Act 2000, s 93(4). That section provides that the court may make a discharge order if it is satisfied that (a) the adoption order, or any consent to adoption, was obtained by fraud, duress, or other improper means; or (b) there is some other exceptional reason why the adoption order should be discharged. Gordon’s application relied on the existence of exceptional circumstances. Based on earlier decisions, the Court observed that the following may amount to exceptional circumstances: mistreatment by the adoptive parent of the child adopted (at ); a serious mistake in a welfare report (at ); a material misrepresentation that the adoptive parents were fit and proper to be in a parental role to the adopted child; or the adoptive relationship has undergone a significant and irretrievable breakdown in the adopted relationship (at ).
However, the Court observed that ‘[t]here are sound public policy reasons why adoption orders ought not easily be set aside. Indeed, public policy considerations ordinarily militate against revoking an adoption order that has been properly made… [A]n adoption order, when made, is meant to be final and establishes legal rights which have significance beyond just those of the adopted person’ (at ).
The Court stated that ‘[t]he treatment by [the adoptive parent], NAP deposed to by Gordon falls well short of the kinds of physical, and sexual, abuse, which has been accepted in other cases as exceptional reasons to discharge an adoption order… At its highest, it seems to me to demonstrate no more than commonplace human failing or inadequacy and a deficiency in parental character’ (at ). ‘There is no evidence that, almost 20 years after NAP’s death, a discharge order would ameliorate any remaining effects of the treatment that Gordon asserted that he suffered at her hands’ (at ). The Court felt that ‘the opposition by the executors of the estate of the deceased, all of whom are members of the deceased’s immediate family, suggests that the relationship which Gordon has with his biological relatives is unlikely to improve’ (at ). The Court observed that Gordon received a benefit following the death of NAP. So, even if exceptional circumstances were established, the Court would refuse the application as a matter of discretion: ‘Having received that benefit, Gordon should not be granted a discharge of the adoption order that founded the relationship which gave rise to that benefit’ (at ).
Executor who breaches duty by delaying interim distribution is not entitled to commission
Paul Badstuebner died on 6 May 2018. His will left his residual estate to his four children in equal shares and appointed one of his children, Thomas, as executor. It was not a complex or unusually large estate to administer. Yet Thomas presided over a slow and inefficient administration in which he repeatedly pursued his own interests. He failed to make partial distributions although the estate had cash holdings ($447,500) which exceeded the estate’s likely debts ($42,000).
Thomas applied for executor’s commission pursuant to the Queensland equivalent of Probate and Administration Act 1898, s 86. The Court stated that ‘[i]f an interim distribution can be made in an amount which would not present any realistic possibility of jeopardising the on-going administration of the estate according to law, then a failure to make it would breach the duty to distribute “as soon as may be”’ (Re Estate of Badstuebner  QSC 144 (Henry J) at ). The Court concluded that ‘[b]y not distributing earlier Thomas was in breach of his duty to distribute as soon as may be. He breached that duty, to advance his own interests, in conflict with his role as executor… Thomas’ breach of duty had the detrimental consequence that his siblings’ right to have and use significant amounts of their inheritance for their purposes was needlessly delayed’ (at  – ).
The Court observed that, depending on the degree of seriousness of the breach, breach of an executor’s duty was a circumstance where the court would refuse to authorise payment of a commission (at –). It concluded that ‘[t]he culpability and consequences of [Thomas’] conduct are so serious that in my conclusion it is not appropriate to authorise any payment of commission for his services as executor’ (at ). The application was dismissed.
Difficult estate planning with death benefits
The member died in April 2016; she made a binding death benefit nomination (‘BDBN’) in September 2013 nominating a person, named as her ‘spouse’, as sole beneficiary. She made a will on the same date naming the person as co-executor and stating that ‘[i]f the nomination is invalid at the date of my death, I give [the benefit] to’ the person. The member’s adult children claimed the death benefit. The trustee of the member’s superannuation fund determined that the BDBN was invalid as the person did not meet the definition of ‘dependant’ in accordance with the fund’s trust deed at the date of the member’s death. It decided to pay the death benefit to the adult children.
On review, the Superannuation Complaints Tribunal considered whether the person was eligible to receive the death benefit as either the member’s legal personal representative or dependant. As to the first, the Tribunal observed that the member was declared bankrupt in October 2016 ‘and other persons were appointed joint trustees of the bankrupt estate of the’ member. Therefore the person was considered as no longer meeting the definition of legal personal representative (D19-20\132  SCTA 254 at ). In relation to the person being a dependant, that term was defined to include a spouse, a person in an interdependency relationship with the member, a person dependent on the member, and a person with a legally enforceable right to look to the member for financial support.
The Tribunal was not satisfied that the person was financially dependent. Much of the support given to the person was treated as ‘either one-off payments (such as payment for medical costs or the university fees of the [person’s] daughter) or historic liabilities and payments (such as those relating to the joint business or houses). For the remainder, the Tribunal notes that there is no evidence submitted that they were ongoing at the time of the [member’s] death (such as the credit card used for the [person’s] living expenses)’ (at , and  in the cognate decision D19-20\133  SCTA 255). The member provided intermittent financial assistance, such as $5,000 for surgery, but this was not pursuant to a legally enforceable right. The person and member had maintained separate houses in different cities since at least 2012. The Tribunal did not find compelling evidence of a degree of mutual commitment to a shared life (at , ) so the Tribunal considered that the definition of ‘spouse’ was not satisfied. The Tribunal concluded that the person was not a dependant pursuant to any part of the definition. The BDBN was therefore found to be not valid.
The Tribunal found that the adult children, although not dependent on their mother at the time of her death, were the only dependants within the meaning in the trust deed. The trustee’s decision to pay the death benefit of $323,285 to them was therefore fair and reasonable in the circumstances (at , ). As a result neither the member’s BDBN nor her will decided the recipient of the member’s death benefit.
Update on BMLS Succession workshop, conference and dinner 11-13 September 2020
This year’s program includes a workshop on the Life cycle of a family provision claim, a discussion of accountability in the administration of estates (by reason of incapacity or death), a practitioner’s guide to the Guardianship Division of NCAT, consideration of making a superannuation death benefit claim where there is no valid binding nomination, the regular panel discussion on a range of topical, difficult or ‘burning’ issues, and much more. The conference has a COVID-19 safety plan, so numbers will be limited.
Darryl Browne is the Principal at BROWNE.Linkenbagh Legal Services, and Chair of the Law Society Elder Law, Capacity and Succession Committee.