Family Provision 2

I’ve posted about Family Provision before.  I still think of it as that though now it is simply “provision” under the Succession Act. I’m using acro-pseudonyms in this post to protect the young, more from search-generated publicity than anything else.

The funeral service for MM, who died on 4 November 2009, was held at St Peter’s Watson’s Bay on 11 November 2009.

The memorial notice described him as:

Late of Watsons Bay.
Loving son of
P, loving father of X, cherished brother and brother-in-law of Y and
Y2, Z and Z2, fond uncle of [etc].

Aged 57 years

That’s an early death these days.  MM died in his sleep at his home. of cancer of the throat  There was a big turn-out, and an article in the Wentworth Courier.  MM had been a teacher at Paddington Public School for two decades and by all accounts (not just in the article) had been an inspiring one.  Dozens of former students packed his funeral, the paper reported.

Obviously, dying of cancer of the throat is not the nicest of endings, but there were other respects in which MM’s final years had been less than ideal.

In 2006 he and his wife had separated. In 2007 they were divorced.  She got primary custody of their son, X.  MM saw X occasionally but eventually this stopped after an incident in 2008 in which X, then aged 15, stabbed him in the arm.  X, for his part, alleged that MM had assaulted him.  Criminal charges were brought and interim AVOs taken out.  Those charges and the AVO were ultimately dismissed on 23 April 2009 when X simply did not turn up to court on the appointed day.

During this time, Family Court property proceedings were still afoot.  MM’s health must have already been poor as his brother Z was appointed litigation guardian to conduct his case.  A settlement was reached in March 2009. It does not appear to have involved MM undertaking obligations towards either his former wife or his son.  He had been a primary school teacher; she had for some years been the CEO of Sydney Airport Corporation and before that an executive for the Macquarie Bank airports venture.

On 4 September 2009 MM made a fresh will leaving his estate to his two brothers, Z and Y (who was his twin).  He also wrote a letter on that day explaining why he did not leave anything to X.  He referred to the stabbing incident and its aftermath.  He further wrote:

3. Since that time I have made occasional attempts to restore relations by text messages on his birthday and regarding his grandmother’s serious medical condition. He has rejected my approaches clearly expressing the wish to have nothing more to do wish me.

4. X is an only child and his mother is CEO of Macquarie Airports and extremely wealthy. X has been entirely maintained by his mother since his relationship with me has broken down. I anticipate that his mother will meet all X’s needs in life until he is independent and that he will ultimately inherit a very significant interest from her estate.

5. I do not believe that anything I might have left to X would make any different to his life.

MM’s estate consisted chiefly of his house in Watson’s Bay, and superranuation which could either be paid to the estate as a lump sum or (at X’s election) paid to X at about $250 per week until X turned 25, which would be in 2018 or until he stopped undertaking approved studies if that was later.

MM’s former wife, KM, commenced proceedings in the Supreme Court as X’s tutor for provision (“Family Provision”) for X out of his father’s estate.  After X turned 18, an order was made enabling KM to continue as X’s tutor even though he was now of age.

The matter finally came to trial before Associate Justice Macready.  By that stage the house had been sold and the likelihood was that after legal costs on both sides there would be an estate of about $2.1 million.

At the time of the trial, X lived with his mother.  He owed her $14,000 which she had lent him to buy a car.  Apart from the car, he had golf clubs worth $2,000 and was part-way through a course at Bonny Doon golf course in pursuit of his ambition to become a professional golfer.

X (or perhaps more accurately, his mother, KM) sought an order that he be be provided with the whole of MM’s estate.  The following needs were put forward as being needs for which X should be provided:

(a) the purchase of a home unit in the Darling Point area in the range of prices between $775,000 to $1,975,000;

(b) costs of purchase and fit-out of $100,000;

(c) a bigger car of $21,000-22,000;

(d) golf expenditure and clothing expenditure of $13,500 per annum;

(e) running costs of the car of $10,000-11,000 per annum;

(f) food and groceries of $15,000-16,000 per annum;

(g) golfing fees to bring him up to professional status of $50,000;

(h) counselling costs.

This sort of list is often referred to in the trade as a “wish list” – not that this is particularly a term of art.  It certainly seems extravagant and you have to wonder at the idea of someone of that age undertaking a diploma to become a professional golfer, but the estate was large, X was the only eligible person (not even Y, MM’s twin, was an eligible person) so that the only competing consideration was the respect that the court should pay to to the testator’s wishes.

The reference to counselling costs is in part because quite apart from his parents’ divorce, X’s upbringing had not been an easy one.  He spent his first five years in an orphanage and arrived in Australia with no education and no English.  He had had behavioural and learning difficulties at school and a psychiatrist mentioned “impulsive behaviour and history of aggressive behaviour when provoked.” Unless his sporting ambitions came good, it was unlikely that X would be able to earn an income commensurate with the lifestyle to which he was accustomed.  Apart from sport, X’s employment prospects would at best be in the hospitality industry or some other manual work

The defendants, MM’s brothers, conceded that X was an eligible person under the relevant legislation (now the Succession Act) and that as adequate provision had clearly not been made for him (given that he had some provision should be made for him. They proposed that X receive one third of the estate.  Essentially their line was that X had rejected his father (when MM had texted him about his MM’s mother’s declining health, he had replied “Never text me again. I am trying to get on with my life.” – admittedly he can only have been 15 or 16 at the time) and that X’s mother was more than able to provide for X’s welfare and was likely to leave him a sizeable inheritance.

Associate Justice Macready did not accept either of these arguments.

As to the estrangement, he found that it was for a relatively short period.  “It was a difficult time” but about a week before MM’s death, X had visited him (with a friend – Macready AsJ makes no comment about that though you do have to wonder) for about half an hour and made some kind of rapprochement.  The breach between X and MM was not such that his Honour would reduce or decline provision on that account.

As to the wealth of KM and the prospect of a sizeable inheritance, anything that she might leave on her death was likely to be a good while off yet, and she was not obliged to provide for X while she was alive now that he was an adult.   MM had a responsibility to provide for his son out of his estate and the comments in para 4 of his note were “an attempt…to abdicate from the

His Honour ordered that X receive a legacy of $1.1 million.  This was based on $850,000 for a flat in the eastern suburbs (but not necessarily Darling Point or the like), $50,000 for costs and fit-out, $12,000 for a new car (he commented that X could trade in the present one), $63,500 for the remainder of his golfing course and a buffer (actually, by my calculations, about $124,500) to give him some years to establish himself as a golfer or alternately follow some other path. He assumed that X would then take the pension under his father’s superannuation.

There is remarkably little argument as to support this – for example, his Honour did not deduct any amount to take into account the superannuation.  It looks very much as though he has simply decided to give X about half and let him take the super.

After costs, the likely effect of this is that each of the brothers will receive about $500,000 from MM’s estate.  That’s $200,000 less each than they had proposed, though they each also stand to receive about $360,000 from their mother’s estate (an amount which is presumably increased because MM did not survive his mother to take a share).

On reflection, the outcome is not particularly surprising.  Misconduct in the young is less likely these days to count as what was once called “disentitling conduct” and even when it sometimes counted for more (in the days of the bifurcate jurisdiction in the Supreme Court of the two M[a]c Associate Justices –Laughlin and – -ready) Associate Justice Macready was always the AsJ less inclined to take that approach.  For some years there has been a developing theme of attempting to rescue children from the fallout of divorces when the time comes for either testamentary or family [now under the Succession Act] provision.

It was probably impossible for MM to exclude X from sharing in his estate, even if, at the time and as part of the Family Law property settlement (when MM’s death was probably on the fairly near horizon) some express and substantial settlement had been made by KM for X’s benefit.  Still, you can understand why the brothers might have dug their heels in, and not simply because they wanted the money for themselves.   Why shouldn’t KM have put her hand in her pocket now and settled some money on X, rather than run a court case to take it from them out of the estate of MM after all that had happened?  If you’ve had to park a car at the airport recently, you’d probably think she could easily have afforded it.

2 Responses to “Family Provision 2”

  1. Victor Says:

    I gather from your report the Judge concluded, in effect, that the surviving parent is not obliged to provide for an adult child but the deceased parent is so obliged.

    The law seems odd to me at times.

    • marcellous Says:

      You’ve captured it exactly, Victor. It’s not a proposition totally devoid of logic: the “duty” to provide arises on death because you can’t take it with you and you don’t actually need it any more yourself.

      The odd thing here is how it interplays with the divorce. It’s hard not to see the case as a claw-back by KM – admittedly for her son’s benefit but indirectly for her own, given that otherwise it is likely that she could and would provide for her son in her lifetime, of what from her perspective was “given” to MM on the near-deathbed divorce property settlement. That’s why I thought of Sydney Airport, because you don’t get much for free there either.

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