The 64-yr-old son of a former Brisbane sales-manager has succeeded in a Supreme Court action against his younger sister to gain a greater share of their father’s $2.8m estate.
William North died in 2018 aged 90 leaving behind three children: Jeffrey aged 64 yrs; Julie-Anne, 66; and Jennifer, 54.
Following the death of his wife Alfreda in 2009, he made numerous wills the last in 2017. Only his 2009 will provided equally for the three children and beginning in 2014, his valuable Killarney Heights residence was consistently left solely to Jennifer.
Under his last will, Jennifer was bequeathed the $2.3m Killarney Heights home and contents, a one third share of his car and half of the residue. Jeffrey received the same less the home and contents but plus $50k. Julie-Anne was to receive about $200k in cash plus the remaining one third share in the car.
There was in fact no vehicle and after expenses and legacies, the residue was likely to be not much at all for Jeffrey and Julie-Anne to share.
Julie-Anne filed proceedings challenging the validity of the 2017 will and seeking further provision out of the estate.
Her claim was resolved just prior to Jeffrey’s claim seeking further provision being heard by the Supreme Court of NSW. She settled on the basis that the 2017 will stood and she would receive a $300k legacy, with the estate paying her legal costs.
The wash-up – with only the home and cash of $70k left in the estate – was that the Killarney Heights residence would have to be sold or Jennifer would need to borrow to satisfy any further provision for Jeffrey and pay the costs of Julie-Anne’s proceedings.
In his 60-page judgment, Justice Philip Hallen clearly distils the issues a court needs to consider in claims made by adult children for further provision. The “statutory scheme” is discussed in paragraphs 104 to 145 and additional principles applying to claims by adult children are set out paragraphs 146 to 163.
The judge noted that though such principles were not to be seen as a fetter on the discretion of the court – “I do not intend what is provided as a guide to be turned into a tyrant” – the guide was important to “avoid arbitrariness and serve the need for consistency in the exercise of judicial power”.
His Honour then turned to a close consideration of the facts.
Following a work injury in 1997, Jeffrey had suffered from depression and anxiety and – although his assets of $1.1m included a waterside home – he survived on a disability support pension and could not afford the considerable maintenance that the home required.
He contended for a provision of $600k to carry out such repairs and for his ongoing health needs.
Jennifer owned no property, having lived with her father at the Middle Harbour property from 2018 after her marriage ended and the marital property was sold. Her superannuation and other assets were in the order of $800k and she was in secure employment on a salary more than sufficient to cover expenses.
She had very specific requirements for any home she would buy out of her share and pleaded that its acquisition cost would require almost all of the proceeds of the Killarney Heights sale to be allocated to her.
“To make provision for Jeffrey,” she submitted to the court “would create an ‘illogical situation’, where Jeffrey owns a home but Jennifer, the chosen object of the deceased’s bounty, would not.”
Had adequate provision for the proper maintenance or advancement in life of Jeffrey been made?
Should further provision be made for the 54-yr-old “that will improve, and enhance, his material situation”?
Justice Hallen reasoned in response to these questions that Jennifer had a significant financial and moral claim to the bulk of the estate given her closeness to her father and the assistance she provided him by living at the home. Indeed she was the person preferred by her father to receive the majority of his estate on the many occasions he revisited his will.
Jeffrey had though provided as much assistance as he could – long distance – from Queensland. And although he was “relatively financially secure”, he had some financial needs that he could not meet from his own resources.
His Honour concluded that the estate value was “reasonably large” and sufficient enough to make provision for all persons the deceased owed some form of testamentary obligation but in Jeffrey’s case, not to the extent he argued for.
The “adequate” and “proper” further provision he allowed Jeffrey – at $350k – would allow him to carry out the house repairs he chose to do and to use the balance for future needs. This lesser allocation would at the same time, give Jennifer greater capacity to borrow so as to retain the Killarney Heights property.
Not all the facts, or issues in dispute, or orders made have been detailed in this report. They are far too numerous to include them all. The case is recommended for reading in full as a succinct example of how courts approach applications of this type especially for adult children.
The principles discussed above and in the case are equally applicable in Queensland as they are in New South Wales.