An 81-yr-old pensioner who negotiated the Public Trustee’s consent to an increase in her share of her deceased partner’s estate had has the settlement quashed in the District Court.

A right to reside is a valuable testamentary benefit

George Davis died in Bundaberg in July 2018. He and Isabell Leach had been living together in his home at 68 Alice Street, Bundaberg since 1994. George left a last Will made almost 5 years before his death.

In that Will, George gave Isabell a right to reside in the Alice Street property for 5 years, and when that right ended the property was to be sold and Isabell was to receive 50% of the net sale proceeds. The other 50% was left to George’s three sons Rodney, Gregory and Peter who were all in their 60’s at the time of the court hearing.

Isabell – an aged pensioner with no significant assets – was not happy with George’s decision and filed an application seeking further provision out of his estate.

The estate was not a large one. Apart from a vehicle and personal effects of minimal value, the only asset was the Alice Street property valued at $175k.

The executor of the estate was the Public Trustee of Queensland who was concerned about legal costs being incurred unnecessarily and properly wanted to avoid a trial.

A settlement was reached whereby the right to reside was to end, the property sold, and after the Public Trustee’s legal fees and a fixed amount of $15k paid for Isabell’s legal costs, she was to receive 75% of the residue (about $87,000), and the 3 sons would receive 25%, or just under $30,000 between them.

However, the deceased’s 3 sons did not consent to the agreement, requiring Isabell to apply to the Court for sanction.

Only a Court can vary the provisions made in a Will, but often parties do not seek a court sanction of settlement terms to vary a Will, largely in order to minimise further legal costs.

There are circumstances where a sanction is necessary – for example where affected persons are under an incapacity (minors or cognitively impaired) and can’t consent – but no such circumstances existed here.

When Isabell’s application for approval of her increased 75% estate share came before Judge Dennis French QC, it was supported by the Public Trustee but opposed by the three sons.

The issue that confronted the court was whether or not the Will had already made adequate provision for Isabell.

There was some dispute between Isabell and those opposing her as to the true nature of her relationship with the deceased and her contributions over the years.

Ultimately these issues did not have to be decided one way or the other as Judge French concluded the provision made for Isabell in the Will was in fact adequate for her needs.

Comparing the benefit to her under the Will and what she would achieve under the settlement, there was – so held the court – no practical difference.

It was after all a very small estate. And ending the right to reside exposed Isabell to higher living costs in the way of rent over the 2 years remaining under it.

Judge French’s ruling meant the dismissal of both the application to sanction the settlement and Isabell’s primary application seeking further provision from the estate.

Isabell was denied an order that the estate pay her legal costs of the application. The estate and the deceased sons were also ordered to pay their own costs.

This case is another example of why court proceedings regarding small estates should be carefully considered.

Leach v The Public Trustee of Queensland [2020] QDC 284 Lynch QC DCJ, 13 November 2020