Out of time Family Provision claim overturned on appeal

Donald Whiteway died on 14 July 2003, aged 74. Donald married Sheila in 1956; although they separated in January 1984 they remained married until Sheila’s death in December 1985. There were two children of this marriage: Jane and Elizabeth.

In February 1987 Donald married Stephne; there were no children of this marriage. Donald left $25,000 each to Elizabeth and Jane, with the balance of the estate left to Stephne.

Stephne died, on 18 November 2016, aged 60 with no children. Stephne named her brother Adrian Haertsch, as her executor with Elizabeth and Jane receiving $100,000 each with the balance of the estate being left to Stephne’s siblings and their children.

Family Provision claim

Elizabeth, being unable to make a provision claim against Stephne’s estate under the Succession Act 2006 (NSW), made an application for provision out of Donald’s estate under the Family Provision Act 1982 (NSW) (”the Act”) seeking an order designating property in Stephne’s estate as the notional estate of Donald.

As her claim was some 12 and a half years out of time, she also sought an extension of time in which to make an application, under the Act. The court accepted that Elizabeth’s delay in making her application was sufficiently explained by:

(a) her reasonable expectation of benefit from Stephne’s estate as compensation for any disappointment attending administration of Donald’s estate in the interests of Stephne;

(b) the respect she paid to Donald’s concern for Stephne’s wellbeing, and for her ongoing relationship with Stephne, by deferring any claim she might have had until the death of Stephne; and

(c) the consistent assurances of future benefit she received from Stephne (in due course acted upon by Stephne), articulated by reference to a common bond with Donald.

In assessing what provision should be made for the Elizabeth out of Donalds notional estate, the primary judge granted an extension of time, designated $740,000 of Stephne’s estate, as notional estate of Donald, and made an order for a further provision of $250,000 to be made to Elizabeth out of that notional estate. The court considered that a larger grant would pay insufficient respect for Stephne’s reasonable expectation of testamentary freedom in disposition of her estate.

Appeal

On appeal, the NSW Supreme Court held that s 24 of the Act is concerned with beneficiaries of the estate and does not invite a broader “chain of causation” inquiry. As a corollary, there is no basis for Adrian Haertsch who did not hold property “as a result of” the distribution to Stephne from Donald’s estate.

Similarly, the general assurances of a testamentary benefit given to Elizabeth by Stephne were not “sufficient cause” for the application not having been made within time, as required by s 16(3)(b) of the Act.

Additionally, the primary judge erred in finding that there was no prejudice to Stephne or her estate in allowing the application out of time in circumstances where the strength of Elizabeth’s claim for provision was improved by Stephne’s death.

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