The Administration and Probate Act 1958 (Vic) permits the Court to provide for an eligible person from a deceased estate for proper maintenance and support. In 2014, parliament amended the Act to restrict who could claim a family provision from a deceased estate. The Act has three key stages that an applicant must follow.
Firstly, the person making the claim must be an ‘eligible person’ and meet specific categories provided in the Act. A person can only claim if they fit into one of these categories.
Secondly, the Court must have the power to make an order for provision. The Court must be satisfied with various matters before it can make an order for provision (or greater provision) from an estate. Depending on the category of ‘eligible person’, some claimants must be able to show the Court that they were “wholly or partly dependent on the deceased” for their maintenance and support. The deceased also had a moral duty to make provision for the person’s proper maintenance and support at the time of their death, and the deceased’s estate must not make adequate provision for that person’s ‘proper maintenance and support’.
Lastly, the Court must consider the amount of the order. The Court may consider various factors, including
- the deceased’s moral duty to provide for the eligible person,
- the distribution of the deceased’s estate failing to make adequate provision for the proper maintenance and support of the eligible person,
- an eligible person being unable to provide adequately for their proper maintenance and support (for some categories of eligible persons only), and
- an eligible person being wholly or partly dependent on the deceased for their proper maintenance and support at the time of the deceased’s death (again, for some categories of eligible persons only).
The Act is particular about the categories of eligible persons and requires evidence of being ‘dependent’ on a deceased person.
According to the Administration and Probate Act 1958, if you want to claim a share in a deceased person’s estate, you may be considered a child if you fall into one of the following categories:
- You’re under 18 years old
- You’re aged between 18 and 25, and a full-time student
- You have a disability
- You’re a step-child or adopted child of the deceased and fall into one of the above categories
- You’re an adult child who is having difficulty supporting yourself financially, and you can prove that you can’t provide for your own maintenance and support
- You’re an “assumed child”, which means that the deceased treated you as if you were their own child.
Family provision claim
In Re Janson; Gash v Ruzicka [2020] VSC 449 Ellen Gash (the applicant) commenced proceedings for proper maintenance and support against Eva Ruzicka, the executor of the estate of Milan Janson (the ‘deceased’), who died on August 7 2017, under pt IV of the Administration and Probate Act 1958 (the ‘Act’).
The deceased died in August 2017, survived by his adult daughters — the applicant and Vaclava (‘Wendy’) Klempt — as well as his partner, the executor of the deceased’s estate, who is also a beneficiary under his Will.
The Will
The deceased’s Will divides the estate into 100 equal parts and distributes the estate as follows:
(a) Thirty parts to the deceased’s brother, Josef Jandovsky. Josef lives in the Czech Republic. The deceased travelled to see him each year from 2008 to 2017.
(b) Thirty parts to Wendy Klempt. Wendy is a child from a relationship the deceased had in the Czech Republic before he migrated to Australia. Wendy resumed a relationship with the deceased as an adult in 2007. She lives in Canada. The respondent met Wendy on four occasions.
(c) Fourteen parts to the respondent. From 2007, the respondent was the primary caregiver and loving partner of the deceased. The deceased suffered from several serious health issues in the years before his death.
(d) Twelve parts to the deceased’s niece, Klara Jandovska. Klara lives in the Czech Republic.
(e) Seven parts to the deceased’s friend Elena Dolinsky, who helped him with his paperwork, including bills and taxes, and who passed away after the deceased.
(f) Six parts in varying proportions to six other beneficiaries (two of the deceased’s friends, Janka Banda and Marie Simon; two clubs associated with the Czech Republic; and the applicant’s two daughters, Naomi and Nicole).
(g) One part to the applicant.
The deceased recorded reasons for this disposition in his Will, stating that
[N]o further benefit whatsoever under this my Will to my daughter Ellen Gash as she has shown no interest in knowing me or her mother, my late wife Eliska Jandovska, during our lifetime. My said daughter has had no contact with my late wife for a period exceeding 17 years till my late wife’s death. I have not seen my said daughter for approximately 25 years now. It has saddened and burdened both my and my late wife’s lives that our said daughter Ellen Gash had not contacted my late wife despite knowing that she was suffering from cancer in 1990 and later again in 1999. After my late wife succumbed to cancer my said daughter did not even telephone nor did she attend the funeral. Because of the great pain she has caused my late wife and myself, I believe her not to be deserving of any further financial gain after my death …
In Re Janson; Gash v Ruzicka [2020] VSC 449, the judge declined to make substantive orders given that the applicant had failed to provide adequate evidence of financial need but allowed the applicant to file further evidence. The Judge then conducted a further hearing on May 3, 2021.
Re Janson; Gash v Ruzicka (No 2) [2022] VSC 139
At the hearing, the executor advised the Court that the estate’s value was $3.179 million, reduced by the executor’s commission (2 per cent) and legal costs of the proceeding. The respondent conceded that the deceased owed a moral duty to the applicant but contested the quantum of any award.
There was a dispute on the evidence regarding the extent and cause of the estrangement between the deceased and the applicant. The matter was complicated further by the need for more evidence relating to the estrangement. However, the applicant did not challenge the ultimate finding of the Judge that the relationship was ‘very limited to almost non-existent’ and that she and her father led separate lives from 1989 onwards.
The applicant’s claim varied considerably. However, she ultimately sought an amount of $1.6–$1.9 million, which included an amount of $1.2–$1.5 million for the purchase of a new home and $75,500 for a car and furniture. The respondent, however, made an open offer providing the applicant with a ‘nest egg’ of 10 per cent of the estate (in addition to the applicant’s existing 1 per cent) and submitted that this was an appropriate amount of provision.
The Judge delivered further reasons ordering that provision be made for the applicant in the amount of 11 out of 100 parts of the net estate after deducting the executor’s commission and costs. The Court ordered the provision of ten more shares owing to the applicant’s limited financial means. The applicant sought leave to appeal the orders.
The appeal
In Gash v Ruzicka [2023] VSCA 189 the applicant has again revised her claim and sought a (further) revised allowance of $1.4 million.
The applicant submitted that the amount awarded should include:
- a) a contribution towards purchasing a property of an unspecified amount;
- b) ‘support’ with expenses and, as an alternative to purchasing property, her rental needs, based on the applicant’s alleged life expectancy of some 20 years. She provided non‑capitalised rent estimates, homestay income and living expenses based on this life expectancy.
These amounts indicate the sort of amounts required to meet the necessities of her life;
- (c) an amount of $75,500 for a new car and furniture (as accepted by the Judge), and
- (d) an unspecified amount for other health or care needs for the applicant and her husband, including possible aged care costs.
In oral submissions, counsel for the applicant sought to justify the $1.4 million figure by highlighting that the amounts the applicant would incur in expenses and rental would be almost $1.5 million (over 20 years) and the expected Centrelink income the applicant could receive over that same period (of some $900,000).
The decision
For the following reasons, the Court granted leave to appeal, allowed the appeal, and ordered that the estate provide an additional fifteen shares to the applicant.
“What is right and proper, and thus what the wise and just testator must do, is not determined by the ‘character and conduct’ of each applicant but by what the testator ought to have felt in duty bound to provide notwithstanding any defects in character or conduct but nevertheless having due regard to the nature of their relationship with and their treatment (whether morally reprehensible or the opposite) of the testator during their lifetime. It is only when that behaviour has affected, or (arguably) is perceived to have affected, the testator that they are in good conscience entitled to make lesser or greater provision for an applicant than that to which the applicant would have been entitled having regard only to the bare bones of their financial needs and circumstances.
Collicoat v McMillan [1999] 3 VR 803. at 818 [43] (Ormiston J).
Concerning s 91(4)(a), the respondent accepted that there was a moral duty to provide for the applicant. However, the ‘degree’ to which there is a duty is affected by three matters.
- First, there was an unchallenged finding there was an estrangement, such that the relationship between the deceased and the applicant was almost ‘non‑existent.’ The Judge cannot ascribe blame to reach a specific conclusion regarding the reasons for the estrangement. However, the Court is entitled to consider the nature of the relationship between the deceased and the applicant. In circumstances where this estrangement has impacted the testator, given the reasons provided, we consider that a wise and just testator was entitled to make a lesser provision for his adult daughter than would be appropriate if there had been an existing loving relationship.
- Secondly (and partly a function of the first matter), there was no pre‑existing dependency on the deceased. There might be an expectation that the deceased fulfil that ongoing dependency after death.
- Thirdly, as the Judge found, the deceased had a moral obligation to provide for the respondent and each of his daughters. In reality, any order in favour of the applicant will negatively impact the entitlement of all the other beneficiaries in an estate, which, while not negligible, is also not particularly large.
The respondent accepted that the distribution of the estate to a daughter of only one share failed to make adequate provision for the proper maintenance and support of the applicant.
The Court articulated the ‘degree’ of this failure below:
- a) the applicant owns no real property, no superannuation and has little savings or other assets;
- b) the applicant relies on a carer’s allowance from Centrelink for the bulk of her income;
- c) the applicant no longer works in paid employment and likely will not work in paid employment for the rest of her lifetime;
- d) the applicant’s husband has multiple sclerosis and hence was ‘limited’ in the support he could provide the applicant;
- e) as the couple’s annual expenditure on rent ($42,600) was only slightly less than their income from Centrelink ($45,064.60), it appeared that they relied on their income from homestay students to remain in their current home and to finance some of the other everyday costs of living, such as groceries.
In assessing the ‘degree to which the applicant cannot provide for her proper maintenance and support’, the Court is entitled to consider her needs at the hearing and for the foreseeable future. Although the applicant appeared to be (barely) meeting her commitments at the hearing, there were several foreseeable contingencies liable to affect her in the future. These included:
- (a) that rent might increase;
- (b) that a lack of international students might substantially reduce the homestay income, or it may disappear and
- (c) given the applicant’s age (at the time of judgment) and her husband’s health, costs concerning their care and accommodation will likely increase.
Regarding the amount specifically sought by the applicant, the Court rejected the submission that the estate should contribute to the property purchase when the applicant abandoned the claim for a property. It seems unlikely that the applicant would have the necessary means to maintain property ownership (given expenses such as rates and other upkeep).
However, the executor accepted, as did the Judge, that the applicant needed a new car and furniture valued at $75,500. The Court further accepted that the estate should provide some amount for contingencies that would address the foreseeable risks of reduced homestay income, rent increases, and further care needs arising. However, the Court must balance these contingencies against the other factors already specified, including the deceased’s clear intentions and the interests of the other beneficiaries.
Following the assessment of the above matters, the Court believed that the estate should provide fifteen further shares for the applicant, with the remaining 85 shares distributed to the beneficiaries pro rata following the terms of the Will (including the one share already left to the applicant in the deceased’s Will). On current estimates, the applicant’s interest will be approximately $508,000 (including $75,500 for a new car/furniture and some $432,500 as sufficient further provision for her maintenance and support). Accordingly, the Court ordered an adjustment so the applicant receives 15 additional shares.