Marquis v McNamara

The thoughtful exercise of testamentary freedom does not always satisfy even the most honourable of testamentary expectations. This is an example of such a case. Without disrespect, I shall refer to the parties and other protagonists by their given names.

The plaintiff, Craig Marquis, is the 69 year old only child of the late Alfred Marquis, who died in July 2023 at the age of 97. The defendant, Mr Philip McNamara is a solicitor appointed under Alfred‘s will, made on 20 June 2022, as executor of Alfred’s estate.

The estate is not large and primarily consists of Alfred’s home at Nowra (the property).

There was no dispute that Craig was a loving and devoted son until the day Alfred died. Nor was there any dispute that, during his life, Alfred was a generous and loving father to Craig. Alfred was also a generous grandfather to Craig’s children.

Craig expected that he would receive the whole of his father’s estate. Instead, Alfred chose to leave most of his estate in equal shares to Craig and Craig’s four children (Alfred’s grandchildren) Nicholas, Dominic, Monique and Kyle.

Craig brings these proceedings for additional provision under the Succession Act 2006 (the Act). For the reasons which follow, the Court will make a family provision order in favour of Craig to ensure that he receives from the estate an amount which will enable him to discharge the mortgage over his home.

Mr CP Locke of Counsel appear for Craig. Mr PR Glissan of Counsel appeared for Mr McNamara.

No material facts were in dispute, nor were the applicable legal principles. I will next set out the facts, which represent the Court’s findings, under headings which are familiar in matters of this kind.

Under the will, Alfred disposed of the estate in this way:

After the property and the fixed deposit, the balance of estate comprised a motor vehicle valued at $1,500 and cash of $5,607.39.

The parties accepted that the residue would not suffice to pay the estate’s debts and testamentary expenses, such that there would have to be a rateable reduction in the size of the specific legacies. Taking this into account, it was common ground (save as to one matter) that the Court should proceed on the basis that on due administration after payment of debts, funeral and testamentary expenses each specified beneficiary would receive:

The figures in the preceding paragraph take into account payment of the estate’s costs of these proceedings on the indemnity basis of $96,000 (rounded). The figures will be slightly understated because the evidence assumed a two day hearing when only one was required, so the saving will be available for distribution.

Significantly for present purposes, the figures in [11] above do not allow for the payment out of the estate of Craig’s legal fees. The evidence was that those costs were $140,000 (rounded) on the indemnity basis (and involving a deduction by the Court of $10,000 from the figures in the evidence to allow for the reduced hearing time) and $95,000 on the ordinary basis (a deduction of $15,000 from the figures in the evidence).

Craig presented as an entirely honest and straightforward witness, who readily accepted in cross-examination that he had commenced these proceedings out of a sense of hurt and what he saw as the unfairness of Alfred’s decision not to leave him (Craig) the entire estate. There was a faint attempt in Craig’s case to cast some doubt over Alfred’s capacity in an attempt to explain why, there being no falling out or any other controversy, Alfred might have done what he did. To the extent any finding is necessary, I reject that suggestion. Mr McNamara, who prepared Alfred’s last will (and some of its predecessors), was cross-examined. His evidence, which I accept, was that Alfred presented as a lucid testator who understood what his assets were and who his potential beneficiaries might be.

Alfred was a conscientious will maker:

Margaret died on 1 November 2021. As I have already recorded, the will was made on 20 June 2022.

Craig is now 69 years old and his wife, Veronika, is 63. Craig is employed as a senior integrated logistic support practitioner on a gross salary of $135,000 per annum. He also receives a Department of Veterans Affairs (DVA) pension of $1,387.68 per month.

Veronika is retired but works one day a week in a local shop earning a nominal rate of $29 per hour.

Out of his total income, Craig salary sacrifices $1,000 per month into his superannuation. His recurrent expenditure is $8,157 per month (inclusive of the superannuation contribution of $1,000 per month), and this consumes the entirety of his monthly income.

Craig and Veronika own a home at Yerrinbool with a value of $800,000. The current balance of the mortgage on Craig and Veronika’s home is approximately $189,000 with a monthly mortgage payment of $2,800. Craig and Veronika’s combined superannuation balance is $404,000. Their only other significant asset is a car, with an estimated market value of $32,000.

Veronika suffers from thyroid gland problems.

Craig suffers from epilepsy, which is successfully controlled with medication, and has had his prostate removed due to cancer. Nevertheless, the medical evidence is that his overall prognosis is “excellent”.

Craig and Veronika wish to sell their Yerrinbool property and move to Wagga Wagga (where Monique lives). They have identified, as an example, a four bedroom, two bathroom, double garage home in Wagga Wagga which in May this year was for sale for $1,150,000.

There was no dispute that throughout Alfred’s life up to his dying day, Craig was a loving and attentive only child. There was no suggestion of any dispute or falling out between them.

Craig put that he needed further provision over the estimated $101,900 he would receive, primarily because he was still working at the age of 69 and paying off a mortgage. He was at an age and point in life where he wished to retire and live in unencumbered, secure accommodation with adequate funds for his retirement.

Craig accepted in cross-examination that his father was a generous man who treated everyone in the family fairly and generously. In that regard, he accepted that his father had made the following gifts to him:

Kyle is a 38 year old, single, self-employed carpenter. There is no doubt, as evidenced by Alfred’s pattern of will making (see [15] above), that Kyle enjoyed a special relationship with his grandfather.

Kyle was estranged from Craig. Kyle was six years old when Craig and Deborah separated. Kyle’s evidence was that Alfred became like a father to him in the absence of Craig.

Kyle earns approximately $8,500 per month, which is slightly more than his regular expenses. He has approximately $70,000 in assets comprising a vehicle worth $10,000, work tools of $20,000, and superannuation of $40,000. He has $35,000 in liabilities. He currently lives in rented accommodation.

Kyle’s evidence was that he would like to start a family, which would be assisted if he could grow his business with the money he receives from Alfred’s estate. He would like to work towards a deposit for a house. He also deposed that his vehicle was very old and would need to be replaced, but there was no evidence as to what a replacement vehicle might cost.

Kyle was cross-examined. Mr Locke suggested that Kyle had not been completely forthcoming in disclosing his financial affairs. To the extent there may be merit in that criticism, it is immaterial for present purposes. The essential elements of Kyle’s financial position were clear to the Court.

Nicholas is 30 years old, single, and employed as a public affairs officer with the Australian army. He does not own any real property.

As at May 2024 he owned two motor vehicles, had savings of about $10,000, a bank loan of $83,000, a HECS debt of $63,455 and a credit card debt of about $4,275.

Nicholas’ salary is approximately $109,000 per annum. While he receives rental assistance through defence housing, he contributes approximately $1,050 per fortnight from his salary towards his current rent.

Nicholas was not cross-examined. His affidavit evidence was that he had a close relationship with Alfred. He would like to apply his legacy towards paying off his debts and assisting him in having a deposit to enter the housing market.

Monique was not cross-examined. She is married with a now one year old baby. She and her husband own a home in Wagga Wagga as joint tenants with a mortgage debt of $833,488.

Monique is a registered nurse who is usually employed part time, but at the time of deposing her affidavit in May 2024 was on six months unpaid maternity leave. Her usual income from her employment was approximately $860 per week.

Currently, Monique’s husband is their sole income provider and earns approximately $1,327 per week after tax. Their weekly living expenses are approximately $1,116.

Monique’s evidence was that she also enjoyed a good relationship with Alfred. He had given her money at birthdays and Christmas, $2,000 at the time of her engagement and $5,000 at the time of her wedding. Her evidence was that Alfred was generous to her and her siblings when any of them asked for help.

There was no evidence concerning Deborah’s circumstances.

Nor was there any evidence from Dominic. He lives with Craig and Veronika at the Yerrinbool property.

There was no dispute about the applicable legal principles. Mr Glissan drew attention to this summary in the judgment of the Court of Appeal (Bell P; Leeming and Payne JJA) in Bassett v Bassett [2021] NSWCA 320 which I respectfully adopt and apply:

In addition to the passage from Bowditch referred to by the Court of Appeal, Mr Locke drew attention to what Hallen AsJ (as his Honour then was) had said in that case about claims by grandchildren, which he submitted was applicable by analogy in relation to considering the competing claims of grandchild beneficiaries who had put their circumstances in issue:

Mr Locke submitted that what is referred to as the “jurisdictional question” should be answered in Craig’s favour. He submitted that the limited provision in the will, having a value of $101,900 (but not taking account of his legal expenses if these were to be paid out of the estate) was in all the circumstances not adequate for Craig’s proper maintenance or advancement in life. This was said to be by reason of his personal and financial circumstances, his age and health, his close relationship with Alfred, the relatively small size of the estate and the nature of the competing claims on the estate (being those of grandchildren over a child of the deceased).

Mr Locke submitted that in lieu of Craig’s entitlement under the will, provision in an amount of $320,000 would be adequate and proper having regard to what was said to be Craig’s requirements, being:

While the mortgage payout figure of $189,000 was easily identifiable from the evidence, I enquired of Mr Locke how he justified on behalf of Craig the balance of the figure of $320,000. Mr Locke contended that the balance could be justified on the basis of the Court’s instinctive synthesis that a man in Craig’s position needed a buffer for contingencies at his time of life.

Mr Glissan submitted that, in all the circumstances, proper provision had been made for Craig, not least because Craig and Veronika were not in any particular need. Having regard to: Alfred’s generosity to Craig during Alfred’s lifetime; Craig and Veronika’s adequate financial and housing position now; the competing needs of the other beneficiaries; and the small size of the estate, the Court could not conclude the jurisdictional question should be answered in Craig’s favour.

There were three matters on which Mr Glissan laid particular emphasis.

First, he relied heavily on a concession which he had obtained from Craig in cross-examination to the effect that he (Craig) and his wife would be “comfortable” on the assumption that he received at least $100,000 from the estate and applied that together with some of his superannuation to eliminate their mortgage. In order to appreciate that submission it is necessary to set out the relevant part of the transcript (Tcpt, 2 October 2024 pp 33(29)-34(50):

Second, Mr Glissan drew attention to the financial assistance which Alfred had provided to Craig during Alfred’s lifetime (see [26] above).

Third, Mr Glissan referred to Alfred’s pattern of will making. He submitted that in each of his wills, culminating in the will, Alfred had given careful thought to the division of his estate. The will was rational and wise. He submitted this a case on all fours with that postulated by White JA in Sgro (quoted in [41] above) that “respect should be given to a capable testator’s judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate… if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator’s testamentary wishes in recognition of the better position in which the deceased was placed”. As it is of relevance in this case, I also record that White JA indicated that a qualification to the approach he had described was the Court having to decide any application by reference to the facts at the time of hearing.

It will be apparent from the parties’ submissions that the primary focus of their attention was whether or not s 59 (1) (c) of the Act had been satisfied. This provides:

I have referred in [14] above to Craig’s frank acknowledgment of how hurt he feels by what he perceives to be the injustice of the will. In approaching this matter, I have borne firmly in mind that the family provision jurisdiction does not exist to mend hurt feelings or to rewrite a will which someone perceives (understandably or otherwise) to be unfair.

Mr Glissan relied on what was said by the High Court in McCosker (see [41] above) as to the meaning of “proper”. While under the Act the various matters set out in section 60(2) are not in terms required to be considered in relation to s 59(1)(c) (see s 60(1)), the matters in s 60(2) are all examples of matters that can be relevant to addressing what constitutes “adequate” provision and “proper” maintenance. As the summary of authorities in [41] above makes clear, while the financial analysis of the amount of provision and the plaintiff’s needs, together with those of others with claims on the testator’s bounty are important, the adequacy of provision is not solely determined by a financial calculus. Both the adequacy of provision and what is required for proper maintenance, education or advancement in life requires a more holistic assessment of all the plaintiff’s circumstances, the size and nature of the estate, the relationship between the plaintiff and the deceased, and the relationship between the deceased and others who have some claim for testamentary recognition.

In my respectful opinion, Mr Glissan’s argument gave far too much primacy to a financial analysis alone. Mr Glissan’s essential point was that Craig and Veronika had approximately $400,000 in superannuation which they were able to access. With the approximately $100,000 that Craig would receive from the estate and $89,000 from their superannuation, Craig and Veronika could pay off their mortgage. This would leave them with a house worth $800,000 and superannuation of $311,000, and would leave them, as Craig accepted in cross- examination “comfortable”. While there was very little evidence about the price of homes in Wagga Wagga, Mr Glissan submitted that $800,000 could buy a suitable home in Wagga Wagga. While ultimately not relevant to the outcome, the Court accepts Mr Glissan’s submission that the evidence did not support Craig and Veronika needing a four bedroom home. However, they have demonstrated a need for a three bedroom home because Dominic currently lives with them and they would like to have a spare bedroom for visits from other family members.

There are difficulties both of principle and, in this case, practice in the approach urged upon the Court by Mr Glissan.

It is common in family provision cases for plaintiffs to be cross-examined with a view to eliciting a concession that if they were to receive $X then they would accept that they would be “comfortable” or a word to similar effect. Such evidence will always be relevant in addressing questions of whether provision is “adequate” and “proper”. However, too frequently such concessions are presented in argument as dispositive against the plaintiff’s case. In some cases, they may be.

However, such an answer does not absolve the Court from considering all of the relevant circumstances, of which such a concession will only be one such circumstance. As was observed in Vigolo (quoted in [41] above) “adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably” (emphasis added). Just as the operation of the Act does not favour the grasping claimant, nor does it exclude the stoic. In other words, I accept Mr Locke’s submission that even where a plaintiff, who to their credit may just be stoic, accepts that a particular amount of provision may leave them “comfortable”, that plaintiff’s subjective assessment does not automatically answer the Court’s enquiry on both “adequate” and “proper” unfavourably to the plaintiff.

Apart from this difficulty in principle, there is a practical difficulty with the assumptions underlying the cross-examination which I have set out in [49] above. As the parties acknowledged, the Court must make its assessment of both “adequate” and “proper” at the time of the hearing by reference to the facts then known. Among the facts known to the Court are the consequences for the parties of the legal costs that have been incurred. The first step in Mr Glissan’s analysis is that Craig will receive approximately $100,000. That will only occur if he fails in these proceedings. He will then necessarily be left with the liability to meet his own legal fees ($150,000) together with, almost certainly, a liability to pay the estate’s costs on the ordinary basis (which the Court estimates at $65,000 given indemnity costs were deposed to be $96,000 with a two day hearing).

Assuming the combined superannuation of approximately $400,000 supplemented by the $100,000 from the estate, from that $500,000 would have to be deducted a liability for his own ($150,000) and the estate’s ($65,000) legal fees totalling $215,000. This would leave $285,000 in combined superannuation. Following the of logic Mr Glissan’s submission, if Craig were to pay off his mortgage ($189,000), he and his wife would be left with a combined superannuation balance of $96,000. Alternatively, Craig would still be left paying off a mortgage of $189,000 (which would entail continuing to work) and have combined superannuation of $285,000. Either outcome demonstrates, in my respectful opinion, that approximately $100,000 was not adequate provision for Craig’s proper maintenance and advancement in life as a faithful 70 year old only son, including when the claims of the other beneficiaries are taken into account.

In reaching this conclusion I have weighed the following factors:

As is often the case, the same factors which have satisfied the Court that the jurisdiction to make a family provision order has been engaged are relevant to what provision should be made (noting the non-prescriptive list in s 60(2) of the Act). Having regard to the size of the estate and the desirability of attempting, as far as possible, to respect Alfred’s intention to benefit his grandchildren, I do not accept Mr Locke’s submission that a total amount of provision of $320,000 should be made for Craig’s maintenance and advancement. It will be apparent from the preceding paragraphs, in particular by reference to the factors I have identified in [61] above, that the Court concludes that the provision which ought to be made for Craig, and which Alfred ought to have made as a wise and just testator, is such that will allow Craig to discharge his mortgage without recourse to his superannuation. This will enable him to retire with secure unencumbered accommodation and maintain the superannuation which he has with his wife to fund their retirement, including to meet any contingencies. In reaching this conclusion I have also taken into account that he will continue to receive his DVA pension. This outcome should also enable them to sell the Yerrinbool property and buy an unencumbered 3 bedroom home in Wagga Wagga if they wish to do so.

Accordingly, the Court is of the view that Craig should receive that amount of further provision from the residue of the estate as would give him $189,000. This outcome assumes that Craig’s costs on the ordinary basis will be borne by the estate and that provision over and above what he would otherwise receive from the residue to achieve $189,000 will be borne rateably by the other beneficiaries including Deborah.

This outcome should leave an amount available for Deborah and each of Alfred’s grandchildren. By way of example (with rounded figures for simplicity), using the figures currently available to the Court, this can be demonstrated in three stages by reference to the following table (using rounded figures).

During the course of argument I raised with counsel whether there was any authority for how, if at all, the impact of a plaintiff’s costs on the available distributable estate might be relevant to answering the jurisdictional question. While this judgment was reserved, Mr Glissan helpfully drew the Court’s attention to the judgment of Hallen J in Page v Hull-Moody [2020] NSWSC 411 at [62] to [79]. That judgment has some similarity to the case at bar, including a plaintiff who had received benefits in the testator’s lifetime and under the will, and involving the testator’s children and grandchildren.

The matter which concerned his Honour in that case was the amount of costs incurred by each party in what was a small estate. His Honour’s concern was exacerbated by the fact that counsel sought additional provision for his client of $50,000 when the parties’ joint legal expenses were $150,000. His Honour expressed the view (at [77]) that it would be “a wholly unsatisfactory outcome” if the legal costs incurred in the proceedings were three times the amount of provision to be ordered.

The Court makes five observations with the benefit of Page.

First, a critical part of his Honour’s reasoning in that case in dismissing the plaintiff’s claim was:

That is not this case. The agreed figures in column A of the table in [64] above include a rateable reduction representing the estate’s costs of these proceedings of $96,000. If these are added back in, Craig’s legacy would increase to $120,456. This amount would still not allow Craig to discharge his mortgage debt without depleting his joint superannuation. It is for that discharge without recourse to superannuation which the Court has concluded a wise and just testator in Alfred’s position ought to have provided.

Second, experienced counsel, in response to the Court’s enquiry before the hearing as to the amount of provision for which Craig contended having regard to counsel’s view as to the amount which was properly maintainable, advocated for total provision of $320,000. In a notoriously discretionary area such as family provision, it cannot be said that was not open to Craig, notwithstanding that he has not succeeded to that extent.

Third, I respectfully agree with, and share, Hallen J’s concern about both the absolute amount of costs incurred by parties in family provision cases and the issue of the proportionality of those costs to the result achieved. Especially in cases where a plaintiff does receive something under a will it is essential that some effort is made before proceedings are commenced to consider how much more, and at what cost personally and usually to the estate, a plaintiff is likely to receive if proceedings are prosecuted to their conclusion. However, I also accept that in many family provision cases this is more easily said than done.

Fourth, in my respectful view, the costs of both parties in this case are at the upper end of what I would, prima facie, consider appropriate in a dispute over an estate of this size, with affidavits easily accommodated in one lever arch folder, and a hearing of one day. However, I express this view tentatively because much happens entirely properly in the reasonable preparation of cases which the Court does not see. In the absence of an application for a cost capping order, the remedy available to the parties in relation to costs is assessment of inter partes costs or assessment of their own solicitor client costs.

Fifth, given both the prima facie view expressed in the preceding paragraph and the fact that the Court has taken into account (as is usual in these cases) the likely costs outcomes in reaching its conclusion, I urge the parties to do whatever they can to minimise further legal expenditure by endeavouring to agree the costs orders to be made in these proceedings.

The parties will be given an opportunity to bring in short minutes to give effect to these reasons and to make any submissions as to costs to the extent that issue cannot be agreed.