Smith v Johnson

1. [1]

   MACFARLAN JA: I agree with Sackville AJA.

2. [2]

   WARD JA: I agree with Sackville AJA and with the orders his Honour has proposed.

3. [3]

   As Sackville AJA has concluded, the evidence did not establish a need for a two bedroom apartment and hence there was a material error of fact that vitiated the determination made by the primary judge for the award of provision for Andrew in lieu of that provided under his mother’s will.

4. [4]

   In the re-exercise of the discretionary judgment required to be undertaken by this Court, I agree, for the reasons that Sackville AJA has given, that the will made adequate provision for Andrew’s proper maintenance and advancement in life. I add that, had I been of the contrary view, I would not have considered that anything more than the forgiveness of Andrew’s liability to the estate for the $31,000 interest debt was warranted.

5. [5]

   By way of general observation I note that Andrew’s conduct has diminished the value of the estate, has dissipated his assets and has no doubt caused his family much grief. To the extent that he has chosen, in effect, to fritter away in ill-advised litigation that which would otherwise have come to him by way of inheritance under his mother’s will, the position in which he finds himself is wholly of his own making. Community expectations as to the provision to be made for adult children would not, in my view, extend to the making of provision over and above that which Mrs Johnson made for her son and which, absent any further forays into the litigious sphere, should enable him to acquire accommodation adequate for his needs with a buffer for his ongoing needs.

6. [6]

   SACKVILLE AJA: The appellants are two of the three adult children of the late Frances Madge Johnson (Mrs Johnson), who died on 12 September 2012 at the age of 87. The appellants have obtained a grant of Letters of Administration with the will made by Mrs Johnson annexed. They appeal against orders made by a Judge of the Equity Division (Kunc J) under Chapter 3 of the Succession Act 2006 (NSW) (Succession Act), for further provision out of Mrs Johnson’s estate in favour of her third adult child, the respondent. [1]

7. [7]

   I refer to the parties and other family members (other than Mrs Johnson) by their first names, without intending any disrespect. Accordingly, I refer to the appellants, respectively, as Karen and David and to the respondent as Andrew.

8. [8]

   Mrs Johnson made her will on 5 January 1962 (Will), 50 years before her death. She appointed her husband, Andrew Snr, to be the sole executor of her estate and named him as the beneficiary of her whole estate. Andrew Snr died on 5 July 2007. Thus the substitutional gift in the Will came into effect. This left Mrs Johnson’s estate to the three children in equal shares.

9. [9]

   The value of Mrs Johnson’s estate at her death was agreed to be about $2,337,000. Each of the three children has received an interim distribution from the estate of $406,312.93, a total interim distribution of approximately $1,219,000. However, Andrew’s distribution was offset against debts due by him to the estate so that he did not receive any cash payment.

10. [10]

    The orders made by the primary Judge provided for Andrew to receive, in lieu of the provisions made for him under the Will:

Statutory Framework

1. [11]

   Part 3.2 of the Succession Act provides for family provision orders. An “eligible person” may apply to the Court for a family provision order in respect of the estate of a deceased person. [2] An eligible person includes a child of the deceased and a person who was wholly or partly dependent on the deceased and who was a member of the deceased’s household. [3]

2. [12]

   Sections 59 and 60 of the Succession Act relevantly provide as follows:

The Estate

1. [13]

   Mrs Johnson’s estate at her death comprised mainly term deposits, the family home having been sold some years earlier because Mrs Johnson had been placed in a nursing home in 2008. However, assets of the estate also included debts due by Andrew to the estate amounting to about $480,000. These debts arose out of costs orders made against Andrew in intra-family litigation in which he had been involved.

2. [14]

   By the date of the hearing, Andrew’s indebtedness to the estate had been reduced by the set off of the interim distribution from the estate and by applying a portion of a family provision order Andrew had obtained from the estate of Andrew Snr. [4] The primary Judge found that the value of assets in the estate at the date of the hearing was approximately $956,000, comprising:

3. [15]

   At the date of the trial, the estate had incurred costs of approximately $72,000 in relation to Andrew’s Succession Act claim. Andrew’s costs, on a solicitor and client basis, were estimated at $155,000.

4. [16]

   The primary Judge noted that if the appellants’ costs of Andrew’s Succession Act claim were deducted from the estate, there would be a balance of $884,000 ($956,000 less $72,000). [5] If Andrew received one third of that amount and no costs orders were made in his favour, he would receive a cash distribution of approximately $294,000. In that situation, he would not be relieved of his debt of $31,000 due to the estate and would be required to meet his own costs of $155,000.

5. [17]

   His Honour calculated that if Andrew’s own costs were paid out of the estate, but on the ordinary basis, the balance of the estate would amount to $768,000 ($884,000 less $116,000, the latter figure presumably being his Honour’s estimate of Andrew’s costs assessed on the ordinary basis). [6] If Andrew were to receive a distribution of one third of this sum, he would be paid approximately $256,000. Unless relieved of his indebtedness to the estate, he would remain liable to repay the sum of $31,000 to the estate. He would have to meet the balance of his solicitor and client costs, apparently amounting to about $39,000.

6. [18]

   The effect of the primary Judge’s orders is that Andrew is to receive a legacy of $500,000 in lieu of his remaining entitlement under the Will and is also to be forgiven the debt of $31,000 he owes to the estate. The balance of the estate is therefore reduced to $237,000 ($768,000 less $531,000). The total benefit accruing to Andrew from the estate if the orders remain in place is $937,312.93 ($500,000.00 plus $406,312.93 plus $31,000.00). However, $437,312.93 of this amount has been applied in reduction of Andrew’s indebtedness to the estate. Under the primary Judge’s orders, Andrew’s costs are to be paid out of the estate on the ordinary basis, but he would have to pay the balance of his solicitor and client costs out of the legacy of $500,000.

The Parties

1. [19]

   Andrew was born in 1962. The primary Judge found that Andrew has never held a job for more than a short period and has not had any form of gainful employment since 2000. He has been “dogged by personality and psychiatric difficulties” that have impaired his adult life.

2. [20]

   Andrew always lived with his parents, who met his living expenses. Andrew’s parents supported him in various unsuccessful business ventures, giving him well over $300,000 for the purpose. Andrew lived in his parents’ home rent free until May 2011.

3. [21]

   As Mrs Johnson’s mental and physical health declined from about 2004, Andrew became her principal carer. From 2006, he received a Centrelink carer’s allowance. His Honour found that Andrew’s role as carer became single-minded to the point of obsessiveness, resulting in the protracted litigation involving the family.

4. [22]

   The primary Judge summarised Andrew’s position at the trial in rather stark terms: [7]

5. [23]

   Karen was aged 55 at the date of the hearing. She has been married to Michael, aged 60 at the date of the trial, since 1985. Karen and Michael have three adult children.

6. [24]

   The primary Judge found that Karen and Michael had unencumbered joint assets, primarily their home in Bellevue Hill, valued at about $1,100,000. Michael had assets, mostly superannuation, of $800,000. In 2014, he received $208,000 from his late father’s estate, with an expectation of a further $560,000. Karen retained about $350,000 of the interim distribution made to her from Mrs Johnson’s estate.

7. [25]

   Karen, Michael and the members of their immediate family are in good health.

8. [26]

   David was 54 at the hearing. He is divorced and has two teenage children who mostly live with him. He suffers from colour blindness, dyslexia and sciatica.

9. [27]

   David owns his own home valued at $1,400,000. He applied his share of the interim distribution to discharge debts, including his home mortgage.

10. [28]

    David took redundancy in 2008 and has not been employed since. He does some handyman and contract work, but most of his modest income is derived from renting out the bottom half of his home.

The Litigation

1. [29]

   Andrew Snr died intestate on 5 July 2007. Andrew lodged a caveat on 12 March 2008, requiring that no grant of administration of the estate be made without notice to him. Karen brought proceedings in the Equity Division that resulted in her receiving a grant of Letters of Administration of the estate on 4 March 2009. [8]

2. [30]

   In 2007, the Guardianship Tribunal appointed the Public Trustee as Mrs Johnson’s guardian. On 6 July 2009, Palmer J rejected an application by Andrew to have himself appointed as the financial manager of his mother’s affairs in place of Karen. [9]

3. [31]

   In the meantime, on 11 April 2008, Mrs Johnson, by Karen as her tutor, commenced proceedings against Andrew. In effect, Mrs Johnson sought declarations and orders requiring Andrew to return the proceeds of two cheques totalling $540,000 signed by Mrs Johnson on 17 May 2007. One cheque was made payable to Andrew and Andrew Snr, and the other was made payable to Andrew alone. By the time the proceedings were instituted Andrew Snr had died.

4. [32]

   The “money case”, as the parties described it, was heard over five days, from 18 to 22 May 2009. Mrs Johnson was represented by senior counsel. Andrew was unrepresented at the hearing, although he had previously been represented in the proceedings.

5. [33]

   In a judgment delivered on 9 June 2009, [10] Forster J held that Mrs Johnson was entitled to rely on the principles of “catching bargains” to recoup the moneys. His Honour gave these reasons for his conclusion: [11]

6. [34]

   Forster J declared that the proceeds of certain bank accounts in Andrew’s name were held in trust for Mrs Johnson. Judgment was also given for Mrs Johnson against Andrew in the sum of $100,055.18, being damages by reason of his conduct in spending some of the funds on himself. Andrew was subsequently ordered to pay Mrs Johnson’s costs of the proceedings.

7. [35]

   Andrew unsuccessfully appealed to the Court of Appeal against Forster J’s decision. [12] He then unsuccessfully applied for leave to appeal to the High Court. [13]

8. [36]

   Following contested costs assessments, Andrew was required to pay $336,879 in costs in respect of the money case decided by Forster J and costs of $106,318.59 in respect of his unsuccessful appeal to the Court of Appeal.

9. [37]

   On 31 January 2008, Andrew applied for a family provision order out of the estate of Andrew Snr. The actual estate was quite small because Andrew Snr’s principal asset was the jointly owned matrimonial home, which had passed on his death to Mrs Johnson by right of survivorship. By an amended summons filed on 15 December 2009, Andrew sought a declaration as to the extent of Andrew Snr’s notional estate that could be the subject of a family provision order.

10. [38]

    In a judgment delivered on 16 March 2010 in the family provision proceedings, Macready AsJ noted that Andrew had “obvious needs” if the home was sold, specifically for accommodation and for funds to meet his liabilities. [14] As Andrew had not put forward any evidence of the cost of alternative accommodation, Macready AsJ considered that the only approach was to award a capital sum which might assist Andrew with rented accommodation. His Honour ordered that Andrew receive a legacy of $400,000 payable out of Andrew Snr’s notional estate, being property of Mrs Johnson. His Honour directed that up to $200,000 of this sum could be offset against Andrew’s indebtedness to Mrs Johnson and that the balance should be paid to him.

11. [39]

    On 16 November 2010, Andrew commenced proceedings in the Equity Division seeking orders for a statutory will to be made on behalf of Mrs Johnson. The proceedings were defended by the New South Wales Trustee and Guardian, who authorised Karen as Mrs Johnson’s financial manager to protect her interests. The application was dismissed on 20 July 2011 and Andrew was subsequently ordered to pay costs. [15] Andrew apparently paid $27,860.00 on 11 October 2013 in settlement of the costs order.

12. [40]

    Andrew continued to live in his parents’ former matrimonial home after Mrs Johnson had been placed in a nursing home. In 2011, Mrs Johnson, again by her tutor Karen, commenced proceedings against Andrew seeking an order for possession of the former matrimonial home at Lindfield. The proceedings were discontinued on 12 May 2011, when Andrew vacated the Lindfield property. The property was subsequently sold.

13. [41]

    Although the primary Judge made no reference to criminal complaints made by Andrew, it appears that he made several unsuccessful attempts to have Karen charged with criminal offences. There is no material suggesting that these complaints had any substance.

The Primary Judgment

1. [42]

   The primary Judge recounted the history of the litigation in which Andrew had been involved. His Honour found [16] that as a result of the various costs orders Andrew owed Mrs Johnson’s estate $480,305.08, plus interest. This debt had been paid partly through the offset from the family provision order made out of Andrew Snr’s notional estate and partly through the offset from the interim distribution out of Mrs Johnson’s estate. The debt of $31,000 owed by Andrew to Mrs Johnson’s estate at the date of the hearing represented unpaid interest. [17]

2. [43]

   His Honour said that, in practical terms, the litigation: [18]

3. [44]

   The primary Judge found that the provision made in the Will was not adequate for Andrew’s proper maintenance, education or advancement in life. [19] His Honour’s reasons, in summary, were as follows: [20]

4. [45]

   In determining what provision should be made for Andrew, his needs had to be taken into account. He needed his own accommodation, a sum for discretionary expenditure and a “buffer against vicissitudes”. [21]

5. [46]

   His Honour referred to each of the matters identified in s 60(2) of the Succession Act. In doing so, he made the following observations: [22]

6. [47]

   The primary Judge was satisfied “that sufficient, but not over generous provision should be made for Andrew” to meet the needs previously identified. His Honour dealt with Andrew’s need for accommodation as follows: [26]

7. [48]

   The primary Judge considered that an allowance of $30,000 should be made to cover dental work and medical treatment, the purchase of a second hand car and limited discretionary spending. In addition, his Honour allowed $90,000 for vicissitudes, for these reasons: [27]

8. [49]

   Finally, the primary Judge addressed what he described as the “ultimate discretion” as to whether an order should be made. Notwithstanding the submission put on behalf of the appellants that Andrew’s predicament was his own fault, his Honour was satisfied that the matters to which he had previously referred justified exercising the discretion in Andrew’s favour. He added this observation: [28]

9. [50]

   For these reasons, the primary Judge concluded that an order should be made having the effect that Andrew would receive $500,000 “in hand”. In addition, Andrew’s remaining debt to the estate would be forgiven.

Grounds of Appeal

1. [51]

   The appellants’ notice of appeal contained six grounds, as follows:

Submissions

1. [52]

   Mr Ellison SC, who appeared with Ms Bennett for the appellants, accepted that the primary Judge’s decision involved the exercise of discretion and could be set aside only if the discretion had miscarried. He also accepted that the primary Judge’s statement of the principles relevant to a claim by an adult son was unexceptionable. He submitted, however, that the result reached by the primary Judge was so unreasonable or unjust as to bespeak error. Mr Ellison supported the submission that the primary Judge’s discretion had miscarried by reference to Grounds 2-6 in the Notice of Appeal.

2. [53]

   Mr Ellison’s starting point, reflected in Ground 3 of the Notice of Appeal, was that it was Andrew’s conduct that was responsible for reducing the net value of the estate. Had there been no litigation, so Mr Ellison contended, the estate would have been enlarged by about $1,000,000 and Andrew would have received one third of that amount in addition to other distributions under the Will. Had that occurred, no finding could have been made that the Will had not made proper and adequate provision for Andrew’s maintenance and advancement in life. Mr Ellison also referred to evidence suggesting that the estate had been depleted by about $183,000 in irrecoverable costs incurred in pursuing the money case against Andrew (including the appeal and what was said to be an unusually complex costs assessment) and in defending the statutory will case brought by Andrew.

3. [54]

   Mr Ellison submitted that the primary Judge incorrectly disregarded the interim distribution received by Andrew. While the interim distribution produced no moneys in Andrew’s hands, it represented a benefit to him in that it allowed him to become very nearly debt free.

4. [55]

   Mr Ellison contended that the primary Judge’s finding that Mrs Johnson had manifested a testamentary intention (although not in the Will) that she wanted each child to be set up as well as could be done travelled beyond the legislative regime. In any event, but for Andrew’s conduct, he could have had more than adequate accommodation.

5. [56]

   Mr Ellison’s written submissions contended that the primary Judge should not have awarded Andrew an amount determined by the cost of purchasing a two bedroom unit. Andrew had sufficient resources available to him from the yet to be distributed estate to purchase a one bedroom unit in an area in which he was prepared to live. There was no evidentiary basis for a finding that Andrew needed a two bedroom unit in order to have satisfactory accommodation.

6. [57]

   Mr Ellison submitted that the primary Judge should have found that Andrew was determined to deplete Mrs Johnson’s estate and conducted litigation in a way designed to bring about that result. Apart from the litigation Andrew initiated, his conduct in appropriating $540,000 from Mrs Johnson’s bank account was a deliberate act which caused economic harm to Mrs Johnson and, after her death, to her estate.

7. [58]

   Mr Lawrence, who appeared for Andrew, submitted that the primary Judge had correctly stated the principles and that he had not committed any error that would vitiate the exercise of his discretion. Mr Lawrence contended that the primary Judge’s assessment of Andrew’s needs was not so unreasonable or unjust as to require the intervention of this Court.

Reasoning

1. [59]

   The primary Judge in the present case adopted what has usually been described as a “two stage process”. He first considered whether the Will had not made adequate provision for Andrew’s proper maintenance and advancement in life and answered that question “yes”. [29] His Honour then considered what provision should be made for Andrew having regard to the matters identified in s 60(2) of the Succession Act and concluded that the appropriate provision “in hand” was $500,000.

2. [60]

   Different views have been expressed as to whether a two stage approach continues to be mandatory or even appropriate under the Succession Act, having regard to the differences in the current statutory language compared with the Family Provision Act 1982 (NSW). [30] The parties in the present case appeared content with the primary Judge’s approach and neither suggested that his Honour had erred in taking that approach.

3. [61]

   The parties also agreed that both determinations made by the primary Judge involved evaluative assessments to which the principles governing appellate review of discretionary decisions apply. It follows that the appellants, in order to set aside the primary Judge’s determinations, must show: [31]

4. [62]

   The primary Judge followed the general principles stated by Hallen J in Camernik v Reholc [32] as applicable to a family provision claim by an adult child. The parties to the present appeal did not challenge the correctness of those principles, which have been referred to with approval in this Court. [33] The relevant passage in Hallen J’s judgment is as follows:

5. [63]

   Mr Ellison’s principal contention, in substance, was that the primary Judge should have found that Andrew had brought on himself his financial difficulties and that his conduct had unjustifiably diminished Mrs Johnson’s estate. According to Mr Ellison, his Honour’s failure to make these findings vitiated his conclusion that the Will did not make adequate provision for Andrew’s proper maintenance and advancement in life. This contention covered Grounds 2 and 3 of the Notice of Appeal.

6. [64]

   The contention has some force. Andrew’s conduct in causing his mother to give away $540,000 necessitated what became protracted and disproportionately expensive litigation to retrieve the funds. While the funds were ultimately recovered and Andrew was required to pay Mrs Johnson’s costs of the proceedings, as Mr Ellison pointed out the estate was diminished by the difference between the costs recovered from Andrew and the solicitor and client costs incurred on Mrs Johnson’s behalf. To the extent that the litigation, including the unsuccessful appeals, can be attributed to Andrew’s conduct, it caused him to be hundreds of thousands of dollars worse off than if he had never taken the money or if he had not resisted the demand to repay it. Moreover, the primary Judge found that Andrew made a deliberate decision to use most of the funds obtained from his father’s notional estate to pay for lawyers in subsequent legal proceedings, rather than to acquire the accommodation he needed.

7. [65]

   Nonetheless, there is a difficulty with the appellants’ submissions in that they do not distinguish between the various aspects of Andrew’s conduct. The litigation Andrew initiated, although undoubtedly burdensome and distressing to his siblings, had a relatively modest impact on the value of Mrs Johnson’s estate. The litigation appears to have had a considerably greater impact on Andrew’s own financial position, notably by consuming the greater portion of the funds released to him under the orders made in his family provision claim against his father’s estate. However, the most substantial contribution to Andrew’s parlous financial position at the date of the trial was the liability of about $448,000 he incurred to Mrs Johnson in consequence of his unsuccessful defence of the money case.

8. [66]

   The primary Judge implicitly accepted that if Andrew’s conduct as a litigant had been malicious or deliberately designed to inflect economic harm to his mother’s estate or other beneficiaries, it may have been appropriate to refuse to make a family provision order in Andrew’s favour. But his Honour found that Andrew’s conduct:

9. [67]

   In his oral submissions, Mr Ellison suggested that since Andrew had given instructions in the litigation he commenced and sometimes acted on his own behalf in that litigation, he should be held responsible for the financial consequences of that litigation. This, in my view, is not a sound criticism of the primary Judge’s findings. His Honour referred to evidence indicating that Andrew suffered from a serious and permanent psychiatric condition that influenced his propensity for litigation, as well as rendering him unfit for employment. Just as physical disabilities can and should be taken into account in assessing the needs of a claimant seeking a family provision order, it can hardly be an error to take into account psychiatric disabilities. The evidence amply supported his Honour’s findings as to the underlying causes of Andrew’s behaviour in obsessively pursuing futile litigation.

10. [68]

    The primary Judge’s conclusion that Andrew’s conduct in initiating and pursuing litigation was not a basis for declining to make a family provision order did not involve any misapprehension of the evidence or any other discretionary error. The primary Judge fully appreciated that Andrew’s actions in initiating litigation had contributed to his financial difficulties. However, his Honour attributed Andrew’s conduct to his psychiatric condition and concluded that it was not malicious or deliberately designed to conflict economic harm on others. In these circumstances, the primary Judge was entitled to assess Andrew’s needs and the adequacy of the provisions under the Will by reference to his financial circumstances at the date of the trial, without holding him responsible for the adverse financial consequences of the litigation he initiated.

11. [69]

    Andrew’s conduct, insofar as he influenced his mother to write the two cheques and resisted the claim to repay the money, involves different considerations. Andrew did not initiate the money case, but his actions triggered the need for litigation to recoup the funds. The primary Judge did not find that Andrew’s psychiatric condition caused him to persuade his mother to hand over $540,000. His Honour did rely, however, on Forster J’s refusal to impute immoral or dishonest motives to Andrew, even though Andrew used a significant proportion of the funds for his own purposes.

12. [70]

    Perhaps not all decision-makers would have given so little weight to Andrew’s conduct in taking money from his mother as did the primary Judge. But the primary Judge was clearly aware of and took account of Andrew’s actions in causing Mrs Johnson to pay over $540,000 and in using some of the money for his own purposes. I do not think it can be said that his Honour made a material error of fact or failed to take into account that Andrew’s liability to pay costs reduced his own assets and that his conduct diminished, to some extent, the value of Mrs Johnson’s estate. While the costs generated by the money case appear to be grossly disproportionate to the amount at stake, there was no evidence that Andrew’s conduct of the proceedings was responsible for inflating the costs. I do not think that there is any substance in the appellants’ challenge to the primary Judge’s finding that Andrew’s conduct as a litigant was not malicious or in bad faith (Ground 6). Karen gave evidence that Andrew had made a statement to her suggesting that he was content for the estate to be eaten up in legal costs. But Andrew denied making the statement and he was not cross-examined on his denial. While Mr Ellison submitted that the manner in which Andrew conducted the litigation warranted an inference that he was motivated by malice, the Court was not taken to evidence of conduct of this kind.

13. [71]

    For these reasons, I consider that the appellants have not demonstrated any error in his Honour’s finding that Andrew’s conduct in relation to the cheques and the subsequent litigation involved an error that vitiated his Honour’s discretionary judgment.

14. [72]

    Mr Ellison’s challenge to the primary Judge’s finding as to Mrs Johnson’s testamentary intentions (Ground 4) appears to rest on the proposition that the only relevant expression of intention was in the Will. Section 60(2)(j) expressly states that the Court may take into account “any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person” on the question of whether to make a family provision order and the nature of any such order. The statutory language permitted the primary Judge to take into account Mrs Johnson’s expression of testamentary intention, even though not incorporated in a properly executed will.

15. [73]

    The primary Judge recognised that, by reason of s 60(1)(b) and (2)(d) of the Succession Act, Andrew’s financial resources and financial needs were important considerations in determining whether a family provision order should be made in his favour and, if so, the nature of any such order. As has been seen, his Honour’s determination that Andrew’s indebtedness to the estate had to be taken into account in assessing his financial position at the date of the hearing did not involve an appellable error.

16. [74]

    The appellants’ challenge, in Ground 5 of the Notice of Appeal, to the primary Judge’s assessment of Andrew’s financial needs raises separate issues. His Honour found that Andrew’s needs included “a modest two bedroom unit in Western Sydney (including transaction and moving costs).” [34] On the basis of evidence suggesting that the cost of such a unit was between $270,000 and $425,000, his Honour considered that Andrew’s needs justified an allowance of $380,000 for the purchase of suitable accommodation.

17. [75]

    The primary Judge was not necessarily obliged to assess Andrew’s financial needs by considering the cost of acquiring suitable accommodation separately from Andrew’s other needs. However, his Honour took that course. Accordingly, the finding as to Andrew’s accommodation requirements played a significant part in his Honour’s conclusion that the Will did not make adequate provision for Andrew’s proper maintenance and advancement in life. The finding also played an important part in his Honour’s conclusion that Andrew should receive further provision of $500,000 “in hand”. [35]

18. [76]

    The primary Judge pointed out, correctly, that Andrew’s financial and personal circumstances were worse than those of his siblings. [36] His Honour considered that unless Andrew received further provision from the estate, he would have an amount sufficient to pay for only a basic studio or one bedroom unit in western Sydney and a second hand car, with little or no capital to act as a “buffer”. [37] In making this assessment, his Honour appears to have assumed that, in the absence of a family provision order, Andrew would receive $256,000 as the balance of his entitlement under the Will. [38] On the primary Judge’s calculations, if Andrew had not made a claim under the Succession Act, the balance of his entitlement under the Will would have been approximately $319,000 “in hand”, from which he would have had to pay the estate the debt of $31,000. [39]

19. [77]

    The appellants submitted to the primary Judge that a studio apartment outside Sydney was adequate for Andrew’s needs, while Andrew argued for a two bedroom apartment in the Lindfield area. In allowing $380,000 for the purchase of accommodation the primary Judge took what he described as a “middle” course. [40] However, he acted on Andrew’s concession in evidence that if a suitable one or two bedroom unit could be found in St Mary’s, where a friend of his had a house, he could live in that vicinity.

20. [78]

    The evidentiary basis for the finding that Andrew needed a two bedroom apartment, as distinct from a one bedroom apartment, is elusive. In his evidence in chief, Andrew said that immediately before the hearing he had carried out searches of property websites covering the Lindfield area. He said that a two bedroom unit in Lindfield, for sale at about $650,000, would be suitable for his requirements. He rejected as unsuitable a one-bedroom unit in the same area priced at $699,000 because he would

21. [79]

    The primary Judge found that Andrew’s aspirations to undertake study and seek employment, although sincerely expressed, were unrealistic having regard to permanent psychiatric conditions and his work history. [41] Specifically his Honour considered that Andrew has “no real prospects of finding employment”. [42] No doubt for this reason, his Honour did not attribute Andrew’s need for a two bedroom apartment to any work or study requirements. Rather, he found that the need for an additional bedroom arose from Andrew’s interest in West Papua and the desirability of having a “separate combined workspace and visitor bedroom if required”. [43]

22. [80]

    Mr Lawrence, who appeared for Andrew, was invited to identify the evidentiary basis for this finding, but he referred only to Andrew’s evidence in chief. In that evidence, Andrew said nothing about requiring a second bedroom as guest accommodation. No other evidence was drawn to our attention suggesting that Andrew had any such need.

23. [81]

    The primary Judge’s reference to Andrew’s interest in West Papua seems to be based on Andrew’s affidavit evidence that he had used a guest room in his parents’ home to pursue his interest in the decolonisation of West Papua. He did not explain why he required a separate room to pursue his interest, other than by an assertion that his “lobby and advocacy activities” were incompatible with a restriction of space. His vague evidence as to the nature of those activities does not demonstrate any incompatibility or that he could not carry on those activities in a conventionally designed one-bedroom unit.

24. [82]

    Andrew’s vagueness about the extent of his involvement in West Papua was evident in his cross-examination. When asked how much time per week he had spent in 2014 on the West Papua issue he said he did not know. When asked when he had last turned his mind to the issue, he said he had done so the previous week but did not explain what, if any, activity he had undertaken. He volunteered in his evidence that he was functional only for “a couple of hours in the day” and that in the past seven years he had devoted the bulk of his time “to try to find some sort of [legal] remedy”, presumably for his own difficulties.

25. [83]

    In my opinion, the evidence does not support the primary Judge’s assessment that Andrew’s “financial needs” at the date of the hearing included a need for sufficient funds to enable him to purchase a two bedroom unit. No doubt there will be cases where an applicant who has no family responsibilities and no prospects of paid employment requires more space than is provided by a one bedroom unit. But the evidence in this case did not establish that Andrew’s circumstances created a need for anything other than a reasonably appointed one bedroom unit in the St Mary’s area. Specifically, the evidence did not show that Andrew had existing or foreseeable family responsibilities or work or other commitments that created a need for a two bedroom unit.

26. [84]

    I acknowledge that the assessment of an applicant’s needs is not a mechanical process. In Andrew v Andrew, [44] Allsop P observed that “[a]ccepted and acceptable community values permeate or underpin many, if not most, of the individual factors in s 60(2)”. That observation applies to the concept of “financial needs” embodied in s 60(2)(d) of the Succession Act. The needs of a person depend on a range of factors that will vary from case to case. Some of those factors, such as the person’s age and earning capacity, are specifically mentioned in s 60(2). Other factors, such as the person’s financial or non-financial responsibilities to family members, [45] or the standard of living which the deceased encouraged the person to enjoy, are not expressly identified in s 60(2) of the Succession Act.

27. [85]

    Nonetheless, an assessment of needs, particularly where it is directed to such an important matter as the nature and cost of accommodation required by an applicant, must have a sound evidentiary foundation. In my view, the evidence in the present case does not support his Honour’s finding that Andrew required a two bedroom unit. The evidence established that Andrew desired a two bedroom unit, not that he needed anything larger than a one bedroom unit. His Honour therefore made a material error of fact which vitiated both his determination that the Will did not make adequate provision for Andrew’s maintenance or advancement in life and his decision to award Andrew $500,000 “in hand”.

28. [86]

    In view of this conclusion, it is necessary for this Court to exercise its own judgment on the two relevant questions. The first is whether the Court is satisfied that adequate provision for Andrew’s maintenance or advancement in life has not been made by the Will. The second question, assuming the Court is so satisfied, is what order for provision should be made out of Mrs Johnson’s estate for Andrew’s maintenance or advancement in life, having regard to the facts known to the Court. [46] In undertaking these tasks, the Court may take into account the matters identified in s 60(2) of the Succession Act.

29. [87]

    There are several difficulties confronting Andrew. The first is that no evidence was adduced on his behalf as to the cost of a one bedroom unit in the St Mary’s area. The only evidence concerned the sale price of two bedroom units which, as the primary Judge recorded, were being offered at prices ranging from $270,000 to $425,000. The property information in evidence recorded that the median price of units in St Mary’s at about the date of the trial was $260,000. This figure seems to have been the median price for all units, not only one bedroom units.

30. [88]

    It is incumbent on a plaintiff to adduce evidence in support of his or her case. The evidence adduced on Andrew’s behalf was not directed to the question that in my view is the critical one, namely the cost at the relevant time of a reasonably appointed one bedroom unit in St Mary’s. The price of two bedroom units does not provide a reliable guide to the cost of one bedroom units. In the incomplete state of the evidence, I am not prepared to infer that the cost of acquiring a one bedroom unit in the St Mary’s area, including transaction and relocation costs, was any more than $200,000.

31. [89]

    A second difficulty is that I would not take the same view as the primary Judge of Andrew’s conduct in taking money from his mother. That conduct necessitated expensive litigation to recover the moneys. The effect of the litigation was not merely to dissipate Andrew’s assets, but to reduce the size of the estate (because of irrecoverable costs). Like the primary Judge, I accept that Andrew’s conduct should not be characterised as dishonest or immoral. I also accept that a finding should not be made that he unnecessarily prolonged the case by the way in which he conducted his defence. Nonetheless, he was found by the Court to have taken financial advantage of Mrs Johnson and to have used some of the money taken from her for his own purposes. I think that this conduct should be taken into account in answering the question posed by s 60(1) of the Succession Act, not as an expression of disapproval of his conduct, but because he engaged in deliberate conduct that ultimately resulted in a significant diminution of the value of the estate.

32. [90]

    A third difficulty confronting Andrew is that I would regard the figure of $90,000 awarded by the primary Judge as a “buffer” to be somewhat generous. I accept that adequate provision for Andrew’s proper maintenance and advancement in life requires him to have some funds as a “buffer” against the vicissitudes of life, having regard to his psychiatric disabilities and his inability to obtain employment. Recognising that a figure involves an exercise of judgment, I would select a more modest figure in the range of $50,000 to $70,000 as an appropriate normal “buffer”.

33. [91]

    Subject to my observation concerning Andrew’s conduct in taking money from Mrs Johnson, I would assess his needs by reference to his financial position at the trial. I would not “discount” those needs because of his conduct in pursuing litigation against family members or because (as Mr Ellison suggested) he is said to have prolonged the money case.

34. [92]

    It is appropriate to take into account in Andrew’s favour that, as the primary Judge found, the estate, despite the impact of irrecoverable legal costs, is relatively large and Andrew’s financial and personal circumstances are very much worse than those of his siblings. It can be accepted, as Hallen J said in Camernik v Reholc, that in general the community does not expect a parent to look after an adult child for the rest of his or her life. But as Hallen J also said, if the adult child has been dependent on his or her parents and has fallen into hard times through illness (whether physical or psychiatric), community expectations are likely to extend to ensuring that the provision is sufficient to meet the applicant’s basic requirements to avoid destitution.

35. [93]

    I agree with the primary Judge’s view that the adequacy of the provision made in the Will should be assessed by reference to whether the provision is sufficient to enable Andrew to meet his needs, but not on an overly generous basis. I respectfully differ from his Honour essentially because I consider that the evidence establishes that Andrew’s reasonable accommodation needs can be met by a more modest outlay.

36. [94]

    It follows from what I have said that Andrew’s needs, assessed at the date of the trial, required provision for:

37. [95]

    Had Andrew not brought proceedings under the Succession Act, he would have received about $319,000 from the estate, but would have had to repay his interest debt of $31,000. Thus he would have received about $288,000 “in hand”. This is very close to the amount that I consider would have constituted adequate provision for Andrew’s proper maintenance and advancement in life. On this basis, I am not satisfied that the Will did not make adequate provision for Andrew’s proper maintenance and advancement in life. I reach this conclusion independently of his conduct in taking money from Mrs Johnson, but that conduct reinforces my view.

Orders

1. [96]

   For these reasons, I consider that the appeal should be allowed and the orders made by the primary Judge should be set aside. In lieu of those orders, Andrew’s summons should be dismissed.

2. [97]

   In the unusual circumstances of the present case, I would not disturb the costs order made by the primary Judge. If Andrew has to pay the appellant’s costs of the proceedings at first instance he will in all likelihood be prevented from securing his own accommodation. However, he should pay the appellant’s costs of the appeal.

3. [98]

   I propose the following orders: