Strang v Steiner

1. [1]

   MACFARLAN JA: On 12 October 2011 Ms Dorothy Steiner (“the deceased”) died, aged 88. Probate of her last will, dated 7 June 2011, was granted to the appellants. The deceased left a large estate, valued at over $13 million at the time of her death. She left it by detailed testamentary provisions to her three children (John Steiner, Lesley Webster and Robyn Webster), their children and the deceased’s great grandchildren. For convenience, and without intending any disrespect, I shall refer to family members by their first names.

2. [2]

   By summonses filed in the Equity Division, John and Robyn sought orders under s 59 of the Succession Act 2006 (NSW) for provision out of the deceased’s estate for their maintenance, education and advancement in life, additional to the testamentary gifts to them. In John’s proceedings, the appellants sought, by cross-claim, recovery from him of an amount of $881,000 lent to him by the deceased. This loan was the subject of a document entitled “Acknowledgment of Loan” dated 18 December 2007 which stated that the loan could be repaid by offsetting its amount against John’s entitlement as residuary beneficiary of the deceased’s estate. As it has transpired, there is no residuary estate.

3. [3]

   After a substantial hearing before Kunc J, his Honour found, by judgment of 23 April 2018, that additional provision should be ordered for both John and Robyn, including, in the case of John, forgiveness of the debt of $881,000 which his Honour found to be otherwise repayable by John ([2018] NSWSC 495).

4. [4]

   The executors appeal against the orders for additional provision, principally on the grounds that the primary judgment paid insufficient regard to the deceased’s testamentary intentions and that the provision ordered is manifestly excessive.

5. [5]

   With one exception, the appellants do not challenge any of the primary facts found by his Honour in his 168 page judgment of 23 April 2018 or in his 37 page supplementary judgment of 13 September 2018 ([2018] NSWSC 1411). The exception is that they challenge a finding that Robyn did not have the same opportunity as Lesley to share in the considerable value that the family’s businesses came to have over time. The deceased and members of her family were involved over a long period of time in a number of fashion businesses, principally Abbey Bridal and Maggie Sottero Designs LLC, which operated in part in Utah in the United States of America.

6. [6]

   By way of cross-appeal, Robyn’s children and grandchild (other than her child Elizabeth) seek a variation of his Honour’s order that their legacies (and that of Elizabeth) bear the initial burden of the order in favour of Robyn for additional provision. They contend that Lesley’s family should have been ordered to bear that burden.

7. [7]

   For the reasons that appear below, I consider that both the appeals and the cross-appeal should be allowed, with the result that the additional provisions in favour of Robyn and John should be reduced and that Lesley’s family should bear the initial burden of Robyn’s additional provision.

The family members

1. [8]

   John was born in 1945. He has two children, Anthony (born in 1967) and Donna (born in 1968). Anthony does not have any children but Donna has four.

2. [9]

   Lesley was born in 1949 and is married to Wayne Webster Jnr. Lesley has one child, Kelly Midgley, from a previous marriage. Kelly has five children. Lesley is also step-mother to Katrina Peterson.

3. [10]

   Robyn was born in 1951. She has five children. One of them, Wayne Bruce Webster, has a daughter, Madison Webster.

The deceased’s estate

1. [11]

   The deceased’s estate at the date of her death in October 2011 was valued for probate purposes at $13,287,727.28, together with the value of about $850,000 of the estate’s share of assets held in common with others.

2. [12]

   The principal assets and their assigned values were:

3. [13]

   The only liability of the deceased known to the executors was a debt to Lesley’s husband, Wayne Jnr, of about $280,000, in respect of payments made by him at the deceased’s request during her lifetime.

The deceased’s last will

1. [14]

   The deceased made the following specific gifts to or for the benefit of Lesley, her husband or their daughter. Their values as estimated by the executors at the date of their affidavit of 15 May 2017 (that is, five and a half years after the deceased’s death) were:

   1. (1)

      one third interest in East Killara property: $1.37 million;

   2. (2)

      shares in businesses: $6.48 million;

   3. (3)

      interest in bank accounts: $1.45 million.

   4. (4)

      Total: $9.3 million

2. [15]

   The will also provided for legacies to be paid as follows:

   1. (1)

      $2 million to each of Robyn and John;

   2. (2)

      $1.55 million in total to Robyn’s five children and her grandchild;

   3. (3)

      $1.55 million in total to Lesley’s daughter and step-daughter, and her daughter’s five children;

   4. (4)

      $700,000 in total to John’s two children and his four grandchildren.

3. [16]

   The will provided for the residue of the deceased’s estate to be divided between John and Robyn in equal shares as tenants in common.

4. [17]

   The executors’ affidavit of 15 May 2017 valued the estate assets which were not the subject of specific gifts at $5.85 million, plus the debt of $881,000 claimed by the estate from John. By that date, distributions totalling about $0.8 million and $1.34 million had been made by the executors to John and Robyn respectively. The executors estimated the estate’s then liabilities as $0.34 million for payment of costs and expenses of the administration and court proceedings, and payment of the debt due to Wayne Jr.

John’s circumstances

1. [18]

   Over his working life John engaged in a number of different occupations. He suffered severe losses in the share-market during the period 2000 to 2003, in 2006 and in 2008 to 2009. He is no longer able to work. He maintained a close relationship with his mother during her lifetime, with regular contact occurring between them. She gave him considerable support by meeting many of his liabilities and living expenses.

2. [19]

   John suffers from poor health, as does his wife, Lynne, who has not worked for the last 40 years. When John swore his affidavit of 29 November 2016 his son Anthony was living with him and Lynne. Anthony also has severe health problems.

3. [20]

   In his first judgment, the primary judge summarised John’s financial position as follows (at [346] to [350]):

Robyn’s circumstances

1. [21]

   In about November 1974, Robyn and her later-to-be second husband, Larry Webster, commenced operating a business called “The Sugar House”, marketing wedding and evening fashion. Subsequently, the deceased and Lesley also began to work at The Sugar House, which expanded its operations considerably over time. In the mid-1980s, another bridal fashion business, Abbey Bridal, was commenced with the deceased, Robyn and Lesley (amongst others) holding shares. The business was very successful and a related American company, Maggie Sottero, was established. An indicator of the business’ success is to be seen in the growth in its total annual sales from about $7 million in 2000 to over $68 million by 2011. Robyn and Larry were divorced in 1995.

2. [22]

   In 2004 Robyn commenced legal action against Maggie Sottero (that is, effectively against the deceased, Lesley and Wayne Jr), which led to her being bought out of the family businesses for $US 5.5 million.

3. [23]

   The deceased and Robyn had a close and loving relationship with regular telephone and other contact between them. The primary judge found this to be corroborated by the many gifts of substantial sums of money that the deceased made to Robyn. The primary judge concluded (at [460]):

4. [24]

   In his first judgment, the primary judge reached the following conclusions concerning Robyn’s personal and financial circumstances (at [467] to [480]):

Other beneficiaries’ circumstances

1. [25]

   There was no evidence of Lesley’s financial or other circumstances, or of those of her husband, children and grandchildren.

2. [26]

   In his first judgment, the primary judge noted that there was evidence that the combined income of John’s daughter Donna and her husband “sustained their family, without [them] living an ‘affluent lifestyle’” (at [482]). The evidence also showed that they had a surplus of assets over liabilities. There was evidence also of John’s son Anthony’s poor health and limited earning capacity, and of his dependence on John.

3. [27]

   In his first judgment, the primary judge also referred to evidence concerning the financial circumstances of four of Robyn’s five children. There was evidence of financial need in respect of two of them and of modest circumstances in respect of the others.

The principal judgment at first instance

1. [28]

   In determining the claims for orders under the Succession Act, the primary judge expressed the following conclusions which it is necessary to set out in full:

The supplementary judgment at first instance

1. [29]

   After delivery of his principal judgment, the primary judge considered motions, evidence and submissions relating to the following presently relevant topics.

2. [30]

   The primary judge received updating evidence that John’s “Strand Property” referred to in the principal judgment had been sold at the commencement of 2018 and that John’s son, Anthony, no longer lived with John and Lynne. In these circumstances, his Honour concluded that the appropriate provision to be made in respect of John’s accommodation was $500,000, to enable him to buy a modest two bedroom apartment for him and Lynne to occupy in Townsville.

3. [31]

   In his principal judgment, the primary judge concluded that the burden of the additional provision in favour of Robyn should be borne by her family members. Subsequently, his Honour ordered that, at their request, Robyn’s family members (with the exception of Elizabeth) be joined to the proceedings to contest this finding, and be given leave to adduce further evidence as to their financial circumstances. Notwithstanding that their evidence showed that those family members were, to a greater or lesser extent, in financial need and that Lesley’s family members, who were also joined as parties, did not put on evidence of their financial circumstances, his Honour declined to alter the conclusion that he had earlier reached. In this regard, his Honour said at [108]–[109] that he was unable to accept the submission of senior counsel for Robyn’s family as to the starting point of the analysis:

The orders at first instance

1. [32]

   The orders made by the primary judge on 26 September 2018 in John’s proceedings to give effect to his two judgments were, so far as is presently relevant, to the following effect:

   1. (1)

      The Court declared that John was indebted to the deceased in the sum of $881,000 but made an order under the Succession Act for provision to John in the form of forgiveness to John of that debt.

   2. (2)

      As a further addition to the $2 million legacy to John for which the will provided, the Court ordered provision for him by way of payment of a series of debts owed by him to third parties, principally in respect of various court costs. Making estimates of the Australian dollar equivalent of some amounts expressed in $US, the total of the debts was in the order of $2.2 million.

   3. (3)

      The Court ordered further provision for John in the amount $500,000 to enable him to acquire a home unit in Townsville and $200,000 as a contingency fund.

   4. (4)

      The Court ordered that the burden of these additional provisions be borne, first, by the legacies payable to John’s family and, to the extent of any deficiency, by the various specific gifts made by the will to Lesley and her family.

2. [33]

   The Court’s orders of 26 September 2018 in Robyn’s proceedings were relevantly to the following effect:

   1. (1)

      The Court ordered additional provision under the Succession Act for Robyn in the sum of $1.2 million.

   2. (2)

      The Court ordered that the burden of the additional provision be borne, first, by the legacies in favour of Robyn’s family and, secondly, by the various specific gifts made by the will in favour of Lesley and her family.

The parties’ submissions on appeal

1. [34]

   The appellants first contended that the primary judge paid no, or no proper, regard to the testamentary intention of the deceased manifested by her last will, and by a number of previous, similarly detailed, wills. The appellants submitted that the deceased’s wills were “far from simple” and showed “an obvious appreciation of different entitlements by different family members with whom she had different personal and business relationships”. The effect of their submissions was that the deceased’s careful and full statement of her intent as to how her estate should be distributed should not have been disturbed.

2. [35]

   Secondly, they contended that the primary judge erred in concluding that the deceased would have assumed at the time she made her will (wrongly as it transpired) that she would receive during her lifetime all the substantial instalment payments outstanding under the agreements for the sale of her interests in Maggie Sottero. Under those agreements, the purchasers were relieved of any obligation to pay instalments which fell due for payment after the deceased’s death. The instalments outstanding at her death totalled $2.9 million. The appellants contended, contrary to the primary judge’s inference, that the deceased must have contemplated the possibility that she would die before all the instalments were received and that her estate would to that extent be diminished.

3. [36]

   Thirdly, the appellants challenged the primary judge’s finding that the deceased intended to treat equally the families of her three children (as distinct from her three children themselves). They submitted that the apparent equality identified by his Honour only came about as a result of his Honour’s inappropriate inclusion in his calculation of the personal benefit to John himself of having his $881,000 debt paid out of residue.

4. [37]

   Fourthly, the appellants submitted that his Honour should not have made an order having the effect of waiving John’s liability to repay his debt of $881,000 to the estate because the deceased’s clear intent (expressed in the Acknowledgment of Loan) was that the debt should be repaid by offsetting it against John’s entitlement under the will to a share of residue.

5. [38]

   Fifthly, the appellants submitted that provision should not have been ordered under the Succession Act to enable payment of John’s “extravagant expenses” and his costs, including the solicitor/client component of his costs, incurred in unsuccessful litigation that he brought against the deceased’s estate.

6. [39]

   Sixthly, the appellants submitted that John should not have been awarded provision to enable him to purchase a home unit in Townsville when his evidence suggested that he may not be there for six months each year because of the effect on his health of the summer heat. They submitted that a fund to cover rental expenses would have been sufficient.

7. [40]

   Seventhly, they submitted that the primary judge should not have found, and taken into account, that Robyn did not have the same opportunity as Lesley to participate in the growth in the value of the family businesses. They referred in this regard to Robyn having decided to realise her interests in those businesses for substantial sums of money before much of that growth occurred.

8. [41]

   Eighthly, they submitted that the orders for provision in favour of John and Robyn were so excessive as to indicate that there must have been error in the primary judge’s approach. They thus submitted that they had satisfied the standard of appellate review stated in House v The King (1936) 55 CLR 499; [1936] HCA 40.

9. [42]

   In support of this submission, the appellants sought to demonstrate the unreasonableness of the orders by asserting that the effect of them, after adding entitlements under the will, was that:

   1. (1)

      John would receive at least $5.3 million but his children would receive nothing;

   2. (2)

      Robyn would receive $3.2 million but her children and grandchildren would receive nothing; and

   3. (3)

      Lesley and her family would have to bear a substantial part of the burden of the provisions in favour of John and Robyn (although her children and grandchildren would nevertheless receive their legacies totalling $1.55 million).

10. [43]

    John first submitted that the primary judge had departed from the deceased’s testamentary provisions only to the extent necessary to meet John’s needs and that his Honour did not err in taking this course.

11. [44]

    Secondly, John submitted that the deceased would have expected that there would be a residue of the estate and that John would be able to set-off his liability to repay $881,000 against his share of it. He referred to the appellants’ concession that, as events had transpired, there would in fact likely be no residue, with the result that what the deceased had contemplated had, through no fault of herself or John, not come to pass. There was therefore, he submitted, a justification for departing from the deceased’s supposed testamentary intention.

12. [45]

    Thirdly, he submitted that the significance of the principle of testamentary freedom could be, and was in the present case, diminished by events occurring after a deceased’s death. In particular, in the present case, John’s needs had significantly increased after his mother died.

13. [46]

    Fourthly, John submitted that the primary judge’s description of the position of him and his wife as “very poor” did not do justice to “the full gravity” of their positions.

14. [47]

    Fifthly, John emphasised that the primary judge found that the deceased would not have wanted John to have been destitute and that the appellants did not challenge that finding.

15. [48]

    Sixthly, John submitted that the deceased’s generosity during her lifetime should not be treated as a factor that militated against John and Robyn’s claims.

16. [49]

    Seventhly, John pointed out that he had given evidence of the way in which he had used the inter vivos provisions he received from the deceased and that the appellants did not, by their notice of appeal, seek a finding that John had been profligate.

17. [50]

    Eighthly, so far as the provision for John’s accommodation was concerned, John contended that at the principal hearing at first instance the appellants had not submitted that he should receive provision only to enable him to rent, rather than purchase, appropriate accommodation. He referred to the primary judge’s recognition of this in his supplementary judgment.

18. [51]

    Robyn first sought to counter the appellants’ submission that the primary judge should have had greater regard to the deceased’s intentions as expressed in her will by submitting as follows that if the deceased had known of Robyn and John’s circumstances at the date of the hearing at first instance she would have made additional provision for Robyn and John consistent with that for which the court orders provided:

19. [52]

    Secondly, Robyn submitted that the primary judge’s award of additional provision to her was well justified by the following circumstances:

20. [53]

    Thirdly, Robyn submitted that the “effect of the Primary Judge’s order is to clear Robyn’s pressing debts and give her a buffer against future contingencies, and, by doing so, give her relative comfort and security in her home without the fear of ejection or future bankruptcy, if the $2m loan to Larry Webster has to be repaid”. In this context, Robyn noted that the Court’s jurisdiction is not solely related to the needs of applicants but may extend to ordering provision for “advancement in life”, that is to say, not merely maintaining the living standards and status of an eligible person, but in an appropriate case, improving and enhancing them.

21. [54]

    Fourthly, Robyn submitted that it is consistent with community expectations for awards to be made in respect of dependent children “who have fallen on hard times and might otherwise be left destitute, … where the available resources of the deceased’s estate are considerable …”.

22. [55]

    Fifthly, Robyn submitted that although she received value for her interests in the Abbey Bridal and Maggie Sottero businesses, she was “effectively driven out” of them and “was deprived of the same opportunity of drawing a consistently significant salary for well over 15 years (while the same or similar opportunities were afforded to others)”.

23. [56]

    In reply, the appellants first submitted that it was likely that the deceased ignored or overlooked the fact that her receipt of substantial instalments of the proceeds of sale of her interests in the family businesses was contingent on her survival. If not, she must, the appellants submitted, have been making the unlikely assumption that she would survive to about age 93 when the instalment payments were scheduled to conclude.

24. [57]

    Secondly, the appellants denied that the Acknowledgment of Loan evidenced an expectation that John’s $881,000 debt would be able to be paid out of the residuary estate and submitted that, in any event, there was a residuary estate at the date of the deceased’s death, its subsequent depletion being caused by John and Robyn’s largely unsuccessful claims against the estate.

25. [58]

    Thirdly, the appellants submitted that it was not sufficient to justify the primary judge’s orders in favour of John that the deceased might not have wanted to see him destitute. They submitted that “it is by no means clear the deceased’s generosity was ad infinitum” and “to resurrect entirely John’s financial position (and to provide substantial funds for accommodation and contingencies), led to a disproportionate or impermissible alteration of the deceased’s testamentary intentions”.

26. [59]

    Fourthly, the appellants submitted that they were unable to raise earlier their argument as to provision for rental payments being sufficient for John because they were not made aware of his receipt of medical advice to avoid staying in Townsville during summer until after the principal judgment had been delivered.

27. [60]

    Fifthly, they submitted that Robyn’s argument that she lost the opportunity to share in the increased wealth of the family businesses was based on “hindsight reasoning” because it was “by no means a certainty in 1998 and 2004 when Robyn decided to sell her shares” that the businesses would succeed to the extent that they did.

28. [61]

    The cross-appellants, members of Robyn’s family, first referred to their evidence of their financial needs and emphasised that Lesley’s family members chose not to disclose their financial circumstances to the Court.

29. [62]

    Secondly, they submitted that the primary judge acted under s 65(1)(c) of the Succession Act in directing how the burden of the additional provision in favour of Lesley was to be borne, whereas arguably sub-ss 66(2) and 72(2) of the Succession Act provided additional sources of power to do that. They submitted that if the primary judge had recognised that to have been the case he would have had to consider whether his orders as to the burden of the provision were “just and equitable”, which is an expression that appears in both sub-ss 66(2) and 72(2) but not in sub-s 65(1)(c). These statutory provisions are set out at [74] below.

30. [63]

    Thirdly, they submitted that as the primary judge did not find that the deceased had any greater moral obligation to provide for Lesley and her family than for Robyn’s family, the needs of the respective families should have been given primacy. They submitted that if that had been done, Lesley’s family would have been ordered to bear the burden of the order for additional provision for Robyn.

31. [64]

    The cross-respondents, Lesley’s family (that is Kelly and her children, and Katrina), first submitted that in exercising the discretion given by sub-s 65(1)(c) the primary judge must have in fact had regard to the justice and equity of his order concerning the burden of the provision when making the order, even though the words “just and equitable” do not appear in that sub-section.

32. [65]

    Secondly, they submitted that the practical effect of the primary judge’s orders, even if they are not varied on appeal, is that Lesley and her family will need to bear $50,000 of the burden in respect of the provision for Robyn and $3,357,680 in respect of the provision for John.

33. [66]

    Thirdly, they submitted that it was clear that the primary judge had, appropriately, had regard to the evidence of Robyn’s family’s financial circumstances and the fact that Lesley’s family members did not provide evidence of their financial circumstances. His Honour had thus not overlooked the circumstances on which the cross-appellants now relied.

Relevant statutory provisions and legal principles

1. [67]

   Sub-sections 59(1) and (2) are in the following terms:

2. [68]

   As John and Robyn were children of the deceased, they were “eligible persons” as defined in s 57 of the Act.

3. [69]

   Sub-section 60(2) of the Act provides that in determining whether to make a family provision order and the nature of any such order, the court may have regard to the factors listed in s 60(2), which are as follows:

4. [70]

   The primary judge in the present case (at [500]) helpfully summarised as follows the principles that are applicable to the application of ss 59 and 60. His Honour drew these principles from the decision of Hallen J in Jodell v Woods [2017] NSWSC 143 at the paragraphs indicated:

5. [71]

   In considering the financial resources and needs of the applicant for provision (see factor (d) referred to at [69] above), the following observations of Basten JA (made with the concurrence of Simpson and Payne JJA) in Chan v Chan [2016] NSWCA 222 at [22] should be borne in mind:

6. [72]

   So far as the testamentary intentions of the deceased are concerned (see factor (j) referred to at [69] above), the following observations of White J (as his Honour then was) in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] are pertinent:

7. [73]

   To similar effect were his Honour’s observations (made with the concurrence of McColl and Payne JJA) in Sgro v Thompson [2017] NSWCA 326 at [86]:

8. [74]

   The statutory provisions relevant to the cross-appellants’ submissions referred to at [62] above are:

9. [75]

   Section 59(2) of the Succession Act states that the court “may” make an order for provision out of a deceased’s estate for the maintenance, education or advancement in life of an eligible person. The words “may” and “such order … as the court thinks ought to be made” indicate that the court has a discretion as to whether to make an order and as to the amount of any order. As a result, there is no doubt that the principles applicable to the appellate review of discretionary decisions apply on appeal from a s 59(2) order. Thus, to succeed on appeal, an appellant has to demonstrate “an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or [that] the result is so unreasonable or plainly unjust to bespeak error of such a kind” (see DJ Singh v DH Singh [2018] NSWCA 30 at [277] per Gleeson JA summarising the principles stated in House v The King).

10. [76]

    A precondition to the making of an order under sub-s 59(2) is satisfaction of s 59(1)(c) which requires that the court conclude that adequate provision for the proper maintenance, education or advancement in life of the claimant has not been made by the will of the deceased (assuming the deceased dies testate). This conclusion constitutes a finding of fact, albeit one that is, in light of the subjective character of the matter to be decided, evaluative. Nevertheless, making the finding involves a binary choice – either adequate provision has been made, or it has not. A finding on the issue does not therefore involve an exercise of discretion, with the result that, prima facie, the correctness standard of review, rather than the House v The King standard, should apply. If the former standard is applicable, the appellate court will intervene if, having given due weight to the decision below, it considers it to be erroneous (see Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9). I have referred to the House v The King standard above.

11. [77]

    In Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713 at [49], Gageler J, after considering relevant authorities, concluded as follows in relation to the circumstances in which one rather than the other standard applies:

12. [78]

    The principles stated by Gageler J in SZVFW were recently applied by this Court in State of New South Wales v Naaman (No 2) [2018] NSWCA 328 at [10]-[15].

13. [79]

    Notwithstanding that the logic of Gageler J’s reasoning in the above paragraph would seem to indicate that the correctness standard of review would apply to a challenge to a s 59(1)(c) finding, authority clearly requires that the House v The King standard be applied. This was established by the High Court’s decision in Singer v Berghouse (1994) 181 CLR 201 (especially at 212); [1994] HCA 40 despite that case dealing with the now-repealed Family Provision Act 1982 (NSW), which was structured somewhat differently to s 59 of the Succession Act. The plurality in that case recognised that a finding that adequate provision had not been made for a claimant was not “strictly speaking” a discretionary judgment (at 211) but nevertheless concluded that the House v The King standard was applicable to appellate review of it. In SZVFW at [45] Gageler J referred to Singer v Berghouse without criticism. Moreover, its decision on this point has been applied to s 59(1) of the Succession Act (Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6], [42] and [99]-[100]). The applicability of the House v The King standard of review in this context has been repeatedly confirmed in this Court (see DJ Singh v DH Singh at [277] and Steinmetz v Shannon [2019] NSWCA 114 at [14]).

Determination of Robyn’s Appeal

1. [80]

   The primary judge’s disposition of Robyn’s case is to be found in [587] of his judgment (quoted in [28] above). In essence, his Honour concluded that sufficient provision should be made for Robyn to enable her to pay off her mortgage and other debts. His Honour referred to this provision as an amount of $1.2 million (in addition to her $2 million legacy under the will). It is clear that his Honour contemplated that Robyn would in effect receive the full amount of her $2 million legacy in addition to the further provision of $1.2 million that he ordered. That is, he did not contemplate that she would be disadvantaged by her legacy abating by reason of the insufficiency of the estate to meet the full amount of the various legacies listed in the will. This is clear because his Honour’s Order 2 specified not only how the award of $1.2 million was to be borne, but also how “the difference between the sum of $2,000,000.00 and the pro-rata adjusted amount of the Legacy payable upon distribution of the estate of the Deceased” was to be borne. In other words, his Honour effectively made provision, in addition to the amount of $1.2 million, for the amount by which abatement would reduce Robyn’s $2 million legacy.

2. [81]

   His Honour found that Robyn’s total liabilities, excluding the debt of $2 million owed to her former husband, Larry, were $1.37 million, her mortgage debt of approximately $881,000 being the largest. It seems that his Honour largely, if not wholly, disregarded the $2 million debt because Larry gave evidence that he would not seek to have it repaid unless Robyn sold her existing home at Noosa.

3. [82]

   Robyn’s liabilities stood at the amount $1.37 million referred to by his Honour after receipt by her prior to the hearing at first instance from the estate of $1.335 million on account of her $2 million legacy. Receipt of the remainder of the legacy ($665,000) would enable her to reduce the debts (assuming that they otherwise remain unaltered) to $715,000. His Honour did not explain why Robyn needed additional provision of $1.2 million (rather than $715,000) to discharge these liabilities. Such provision exceeded the amount required for that discharge by $485,000 (assuming that the debt amount is rounded up to $1.4 million).

4. [83]

   Although in his conclusion concerning Robyn’s claim at [387], his Honour referred to the $1.2 million additional provision as being required by Robyn to pay her debts, his Honour was aware that that provision would exceed the amount of those debts by $485,000 as his Honour referred to that amount in the course of reciting Robyn’s submissions. As his Honour recorded, Robyn submitted that she should be awarded the additional $485,000 as “a buffer so that she has something to live on and retire upon, including some expenditure on upgrading access to town water, sewerage and the like at Lot 276 Noosa” where she lived (at [555]). In oral submissions, Robyn’s counsel submitted to his Honour:

5. [84]

   Acceptance of these submissions could explain, although not necessarily justify, his Honour’s award of $1.2 million to Robyn. Support for the view that his Honour intended to award Robyn a contingency fund in addition to sufficient funds to enable her to pay her debts, but overlooked mentioning that in the critical paragraph of his judgment ([587] quoted at [28] above), is to be found at three points in his Honour’s judgment: first, in his Honour’s reference to a fund or buffer for contingencies in [586] (see [28] above); secondly, in his reference back to Robyn’s submissions in [587] itself; and thirdly, in his provision of a fund for John in respect of contingencies, when logic would not seem to distinguish his position in principle from that of Robyn.

6. [85]

   I turn then to the appellants’ challenges to the award of additional provision to Robyn.

7. [86]

   First, as noted at [40] above, the appellants submitted that the primary judge erred in finding, and taking into account, that Robyn did not have the same opportunity as Lesley to participate in the growth in the value of the family businesses. I do not consider that his Honour was in error in this regard. Certainly, as his Honour recognised, Robyn sold her interests in the businesses for their value at the time of sale but the reality was that the relationships within the family at that time were such that she had to sell, and the businesses increased substantially in value after her sale. In my view, these matters were part of the circumstances of the family, and of Robyn in particular, that the primary judge was entitled to take into account in exercising his discretion.

8. [87]

   Secondly, as noted at [41] above, the appellants submitted that the order for provision in favour of Robyn was so excessive as to attract the principles in House v The King. As her counsel submitted, and as the primary judge accepted, Robyn’s financial circumstances are and, without some significant additional provision, will continue to be very poor indeed (see [24] above). The estate is a large one and the burden of the additional provision will (in light of what I propose below at [113] in relation to the cross appeal) essentially be borne by Lesley and her family for whom the will provides specific gifts of a value in excess of $9 million, as well as substantial legacies. Moreover, no evidence was adduced of any needs of Lesley and her family. A significant provision for Robyn was well within the range of options open to his Honour in the proper exercise of his discretion. Her, and John’s, position was aptly described by his Honour as follows (at [585]):

9. [88]

   For two reasons however I consider that his Honour’s exercise of discretion miscarried and that the amount of the additional provision that his Honour made for Robyn should be reduced.

10. [89]

    First, as I have indicated, his Honour’s reasons did not explicitly identify the basis for awarding $485,000 more than was necessary for Robyn to pay her debts. Whilst it may be inferred that his Honour had in mind that an amount should be awarded as a buffer against contingencies (see [83] above), his Honour did not explain why an amount of $485,000, or of any particular magnitude, was required for that purpose.

11. [90]

    Secondly, assuming that the order for provisions was, to the extent of $485,000, intended to be a buffer against contingencies, it was in my view manifestly excessive. Bearing in mind that Robyn would be able to repay all her debts (other than the debt to her ex-husband which his Honour did not envisage would be repayable) the nature of the contingencies identified by her counsel in submissions to his Honour (see [83] above) did not support the award of a buffer of that size. Particularly is this so as the buffer for contingencies that his Honour awarded to John, whose financial position was at least as poor as Robyn’s, was only $200,000.

12. [91]

    The Court inquired of counsel who appeared on the appeal whether any party contended that, if the Court found error in the judgments at first instance, it should not simply correct the error but should re-exercise the court’s discretion in respect of Robyn’s claim in toto. As no party contended that this was the position, I proceed upon the basis that the Court may simply correct the error by re-exercising the court’s discretion to the extent that its exercise miscarried at first instance.

13. [92]

    In these circumstances, I conclude that the additional provision of $1.2 million in favour of Robyn should be reduced by $185,000 to $1,015,000 so that, in addition to Robyn being enabled to pay her relevant debts, she will receive a buffer for contingencies of $300,000, rather than the buffer of $485,000 for which the primary judge’s orders effectively provide. I consider that, taking into account particularly Robyn’s dire circumstances (as to which see [24] above), her relationship to the deceased, the size of the estate, the terms of the deceased’s will and the circumstances of the other beneficiaries so far as they are known, such a fund should be provided for her maintenance in accordance with s 59(2) of the Succession Act.

14. [93]

    Whilst Robyn’s financial circumstances are different, as a matter of degree, from those of John, I consider that their both poor financial positions and the deceased’s apparent desire to achieve some, or though far from complete, equality between them by giving them legacies of the same amount justifies them being provided with contingency funds of the same amount.

15. [94]

    It is unnecessary to refer further to Robyn’s submissions which I have described in [51] to [55] above. I have in substance accepted those submissions in concluding that the primary judge was justified in awarding a substantial additional provision to Robyn and in my responses to the appellants’ submissions.

Determination of John’s appeal

1. [95]

   The primary judge’s disposition of John’s case is to be found in [590] to [592] of his judgment, quoted in [28] above. In essence, his Honour concluded that John should be relieved of his debt of $881,000 to the estate, have his debts (in the order of $2.2 million) paid, have $500,000 to enable him to acquire a home unit and have $200,000 as a contingency fund.

2. [96]

   It is clear from the primary judge’s reasons and orders that he intended these provisions for John to be additional to John’s entitlement to the $2 million legacy given to him by the will. Unlike the position in relation to Robyn, it does not however appear that his Honour intended that John would retain the benefit of the full amount of that legacy without abatement of it by reason of the inadequacy of the estate to pay all the legacies. An issue between the parties on this point was identified in written submissions that they lodged after the hearing in this Court. The appellants submitted that his Honour contemplated that John’s $2 million legacy would abate (in which case he would receive approximately $1.6 million of it), whilst John contended to the contrary. For the following reasons, I consider the appellants’ submissions on this issue to be correct.

3. [97]

   His Honour lists John’s various intended entitlements in Order 3 of the orders in John’s case. In Order 3(o), he lists “the balance of the Plaintiff’s pro-rata adjusted legacy pursuant to cl 3(a) of the deceased’s will dated 7 June 2011”. His Honour’s reference to the “pro-rata adjusted legacy”, rather than simply the “legacy”, supports the appellants’ argument. Moreover, his Honour did not make an order in John’s case corresponding to that which he made in Robyn’s case as to how “the difference between the sum of $2,000,000 and the pro-rata adjusted amount of the Legacy payable upon distribution of the estate of the Deceased” was to be borne (see [80] above). Further, in his reasons for judgment the primary judge referred to Robyn’s prospective receipt of “the full amount of her $2 million legacy” (emphasis added), whereas he did not use that expression in relation to John’s entitlements.

4. [98]

   In these circumstances, consideration of the appellants’ challenge to the additional provisions for John should be approached on the basis that John’s $2 million testamentary legacy will produce for him only the abated amount of approximately $1.6 million. I add that, contrary to John’s post-hearing submission, I do not consider that there is any reason for the Court to preclude the appellants taking a different stance on this issue than that which they adopted (in passing) earlier in the proceedings in this Court, at a time when the present issue had not crystallised. Moreover, I do not accept that John established in this Court that the appellants clearly, or in fact at all, took a stance at first instance contrary to that which they now take.

5. [99]

   It is now necessary to examine the primary judge’s reasons for the additional provisions that he made in favour of John (see [590] to [594] quoted in [28] above). As I have noted above, in essence his Honour said that the provisions were intended to render John debt-free, provide accommodation (in the form of a modest home unit in Townsville), and provide him with a $200,000 contingency fund. To achieve the first of these goals, his Honour’s orders forgave John the $881,000 debt he owed to the estate and provided for direct payment by the estate of a variety of debts totalling in the order of $2.2 million. The second goal was achieved by providing him with $500,000 for purchase of a home unit, and the third by providing him with $200,000 for contingencies. Bearing in mind particularly John’s straitened circumstances, the size of the estate, the gifts made by the will to Lesley and her family and the absence of any evidence of need on the part of Lesley and her family, these provisions in favour of John would, if the will had not provided for a legacy of $2 million in his favour, in my view have been within the range of provision orders consistent with the proper exercise by the primary judge of his discretion. Thus, the appellants’ submission that the provisions were so excessive as to satisfy the high bar for appellate review stated in House v The King would have failed in this event.

6. [100]

   It is necessary however to take account of the $2 million legacy. The first point to be made is that, prior to the date of the primary judge’s orders of 26 September 2018, the estate paid John approximately $800,000 on account of his legacy. The debts for which his Honour’s orders provided payment thus subsisted notwithstanding John’s receipt of that sum of about $800,000, with the result that the existence of the legacy, at least to that extent, does not detract from the conclusions I have expressed in the last paragraph. However, approximately $800,000 of the abated legacy of $1.6 million remained outstanding.

7. [101]

   In my view, neither the evidence nor the judgment below identifies a proper basis for the provisions made by his Honour’s orders in circumstances where $800,000 of John’s legacy remains due to him. As a result, his Honour’s exercise of discretion miscarried as follows: first, his Honour’s reasons did not contain a justification for John receiving both the additional provision awarded and the balance of his legacy and, secondly, when the balance of the legacy is taken into account the additional provision that his Honour awarded was manifestly excessive.

8. [102]

   Having become debt-free, the balance of $800,000 of John’s legacy will be available to him to use $500,000 to acquire his accommodation and $300,000 as a contingency fund. To that extent he does not need orders for provision under the Succession Act. To eliminate the excess of the provision made, the provisions for John’s accommodation ($500,000) and his contingency fund ($200,000) should be set aside. I would not make any further reduction of the provisions made by the primary judge as I am satisfied that it is appropriate that John have a contingency fund of $300,000, rather than of $200,000 as awarded by the primary judge. As White JA points out in his judgment, John did not provide any acceptable evidence of a realistic budget for his living expenses. Nevertheless the other uncertainties to which his Honour refers warrant some increase in the provision for contingencies that John should be allowed.

9. [103]

   By reason of these conclusions, I can deal briefly with the appellants’ submissions as recorded at [34] to [42] above:

   1. (1)

      The primary judge did not fail to pay proper regard to the deceased’s testamentary intentions. To the extent that I have concluded that they should be upheld, the primary judge’s orders properly reflected the circumstances of the estate and beneficiaries as they stood at the time of the hearing before him when considered in light of the deceased’s testamentary intentions and other relevant matters. Section 59(2) expressly requires the court in considering the making of a provision order to have “regard to the facts known to the Court at the time the order is made” (see [75] above). The hearing before the primary judge occurred some five and a half years after the deceased’s death. Unsurprisingly, the circumstances of the estate and of Robyn and John had changed in the meantime. In particular, the estate had been depleted (according to the appellants, principally by legal proceedings brought by John) and Robyn and John’s financial circumstances had worsened significantly. These changes lessened the significance to be attached to the deceased’s testamentary intentions.

   2. (2)

      The primary judge’s inference that the deceased would have assumed that she would receive during her lifetime the substantial instalment payments outstanding under agreements relating to the sale of her interests in Maggie Sottero was open to him even though other judges may have drawn different inferences. It thus did not constitute a clear error of fact that might have attracted the principles in House v The King.

   3. (3)

      There was also no clear factual error in his Honour’s inference that the deceased, by her will, intended to treat the families of her three children equally. His inclusion in his calculations of the personal benefit to John of having his $881,000 debt paid out of residue was one possible, although tenuous (see [110] below) way of attempting to ascertain what intent lay behind the provisions the deceased made in her will.

   4. (4)

      The statement in the Acknowledgment of Loan that John’s debt of $881,000 should be repaid by offsetting it against his entitlement under the will to a share of residue did not preclude his Honour providing for forgiveness of the debt, when in the circumstances subsisting at the date of the hearing before his Honour there was not expected to be any residue to enable this to be done.

   5. (5)

      There was no error in his Honour providing for the payment of debts of John that included costs of unsuccessful litigation that he brought against the deceased’s estate, particularly in circumstances where, as conceded before this Court, the appellants did not put at first instance that John had been unreasonable in bringing these proceedings. Nor was there error in providing for payment of other debts which were not found (contrary to the appellants’ implicit submission) to have resulted from “extravagant” expenditure.

   6. (6)

      There was no error in his Honour awarding John sufficient funds to enable him to purchase a home unit in Townsville, particularly when he was not cross-examined to suggest that rental accommodation would have been adequate for him.

10. [104]

    It is unnecessary to say more about John’s submissions described at [43] to [50] above. I have in substance accepted them, expressly or by implication, in reaching my conclusion that his Honour was justified in awarding substantial additional provisions to John and in the responses I have given to the appellants’ submissions.

Determination of the cross-appeal

1. [105]

   By their cross-appeal, Robyn’s children (with the exception of Elizabeth) and her grandchild challenge the primary judge’s order that the additional provision that he ordered for Robyn be borne in the first instance by the cross-appellants’ (and Elizabeth’s) legacies under cl 3(b) of the will. In that order’s place, they seek an order that, in the first instance, the additional provision for Robyn be borne by the legacies payable to the members of Lesley’s family under cl 3(c) of the will. Their reference to additional provision includes not only the award of $1.2 million (which I have said should be reduced to $915,000) but also the difference between Robyn’s $2 million legacy and the pro-rata adjusted amount of the legacy payable upon distribution of the estate (see [80] above).

2. [106]

   The cross-appeal is not concerned with the questions of whether orders should have been made in favour of Robyn and John and, if so, in what amounts. Rather, it is concerned with how the burden of those orders should be borne.

3. [107]

   The cross-appellants submitted to this Court that sub-ss 66(2) and 72(2) of the Succession Act were sources of power for the primary judge’s directions as to the burden of the provisions ordered under the Act, additional to sub-s 65(1)(c) of the Act, under which his Honour professed to act (see the legislative provisions at [74] above). The cross-appellants sought to obtain assistance from the express reference in sub-ss 66(2) and 72(2) to the court acting in a manner that is “just and equitable”. In my view, it is however implicit in sub-s 65(1)(c) that under that section the court will act also in a manner that is “just and equitable” when exercising its discretion. The source of power is accordingly not of significance.

4. [108]

   The crux of the cross-appellants’ submissions was that the cross-appellants adduced evidence before his Honour of their financial needs whereas, despite having the opportunity to do likewise, Lesley’s family did not adduce evidence that they have any financial needs.

5. [109]

   The primary judge’s response when this point was emphasised to him was to reject that “in every case … the default position becomes [that] the ‘well off’ beneficiaries virtually automatically bear the burden of any additional provision” (at [109]). Whilst his Honour considered that that would be the result in many cases, he would not so find in the present case because of “the clear and rational division which the Will demonstrates between the three families” and also because proper weight would not otherwise be given “to Dorothy’s intention to give the substantial benefit of her estate to Lesley, Wayne and Kelly to reflect their very considerable role in generating Dorothy’s wealth” (at [109]).

6. [110]

   I do not, with respect, accept that the former factor is of present significance. If, by referring to “the three families”, his Honour was referring to the deceased’s children and their families, the division was skewed (arguably for good reason) in favour of Lesley and her family because of Lesley and her husband’s significant roles in relation to the conduct of the family businesses. If he was referring only to her grandchildren (and great-grandchild), the notion that the deceased provided for equality between the families is a tenuous one because to make it good it was necessary for his Honour to include John himself in the calculation, whereas neither Robyn nor Lesley were included (see [36] and [103(3)] above).

7. [111]

   Similarly, I do not consider the other matter to which his Honour referred (the generation of the deceased’s wealth) to be of present significance. Placing the initial burden of Robyn’s additional provision on the legacies in favour of Lesley’s family would not affect the very substantial specific gifts (in excess of $9 million in value) in favour of Lesley and her family. These gifts were to a significant extent of assets related to the family businesses and thus reflected Lesley, Wayne Jr and Kelly’s roles in generating the wealth acquired by the deceased from them. There is no basis in the will for an inference that the cl 3(c) legacies to Lesley’s family (for the same total amount as those to Robyn’s family) were intended to be a further recognition of those roles.

8. [112]

   In these circumstances, and bearing in mind the absence of any apparent difference in the deceased’s remaining moral obligations to Robyn’s and Lesley’s families, one is left with evidence that shows that Robyn’s family members (with the exception of Elizabeth) have distinct financial needs, but does not show that Lesley’s family members have similar, or indeed any, needs. As a result, Lesley’s family members should primarily bear the burden of the additional provision made in favour of Robyn. As there was no evidence of financial need on the part of Elizabeth, it has not been shown that the primary judge’s discretion miscarried to the extent that he included Elizabeth (a member of Robyn’s family) in the category of those by whom the burden of Robyn’s provision was initially to be borne. She should accordingly remain in that category.

9. [113]

   For these reasons, the cross-appeal should be allowed. I add that the cross-appellants need an extension of time for their cross-appeal. That extension should be granted as there is no opposition to that occurring.

Orders including costs on the appeals

1. [114]

   With one exception, there should be no change to the costs orders made at first instance. Those orders were premised on the success of Robyn and John in obtaining orders under the Succession Act for substantial additional provision. Although I propose that the provision for each of them be reduced, they remain entitled to orders for substantial addition provision, which if ordered at first instance, would have been sufficient to justify the costs orders that were made.

2. [115]

   The one exception is that the cross-appellants’ notice of motion (concerned with how the provision for Robyn should be borne) was unsuccessful at first instance but, I propose, will be successful on appeal. The cross-appellants should therefore have their costs of that notice of motion paid by the cross-respondents.

3. [116]

   On appeal, both Robyn and John, on the one side, and the appellants, on the other, have had substantial success. Robyn and John have retained the benefit of orders for substantial provisions but the appellants have been successful in reducing those provisions by significant margins. In these circumstances, those parties should each have their costs paid out of the estate. As the cross-appellants have been successful, their costs of the cross-appeal should be paid by the cross-respondents.

4. [117]

   For the reasons given above, I propose the following orders:

   1. (1)

      In respect of John Steiner’s claim for provision under the Succession Act, allow the appeal and vary the orders made below on 26 September 2018 in Case Number 2012/185566 by deleting Orders 3(n) and (p), 6 and 7.

   2. (2)

      In respect of Robyn Webster’s claim for provision under the Succession Act, allow the appeal and vary orders made below on 26 September 2018 in Case Number 2012/129833 by replacing the sum of $1,200,000 referred to in Order 1 with the sum of $1,015,000.

   3. (3)

      Allow the cross-appeal and vary Order 2(c) by replacing the expression “clause 3(b)” with the expression “clause 3(c)” and adding the words “and the legacy payable to Elizabeth Fuggle under clause 3(b) of the Deceased’s will”.

   4. (4)

      Extend the time for the filing of the cross-appeal to the date upon which it was filed.

   5. (5)

      Order that the costs of all parties to the appeal (as distinct from the cross-appeal) be paid out of the estate on an indemnity basis.

   6. (6)

      Order that the cross-respondents pay the cross-appellants’ costs of their amended notice of motion filed in the court below on 28 May 2018 and of the cross-appeal.

   7. (7)

      Order that the cross-respondents have certificates under the Suitors’ Fund Act 1951 (NSW), if qualified.

5. [118]

   WHITE JA: The facts giving rise to this appeal and the parties’ contentions are summarised in the reasons for judgment of Macfarlan JA which I have had the advantage of reading in draft.

6. [119]

   Like Macfarlan JA I will refer in these reasons to the parties by their first names, intending no disrespect.

7. [120]

   The deceased left pecuniary legacies of $2 million to each of Robyn and John. She left pecuniary legacies to her grandchildren, being the children of Robyn, Lesley and John. She left her half-share in a house property in East Killara to her daughter Lesley and Lesley’s husband, Wayne Porter-Webster. She left her shares in the company that traded as Abbey Bridal and in Maggie Designs Pty Ltd to the trustees of a trust for the benefit of Lesley. She left her shares in Maggie Sottero Designs LLC and moneys in the Sottero bank accounts to trustees for the benefit of Lesley and her granddaughter Kelly. She left another bank account to Lesley and Kelly and gave the residue of her estate to John and Robyn in equal shares as tenants-in-common.

8. [121]

   Clause 13 of the will provided that if the pecuniary bequests that totalled in aggregate $7,800,000 exceeded the available funds in the estate, then each beneficiary’s respective share would abate.

9. [122]

   In the events which have happened and largely due to the costs the estate has incurred in defending proceedings brought by John, the pecuniary legacies will abate. The abated amount of the $2 million legacies in favour of John and Robyn is estimated to be $1,610,680.

10. [123]

    The order for provision made in favour of Robyn was in these terms:

11. [124]

    It is common ground that a further order for provision was made in favour of Robyn by order 2 which reads as follows:

12. [125]

    Order 2(a) provides for Robyn to receive the difference between the sum of $2 million and the pro rata adjusted amount of her legacy payable upon distribution. Robyn is only entitled to that amount pursuant to an order under s 59 of the Succession Act. Order 1 should be corrected to provide for that additional provision.

13. [126]

    One of the issues on the appeal was whether John was also entitled to further provision by way of the difference between the abated amount of his legacy and $2 million. I agree with Macfarlan JA that the primary judge did not so determine. It is true that at times the appellants’ submissions assumed that John would receive a legacy of $2 million. By the same token at times during the course of the hearing before the primary judge John advanced his claim for provision on the basis that his legacy would abate. Thus, in the course of John’s cross-examination Mr Condon SC, who appeared for John, objected to a question asked by Mr Ellison SC, who appeared for the executors, because it was said to be premised upon an assumption that John would receive $2 million under the will.

14. [127]

    The orders made in favour of John included no equivalent order that he receive the difference between $2 million and the pro rata adjusted amount of the legacy payable upon distribution of the estate. Order 3(o) made in John’s proceeding was premised on his legacy abating.

Nature of the appeal

1. [128]

   In Singer v Berghouse (No 2) (1994) 181 CLR 201; [1994] HCA 40 Mason CJ, Deane and McHugh JJ held that in the context of family provision cases the principles governing the review of a decision on the jurisdictional question of whether the applicant has been provided with adequate provision for his or her proper maintenance, education or advancement in life, is to be determined on the principles governing appellate review of discretionary decisions (at 212). Their Honours approved the statement of Kirby P in Golosky v Golosky [1993] NSWCA 111 (at 8) that:

2. [129]

   In Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124; [2008] HCA 13, Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ said (at [39]):

3. [130]

   In R v Ford [2009] NSWCCA 306 Campbell JA observed that in an appeal by way of rehearing the appellant needs to establish error on the part of the primary judge and referred to the many and disparate factors to which regard must be had as to how error is established, including the type of decision appealed from and whether the decision appealed from involves a question that can be answered yes or no (at [75]), whether the decision is a discretionary decision and the nuances of that description discussed in Dwyer v Calco Timbers Pty Ltd (at [76]-[79]), the fact that some non-discretionary decisions are reviewed in accordance with House v The King criteria (at [80]), the need to recognise advantages the trial judge might have in deciding facts, and the need for the appellate court to reach its own conclusions where the facts are undisputed or have been found and the appellate court is in as good a position as the trial judge to make an evaluative judgment (at [81]-[89]). His Honour concluded (at [92]):

4. [131]

   As Macfarlan JA observes (at [79]) authority clearly requires that the House v The King standard be applied to a challenge to a finding under s 59(1)(c) of the Succession Act that an applicant was or was not left with less than adequate provision for his or her maintenance, education, or advancement in life. Similarly, the House v The King standard applies to a challenge to the determination of what provision should be ordered if the applicant is given inadequate provision by the deceased’s will or on intestacy (Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 335 at [82] per Campbell JA).

5. [132]

   Singer v Berghouse and House v The King show that although an issue for determination may be posed as a binary question, there may be a range of outcomes such that the question cannot be answered “yes” or “no”. House v The King was an appeal against sentence in the general appellate jurisdiction of the High Court. The issue could have been framed as whether the sentence was excessive, or perhaps manifestly excessive. That framing of the question would not change the essentially discretionary nature of the sentencing decision.

6. [133]

   I agree with McCallum JA that in Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713 Gageler J’s reasoning suggests that his Honour reconciled Singer v Berghouse with the analysis explained by his Honour (at [49]) on the basis that the legal criteria by which the determination of whether an applicant had been left with inadequate provision for his or her proper maintenance, education and advancement in life tolerated a range of outcomes on its proper application, and so attracted the principles in House v The King.

7. [134]

   Applying what was said in Singer v Berghouse and its endorsement of what was said by Kirby P in Golosky v Golosky, and repeated in this Court many times (DJ Singh v DH Singh [2018] NSWCA 30 per Gleeson JA at [277]-[278] (and cases cited), and Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6], [42], and [99]-[100]), the primary judge’s order for provision in favour of Robyn should only be disturbed if an error of the kind described by Macfarlan JA at [75] of his Honour’s reasons, or an error analagous thereto, is found.

8. [135]

   For the reasons which follow I do not consider error has been shown in any sense in the primary judge’s disposition of Robyn’s claim. In the case of John’s claim the primary judge erred in failing to explain how he assumed that the balance of John’s legacy would be applied so as to explain his reasons for ordering additional provision in the amounts found. In other words, his Honour failed to provide sufficient reasons.

9. [136]

   In some cases even though the court’s reasons do not show how a discretionary decision has been reached, it can be inferred that the judge applied a wrong principle or made a material error of fact or took into account irrelevant considerations or failed to take relevant considerations into account (Flint v Lovell [1935] 1 KB 354 at 367; Wilson v Peisley (1975) 7 ALR 571 at 586; The Queen v Nikodjevic [2004] VSCA 222 at [19]). If it should be inferred that the primary judge overlooked the fact that John is entitled to the balance of his legacy then it would follow that he failed to take account of a relevant consideration. The judgment would then be open to appellate review whether or not the provision made was manifestly excessive. For the reasons below (at [155]-[160]) that is not this case.

10. [137]

    The question then is whether error by way of failure to provide sufficient reasons opens the primary judge’s decision on John’s claim to appellate review only if the provision ordered was manifestly excessive so that it fell outside the proper exercise of an evaluative judgment. The relevant passage in House v The King (1936) 55 CLR 499 at 504-505 bears repetition:

11. [138]

    Two general classes of error are referred to: error in reasoning of the kinds identified, and manifest error in result, where it does not appear how the result was arrived at.

12. [139]

    If the error in failing to provide sufficient reasons falls into the latter category only, then the primary judge’s order for provision for John can only be disturbed if it was manifestly excessive so as to be outside the limits of the proper exercise of an evaluative judgment.

13. [140]

    The failure to provide sufficient reasons, where reasons are required, is not specifically identified as one of the errors falling within the first category of error in House v The King. Nonetheless, it would be wrong to read the judgment as if it were a statute; that is, as if it were definitive rather than descriptive of the errors for which a discretionary judgment could be reviewed. The principles were stated with respect to discretionary judgments where, in some cases, there may be no obligation to give reasons, or the obligation may be attenuated (e.g. the grant or refusal of an interlocutory injunction in a busy duty list).

14. [141]

    In Figliuzzi v Yonan [2005] NSWCA 290 Santow JA (in dissent) (at [36]) considered that a primary judge’s error in failing to give sufficient reasons for upholding an application for extension of a limitation period where the decision was essentially discretionary did not justify appellate interference where reasonable views could differ. By contrast, in Costa v Public Trustee of NSW [2008] NSWCA 223 Hodgson JA treated the first category of error described in House v The King as being a material error in reasoning, and treated a failure to give reasons as being a similar material error in reasoning that warranted appellate intervention whether or not the decision was outside a reasonable range for the decision (at [17]-[18]). In Hornby v The Nominal Defendant [2007] NSWCA 222, Tobias JA (with whom Mason P agreed) had earlier adopted the same position (at [53]).

15. [142]

    In Singer v Berghouse the plurality approved the reasons of Kirby P in Hunter v Hunter (1987) 8 NSWLR 573 at 576, Golosky v Golosky [1993] NSWCA 111 and Singer v Berghouse (Unreported, NSW Court of Appeal, 24 July 1992 at 12-13) that particular care must be taken by an appellate court when invited to substitute its judgment for that of the trial judge, in part, because of the evaluative considerations that arise, and, in part, because, objectively speaking, the view of the appellate court may be no better than that of the trial judge. Neither Kirby P nor the High Court in Singer v Berghouse was considering a case where the trial judge’s reasons were insufficient.

16. [143]

    My view has fluctuated on whether in John’s case, the primary judge’s evaluation of what is adequate provision for John’s proper maintenance and advancement in life can only be interfered with if his Honour’s determination is manifestly excessive. If that were the determinative criterion I would not be so satisfied.

17. [144]

    It is arguable that the reasons of the plurality in Singer v Berghouse and the plurality’s endorsement of the reasons of Kirby P in Hunter v Hunter, Golosky v Golosky and Singer v Berghouse show a need for judicial restraint even if there is error in the sufficiency of reasons.

18. [145]

    However, the better view is that where, on an appeal by way of rehearing under s 75A of the Supreme Court Act 1970 (NSW) from a discretionary or evaluative decision to which the House v The King standard of appellate review applies, an error of reasoning is shown of the kind described in the first category of House v The King, or error by insufficiency of reasoning, it is not necessary also to show that the decision is manifestly unreasonable before appellate intervention is warranted.

Appeal from orders for provision in favour of Robyn

1. [146]

   In my view there is no reason to interfere with the primary judge’s assessment of the provision to be ordered in Robyn’s favour.

2. [147]

   The dispositive reasoning of the primary judge in dealing with Robyn’s claim for provision is found in paras [553]-[555] and [587] of his reasons. Of particular relevance was the submission made for Robyn summarised at [553]-[555] as follows:

3. [148]

   Thus, the primary judge accepted Robyn’s submission that adequate provision for her future maintenance and advancement in life included the need to secure and improve her Noosa property, to pay off significant debts in preparation for retirement, and to have a lump sum as a buffer against future contingencies. Robyn’s submission was that after clearing her debts, a sum of $485,000 by way of further provision was required as a buffer to provide her with something to live on, something to retire upon, and something that could be used to upgrade access to town water, sewerage, and “the like” at the Noosa property.

4. [149]

   Robyn deposed that her property at Noosa had no access to town water, nor town supply of electricity. Power was provided by a generator and it depended upon its tanks for water. She had water tanked into the property and used bottled gas. There was no septic system. She said that she would like to have an off-grid solar system for electricity. The property needed a new water tank and repairs were required to the roof and gutters. Noosa was the home to which she planned to retire. She deposed that she would like to retire and could do so if she owned Noosa debt-free and had a lump sum for contingencies and which would generate a small income. She also needed a new car.

5. [150]

   The primary judge recorded that Robyn bought her Noosa property for $800,000 in about 2001 or 2002 (Judgment [437]). Her ex-husband, Larry, agreed not to enforce a $2 million loan debt payable by Robyn to him until the Noosa property was sold (Judgment [442] and [444]). At some future time Robyn might need to move into different retirement accommodation or an assisted living facility and the Noosa property may need to be sold. It cannot be assumed that the property would sell for more than the $2 million debt that Larry might then be entitled to enforce. The buffer of $485,000 for contingencies or some part of it could well be needed to allow her to move to new accommodation.

6. [151]

   In my view this evidence amply justified the primary judge’s acceptance of the submissions made for Robyn that a buffer for contingencies of $485,000, in addition to a sum that would enable her to discharge all her debts, does not reveal any error. It is true that in para [587] of the primary judge’s reasons he said that the provision sought by Robyn would “... enable her to pay off the mortgage over lot 276 Noosa and her other debts”, whereas he might have added “and provide a reasonable buffer against contingencies”. But it is clear from the primary judge’s earlier reasons and his acceptance of submissions of counsel for Robyn, that that was what he had in mind.

7. [152]

   It is not a sufficient justification for interfering with the primary judge’s assessment as to what provision for contingencies was appropriate for Robyn that John received a lesser additional provision for contingencies. John received much greater assistance from the deceased during her life and he received orders for substantially greater provision from the estate. John’s and Robyn’s circumstances are materially different.

8. [153]

   For these reasons I would correct order 1, which inadequately describes the provision made for Robyn under s 59, to include the difference between the $2 million legacy and her abated legacy, but otherwise dismiss the executors’ appeal from the order for provision made in favour of Robyn.

Appeal from the order for provision in favour of John

1. [154]

   For the reasons above I agree with Macfarlan JA that the orders for additional provision that the primary judge made in favour of John were not premised upon an assumption that his $2 million legacy would not abate.

2. [155]

   There is no reason to think that the primary judge overlooked the fact that John’s legacy would abate. The appellants did not submit that the primary judge had overlooked the balance of the legacy payable to John (approximately $800,000).

3. [156]

   The primary judge recorded (Judgment [525]) that John submitted that:

4. [157]

   In the course of his reasons for finding that less than adequate provision had been made for John’s proper maintenance and advancement in life the primary judge said:

5. [158]

   In paragraph [590] of his Honour’s reasons, the primary judge said:

6. [159]

   It is clear that the primary judge intended that ensuring that John was debt-free, ensuring that he had a three-bedroom (later adjusted to a two-bedroom) apartment for him and his wife Lynne to live in, and had an amount for contingencies was a matter required to be provided by way of additional provision to that provided for under the will. The proper inference is that the primary judge considered that the balance of the legacy payable to John would be required to provide John and his dependant wife Lynne with the degree of comfort they currently lacked and which the primary judge considered to be necessary for their maintenance and advancement in life (Judgment [585]).

7. [160]

   I infer that it was for this reason that the primary judge did not address the question as to whether additional provision was required to meet the shortfall between John and his wife’s income and the income that John deposed would be needed if he and his wife were to have a comfortable lifestyle.

8. [161]

   John deposed:

9. [162]

   It is clear from para [585] of the primary judge’s reasons that he accepted that evidence.

10. [163]

    John prepared a budget in which he calculated that $15,470 per month would be required for the comfortable lifestyle he described with the ownership of two properties, Townsville and Bondi. John expressed the wish to have a property at Bondi to which he and his wife could move to avoid the North Queensland summer heat. This claim was not accepted by the primary judge. Mr Condon provided a re-working of that budget to exclude the costs assumed in relation to ownership of a second property in Bondi. As so adjusted, John’s budget was $12,970 per month. John and Lynne’s combined pension income was $3,081 per month, a shortfall of approximately $10,000 per month. Mr Condon submitted that the primary judge assumed that the shortfall between the pension and the living costs would be met by the balance of the legacy which was yet to be paid.

11. [164]

    That is a probable explanation. But the primary judge did not make that finding. He made no finding as to how he assumed the balance of the legacy might be used in assessing what additional provision was required. That is an error that requires appellate reassessment.

12. [165]

    Mr Condon submitted that the appellants had not included as a ground of appeal nor had they submitted that the primary judge erred by not explaining what assumptions he made about the use to which the balance of John’s legacy could be put in assessing what additional provision was required. This is correct. But Mr Condon also correctly accepted that the grounds of appeal were wide enough to cover the issue that was raised by the Bench and accepted that he was able to meet it.

13. [166]

    John Steiner provided a number of different budgets prepared on different assumptions. He was cross-examined on them to suggest that some of the claimed amounts were extravagant. In the budget (annexure N) on which Mr Condon ultimately relied the monthly expenditure was assessed as follows (after adjustment for the exclusion of expenses in relation to a Bondi property):

14. [167]

    The primary judge made no finding as to whether he accepted these claimed expenses as reasonable estimates of expenses required to provide John and Lynne a comfortable lifestyle. John was not cross-examined on all of the expenses. Indeed, the cross-examination concentrated on other budgets. Given the adverse credit finding the primary judge made in relation to John the figures cannot simply be accepted. No party suggested that the matter should be remitted to enable further findings of fact to be made.

15. [168]

    The provision Macfarlan JA proposes would provide a fund for contingencies of $300,000 to be met from the balance of the legacy. It would leave John’s claim to provision of an additional capital sum to supplement his income unaddressed.

16. [169]

    John has a life expectancy of approximately 13-14 years. In addition to a sum for contingencies he should be provided a capital sum which could be used to augment his and his wife’s income for his remaining estimated lifetime.

17. [170]

    The only source of current income for John and his wife Lynne is their Centrelink aged pension. They have no superannuation. Prior to her death the deceased provided gifts of income to John by quarterly payments of $50,000. He used much of that income to meet interest on debts, but he also used it to pay motor vehicle running expenses, food, and other living expenses such as telephone, and internet charges and medications.

18. [171]

    Both John and Lynne suffer from health problems. He deposed that they take 50 types of vitamins twice daily. Lynne suffers from schizophrenia and takes nightly medication. John estimated that they spent about $300 each month on prescribed medications and vitamins (using the pensioner discount where they pay a maximum of five dollars per prescription). He estimated that if they ceased to be entitled to the pensioner discount for medications Lynne would spend about $700 per month on prescribed medications plus the cost of vitamins for which there is no pensioner discount. In addition to the matters to which John deposed quoted at [161] above, he deposed that their motor vehicle was very old and had no functioning air-conditioning. They needed a new car.

19. [172]

    John deposed to the need for dental treatment for both him and Lynne. He deposed that he might require a hip replacement and that Lynne needed knee and hip replacement surgery. He deposed that both he and Lynne needed chiropractic physiotherapy and remedial massage as well as naturopath services. John deposed to costs that he and Lynne would face in the future with additional medical costs and the potential need for funds if one of them were required to move to a nursing home. He also referred to their wish to have holidays.

20. [173]

    Having regard to the size of the estate and the deceased’s wish for John to live comfortably, provision of a capital sum that can be drawn on to augment John and Lynne’s income so as to provide a reasonably comfortable lifestyle is required. The primary judge recognised this (at Judgment [585]). In my view a sum that can be drawn on to provide a further $36,000 per year (that is approximately double his and his wife’s current income) is not more than adequate provision for that purpose.

21. [174]

    At a time of very low interest rates there is no reason to apply a three per cent (let alone a five per cent) discount rate to reflect assumptions about future returns on the investment of the capital sum, future rates of inflation to preserve the real value of the income stream and the impact of taxation (Tchadovitch v Tchadovitch (2010) 79 NSWLR 491; [2010] NSWCA 316 at [52]-[60]; Wardy v Salier [2014] NSWSC 473 at [181]-[183]). I see no reason to assume that earnings on the capital sum to provide a supplement to John’s income, after taxation, would do better than match future inflation. A capital sum of between $468,000 and $504,000 would be required to provide such an augmentation of income.

22. [175]

    The primary judge’s assessment that $200,000 should be provided for contingencies was by way of “additional provision”, that is, in addition to the payment of the unpaid legacy estimated to be of about $800,000 under the will.

23. [176]

    Having regard to the size of the estate and the absence of any competing financial need, in my view a provision for John for contingencies of only $300,000 is inadequate without an additional capital sum that can be drawn on to augment income. I do not infer that the primary judge overlooked the fact that John was entitled to an additional $800,000 remaining to be paid under the legacy. The effect of the primary judge’s determination was that after discharging John’s debts and providing a sum of $500,000 for his accommodation in a two-bedroom unit in Townsville, he should receive a further $1 million ($800,000 under the will and $200,000 by way of additional provision) to supplement his income, provide a new car and a buffer against contingencies.

24. [177]

    In addition to the sum that can be drawn on to augment John’s and his wife’s income, a contingency for which provision should be made is that one of John or Lynne might need to move into a nursing home or similar accommodation whilst the other continues to live in the unit to be acquired. A capital sum might be required for that purpose. There should also be a buffer against the contingencies of future substantial medical expenses. Adequate provision for John’s maintenance and advancement in life must be assessed having regard to John’s obligation to support Lynne (Hughes v National Trustees and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 14; [1979] HCA 2; Goodman v Windeyer (1980) 144 CLR 490 at 498, 505; [1980] HCA 31).

25. [178]

    Taking into account John’s need for a capital sum that can be drawn upon to augment income as described above, John’s need for a new car, and the contingencies for which a buffer is required, including the possibility of moneys being needed if one of John or Lynne has to move from the accommodation to be acquired into a nursing home or similar facility, and future medical expenses, the additional provision ordered by the primary judge is not beyond the proper exercise of his discretion.

26. [179]

    Although the primary judge did not articulate how he arrived at his assessment, his conclusion that there should be an order for additional provision in the sums indicated was within a legitimate range of a judicial evaluation. To put it another way, I do not consider that provision of $1 million in addition to provision enabling the discharge of John’s debts and providing accommodation was manifestly excessive, having regard to the size of the estate and the absence of competing financial need.

27. [180]

    However, because the primary judge’s decision can be reviewed on appeal without the need to show that the provision his Honour ordered was manifestly excessive (owing to an error analogous to the first category in House v The King) I would substitute my own judgment. In my view, after an order for provision for accommodation, the balance of the legacy of $800,000 is sufficient for adequate provision for John’s proper maintenance and advancement in life. I would reduce the provision made by the primary judge by deleting the order for additional provision of $200,000 for contingencies (order 3(p)). In my view, having regard to the contingencies addressed above, the balance of the legacy payable under the will is sufficient to provide a buffer for contingencies and a sum that can be drawn on to augment income, provided provision is also made for John and Lynne’s accommodation.

Cross-appeal

1. [181]

   I agree with Macfarlan JA that the cross-appeal by Robyn’s children should be allowed for the reasons given by Macfarlan JA. I also agree with Macfarlan JA’s proposed costs orders.

Proposed orders

1. [182]

   The orders made on John’s claim included the following:

2. [183]

   The “Legacy” was the legacy payable to John under clause 3(a) of the will, viz, the legacy of $2 million subject to abatement. Order 3(o) is an evident mistake. It is self-contradictory. The balance of John’s pro-rata adjusted legacy is not to be received “in addition to the Legacy”. Prima facie order 3(o) would mean that the plaintiff should receive the balance of his legacy twice. This should be corrected. There is no need for order 3(o) because that sum is part of the “Legacy” in the chapeau to order 3.

3. [184]

   Orders 6 and 7 are unusual. The additional provision ordered pursuant to s 59 of the Succession Act included:

4. [185]

   Orders 6 and 7 were as follows:

5. [186]

   Although a court frequently justifies a particular family provision order by reference to what it assesses to be an applicant’s financial needs, it is usually a matter for the applicant how he or she uses a provision ordered (Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189 at [17]). John and his dependent wife Lynne have a need for accommodation whether or not a home unit is acquired within 12 months. There is no obvious reason for that order for provision potentially to lapse, nor for the executors to have a continued involvement in the application of the provision ordered. However, John did not file a cross-appeal in relation to orders 6 and 7.

6. [187]

   In the case of Robyn, I consider that her appeal should be dismissed, save for the correction of order 1.

7. [188]

   Otherwise I agree with the orders proposed by Macfarlan JA.

8. [189]

   For these reasons I propose the following orders:

   1. (1)

      The appeal against the orders of the primary judge in favour of the first respondent be allowed in part.

   2. (2)

      Set aside paragraphs (o) and (p) of order 3 made on 26 September 2018.

   3. (3)

      Otherwise appeal dismissed.

   4. (4)

      In respect of Robyn Webster’s claim under the Succession Act:

   5. (5)

      Allow the cross-appeal and vary Order 2(c) by replacing the expression “clause 3(b)” with the expression “clause 3(c)” and adding the words “and the legacy payable to Elizabeth Fuggle under clause 3(b) of the Deceased’s will”.

   6. (6)

      Extend the time for the filing of the cross-appeal to the date that it was filed.

   7. (7)

      Order that the costs of all parties to the appeals (as distinct from the cross-appeal) be paid out of the estate on an indemnity basis.

   8. (8)

      Order that the cross-respondents pay the cross-appellants’ costs of their amended notice of motion filed in the court below on 28 May 2018 and of the cross-appeal.

9. [190]

   McCALLUM JA: I have had the benefit of reading the judgments of Macfarlan JA and White JA in draft. As noted in both judgments, it is uncontroversial that the House v The King standard applies to a challenge to the determination of the amount of additional provision to be made. As to what Macfarlan JA has said at [79] in respect of Gageler J’s reasoning in SZVFW at [49], it is not clear to me that Gageler J’s reasoning would hold (other authority aside) that the correctness standard of review would apply to a challenge to such a finding. Justice Gageler’s reasoning at [45] of the judgment suggests, on the contrary, that his Honour reconciled Singer v Berghouse with the analysis explained at [49] on the basis that the legal criterion by which the determination was to be made in that case (whether an applicant had been left with “inadequate” provision for his or her “proper maintenance, education and advancement in life”) was of a kind that, although ultimately requiring a binary choice, would tolerate a range of outcomes on its proper application and so attracted the application of the House v The King standard. However, it is not necessary for present purposes to decide that question.

10. [191]

    I agree with White JA that no error has been shown in the primary judge’s disposition of Robyn’s claim, for the reasons his Honour has explained. In my respectful opinion, the primary judge’s reasons on this issue are clear. His Honour accepted Robyn’s submission, both as to the contention that the additional provision should include a contingency fund in addition to the funds required to enable her to pay her debts and as to the amount identified, having regard to her likely future needs. I do not read [587] of the judgment as being inconsistent with that. I do not think the third sentence in that paragraph was intended to be a comprehensive statement of all of the reasons for making the order. Reading the judgment fairly as a whole, it is clear that the position his Honour reached, after closely considering the relevant matters, was to accept her claim as framed. While the amount of $485,000 might be viewed as reflecting a careful or favourable provision for the future, I am not persuaded that it was so excessive as to attract the principles in House v The King. I agree with the orders proposed by White JA for the disposition of the appeal concerning Robyn’s claim.

11. [192]

    As to John’s case, I agree with Macfarlan JA and White JA that the orders for additional provision made in favour of John were premised upon the assumption that his $2 million legacy would abate. I also agree, as both Macfarlan JA and White JA have held, that the judge’s reasoning concerning John’s contingency was, with respect, inadequately exposed. In particular, it is not possible to discern whether, in allowing a contingency of $200,000, his Honour overlooked the legacy. If he did, that would be a separate error. If he did not, in my view the additional provision was manifestly excessive, for the reasons stated by Macfarlan JA.

12. [193]

    Justice White has considered the nature of an error consisting in failure to provide adequate reasons. In my respectful opinion, the correct approach is as stated by Hodgson JA in Costa at [16]-[18]. If there is material error in the reasoning (including a failure to give reasons), that is an error of a different kind, the determination of which is anterior to and separate from the application of the House v The King standard and the consequence of which is that the order cannot stand. In any event, as already indicated, I agree with Macfarlan JA that, assuming the primary judge did not overlook the legacy, the additional provision was manifestly excessive. I agree with the orders proposed by Macfarlan JA concerning John’s claim, for the reasons his Honour has given. I also agree with his Honour’s reasons and proposed orders concerning the cross-claim.