Re Estate Grant, deceased

This judgment determines three related sets of proceedings (by an order of the Court, made with the consent of all parties, heard together) relating to the estate of David William Grant (“the deceased”) who was born in August 1960 and who died in Sydney on 14 December 2015, aged 55 years.

At core, there are competing claims to:

These values are characterised as “estimates” in part because it is agreed between all parties that, in working out the Court’s orders, it will be necessary for adjustments to be made, accounting for the fact that, pending a determination of the proceedings, the superannuation fund is funding payments due on a mortgage charged against the title to the deceased’s principal asset. Since the deceased’s death, the fund has made mortgage payments totalling not less than about $69,000, reducing the available fund from about $858,000 to about $789,000 in the absence of adjustment.

The “principal asset” is a residential property in Queen’s Avenue, McMahon’s Point (a suburb of Sydney) which, at the time of the deceased’s death, was the family home of his second wife (now his widow) and himself. The property was purchased, and registered, in the name of the deceased. Beneficially, his estate holds a 94.8% share of the property and his widow holds the remaining 5.2% share.

The principal contest in the proceedings is between the deceased’s widow (on the one hand) and (on the other hand) three adult sons of the deceased (particularly that one of the sons who is, in strict terms, a stepson) associated with his first marriage.

The deceased’s brother is a party to the proceedings, essentially in the interests of the three sons, insofar as he applies for a grant of probate in respect of a will made by the deceased on 3 January 2014 which names the three sons as the deceased’s sole beneficiaries (in equal shares), and him as executor.

Of the three sets of proceedings before the Court:

The central question for determination in the proceedings, taken together, is whether, by operation of section 12 of the Succession Act:

The will was not expressed to have been made in contemplation of marriage; but, on the current wording of the Succession Act, that is not, of itself, an impediment to a finding that it was, in fact, made in contemplation of marriage.

The deceased’s widow contends that the will was not made in contemplation of marriage and, so, it was revoked by her marriage to the deceased.

The deceased’s brother and the three adult children of the deceased named as sole beneficiaries in the will contend that it was made in contemplation of the deceased’s second marriage and, accordingly, that it was not revoked by the marriage and it should be admitted to probate.

Although a grant of administration was made by the Court upon an assumption of intestacy:

The original will cannot presently be located; but there is no dispute as to its terms, or (if not revoked by marriage) its validity.

Contingently upon the Court’s determination of the central question as to the validity of the deceased’s will, applications for family provision relief have been made by both the deceased’s widow and the stepson named in the deceased’s will as a beneficiary.

If the will is admitted to probate, the stepson does not press his application for family provision relief (because he is entitled to a one third share of the deceased ‘s estate as a beneficiary named in the will), but the widow presses her application for family provision relief (because she stands to acquire nothing under the will).

If the will is held to have been revoked, so that the estate is to be administered on an intestacy, the stepson presses his claim for family provision relief (because, as a stepson, he stands to acquire nothing under the intestacy rules for which chapter 4 of the Succession Act provides), and the widow does not press her family provision application (because, under chapter 4, she acquires the bulk of the deceased’s estate).

In the proceedings numbered 2016/00371991 the two sons of the deceased (twins) were originally named as plaintiffs, together with their step brother, because they too made an application for family provision relief. However, they withdrew their claims for relief and, in the stepson’s amended summons, they are named as defendants rather than as co-plaintiffs.

They withdrew their family provision applications because: (a) if the deceased’s will is admitted to probate, they each take a one-third share of the deceased’s estate; and (b) if the will is held to have been revoked by marriage, so that the deceased’s estate is to be administered on an intestacy, then (under chapter 4 of the Succession Act) they each take a one-quarter share of the residue of the deceased’s estate after statutory allowances made in favour of the widow.

The trustee of the deceased’s superannuation fund is a corporation presently under the control of the administrators of his estate; that is, his widow and one of his twin sons. Given the competing claims made in the present proceedings, management of the company is deadlocked.

At the tail end of the final hearing of the proceedings, but with the consent of all concerned, the company was joined as a defendant in the proceedings in which family provision relief has been claimed. This was done so as to facilitate (if appropriate) an order for designation of the superannuation fund as notional estate of the deceased.

All parties agreed that the company be joined; that, in circumstances in which all interested parties are otherwise represented in the proceedings, any requirement for the company to file an appearance be dispensed with; and that, if required, the superannuation fund is available for designation as notional estate even if, as is common ground, the deceased’s actual estate is of a size sufficient to bear the burden of any family provision order likely to be made.

The deceased was twice married. He had two children, and two stepchildren, by his first marriage; but he and one of his stepchildren were estranged. There were no children of his second marriage.

Between 14 October 1989 and 5 November 2013 the deceased was married to Lisa. That marriage ended in divorce, preceded by a property settlement (as between the deceased and Lisa) formally approved by the Family Court of Australia. The date and terms of the property settlement are not in evidence.

For practical purposes, there are four children of the deceased’s marriage to Lisa. The deceased treated her two sons from an earlier relationship as sons of his own.

The deceased met Lisa in about 1987 or 1988. She moved into his home in February 1989. At that time she had two young children: Siegfried and Maximilian. In January 1990 they changed their surname to “Grant” to match that of the deceased.

Siegfried (“Zig”) was born in 1983 and is presently aged about 35 years. He and the deceased were estranged.

Maximilian (“Max”) was born in 1988 in the presence of the deceased. The deceased chose his name. He is presently aged about 30 years. He is the stepson named as a beneficiary in the deceased’s will. He is an applicant for family provision relief if the will is not admitted to probate.

Twin sons were born to the deceased and Lisa in 1990. They are presently aged about 27 years. Jackson (“Jack”) is the son to whom, with the deceased’s widow, a grant of administration of the deceased’s estate has been made. Lewis is the other twin.

The deceased’s second marriage, to Katerina, grew out of what was an extra marital affair between co-workers which commenced in 2006 (within a year or so of Katerina commencing employment with the deceased) and continued, intermittently, until he and his first wife finally separated in April 2012.

In retrospect, Katerina regards herself as having commenced living in a de facto relationship with the deceased in April 2012, notwithstanding that they had an “on again/off-again” relationship extending back to 2006 and they did live together for several months in 2011.

There is no real dispute between the parties that the deceased and Katerina did in fact live in a de facto relationship that commenced in April 2012, coincidently with the deceased’s final, formal separation from Lisa.

Although the deceased and Katerina can be taken to have commenced living in a de facto relationship in and from April 2012:

The deceased and Katerina collaborated in purchase of the McMahon’s Point property in 2013. It was bought in the name of the deceased, at an auction held on 26 October 2013, for a purchase price of $3.64 million. The purchase was completed on 25 November 2013. Stamp duty payable on the purchase contract was $195,310. Accordingly, the total amount paid for the property (not including legal costs) was $3,835,310. That sum was funded by: (a) a contribution of $2,635,310 made by the deceased; (b) a contribution of $200,000 made by Katerina; and (c) a loan of $1 million from the ANZ Bank secured against the property. The bank loan was made to the deceased alone but, as between themselves, the deceased and Katerina agreed that they would service the loan (with regular payments of principal and interest), and pay all outgoings on the property, in equal proportions.

On 28 November 2014 (a year after completion of the purchase) they executed a deed of trust which formalised their informal arrangement for ownership of the property. The deed made no mention of the parties’ de facto relationship. It appears in the guise of an arm’s length commercial arrangement. The parties’ beneficial co-ownership of the property was characterised as a tenancy in common. Their respective shares were expressed as proportionate to their money contribution to the total cost of acquisition of the property: $200,000 represents 5.214702% of $3,835,310. The deed contains an express acknowledgement that Katerina’s share in the property might increase in accordance with loan repayments. It also contains an acknowledgement of her entitlements to lodge a caveat on the title and to call for a transfer to her of her share of the legal estate.

The deed was executed at about the same time as the couple commenced full-time cohabitation at the property. At about that same time Max and Jack, who had been living with their father, moved out so as to allow the deceased and Katerina space for their relationship.

Although the solicitor who prepared the deceased’s will (Mr Beattie) was a close personal friend of the deceased, the deceased did not introduce Katerina to him until several months after the will was prepared. At the time the will was prepared, the deceased’s expressed, perceived need for a will was a desire to ensure that Lisa and Siegfried obtained no benefit from his estate should he unexpectedly die. As between the solicitor and the deceased, there was no mention made of Katerina, or a general possibility that the deceased would remarry.

In the course of an established but developing personal relationship, in which marriage was expressly discussed from time to time, the deceased formally proposed marriage to Katerina on 6 June 2015, and they were married on 19 September 2015.

Married the day after her 36th birthday, Katerina was left a widow within three months of her marriage.

The deceased died of a brain cancer first diagnosed in February 2015. Having mentored Katerina at the commencement of her career he was, by that time, a consultant working for her. On 3 March 2015 he executed instruments appointing her as his enduring attorney and enduring guardian, appointments she accepted that same day. Although he continued working until about April-May 2015, he was too debilitated by medical treatment to continue working beyond that time.

Although the deceased’s will was prepared by a solicitor, it was not executed at or about the time of preparation or under the direct supervision of the solicitor. The solicitor prepared the document as a draft, anticipating confirmatory or supplementary instructions before settling its terms. No such instructions were received.

In fairness to the solicitor (who proffered the deceased no advice about the operation of section 13 of the Succession Act, let alone section 12), the deceased did not submit to an ordinary solicitor-client relationship with Mr Beattie. He approached the relationship casually, treating Mr Beattie as a resource to be used as and when convenient to himself rather than as an adviser to be consulted for guidance in matters of substance.

In broad terms, whereas section 12 of the Succession Act deals with revocation of a will by marriage, section 13 deals with revocation by divorce of provision made in a will for a (subsequently divorced) spouse.

Section 13 was not a complete answer to the deceased’s concerns about his pre-divorce will in favour of his first family. He wanted to disinherit Siegfried as well as Lisa, and he wanted to reinforce their disinheritance with an express repudiation of Siegfried (and implicitly Lisa) in a new will.

Although it is common ground that the will was executed on or about 3 January 2014, the document bears no date of execution beyond the typed date “2013”. The deceased and the two lay witnesses in whose presence he executed the will neglected to date it.

The date “3 January 2014” attributed to the will as the date of execution coincides with the date upon which, by an email, the deceased sent a copy of the signed will to both his solicitor and his executor.

The will was prepared for execution in late November 2013, at about the time of completion of the deceased’s purchase of the McMahon’s Point property. Instructions for the preparation of a will were first given, via email, on 21 November 2013. After further exchanges, via email and telephone conversations between the deceased and his solicitor, the solicitor sent the will to the deceased via email on 27 November 2013. Despite the deceased’s expressed anxiety for the preparation of a new will as soon as possible, he evidently made no arrangements for its execution until 3 January 2014, as he rushed to meet a travel commitment. He travelled to the Gold Coast, Queensland, for a prestigious celebrity horse sale.

At that point, without engaging his solicitor in the process of settling its terms or attending to its execution, the defendant arranged to sign the will in the presence of witnesses arranged for that purpose by himself.

That this was a disjointed process appears on the face of the will in the incomplete identification of an alternate executor.

The material provisions of the will are found in clauses 5-8, here reproduced:

Upon an assumption that the deceased’s will was revoked by marriage, and that he accordingly died intestate, his beneficiaries (by operation of chapter 4 of the Succession Act) are:

Of a net estate with an estimated value of about $4.4 million (not including personal effects), Katerina’s share is estimated to be worth about $2.4 million and the respective shares of Jack and Lewis are estimated to be worth about $990,000 each (subject to orders for costs made in these proceedings). The total costs incurred by all parties to the proceedings are of the order of about $500,000.

Subject to accounting adjustments consequent upon the Court’s orders, it is agreed between all parties to the proceedings that, in administration of the deceased’s estate as an intestate estate:

The importance of the availability of a conditional order is that there has been a substantial increase in the value of the McMahon’s Point property since the date of the deceased’s death, and the deceased’s sons are anxious that Katerina not be permitted to benefit economically from her delay in making an election.

There is no direct, expert evidence of the value of the McMahon’s Point property at the time of the deceased’s death. The best evidence (upon which all parties invite the Court to act) is an estimate of value of the deceased’s 94.8% beneficial interest in the property (after deducting a mortgage liability of $962,918) found in the inventory of property attached to the letters of administration issued to Katerina and Jack on 15 July 2016. That estimate of $2.7 million translates into a value of approximately $3.811 million for the whole of the property.

The current market value of the property is agreed between all parties to be $5.625 million. 94.8% of that figure (indicative of the value of the deceased’s share of the property) is $5,332,500 (subject to the ANZ Bank mortgage secured on the property).

Each of Katerina and Max makes an application for a family provision order contingent upon determination of the “probate proceedings”. Both applications were made within the time limited by section 58(2) of the Succession Act.

Each of Lisa, Jack and Lewis has expressly disclaimed any intention to apply for family provision relief.

Having been served with notice of the proceedings, Siegfried has made no application for a family provision order. The time within which he was required (by section 58(2) of the Succession Act) to apply for such an order expired on 14 December 2016, 12 months after the date of the deceased’s death. Unlike Lisa, Max, Jack and Lewis, he has given no evidence in the proceedings. On the face of the record, he has played no role in the proceedings at all. Although he could claim the status of an “eligible person” on the same basis as Max, he has not done so. In determining the applications for a family provision order made by Katerina and Max, the Court is authorised by section 61 of the Succession Act to disregard his interests. No party contends that some allowance should nevertheless be made for those interests.

There is no dispute about the eligibility of Katerina and Max to make a claim for family provision relief. As the deceased’s widow, Katerina is an “eligible person” within the meaning of section 57(1)(a) of the Succession Act. All parties accept that Max is an “eligible person”, within the meaning of section 57(1)(e) of the Act, as a person who was, during his youth, a dependent member of the deceased’s household. In each case, the jurisdictional requirement for the making of a family provision order found in section 59(1)(a) of the Act – namely, that the Court be satisfied that the claimant is an “eligible person” – is satisfied.

Nor is there any dispute that, if Max’s family provision application is pressed, then, in terms of section 59(1)(b) of the Succession Act, there are factors which warrant the making of his application. Not until he was 17 years old did he discover the truth about his paternity. He was treated by the deceased, as a son, on a par with the deceased’s own twin sons. He was, thus, a natural object of the deceased’s bounty: Re Fulop (1987) 8 NSWLR 679 at 681 Churton v Christian (1988) 13 NSWLR 241 at 254. If the deceased’s estate is to be administered on intestacy, he is not a beneficiary even though under the deceased’s will he stood to receive one-third of the deceased’s estate, on a par with the deceased’s twin sons. In common with Lisa and his step brothers, he was advised by the deceased of the terms of the will via email on 3 January 2014, the day it was executed. His application satisfies the jurisdictional requirement in section 59(1)(b) that the Court be satisfied that, having regard to all circumstances, there are factors which warrant the making of his application.

As the deceased’s widow, Katerina is not required by section 59(1)(b) of the Succession Act to prove “factors warranting”.

If Max’s application for a family provision order is pressed (because the estate is to be administered on intestacy), there is no dispute that, within the meaning of section 59(1)(c) of the Succession Act, he has been left without adequate provision for his proper maintenance, education or advancement in life. He is a young adult, without substantial assets, despite an expectation (fostered by the deceased) that he would inherit a one-third share of the deceased’s estate, an object of which testamentary provision was, in the mind of the deceased, to assist Max to acquire his own residential accommodation.

Upon an intestacy, he has no entitlements. There is no opposition to a finding (which I make) that he has satisfied the jurisdictional requirement of section 59(1)(c).

The substantial battleground on Max’s family provision application is:

No party suggests that no provision should be made for Max upon an application of the Succession Act, section 59(2). The controversial questions are “how much?” and “who pays?”.

Max’s primary contentions are that he should be treated equally with Jack and Lewis, and that Katerina alone should bear the burden of any provision made for him.

In advancing those contentions, Max acknowledges that the family provision jurisdiction is not designed to be a vehicle for ensuring that an estate is distributed “fairly” or in “equal” portions. Without oversimplifying the list of factors to be taken into account specified by section 60(2) of the Succession Act, the practical focus upon an exercise of family provision jurisdiction is upon whether a claimant for relief has any “need” which might properly be characterised as a well-founded claim on the bounty of the deceased.

Max’s case is that, in common with his stepbrothers, he is a young person in need of assistance from the deceased, and the Court has before it (in the deceased’s will and associated statements made by the deceased) evidence that the deceased himself thought that all three should be treated equally or, avoiding the word “equally”, on substantially the same terms in meeting their similar needs.

Supported by his stepbrothers, Max invites the Court to designate the deceased’s superannuation fund as notional estate for the purpose of funding a family provision order, in the nature of a legacy, in his favour. An added attraction for the boys in this submission is that Katerina claims to be the only person to whom the deceased’s superannuation entitlement can, under the governing deed and rules of the fund, be paid.

If pressed (because the deceased’s will is admitted to probate, leaving her with nothing from the estate of the deceased), Katerina’s family provision application is opposed by Max, Jack and Lewis – by reference to both section 59(1)(c) and section 59(2) of the Succession Act – essentially because: (a) Katerina is a successful businesswoman with wealth independent of any interest she may have in the deceased’s estate, or any entitlement she may have to his superannuation entitlements; and (b) she was assisted in establishing her business by mentoring efforts made by the deceased during his lifetime. They point also to the short duration of the deceased’s marriage to Katerina.

For her part, Katerina acknowledges that the facts of her case do not neatly fit the classic paradigm generally discussed by reference to Luciano v Rosenblum (1985) 2 NSWLR 65 at 69. In that case, Powell J observed that, as a broad general rule, and in the absence of special circumstances, the duty of a testator under family provision legislation, to make a “adequate provision for the proper maintenance, etc.” of his widow, requires that, to the extent to which his assets permit him to do so, a testator ensure that his widow is secure in her home, that she has an income sufficient to permit her to live in the style to which she is accustomed, and that she has available to her a fund to which she might resort in order to meet any unforeseen contingencies.

Katerina’s marriage to the deceased was admittedly short, but it was preceded by a de facto relationship of about three years and a personal relationship of longer duration. Through her own efforts, as well as early assistance from the deceased, she has built up a successful business (dependent largely upon her continuing, personal exertions), enjoying a substantial income and acquiring property in her own right along the way.

By her family provision application, she seeks to secure a continuing right to live in the McMahon’s Point property (accepting an obligation to service the mortgage charged on the property) and, if the property must be sold, she seeks an entitlement to not less than one-half of the net proceeds of sale, free of any obligations to repay the mortgage principal.

Max (with the support of his step brothers, and that of his uncle named as executor in the deceased’s will) relies upon the following facts (as I find them to be) in support of his contention that the will was “made in contemplation of [the deceased’s second] marriage” so as to attract the operation of section 12(3) of the Succession Act:

This last point needs to be set in the context that the deceased did not communicate to the solicitor any intention to marry Katerina, and the solicitor did not interrogate him about future prospects of marriage or advise him about the effects of divorce and (re)marriage on the effectiveness of a will.

The penultimate point needs to be set in the context of the following paragraphs in an affidavit affirmed by Katerina on 23 February 2017, admitted into evidence without objection and not cross examined upon directly (but obliquely) in the course of the final hearing (with emphasis added):

As life unfolded, the deceased and Katerina had no children. After he was diagnosed with brain cancer in February 2015, he arranged for his sperm be available for Katerina to have children by him. Shortly after their wedding on 19 September 2015 he was admitted to hospital and told that medical treatment of his cancer was no longer effective, leaving him four-six months to live. He told Katerina that he still “wanted to try for her to get pregnant” before he died, which she took as an ultimate expression of love. She told him that they needed to focus on him and their relationship in the short time still available to them.

Counsel for Max emphasised a course of events between the early discussions of 2010 through to the time when the will was executed in which, he submits: the deceased expressed a desire for marriage; Katerina identified three impediments to marriage (namely, the absence of separation, divorce and a marriage proposal capable of acceptance); there was a removal of the first two of those three impediments; “contemporaneous” steps were taken by the deceased towards establishment of a new home and planning for children; and, in that context, there were discussions about the deceased’s testamentary arrangements for disinheritance of Lisa and Siegfried and the making of provision for Max, Jack and Lewis as children towards whom the deceased felt ongoing family obligations.

Katerina’s counsel emphasised that: (a) the deceased did not make a formal proposal of marriage to Katerina until 6 June 2015; (b) at no time before then, and particularly at no time in the early discussions of 2010, did Katerina commit herself to marriage in advance of a proposal capable of acceptance; (c) in the 2010 discussions, Katerina said no more than that she was prepared to discuss marriage with the deceased if and when he was able to make, and he did make, a proposal of marriage capable of acceptance; (d) at the time he executed his will on 3 January 2014, the deceased did not have in contemplation marriage to Katerina, only freeing himself from his marriage to Lisa; and (e) the will was prepared in haste and, after procrastination on the part of the deceased, executed in haste as a “stop gap” will (admittedly as a fully operational will, not as a “stop gap” will of the type of informal will described in Permanent Trustee Co Limited v Milton (1995) 39 NSWLR 330 at 335 D-E) to be reviewed at leisure later at an unspecified time.

At no time between the date the will was provided to him by the solicitor in draft and the time of his death, did the deceased show a copy of the document to Katerina.

In November 2014 the deceased and Katerina commenced full time cohabitation at the McMahon’s Point property and they executed their “deed of trust” (which did not refer to the nature of their domestic relationship or any prospect of marriage) designed to acknowledge: (a) Katerina’s beneficial interest in the property; and (b) her agreement to bear 50% of the burden of servicing the mortgage and paying outgoings.

The deceased stopped working on his own account in about late 2011, and took up a paid consultancy role in Katerina’s then newly established business.

In February 2015 the deceased was diagnosed with brain cancer. By about April of that year he was suffering too greatly from his illness, and the medical treatment designed to cure it, to be able to work. In June he proposed marriage, a proposal unhesitatingly accepted. Thereafter, his mental facilities began to fail such that, when his brother on one occasion suggested to him that marriage would revoke his will, one could not be certain about: (a) whether he understood the suggestion; or (b) the meaning of his response. The marriage took place, as planned, on 19 September 2015; Max, Jack and Lewis served as groomsmen, Mr Beattie as best man. On 14 December 2015 death intervened.

Section 12 of the Succession Act is and was at all material times in the following terms (with emphasis added):

Section 12 is in substantially the same terms as its predecessor (the Wills, Probate and Administration Act 1898 NSW, section 15) at the time of its repeal.

Section 12 of the Succession Act (and section 15 of the Wills, Probate and Administration Act 1898) reflect three stages of development of Anglo-Australian law.

First, section 15 initially provided that “[every] will made by any person shall be revoked by his [or her] marriage…”. This provision (now found in section 12(1) of the Succession Act) can be traced back to the English Wills Act 1837 (1 Victoria chapter 26, section 18), expressly adopted in NSW, in 1840, by (1839) 3 Victoria No. 5. By adoption of the English legislation, the NSW Parliament ostensibly abolished an earlier “doctrine of implied revocation of wills by change of circumstances” developed in England (and, semble, assumed to have been received as law in NSW) under the general law, substituting the narrower rule of revocation of a will by marriage.

A convenient, if not authoritative, exposition of the old “doctrine” can be found in the NSW Law Reform Commission Report (Report 47 (1986) - Community Law Reform Program: Wills - Execution and Revocation) which recommended amendments to section 15 of the Wills Probate and Administration Act (which, in due course, became section 12 of the Succession Act). Omitting footnotes, paragraphs 9.2 and 9.3 of the Commission’s Report were in the following terms:

The old “doctrine” was replaced by what we now recognise as the marriage revocation rule (Succession Act, section 12(1)), itself modified by exceptions. The old “doctrine” could not survive changes in thinking about property law, the law of inheritance generally, the status of women and divorce. Nevertheless, notice should be taken of the fact that the law focused attention on the actual, or presumed, intention of a person vis á vis claims on testamentary bounty associated with obligations of “family”.

A second stage of development of the law came to NSW in 1930, when section 15 was amended to introduce an exception to the general marriage revocation rule by including a new subsection 15(2). With emphasis added, it provided that a will “… which is expressed to be made in contemplation of marriage, shall not be revoked by the solemnisation of the marriage contemplated”: Conveyancing (Amendment) Act 1930 NSW, section 43(a). This legislation in substance adopted a reform effected by the English Law of Property Act 1925 (15 George V chapter 20), section 177.

The third stage of development of NSW law came in 1989. A new subsection 15(3) was introduced. It provided (with emphasis added) that “[a] will made… in contemplation of a marriage, whether or not that contemplation is expressed in the will, is not revoked by the solemnisation of the marriage contemplated: Wills, Probate and Administration (Amendment) Act, 1989 NSW. By the same amending Act, a new section 15(4) was introduced to preserve “a will … expressed to be made in contemplation of marriage generally”.

These reforms implemented recommendations made by the NSW Law Reform Commission’s Report 47 at paragraphs 9.20-9.21.

The 1989 Act also introduced into the Wills, Probate and Administration Act section15A (the precursor to section 13 of the Succession Act) directed towards revocation by divorce of provision made in a will for a (subsequently divorced) spouse. This reform of the law was recommended by the Law Reform Commission in Report 47, paragraphs 10.16 et seq.

The two types of legislative reform came into operation as a twin package. Two events common in modern society – marriage and divorce – are likely uniquely to bear upon claims upon the bounty of a will-maker. By their very nature, they each require a re-think of testamentary arrangements, failing which succession to property may of necessity have to be governed by general rules of intestacy, or be left to an exercise of discretionary family provision jurisdiction.

When the Succession Act commenced operation on 1 March 2008, it enacted as chapter 2 of the Act provisions (including section 12) relating to the making, alteration, revocation and revival of wills. Those provisions replaced provisions earlier found in the Wills, Probate and Administration Act, renamed the Probate and Administration Act 1898 NSW.

In approaching section 12 of the Succession Act, the parties agree (and I accept) that:

A “marriage” which is “in contemplation” for the purpose of section 12(3) is a “marriage” which, but for section 12(3), would result in a will being revoked by operation of section 12(1). Section 12(3) refers to a marriage which, at the time a will is made, is a future prospect.

That said, there is force in the following observations made by Dixon J in Steel v Ifrah [2013] VSC 199; 38 VR 186 at [12], here adapted editorially to a NSW setting and with emphasis added:

A return must be made, later in this judgment, to Dixon J’s concluding comment about “what is important”.

In the present proceedings Max and those who support his cause contend that the deceased’s will was not revoked by his second marriage because, at the time he made the will, the deceased had that marriage in mind when, with a backward glance towards his first family, he settled the terms upon which he intended to make testamentary provision for them.

The parties’ debate about how section 12(3) of the Succession Act must operate in the factual setting of these proceedings focused attention on differently nuanced expositions of comparable legislation by White J in Hoobin v Hoobin [2004] NSWSC 705 at [34]-[53] and Dixon J in Steel v Ifrah (2013) 38 VR 186, each acknowledging earlier observations of Mahoney JA in Layer v Burns Philp Trustee Co Ltd(1986) 6 NSWLR 60 at 67.

As White J observed in Hoobin v Hoobin [2004] NSWSC 705 at [39] and [44]-[46], Layer v Burns Philp Trustee Co Ltd is authority for the propositions that: (a) to contemplate something does not necessarily import an intention to bring it about; (b) the deceased need not have intended nor understood that his or her contemplation of a particular marriage would preserve his or her will from revocation if that marriage took place; and (c) there is no requirement that a will be made because the deceased proposed a particular marriage, no causal connection being required between the making of the will and the proposal to marry.

As his Honour also observed, the Court of Appeal did not decide what state of mind is sufficient to amount to “contemplation of marriage”. That was a topic to which he was required to direct attention.

Sections 15(2) -15(3) of the Wills, Probate and Administration Act were the subject of White J’s judgment. However, as those provisions are substantially the same as section 12(3) of the Succession Act, and Parliament did not intend a change in the law governing this topic by enacting the Succession Act, his Honour’s observations have direct application in the current proceedings. There is a difference in form between section 15(3) of the Wills, Probate and Administration Act and section 12(3) of the Succession Act insofar as the former refers to contemplation of “a marriage” whereas the latter refers to contemplation of “a particular marriage”; but there is no difference of substance in that terminology. In each statute, the contrast is between contemplation of a particular marriage and (by allusion to a next following subsection) contemplation of “marriage generally”.

The essence of White J’s reasoning appears in paragraphs [42] and [53] of his judgment, when he made the following observations (with emphasis added):

In addressing section 13(3)(a) of the Wills Act 1997 Vic (the Victorian equivalent of section 12(3) of the NSW Succession Act), Dixon J reviewed Hoobin v Hoobin [2004] NSWSC 705; noticed that Hoobin v Hoobin was cited with approval in Berry v Bell [2012] WASC 197; and adopted observations made by O’Neill J, in the High Court of Ireland, in Re Estate of O’Brien (Dec’d) [2011] IEHC 327; (2011) 4 IR 687 at [37] .

On the way to adoption of the Irish observations, Dixon J made the following observations of his own (with emphasis added):

With that background, Dixon J (at [18]) expressly adopted the following observations of O’Neill J in Re Estate of O’Brien (Dec’d) (2011) 4 IR 687 at [37] (here editorially adapted, with emphasis added), which he described as an analysis both apposite to the terms of the Victorian legislation and persuasive:

There is a tension between Dixon J’s adoption of these observations and what he wrote in paragraphs [12]-[13] of his judgment, extracted above. His own exegesis of the concept of a will “made in contemplation of marriage” is closer to White J’s than to that of O’Neill J.

To the extent that there is any difference of approach between White J’s exposition of the law and that of Dixon J by reason of Dixon J’s adoption of O’Neill J’s observations, White J’s formulation of the law is to be preferred.

His Honour’s analysis was undertaken in the context of NSW legislation substantially the same as now operates. The questions with which he grappled were similar to those at the core of the current proceedings: Was a will made in contemplation of marriage? In the administration of an intestate estate, what flowed from a spouse’s statutory right to elect to acquire a family home? What, if any, family provision relief should be granted? How do the various elements of probate law, estate administration and family provision jurisdiction fit together in administration of a contested estate?

Section 15 of the Wills Probate and Administration Act was in substantially the same terms as section 12 of the Succession Act now is. The statutory rules of intestacy changed between one Act and the other, but not in respects presently material. The Family Provision Act 1982 NSW was not materially different from what is now found in chapter 3 of the Succession Act.

This is important because section 12 of the Succession Act must be construed, and allowed to operate, as part of a broader legislative regime governing the law of succession.

O’Neill J’s observations were made for the purpose of distinguishing Irish law from English law in a legal system which differs from that found in NSW.

In a concluding part of paragraph [37] of Re Estate of O’Brien (Dec’d) not quoted in Steel v Ifrah (2013) 38 VR 168 at [18] O’Neill J wrote the following:

Section 85(1) of the Irish Succession Act 1965 provided that: “[a] will shall be revoked by the subsequent marriage of the testator, except a will made in contemplation of that marriage, whether so expressed in the will or not”.

This terminology is not materially different from that found in sections 12(1) and 12(3) of the NSW Succession Act, but the context in which the Irish and NSW provisions fall to be construed is different.

In giving to the expression “a will made in contemplation of that marriage” a broad construction, O’Neill J was mindful that the Irish legislation reserved a fixed portion of a testator’s estate for a spouse whatever the outcome of an application of the marriage revocation rule. It is not necessary to dwell on other provisions of the Irish Succession Act which allowed a spouse’s “legal right” under section 111 to be renounced or qualified in various ways. It is sufficient to notice that section 112 of the Act provided that that legal right “shall have priority over devises, bequests and shares on intestacy.”

If (as I find) section 12 of the NSW Succession Act is to be construed in the context of the Act as a whole, these marked differences between the Irish legislative regime and that for which the NSW Act provides deprive O’Neill J’s observations of persuasive value they might otherwise have had.

In the NSW context, care needs to be taken not to downplay too much the concept of “intention” upon an analysis of exceptions to the rule that a will is revoked by marriage. The concept of “intention” lies at the heart of disposition of property by will, and it is no less important to an assessment, generally, of whether a will, once made, is revoked by an act of a will-maker. Whether, and to what extent, execution of a testamentary instrument or other conduct of a will-maker revokes an earlier testamentary instrument generally depends on the intention of the will-maker as ascertained from the later instrument, or conduct, and all surrounding circumstances: In the Will of Page [1969] 1 NSWR 471 at 474-475 and 477; (1969) 90 WN (NSW) (Pt 1) 6 at 10-11 and 14; Re Barker [1995] 2 VR 439 at 445-448; Singh v Singh [2008] NSWSC 715 at [31]-[35]; Schneider v Sydney Jewish Museum Inc. [2008] NSWSC 1331 at [106]-[110]; Fawcett v Crompton [2010] NSWSC 219 at [23]-[26]. Coherence in exposition, and development, of the law compels an appreciation of the role played by “intention” in testamentary dispositions.

The NSW Law Reform Commission Report (Report 47), which introduced the reforms which subsequently found expression in section 12(3) of the Succession Act, implicitly cautions against downplaying the language of “intention” in this area of the law, bearing in mind the law’s general policy concern to give effect to the actual intentions of a will-maker where clearly evidenced.

The recommendations made (in paragraph 9.21 of the Report) for what subsequently became sections 12(3) and 12(4) of the Succession Act were in the following terms (with emphasis added) :

In making these recommendations, the Law Reform Commission bowed to community pressure to retain the general rule (now found in the Succession Act, section 12(1)) that a will is revoked by marriage. Its recommendation to retain the rule was justified (in paragraph 9.20 of Report 47) by reference to the following reasons (with emphasis added):

This treatment of the topic demonstrates that policy considerations underlying the Succession Act, section 12, focus not only on a need to give effect to a testator’s “intentions” – where they can be proved – but also on the presumed intentions of a will-maker who might not have thought about the testamentary implications of a marriage, and the idea that there are some people whose “specific need… ought” to have been satisfied by a testator.

Care needs to be taken not to elevate analyses of a legislative text into a “gloss” deployed as a substitute for the text itself. One must always begin, and end, with the text. This is particularly important where legislation is required to be applied to a broad, dynamic range of social relationships.

Even if the concept of “marriage” deployed in this particular legislation is assumed to provide a stable, constant point of reference, diversity of human experience is likely to find an outlet in the expression “made in contemplation of”. That there are many pathways to a formal marriage in contemporary Australian society is confirmed, for example, by the legal incidents now attending a “de facto relationship” (defined by the Interpretation Act 1987, section 21C) and the breadth of the concept of “family” implicit in the definition of “eligibility” to apply for family provision relief. The days have passed – if they ever truly existed – when, in social terms, there was a single bright line dividing all “pre” and “post” marriage relationships.

In his treatment of the earlier judgments of the NSW Court of Appeal in Layer v Burns Philip Trustee Co Ltd and of White J in Hoobin v Hoobin, Dixon J was conscious of a broad correspondence between his views and those expressed in the earlier judgments.

Having described his own views in terms of “what is important” (in paragraph [12] of Steel v Ifrah) – with an emphasis (in paragraph [13]) on a need for a testator to give “thoughtful observation or consideration of a prospect, or an expectation, of a marriage in the process of making [a] will” – Dixon J introduced his references to interstate judgments by recording (in paragraph [14]):

Analyses of the operation of the legislation in particular cases need to be understood in the context of each particular case.

In Layer v Burns Philp Trustee Co Ltd (a case which preceded the 1989 amendments to the Wills Probate and Administration Act) the Court of Appeal found that a testamentary gift, in favour of a de facto wife described as “my wife” and by reference to the testator’s surname, in a will made shortly before, on the same day, the two were married was a gift in the will expressed to have been made in contemplation of marriage.

In Hoobin v Hoobin White J found that a testator did not make a will in contemplation of marriage because, at the time he made the will, he was not looking beyond an impending hospitalisation from which he did not expect to emerge alive. It is important to note, also, that despite discussion of marriage in a de facto relationship, at the time he made a will wholly in favour of his “de facto spouse”, so described, the deceased had no current expectation of marriage and, with the benefit of legal advice, he disclaimed an opportunity to make his will explicitly in contemplation of marriage.

In Steel v Ifrah Dixon J found that a will was made in contemplation of marriage in the context of a testatrix, having accepted a proposal of marriage, co-operating with her fiancé in each making a will to protect entitlements of their respective children from earlier relationships; and the testatrix subsequently giving instructions for a new will, after marriage, in terms materially similar to her pre-marriage will.

In Re O’Brien (Dec’d) O’Neill J found that a will was made in contemplation of marriage by a testator who, although expressly advised at the time of its execution that his impending marriage would revoke it, refused to accept that advice and, following his marriage, made statements (including statements to his wife) to the effect that he adhered to the terms of his will notwithstanding that it was made before his marriage was solemnised.

An application of the concept of “a will made in contemplation of marriage” is fact-sensitive.

The facts of the current case can be dealt with within the treatment of the law found in Hoobin v Hoobin and (shorn of observations in In Re O’Brien (Dec’d)) Steel v Ifrah, but with a different nuance. White J’s language (“there must be a more definite state of mind than a mere consciousness of the possibility of a particular marriage” and “having a marriage in mind as a contingency to be provided for or as an end to be aimed at”) comes to mind. So too does Dixon J’s requirement that there be something more than “a mere consciousness of a possibility of marriage in the future”: a “thoughtful observation or consideration of a prospect, or an expectation, of a marriage in the process of making [a] will”.

In the present case attention must be focused on whether, in the “process” of making his will (to defer to Dixon J on this point), the deceased ever had in mind a prospective marriage to Katerina or, incidentally to such a marriage, any claim on his bounty that she, or children they might have together, might reasonably have.

Care needs to be taken not to be too prescriptive about the attributes of a “marriage” located in the contemplation of parties. Nevertheless, something of the flavour of a “marriage” in a contemporary Australian setting can be discerned in the following observations of the High Court of Australia in Commonwealth v Australian Capital Territory (The Same Sex Marriage Case) (2013) 250 CLR 441 at [33]-[34]:

As the source of power for the Commonwealth Parliament’s enactment of the Marriage Act 1961, section 51(xxi) of the Constitution points the way to an understanding of the word “marriage” in the Succession Act, section 12. Whatever might be the Commonwealth’s definition of “marriage” from time to time, the concept looks to “rights and obligations which stem from” a “legally recognised status of marriage”.

So understood, a question for consideration in the present proceedings is whether, at a material time, the deceased ever had in mind taking on a “legally recognised status of marriage”, with the rights and obligations which stem from such a status, vis á vis Katerina.

In the present proceedings the position is not materially different if the concept of “marriage” is also viewed through the prism of social (as distinct from legal) rights and obligations bearing, principally, upon the deceased’s “contemplation of marriage”. An idea inherent in the concept of marriage as a social institution is that, by embracing a marriage commitment, partners voluntarily take upon themselves a duty to care for, and to protect, one another. In life as lived, such a duty might be honoured in the breach; but, save possibly in a “marriage of convenience” (not a common phenomenon), it is likely to attend contemplation of any prospective marriage.

Nothing in the evidence suggests that, when they discussed “marriage” the deceased and Katerina had in mind a “marriage of convenience” or anything other than a duly solemnised marriage (registered under the Marriage Act 1961) conferring upon them the status of a legal marriage, attracting all the rights and obligations of such a status under Australian law. Equally, nothing in the evidence suggests that they were unhappy to be, or to remain indefinitely, in a de facto relationship, a chief characteristic of which was mutual freedom from the formal status, or commitments, of a registered marriage.

Section 12 of the Succession Act accommodates considerations of this nature in an endeavour (in common with probate law generally, general intestacy rules and a discretionary family provision jurisdiction) to facilitate testamentary arrangements which pay due regard to well-founded claims on the bounty of a person who contemplates death, however near or far death may be.

Recognition of the importance of due consideration of well-founded claims on the bounty of a person contemplating death appears in various guises in the law of succession.

An example of this is the classic test for testamentary capacity found in Banks v Goodfellow (1870) LR 5 QB 549 at 565 (with emphasis added):

A modern reformulation of this test, and an exposition of it, can be found in a paper by MS Willmott SC and CP Birtles, “Testamentary Dispositions – Wills and Codicils” (2016) 43 Australian Bar Review 62 at 82-83:

Thus, Banks v Goodfellow can be restated in terms of an ability “to remember, to reflect and to reason” with respect, inter alia, to claims on testamentary bounty.

Another example of the importance of due consideration of well-founded claims on testamentary bounty is found in legislation conferring on the Court family provision jurisdiction. Here, as in Banks v Goodfellow, one not uncommonly encounters the word “ought” (as presently found in section 59(2) of the Succession Act), expressly or impliedly in close proximity to a claim on a testator’s bounty. Consideration of what is “adequate” provision for the “proper” maintenance, education and advancement in life of a claimant for family provision relief requires, inter alia, consideration of “the nature, extent and character of [an] estate and other demands upon it, and also what the testator regarded as superior claims or preferable dispositions”: Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19-20. Section 60(2) of the Succession Act is to similar effect.

Recognition of a need to accommodate well-founded claims on the bounty of a deceased person can also be found, implicitly, in general, statutory intestacy rules: not only in particular rules that might from time to time operate, but also in the fact that those rules are amended from time to time to accommodate social imperatives as family relationships change: Re Estate Wilson, deceased (2017) 93 NSWLR 119 at [97]-[98].

It is not enough, for a will to have been “made in contemplation of a particular marriage” within the meaning of section 12(3) of the Succession Act, that the will-maker was, when the will was made, merely conscious of a possibility of a future marriage, or that he or she had been conscious of the possibility. To get beyond “a mere consciousness of a possibility” of a future marriage a will-maker, at some time in the process of making his or her will, must have brought to mind not only the possibility of a formal act of marriage but also claims on his or her bounty associated with the marriage. The expression “contemplation of a particular marriage” refers to contemplation of “the rights and obligations which stem from” a “legally recognised status of marriage”, not merely a casual contemplation of the bare formalities of a marriage ceremony.

To have been “made in contemplation of a particular marriage” a will must be expressed to have been so made or it must have been made by a will-maker otherwise proven to have been at that time conscious of claims on his or her bounty arising from the marriage in question.

It is not necessary in these proceedings to do more than notice O’Neill J’s obiter (in Re Estate of O’Brien (Dec’d) (2011) 4 IR 687 at [34]-[35]) to the effect that an express statement in a will that the will was made in contemplation of a marriage may not be decisive evidence of the fact. In these proceedings it is sufficient to hold that a will “made in contemplation of a particular marriage” must have been made by a mind seriously engaged with the possibility of that marriage, weighing competing claims on the will-maker’s testamentary bounty.

Absent such an engagement, a will will be revoked by a future marriage, by operation of law, leaving the will-maker’s estate to be administered on an intestacy, subject to invocation of the family provision jurisdiction.

If, in the process of making a will, the will-maker has seriously engaged with the possibility of a future marriage – consistently with what the law ordinarily expects in the making of a will – then there is no need, consistent with testamentary freedom, for the operation of a policy rule that a will is revoked by marriage.

On the other hand, if such an engagement is absent, there is a policy foundation for the rule, residing as it does in the context of legislation governing a distribution on intestacy and claims for family provision relief. In such a case, the law endeavours to facilitate an orderly succession to property, taking into account claims on testamentary bounty that a deceased person ought to have taken into account but apparently did not.

The necessity for this, in understanding the purpose and operation of section 12 of the Succession Act, is highlighted by the absence from the deceased’s will, or the elongated process of his giving instructions for, executing and publishing his will, of any evidence of consideration given to the claims on his bounty of Katerina or – perhaps more tellingly – children that might be born of a marriage between himself and Katerina. The deceased (a man who was so conscious of his relationship with his children that he treated stepchildren equally with his own, that he expressly disinherited an estranged stepson and that he treated his other children equally) made no provision for, and articulated no concern about, future-born children. He published his will to his brother, but provided no copy to Katerina. She was out of mind in the process of making his will, though not out of sight.

At the time he made his will (focusing on the whole process of will making, from initial contemplation, to instructions, to execution and to publication of the will) the deceased was living a compartmentalised life, a life in transition. When the will was drafted, he was in the process of divorcing his first wife. By the time he executed it, he had divorced her. He had made no commitment to marry any other. Katerina had made no commitment to marry him, if ever he were to propose. Both were free agents, free to marry somebody else, or not to marry at all. He was in a de facto relationship with Katerina, but not living with her in the same house on a full-time basis. His purchase of the McMahon’s Point property took the form of an investment even when, nearly a year after the will was “made”, full-time cohabitation commenced.

At the time the will was “made” the deceased’s mindset was such that he was living in a mental space – a compartment - separate from that occupied by Katerina. She was not on his radar when he “made” the will. That the two of them lived in close physical proximity, in a de facto relationship, does not alter the fact that he did not consider whether she, or any children they might have together, had any claim on his bounty. That was something he was content to defer until such time, if ever, they married. His de facto relationship fell short of marriage in substance and form. It was not inevitably bound to end in marriage. He and Katerina had had an on-again / off-again relationship over an eight year period, including a period of cohabitation in 2011. They were not yet cohabiting full time. Their relationship was a work-in-progress. Although marriage was from time to time discussed it remained a matter of speculation until such time as the deceased might bring himself to propose marriage, at which time Katerina (however hopeful she might have been) reserved a right of refusal. He was focussed entirely on re-ordering claims on his bounty by his first family. He did not have in mind, or have regard to, the possibility that he might re-marry or, in particular, that he might marry Katerina. That was a separate topic, reserved for future consideration.

He was focused upon extricating himself from a spent marriage (severing all connection with his wife, but maintaining relationships with favoured children of that marriage), unconcerned with any prospective marriage or family obligations arising from such a marriage.

For these reasons, I conclude that the deceased’s will was not (within the meaning of section 12(3) of the Succession Act) made in contemplation of his marriage to Katerina and, accordingly, it was, by section 12(1) of the Act, revoked by and upon that marriage being solemnised. The will cannot be admitted to probate. The deceased died intestate. His estate must be administered in intestacy, subject to any family provision order made in favour of Max.

The deceased having been found to have died intestate, the grant of letters of administration in respect of his estate was correctly made; consideration must be given to Katerina’s application for an extension of time within which to purchase the McMahon’s Point property from the estate; as she concedes, her family provision application must be dismissed; and Max’s family provision application must be determined, as must the parties’ ancillary dispute about competing entitlements to the deceased’s superannuation fund.

The focus for attention here is upon whether (and, if so, upon what terms) the Court should grant to Katerina an extension of time within which to exercise a statutory right to elect to acquire property from the deceased’s estate. The Court is not called upon to make a determination about the mechanics of any such election, if made.

Nevertheless, the Court’s determination about an extension of time must be located in the context of the provisions governing the existence, and exercise, of a statutory right of election.

Semble, those provisions have yet to be the subject of judicial consideration since their enactment in Chapter 4, Part 2, Division 2 (sections 114-121) of the Succession Act. They represent a development of provisions formerly found in the Wills Probate and Administration Act (centred upon section 61D) which gave a spouse a right to acquire a shared family home. Hoobin v Hoobin [2004] NSWSC 705 provides an illustration of those provisions in operation.

In recommending an extension of a surviving spouse’s right to elect to acquire any part of an intestate’s estate (not merely a shared home) the NSW Law Reform Commission, in deference to the National Committee for Uniform Succession Laws, took the view that there was no reason against the broader right “so long as [the surviving spouse] can provide satisfaction for [the value of the property acquired]” : NSW Law Reform Commission, Report 116 (Uniform Succession Laws: Intestacy, April 2007), paragraph 5.21. Cf, paragraphs 5.64 and 5.77.

The current provisions apply to these proceedings because the deceased was survived by a “spouse” (as defined by sections 101 and 104 of the Succession Act), but not more than one spouse.

Section 104 of the Succession Act is in the following terms:

Katerina was married to the deceased immediately before his death, and he was not a party to any “domestic partnership” with any other person at that time. A “domestic partnership” is defined, by section 105 of the Succession Act, as, inter alia, a de facto relationship that has been in existence for a continuous period of two years or has resulted in the birth of the child. The expression “de facto relationship” is defined by section 21C of the Interpretation Act 1987 by reference to whether two people “have a relationship as a couple living together” and are not married to one another or related by family. By virtue of section 114 of the Succession Act Chapter 4, Part 2, Division 2 of the Act applies in administration of the deceased’s estate.

In that Division, entitled “Spouse’s preferential right to acquire property from the estate”, sections 114-121 of the Succession Act are in the following terms (with emphasis added):

The right of election upon which Katerina seeks to rely is found in section 115(1). After some hesitation, the case was conducted on the basis that section 115(2) does not apply in these proceedings and, accordingly, Katerina does not require a grant by the Court of “authorisation” to acquire the deceased’s interest in the McMahon’s Point property. Counsel accept (as do I) that neither paragraph of section 115(2) applies to the facts of this case merely because the property to be acquired is the deceased’s interest, in a stand-alone residence, as a tenant in common with Katerina as his spouse.

It is accepted by all parties that the fact that Katerina is a personal representative of the deceased (or even if she were held to hold estate property as a trustee) does not disentitle her from enjoyment of a statutory right of election: sections 115(6) and 116(2).

It is also accepted that, because Katerina is one of the personal representatives of the deceased, it is not necessary that she be given formal notice of her right of election: section 16(2).

Although a complaint was made, early in the hearing of the proceedings, that Katerina had not identified with particularity the property of the deceased which she sought to have an election to acquire, during the course of the hearing all parties accepted that her case is directed towards, and confined to, a prospective acquisition of the deceased’s interest in the McMahon’s Point property: Cf, section 118(1).

Given that all parties acquiesced in a submission that the Court should make a finding about the value of the McMahon’s Point property based upon an estimate of value found in the inventory of property attached to the grant of administration made to Katerina and Jack on 15 July 2016, the Court is justified in proceeding on the basis that section 119(5) applies. On any view of individual entitlements, all persons entitled to a share in the deceased’s estate (including Max as the expectant beneficiary of a family provision order) may be taken to have waived any requirement that the deceased’s administrators obtain a formal valuation of the McMahon’s Point property.

Given that Katerina did not give notice of any election (as required by section 118) within the time limited by section 117(1)(b) , and that administration of the deceased’s estate has not been completed (so as to engage the second limb of section 117(3)), the focus for attention falls on whether (within the meaning of section 117(2)) “ there is sufficient cause” for granting to Katerina an extension of time for the making of an election.

On the facts of the current proceedings, the second limb of the formal note to section 117(2) points in the direction of a grant of extension of time even though (as section 35(2)(c) of the Interpretation Act 1987 NSW confirms) the note is not part of the Succession Act. Sections 34(1), 34(2)(a) and 35(5) of the Interpretation Act 1987 confirm that consideration may be given to the note upon consideration of the meaning of the expression “sufficient cause”.

In the context of the Succession Act, that expression can be taken to have a meaning consistent with the meaning generally attributed to the same expression in section 58(2), which governs an extension of time within which to make an application for a family provision order.

In the context of section 58(2), meaning is attributed to the expression “sufficient cause”, not by a substitute definition, but by an enumeration of factors generally regarded as relevant to exercise of a discretionary power. Relevant factors are generally said to be: (a) the sufficiency of any explanation of delay; (b) whether there is any prejudice to beneficiaries; (c) whether there has been any unconscionable conduct by the applicant for an extension of time or beneficiaries; and (d) the strength of the applicant’s case: Warren v McKnight (1996) 40 NSWLR 390 at 394E; Dare v Furness (1998) 44 NSWLR 493 at 500C; JJK de Groot and BW Nickel, Family Provision in Australia (Lexis Nexis Butterworths, Australia, 5th ed, 2017), paragraph [5.12].

I am content to apply a similar approach to section 117, subject to the qualification that (be it in relation to a family provision application under chapter 3 or in relation to a right of election under chapter 4) the approach of the Court must be tailored to the nature of the right sought to be exercised outside the constraint of a specified time.

In the present proceedings, there has been no formal explanation of Katerina’s delay in exercising her right of election beyond a reference to the chronology of unfolding, competing claims to the deceased’s estate, and a reference to the pendency of unresolved disputes about the validity of the deceased’s will and about entitlements to family provision relief. In the context of the proceedings as a whole, there is here a sufficient explanation of delay.

The crux of opposition to Katerina’s application really focuses upon prejudice to beneficiaries (the deceased’s twin sons, if not also Max) arising from an increase in value of the McMahon’s Point property since the date of the deceased’s death - the date by reference to which section 119(1) defines the price for which Katerina might elect to acquire the property.

This is not fatal to Katerina’s application for an extension of time because, as all parties agree, section 86 of the Civil Procedure Act 2005 empowers the Court to grant an extension of time on terms and conditions which might allow the respective rights of the parties to be adjusted so as to address any prejudice arising from delay. Section 86 is conceptually consistent with sections 115(3) and 115(4).

It is not suggested against Katerina, or any other party, that there has been unconscionable conduct bearing upon whether or not Katerina should be granted an extension of time within which to make an election.

In circumstances in which there is no dispute as to her status as the deceased’s sole “spouse”, and she has no need of a grant of authorisation under section 115, Katerina has a strong case for a grant of an extension of time under section 117(2).

Subject to consideration of the terms and conditions (if any) upon which a grant of an extension of time should be made, and consideration of the length of time within which any election must be made, I am minded to grant an extension of time within which Katerina can elect to acquire the deceased’s beneficial interest in the McMahon’s Point property.

As to “terms and conditions”, there is a means (not unfair to any party) of overcoming claims of prejudice made by the deceased’s sons against an extension of time.

In Hoobin v Hoobin, White J determined family provision claims contingent upon a widow’s future exercise, or not, of a right to elect to acquire a family home upon administration of an intestate estate. He did so by conditioning prospective orders on whether, or not, the widow was prepared to undertake to the Court that she would not make an election under section 61D of the Wills Probate and Administration Act ( the predecessor of the Succession Act, section 115 et seq). See also Hoobin v Hoobin (No. 2) [2004] NSWSC 953.

In the current proceedings, as a condition of a grant to her of the extension of time she seeks under section 117(2) of the Succession Act, Katerina should be required to give to the Court an undertaking that:

As to the duration of any extension of time granted to Katerina, several points should be made:

Taking these factors into account, and reserving to all affected parties an opportunity to be heard before final orders are made, I incline to the view that (subject to further orders of the Court in the event that interlocutory orders are necessary to accommodate an appeal) an extension of time should be granted for a period of three months after the date upon which the Court’s orders are made.

As earlier noted:

The core questions in dispute on Max’s family provision application are: First, what measure of relief should be granted to Max; secondly, who should bear the burden of the relief granted to him?

An incidental feature of this disputation is a contest about who is, or should be held to be, entitled to the “death benefit” payable (under rule 13 of rules which form part of the deed governing the deceased’s superannuation entitlements, Exhibit P10) in respect of the death of the deceased as a “member” of the superannuation fund.

It is common ground that there is no evidence that the deceased left a binding death benefit nomination (under rule 13(a)) the effect of which, if one existed, would be (under rule 13.4(a)) to require the trustee to pay the deceased’s death benefit in accordance with his direction.

Nor is there any evidence of a non-binding nomination (under rule 13.3(b)) which might be taken into account in decision making about the identity of the person, or persons, to whom the deceased’s death benefit should be paid.

So far as is material, rule 13.4(b) provides that “the Trustee alone shall have the power to decide which of the Member’s Dependents (if any) and/or legal personal representative shall be paid the death benefit and the proportion payable to each such person.”.

Rule 1.20 provides the definition of “Dependant “:

Max and his stepbrothers Jack and Lewis contend that, upon the proper construction of rule 13.4(b), read with rule 1.20, the Trustee has a discretion to distribute the deceased’s death benefit, in such proportions as it thinks fit, to the administrators of the deceased’s estate, Katerina, Jack and/or Lewis.

Katerina contends that the Court should treat the whole of the deceased’s superannuation entitlement as being payable to her because, in the context of the Commonwealth’s legislation and determinations of the Australian Taxation Office, the only person who can properly be characterised as a “dependant” of the deceased without attracting adverse taxation consequences is Katerina as the deceased’s spouse.

Max and his stepbrothers respond to that contention by submitting that: (a) although it may be accepted that payments made from the deceased’s superannuation fund may be taxed at different rates in the hands of different beneficiaries, it is not possible on the present state of the evidence for the Court, fairly, to make a finding as to who might or might not be a “dependent” or “non-dependant” for the purpose of the Income Tax Assessment Act 1997 Cth; (b) in any event, the Income Tax Assessment Act 1997 specifically contemplates death benefits being paid to both a ”non-dependant” and a “dependent” (as defined in the Act); (c) to the extent that a distribution of a death benefit is made to a ”non-dependant”, any tax is payable by the recipient of the payment, not by the superannuation fund or the estate of the deceased; (d) the possible tax consequences of a decision made by the Trustee about payment of the deceased’s death benefit do not control the construction of the deed (or rules) governing the fund; (f) the fund is available to be designated as notional estate; and (g) there is no restriction on the Court’s power to designate the fund as notional estate and to order that provision be made from the fund to an eligible person, regardless of whether that person is (or is not) a discretionary object of the fund.

I accept, and act upon, the submissions of Max and his stepbrothers. Whatever may be the taxation consequences of a decision made by the Trustee under rule 13.4(b) about payment of the deceased’s death benefit, the potential payees are Katerina, Jack and Lewis. They fall within the definition of “dependant” in rule 1.20. As a stepson of the deceased by his first marriage, Max does not. In any event, the death benefit payable upon the death of the deceased is, as the parties have agreed, available for designation as notional estate of the deceased.

The agreement of the parties that the deceased’s superannuation entitlement is available for designation as notional estate may relieve the Court of an obligation to articulate full reasons for the making of a designation order; but it does not relieve the Court of an obligation to be satisfied that the statutory preconditions for the making of a designation order have been satisfied.

Taken step-by-step, the path necessary to be taken before the Court can make an order for the designation of property as notional estate, followed by a family provision order (and, if appropriate, an order for the payment of costs) charged against notional estate, is a tortuous one. In the circumstances of the present proceedings, that leads one through the following provisions of the Succession Act: sections 63(5), 73(2), 74, 75(1), 76(1), 76(2)(e), 77(1), 78, 80(1), 80(2)(c), 80(3)(a), 83, 84, 86, 87, 88(c) and 89.

A point at which some hesitancy is required upon an application of these provisions, is embodied in sections 87, 88 and 89, particularly in section 88(c).

Section 87 provides that the Court must not make a notional estate order unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the order; and (c) any other matter it considers relevant to the circumstances.

Section 89(2) provides that the Court must not designate as notional estate property that exceeds that necessary, in the Court’s opinion, to allow the provision that should be made by a family provision order or, if the Court makes an order that costs be paid from notional estate under section 99 of the Succession Act, to allow costs to be paid as ordered, or both.

With those counsels of caution, section 88 is in the following terms (with emphasis added):

Section 88(a) does not apply because the deceased left an ample estate.

Section 88(b) does not apply because the amplitude of the deceased’s estate is such that it could not be held to be “insufficient” for the making of orders reasonably in contemplation in these proceedings.

The first limb of section 88(c) has no application to the facts of the case. There are no persons other than Max relevantly entitled to apply for family provision orders. No application was made by Lisa or Siegfried within the time limited by section 58(2) of the Succession Act. Jack and Lewis discontinued their applications, and disclaimed any intention to advance an application. Having succeeded in establishing that the deceased died intestate, Katerina can be taken also to have disclaimed her application. Only Max remains as an applicant for a family provision order.

To make an order for designation of the deceased’s superannuation entitlements as notional estate, the Court must be satisfied (as section 88(c) of the Succession Act requires) that “there are special circumstances”.

The parties’ agreement that a designation order can be made goes some way to establishing ”special circumstances”; but, by itself, it is not enough. I am, however, prepared to find ”special circumstances” based not only on that agreement, but also upon: (a) the desirability of not charging the McMahon’s Point property unnecessarily with the burden of a family provision order in circumstances in which Katerina was encouraged by the deceased to believe that she could continue to live there, and she may exercise her right of election to purchase that property; and (b) recognition that management of the corporate trustee of the superannuation fund by the administrators of the deceased’s estate is deadlocked so as to preclude any orderly decision being made about payment of the deceased’s superannuation entitlements; (c) the fact that designation of those entitlements as notional estate will not only provide property against which a family provision order and costs can be charged but also serve an incidental purpose of facilitating the due administration of the deceased’s estate by breaking the administrators’ deadlock.

For these reasons, subject to allowing the parties an opportunity to be heard as to the form of orders to be made, I propose to order that any and all benefits payable by the Trustee consequent upon the death of the deceased be designated as notional estate of the deceased so far as may be necessary for the purpose of a family provision order to be made in favour of Max, and for the purpose of any order that costs of the family provision proceedings before the Court be paid out of the deceased’s notional estate.

Upon a consideration of what measure of family provision relief should be made for Max, the task for the Court is not one (as suggested on his behalf) of simply noting that he was treated equally with his stepbrothers under the deceased’s will, noting that they will receive substantial benefits as beneficiaries of the deceased’s intestate estate, and framing orders designed to grant to him relief approximately equal to their entitlements on intestacy.

Revoked by marriage, the deceased’s will of January 2014 provides at best an uncertain guide to quantification of family provision relief measured against the competing entitlements of Katerina, Jack and Lewis at the present day.

Candidly quantified by his counsel, Max’s claim for family provision relief is, essentially, that he be granted the whole of the deceased’s superannuation entitlements.

Considerations of expediency (based upon a supposition that Max, Jack and Lewis should receive approximately the same measure of benefit from the deceased’s estate) may point in that direction. However, it is not open to the Court to proceed so summarily to an outcome.

Nevertheless, the competing cases advanced by Max and Katerina may not be so far apart. Putting a figure on Max’s claim, his counsel proposed the sum of $750,000 “or more”. In his submissions, Katerina’s counsel suggested that Max might possibly receive $600,000.

In approaching the question for which section 59(2) of the Succession Act provides, the Court must endeavour to place itself in the position of the deceased, and to consider what he ought to have done in all the circumstances of the case, in light of facts now known, treating him as wise and just, rather than fond and foolish (In Re Allen [1922] NZLR 218 at 220-221; Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478-479; Pontifical Society for the Propagation of the Faith v Scales (1962) 17 CLR 9 at 19-20), making due allowance for current social conditions and standards (Goodman v Windeyer (1980) 144 CLR 490 at 502; Andrew v Andrew (2012) 81 NSW LR 656) and, generally, consulting the criteria set out in section 60(2) of the Act so far as they may be material.

Section 59(2) of the Succession Act implicitly relates back to the concept of “adequate provision for proper maintenance, education and advancement in life” found in section 59(1)(c) of the Act. Section 59(2) provides as follows:

Although this provision refers only to the “estate” of a deceased person, section 63(5) of the Succession Act provides that a family provision order can be made in relation to property that is not part of an estate if it is designated as notional estate, and section 73(2) provides that Part 3.2 of the Act (which includes sections 57-60) applies to property designated as part of the notional estate of a deceased person in the same way as it applies to property that is part of his or her estate.

The concepts of “adequate” and “proper” found in section 59(1)(c) of the Succession Act, and implicitly relevant to section 59(2), are relative to the facts of the particular case: Scales Case (1962) 17 CLR 9 at 19.

Upon an assessment of what, in a particular case, is ”adequate” provision for the ”proper maintenance, education or advancement in life” of an applicant for family provision relief, the Court needs to have regard to competing claims upon the bounty of the deceased and their relative urgency, the standard of living the deceased’s family enjoyed in his or her lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the deceased’s ability to meet such claims having regard to the size of his or her were resources: McCosker v McCosker (1957) 97 CLR 566 at 571-572.

It is not necessary to traverse expressly each of the section 60(2) factors so far as they bear upon Max’s claim for relief. He had a close and loving relationship with the deceased: section 60(2)(a). As a young 30 year-old, he has but limited financial resources: sections 60(2)(d) and (g). He has struggled with stress, anxiety and depression (in part, complicated by a marijuana addiction he claims now to have overcome) since the breakdown of the deceased’s first marriage: section 60(2)(f). In common with his brothers, he received support from the deceased during the deceased’s lifetime (section 60(2)(i)), including payment of tertiary education expenses and provision of a car. Independently of the deceased’s will there is evidence, in the form of Katerina’s testimony, that the deceased intended that Max should benefit from his estate: section 60(2)(j).

For the past 10 years Max has worked (albeit as a casual employee) for the one employer, doing the best he can, as and when he can, to pursue university studies in the hope of advancing a career in environmental work. He is not without initiative.

On present estimates, but subject to whatever costs orders are made, each of Jack and Lewis will receive approximately $990,000 from the deceased’s intestate estate. Katerina will receive about $2.4 million (subject to costs); but, if she is to continue to live in the McMahon’s Point property as her family home, she will have to service a bank debt of approximately $900,000 and make arrangements for Jack and Lewis to be paid their due. Her ability to do this depends on her own self reliance as a businesswoman, and (despite some health concerns) continuing good health.

A case put against Katerina is that the Court should take into account the relatively short duration of her de facto relationship with the deceased; the even shorter duration of her marriage to him; the substantial value of her business, part of which was built up with support of the deceased; her own substantial assets; and a reasonable expectation that her business will continue to provide her with a substantial income. There is an element of truth in each of these factors; but they cannot, and should not, be taken into account on an implicit assumption that Katerina bears an onus to justify benefits received from the deceased’s estate.

Max bears the onus of proof in establishing his claim for family provision relief, without imposition of any onus on Katerina.

In all the circumstances, I find that a family provision order should be made in favour of Max, in the sum of $750,000, payable out of the notional estate of the deceased; that is, out of the deceased’s superannuation entitlement, designated as notional estate.

Subject to allowing the parties an opportunity to be heard about the form of orders to be made (incorporating adjustments, if any, presently in contemplation by the parties), and as to costs generally, I propose to make orders to the effect here set out.

In the proceedings numbered 2017/00141397, I propose to order that the statement of claim (filed by the deceased’s brother, Michael John Grant) be dismissed.

In the proceedings numbered 2016/00369836, I propose to make the following orders:

In the proceedings numbered 2016/00371991, I propose to make the following orders:

The parties’ estimates of the costs of these proceedings, total $500,000, no small amount.

In inviting the parties to make submissions about costs, I draw to attention the fact (as I presently perceive it to be) that the complexity of the current litigation focused upon the deceased’s first family’s contention that the deceased’s will was revoked by marriage, an issue in respect of which (conformably with section 98 of the Civil Procedure Act 2005 NSW and rule 42.1 of the Uniform Civil Procedure Rules 2005 NSW) costs might be expected to follow the event.

I also draw to attention that sections 78 and 99 of the Succession Act, govern the circumstances in which an order can be made for costs of family provision proceedings to be paid out of the notional estate of a deceased person. Prima facie, Max and Katerina (if not other parties) might be able reasonably to have some part of their costs paid out of the deceased’s superannuation entitlement as property designated as notional estate.

On 5 July 2018 I delivered reasons for judgment published as Re Estate Grant, deceased [2018] NSWSC 1031.

On 12 July 2018 the parties presented submissions as to the form of orders, and costs orders, to be made to give effect to those reasons.

There was no real dispute about the form of the substantive orders to be made. A few drafting suggestions were advanced, but nothing of profound significance.

Controversy was confined to proposed orders for costs. This is not altogether surprising given the interrelated nature of the three sets of proceedings before the Court, and the nature of the contest they embodied. Viewed strategically, the proceedings together were, in substance, a contest between the deceased’s first family (on the one hand) and (on the other) his widow, Katerina. The deceased’s brother, Michael, and the deceased’s three sons (Michael’s nephews) played their respective roles apparently conscious of the implications of each tactical decision made in conduct of the proceedings.

These supplementary reasons for judgment (published as an addendum to the principal reasons) explain briefly the rationale for my determination of costs questions.

In dealing with those questions, I am conscious that the three sets of proceedings before the Court were not commenced in the order in which I here deal with them. However, in logical sequence, and perhaps in how the proceedings necessarily came to be viewed by the parties at a final hearing, the probate proceedings should be dealt with first; followed by Katerina’s application for an extension of time to make an election to acquire property from the deceased’s intestate estate; followed, finally, by Max’s family provision application.

In point of fact, Katerina’s proceedings were commenced first (on 9 December 2016), and Max’s family provision application was commenced shortly thereafter (on 12 December 2016). At the time Max’s proceedings were commenced, he was only one of three plaintiffs; his brothers, Jack and Lewis were his co-plaintiffs. On 4 July 2017 Jack and Lewis abandoned their claims for family provision relief and were named as defendants, rather than plaintiffs. Michael’s application for a grant of probate was made by a statement of claim filed on 11 May 2017; it took the form of an application for revocation of letters of administration granted to Katerina and Jack on 15 July 2016.

Commencement of the probate proceedings, and the subsequent discontinuance of the family provision applications of Jack and Lewis, post date a private mediation which the Court (on 6 March 2017) ordered be held on 28 April 2017.

An apparently belated decision to propound the deceased’s will might, as senior counsel for Katerina submitted, be explained by the first family’s hope of taking advantage of statements made by Katerina in her affidavits, if not during the course of the proceedings generally, about conversations between herself and the deceased concerning his testamentary arrangements. I step back from speculation, concentrating on observed facts about the nature and course of the proceedings.

Objectively, the course of the proceedings (evidenced in part by the dates upon which substantive affidavits were sworn or affirmed) may have a bearing upon how, in the absence of agreement, a costs assessor might apportion costs between three sets of proceedings heard together. Come the hearing, the proceedings might be taken to have occupied equal time in presentation. By that time, they were very much interwoven.

On the first family’s side of the proceedings, each of the natural persons party to the proceedings, other than Michael, had a personal, commercial interest in the outcome of the proceedings. The proceedings were ostensibly conducted by Michael for the benefit of the deceased’s three sons: Max, Jack and Lewis.

I have not been informed whether, or not, Michael protected his own interests vis a vis his nephews, before embarking on a litigious path, by securing from them an indemnity against his exposure to costs liabilities. It was open to him to have done so. It was not incumbent upon him to apply for probate. He could have renounced probate, leaving it to one or more of his nephews to propound the deceased’s will if minded to do so. The deceased’s sons (the beneficiaries under the will) were no less aware of the existence and terms of the will than was Michael. His intervention masked a strategic shift in the boys’ contest with Katerina.

In the probate proceedings (case number 2017/00141397):

In Katerina’s proceedings (case number 2016/00369836):

In Max’s family provision proceedings (case number 2016/00371991):

There was no opposition to the costs of both sets of family provision proceedings (namely, those of Max and Katerina) being paid out of the notional estate of the deceased, so far as notional estate is available for that purpose. The common expectation of all parties is that, after payment of the provision made for Max out of the notional estate and some of the costs of the proceedings, the deceased’s superannuation entitlement will be exhausted.

Implicit in an order that Max’s provision be made out of the notional estate of the deceased, coupled with orders for the payment of costs out of the notional estate or estate of the deceased, is a direction that the provision for Max out of notional estate take precedence over the payment of costs out of notional estate, leaving any shortfall in costs to be paid out of the deceased’s estate.

Accordingly, I make the following orders and notations in final disposition of the proceedings before the Court:

The notations made in paragraphs 9 and 10 of the orders made in Katerina’s proceedings are made in those proceedings, rather than (as counsel for the first family suggested) the probate proceedings, because Grantrust Pty Ltd is a party to the former, not the latter. If there is to be an order for accounts, all affected parties should be in the mix.

As a general precaution, liberty to apply for consequential relief in the working out of orders made in any or all of the proceedings is reserved. That is appropriate given the interconnectedness of the proceedings and the fact that, by an earlier order of the Court made with the consent of the parties, the proceedings were heard and determined together.