Earlier this year, I was surprised to read a judgement where a former spouse successfully claimed for further provision from her former husband’s estate notwithstanding the pair had completed a property settlement 25 years prior. You can read my earlier post here.
It may come as no surprise that the matter was appealed to the NSW Court of Appeal by the daughter of the pair, who was the sole beneficiary of the intestate estate and the administrator.
The case of Lodin v Lodin  NSWCA 327 was handed down today and the Court allowed the appeal and dismissed the proceedings by the former wife. AND, the former wife was ordered to pay the daughters costs in both proceedings (i.e. Supreme Court and Court of Appeal).
The basis of the appeal was set out as follows in paragraph 21 of the judgement:
- His Honour erred in finding factors warranting the making of the claim for a family provision order by the Respondent.
- His Honour erred in finding the Respondent was a natural object upon the Deceased’s testamentary bounty.
- Alternatively, his Honour’s discretion so miscarried in finding factors warranting [the making of the claim] as to justify appellate intervention.
- His Honour erred in making any provision for the Respondent.
- His Honour erred in making for the Respondent the provision which he did.
- His Honour’s discretion miscarried in a way not apparent but so as to justify appellate intervention.
- His Honour’s decision is so divorced from reality, so unrepresentative of community standards or expectation, and so totally inconsistent with the object is and principles of family provision legislation as to be wrong and thus deserving of appellate correction.
In response to the notice of appeal, the Respondent filed a Notice of Contention seeking to confirm the position of the Supreme Court in her favour on the following basis (at paragraph 22):
- That in view of the finding made by the Primary Judge (namely, that it was probable that by December 1992, the [Deceased] was earning substantially more than $1,300 per week, probably twice that amount, ie $2,600 per week, which was not disclosed to the Family Court of Australia, not to [the respondent], the Primary Judge should have found, that such fraud or non-disclosure by the [Deceased] is a factor warranting [the respondent’s] family provision application against the Estate of the [Deceased] (Succession Act 2006, ss57(1)(d), 59(1)(b)).
- If, and inasmuch that, the Primary Judge did not find, that a duty to atone is a factor that may constitute a factor warranting [the respondent’s] family provision application against the Estate of the [Deceased], the Primary Judge should have found that the [Deceased] did have a testamentary duty or obligation to atone to [the respondent], and that such duty or obligation was enlivened in the circumstances, and does constitute a factor warranting [the respondent’s] family provision application against the [Deceased’s] Estate.”
In allowing the appeal, the Court took to considering the history of the legislation allowing a former spouse to be an eligible applicant in a family provision application. The Court referred to the history of the legislation and how it came about in terms of the former spouse being entitled to make a family provision application.
In various readings of the proposed legislation, being both the [now repealed] Family Provision Act 1982 and the Succession Amendment (Family Provision) Act 2008, Parliament had suggested that the concept of allowing a former spouse to claim was to “overcome the serious injustices now occurring where a party dies soon after the divorce and before a property settlement is made under the Family Law Act” (para 77). Additionally, the Court identified that during the second reading speech of the Family Provision Bill (as it then was) the Minister made certain assurances:
The Minister assured Parliament that there was no danger of a flood of claims from divorced spouses, for three reasons. First, cl9(1) of the Bill required the court to find that there were factors warranting the application. Secondly, in the usual case a divorced spouse would have been party to a financial settlement in the divorce proceedings and this “will have determined one and for all the financial obligations of the parties”. Thirdly, divorced spouses already could apply for family provision orders under the law of all other Australian States, although the legislation imposed various conditions.
The Court entered into a detailed analysis of the matters to be taken in to account by the Court that are set out in Succession Act. In particular, the Court identified that the inquiry required by section 59(1)c) (i.e. regarding whether adequate provision has been made for a person) and the inquiry required by section s59(1)(b) (i.e. regarding whether there are factors which warrant the making of the application) are different.
The Court noted, at paragraph 117, that:
the starting point for the inquiry under s59(1)(c) is that the applicant is a person who can ordinarily be regarded as a natural object of the deceased’s testamentary recognition and thus is entitled to have his or her claim for a family provision order considered by the Court. The claim is then assess in accordance with the familiar two step approach..
In considering past cases of a similar nature, the Court referred to the case of Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 and said, at paragraph 126:
It follows from Dijkhuijs that care must be taken not to impose rigid constraints on the circumstances that might constitute factors warranting a former spouse of the deceased making an application for family provision from the estate. Nonetheless it is difficult to see how a former spouse could satisfy s59(1)(b) of the Succession Act simply by relying on the existence of the marriage and the fact that he or she now has unmet financial needs. The reason is that these factors alone do not demonstrate that the deceased had a social, domestic or moral obligation to make testamentary provision for the former spouse. The position is unlikely to be different event if the estate is relatively large. Something more is ordinarily needed for the claimant to show that he or she was a natural object of testamentary recognition.
The Court noted that the primary Judge that it was “wrong for the Deceased to leave the whole of his estate to his only daughter and to ignore his former wife” and said that the primary Judge appeared to accept that the size of the estate and the sole entitlement of such a large estate by the daughter was of itself a factor warranting the family provision application by the former wife (paragraph 141). Taking issue with this approach, the Court said, at paragraph 142:
The difficulty with the approach adopted by his Honour is that it assumes that a deceased person has a moral responsibility to make testamentary provision for a former spouse simply because the estate is large and the sole beneficiary of the estate under the will or on an intestacy is a member of the deceased’s family for whom the former spouse had some responsibility.
Further, the Court said, at paragraph 143:
The fact that the former spouse was responsible for raising the child of the parties cannot, of itself, alter the position. It may be different if, for example, a finding is made that the deceased failed to comply with his or her obligations to provide financial support for the child, thereby placing the burden wholly or very largely on the former spouse. But that is not this case.
In summarising their findings, the Court, at paragraphs 162-167 said:
“Bearing in mind these considerations, I am nonetheless of the view that the evidence in this case does not establish that there are factors warranting the respondent making a family provision application. The starting point is that the marriage effectively ended a quarter of a century before the hearing of the respondent’s claim. The relationship between the Deceased and the respondent lasted for less than six years and the marriage itself lasted only nineteen months.
The financial affairs between the Deceased and the respondent were resolved by final order of the Family Court in December 1992. The making of those orders, which were confirmed on appeal, does not necessarily constitute a fatal barrier to the respondent’s claim, but it is an important consideration counting against her claim. In the absence of evidence demonstrating a significant causal link between the Deceased’s conduct towards the respondent and her financial needs at the date of the hearing, the Family Court orders retain their significance for the purposes of the present proceedings.
A further factor counting against the respondent’s claim is that, as his Honour found, the Deceased meticulously complied with his obligations to provide financial support for Rebecca. The level of support provided for Rebecca’s maintenance and education was reasonably substantial. Moreover, the Deceased from time to time gave additional financial support over and above his legal responsibilities. At the same time, the respondent was not entirely honest in her claims for support, in that she withheld both from the Deceased and the Child Support Agency the fact that Rebecca had received a bursary from her private school.
The respondent’s financial needs at the date of the hearing and for a considerable period prior to that date were due to a combination of factors. These include her own decisions to institute and maintain legal proceedings against the Deceased that ultimately yielded not benefit….
…The Deceased cannot be said to have come under a moral duty to provide for the respondent because of injuries entirely unrelated to the parties’ relationship.
A relevant factor of in considering the respondent’s claim is also what the primary Judge described as her “relentless persecution” of the Deceased. That persecution extended to the making of serious allegations against the Deceased which, apart from the claims of professional misconduct, where not upheld. It is correct, as Mr Bates submitted, that the primary Judge made no express finding that the allegations were false. But an application for an apprehended violence order against the Deceased was dismissed by a magistrate after hearing evidence from both the respondent and the Deceased. The dismissal of the application justifies an inference that the serious allegations supporting the application, which the Deceased denied on oath, were not true.
The fundamental question posted by s59(1)(b) of the Succession Act in relation to a claim by a former spouse of the deceased is where the claimant can be regarded as a natural object of testamentary recognition by the deceased. If the respondent’s persecution of the Deceased was the product of a psychiatric illness or genuine disability induced by the Deceased’s conduct or perhaps by the nature of the parties’ relationship, the respondent’s persecutory conduct might be given relatively little weight. But in the absence of evidence establishing a casual relationship of this kind, the respondent’s conduct towards the Deceased counts against her entitlement to make a family provision claim against his estate.
You can read the case here.