Family provision: how determinative is the “character and conduct” of the applicant?

This article was originally published by the Retirement and Estate Planning Bulletin.

On balance, the success of a family provision claim can hinge on the ‘character and conduct’[1] of the applicant.  Therefore, depending on the nature of the conduct, it can be a determinative factor, notwithstanding the extensive list of other enumerated discretionary considerations for the court in s 60(2) of the Succession Act 2006 (NSW) (the Act).  Indeed, it appears from the case law that the approach of the NSW Supreme Court in this context has been to treat the ‘character and conduct’ of the applicant as sitting on a ‘sliding scale’ of morality – a scale that is inversely proportionate to the deceased’s moral duty to provide for the applicant.  Simply put, the more morally reprehensible the conduct, the lesser the court may regard the deceased’s moral duty to provide for the applicant.[2]  Further, this approach is underpinned by ‘accepted social and community values’;[3] specifically, ‘whether the conduct of the applicant is such as would, in the eyes of the right thinking and reasonable members of the community, disentitle the applicant to relief.’[4]  The approach of the courts, in balancing the needs of the applicant with the intentions of the testator, endeavours to cater to the complexity of the issues that arise.  The aims of this paper are two-fold: firstly, to analyse the elements of the court’s inquiry within the broader context of the statutory framework; and secondly, to examine situations in which the ‘character and conduct’ of the applicant has been determinative in precluding the Court from making a family provision order.

‘Character and Conduct’ within Broader Statutory Inquiry

Jurisdictional & discretionary considerations

It must be recognised that the court’s assessment of the ‘character and conduct’ of the applicant exists as part of the court’s broader task required by s 59 of the Act.  Section 59 sets out the questions to be considered by the court when determining whether a family provision order may be made.  Before the court can make a family provision order, it must first be satisfied that the applicant is an ‘eligible person’.[5]  If eligibility is found, then the court must assess whether, in all the circumstances of the case, adequate provision for the proper maintenance, education or advancement in life has been made for the applicant by the will of the deceased or by the operation of the intestacy rules.[6]  Satisfaction of this ‘jurisdictional’ limb of s 59 is said to then enliven the discretionary question under s 59(2) of the Act as to whether ‘the Court may make such order for provision…’ (emphasis added).  At both stages of the inquiry, the court is called on to make an ‘evaluative judgment’,[7] having regard to the ‘character and conduct’ of the applicant, and the other enumerated considerations set out in s 60(2) of the Act.[8]

Judges at first instance have, for a number of years, tended to favour the traditional ‘two stage approach’.[9]  However, whether the task required by s 59 of the Act may be regarded as a ‘two-stage’ determination comprising both a ‘jurisdictional question’ and a ‘discretionary question’ as affirmed by the High Court in Singer v Berghouse in respect of the earlier Family Provision Act 1982 (NSW)[10]; or, whether those stages are simply ‘convenient steps in undertaking what is required by the legislation’[11] as Basten JA suggested in Andrew v Andrew,[12] has, in recent years, become the subject of lively and ongoing conjecture in the NSW Court of Appeal.[13]  In Sgro v Thompson, the Court of Appeal sought to clarify that what is required is a multi-faceted evaluative approach to the question posed by s 59 of the Act as to whether adequate provision was made for the proper maintenance, education or advancement in life of an applicant.[14]  The Court of Appeal in that case also noted that the question of whether a ‘two-stage inquiry’ ought to be undertaken should be of no real significance, provided that the nature of the first stage of the inquiry is not misunderstood.  In this regard, White JA echoed the observation of Allsop P in Andrew v Andrew that the question is probably an analytical one of ‘little consequence’.[15]

Assessing ‘character and conduct’: general principles

It is worth prefacing this section with the observation that ‘there is no fixed standard of poor character or conduct that may negatively impact on an applicant’s claim’.[16]  Rather, the success of the applicant’s claim is ‘influenced by the totality of the circumstances’.[17] The court need only be satisfied on the balance of probabilities of the justification for the applicant’s claim, with the onus on the applicant to prove as much.[18]

Indeed, it is difficult to define precisely what constitutes poor ‘character and conduct’.[19] Rather, the courts have framed the question in terms of a correlation between the ‘morally reprehensible’ conduct of the applicant on the one hand, and the deceased’s moral duty to provide for the applicant on the other.  Put simply, there is a need for the applicant’s ‘character and conduct’ to affect the deceased to such an extent that the deceased may be regarded as being absolved of his or her moral duty to provide for the applicant.[20]  In the oft-quoted passage in Collicoat v McMillan, Ormiston J explained it in the following way:

…it is only when that behaviour has affected, or…is perceived to have affected, the testator that he or she is in good conscience entitled to make lesser or greater provision for an applicant than that to which the applicant would have been entitled to having regard only to the bare bones of his or her financial needs and circumstances.[21]

Therefore, morally reprehensible conduct, even if it may not warrant a complete disentitlement to provision, may still limit the extent of provision ordered.[22]

It follows that a testator is entitled, in certain circumstances, ‘to make no provision for children…particularly…in respect of children who treat their parents callously, by withholding without proper justification, their support and love from them in their declining years…’.[23] However, this proposition is not without qualification.  In Foley v Ellis, Sackville AJA noted that:

Care should be taken…not to oversimplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context of the raw emotions experienced at the time.[24]

To this end, the concept of a ‘wise and just testator’ which emerged in Bosch v Perpetual Trustee Co Ltd[25] has served to temper the subjective reasons of the testator for denying provision in situations where those reasons might appear irrational or extreme.  Although those reasons are relevant, they are not determinative.  Instead, the court will consider what a ‘wise and just testator’ would have done in the circumstances, ‘rather than a fond and foolish, husband or father.’[26]

Infused into the notion of a ‘wise and just testator’, and also underpinning the assessment of the applicant’s ‘character and conduct’ are prevailing community attitudes of what is right and appropriate.  Specifically, the court’s task is to ‘make a determination according to the feeling and judgment of the fair and reasonable man in the community’.[27]  For example, in Wenn v Howard, the court had to consider whether the ‘character and conduct’ of the applicant, in renouncing the testator’s religion, was such as to justify the testator’s denial of provision.  McInerney J held that because the ‘community’ generally would not regard the conduct as morally undeserving, renunciation of the testator’s religion could not preclude a positive finding in favour of the applicant.[28] Given that community standards change over time, there are understandable difficulties for the courts in making value judgments as to current community attitudes.  Somewhat equivocally, Basten JA reasoned that ‘the only guiding light…is the identification of community standards as reflected in current legislation.’[29]

Furthermore, the strong financial need of an applicant may mean that the testator is not absolved of his or her moral duty and may mitigate the limiting nature of the applicant’s misconduct on any provision that might be ordered.[30]  This was made clear by Gibbs J:

The question whether conduct is sufficient to disentitle an applicant to relief must depend not only on the nature of the conduct itself, but also, to some extent, on the strength of his need or claim to provision from the estate of the testatrix.  The stronger the applicant’s case for relief, the more reprehensible must have been his conduct to disentitle him to the benefit of any provision.[31]

Thus, ‘character and conduct’ is not assessed in a vacuum.  Rather, the courts undertake a holistic approach, balancing the severity of the conduct and the need for provision against the testator’s perceived moral duty and right to deny provision.  Theoretically, ‘character and conduct’ is not determinative of the success of the application per se, given the range of other considerations the court may take into account.  In reality, however, as is apparent from the ensuing discussion, ‘character and conduct’ can be a decisive factor.

Situations where ‘character and conduct’ may be determinative

Estrangement

A state of estrangement between the applicant and the testator in and of itself is not enough to terminate the obligation of the testator to provide for the applicant.[32]  In this regard, Hallen J, in the first instance decision of Underwood v Gaudron (an appeal was dismissed), helpfully set out some broad principles on estrangement which he suggested ‘should be remembered’.  These are extracted as follows:

(a) The word 'estrangement' does not, in fact, describe the conduct of either party. It is merely the condition that results from the attitudes, or conduct, of one, or both, of the parties to the relationship. Whether the claim of the applicant on the deceased is totally extinguished, or merely reduced, and the extent of any reduction, depends on all the circumstances of the case: Gwenythe Muriel Lathwell, as Executrix of the Estate of Gilbert Thorley Lathwell (Deceased) v Lathwell [2008] WASCA 256, at [33].

(b) The nature of the estrangement and the underlying reason for it is relevant to an application under the Act: Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361, at [88] - [94]; Foley v Ellis. In Palmer v Dolman, Ipp JA, after a review of the cases, observed, at [110], that:

"... the mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act."

(c) There is no rule that, irrespective of a Plaintiff's need, the size of the estate, and the existence or absence of other claims on the estate, the Plaintiff is not entitled to "ample" provision if he, or she, has been estranged from the deceased.  The very general directions in the Act require close attention to the facts of individual cases.

(d) The court should accept that the deceased, in certain circumstances, is entitled to make no provision for a child, particularly in the case of one "who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years.  Even more so where that callousness is compounded by hostility":  Ford v Simes [2009] NSWCA 351, at [71], per Bergin CJ in Eq, with whom Tobias JA and Handley AJA agreed.

(e) As was recognised by the New South Wales Court of Appeal in Hunter v Hunter (1987) 8 NSWLR 573, at 574 - 575, per Kirby P (with whom Hope and Priestley JJA agreed):

"If cases of this kind were determined by the yardstick of prudent and intelligent conduct on the part of family members, the appeal would have to be dismissed. If they were determined by the criterion of the admiration, affection and love of the testator for members of his family, it would also have to be dismissed. Such are not the criteria of the Act.  The statute represents a limited disturbance of the right of testamentary disposition.  It establishes a privilege for a small class of the immediate family of a testator (the spouse or children) to seek the exercise of a discretionary judgment by the Court for provision to be made out of the estate different from that provided by the testator's will."

(f) Even if the applicant bears no responsibility for the estrangement, its occurrence is nevertheless relevant to the exercise of the court's discretion under s 59(2) of the Act to make a family provision order where the jurisdictional requirements of s 59(1) are met.  That the applicant had no relationship with the deceased for some years, and that there did not, therefore, exist between them the love, companionship and support present in normal parent/child relationships, during those years, is a relevant consideration: Keep v Bourke [2012] NSWCA 64, per Macfarlan JA, at [3].

(g) The poor state of the relationship between the applicant and the deceased, illustrated by the absence of contact for many years, if it does not terminate the obligation of the deceased to provide for the applicant, may operate to restrain amplitude in the provision to be made:  Keep v Bourke, per Barrett JA, at [50].

(h) Where the applicant has been estranged from the deceased, the application of the Act requires that the estrangement be appraised and its causes considered.  In addition, s 60(2)(m) permits the court to consider the character and conduct of the applicant at the second stage of the process.  Care should be taken not to oversimplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other.[33]

Generally, the courts will look at the causes of the estrangement; and, in particular, on whom responsibility for the estrangement largely falls – assessing the relationship in a ‘fairly broad brush way’.[34]

However, where the ‘character and conduct’ of the applicant is the primary cause of the estrangement, any provision is likely to be modest.[35]  Where the applicant’s conduct has been especially egregious in contributing to the estrangement, the court may deny provision altogether.  For example, in Ford v Simes the ‘unilateral abandonment of a father for 14 years from when he was aged 76 until he died at aged 90 [sic] with a single abusive encounter in that period’[36] was sufficient to justify the testator’s denial of provision. Further, the court in reaching this decision, reasoned that:

The deceased spent the last 14 years of his life without any assistance from the appellant; without any communication (except the abusive encounter) from the appellant; and without the benefit of the love from a child whom he had nurtured and financially assisted during his formative years.[37]

Similarly, in Underwood v Gaudron, the court held the testator to be entitled to make no provision for the applicant in circumstances where the applicant was found to inexplicably have ‘demonstrated a complete indifference to, and neglect of, the deceased for the last 20 years of the deceased’s life’.[38]  A further example still is Rogers v Rogers, in which the plaintiff’s claim was dismissed.  In that case, the court found that the applicant daughter, despite encouragement from her siblings, had maintained no contact with the deceased, for a period of about 26 or 27 years and that there was a complete and permanent estrangement between the plaintiff and the deceased which the plaintiff was ‘prepared to, and continued to maintain’.[39]

Because this paper is concerned with the conduct of the applicant, it is beyond its scope to consider situations where the estrangement was caused by conduct of the deceased,[40] or caused mutually by both the applicant and deceased.[41]  In these circumstances, the courts recognize that disagreements often occur between child and parent, and the ‘wise and just testator’ is taken to understand this.  Suffice it to say that if the estrangement from the testator is explicable, the applicant may still ‘achieve an order for provision under the Act.’[42]

Misconduct that directly affected the deceased

Conduct by the applicant that affects the deceased in a more proximate way (as distinct from estrangement) may justify a finding that the applicant has forfeited his or her moral claim on the deceased.  For example, if the deceased had good grounds to believe that his or her spouse had committed adultery, the court is likely to deny the applicant any provision.[43] Similarly, continuous domestic violence, as occurred in Murphy v Stewart was held to disqualify the applicant from being ‘a natural object of testamentary recognition by the deceased.’[44]  In Barbanera v Barbanera, relevant to the court’s decision to dismiss the plaintiff’s summons was the finding that the plaintiff’s relationship with the deceased was ‘extremely turbulent and volatile and was characterised by abuse, threats and intimidation.’[45]  Even more extreme, is the situation in Troja v Troja, where a wife killed her husband and the principle of forfeiture operated to prevent her from receiving under his will as the principal beneficiary.  Upon applying for a family provision order her conduct was held to be disentitling, and the court observed that it would be inconsistent with the forfeiture rule, and ‘inconsistent with public policy… were the [defendant] now to be able to avail herself of the provisions of the Family Provision Act 1982…’.[46]  Furthermore, in Re Hardgraves a son was denied provision because he had dishonestly taken the benefit of sales and stock and produce from his deceased father’s farm, during his father’s lifetime.[47]  These examples clearly demonstrate the way in which the applicant’s conduct can determine the outcome of a family provision application.

Criminal conduct by the applicant

Where criminal conduct engaged in by the applicant has brought shame or disappointment upon the deceased, this may be sufficient justification for a ‘wise and just testator’ to make little or no provision for the child.[48]  Indeed, an applicant is not barred from provision merely because he or she has a criminal record.[49]  There must be other factors which, when taken together with the criminal conduct of the deceased, affect the moral duty of the testator to provide for the deceased.  For example, the applicant-son in Ford v Simes had a criminal record, but this factor was compounded by ‘unilateral abandonment’ of the relationship.[50]  Furthermore, in Hastings v Hastings, the criminal conduct of the applicant-son, who had been heavily involved in illegal drug dealing for 20 years and had spent several years in gaol, coupled with the way in which the publicity of the son’s arrest in the newspaper made the deceased feel ‘shunned’ and ‘embarrassed’,[51] were sufficient grounds for the court to refuse an order.  This was notwithstanding the applicant’s ‘considerable financial needs’.[52]  Therefore, criminal conduct by the applicant, though itself is not determinative, may be ‘part of a bigger picture’[53] which does affect the success of a family provision application.

Conclusion             

In summary, it can be said that the ‘character and conduct’ of the applicant can be a determinative factor in whether a court makes a family provision order.  Although ‘character and conduct’ have been shown to form part of a broader evaluative process amongst other discretionary considerations in the legislation, in reality, depending on the circumstances, it can and does tip the balance against the applicant.  Indeed, as has been demonstrated through case illustrations, an applicant’s ‘character and conduct’ may be so reprehensible, as to completely absolve the testator from any moral duty to make provision in his or her will for the applicant.  Often, it will at least limit the extent of the provision ordered.

Indeed, the courts are faced with a difficult task in assessing when an applicant’s ‘character and conduct’ reach such a threshold as to preclude him or her from obtaining a favourable order.  Nonetheless, the courts’ ‘sliding scale’ approach, which measures the nature of the applicant’s ‘character and conduct’ against the testator’s moral duty to provide for the applicant is one that enables the courts to negotiate their way through the complexity of the issues which arise in cases of the kind illustrated.  It is a holistic approach that not only acknowledges the importance of ‘freedom of testation’ for the ‘maintenance of the integrity of the process,’[54] but also recognises the need to balance this with the needs of the applicant, other competing claims on the testator’s bounty and prevailing community attitudes of what a ‘wise and just testator’ would do in the circumstances.

Author: Raffael Maestri

Contributing author: Gerard Basha

 

[1] Succession Act 2006 (NSW) s 60(2)(m).

[2] Collicoat v McMillan [1999] 3 VR 803, 818; Delacour v Waddington (1953) 89 CLR 117, 127; Re Hattie [1943] SR (Qld) 1, 26; Stern v Sekers [2010] NSWSC 59 (12 February 2010) [134].

[3] Andrew v Andrew (2012) 81 NSWLR 656, 660 [12] (Allsop P), 664 [35] (Basten JA), 679 [95] (Barrett JA).

[4] Wenn v Howard [1967] VR 91, 95.

[5] Succession Act 2006 (NSW) s 59(1)(a).

[6] Ibid s 59(1)(c).

[7] Singer v Berghouse (1994) 181 CLR 201, 209-10 (Mason CJ, Deane and McHugh JJ); Phillips v James (2014) 85 NSWLR 619, 629 [54]-[55] (Beazley P).

[8] Aubrey v Kain [2014] NSWSC 15 (30 January 2014) [39]-[44] (Hallen J); Underwood v Gaudron [2014] NSWSC 1055 (7 August 2014), [132], [162] (Hallen J), affd [2015] NSWCA 269 (8 September 2015); Dodds v Dodds [2013] NSWSC 1933 (19 December 2013) [32], [66] (Hallen J); Theoctistou v Theoctistou [2013] NSWSC 1487 (4 October 2013) [62]-[63] (Lindsay J); Cringle v Cringle [2018] NSWSC 1558 (19 October 2018) [32] (Ward CJ in Eq); Sgro v Thompson [2017] NSWCA 326 (15 December 2017) [70] (White JA).

[9] See, eg, Frisoli v Kourea [2013] NSWSC 1166 (23 August 2013) [139] (Slattery J); Dunne v Dunne [2013] NSWSC 1911 (18 December 2013) [31]-[32] (Young AJ); Phillips v James (2014) 85 NSWLR 619, 628 [50], [52] (Beazley P); See also Gardiner v Gardiner [2014] NSWSC 435 (14 April 2014) [126]; Dudic v Jakovljevic [2014] NSWSC 169 (5 March 2014) [78]; Oldereid v Chan [2013] NSWSC 434 ( 29 April 2013) [52]; Cf Verzar v Verzar [2012] NSWSC 1380 (16 November 2012) [92].

[10] (1994) 181 CLR 201, 208-11 (Mason CJ, Dean and McHugh JJ).

[11] Oldereid v Chan [2013] NSWSC 434 ( 29 April 2013) [53].

[12] (2012) 81 NSWLR 656, 663 [29] (Basten JA); Cf Keep v Bourke [2012] NSWCA 64 (5 April 2012) (Basten JA).

[13] See, eg, Andrew v Andrew (2012) 81 NSWLR 656; Burke v Burke [2015] NSWCA 195 (13 July 2015) [17]-[23] (Ward JA); Poletti v Jones [2015] NSWCA 107 (27 April 2015) [16]-[22] (Basten JA); Underwood v Gaudron [2015] NSWCA 269 (8 September 2015) [66]-[70] (Basten JA), [92]-[95] (Macfarlan JA).

[14] [2017] NSWCA 326 (15 December 2017)[5]-[7] (Payne JA), [68]-[75] (White JA).

[15] Andrew v Andrew (2012) 81 NSWLR 656, 658 [6] (Allsop P).

[16] G. E. Dal Pont and K. F. Mackie, Law of Succession (LexisNexis Butterworths, 2nd ed, 2017) 657.

[17] Ibid.

[18] Underwood v Gaudron [2014] NSWSC 1055 (7 August 2014) [127], affd [2015] NSWCA 269 (8 September 2015).

[19] See, eg, Re Gilbert (1946) 46 SR (NSW) 318, 318.

[20] Dal Pont and Mackie, above n 16, 658.

[21] [1999] 3 VR 803, 818; See also Delacour v Waddington (1953) 89 CLR 117, 127.

[22] Leonie Englefield, Australian family provision law (Thomson Reuters (Professional) Australia Limited, 2011) 136; See, eg, Andrew v Andrew [2011] NSWSC 115 (4 March 2011) (Hallen J ), revd (2012) 81 NSWLR 656.

[23] Ford v Simes [2009] NSWCA 351 (6 November 2009) [71] (Bergin CJ in Eq, with whom Tobias JA and Handley AJA concured).

[24] [2008] NSWCA 288 (6 November 2008) [102].

[25] Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 478-9.

[26] Ibid 479.

[27] Andrew v Andrew (2012) 81 NSWLR 656, 680 [97] (Barrett JA), 661 [16] (Allsop P); See also Wenn v Howard [1967] VR 91, 95 (Mcinerney J).

[28] [1967] VR 91 cited in Dal Pont and Mackie, above n 16, 659.

[29] Andrew v Andrew (2012) 81 NSWLR 656, 664 [36].

[30] Englefield, above n 22, 136.

[31] Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134, 156; See generally, Collicoat v McMillan [1999] 3 VR 803.

[32] Foley v Ellis [2008] NSWCA 288 (6 November 2008) [101] (Sackville AJA); Palmer v Dolman [2005] NSWCA 361 (12 December 2005) [110] (Ipp JA); Wheatley v Wheatley [2006] NSWCA 262 (22 September 2006) [22] (Bryson JA); Andrew v Andrew (2012) 81 NSWLR 656, 666 [40] (Basten JA); Rogers v Rogers [2018] NSWSC 1982 (18 December 2018) [152] (Hallen J); Keep v Bourke [2012] NSWCA 64 (5 April 2012) [37] (Barrett JA).

[33] [2014] NSWSC 1055 (7 August 2014) [231] affd [2015] NSWCA 269 (8 September 2015).

[34] Hampson v Hampson [2010] NSWCA 359 (17 December 2010) [80].

[35] John K. De Groot and Bruce W. Nickel, Family provision in Australia (LexisNexis Butterworths, 5th ed, 2017) 24.

[36] Ford v Simes [2009] NSWCA 351 (6 November 2009) [70].

[37] Ibid [72].

[38] [2014] NSWSC 1055 (7 August 2014) [312], affd [2015] NSWCA 269 (8 September 2015); See also Burke v Burke [2015] NSWCA 195 (13 July 2015).

[39] [2018] NSWSC 1982 (18 December 2018) [4], [131]-[142].

[40] See, eg, Keep v Bourke [2012] NSWCA 64 (5 April 2012).

[41] See, eg, Foley v Ellis [2008] NSWCA 288 (6 November 2008); Palmer v Dolman [2005] NSWCA 361 (12 December 2005).

[42] Ford v Simes [2009] NSWCA 351 (6 November 2009) [72]; See also De Groot and Nickel, above n 35, 24-26.

[43] Re McGoun [1910] VLR 153, cited in De Groot and Nickel, above n 35, 38.

[44] [2004] NSWSC 569 (28 June 2004) [44]; See, eg, Amos v Hogg [2018] NSWSC 1226 (15 August 2018); Cf Cross v Watson [2009] NSWSC 378 (12 May 2009).

[45] [2017] NSWSC 357 (5 April 2017) [29] (Slattery J).

[46] (1994) 35 NSWLR 182, 185-6 (McLaughlin M).

[47] Re Hardgraves [1955] St R Qd 101, cited in Englefield, above n 22, 140.

[48] Dal Pont and Mackie, above n 16, 665.

[49] See, eg, Wilson v Public Trustee [2009] NSWSC 464 (1 June 2009); McLeod v Radnidge [2009] NSWSC 1105 (16 October 2009).

[50] [2009] NSWCA 351 (6 November 2009).

[51] [2008] NSWSC 1310 (9 December 2008) [38].

[52] Ibid [25].

[53] Dal Pont and Mackie, above n 16, 665.

[54] Ford v Simes [2009] NSWCA 351 (6 November 2009) [71].