Paul v Satici [2022] NSWSC 922

30 Nov Paul v Satici [2022] NSWSC 922

This case is of interest as it demonstrates the circumstances in which an adult child can be successful in claiming additional provision from an estate.

Facts

The Plaintiff sought orders against the estate of her father to make provision for her proper maintenance. The youngest child of the deceased was appointed as executor as well as having an entitlement under the will to a legacy of $300,000 pursuant to a codicil. The residue of the estate was to be divided into four equal parts with one quarter to each of the deceased’s three children, and one quarter to be distributed among his ten grandchildren. The Plaintiff was a single mother with three dependent children. Her income comprising various forms of government support was barely sufficient to meet her regular expenses.

Decision

Justice Kunc of the New South Wales Supreme Court found that the quarter share of the estate, which after expenses would have been worth about $407,500, did not constitute adequate provision for the Plaintiff.

In evaluating the amount of provision that would be adequate, the Court considered factors pursuant to s 60(2) of the Succession Act 2006 (NSW) and found that the Plaintiff had a close relationship with her father; that her three children were financially dependent on her; and that it would be several years before she could return to full-time work. The Court noted there was no evidence that the late father did not wish to provide adequately for the Plaintiff.

In considering the extent of additional provision, his Honour Justice Kunc held:

            ‘In my respectful view, the decisive matters are that Esin is of an age where she will still be able to work for a number of years. She is taking steps to retrain as a jewellery designer. Her own calculations in her evidence (displaying her background in bookkeeping that she has not pursued for many years) were premised on her returning to work in a few years’ time.   Furthermore, her children (currently aged 24, 18, 16 and 13) will all have reached their majority within the next five years. There is no suggestion in the evidence to contradict the usual expectation that they will wish to make their independent way in the world’ [at 93].

            ‘These matters persuade me that a wise and just testator would approach the question of Esin’s needs, taking into account the size of the Estate and the proper claims of the other family members, to ensure that Esin had funds to continue to rent her home (given that any inheritance much over that which she would otherwise receive would deprive her of her entitlement to a rental subsidy) while her children were in their minority and she retrained and re-established herself in her new career, together with a fund for general purposes, including to meet any immediate needs that she may have. Given the size of the Estate and the circumstances of other family members, her moral claim does not extend to being given a fund to buy her own property’ [at 94].

Justice Kunc ordered that the Plaintiff should receive $700,000 ‘…in lieu of the quarter share of the residue that she would otherwise receive, in effect an additional provision of just under $300,000’ [at 95]. He went on to say he reached that number by two different routes. The first route was calculated in accordance with the Plaintiff’s expenses including rent until such time as her youngest child reaches 18 years of age, plus an amount for contingencies of $100,000. The Court recognised, ‘…that applications for family provision do not call for a precise delineation of the components of the provision, but rather an evaluative assessment of what will meet the proven needs of the plaintiff in the light of all the facts before the Court…’ [at 96].

The second route was calculated in accordance with the Plaintiff’s calculations which included the difference between the Plaintiff’s income and expenses for the period until her youngest child turns 18, and expenses in the event that one of her children continues to live in the family home until they finish university. This also amounted to approximately $700,000.

The burden of providing the additional funds from the estate was to be borne rateably by the Plaintiff’s two siblings. The grandchildren’s share was not burdened. Costs of $100,000 were awarded subject to liberty to apply if that was insufficient.