My Not So Fair Share – Trends in Family Provision Claims

The personal and often emotional issues that arise when people’s expectations are not met by the decisions of a will maker often give rise to thoughts and actions premised on entitlement and occasional avarice. However, the usual “pub talk” that follows can be a slippery slope of disaster and it is worthwhile occasionally reviewing what the Court’s attitude is towards the genesis of a family provision claim rather than just relying on commonly held beliefs.

Courts will frequently ask the wills lawyer to present the nature of the estate such as its size and the composition of its assets and liabilities as well as the financial position of the parties. In Darveniza the Queensland Supreme Court awarded $3m out of a $27m estate to a son who had performed significant amounts of work in the deceased’s business relying on certain promises of provision.  Similarly, in Mead the Western Australian Supreme Court ordered $25m paid to the daughter of a relationship between the testator and his former wife, from whom he was divorced.  The estate was agreed to have a value of at least $1Bn and the testator, who was in his third marriage at the time of death had some obvious issues with the daughter and left her approximately $3m inside a trust that made it almost impossible for her to actually receive the money. The case is currently on appeal.

The converse example is of course small estates, where the costs of conducting the litigation can very quickly eclipse the value of the estate.  There is a significant judicial trend in warning parties about this factor and occasionally going to the point of limiting the costs that will actually be met by the estate.  In Forsyth the Victorian Court of Appeal held that an applicant that had acted unreasonably in bringing the proceedings should bare 50% of the costs of the litigation personally and not be reimbursed from the estate.  The Court also confirmed that having costs paid out of the estate is at the discretion of the Court, not an automatic right.

The restricting of the costs that will be paid by the estate is evidenced in Gill where the New South Wales Supreme Court capped the costs borne by the estate at $40,000.  The Plaintiff had been awarded $100,000, however the Judge determined that the costs incurred were excessive and largely wasted on irrelevant affidavit material.  The manner in which costs were incurred was also considered by the Queensland Supreme Court in Manly.  In an estate of around $380,000 litigation costs of $180,000 were stated by the Court to be out of proportion with the degree of difficulty of the legal work undertaken.  Having regard to the same principles in a later application for costs orders against the Applicant, the Court reluctantly capped the costs that would be paid out of the estate even when there was some misconduct on the part of the Applicant.

The Court’s stern warning to applicants and their lawyers is a clear sign that costs need to be appropriately and diligently incurred in family provision matters.   Furthermore, it is an obvious mistake to assume that there is little risk in bringing an application because costs will be borne by the estate.

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