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Back to "Estate Planning Newsletter - July 2015"


Family Provision Claim – Neale v Neale [2015] NSWCA 206

Neale v Neale [2015] NSWCA 206

This case was heard in the NSW Supreme Court (Court of Appeal) on 17 July 2015 before Basten JA, Macfarlan JA and Gleeson JA and concerned an appeal from the decision of Lindsay J.

The case concerned a dispute between the deceased’s widow (the Appellant) and his two children from a former marriage (the Respondents). The deceased had died leaving the entirety of his $1.7 million estate to his widow, effectively excluding the Respondents from any benefit under the will. The Respondents had commenced proceedings in November 2013 and were awarded a legacy of $100,000 each pursuant to their successful family provision claim under Part 3.2 of the Succession Act 2006(NSW). The Appellant brought the current proceedings seeking to have the legacies set aside and costs orders made against the Respondents.

There were 5 appeal grounds identified for determination by the Appeal Court, the more significant of which were the 3rd and 4th grounds concerning the circumstances relating to the Respondent’s legacy, namely the dispute over another will being that of the deceased’s mother, the Respondent’s grandmother (the Grandmother). Of particular note was the Appeal Court’s consideration of the question as to whether a family member (grandchild respondents) forgoing an entitlement that could be viewed as part discharge of moral obligations (to their father, the deceased) and filial affection for a sick family member (their father, the deceased), could displace an expectation (by the grandchildren respondents) to a legacy in the will of that family member (their father, the deceased).

The Grandmother left an estate of $1.2 million out of which her will provided for legacies of $100,000 each to her sons, (the deceased and the deceased’s brother), and the balance apportioned equally between her four grandchildren two of whom were the Respondents. A dispute which arose over this will was settled by a “deed of arrangement” under which the grandchildren (including the Respondents) forewent their entitlement in favour of the deceased.

The issue for consideration on appeal was whether or not there was (as the trial judge found) a representation made to the Respondents by the deceased to the effect that he would make a provision for them in his own will. A further closely related issue was whether or not the Respondents’ act of foregoing their entitlement under the Grandmother’s will gave rise to an expectation that they would receive something from the deceased’s estate (something the trial judge also found).

The Appellant alleged that, there was a lack of evidence that the deceased had made any representations, but lack of counter evidence left open for the trial judge to make the findings that a representation had been made.

Furthermore, in relation to the expectation, the Appeal Court rejected the Appellants arguments that the Respondents’ were motivated to forego their legacy, (as it would be spent on medical costs to treat their father’s illness) which was a motive to discharge a moral obligation based on filial affection: in other words, the children had no expectation.

In his judgment for the Court Basten JA observed that

No doubt filial affection was one reason why the respondents agreed to the settlement of the deceased’s claims to part of his mother’s estate. However the contributions of the respondents cannot be seen purely in terms of the discharge of an existing moral obligation…that provides no absolute defence to a later claim by the offspring on a parent’s estate….

Basten JA also noted that the expectation was that of forming obligations or responsibilities such as those owed by the deceased to the Respondents and which the Court was required to consider, and was different from estoppel, where the person must establish they relied upon an unfulfilled expectation and suffered detriment.

So, notwithstanding the deceased’s children had been motivated by a moral obligation, their expectation to receive adequate provision under their father’s will, was not exhausted. The Appeal was dismissed.

Authors: Patricia Monemvasitis & Kim Leontiev

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