NORTH QUEENSLAND LAW ASSOCIATION CONFERENCE 2010 2010 SUCCESSION LAW UPDATE

1. NORTH QUEENSLAND LAW ASSOCIATION CONFERENCE 20102010 SUCCESSION LAW UPDATE Dr John de Groot 29 May 2010Cairns

2. FAMILY PROVISION APPLICATIONS • A more generous court • O’Donnell v Gillespie [2010] QSC 22 • Currey v Gault [2010] QSC 027

3. FAMILY PROVISION APPLICATIONS • More generous to second spouses vis-a-vis children of first marriage • Now in the 55-75% range • Sayer v Public Trustee [2009] NSWSC 89 • Influence on these outcome - accommodation flexibility and increased house prices?

4. FAMILY PROVISION APPLICATIONS • A more understanding court • Foley v Ellis [2008] NSWCA 288 • “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. The “wise and just” testator or testatrix…must be taken to understand this.”

5. IMPACT OF BFAs ON FPAs • Cohabitation agreement/BFAs since December 2000 • Clauses often included: • That no FPA claim will be made; or • Adequate funds to maintain themselves

6. IMPACT OF BFAs ON FPAs • Contracting out of rights to an FPA is void on the grounds of public policy Lieberman & Anor v Morris (1944) 69 CLR 69 • Clients advised accordingly • Clauses relevant as to sentiment and moral constraint

7. IMPACT OF BFAs ON FPAs • Singer v Berghouse (1994) 181 CLR 201 • It was held that the Master had not erred in his judgment and that the agreement was admissible for the limited purpose of showing that the parties thought its terms fair at the time they signed it, and in the event of the husband's death the wife could not say she had expectations of a more affluent life than she had lived before the marriage

8. IMPACT OF BFAs ON FPAs • Re Little (1995) 16 QL Rep 39 • The Court held that the Family Court order did not act as a bar or a release of the applicant's claim but it was relevant to the exercise of the court's discretion in making any order

9. IMPACT OF BFAs ON FPAs • Kozak v Matthews [2007] QCA 296 • It was held that the primary judge had not erred in taking the agreement into account as setting out the basis on which the relationship between the deceased and the applicant had proceeded. The deceased had made it clear that she was not providing further for the applicant and he accepted that position

10. IMPACT OF BFAs ON FPAs • Manly v The Public Trustee of Qld [2008] QCA 198 • Justice Daubney in the leading judgment dismissing the appeal also stated that the 'pre-nuptial' agreement entered into between the deceased and the applicant had "considerable bearing on the 'totality of the relationship between the applicant and the deceased'”

11. IMPACT OF BFAs ON FPAs • Hills v Chalk & Ors (as executors of the estate of Chalk (deceased)) [2008] QCA 159 • This Court of Appeal judgment takes the use of a BFA one step further. The court held that the learned primary judge erred in failing to appreciate that the pre-nuptial agreement, although not directly decisive, was relevant to the question of whether adequate provision had been made for the applicant in an 8 year relationship. The court held that pre-nuptial agreement was relevant to the totality of the relationship

12. IMPACT OF BFAs ON FPAs • The shorter the time between the agreement and the bringing of an application, the stronger the influence on the outcome • The less change that has occurred in the circumstances of each party, the greater the relevance of these agreements

13. IMPACT OF BFAs ON FPAs • Keane JA "In my respectful opinion, the learned primary judge erred in failing to appreciate that the pre-nuptial agreement made by the parties, though not of itself decisive against Mr Hills' claim, is of significance to the assessment to be made by the court of Mr Hills' application…. The mutually agreed intentions and expectations of the Testatrix and Mr Hills expressed in the pre-nuptial agreement in relation to their adult children, and their acknowledgement that each should not seek to defeat the intentions of the other in that regard, was a consideration which should be regarded by the court as illuminating the totality of their relationship, and as suggesting that the provision made for Mr Hills by the Testatrix was adequate for his proper maintenance and support within the meaning of the Act."

14. IMPACT OF BFAs ON FPAs • Keane JA again "In my opinion, the court should have regard to such a voluntary statement by the parties of their intentions and expectations, unless there is good reason for the court to conclude that these intentions and expectations would not have shaped the thinking of the wise and just testator or testatrix postulated by the Act. There may be cases, for example, where the length of time and change in circumstances between the making of a pre-nuptial agreement and the death of one of the parties is such that the pre-nuptial agreement is no longer a true reflection of the parties' relationship."

15. PRACTICE TIPS • It is now more important in any family provision claim where a surviving spouse is taking action against the estate of the deceased spouse, to raise specifically whether a BFA or its equivalent was entered into, to scrutinise that agreement and ascertain whether it contains a prohibition on bringing a family provision claim so that its relevance can be considered in the particular circumstances of the case in question

16. OSR DISCUSSION AGENDA • Distributions from testamentary trusts • Changes in shareholding of corporate trustees

17. PROBATE RULES REVIEW • Passing of accounts • Clarifications of relevant Uniform Civil Procedure Rules(rules to be more explicit) • Clarifications of Registrar’s authority: • - To make grants • - To make 666 orders

18. SUCCESSION ACT s18 • Re Cleland [2009] QSC 189 • Unsigned, undated, unwitnessed ‘codicil’ admitted to probate

19. SUCCESSION ACT s21 • Court authorised will • Payne v Smyth [2010] QSC 45 • Historical perspective • Re Fenwick; Re Charles [2009] NSWSC 530

20. ADEMPTION CASES • Re Viertel [1997] 1 QdR 110 • Ensor v Frisby [2009] QSC 268 • Re Blake [2009] VSC 184

21. PRACTICE ISSUE • Larke v Nugus • Principles and relevance to succession lawyers