Outline of Facts

The late Bill and Jill Bassett were farmers and of their four children, Geoff was the only child to pursue farming professionally and he worked alongside his parents. At the time of his death, Bill had a 50% share in a farm with Geoff owning the other 50% interest. In 1998, Geoff had largely been gifted a rural property by his parents, which he sold in 2009 for $4.2 mil, which was described by the deceased and the beneficiaries as Geoff’s “early inheritance”. Bill’s Will expressly excluded Geoff from receiving any interest in the farm which Bill owned with Geoff at the date of Bill’s death. Geoff did benefit under Bill’s will but not in a share of the farm real estate.  The other children, Merilyn, Bruce and Sue were residuary beneficiaries under Bill’s Will (which included Bill’s interest in the farm).

Shortly after the grant of probate of Bill’s estate, Geoff asserted a proprietary estoppel claim over Bill’s 50% of the farm and in the alternative, a family provision order under the Succession Act 2006 (NSW).

Keypoint Law (Monica Ross-Maranik) together with Senior Counsel acted for Merilyn and Bruce, who were appointed to represent Bill’s estate in the proceedings,  and defended Geoff’s family provision and estoppel claims.

Original dismissal of estoppel in the proceedings at first instance

The estoppel claim was asserted based upon a series of alleged representations by Bill to Geoff, commencing in 1984. At hearing, the claim was principally founded upon a representation said to have been made in 2009. If successful, Geoff would have secured 100% ownership of the farm which was estimated for probate purposes at $1.9 mil and at hearing at $3.5 mil.

At first instance, Geoff was unsuccessful in the estoppel claim against Bill’s Estate for a 50% interest in the farm.

Successful appeal where the provision made for the applicant was reversed on appeal

Geoff was successful in his family provision claim made under s 59 of the Succession Act 2006 (NSW) (‘Act’) at first instance. The primary judge granted Geoff  50% of Bill’s interest in the farm, the effect of which was that Geoff then had a 75% interest in the farm.

Merilyn and Bruce contended that the primary judge exercised her power to make a family provision order contrary to s 59(2) of the Act by having regard to facts not known, namely whether it was in fact Geoff’s intention to continue farming and whether this depended upon his ability to buy out his sibling’s interest in the farm, they otherwise being entitled as residuary beneficiaries under Bill’s Will.

On Appeal the court considered that there was no assessment made of what Geoff’s financial needs otherwise were and “the s 59(1)(c) exercise involves more than simply an assessment of financial needs, that will generally be an essential part of the determination of whether adequate provision has been made for the proper maintenance and advancement in life of an eligible person.… the Court is required to consider not only material or financial needs, and the word “proper” in s59(1)(c is heavily value laden.”

On appeal Bell P, Leeming and Payne JJA held that the primary judge erred in the conclusion that adequate provision had not been made for Geoff’s proper maintenance and advancement in life, insofar as he would not be able to retain and continue to farm . It was an extremely unlikely coincidence that adequate provision for Geoff’s proper maintenance and advancement would approximate to half of Bill’s 50% interest in the farm.

The primary judge erred in cross-checking the proportionality of the siblings shares from their parent’s respective estates (including their interest in Bill’s wife’s estate, as she pre-deceased Bill). A proper assessment would have shown  (taking into account Geoff’s possible costs exposure from the dismissal of his estoppel claim  and also his substantial early inheritance) a grossly disproportionate outcome in Geoff’s favour as a result of the family provision order awarded at first instance .

The primary judge, if justified in making any provision for Geoff, made the provision beyond what was “adequate” and such that it was “highly excessive”.

On the re-exercise of the discretion pursuant to s 59 of the Act, no order for provision was made for Geoff.

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This article is for general information purposes only and does not constitute legal or professional advice.  It should not be used as a substitute for legal advice relating to your particular circumstances.  Please also note that the law may have changed since the date of this article.