6. Family provision

Introduction

Current law and terms of reference

  1. 6.1 In Victoria, any person can apply for a court order to redistribute a deceased person’s estate in their favour if they believe that the deceased person had a responsibility to provide for them, and did not do so. This area of law, family provision, exists in some form in all Australian states and territories. Family provision law recognises that, although people are free to give away their property by will after they die, or to not make a will at all, they also have a responsibility to provide for certain people, usually family members.
  2. 6.2 In Victoria, family provision is governed by Part IV of the Administration and Probate Act 1958 (Vic). The Commission’s terms of reference directed it to review and report on:

whether Part IV of the Administration and Probate Act 1958 concerning family provision applications is operating justly and effectively, having regard to its objective of providing for the proper maintenance and support of persons for whom a deceased had a responsibility to make provision.

  1. 6.3 Under the Administration and Probate Act, any person can apply to the County Court or Supreme Court for a share, or a larger share, of a deceased person’s estate. When hearing a family provision claim, the court must decide whether:
  • the deceased person had responsibility to provide for the person making the application (the applicant)
  • distribution of the deceased person’s estate by their will, intestacy laws, or both, makes adequate provision for the proper maintenance and support of the applicant and, if not, the amount of further provision that should be made.1
  1. 6.4 The many factors that the court must consider in making these decisions include:
  • the nature of the relationship between the applicant and the deceased person
  • the size of the estate
  • the financial resources and needs of the applicant
  • contributions by the applicant to building up the estate.2

 

  1. 6.5 If the court is satisfied that the deceased person had responsibility to provide for the applicant, and that the will or intestacy provisions failed to make adequate provision for the proper maintenance and support of the applicant, it may order that further provision should be made for the applicant out of the deceased person’s estate.3
  2. 6.6 The court decides each case on its own merits, after balancing the relevant statutory criteria. There are no definitive rules about when a family provision claim will succeed. As discussed in the Commission’s consultation paper on family provision, applicants in a range of different relationships with the deceased person have been successful or unsuccessful, based on the individual circumstances of each case.4
  3. 6.7 It is important to note, however, that the vast majority of family provision claims are not ultimately decided by the courts; they are usually settled by agreement between the parties.

Overview of the problems with family provision law in Victoria

  1. 6.8 In the course of this reference, the Commission has heard a number of criticisms about the operation of family provision law in Victoria. The Commission identified several in its consultation paper on family provision:
  • a belief that the current law encourages opportunistic or non-genuine claims
  • the high legal costs in family provision proceedings and the fact that they are often borne by the estate, even where a family provision claim fails
  • the settlement of a high proportion of claims that may not otherwise have succeeded at trial
  • the fact that, due to the high rate of settlement, the courts have little oversight over costs in family provision matters
  • the lack of certainty that exists in this jurisdiction and the difficulties experienced by legal practitioners when advising clients about the validity and strength of the claim
  • the perception of some members of the public that their will can effectively be challenged by anyone, and that they do not truly have freedom to dispose of their property by will.
  1. 6.9 In relation to such concerns, the Commission sought comments about:
  • the factors that affect a decision to settle a family provision proceeding
  • the extent to which the current law allows applicants to make family provision claims that are opportunistic or non-genuine
  • whether summary dismissal proceedings or existing costs rules deter opportunistic family provision applicants
  • whether costs orders unfairly impact on estates
  • which procedures in the County Court and Supreme Court are working well to reduce costs, and whether any additional measures would assist with this.

 

  1. 6.10 Many submissions expressed the view that costs rules and the power of the court to summarily dismiss claims are not effective in deterring opportunistic or non-genuine claims.5 Both the Law Institute of Victoria and Arnold Bloch Leibler considered that the current law allows opportunistic and non-genuine family provision claims ‘to a significant extent’.6 State Trustees said that it had experienced such claims on many occasions.7 A County Court practice note adverts to the existence of such a problem, stating that, ‘In some cases, a plaintiff may issue proceedings where there is little merit in the claim or alternatively an appearance is filed where a defendant has no real defence’.8
  2. 6.11 Some legal practitioners, however, considered that the problem of opportunistic claims is not widespread.9 Barrister Andrew Verspaandonk said that, although ‘try on’ claims are made, they represent a relatively modest proportion of the overall number of claims made, but they do gain notoriety.10 Carolyn Sparke SC agreed that marginal cases are relatively few in number, but are overrepresented in the media.11 Whatever the extent of the problem, it is clear that opportunistic claims, legal costs, uncertainty in the jurisdiction and the high rate of settlement are closely related.
  3. 6.12 Settlement is prevalent in the family provision jurisdiction, with one barrister noting that, ‘In my experience, almost all such claims resolve at the point of mediation’.12 Although the merits of a claim13 and the desire to preserve family relationships14 affect the decision about whether to settle, a number of submissions expressed the view that settlement is not always, or even usually, based on the merits of the claim and an outcome that is best for all parties.

Concerns about costs

  1. 6.13 The Legal Services Commissioner said that, in complaints made in relation to family provision proceedings, some unmeritorious claims appear to have been settled not on the merits of the claim, but because costs of the litigation are likely to be paid out of the estate.15 In preliminary comments on the terms of reference, Equity Trustees Ltd agreed with this contention, noting that settlement does occur to protect the value of the estate.16
  2. 6.14 The Property and Probate Section of the Commercial Bar Association and the Law Institute of Victoria agreed that the risk that an unsuccessful plaintiff will receive their costs out of the estate motivates some defendant personal representatives to settle claims.17 State Trustees also noted the existence of the practice of settling unmeritorious claims to prevent incurring further legal costs and eroding the estate, referred to colloquially as ‘go away money’.18  
  3. 6.15 Arnold Bloch Leibler expressed the view that, even if a family provision claim is successfully defended, ‘there is very little prospect that the plaintiff will be ordered to
    pay the estate’s costs’.19 State Trustees noted that costs still ‘default’ to the estate in the majority of instances.20 Further, the Law Institute of Victoria considered that:

plaintiffs can expect solicitor-client costs from the estate despite being unsuccessful at trial, which has a chilling effect on mediations and encourages executors to settle even unmeritorious claims.21

  1. 6.16 The Supreme Court of Victoria noted that costs orders in family provision proceedings affect not only how claims are brought, but also how they are defended:

the usual disincentive to a defendant opposing a meritorious claim does not necessarily exist in family provision matters. While a defendant executor who has an interest in the estate has an incentive to prevent diminution of the estate through legal costs, a defendant executor with no interest in the estate will not. Their costs will be met by the estate almost universally, and they may adopt the position that they are under an obligation to defend the will … In the Court’s experience, defendants who are not also beneficiaries can on occasion unreasonably resist meritorious claims.22

  1. 6.17 A member of the public who had been the executor and a beneficiary of a will against which a successful family provision claim has been made said that ‘huge legal expenses’, fear of a worse result and mistrust of the system all contribute to the decision to settle.23 Some members of the legal profession considered that the considerable costs involved are ‘almost invariably’ a factor resulting in settlement.24 While the Cancer Council Victoria noted that the high rate of settlement ‘provides a check against unfounded claims progressing’,25 it also noted that legal costs up to mediation are still commonly borne by the estate.26
  2. 6.18 The Commission also heard that lawyers’ practices contribute to the costs problem in family provision. Several submissions suggested that ‘no win, no fee’ practices and uplift fees contributed to high legal costs in family provision proceedings.27 The Supreme Court of Victoria noted that costs will only rarely be judicially determined, so the costs charged by legal practitioners need to be scrutinised.28 Moores Legal reiterated that courts rarely have the opportunity to examine the parties’ costs and make a determination about whether they are reasonable and proportionate.29 A member of the Commission’s succession laws advisory committee noted that, because the court does not have control over costs at the point of mediation, practitioners often grossly overestimate their costs at this stage.30 Additionally, one submission from a member of the public noted that where a family is ‘fractured or dysfunctional’ parties may not care about costs ramifications, ‘in fact they delight in them’.31
  3. 6.19 The Commercial Bar Association noted that the size of the estate is another important factor in decisions made to settle family provision applications.32 A charitable beneficiary expressed the view that it may not be worthwhile to pursue a weak claim to trial, because the costs of doing so would be exorbitant relative to the size of the estate. The Property and Probate Section of the Commercial Bar Association noted that, in the case of smaller estates, settlement is likely where it becomes apparent to the defendant that their net return if the matter proceeds to trial will be less than an amount that can be agreed upon at mediation.33
  4. 6.20 Other charitable beneficiaries said that their motivation to settle can be influenced by: the availability and potential costs of legal advice and representation; the chance that the application will be successful; and the reputational risks to the charity, and how it may be portrayed in the media, irrespective of the validity or strength of the application.34 The Commission also heard that charities may be compelled to settle as soon as possible because of immediate financial requirements.35

Uncertainty about whether the claim will succeed

  1. 6.21 Submissions from law firms emphasised the uncertainty that exists in the family provision jurisdiction:
  • Because family provision matters are so fact-based, it is difficult to accurately predict the advice that the opponent will be given.36
  • The case-by-case nature of determinations means that it is difficult to predict whether a claim will succeed and, in the event of success, the amount of any order for provision.37
  • ‘There may be 50 judges and 50 different decisions and none of them would be wrong.’38
  • ‘It is only at the time of judgment that the parties know for certain whether the plaintiff was indeed a person for whom the deceased had a responsibility to provide.’39
  1. 6.22 In consultation, representatives of the Law Institute of Victoria’s Succession Law Committee noted that the uncertainty in family provision creates difficulty for solicitors advising their client as will-maker, applicant or executor.40 The Supreme Court of Victoria agreed that, due to the highly discretionary nature of the jurisdiction, a defendant can rarely be entirely confident of success.41 As well as making it difficult for legal practitioners to advise their clients, uncertainty contributes to the likelihood of settlement.42 However, barrister Andrew Verspaandonk noted that the effect of uncertainty can be mitigated by appropriately qualified advice,43 and legal practitioners in Colac did not consider it difficult to advise a client about whether they have a valid claim.44

Non-financial costs

  1. 6.23 The time and mental energy demanded of the parties in family provision proceedings is also at play in decisions to settle. Arnold Bloch Leibler noted that family embarrassment and the desire for confidentiality, as well as family stress, contribute to decisions to settle family provision claims.45 The Law Institute of Victoria cited ‘the trauma of going through the process and a public hearing’ as a reason for settlement,46 and the Institute of Legal Executives noted the emotional effort involved for parties if a matter ‘drags on’.47 
  2. 6.24 In barrister Andrew Verspaandonk’s view, the parties’ desire to avoid a hearing and get on with their lives is the strongest incentive to settle family provision claims:

All practitioners know that there are non-financial costs to litigation. These are particularly pointed in Family Provision litigation where the trigger for the litigation has been the death of a loved one. In my experience, both plaintiffs and defendants have been keen to resolve the proceeding … simply to have it all over and done with … This also occurs even where the merits of the case would justify a continuation to trial.48

Discrepancy between the law and community expectations

  1. 6.25 There is a perception that the law does not accord with community expectations. A member of the public who had been an executor and beneficiary of an estate against which a family provision claim had been made expressed dismay that, in her view, a judge had been permitted to over-rule her mother’s wishes where all children had been equally provided for.49 Another member of the public in a similar situation expressed the view that people do not want their wills changed and are generally not aware that this can happen.50
  2. 6.26 Include a Charity and a legal practitioner from a community legal centre agreed that many people are unaware that their final wishes can be altered after their death.51 Retirees surveyed by the Association of Independent Retirees unanimously expressed the view that they did not want their wills to be challenged, with one asking ‘Why pay to make a will when ultimately my wishes will be challenged?’52

Recommended areas for reform

  1. 6.27 Most possible reforms in response to the problems identified in family provision,
    as discussed in this chapter, are directed to four aspects of the operation of the law:
  • court jurisdiction
  • eligibility to make a family provision claim
  • costs rules
  • procedure.
  1. 6.28 In relation to family provision, there seems to be little possibility of achieving national consistency by implementing the recommendations of the National Committee for Uniform Succession Laws. Where desirable, the Commission has drawn from law and practice in New South Wales, with a view to achieving consistency between the two most populous states in Australia.
  2. 6.29 Aspects of family provision law that were raised in the consultation paper, but for which no change is proposed, are:
  • the time within which to bring an application
  • notional estate.  

Court jurisdiction

Current court jurisdiction

  1. 6.30 Both the County Court and the Supreme Court have unlimited jurisdiction to hear and determine family provision claims.53 The County Court has had jurisdiction to hear family provision claims ‘where the value of the estate does not exceed its jurisdictional limit’ since 1986,54 and it has had unlimited civil jurisdiction since 2007.55
  2. 6.31 In its consultation paper on family provision, the Commission asked whether family provision proceedings were generally less costly in the County Court than in the Supreme Court.56 In consultation and submissions, stakeholders raised a range of views about court jurisdiction generally.

Victorian Civil and Administrative Tribunal

  1. 6.32 The Victorian Civil and Administrative Tribunal (VCAT) proposed that it should have jurisdiction to determine family provision applications.57 In consultation, representatives from VCAT suggested that VCAT should have exclusive jurisdiction over family provision claims in respect of estates of a limited value, perhaps up to $200,000, and concurrent jurisdiction with the County Court and Supreme Court over all other family provision claims.58
  2. 6.33 VCAT gave the following reasons why it should have jurisdiction in family provision matters:59
  • It offers an accessible service, conducting hearings throughout Victoria and with supported offices in a number of regional hubs.
  • It has a comprehensive existing alternative dispute resolution system and is able
    to accredit mediators.
  • It is a lower cost jurisdiction.
  • Members are assigned to lists based on their expertise, and a number of legally-qualified members have experience in wills and estates.
  • It has experience dealing with self-represented litigants.
  1. 6.34 Some individuals and organisations supported the idea that VCAT should hear and determine family provision proceedings.60 Seniors Rights Victoria expressed the view that its clients would be more likely to take disputed matters to VCAT than to court because of VCAT’s less formal atmosphere and cost effectiveness.61 Some legal practitioners suggested that giving VCAT jurisdiction could reduce opportunistic claims.62
  2. 6.35 However, there has been substantial opposition to this proposal within the legal profession.63 Concerns about VCAT hearing family provision claims included a perceived lack of expertise, insufficient regard for the rules of evidence and inconsistent decision making.64 The view was expressed that it is already difficult to ensure consistency in decision making between the Supreme Court and County Court, and this would be compounded if VCAT were given jurisdiction in family provision matters.65
  3. 6.36 In consultation, representatives of VCAT said that lawyers often attend mediations and compulsory conferences. If VCAT had jurisdiction in family provision matters, VCAT took the view that the parties would not necessarily require legal representation, but legal representation would not be discouraged. Although professional advocates generally need leave to appear, in some lists leave is usually granted.66
  4. 6.37 Based on VCAT’s description of how the jurisdiction would operate, it seems likely that parties would be legally represented at VCAT, as they usually are in court. When defending a family provision claim, a prudent executor would most likely engage legal representation to defend the claim. Given that legal fees are the main contributor to costs, any costs saving at VCAT would be minimal if parties were legally represented. Even if family provision claims were only heard by legally qualified members or senior members, there would be a need for them to be trained and gain expertise in the jurisdiction.
  5. 6.38 Family provision is a complex area of the law and, notwithstanding that VCAT could develop the expertise, systems and practices necessary for it to exercise the jurisdiction, this is a separate matter from the existence of any need to extend the jurisdiction beyond the Supreme and County Courts. The Commission is not persuaded that any such need exists. Family provision applications would not necessarily be disposed of more cheaply at VCAT as legal representation is a practical necessity in family provision applications. The Commission is of the view that efforts need to be directed towards improving procedures in the Supreme and County Courts rather than on extending the jurisdiction to VCAT or the Magistrates’ Court.67
  6. 6.39 For these reasons, the Commission does not recommend that VCAT should have jurisdiction in family provision.

County Court of Victoria

  1. 6.40 In 2011–12, 489 family provision proceedings were initiated in the Supreme Court.68 In the same period, 168 family provision proceedings were initiated in the County Court.69
  2. 6.41 The County Court has said that it has the capacity to hear a greater number of cases than it is currently hearing and that it is able to provide expeditious service.70 It proposed that
    it should have exclusive jurisdiction to hear family provision claims involving gross estates up to a particular value.71 
  3. 6.42 A number of submissions did not consider costs to be significantly less in the County Court than in the Supreme Court,72 with one submission noting that the work and responsibility involved in preparing a case for the County Court is the same and costs charged by legal practitioners are unlikely to be any less.73 However, other legal practitioners agreed that the more expeditious service in the County Court results in reduced legal costs.74 One practitioner considered that reduced filing fees and reduced counsel’s fees also contributed to lower costs in the County Court.75 Some legal practitioners also noted the regional presence of the County Court.76 There was also a perception by some members of the public that family provision matters were too costly in the Supreme Court and should be heard in a lower court.77
  4. 6.43 At a meeting of Supreme Court associate judges, some participants expressed the view that some claims in relation to small estates do not need to be heard in the Supreme Court. However, other participants at this meeting strongly opposed the idea of giving the County Court exclusive jurisdiction over smaller estates, expressing the view that parties should be able to choose their jurisdiction. It was emphasised that it is important to manage the proceeding to minimise costs, regardless of the court.78
  5. 6.44 The point was made in consultation that the Supreme Court is the traditional family provision jurisdiction,79 because probate is granted by the Supreme Court.80 The Commission was also told that some law firms routinely commence proceedings in the Supreme Court rather than the County Court, regardless of the size of the estate.81 It is not clear whether this is a result of the Supreme Court historically having jurisdiction for family provision, or whether it is the result of concerns expressed by some legal practitioners that the County Court brings matters on too quickly, lacks the necessary expertise or does not offer consistent decision making before the same judges.82
  6. 6.45 The Commission considers that any concerns about the expertise or quality of decision making in the County Court are without basis. Practitioners who were experienced in conducting family provision proceedings were satisfied with the quality of the service provided in the County Court. However, the Commission considers that, for as long as both the County Court and the Supreme Court have unlimited jurisdiction in family provision, the traditional practice of the majority of claims being commenced in the Supreme Court will continue.
  7. 6.46 For these reasons, the Commission recommends that the County Court should have exclusive jurisdiction over family provision claims where the net value of the estate does not exceed $500,000. Estates of this amount are likely to be relatively simple estates, with no more than one piece of real property (if any). The Commission considers that cordoning off a portion of family provision claims for the County Court to determine will build greater confidence in the County Court among members of the legal profession.
  8. 6.47 The relevant provisions of the Administration and Probate Act should be amended to provide for this.83  

Recommendation

37 The Administration and Probate Act 1958 (Vic) should be amended to:

  1. 6.48 It was also suggested that the County Court should have jurisdiction to determine
    will construction issues arising in family provision matters. However, it seems that it already has this power under the County Court Civil Procedure Rules 2008 (Vic).84 Accordingly, the Commission does not consider it necessary to make a recommendation on this matter.

Eligibility to make a family provision claim

Current law

  1. 6.49 The Administration and Probate Act does not limit who may make a family provision application­­; anyone may apply. In this regard, Victorian law differs from the law in all other Australian states and territories, where family provision legislation sets out a list of eligible persons.
  2. 6.50 Until 1997 in Victoria, only the deceased person’s widow, widower or children could make a family provision application.85 Family provision eligibility was considered by the Attorney-General’s Law Reform Advisory Council.86 The government ultimately concluded that the law was too restrictive and was excluding some people who had legitimate claims, and that it should be amended to enable a wider category of people to apply for family provision.87
  3. 6.51 Victoria’s current approach to eligibility is described as ‘criteria-based’, because statutory criteria must be considered when determining whether the deceased person had responsibility to provide for a person—that is, whether the person is eligible for family provision.88 This is in contrast to the ‘status-based’ or ‘list-based’ approach adopted in all other Australian jurisdictions,89 where legislation lists those who are eligible to make a family provision application, based on the relationship (usually a familial relationship) that the applicant had with the deceased person.90
  4. 6.52 Because of the criteria-based approach to eligibility to make a family provision application in Victoria, applicants in a variety of relationships with the deceased person have had family provision orders made in their favour. Most successful applicants were in a familial relationship with the deceased person, for example, children of the deceased person, domestic partners and spouses.91 Step-parents may also have a responsibility to provide for their stepchildren, where the relationship is akin to a parent-child relationship92 or where the step-parent’s estate was largely derived from the stepchild’s natural parent.93
  5. 6.53 A grandparent does not have responsibility to provide for their grandchild merely by virtue of that relationship; additional or special factors need to be shown.94 In one case, provision was made for the deceased person’s grand-daughter because, although it was not a relationship of dependence, the grand-daughter had significant financial need, had lost her father early in life and had not inherited anything from his estate.95 Similar reasoning applies to whether responsibility is owed by an aunt or uncle to their niece or nephew.96
  6. 6.54 Occasionally, the courts have recognised relationships other than typical family relationships as giving rise to a responsibility to provide, based on the individual circumstances of the case. In Unger v Sanchez, for example, the Supreme Court ordered provision for a friend and neighbour of the deceased person, who had had a relationship with the deceased person ‘closely akin to that of a daughter to an elderly mother’.97 In Whitehead v State Trustees, the Court ordered provision for the deceased person’s ‘close personal companion and sexual partner’ and her son.98 The Court held that, although the deceased person and applicant had not been in a domestic relationship, they and the applicant’s son ‘represented a social unit which was tantamount to a family’.99 In Borebor v Keane, the Court ordered that provision be made for a child whom the deceased person had believed to be his daughter.100 Although the applicant had lived overseas for her whole life, and a DNA test proved she was not his biological child, the deceased person had supported her as though she were his daughter.101

The problems with family provision eligibility

  1. 6.55 The Victorian criteria-based approach to family provision eligibility takes account of cases in which, although there is no typical family relationship, a family-like responsibility exists. It is sufficiently flexible to allow for unique circumstances that cannot be foreseen by legislators.
  2. 6.56 In the cases heard and determined by the courts, there is no practical problem with eligibility. Judges hear the evidence and make a determination based on the individual facts and circumstances of the case. This was verified in consultation with judges of the County Court and judges and associate judges of the Supreme Court.102
  3. 6.57 However, as discussed above from [6.12], family provision claims are usually settled before they are heard by the court. One barrister noted that, ‘In my experience, almost all such claims resolve at the point of mediation’.103 In some respects, the decision to settle a family provision claim is not greatly different to the decision to settle other types of civil claim: there is less risk involved; the costs are less; the parties have the opportunity to resolve the matter in a way that is mutually satisfactory. However, the great degree of uncertainty in relation to family provision eligibility means that claims are being settled that would perhaps be unlikely to succeed at trial.104
  4. 6.58 Further, the Law Institute of Victoria’s submission suggested that the unlimited class of family provision claimants makes it difficult for the court to exercise its summary judgment jurisdiction: ‘Without considering all relevant facts, it is difficult to determine whether an application has no real prospect of success, which would require a full hearing on the issues’.105 The Legal Services Commissioner criticised the apparent ease with which family provision claims can be made106 and another submission expressed the view that the current law in relation to eligibility is cast too broadly and comes close to requiring judges to rewrite wills.107

Options raised in the Commission’s consultation paper

  1. 6.59 The Commission’s consultation paper set out three mutually exclusive options for reform of eligibility to make a family provision claim:
  • implementing the National Committee’s recommended approach, which is broadly similar to the responsibility test currently in operation in Victoria
  • introducing a flexible list of eligible applicants, as in New South Wales
  • retaining Victoria’s responsibility test, but introducing a threshold requirement
    of dependence and/or financial need.108

The National Committee’s recommended model

  1. 6.60 The National Committee recommended that people in the following categories should
    be eligible to make a family provision claim:
  • the deceased person’s spouse at the time of the deceased person’s death
  • the deceased person’s de facto partner at the time of the deceased person’s death
  • a non-adult child of the deceased person, defined as a person who was under the age of 18 at the time of the deceased person’s death, including natural and adopted children but not stepchildren
  • a person to whom the deceased person owed a responsibility to provide maintenance, education or advancement in life.109
  1. 6.61 The National Committee recommended that those in the first three categories—spouse, de facto partner, non-adult child—would be automatically entitled to apply for family provision, whereas the court would be required to consider a list of statutory factors in relation to applicants in the fourth proposed category to determine whether the person was an eligible applicant.110
  2. 6.62 The National Committee’s fourth category was drafted with Victoria’s legislation in mind.111 Although it represents a slightly different approach to Victoria’s current law, the inclusion of the general fourth category means that adopting the National Committee’s recommended test would not limit the class of people entitled to apply for family provision in Victoria.

Victoria’s responsibility test with a threshold requirement of dependence and/or need

  1. 6.63 In its consultation paper on family provision, the Commission also raised the possibility of retaining Victoria’s current responsibility test for eligibility for family provision, but requiring the applicant:
  • to have been wholly or partly dependent on the deceased person immediately before the deceased person’s death, and/or
  • to demonstrate financial need.112
  1. 6.64 Under this option, applicants would not be limited by whether they were in a particular relationship with the deceased person, and the test would remain one of whether adequate provision had been made for their proper maintenance and support. However, a person would not be able to apply unless they had been wholly or partly dependent on the deceased person, or were able to demonstrate financial need.
  2. 6.65 This option recognised that dependency and financial need are often central to the court’s decision about whether or not provision should be made for a family provision applicant.

The flexible New South Wales list of eligible applicants

  1. 6.66 The Commission proposed one other option in relation to eligibility to make a family provision application: introducing a flexible list of eligible persons, as exists in New South Wales.113
  2. 6.67 The New South Wales legislation recognises the deceased person’s spouse, de facto partner and child as eligible to make a family provision application in all circumstances.114
    It also recognises the following people as eligible in certain circumstances:115
  • a former wife or husband of the deceased person
  • a grandchild of the deceased person who was, at any time, wholly or partly dependent on the deceased person
  • a member of the deceased person’s household who was, at any time, wholly or partly dependent on the deceased person
  • a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death. A close personal relationship is defined as a ‘relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support or personal care’.116 It does not include relationships in which care and support are provided for fee or reward.117
  1. 6.68 The court may only make a family provision order in respect of an applicant in one of these categories if it is satisfied, having regard to all the past and present circumstances of the case, that there are ‘factors which warrant the making of the application’.118 This approach establishes two classes of applicant—those who are regarded as ‘natural objects of testamentary recognition’ and those who are ‘potentially appropriate objects
    of testamentary recognition, depending upon their circumstances’.119
  2. 6.69 ‘Factors which warrant the making of the application’ is not defined by the Succession Act,120 and the Court has held that, in practice, factors which warrant the making of the application are largely coextensive with the factors that the Court must consider anyway when determining a family provision application.121 However, factors which warrant the making of the application are generally defined as:

factors which when added to facts which render the applicant an ‘eligible person’ give him or her the status of a person who would be generally regarded as a natural object
of testamentary recognition by a deceased.122

  1. 6.70 An example of one factor which warranted the making of an application by a dependent household member of the deceased person was that the applicant had been ‘brought up as a permanent member’ of the deceased person’s family.123
  2. 6.71 The Supreme Court of New South Wales has also held that, for the purposes of a family provision claim, dependence is not limited to financial dependence, but includes a person relying on or looking to the deceased, rather than others, for anything necessary or desirable for their maintenance and support.124 Further, there has been judicial consideration of what it means to be a member of a household, with the Supreme Court of New South Wales finding that it is possible to be a member of more than one household at once, and that household membership may be evidenced by regularly attending a household and staying overnight.125
  3. 6.72 In determining whether any applicant is an eligible applicant, the court may have regard to a range of statutory criteria.126 These statutory criteria are similar to those considered
    by the Victorian courts when determining family provision claims.127
  4. 6.73 Although the Commission noted that the New South Wales approach to eligibility was not likely, of itself, to resolve all problems in the jurisdiction, it was canvassed as a way in which to limit what have been described as opportunistic or speculative claims in Victoria.128

Views and conclusions

  1. 6.74 A number of submissions received by the Commission supported retaining Victoria’s current ‘responsibility’ test for family provision eligibility with no change.129 These submissions considered that the problem of opportunistic claims is not widespread130 and would not be resolved by introducing a list of eligible claimants.131 Some submissions were concerned that introducing a list of eligible claimants would arbitrarily exclude otherwise meritorious claims.132
  2. 6.75 Barrister Andrew Verspaandonk expressed the view that, given that claims have succeeded under the current Victorian law that would never have succeeded under the previous law, ‘it seems inappropriate to cut off the prospect that similar claims may succeed in the future, in an attempt to weed out apparently unworthy claims’.133 He suggested that the issue should be addressed by costs rules.134 Carolyn Sparke SC said that the current law allows the court to have regard to ‘the full variety of human relationships’ and that the court should not be artificially restrained in its task.135 Some participants in consultations considered that Victoria’s current responsibility test should be retained.136
  3. 6.76 Two submissions supported retaining Victoria’s responsibility test, but introducing a threshold requirement of financial need and dependence.137 The Property and Probate Section of the Commercial Bar Association supported introduction of a threshold requirement of financial need where the value of the estate does not exceed $250,000.138
  4. 6.77 Two further submissions suggested taking a more limited view, with one proposing a return to the original Victorian legislation, under which only the deceased person’s widow, widower and children were entitled,139 and the other supporting a system under which only spouses (but not domestic partners), infant children and some dependent adult children would be entitled.140
  5. 6.78 Two submissions supported introduction of a modified version of the National Committee’s proposed model. One suggested that the National Committee’s recommendation should be implemented without the responsibility category, which would effectively mean that only the deceased person’s spouse, domestic partner and non-adult child would be entitled.141 The other suggested the National Committee model, with a threshold requirement of financial need.142
  6. 6.79 The Law Institute of Victoria did not present a unanimous view, with a minority supporting retention of Victoria’s current approach and a majority expressing support for limiting eligibility in some way, but being divided about the best way to achieve this.143
  7. 6.80 A majority of submissions on the question of family provision eligibility supported introduction of the New South Wales approach.144 State Trustees expressed the view that, although the National Committee’s proposed categories for eligibility ‘have much to offer’, the New South Wales legislation ‘provides a reasonably comprehensive description of the people who ought to be able to apply’.145 Further, it considered that, as no state has adopted the National Committee’s recommended model, implementing the New South Wales approach in Victoria would promote greater consistency between jurisdictions.146 A majority of members of the Commission’s succession laws advisory committee supported the New South Wales eligibility test, while others supported retaining Victoria’s current test.147 
  8. 6.81 The Supreme Court of New South Wales and legal practitioners put the view that the New South Wales model is operating well.148 However, the Law Society of New South Wales suggested that stepchildren should be included in the list of eligible applicants who must show ‘factors which warrant the making of the application’.149 Presently, stepchildren who had been dependent members of the deceased person’s household would be permitted to claim.150 However, stepchildren would otherwise be excluded. The Elder Law and Succession Committee of the New South Wales Law Society has recommended that stepchildren be included in the New South Wales legislation.151
  9. 6.82 The Law Society of New South Wales noted that there is a possibility that when a person’s natural parent dies, their entire estate may pass to their spouse (the person’s step-parent), and the step-parent may not later provide for the stepchild.152 The Law Society considered that including a stepchild as an eligible family provision applicant would reduce litigation, as step-parents would be encouraged to provide for their stepchildren in their own wills.153 Although the stepchild could make a claim against their natural parent’s estate at the time of their death, many stepchildren may not, in the expectation that their step-parent would later provide for them. Stepchildren are included in the Queensland family provision legislation.154
  10. 6.83 Although the Commission notes the view expressed in some submissions that the current law should be retained, it is not satisfied that costs rules and procedural changes alone can address all the problems in relation to family provision. While there is disagreement about the extent of the problem of opportunistic or non-genuine claims, it is clear that the problem does exist. There is a need for greater certainty on both sides in family provision applications. Further, some weight must be given to community expectations that a will is a clear expression of one’s wishes. If freedom of testation is the fundamental premise of succession law, then some limits need to be placed on exceptions to, and alterations of, expressions of that freedom.
  11. 6.84 The Commission considers that the New South Wales approach to family provision eligibility represents a good compromise. It would provide greater certainty to legal practitioners, prospective applicants and defendant personal representatives, while ensuring that most claims in the typical categories of responsibility are not excluded. Although some cases at the margins, which may currently be provided for under the Victorian legislation, may be excluded under the more limited New South Wales approach, the Commission considers that this is justifiable to promote greater certainty in family provision.
  12. 6.85 The Commission considers that the Victorian statutory criteria should be retained, as well as the test of whether adequate provision has been made for the applicant’s proper maintenance and support. The court should continue to take these factors into account when determining:
  • whether adequate provision was made for the applicant’s proper maintenance
    and support
  • the amount of further provision that should be made, if any.
  1. 6.86 The court should be able to take the factors into account when determining whether the applicant is an eligible person in the context of a decision as to whether there are factors warranting the making of the application.
  2. 6.87 The Commission only recommends change in relation to the threshold determination of who is an eligible person. The test for provision and the statutory criteria are substantially the same in Victoria and New South Wales and any differences do not impact on the issue of eligibility.

Recommendation

38 Victoria should replace its ‘responsibility’ test for eligibility to make a family provision claim with a test based on the New South Wales test for eligibility, but extended to include stepchildren. To this end, section 91(1) of the Administration and Probate Act 1958 (Vic) should be repealed and replaced with provisions in the following terms:

The following are eligible persons who may apply to the court for a family provision order in respect of the estate of a deceased person:

 

Recommendations

39 The Administration and Probate Act 1958 (Vic) should provide that the court may, on application under the relevant provisions, make a family provision order in relation to the estate of a deceased person, if it is satisfied that:

(c) at the time when the court is considering the application, adequate provision for the proper maintenance and support of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy provisions, or both.

40 The court should:

 

Costs rules

Current law

  1. 6.88 Although family provision proceedings are civil proceedings, costs rules operate differently in family provision than in other types of civil proceedings.

Costs orders in civil proceedings generally

  1. 6.89 The Supreme Court Act 1986 (Vic) provides that:

Unless otherwise expressly provided for by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.158

  1. 6.90 Similarly, the County Court Act 1958 (Vic) states that ‘The costs of and incidental to all proceedings are in the discretion of the Court and the Court may determine by whom and to what extent the costs are to be paid’.159 
  2. 6.91 Further, the overarching purpose of the Civil Procedure Act 2010 (Vic) and rules of court in relation to civil proceedings is ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.160 The Civil Procedure Act provides that, in addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose.161 Without limiting this, the Civil Procedure Act provides that the court may:162
  • make different awards of costs in relation to different parts of a proceeding or up
    to or from a specified stage of the proceeding
  • order that the parties bear costs as specified proportions of costs
  • award costs in a specified sum or amount
  • fix or cap recoverable costs in advance.
  1. 6.92 The Civil Procedure Act also places an overarching obligation on parties and their legal representatives to ensure that costs are reasonable and proportionate to the complexity
    or importance of the issues in dispute and the amount in dispute.163
  2. 6.93 Ordinarily in civil proceedings costs follow the event—that is, the unsuccessful party pays their own costs and some of the costs of the other side. Until recently, the unsuccessful party was usually required to pay the successful party’s costs on a ‘party and party’ basis, defined by rules of the Supreme Court and County Court as ‘all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party’,164 and no more. Recovering party and party costs from the unsuccessful party did not cover everything paid by the successful party to their legal representatives. A party could also be ordered to pay the other party’s costs on a ‘solicitor and client’ basis, a higher measure of costs that was defined as ‘all costs reasonably incurred and of reasonable amount’.165
  3. 6.94 Recent amendments to the Supreme Court (General Civil Procedure) Rules 2005 (Vic) have replaced references to costs on the party and party basis and the solicitor and client basis with ‘costs on a standard basis’, meaning ‘all costs reasonably incurred and of reasonable amount’.166 This definition was previously used for costs on the solicitor and client basis.167 References in the County Court Civil Procedure Rules 2008 (Vic) to costs on the party and party basis and the solicitor and client basis remain but at the time of writing the County Court Rules Committee was considering whether references to these measures of costs should be amended.168

Costs orders in family provision proceedings

  1. 6.95 The Supreme Court of Victoria has noted that, ‘in applications under Part IV, orders for costs very often depart from the ordinary rule applicable in civil litigation’.169 Rather than the costs rules applied in other civil proceedings, special costs rules apply in family provision proceedings. The Administration and Probate Act specifies that, in family provision proceedings, the court may:
  • under section 97(7)—order that the applicant pay their own costs and the costs of the defendant personal representative, if the court is satisfied that the application
    ‘has been made frivolously, vexatiously or with no reasonable prospect of success’170
  • under section 97(6)—subject to section 97(7), make any order that is, in the court’s opinion, just.171
  1. 6.96 In Re Bull; Bentley v Brennan, Justice Byrne considered that the legislation empowered, rather than directed, the Court to make a costs order against the plaintiff in the circumstances in section 97(7) because ‘in the ordinary course, an order for costs in family provision cases may not be made against a plaintiff simply because the application has failed’.172 His Honour characterised section 97(7) as a ‘reminder and encouragement offered to the Court … intended to operate as a disincentive to would-be applicants whose claims to a moral entitlement are tenuous’.173 This view of section 97(7) accords with the second reading speech upon introduction of the provision, in which then Attorney-General, the Hon. Jan Wade, said that the provision was intended ‘to ensure that only genuine applications are made’.174
  2. 6.97 More recently, the Supreme Court has held that section 97(7) of the Administration and Probate Act does not limit the Court’s power to make costs orders against unsuccessful family provision applicants to the circumstances contemplated by that subsection. In Re Carn; Moerth v Moerth (No 2), Associate Justice Gardiner held that, even where the plaintiff’s claim is not made frivolously, vexatiously or with no reasonable prospect of success, there will be cases in which it will nevertheless be just that the unsuccessful plaintiff pay the costs of the defendant personal representative.175 Further, in Webb v Ryan, Justice Whelan stated:

I do not think the effect of s 97(7) is to confine the Court’s power to award costs against an applicant to the specific circumstances provided for in that subsection … The Court must address s 97(7), but, where it does not apply, the Court must still exercise its discretion under s 24 of the Supreme Court Act176 in the light of the facts of the case,
and must, under s 97(6) of the Act, determine what order is just.177

  1. 6.98 Based on these decisions, section 97(7) does not prevent the court from making an order as to costs in any case that it considers just. Moreover, where a case does not fall within section 97(7) and the plaintiff’s claim was not made frivolously, vexatiously or without reasonable prospect of success, the court is not prevented from ordering an unsuccessful plaintiff to pay the costs of the estate.
  2. 6.99 However, it is clear that sections 97(6) and 97(7) of the Administration and Probate Act have affected the costs orders made in family provision proceedings. The Supreme Court has noted that in New South Wales, unlike in Victoria, the courts have been more willing to apply general costs principles, including the principle that costs generally follow the event.178
  3. 6.100 On occasion in Victoria, unsuccessful plaintiffs have had their costs paid by the estate.179 However, this is rare and Associate Justice Gardiner recently emphasised that the unsuccessful applicant should not expect to have their costs out of the estate.180 That could happen in a particular case, but the court’s starting point would be that the unsuccessful applicant should bear their own costs or, if their case was particularly unmeritorious, pay the costs of the estate.181
  4. 6.101 Where a family provision claim fails, it is most common for there to be no order as to costs,182 meaning that the unsuccessful applicant bears their own costs and the defendant personal representative receives their costs out of the estate.183
  5. 6.102 It is rare for the court to order an unsuccessful applicant in family provision to pay the costs of the estate. In Re Carn; Moerth v Moerth (No 2), Associate Justice Gardiner found that the claim by one applicant had been made with no reasonable prospects of success,184 although it seems that even if that threshold had not been met, his Honour would have considered it just for costs to follow the event.185 The Court ordered the applicant to reimburse the estate for the defendant personal representative’s costs on
    a party and party basis.186
  6. 6.103 In the costs judgment in Webb v Ryan, Justice Whelan did not find that the applicants’ claim had been made frivolously, vexatiously or with no reasonable prospects of success.187 However, his Honour nevertheless held that it was ‘a case where costs should follow the event, as is the usual rule in civil litigation’.188 Further, because the applicants had unreasonably rejected an offer of compromise, they were ordered to pay the defendant personal representative’s costs on the solicitor and client basis, rather than
    on the party and party basis.189

The problems with family provision costs rules

  1. 6.104 As discussed above, Supreme Court authority shows that for an unsuccessful family provision applicant to be ordered to pay the defendant personal representative’s costs, it is not necessary for the claim to fall within section 97(7) of the Administration and Probate Act—that the claim was made frivolously, vexatiously or with no reasonable prospect of success. The Court has shown a willingness to make such costs orders where the plaintiff’s claim is unsuccessful.190 This appears to be the beginning of a trend towards the general costs principles applying in family provision proceedings.191
  2. 6.105 However, despite the decisions of the Supreme Court of Victoria, discussed above, both the Commercial Bar Association and the Law Institute of Victoria considered that there is still a risk that an unsuccessful plaintiff would receive their costs out of the estate.192 Further, Arnold Bloch Leibler noted that it was unlikely that an unsuccessful plaintiff would be ordered to pay the estate’s costs.193 The Law Institute of Victoria queried whether section 97(7) was well known, and said that it is ‘rarely enforced by the courts’.194 Arnold Bloch Leibler expressed the view that section 97(7) is ‘rarely or insufficiently applied’.195
  3. 6.106 As discussed at [6.10] above, many do not believe that existing costs rules deter opportunistic applicants.

Options raised in the Commission’s consultation paper

  1. 6.107 The Commission raised several options for reform of costs rules in family provision in its consultation paper on family provision and asked whether, when a family provision application is unsuccessful:
  • there should be a legislative presumption that the applicant will not receive their costs from the estate
  • the starting point should either be that costs follow the event (the unsuccessful party pays the successful party’s costs) or that no order as to costs is made (each party bears its own costs).196

Views and conclusions

  1. 6.108 In the costs judgment in Webb v Ryan, Justice Whelan noted that ‘Family provision cases are different to other civil cases in some respects’, but considered that ‘the tendency to move towards the application of general costs principles, whilst recognising the special characteristics of family provision cases where they are relevant, is a sound and sensible approach’.197 In his submission, barrister Andrew Verspaandonk noted this move towards application of general costs principles in family provision proceedings.198
  2. 6.109 A number of submissions expressed the view that the court’s discretion in relation to costs should not be restrained.199 However, some legal practitioners suggested that more stringent costs rules could deter opportunistic claims and have a ‘trickle down’ effect on mediation.200 There was strong support for a legislative presumption that an unsuccessful family provision applicant should not have their costs paid by the estate.201 However, barrister Andrew Verspaandonk warned that a legislatively stated presumption that an unsuccessful plaintiff should not have their costs paid by the estate could be ‘interpreted as a presumption that inhibited the court from ordering that an unsuccessful plaintiff pay the estate’s costs in an appropriate case’.202
  3. 6.110 Several submissions considered that, in addition to the presumption that the unsuccessful applicant should not have their costs paid by the estate, the starting point should then be that the unsuccessful applicant bears their own costs.203 Others thought that the starting point should be that costs follow the event (and the unsuccessful applicant pays the defendant personal representative’s costs).204 The Supreme Court of Victoria’s submission cited Webb v Ryan and suggested that general cost principles could apply in family provision proceedings—which would be that costs follow the event.205 Some members of the Commission’s succession laws advisory committee supported this approach, while others considered that it would operate too harshly in family provision proceedings.206 
  4. 6.111 A small minority of submissions considered that applicants should be required to pay the costs whether successful or unsuccessful.207 However, the Commission notes that this position would be harsher than that which applies in other types of civil proceedings and does not consider it appropriate that such a rule should apply in relation to family provision proceedings.
  5. 6.112 The Institute of Legal Executives and State Limited did not believe that there should be any change to the existing costs rules,208 with State Trustees suggesting that this could be reviewed after a period of time, if the new delineations in relation to family provision eligibility were not producing better outcomes.209 The Institute of Legal Executives considered that the court was best placed to decide how the costs of the parties should be borne.210
  6. 6.113 The Commission notes the concerns about limiting the court’s discretion to make orders as to costs and agrees that the court is best placed to determine what order as to costs is just in all the circumstances. However, the Commission considers that legislative amendment is necessary to ensure that any possible limiting effect of section 97(7)
    is removed and the court is free to make any order as to costs that it considers just.
  7. 6.114 The Commission agrees with Andrew Verspaandonk’s contention that:

if legislative options were clearly wide, it would serve to remind practitioners (and some litigants who examine legislation and case law online) of the width of outcomes that could occur under the rubric of a ‘just’ order as to costs.211

  1. 6.115 Rather than a legislative presumption, which could have the unintended consequence of limiting the courts’ discretion as to costs in family provision proceedings, the Commission considers that the Administration and Probate Act should specify that the court may make any order as to costs that it considers just, and then list several examples of the costs orders that the court may make in family provision proceedings.  

Recommendation

41 Sections 97(6) and 97(7) of the Administration and Probate Act 1958 (Vic) should be repealed and replaced by provisions that:

 

  1. 6.116 Although the court already has power to cap costs under the Civil Procedure Act212 and has done so on occasion in family provision proceedings,213 the Commission considers that it would be useful to reiterate this power alongside the family provision costs provisions in the Administration and Probate Act. The inclusion of such a provision in the Administration and Probate Act is justified on the same basis as listing examples of possible costs orders—it would embolden judicial officers and serve as a reminder to practitioners in the jurisdiction that this was possible. A judge of the Supreme Court supported this view.214

Recommendation

42 The family provision costs provisions in the Administration and Probate Act 1958 (Vic) should specify that the court has the power to cap costs.

 

  1. 6.117 Nothing in the family provision costs provisions should limit any other powers of the County Court or Supreme Court.

Recommendation

43 The family provision costs provisions in the Administration and Probate Act 1958 (Vic) should specify that they do not otherwise limit:

 

Measure of costs direction.215

  1. 6.118 Previously, a successful family provision claimant usually received their costs out of the estate on the solicitor and client basis.216 Arnold Bloch Leibler stated in its submission that it could see no real justification for awarding costs on the solicitor and client basis
    in family provision, especially now that there is no solicitor and client basis in the Supreme Court of Victoria’s new scale of costs.217
  2. 6.119 In its submission, the Supreme Court noted the recent change from costs on the party and party basis and the solicitor and client basis to costs on the standard basis, and said that ‘the standard order for costs in all cases will be equivalent to the usual basis for costs in [family provision] matters’.218 It considered that this change means that this aspect of costs in family provision ‘will therefore be less significant in the future in comparison to other matters’.219 
  3. 6.120 Given the recent introduction of the standard measure of costs in the Supreme Court, the Commission does not consider it necessary to make any recommendations about the appropriate measure of costs in family provision proceedings. However, it would be desirable for measures of costs to be consistent as between the Supreme and County Courts and, as noted above, at the time of writing, the County Court Rules Committee was considering whether references to party and party costs and solicitor and client costs in the County Court Civil Procedure Rules 2008 (Vic) should be amended.

Procedure

The problems that family provision procedures seek to address

  1. 6.121 The Commission has heard a range of views about the particular aspects of family provision proceedings that may result in high legal costs. One such factor was that the disputes are often between family members. As noted above, a submission from a member of the public expressed the view that where a family is ‘fractured or dysfunctional’ parties may not care about costs ramifications, ‘in fact they delight in them’.220 This contention was confirmed, to some extent, by research conducted by Professor Prue Vines for the Australasian Institute of Judicial Administration, which found that costs in family provision proceedings were more likely to be disproportionate in disputes between siblings, and disputes between a second spouse and children of the first marriage.221
  2. 6.122 A number of legal practitioners and judicial officers also noted that affidavits can be excessively long in family provision proceedings. The view was expressed that this is partly due to uncertainty in the jurisdiction, as applicants seek to include any information that might bear on the outcome of their claim. It is also caused, in part, by the cathartic purpose served by affidavits in intractable family disputes, as parties seek to tell their story about what happened over the course of many years.
  3. 6.123 Additionally, because the courts typically have no control over costs at the point of mediation, concern has been expressed that practitioners may ‘grossly overestimate’ their costs up to the point of mediation.222 The Commission heard suggestions that some practitioners simply adopt an amount for costs based on what the other lawyers present at mediation are claiming.223
  4. 6.124 Procedures in family provision proceedings, even before a claim reaches the court, must be directed to narrowing the issues in dispute, ensuring that only relevant information is prepared by legal practitioners and minimising overall costs to the parties and to the estate.

Current family provision procedures

  1. 6.125 A number of procedures are already in operation in the County Court and Supreme Court in family provision proceedings, in order to minimise costs and expedite resolution of cases.
  2. 6.126 In its 2011–12 annual report, the Supreme Court described its approach to case management in family provision proceedings, noting that it strives to be proactive and minimise costs to the parties where estates are small.224 
  3. 6.127 Similarly, a County Court practice note states that, ‘The aim of the County Court in civil litigation is to list, hear and determine cases quickly and cost-effectively, consistent with the demands of justice and in particular with the requirements of the Civil Procedure Act 2010 (Vic)’.225 To this end, the practice note sets out a number of procedures for family provision proceedings and emphasises the need to define the legal issues in dispute,
    so that ‘the Court’s aim to determine a proceeding quickly and cheaply’ is not frustrated
    and so that adjournments may be avoided.226
  4. 6.128 The Commission has heard a range of views about practices in both the County Court and the Supreme Court that are intended to keep costs down, as well as proposals for new procedures, some of which are based on the law in other jurisdictions.

Position statements

  1. 6.129 A number of submissions noted the use of ‘position papers’ or ‘position statements’ at mediation and trial, instead of affidavits.227 Some supported this measure and considered that it is working well to reduce costs,228 and the Law Institute of Victoria was in favour
    of requiring a four-page position statement rather than an affidavit in cases involving small estates.229
  2. 6.130 There was strong support in both the County Court and the Supreme Court for the use of position statements.230 The Supreme Court associate judges said that affidavits are quite often not required by the Court in family provision matters, especially in relation to small estates.231 The Supreme Court said that sometimes an affidavit is ordered in relation to the content of the estate, with all other matters to be dealt with by position statement.232
  3. 6.131 The County Court practice note specifies that, whether parties apply for a judicial settlement conference or intend to mediate the proceeding, ‘the claimant must file and serve a statement setting out the essentials of the claimant’s case in a summary form’.
    It prescribes what should be included in an applicant’s statement—short statements about the relevant statutory criteria.233 The practice note specifies that ‘it is critically important that these statements be a summary’, and should therefore not exceed three pages, must only contain factual material, and ‘must not be used as a vehicle for raising contentious issues or for making submissions of fact or law’.234
  4. 6.132 Representatives of both the County Court and the Supreme Court and a number of legal practitioners agreed that, if position statements are to be used, they should be binding
    or ‘with prejudice’, so that they may be relied upon if the matter proceeds to trial.235
    The County Court practice note specifies this.236 
  5. 6.133 However, some legal practitioners expressed the view that it is difficult to produce a worthwhile position statement and any cost saving is minimal.237 The Supreme Court noted that, even where it does not order affidavits prior to mediation and requires parties to file short position statements, the parties often choose to file affidavits prior to the first directions hearing.238

Pro forma affidavits

  1. 6.134 The Commission heard a number of suggestions that, where affidavits are required, there should be some direction about what is included in them and how long they should be.
  2. 6.135 A practice note of the Supreme Court of New South Wales prescribes what information is to be contained in the plaintiff’s affidavit in family provision proceedings. It includes a section for each of the relevant statutory criteria considered by the court when determining a family provision application.239 Judges of the Supreme Court of New South Wales noted that the pro forma affidavit was developed in extensive consultation with the New South Wales legal profession and was working well in practice.240
  3. 6.136 The Commission heard mixed views about whether introduction of a pro forma affidavit would be desirable in family provision proceedings. A judge of the Supreme Court of Victoria expressed the view that the parties in family provision proceedings should not prepare pro forma affidavits as a matter of course. He considered that large amounts of information could still be included under each heading, and the practice could invite high legal costs at the outset of the proceeding, as the other side responds to the applicant’s affidavit in kind.241 Associate judges of the Supreme Court of Victoria noted that most practitioners follow a type of template affidavit already.242
  4. 6.137 Carolyn Sparke SC expressed the view that, while there may be some role for the length of affidavits to be limited to a certain number of pages, with costs consequences for exceeding that length, it may be better to educate practitioners, because ‘practitioners who understand the jurisdiction will draft proper affidavits and will do so efficiently’.243 A member of the Commission’s succession laws advisory committee suggested that the plaintiff’s affidavit should be no longer than five pages.244

Oral evidence

  1. 6.138 The County Court has expressed a preference for conducting shorter hearings in family provision proceedings where an estate is small, giving parties a short time to put their case and asking direct questions that elicit much more useful information than affidavits.245 Similarly, the Supreme Court has expressed its willingness to order an early trial that is to proceed by way of viva voce evidence.246Viva voce evidence is oral evidence, rather than evidence by affidavit.
  2. 6.139 Although some costs are involved in producing a proof of evidence for the trial to proceed in this way, the Supreme Court considered that viva voce evidence reduces costs by avoiding the use of lengthy affidavits and irrelevant material, allowing judges to ‘get to the heart of the matter’.247 The effect of reliance on position statements, discussed above, is that at trial evidence would be given orally.248

Private mediation and judicial mediation

  1. 6.140 The Supreme Court’s 2011–12 annual report states:

Where estates are small, the applications are referred to mediation before an associate judge. Those mediations are identified at an early stage and the parties are directed to
file a position statement rather than affidavit material. The aim is to minimise cost to the parties.249

  1. 6.141 The Supreme Court annual report specifies that, of 65 mediations held before an associate judge in 2011–12:
  • 59 settled at mediation
  • one settled after mediation
  • two requested further time to negotiate
  • three were ultimately listed for trial.250
  1. 6.142 This accords with anecdotal evidence put to the Commission about high rates of settlement in the family provision jurisdiction, whether through judicial mediation or private mediation.
  2. 6.143 The County Court practice note specifies that parties are required to attend a judicial settlement conference, presided over by a judge, or a mediation within 60 days of the date of filing and service of an appearance.251
  3. 6.144 There were mixed views about the effectiveness of judicial mediation, compared with private mediation. Some legal practitioners expressed the view that judicial conferences are not as effective as private mediation, as there is a perception that private mediators take a more interventionist approach,252 while judges can be more ‘hands off’.253 The Supreme Court of Victoria, however, noted that 91 per cent of claims involving small estates ($300,000 to $400,000) were resolved following judicial mediation in 2011–12.254
  4. 6.145 A practice note of the Supreme Court of Victoria emphasises that ‘Judicial mediation is not a substitute for mediation by appropriately qualified private mediators, rather it is another option that may be employed in appropriate cases’.255 The practice note then sets out guidelines for referral of matters to judicial mediation and matters that will not ordinarily be referred for judicial mediation. For example, a case that has previously been to an unsuccessful private mediation, or a case where there is a risk of disproportionate costs, may be referred to judicial mediation.256

Estimates of costs and affidavits as to costs

  1. 6.146 In consultation, the view was expressed that, because the court does not usually have oversight of costs at the time of mediation, practitioners often overestimate their costs.257 To address this concern, it was suggested that practitioners should be required to bring an assessment or estimate of their costs to mediation.258 Such an assessment could be based on the relevant court scale, to provide an even basis for comparison.259
  2. 6.147 Members of the Commission’s succession laws advisory committee suggested that it should be possible for practitioners with experience in the area to estimate costs, at least as falling within a particular range.260 Importantly, such a requirement would allow the ‘real people’ (the parties) involved in the proceeding to get some notice of costs.261 However, it was emphasised that such estimates should not be used as a basis on which to cap costs.262
  3. 6.148 Associate judges of the Supreme Court also noted that, as of this year, they have been requiring affidavits as to costs and have been enforcing the Civil Procedure Act requirement that costs be proportionate to the complexity or importance of the issues in dispute and the amount in dispute.263

Summary determination

  1. 6.149 Through the consultation process, the Commission raised the possibility of a specific rule permitting both the County Court and the Supreme Court to summarily determine family provision proceedings where the value of the estate was less than a certain amount.
  2. 6.150 In South Australia, for example, the court may determine a family provision proceeding summarily when:
  • there are reasonable grounds on which to conclude that the net estate of the deceased that will be available for distribution will be less than $500,000, and
  • it is in the interests of justice to do so.264
  1. 6.151 Summary determination:
  • may be made by a master
  • is to proceed in accordance with such directions as are given by the court
  • may be on the basis of evidence that does not conform with the rules of evidence, and
  • is to have as a primary object the minimisation of costs and an expeditious but just resolution of the action.265
  1. 6.152 If an action should have been, but was not, summarily determined, the court may order the plaintiff to bear any costs that might have been avoided if the proceeding had been summarily determined.266
  2. 6.153 Various practices of the County Court and the Supreme Court indicate that some degree of summary determination already exists in the family provision jurisdiction. For example, the reliance on position statements in both courts suggests an innovative approach to the evidence that will be accepted in order to minimise costs, as does the willingness to proceed on the basis of oral evidence rather than by affidavit.
  3. 6.154 The Law Institute of Victoria also noted that both the County Court and the Supreme Court are deciding more cases ‘on the papers’, and expressed the view that this was working well, although it did not elaborate on what was meant by ‘on the papers’.267
  4. 6.155 A rule in terms of the South Australian rule would specify the courts’ powers to give directions and make orders about the conduct of family provision proceedings, which both the County Court and the Supreme Court are already doing to a significant extent. There was general support for the introduction of such a rule in Victoria.268
  5. 6.156 In relation to the South Australian rule, a judge of the Supreme Court of Victoria expressed the view that there should still be some regard to the rules of evidence, particularly relevance.269 However, a master of the South Australian Supreme Court noted that there were no concerns about the sub-rule that permits the court to summarily determine a family provision claim on the basis of evidence that does not conform with the rules of evidence.270 There may be marginally relevant material in an affidavit, for example, but the Court addresses this by assessing what weight to give the evidence.271

Views and conclusions

  1. 6.157 The Commission recognises that the courts have control of their own procedures and considers that they are best placed to determine how a particular case should proceed. It is appropriate for the courts to retain their discretion in relation to the use of position statements, affidavits, presentation of evidence, referral of matters to private or judicial mediation, and all other procedural aspects of family provision proceedings.
  2. 6.158 A point made by both the County Court and the Supreme Court was that consistency between the two courts is of paramount importance.272 The Commission recommends, therefore, that both the County Court and the Supreme Court should consider including the procedures discussed above in equivalent practice notes or, where relevant, rules of court.  

Recommendation

44 The County Court and Supreme Court should consider including in equivalent practice notes or rules of court:

 

Summary determination

  1. 6.159 The Commission also considers that a rule in the terms of the South Australian rule permitting summary determination of family provision proceedings may be useful for family provision proceedings in Victoria where the estate is small. The South Australian rule reflects practices that are already in place, to some extent, in both the County Court and Supreme Court.
  2. 6.160 The Commission notes that if an equivalent Victorian rule were limited to proceedings in which the net value of the estate does not exceed $500,000, as it is in South Australia, the effect of the Commission’s recommendations in relation to court jurisdiction would mean that the rule would only apply to proceedings in the County Court. There has been suggestion in South Australia of increasing the limit to net estates not exceeding $700,000.278
  3. 6.161 The Commission considers that the application of a summary determination rule should be limited by the size of the estate, as there would be potential costs consequences for a party when proceedings are not determined summarily because of the actions of that party, but should have been. The Commission considers that it would be appropriate to initially limit application of the rule to proceedings in which the net value of the estate does not exceed $500,000. This would limit operation of the rule to the County Court. If the County Court were to adopt such a rule, and it operated well in practice, consideration could then be given to increasing the limit, and extending the rule’s operation to the Supreme Court.
  4. 6.162 As noted above, under the South Australian rules, if a family provision action under $500,000 should have been, but was not, summarily determined, the Court may order the plaintiff to bear any costs that might have been avoided if the proceeding had been summarily determined.279 The Commission considers that such a costs rule would be useful to encourage parties to seek summary determination in appropriate cases, but that it should apply only where a matter should have been determined summarily and, because of the actions of a party, was not. Such a rule, if adopted, should specify that it does not limit the Court’s discretion as to costs in family provision proceedings.280

Recommendations

45 The County Court should consider including in its County Court Civil Procedure Rules 2008 (Vic) a rule permitting it to determine a family provision application summarily when:

46 The County Court should consider whether its County Court Civil Procedure Rules 2008 (Vic) should provide that summary determination of a family provision application:

 

Recommendation

47 The County Court should consider including in its County Court Civil Procedure Rules 2008 (Vic) a rule that permits the Court to order a party to pay any costs that might have been avoided if a family provision application had been determined summarily if:

The summary determination costs rule should specify that it does not limit any other power of the Court in relation to costs.

 

Other areas for reform raised in the Commission’s consultation paper

Farm property

  1. 6.163 As noted in submissions and consultations, particular difficulties arise when dealing with farm property under succession laws.281 The Victorian Farmers Federation explained the common practice of the second generation working on the farm for a long time, and land being transferred from the first generation to the second in recognition of work done day to day. The submission noted that, under such an arrangement, non-farm siblings may not be provided for out of the farm property, which can cause significant difficulties between on-farm and off-farm siblings.282 David Shalders’ submission describes his personal experience: he had agreed to work on the farm with his parents all his life because he was to inherit the land.283 However, he also had sisters who had not worked on the farm and the Court ordered further provision to be made for them out of his mother’s estate.284
  2. 6.164 Solicitors in Colac noted that it can be extremely difficult to subdivide farms, as local planning laws prevent subdivision under 40 hectares.285 Solicitors in Wodonga noted that subdivision can be a particular problem in relation to wills drafted a long time ago, which propose to subdivide property in a way that is no longer permitted.286
  3. 6.165 The Victorian Farmers Federation emphasised the importance of succession planning.287 However, solicitors noted that there is no ‘magic bullet’ in relation to the problems associated with farm property, and expressed the view that, even with careful succession planning, family disputes may still occur.288
  4. 6.166 Some regional solicitors supported the introduction of a provision allowing the recipients of lifetime gifts to sign a release of their rights to make a family provision claim, such as exists subject to court approval under the Succession Act 2006 (NSW).289 In support of introducing such a provision, it was argued that, where there has been an intergenerational transfer of farm property, a recipient of that property should be precluded from making a family provision claim.290 Arnold Bloch Leibler also supported the introduction of a provision permitting court-approved release of a person’s right to make a family provision claim.291
  5. 6.167 Under the New South Wales Succession Act, a person may apply to the court for approval of a release of their rights to apply for family provision.292 In determining an application for approval of a release, the court is to take into account all the circumstances of the case, including whether:
  • it is to the advantage of the releasing party to make the release, financially
    or otherwise
  • it is prudent for the releasing party to make the release
  • the provisions of any agreement to make the release are fair and reasonable
  • the releasing party has taken independent advice in relation to the release and,
    if so, has given due consideration to that advice.293
  1. 6.168 Legal practitioners in New South Wales noted that the Succession Act release provision is used where there has been a transfer of farm property by family agreement, and also where there has been a family law settlement.294
  2. 6.169 Although such a provision would have general application, it would be particularly useful to encourage lifetime transfers of farm property, by heading off family provision claims following death. It is the Commission’s view that such a provision would assist estate planning during a will-maker’s life and prevent some family disputes after death.

 

Recommendation

48 The Administration and Probate Act 1958 (Vic) should permit any person to apply to the court for approval of a release of their rights to make a family provision application, as provided by sections 95 and 96 of the Succession Act 2006 (NSW).  

Notional estate

The New South Wales notional estate provisions recommended by the
National Committee

  1. 6.170 In all Australian states and territories except New South Wales, family provision can usually only be made out of property that is in the deceased person’s estate.295 However, notional estate provisions in New South Wales allow certain property that is not part of the deceased person’s estate to be designated as notional estate to satisfy a successful claim for family provision, or pay the costs of family provision proceedings.296 The Commission’s consultation paper on family provision discussed notional estate.297 The National Committee for Uniform Succession Laws recommended that notional estate provisions based on the New South Wales legislation should be adopted in all Australian states
    and territories.298
  2. 6.171 The New South Wales provisions allow the court to designate property as notional estate if it is property that has already been distributed from the estate, or property that has been subject to a ‘relevant property transaction’.299 Generally speaking, relevant property transactions captured by the legislation are acts or omissions by the deceased person:
  • for which full valuable consideration was not received
  • that took place within a certain time before the deceased person’s death
  • that resulted in property not accruing to the deceased person’s estate.300
  1. 6.172 Examples of the types of transactions that are sometimes covered are failure to sever a joint tenancy and failure to make a binding superannuation nomination in favour of the deceased person’s personal representative.301 A transaction that took place up to three years before the deceased person’s death can be captured if it was entered into with the intention of depriving someone of family provision, or up to one year before the deceased person’s death if it was entered into when the deceased person had a responsibility to make provision for someone.302
  2. 6.173 The court can only make a notional estate order if it is satisfied of any of the following:
  • the deceased person left no estate
  • the deceased person’s estate is insufficient to make a family provision order, or any order as to costs, that the court thinks should be made
  • provision should not be made wholly out of the deceased person’s estate because other people are entitled to apply for family provision orders or because there are special circumstances.303
  1. 6.174 The National Committee recommended the adoption of notional estate provisions in response to concerns that people were ‘avoiding their family provision responsibilities by divesting themselves of property during their lifetime’.304 However, in 1996, the National Committee had published an issues paper, in which it noted that:

Whether it would be possible to persuade the other States and Territories to follow this approach may perhaps depend on how successful it has been in New South Wales in practice … An evaluation of the legislation, from a New South Wales perspective, must
be undertaken as part of the project.305

  1. 6.175 No such evaluation of the New South Wales provisions has been undertaken, and the need for such provisions and the effectiveness of the provisions in meeting such a need (if one does exist) has never been demonstrated. The National Committee’s recommendation to adopt the New South Wales provisions was not based on empirical research demonstrating the need for such provisions, but rather because the provisions existed and had been in operation for some time, and there was ‘nothing hugely wrong with them’.306  

Views and conclusions

  1. 6.176 The Commission’s consultation paper on family provision asked whether people do in fact deal with their assets during their lifetime in order to minimise the property that is in their estate and frustrate the operation of family provision laws and, if so, whether they should be entitled to do so.307
  2. 6.177 Several submissions agreed that sometimes people structure their assets so that the majority of those assets fall outside the reach of family provision legislation.308 However,
    a judge of the Supreme Court of Victoria made the point that there is a difference between a person dealing with their assets to avoid family provision legislation, and doing so to avoid their responsibility to provide for certain people. While a gift of property during life may have the effect of reducing the property in a person’s estate, the gift may give effect to that same responsibility to provide.309 State Trustees said that it did not consider it likely that people have sought to frustrate the operation of family provision laws, ‘even if their actions may have that effect’.310
  3. 6.178 A number of those who made submissions were opposed to the introduction of notional estate provisions.311 Moores Legal considered that it was arbitrary to place a time limit on transactions, and expressed the view that, given the incursion into property rights that family provision already represents, it is not justifiable to take the step of unwinding lifetime dispositions.312 Arnold Bloch Leibler considered that lifetime transactions should only be overturned if they involved undue influence or duress.313 The Law Institute of Victoria generally agreed that people should be able to deal with their property in any manner they see fit during their lifetime.314
  4. 6.179 Carolyn Sparke SC considered that individuals should be permitted to make gifts to family and friends while they are still alive and ‘feel the satisfaction of knowing that their assets are in the hands of those they wish them to be’.315 To retain this freedom, she considered that notional estate provisions should not be introduced.316 Barrister Andrew Verspaandonk also put the point strongly in his submission:

I strongly believe that people should have the entitlement to exercise their property rights while they are alive, even if the effect would be to limit the extent of their estate upon their death. Private property rights are already significantly encroached upon at the point of death by the existence of Family Provision legislation. Given that testamentary dispositions are actually gifts, the law ought not reach back into the lifetime of the testator to further interfere with property rights. If people are prepared to compromise their own enjoyment of property rights by alienation inter vivos, they should be free to do so.317

  1. 6.180 The Supreme Court of Victoria said that, ‘on balance, the law ought not to detract from the general proposition that persons are able to deal with their property as they wish’. However, it noted that if there is evidence in Victoria of people entering into ‘artificial arrangements designed to avoid their moral obligation’, then introduction of a notional estate scheme may be necessary.318 
  2. 6.181 Of those who supported the introduction of a notional estate scheme in Victoria, most proposed departure from the New South Wales model. A minority of survey respondents represented in the Law Institute of Victoria’s submission considered that notional estate provisions should be introduced, but should be more limited in scope than the New South Wales provisions.319 The Institute of Legal Executives said that, if notional estate provisions were introduced, they should be carefully drafted, to prevent the unfair erosion of a person’s freedom to deal with their assets during life.320 Both the Commercial Bar Association and barrister Shane Newton considered that notional estate provisions should be introduced, but should apply only to transactions entered into with the intention of defeating a claim for family provision.321
  3. 6.182 Participants in consultations in New South Wales were supportive of the notional estate scheme,322 and the submission of the Elder Law and Succession Committee of the Law Society of New South Wales expressed the view that ‘if one subscribes to the concept of family provision, then the concept of notional estate must follow’.323 However, representatives of the NSW Trustee and Guardian noted that it is typically the transactions within 12 months of the deceased person’s death that are the target of applications for notional estate, where no intention needs to be proved.324 Consultees also noted that notional estate is primarily used to meet orders for family provision, not costs orders.325
  4. 6.183 The Commission considers that a notional estate scheme that only applied to transactions entered into with the intention of avoiding family provision obligations could be easily circumvented. Further, intention is difficult to prove, as evidenced by the clear preference for the notional estate provisions in New South Wales which do not require proof of intention to defeat a possible family provision claim. The Commission also agrees that any notional estate scheme that does not require some intention on the part of the deceased person risks being too far-reaching and unduly limiting of a person’s right to dispose of their property during their life.
  5. 6.184 The New South Wales notional estate provisions themselves were not purpose-designed, having been based on the former death duty provisions.326
  6. 6.185 The Commission also considers that any transaction entered into before death may have the effect of benefiting the same people who could later be family provision claimants. The gift during life may give effect to the person’s responsibility to provide, but does this before death rather than after.
  7. 6.186 In the absence of clear evidence demonstrating the need for such provisions in Victoria, or the effectiveness of such provisions in New South Wales, the Commission does not recommend the introduction of notional estate provisions in Victoria.

Time limit to make a family provision claim

  1. 6.187 In the consultation paper on family provision, the Commission asked whether the current period within which a family provision claim can be made—six months from the grant of representation327—is satisfactory, too short or too long. The National Committee for Uniform Succession Laws recommended that an application for provision should be made no later than 12 months after the date of the deceased person’s death.328 
  2. 6.188 Most of the submissions that addressed this point considered the current time limit to be satisfactory.329 State Trustees emphasised the need to balance the interests of ‘vulnerable potential claimants’ with ‘the desirability of expeditious, efficient and certain administration’, but said that on balance it preferred retention of the current time frame, provided that eligibility is limited to deter speculative claims.330 Barrister Andrew Verspaandonk noted that the current time limit allows sufficient time for advice and consideration, while extensions of time are permitted by the Administration and Probate Act.331 Carolyn Sparke SC pointed out that the time taken to obtain probate plus six months typically gives people about eight months from the date of the deceased person’s death to make an application.332
  3. 6.189 Other submissions considered the period of six months from the grant of representation to be too long.333 One submission suggested that the six-month limit ‘was adopted in “horse and buggy” days when there was no instant means of communication as there is today’ and is unfair on executors and beneficiaries.This person recommended that the period be reduced from six months from the grant of representation to three.334
  4. 6.190 One submission expressed the view that the period of six months from the date of the grant of representation is too short, and it and one other submission considered that
    the period should be 12 months from the date of death, as in New South Wales.335
  5. 6.191 Moores Legal considered that the limitation period was probably satisfactory, but proposed a formal process to allow estates to be distributed earlier ‘if it appears unlikely that a claim would be brought’.336 This submission proposed that:

if the executor is notified by all ‘natural’ beneficiaries that they do not intend to bring a claim, the executor is then able to distribute the estate within the limitation period without becoming personally liable to meet any later claim.337

  1. 6.192 The submission suggests that, to guard against the possibility of someone outside the range of ‘natural’ beneficiaries of the estate bringing a claim, the executor could take
    out an insurance policy, at the estate’s expense, to indemnify the executor against any later claim.338
  2. 6.193 On balance, the Commission considers that the period of six months from the date of the grant of representation strikes an appropriate balance between providing notice to interested persons and efficiency. In the Commission’s view, Moores Legal’s proposal establishes a potentially complex regime of insurance, liability and litigation. Under such a scheme, there would be a real risk of someone outside the class of ‘natural’ beneficiaries making a claim against an already distributed estate. There are further difficulties in defining who constitutes a ‘natural’ beneficiary of the estate.
  3. 6.194 Additionally, there is already limited protection for personal representatives who make distributions for the maintenance, support or education of the deceased person’s partner or child within six months from the date of the grant.339 The type of reform proposed by Moores Legal would, at best, allow for distribution only several months earlier than would otherwise be possible. For these reasons, the Commission does not recommend such an approach.
  4. 6.195 The current six-month period within which to make a family provision claim in Victoria commences from the date of the grant of representation.340 As noted above, the National Committee for Uniform Succession Laws recommended that an application for provision should be made no later than 12 months after the date of the deceased person’s death.341
  5. 6.196 Most submissions that addressed this point considered that time should begin to run from the date of the grant of representation.342 The Property and Probate Division of the Commercial Bar Association observed that the grant provides notice to prospective family provision applicants that the time within which to exercise their rights has commenced. It pointed out that this type of public notification is not given in jurisdictions where time begins to run from the deceased person’s date of death.343
  6. 6.197 Patricia Strachan and the Law Society of New South Wales considered that a time limit of 12 months should start to run from the deceased person’s date of death.344
  7. 6.198 On balance, the Commission considers that six months from the date of grant provides an adequate period within which to obtain legal advice and commence proceedings. Further, the grant itself performs an important role in notifying interested parties of when time has started to run. If a caveat is lodged against the making of a grant of representation, the Registrar of Probates of the Supreme Court must give the person who lodged the caveat notice when any application for a grant is made.345 The court’s power to grant an extension of time operates as a sufficient safeguard. For these reasons, the Commission does not recommend any change in relation to the time within which to bring a family provision claim.

Notice of intention to make a family provision claim

  1. 6.199 The submission of the Property and Probate Section of the Commercial Bar Association raises a point that is separate from, but related to, the time limit and extension of time in family provision. Under the Administration and Probate Act, personal representatives are not personally liable for making distributions from the estate after the six-month limitation period has passed, where there has been no notice of a family provision application or intended application.346
  2. 6.200 Notice provided to the personal representative of an intention to make a family provision application, in writing and signed, lapses after three months and cannot be renewed. After three months, the personal representative can ‘act as if he had not received the notice’ unless, within that three months, notice is received that a family provision application has been made to the court.347
  3. 6.201 In the view of the Property and Probate Section of the Commercial Bar Association, these provisions effectively give rise to a nine-month period within which to make a family provision claim, if notice is given on the last day of the six-month period.348 The submission states that consideration should be given to clarifying the effect of giving
    such notice.349 
  4. 6.202 The relevant provisions of the Administration and Probate Act are:
  • Section 99, which states that no application shall be heard by the court unless the application is made within six months of the grant of representation or the court grants an extension of time.
  • Section 99A, which allows prospective family provision claimants to provide notice to the personal representative and effectively extend the time in which they may make a claim to nine months.350
  1. 6.203 It is not clear whether someone who provides notice to the personal representative of their intention to make a family provision claim within six months of the date of grant, but does not file their application in the court within that time, would be required to apply to the court for an extension of time. It seems likely, however, that this provision is only intended to protect the personal representative for certain distributions, and not give rise to an extension of time without court order. The Commission considers that the interaction between the relevant provisions should be clarified to specify that they relate only to the liability of personal representatives for distributions made, and do not give rise to a nine-month period within which to make a family provision claim.

Recommendation

49 Section 99A of the Administration and Probate Act 1958 (Vic) should be amended to clarify that:

6.204 The Commercial Bar Association also pointed out that section 99 of the Administration and Probate Act still refers to Part V of the Administration and Probate Act.351 Part V previously dealt with witness beneficiaries and was repealed by the Wills Act 1997 (Vic). If an application was made under Part V of the Administration and Probate Act, section 99 of the Act allowed for time within which to make a family provision application to be extended.352 The Commission recommends that the reference to Part V should be removed from section 99 of the Administration and Probate Act.

Recommendation

50 The second proviso to section 99 of the Administration and Probate Act 1958 (Vic), which refers to Part V of that Act, should be removed.

 

Footnotes

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