Busch v Mills[2018] QDC 62

DISTRICT COURT OF QUEENSLAND

HER HONOUR: These are my reasons in both files 118 of 2017 and 119 of 2017.  This is an application for final orders to give effect to the compromise of a family provision application made under part 4 of the Succession Act 1981 Queensland in the estate of Kenneth Michael Rice, deceased.  The applicants Mr Busch and Ms Owens are the adult biological children of the deceased.  The respondents are the executors of the deceased’s will.  The deceased was survived by the applicants and another daughter, Ms De Marzi.  At the date of his death, apparently the deceased was unaware that the applicants were his biological children.

The deceased’s last will was dated 11 March 2011.  Probate was granted on 22 May 2017.  Pursuant to a will executed on 11 March 2011, the deceased appointed Ms Mills and Ms Chillemi as executors and trustees.  Under the terms of his will, the deceased left pecuniary legacies of $10,000 to each of three grandchildren, three grand-nieces and three friends.  The rest and residue of his estate he left to his other daughter Ms Chillemi and his two nieces to be divided in equal shares.  No provision was made for the applicants.  The deceased’s estate is a very modest one in size. 

As at the date of death, the total gross value of the estate was $376,258.33.  As at November 2017, there were liabilities of $46,481. Therefore, the net estate is valued at approximately $330,000 as at the date of the application.  However, that figure does not include the costs of these proceedings of the executors or of the applicants which are not yet quantified. 

On 19 July 2017, the applicants filed originating applications pursuant to section 41 of the Succession Act 1981 Queensland seeking adequate provision to be made for their proper maintenance and support from the deceased estate.  No other eligible applicants have applied under section 41 of the Act. 

That section relevantly provides that if a person dies and in terms of the will,

…adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, the Court may, in its discretion, on application, order that such provision as the Court thinks fit shall be made out of the estate of the deceased person.

As the applicants are not seeking to be awarded provision from an estate with a value over $750,000, this Court has jurisdiction to make an order pursuant to section 68(1)(b) of the District Court Act 1976. 

The principles relevant to determining family provision claims are well-known and involve a two-stage process as outlined in Singer v Berghouse (No 2) [1994] 181 CLR 201 where it was said at 208:

The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life.  The second stage, which only arises if that determination be made in favour of the applicant, requires the Court to decide what provision ought to be made out of the deceased’s estate for the applicant. 

The first stage calls for an assessment of whether the provision made for the applicant was inadequate having regard to a number of matters including the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased and the relationship between the deceased and other persons with a legitimate claim on his bounty.

I have also had regard to the statements of principle contained in the decision of Dalton J in Affoo & Anor v Public Trustee of Queensland [2012] 1 Qd R 408 and in particular that:

[24] …The final disposition of a family provision application calls for the exercise of the Court’s discretion.  It cannot be achieved by an agreement or deed.  When parties to a family provision application make an agreement as to the final orders they believe ought to be made in the proceeding, the Court will have regard to that agreement as a factor, usually a significant factor, in deciding what order to make in the exercise of its discretion.

That statement was approved by the Court of Appeal in Abrahams v Abrahams [2015] QCA 286 at [30]. 

Turning to the applicants’ circumstances, Mr Busch was born on 26 December 1966 and is or was at the date of his affidavit 50 years old.  Ms Owens was born on 16 December 1968 and was at the date of swearing her affidavit 48 years old.  The circumstances of their relationship with the deceased are unusual.  The deceased during his life did not acknowledge the applicants.  There is some dispute about the extent of their relationship during his lifetime.  The applicants say that there were some visits to the deceased when they were children, but what is not disputed is that there was no acknowledgement of the applicants as the deceased’s children during their relationship as adults.  It is also not disputed that if the deceased had been aware that the applicants were his biological children, he would have made some provision for them in his will.

Turning to the applicants’ financial positions, Mr Busch is an Aboriginal man of very limited means living in Normanton.  He does not own any property.  His income is limited to that of a CDEP - community development employment program supervisor.  He has three children aged 34, 17 and 15.  Ms Owens is a married Aboriginal woman living in Normanton.  Although she owns her own home, she has three adult children whom she assists financially.  She cares for seven grandchildren.  She has modest assets and a modest income.

The deceased had a close relationship with the three residuary beneficiaries who are his daughter Ms De Marzi and his two nieces Ms Mills and Ms Chillemi.  They lived with the deceased and were raised in the same household with him, and they each had regular contact with him as adults.  Ms Chillemi, in particular, has a strong need as a result of difficult personal circumstances in her life. 

I am satisfied that there is a basis for making the application.  No provision was made for the applicants in the deceased’s will at all.  The deceased failed to provide proper maintenance and support for the applicants who are his children.  I am satisfied that the applicants have a need and a moral claim. In the circumstances, the requirements of the Succession Act were made out, and the jurisdiction of the Court is clearly enlivened.

Although there is a discretion to be exercised by the Court, once, as is the case here, the qualifying requirements for making an application under section 41 are satisfied and there is material indicating an apparent basis for the application and the order sought, then the compromise of the parties is a significant factor.  In the normal course of events, the applicants’ claim would have been litigated at trial. However, here the executors, the applicants and the residuary beneficiaries have reached a compromise which is reflected in a draft order.

The effect of the compromise is that the nine pecuniary legacies of $10,000 each will not be disturbed, but the residue of the estate will be divided roughly equally between the two applicants and the three residuary beneficiaries with a slight weighting in favour of the three biological children. 

The draft order provides that the will will be read and construed as though clause 6 were deleted and the following inserted. That is, the rest and residue of the state will be divided in the following proportions:  21.4 per cent to the deceased’s daughter Ms De Marzi, 21.3 per cent to the deceased’s daughter Ms Owens, 21.3 per cent to the deceased’s son Mr Busch, 18 per cent to the deceased’s niece Ms Mills and 18 per cent to the deceased’s niece Ms Chillemi.  The draft order also proposes that the applicant’s costs be met out of the estate on a standard basis and that the executor’s costs be met out of the estate on an indemnity basis.

Significantly, the three residuary beneficiaries have consented to the order.  I also have signed consents from the two applicants.  Once the jurisdictional question is satisfied, considerable weight must be given to that agreement, and the circumstances would be unusual for the Court to override the agreement of the parties who are of full age and where there is no evidence of undue influence at work in the making of the agreement.  The very small value of the estate and the extent to which it may be depleted by further legal costs if the application were further defended are clearly very relevant circumstances.

I am satisfied that the proposed orders to give effect to the compromise are in all the circumstances appropriate provision for the proper maintenance and support of the applicants from the deceased estate. 

I will make orders in terms of the draft orders as amended by me and placed with the papers.