Jones (a pseudonym) v Smith (a pseudonym) [2016] VSCA 178 (29 July 2016)

Last Updated: 29 July 2016

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0089

EDWARD JONES (A PSEUDONYM)	Appellant
v
CONSTANCE SMITH (A PSEUDONYM)	Respondent

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JUDGES:	WHELAN, FERGUSON and KAYE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15 June 2016
DATE OF JUDGMENT:	29 July 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 178
JUDGMENT APPEALED FROM:	[2015] VSC 398 (McMillan J)

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FAMILY PROVISION AND MAINTENANCE – Failure by mother to make sufficient provision for adult daughter in will – Daughter sexually abused by father as a child – Father later sexually abused grandson – Abuse had significant impact financially and emotionally on daughter and her family – Deceased promised daughter equal share of estate with her brothers – Will changed after grandson reported abuse to police – Daughter received lesser share of estate than brothers – Estate included five properties worth about $6 million – Daughter had assets in excess of $5 million – No requirement to treat children equally – Financial need must be established – Financial need relative concept to be considered in all circumstances of case – Provision not compensation for wrongdoing – Wise and just testator would have made greater provision for proper maintenance and support of daughter – Deceased had moral duty to provide for daughter which was informed by circumstances including promises made during lifetime – Appeal dismissed – Administration and Probate Act 1958, s 91.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr K J A Lyons QC with Mr R B Phillips	Venizelakos Lawyers and Notaries
For the Respondent	Mr S P Newton	Robinson Gill Lawyers

WHELAN JA:

1 I have read in draft the reasons of Ferguson JA. For the reasons she gives, leave to appeal should be granted but the appeal should be dismissed.

FERGUSON JA:

Introduction

2 Edward (the appellant) and Constance (the respondent) are brother and sister.[1] There is a dispute between them over the estate of their mother Abigail. Edward is the executor of the estate and Constance is a beneficiary. A family tree depicting the relationship between them and other relevant family members (including their brother Phillip) is attached.

3 Their father (John) sexually abused Constance when she was a teenager. He later sexually abused her son (David) when he was about 4 years of age. Both Constance and David suffer significant mental health issues as a result of the abuse. The effect of the abuse does not stop with them. Rather, it has affected Constance’s husband (Thomas) and their two other children (Felicity and Robert). The abuse has had a financial impact on Constance and her family.

4 John died some years ago. At the time of his death, Abigail became the sole proprietor of the substantial real estate that they had owned jointly. John had few (if any) other assets.

5 At the time of her death, Abigail owned five properties worth about $6 million. By her will, she left one property to Edward and Phillip, two others to Phillip, another to Edward and the remaining property to Constance.

6 Constance and David made a successful application under Part IV of the Administration and Probate Act 1958 (‘the Act’) for orders that further provision be made for their proper maintenance and support out of the estate.[2] The judge ordered that the property that had been left to Edward and Phillip be transferred to Constance; that Edward, as executor, pay her a pecuniary legacy of $100,000; that David be paid a pecuniary legacy of $175,000; and that each legacy be borne by the share of the estate left to Edward and charged on the property left to him.

7 Edward seeks leave to appeal in respect of the orders for further provision that were made for Constance. He does not challenge the order made in favour of David.

8 For the reasons which follow, I would grant leave to appeal and would dismiss the appeal. Abigail ignored the moral obligation that she had to make adequate provision for the proper maintenance and support of Constance. In those circumstances, the Court’s jurisdiction to intervene and alter the manner in which Abigail had bequeathed her estate was enlivened. Edward has not shown any error in the judge’s exercise of the discretion to make the orders that she did for further provision to be made for Constance.

Factual matters

9 Abigail died on 14 February 2012. As I have said, her estate was predominantly made up of five properties valued at approximately $5.985 million. She bequeathed those properties as follows:

(a) Property 1 to Edward ($1.23 million);

(b) Property 2 to Constance ($1.28 million);

(c) Property 3 (the family home) to Phillip ($1.5 million);

(d) Property 4 to Phillip ($1.2 million); and

(e) Property 5 to Phillip and Edward ($775,000).

10 The three siblings shared equally the proceeds of Abigail’s Lifeplan Funds Management Capital Guarantee Fund with each of them receiving $150,000. The residuary estate was to be divided equally between the three siblings. Nothing is available for distribution from that part of the estate because it has been exhausted by payment of administration and legal costs.

11 Constance’s share of the estate was just over 21 per cent; Edward’s 27 per cent and Phillip’s 52 per cent.

12 Clause 7 of Abigail’s Will read:

I have provided less in this my Will for my daughter... as I consider that more than adequate provision has been made for her by me and my husband during my lifetime. I also specifically record the fact that after serious consideration and after being informed by my lawyers of the existence of the provisions of Part IV of the Administration and Probate Act 1958, that I make no provision for my grandson..., as I consider that I have no duty or moral obligation to provide for him and in addition for the reason that I have made sufficient provision hereby for his mother and my daughter....

13 Constance is now aged 63. It is unnecessary to recite the facts about the sexual abuse of her.[3] Suffice to say that the abuse started in 1967 when she was about 14 and continued for about a year. Constance feared that she would become pregnant and told Abigail about the abuse. Abigail said that she would ‘take care of it.’ Following that, Abigail spoke to her husband, John. Abigail told Constance that her father had begged for forgiveness. The abuse stopped. Nevertheless, John made life very difficult for Constance. She described it as a living hell. He was an abusive, dominating father. In addition, he treated Abigail badly.

14 In the early 1970’s, Constance felt unable to cope with the stress of her father’s abusive behaviour and she suffered some minor breakdowns. At the time of the second of these events, Constance was engaged to her now husband, Thomas. Thomas asked her about what John had done to her, but she could not answer him. Indeed, Constance did not tell Thomas about the abuse by her father until she was preparing her claim under Part IV.

15 Constance and Thomas were married in December 1973 and now have three children — Felicity, David and Robert.

16 Over the years, Thomas helped John in various ways including driving him to do errands. Constance complained to Abigail that her father expected too much of Thomas. Abigail asked Constance to be patient saying ‘all this will be yours one day.’ Her parents repeated this sentiment to Constance and Thomas on many occasions.

17 In about 1978, Abigail was physically attacked by her husband. She sought refuge with Constance and Thomas. They encouraged her to stay with them but she was concerned that she would be left penniless and her children would miss out on their inheritance. She went back to her husband.

18 In about 1981, when Thomas and Constance’s middle child, David, was about four, he was sexually abused by John. When Constance found out about this, she confronted John and Abigail. Her father denied what had happened. Abigail said nothing. Constance and her family then refused to visit her parents for the next six years, although occasionally Abigail secretly visited Constance.

19 During this period, John rang Constance on two or three occasions to ask her to visit him with her family. Each time she raised with him what he had done to David but John continued to deny it. Consequently, she refused to visit him until he invited her to see him in about 1987. She decided to visit him on her own. In Abigail’s presence, Constance told her father that he had ruined her life. She was upset and shaken up. She said ‘Don’t you dare tell me you didn’t touch [David]’. She said that she would never bring her family into his house again ‘if he did not come clean.’ On this occasion, John admitted what he had done. Constance and her family then started to visit her parents again although she made sure that her children were not left alone with her father.

20 When David’s memories of John’s abuse started to come back to him, Constance confided in Abigail about how worried she was for her son. Constance was upset with Abigail because she had not taken any action against her father. According to Constance, Abigail said ‘I stayed with him for your sake,’ ‘this will be all yours one day’ and ‘he was a good hard working father providing for his family and had created all this estate for you three.’

21 As Abigail aged and her health progressively deteriorated, Constance undertook household chores and prepared meals and shopped for Abigail. When the need arose, Constance took Abigail to medical appointments. When Abigail was hospitalised and later entered a nursing home, Constance did Abigail’s laundry, brought her changes of clothing and helped with her grooming and personal hygiene and the like.

22 The effect of the sexual abuse of David has been devastating. In the mid 1990’s, he started to use drugs. Although he was able to attend the National Institute of Dramatic Art and graduate in 2003, he suffered from psychotic episodes and post-traumatic stress disorder brought on by the sexual abuse by John. He confronted his grandfather in 2005 and shortly after reported to the police that John had admitted what he had done. At a later meeting in August 2005 attended by more family members, John denied the allegations and accused Constance and Thomas of trying to extort money from him. In early 2006, David commenced a civil proceeding against John for assault and personal injury. John died the following year and the civil action against him was discontinued because there were virtually no assets in his estate, his interest in all his real property having passed to Abigail as the surviving joint tenant. David’s health has continued to deteriorate and he has been hospitalised on numerous occasions.

23 Constance finds it difficult and traumatic to discuss the abuse inflicted on her by her father. She began seeing a counsellor during the course of her Part IV claim being prepared for trial and continued to do so for about eight months. The impact of the sexual abuse on David has had a flow on effect on his siblings, Felicity and Robert. Felicity has suffered from depression and, among other afflictions, Robert suffers from anxiety.

24 The small nut and confectionary packaging business that Constance and Thomas established in 1994 has suffered. Because they have had to focus on their son’s health issues, sometimes needing to attend him at short notice, they have been unable to attend to the business which has disrupted supply to their customers. Consequently, their major customers have left them. At the time of the trial, the business was not going well. Constance and Thomas support themselves and their three children from their savings.

25 In August 2008, Abigail gave Constance $200,000, Edward $250,000 and Phillip $200,000. There is no explanation as to why Edward received more than his siblings. At the time of these gifts, Abigail told Constance that the three siblings would be equal beneficiaries under her Will. This was consistent with what Abigail and John had previously told Constance. It was also consistent with Abigail’s Will dated 25 June 1990.

26 Constance and Thomas have the following unencumbered assets:

(a) their home worth $855,000;

(b) a family trust with net assets of about $1.5 million;

(c) combined superannuation of about $1.5 million with the fund returning about $126,000 in the 2013 financial year.

27 Before Abigail died, she permitted Constance to receive rent from Property 2 (which was left to Constance in Abigail’s Will) and Constance was entitled to about $45,000 in accumulated rent as at the date of the trial.[4] In addition, as mentioned above, Constance received approximately $150,000, being a third of Abigail’s Lifeplan policy (with the remaining two thirds being left to Edward and Phillip).

28 In about 1980, Constance, Thomas and Edward established a health food business. They remained in business together for a number of years. At some stage there was a falling out between Constance and Thomas on the one hand and Edward on the other. Eventually, court proceedings ensued. The proceedings were settled in about 2006. The settlement resulted in Thomas and Constance’s family trust receiving approximately $1.55 million. They used over half of the settlement funds to repay creditors. The balance has been used by them to support themselves since 2007 and what remains forms part of their savings.

29 Edward contributed $3,250 towards the purchase by his father of two shops. His brother contributed $3,500. The two shops were sold and a fish and chip shop (Property 5) was purchased with part of the proceeds of sale. John retained the balance of the settlement proceeds and they were never repaid the amounts that they contributed.

30 Phillip was diagnosed with schizophrenia in his early 20’s. He has been on medication for this condition since that time. He lived with Abigail at Property 3 (which was left to him in her Will). He lived with her for about 30 years. He has been receiving a disability support pension since 1998 and has savings of about $400,000.

31 Edward did not make any competing claim of financial need. Apart from two paragraphs of an affidavit by him that were tendered, Edward did not give evidence. The first paragraph read:

I say that there was nothing ‘special’ about the relationship which existed between [Abigail and David]. Indeed, to the contrary, because of the unfounded allegations which [he] made against his grandfather, culminating in the issue of legal proceedings against him, when my mother gave instructions to her solicitor... to prepare her last Will, she gave firm instructions that [David] was to receive no benefit at all.

32 The second paragraph of his affidavit stated that in consequence of this, Abigail’s Will included cl 7 which is set out at [12] above.

Legal principles

33 Part IV of the Act provides the basis for the Court altering what happens with the estate of a deceased person. This is not to say that the Court may, nor that it will, act in all cases. The Court will not interfere with the testator’s freedom to leave their estate to whomever they choose, unless there is some proper basis for doing so under the legislation.[5]

34 At the time relevant to this appeal,[6] the Court did not have power to intervene unless:

(a) the testator had responsibility to make provision for the person concerned;^[7] and

(b) there had been a failure by the testator to make adequate provision for the proper maintenance and support of that person.^[8]

35 In considering these jurisdictional issues, the Court was required to have regard to the various matters specified in s 91(4)(e)–(p) of the Act.[9] Included amongst those matters were the obligations of the deceased to the beneficiaries and the person seeking provision;[10] the size of the estate;[11] the financial resources (including earning capacity) and financial needs of those making a claim on the estate and any beneficiary;[12] contributions made by the claimant to build up the estate or to the welfare of the deceased;[13] any disability of any claimant or any beneficiary of the estate;[14] any benefits previously given to the claimant and any beneficiary;[15] and any other matter the Court considered relevant.[16] Consequently, satisfaction of the jurisdictional requirements turned on the circumstances of the case having regard to the matters specified in s 91(4)(e)–(p).[17]

36 If the jurisdictional preconditions were satisfied, on application by or on behalf of the person concerned,[18] the Court had a discretion to order that provision be made out of the estate for them.[19]

37 For many years, when applying s 91 and like provisions, courts have considered the ‘moral’ duty of the testator and whether that moral duty has been breached.[20] In this regard, the Court considers what, in all the circumstances as at the date of death, a ‘wise and just’ testator should have done.[21]

38 There is no requirement that parents treat their children equally.[22] Indeed, it may be difficult for an adult child in a sound financial position to establish the jurisdictional requirements.[23] The concept of ‘need’ is relevant when considering whether the testator has made adequate provision for the proper maintenance and support of any claimant. However, ‘need’ is a relative concept[24] and must be considered in all the circumstances of the case.[25] Adult children did not have to establish some special need or circumstances before relief would be granted.[26]

39 Further, expectations raised and a promise made by a testator to a claimant are relevant when considering what a wise and just testator would have done, particularly where the claimant has relied to their detriment on the promise. [27]

40 Finally, the provisions of Part IV do not create an alternative means of obtaining compensation or damages for a wrong done to a person by the testator or for which the testator bears some blame.[28] Nevertheless, the testator’s conduct may explain why the claimant has a particular financial need.

The judge’s reasons

41 The judge described the evidence of Constance and David, including as to the sexual abuse of each of them. In summing up the impact of sexual abuse on Constance, the judge said:

The impact of the sexual abuse on Constance is hard to quantify, given the period of time that has lapsed since it occurred and her inability to talk about it. Constance’s impetus to disclose this information was David’s disclosure of the sexual abuse by her father, where she said:

the more sick David got, the more it all played out in my mind of what my father did to me...

Constance has suffered as a result of the sexual abuse but kept it to herself apart from telling her mother and confronting her father. It caused her to have an unhappy childhood suffering setbacks at school and, in 1972 and 1973, culminating in a series of nervous breakdowns that went untreated by professionals.

Constance said the process of reliving the abuse while preparing for trial has had a negative impact on her mental health:

The process of preparing this affidavit has been extremely difficult and heart wrenching and I have started to relive the abuse and feel the pain and trauma I was going through all over again. My mental health is not good at the moment and is impacting on my health in general.

Constance only began receiving counselling for the abuse in 2014. She received eight months of counselling, but stopped when David’s behaviour made it impracticable to continue and she has found it difficult and traumatic to discuss the abuse. Constance stated that she would like to continue the counselling:

I just didn’t go back although I feel I should be. I um I didn’t and a lot of times I feel I should and - and I think I eventually will because things just don’t get any better in our household.

What she affirmed in her affidavit and in her oral evidence was all she could disclose at the time of the trial. She feels that she will need ongoing counselling and further treatment to deal with issues arising from the sexual abuse.^[29]

42 The judge described the impact of sexual abuse on Constance’s family; financially, emotionally and on their health.[30]

43 The judge then considered Constance’s financial circumstances.[31] The judge noted that Constance had a share in two companies; that there was little (if any) reliable evidence about their value; that accounts had not been prepared for the companies for some time; nor had accounts been prepared for the family trust and superannuation fund.[32] The judge also observed that Constance and Thomas were behind in preparing and filing their tax returns.[33] The judge summed up by saying ‘Considering this lack of information, it is possible that their assets may be worth more or less than what is claimed’ by Constance.[34] The judge referred to Constance and her family living off the settlement proceeds received as a result of the resolution of the dispute with Edward; that Constance described paying for her children’s living expenses as ‘a substantial cost’ and that she and her husband had helped Felicity and Robert purchase houses and had bought a car for Robert.[35]

44 Before leaving the financial circumstances of Constance, the judge referred to an amount of $100,000 that Constance had borrowed from her mother; that $40,000 had been repaid and that Constance’s evidence was that her mother forgave the balance of the debt.[36]

45 The judge then considered the position of Constance’s two siblings. She noted that Edward did not give evidence nor did he put forward any claim for competing financial need.[37] The judge described the evidence of Phillip, including as to his financial position and noted that he wished to protect his inheritance from Abigail’s estate.[38] The judge also mentioned the contribution of about $6,750 that the two brothers made towards the purchase of the two shops; that those shops were sold and that part of the sale proceeds were used to purchase the fish and chip shop.[39]

46 The judge considered the legal principles.[40] The judge addressed the matters specified in s 91(4)(e)–(p) of the Act. When considering the relationship between Abigail and Constance,[41] the judge said that it was of relevance that Abigail had knowledge of the sexual abuse alleged by Constance and David, was silent about it and supported her husband by not reporting the abuse or making sure that her husband sought help, notwithstanding Constance’s pleas that she do so.[42] The judge said that Abigail did not do enough to remedy the abuse of Constance and had failed to stop the abuse of her grandson.[43]

47 When it came to considering the financial resources of Constance,[44] the judge referred to the matters she had mentioned earlier in her reasons. She then said:

Phillip also referred to a monetary contribution made by him towards his father’s purchase of two shops in Fitzroy that remained unpaid by his father when the shops were sold in the 1970s. Although stated, no evidence was provided to support this statement and no submissions were made concerning it. I disregard it in any assessment of Phillip’s position.^[45]

48 The judge addressed Edward’s criticism of the generality of the information that Constance had provided about her financial situation. The judge stated:

I consider that the emotional and psychological effects of dealing with her father’s abuse, remaining silent about it for so long, dealing with the effects of her father’s abuse of David and its overall effect on her family, has affected her ability to function on a daily basis and keep the family finances up to date. Constance has been unable to complete the accounts for the business and their personal accounts for some years. I find her explanation as to her failures in this regard to be credible and understandable in the circumstances.^[46]

49 Turning next to consider financial need, the judge observed:

it is important that a consideration of the financial needs of an applicant be assessed against the background of any moral claim and in light of all the relevant factors, including the size of the estate. Constance and Thomas’s business has wound down substantially because David’s health, their own health and the health of their other two children has meant that they have been unable to attend to their business. From the settlement of the proceedings... in 2007, they paid out substantial debts and are now using the remaining funds to support themselves. Their current savings are derived from this settlement sum, and are now in their family trust. They also own their family home, and have a property in their superannuation fund. This latter property provides them with some security for their future but it will not be enough in the long term, particularly if their business does not provide them with a viable income. Constance will also receive the property left to her by the deceased and that will assist with their long term security, but not necessarily with their ongoing daily living expenses.

Their financial situation leaves little room for indulgences or major expenses. At their ages and states of health, their working life is finite. Whilst they have been able to provide for themselves and their family in the past, their overall health and wellbeing for the present and in the future is uncertain. Their income earning ability is limited considering their circumstances. On her income and asset base, Constance will not be able to provide for the ongoing future costs of her treatment without selling some of the family assets which, in turn, would threaten their future financial security.^[47]

50 The judge took into account that Constance and Thomas had incurred substantial financial burdens due to the impact of the sexual abuse on David, noting that this had affected the whole family and their business. The judge touched on the psychological impact of the sexual abuse on Constance and other family members and concluded with her observation that all of them would require financial and psychological help in the future. [48] The judge surmised:

The financial needs of the plaintiffs for the foreseeable future are, in my view, significant as both plaintiffs have immediate and long term contingent needs concerning their wellbeing, health, emotional and psychological issues as a result of the sexual abuse. They will require ongoing treatment and support in order to attempt to overcome the serious issues caused as a result of their traumatic experiences. The costs of such treatment are impossible to quantify because of the nature of their problems, and not all of the problems will have emerged. Attempting to evaluate the costs in such uncertain circumstances is difficult but they will be reasonably high because of the seriousness of their problems, with the potential for long term or, perhaps, lifetime treatment.^[49]

51 The judge then referred to Phillip’s financial position and noted that he had not identified his future financial needs and did not disclose any debt.[50] She concluded that his financial resources appeared sound.[51]

52 Section 91(4)(i) of the Act required the Court to have regard to any physical, mental or intellectual disability of Constance or any beneficiary of the estate. In this regard, the judge noted that the health, wellbeing and disabilities of Constance and her son were significant and ongoing.[52] She stated that Constance had been severely impacted by David’s circumstances for a long time but had not spoken about her own abuse until recently.[53] The judge observed that Constance had received some counselling and would like to continue with it and that she would need ongoing treatment and psychiatric help in the short and long term.[54] The judge referred to the medical evidence concerning David and to the description of his psychological prognosis as ‘guarded.’[55] The judge also observed that Phillip had been diagnosed with schizophrenia in his early twenties but that there was no medical evidence of his health before the Court.[56]

53 Among other matters, the judge noted that Constance was 62, that she had been a dutiful daughter caring for Abigail during her lifetime.[57] She also referred to the $100,000 loan that Abigail had advanced to Constance and the gift of $200,000.[58]

54 Under the heading ‘any other matter the Court considers relevant,’[59] the judge considered the sexual abuse of Constance and David, Abigail’s knowledge of it, her silence about it and her support of her husband on this issue. The judge found that the sexual abuse had occurred (a fact which Edward accepts on appeal but which he disputed before the trial judge).[60] The judge found that Abigail and her husband had told Constance that she would receive an equal share of the family wealth. The judge stated:

These statements and promises were made many times over the years, some in the presence of Thomas, and reiterated that the estate would be divided equally between Constance and her brothers. Both John’s will and the deceased’s will made on 25 June 1990 (the ‘June 1990 will’) are consistent with these statements and promises. They were made by John and the deceased and were part of the price for Constance remaining silent about John’s abuse of her. Thomas was made similar promises for carrying out work and assisting the deceased and John. Based on these statements and promises, Constance expected her mother to treat her three children equally.

The statements and promises made by the deceased and John concerning an equal share of the family wealth do not and cannot support a legal obligation to provide for an applicant. They are not in the nature of a contract. The freedom of testators to dispose of their assets as they wish has been affirmed time and time again. However, by its very nature, testator’s family maintenance sits somewhere between the realms of legal liability and moral liability. The expectation that Constance would be provided for on an equal basis to that of her brothers and that she should remain silent about the sexual abuse cannot but take on an enhanced moral character after the deceased changed her will leaving Constance an unequal share of her estate.^[61]

55 The judge noted that Edward accepted that Abigail had a responsibility to make provision for Constance. His case was (and remained on appeal) that Abigail did provide adequately for Constance’s proper maintenance and support. The judge rejected that submission. She stated that that was only one aspect of Constance’s claim and continued:

In support of her claim for further provision for her proper maintenance and support, Constance also relies on the statements and promises made to Constance and Thomas by John and the deceased that the family wealth would be shared equally between Constance and her brothers. Edward submitted that these were not promises made and acted upon and that, with time, circumstances change and there was no requirement that the deceased had to treat her children equally.

Although the expectation raised by both John and the deceased is not such that it can be enforced by way of proceedings under Part IV of the Act, the circumstances in which the statements and promises were made significantly colour and enhance the deceased’s moral responsibility to Constance, particularly in treating her children equally. ^[62]

56 The judge observed that of the three siblings, it was only Constance who was named in cl 7 of the Will (that is that during her lifetime, she and John had made adequate provision for Constance); that the Will had been made after David had reported his grandfather’s conduct to the police (with Constance supporting her son in taking this action); that making less provision for Constance was contrary to the provisions of the earlier wills of Abigail and John which had provided for the three siblings equally.[63] In the judge’s view, Abigail was punishing Constance. The judge stated:

Whilst the sexual abuse was committed by John and was wrong and abhorrent, the deceased’s subsequent conduct towards Constance was also wrong and abhorrent. The deceased knew of her husband’s abuse of Constance yet remained silent about it. Although there may have been many reasons for the deceased not reporting the abuse, the effect of her silence protected her husband and not her young teenage daughter. She could not or would not stand up to her husband and she feared the family wealth would be at risk if she did take any action to report him. The deceased should have recognised that Constance would suffer consequent emotional and psychological damage caused by the sexual abuse. In extracting Constance’s silence about the abuse and failing to protect her, the deceased owed Constance a significant moral duty.^[64]

57 The judge concluded that Abigail had a responsibility to make further provision for the proper maintenance and support of Constance.[65] The judge then considered what that provision should be. In her Honour’s view, Abigail’s ‘moral obligation included that she keep her promises’ that Constance be treated equally with her brothers.[66] The judge noted that as there was effectively no residual estate, any additional provision for Constance would have to come out of her brothers’ share in the estate. She observed that Edward did not make any claim of financial need and that Phillip had been left two properties valued at $2.7 million, one of which he lived in, plus a half share in a third property valued at $775,000. In respect of this last property, the judge said:

If that property were given to Constance, she would then receive a one third share of the estate. Phillip’s inheritance still remains protected in that he will have his other two properties, giving him a secure home and a sizable nest egg for any future contingencies. In order to equalise the shares of the estate between Constance, Edward and Phillip, I will order that Property 5 be transferred to Constance.^[67]

58 The judge also considered that Abigail’s conduct had impacted on Constance and David’s need for provision ‘as it has caused them emotional, psychological and financial damage and deprived them of opportunities in life.’[68] The judge stated:

They should receive further provision for their future costs of attempting to remedy the emotional, psychological and financial damage caused by the deceased’s failure in doing nothing about the sexual abuse of Constance and David, in protecting her husband and remaining silent about the abuse. That provision is to enable both of them to obtain professional advice and assistance to address their ongoing emotional and psychological issues, as well as contribute to their financial welfare, for the immediate and long term future.

These costs are difficult to evaluate because not all of the ramifications arising from their circumstances can be known and it is not clear how long the assistance will be required. Considering the severity of their situation and its traumatic aspects, I consider that Constance should receive further provision in the sum of $100,000. In making this further provision of $100,000 over and above receiving Property 5, I take into account that Constance will have the benefit of the property to assist in her expenses for professional advice whilst having financial security for the future with her assets already owned with Thomas and the property received outright from the deceased.^[69]

59 The judge determined that additional provision of $175,000 should be made for David.[70] Both that amount and the $100,000 to be paid to Constance were to come from Property 1 (which was devised to Edward) with a charge on that property to ensure payment of that amount.[71]

Proposed grounds of appeal

60 There are five proposed grounds of appeal. They are that the judge erred in:

(1) finding that Abigail had a responsibility to make further provision for Constance because she has been adequately and properly provided for when regard is had to her existing financial resources;

(2) finding that Abigail had promised Constance that the family wealth would be shared equally between the three siblings on the basis that such promises were made as part of the price for Constance remaining silent about her father’s abuse and there was no evidence to support that conclusion;

(3) in concluding that by transferring Property 5 to Constance she was equalising the distribution of the estate between the three siblings;

(4) in awarding Constance the further sum of $100,000 as a contribution to future costs attempting to remedy the damage caused by Abigail extracting Constance’s silence about the abuse and failing to protect Constance; and

(5) in ignoring the financial contribution that Edward and Phillip made to the acquisition of the two shops.

Did Abigail make adequate provision for Constance? (Grounds 1 and 4)

61 Edward did not dispute that Abigail had a responsibility to make provision for Constance. Rather, the focus of Edward’s attack was on the sufficiency of the provision that had been made. Edward observed that it is not part of the legislative framework to compensate for damage caused and that this is even more stark when the deceased is not the person who caused any damage. Yet, in Edward’s submission, in substance the sum of $100,000 to be paid to Constance represented compensation for loss rather than adequate provision for proper maintenance and support. In short, Edward contended that although the question of ‘need’ is relative, when regard is had to Constance’s financial position, adequate provision has been made for her. He contended that the Court must have regard to the asset pool in the estate, the resources of Constance and Thomas and the other calls on the estate, including the contribution that Edward and Phillip had made to the acquisition of the two shops. In his submission, once a person has a certain level of assets such that they can look after themselves, then they fall outside Part IV of the Act. Here he says that if account is taken of the assets in the family trust and superannuation fund, Constance has assets in excess of $5 million and that is sufficient, particularly having regard to the income earning capacity of some of those assets. Edward submitted that the effect of the judge’s orders was to increase Constance’s wealth to more than $6 million.

62 Edward submitted that Constance had the burden of establishing that adequate provision had not been made for her from Abigail’s estate and she had failed to discharge that burden. Edward was critical of the lack of evidence by way of tax returns and other documentation (including financial documentation) concerning Constance’s financial position and need (including the costs of any ongoing treatment).

63 Edward contended that the judge did not address Constance’s true asset base and had not embarked upon an analysis of the income earning capacity of Constance’s assets. In particular, he contended that the judge had not taken into account that there is an investment property in the family trust, shares in the superannuation fund worth between $600,000–800,000, the rental that Constance is entitled to from Property 2 (including accumulated rental of about $45,000) and the $150,000 that Constance received from the Lifeplan policy. Moreover, Edward submitted that if the assets available to Constance had not been put to use in earning income, that was not something that should be visited upon Abigail. In this regard, he observed that if the family home was excluded, there were assets worth about $4.5 million available to Constance to invest, including investment properties and cash. Consequently, Edward contended, Constance has more than she needs for her proper maintenance and support.

64 Dealing first with Edward’s criticism of the evidence, this is not a case where there was no or only scant evidence as to the financial circumstances of Constance and her family.[72] Rather, there was sufficient evidence to enable the judge, doing the best that she could, to make an assessment of Constance’s financial circumstances and need. The judge correctly identified that the direct and indirect impact of dealing with the abuse to which she was subjected had affected Constance’s ability to attend to the family finances.[73] It is unsurprising that in those circumstances the evidence was limited. That being the case, the judge did not engage in any detailed analysis of the income earning capacity of some of the family assets, nor would one expect her to do so. Nevertheless, she referred to those assets. It is most unlikely that she did not consider that income could be derived from them. It was not necessary for her to make a finding as to the exact amount of income being earned from the assets, nor to speculate as to exactly what income might be earned. The judge referred specifically to Property 2 (about which there was information, including as to the rental). Given the amount of rental from that property, the judge was able to conclude that whilst it would assist with the long term security of Constance and her family, it would not ‘necessarily’ assist with their ongoing daily living expenses.[74]

65 In oral argument, counsel for Constance submitted that it is not necessary for an applicant for relief under s 91 of the Act to establish ‘need.’ I do not agree. The Victorian authorities make it clear that establishing need was essential under the Act as it stood.[75] The authorities relied upon by Constance concern different legislative provisions.[76] In those cases, the relevant statutory provisions referred to adequate provision being made for the proper maintenance, education or advancement in life of the claimant.[77] Naturally what is said in those authorities is affected by the particular statutory language in question. For example, in Lloyd-Williams v Mayfield, Bryson JA (Giles JA and Stein AJA agreeing) said that it was appropriate to look beyond needs because the ‘concept of advancement in life can take consideration well beyond needs.’[78] On the question of whether ‘need’ must be shown, I do not find the authorities relied upon by Constance of assistance.

66 As noted previously, the question of need is relative. So too is whether the provision that has been made is adequate for the proper maintenance and support of Constance. Those matters were to be assessed in light of all the circumstances having regard to the factors in s 91(4)(e)–(p). It is not a case of looking in isolation at the value of the assets that the claimant has and deciding whether the person has enough to get by on whether comfortably or otherwise. Rather, the claimant’s assets and income are just two facts that go into the melting pot in determining whether there has been adequate provision made. Another important element for this consideration is the size of the estate. If there is more money to go around, then that will affect what is adequate for the proper maintenance and support of the claimant.

67 Leaving to one side any moral culpability on the part of Abigail, the fact is that Constance and her son were sexually abused. This has led to Constance having a significantly greater financial need than may otherwise have been the case. Abigail must be taken to have been aware of this need at the date of her death. A wise and just testator in the position of Abigail would have recognised this need and have made provision for it in her Will taking into account the size of the estate that she would bequeath and the other calls on it. Viewed in this way, one can see that Constance is not being compensated for some wrongdoing of Abigail or her husband but rather that the estate is responding by providing the necessary financial support that would be expected regardless of any involvement of Abigail. That there may have been some connection between the conduct of Abigail and the effect that the sexual abuse had on Constance only serves to heighten the moral obligation that the wise and just testator would be under to provide for a daughter such as Constance.

68 Instead of giving such support, in her last Will Abigail ignored her moral obligations and reduced the bequest that her daughter would have received under her earlier 1990 Will. That it was her intention to ignore her obligations was made clear by the reduced legacy and by cl 7 of the Will set out at [12] above which, as the jud[79] observed,79 only referred to Constance — not to either Edward or Phillip. In essence, as the judge observed, Abigail chose to punish Constance for supporting David in going to the police to [80]port John.80

69 The judge took into account all of the circumstances in the case and the relevant factors under s 91(4)(e)–(p). Her Honour was correct to find that adequate and proper provision had not been made for Constance. The pecuniary legacy of $100,000 ordered by the judge was just that. It was a further provision from her mother’s estate for the proper support and maintenance of Constance. It was not an award of compensation.

70 It follows that both grounds 1 and 4 fail.

Did the judge misapply the relevant principles by treating what was said by Abigail as part of the price paid for Constance’s silence about the sexual abuse and as an obligation to treat the three children equally? (Grounds 2 and 3)

71 Edward acknowledged that a promise made by a person during their lifetime is a relevant consideration under s 91 of the Act, particularly where the person to whom the promise has been made has acted to their detriment in relying on the promise. Here, however, Edward contended that Constance did not rely on any promise that her mother or father made.

72 Edward submitted that the judge had wrongly attached the tag that the promise was made ‘as the price for Constance’s silence.’ Edward contended that there was no basis for that label but that what the judge did as a consequence was to place too much emphasis on the promise when making the order that she did for further provision. He submitted that there is no evidence that Abigail extracted Constance’s silence about the abuse or failed to protect her. He contended that the statements made by Abigail and her husband were not linked to the sexual abuse. Rather, he says, they were made in the context of Constance and her husband having worked hard in assisting Abigail and her husband or when there was a general discussion about how the family wealth was to be distributed.

73 Turning to the statements by Abigail about protecting her own financial position and her children’s inheritance, Edward submitted that those statements were made in the context of violence by John towards Abigail. Edward contended that this had nothing to do with the sexual abuse of Constance.

74 Edward also sought to explain the following evidence given by Constance:

In or about 1969, my father had a mental breakdown and was involuntarily committed to a mental institution. While he was there, he asked my mother to tell the medical staff that he was ‘a good person’ and asked [Thomas] and I to say that he was ‘a good father’. I argued with my mother as I felt it was time we exposed the truth but she was anxious not to cause any further conflict with him and assured me he would change. His treating doctors were not told about my father’s true behaviour at home. My father was discharged from the institution after a few weeks and given anti-psychotic medication to contain his mood swings. However, once we returned home, he threw the medication in the bin and lied to the doctors about taking it as he considered he did not have a problem and did not need or want help.

75 Constance was about 15 at the time these events took place. Edward submitted that at that time, there was no issue about what would happen to the estate. That is, there was no link between a promise that Constance would receive a third of the estate and keeping silent about the abuse.

76 In short, Edward contended that the reason that Constance was silent about the abuse that she had endured was because she could not bring herself to do otherwise.

77 Senior counsel for Edward urged this Court to take into account that Abigail was an immigrant who had been in Australia for less than 10 years when John abused Constance. He described the family as patriarchal with Abigail being the subject of violence from her husband. He observed that once Constance told Abigail about her father’s abuse, Abigail spoke to her husband and the abuse stopped. In those circumstances, he contended that it was inappropriate for the judge to characterise Abigail’s conduct as ‘abhorrent’[81] and it had infected the judge’s reasoning.

78 In my view it is unfortunate that the judge described Abigail’s conduct in that way. Care should be taken in expressing strong views such as that in circumstances where Abigail did not have an opportunity to defend herself or her actions. It was not necessary to make that finding and, it seems to me, there is no proper foundation for it.

79 Leaving that to one side, I can see no error in the judge describing the promises as part of the price for Constance remaining silent about her father’s abuse of her.[82] Nor do I see any error in the judge describing Constance’s silence as having been ‘extracted.’[83] True it is that part of the context for the promises was that Constance and her husband worked hard to help Abigail and John. It is also true that the evidence did not disclose that Abigail or John ever explicitly said to Constance that if she remained silent, she would be rewarded by an equal share in the estate. But when all of the circumstances are taken into account, that was at least part of the subtext. Abigail placed great store in the value of silence when it came to protecting the family assets. For example, when she herself had been attacked by her husband, she kept silent and returned to the matrimonial home to ensure that he did not deprive her (and her children) of the property that they had acquired through hard work. She told Constance that she stayed with John for the sake of her children so that the family assets would one day go to them. The message seems clear — if you keep quiet, you will be rewarded with the fruits of the hard work of your parents. When regard is had to Abigail’s change of position from that she had adopted in her 1990 Will to that in her final Will, it can readily be seen that when Constance broke her silence (by supporting her son in reporting John to the police), the promise to leave her a third of the estate was broken. Part of the moral obligation that Abigail had was to keep that promise.

80 Edward observed that there is no requirement that parents treat their children equally. In any event, he noted that the effect of the judge’s orders was not to equalise the estate so that each sibling received the same. Rather, the effect was that the shares of Edward and Phillip were reduced.

81 The value of the real property in the estate is almost $6 million.[84] In my view, the judge’s intention was to ensure that Abigail fulfilled the moral duty which in the circumstances was informed by the promise as to what Constance would receive; that is Constance would receive a third of the estate. In effect, that is what her Honour’s orders achieved by the transfer of Property 5 to her for she is now the recipient of just over $2 million worth of real property.[85] The additional $100,000 legacy represented the extra amount that the judge thought appropriate to cater for Constance’s need for future treatment. The fact that this may reduce the amount that Edward receives is not a sufficient reason to deny Constance this legacy. He has no competing financial need and provision for Phillip (who does have competing need) was also taken into account by the judge.[86]

82 In my view, grounds 2 and 3 must fail.

Did the judge fail to acknowledge the contribution that the two sons made to the acquisition of the two shops? (Ground 5)

83 Edward contended that the contribution of approximately $6,750 that he and Phillip had made towards the purchase price for the two shops should have been, but was not, taken into account by the judge under s 91(4)(p) of the Act as another matter that was relevant. Edward submitted that given the contributions made by Edward and his brother, Abigail had a reason to leave Property 5 to them. Consequently, he argued, the judge should not have interfered with Abigail’s freedom of testation.

84 For the reasons given above, the Court’s jurisdiction to intervene and alter what was to happen with the estate was enlivened. Consequently, it was then open to the Court to make orders that would depart from what Abigail intended. That is not a wrongful interference with Abigail’s freedom of testation. The decision being discretionary, it is only if Edward showed error of the House v The King[87] type that this Court could intervene. No such error has been identified by Edward. Edward did not contend that he had any competing need. Consequently, so far as the bequest of an interest in Property 5 to him is concerned, there is no basis for complaint. Insofar as his brother is concerned, the judge was alert to his needs and was of the view that his position was protected.[88] I can see no error in that conclusion.

85 In my view, ground 5 fails.

Conclusion

86 Whilst the appeal had a real prospect of success such that leave to appeal should be granted, for the reasons given, I would dismiss the appeal.

Kaye JA:

87 For the reasons stated by Ferguson JA, I agree that leave to appeal should be granted, and the appeal dismissed.

Attachment – Family Tree

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^[1] Throughout these reasons pseudonyms have been used for each of the parties and their relatives to ensure that there is no possibility of identification. The pseudonyms are the same as those used by the judge in Smith v Jones [2015] VSC 398 (‘Reasons’) which is the subject of this appeal.

^[2] The provisions of the Act were amended by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 with effect from 1 January 2015. These reasons refer to the provisions of the Act in force at 14 February 2012, that being the date of death of Abigail.

^[3] At trial, Edward did not accept that Constance was sexually abused by their father. Edward does not challenge the judge’s finding that Constance was sexually abused.

^[4] At the time of the trial, the rental income was about $18,000 to $19,000.

^[5] Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 (‘Pontifical Society’) 19 (Dixon CJ, McTiernan J agreement); Blair v Blair [2004] VSCA 149; (2004) 10 VR 69 (‘Blair v Blair’), 76 [15] (Chernov JA) 84 [39] (Nettle JA) 84 [42] (Hansen JA); Grey v Harrison [1997] 2 VR 359 (‘Grey v Harrison’), 363 (Callaway JA) 360 (Tadgell JA) 361 (Charles JA).

^[6] As noted elsewhere in these reasons, the legislation has since been amended.

^[7] The Act s 91(1).

^[8] The Act s 91(3).

^[9] The relevant factors are now set out in s 91A(2)(a)–(m) of the Act. The legislation now provides that the Court may have regard to those factors. At the relevant time, the legislation provided that the Court must have regard to those factors.

^[10] The Act s 91(4)(f).

^[11] The Act s 91(4)(g).

^[12] The Act s 91(4)(h).

^[13] The Act s 91(4)(k).

^[14] The Act s 91(4)(i).

^[15] The Act s 91(4)(l).

^[16] The Act s 91(4)(p).

^[17] Pontifical Society 19 (Dixon CJ, McTiernan J agreement); Blair v Blair 76 [15] (Chernov JA) 84 [39] (Nettle JA) 84 [42] (Hansen JA); Grey v Harrison 363 (Callaway JA) 360 (Tadgell JA) 361 (Charles JA).

^[18] The Act s 91(2).

^[19] The Act s 91(1).

^[20] Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, 199-205 (‘Vigolo v Bostin’), [11]–[25] (Gleeson CJ), 229–230, [117]–[121] (Callinan and Heydon JJ); Collicoat v McMillan [1999] 3 VR 803 (‘Collicoat’), 815–819 [36]–[45] (Ormiston J); Blair v Blair 75–76 [13] (Chernov JA), 84 [40]–[41] (Nettle JA) 84 [42] (Hansen AJA); Lee v Hearn [2005] VSCA 127; (2005) 11 VR 270 (‘Lee v Hearn’), 273 [4] (Callaway JA), 286 [55] (Batt JA), 286 [57] (Buchanan JA). This is now encapsulated in the amended wording of the Act: s 91(4)(a).

^[21] Re Allen; Allen v Manchester [1921] NZGazLawRp 155; [1922] NZLR 218, 220–221; Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 478–9; Vigolo v Bostin, 200–201 [15]–[17], 202 [21] (Gleeson CJ), 229–230 [118], [121] (Callinan and Heydon JJ); Collicoat 818 [43] (Ormiston J); Blair v Blair 84 [41] (Nettle JA); Lee v Hearn 273 [4] (Callaway JA); MacEwan Shaw v Shaw (2003) 11 VR 95 (‘MacEwan Shaw’), 101 [26].

^[22] In re Hodgson [1955] VicLawRp 77; [1955] VLR 481, 485 (Herring CJ).

^[23] Blair v Blair 79 [22] (Chernov JA) 84 [39] (Nettle JA) 84 [42] (Hansen AJA).

^[24] Collicoat; MacEwan Shaw 117 [195], 120 [213].

^[25] Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 497 (Gibbs J, Stephen and Mason JJ agreeing).

^[26] Blair v Blair 79 [22] (Chernov JA) 84 [39] (Nettle JA) 84 [42] (Hansen AJA).

^[27] Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134, 148 (Gibbs J, Mason and Aickin JJ agreeing).

^[28] Re Bull; Bentley v Brennan [2006] VSC 113 [30]–[31].

^[29] Reasons [86]–[90].

^[30] Ibid [101]–[105].

^[31] Ibid [106]–[111].

^[32] Ibid [108]–[109].

^[33] Ibid [109].

^[34] Ibid.

^[35] Ibid [110].

^[36] Ibid [111].

^[37] Ibid [116].

^[38] Ibid [117]–[120], [122].

^[39] Ibid [121].

^[40] Ibid [123]–[142].

^[41] The Act s 91(4)(e).

^[42] Reasons [145].

^[43] Ibid.

^[44] The Act s 91(4)(h).

^[45] Reasons [149].

^[46] Ibid [150].

^[47] Ibid [151]–[152].

^[48] Ibid [153].

^[49] Ibid [155].

^[50] Ibid [156].

^[51] Ibid.

^[52] Ibid [157].

^[53] Ibid.

^[54] Ibid.

^[55] Ibid.

^[56] Ibid.

^[57] Ibid [160–[161].

^[58] Ibid [163].

^[59] The Act s 91(4)(p).

^[60] Reasons [167]–[180].

^[61] Ibid [181]–[182].

^[62] Ibid [185]–[186].

^[63] Ibid [188]–[191].

^[64] Ibid [193].

^[65] Ibid [203].

^[66] Ibid [205].

^[67] Ibid [206].

^[68] Ibid [207].

^[69] Ibid [207]–[208].

^[70] Ibid [209].

^[71] Ibid [211].

^[72] Collicoat 820 [47].

^[73] Reasons [150]. See [48] above.

^[74] Reasons [151]. See [49] above.

^[75] Collicoat 820 [47]; MacEwan Shaw 117 [195],[213]; Blair v Blair 79 [22] (Chernov JA) 84 [39] (Nettle JA) 84 [42] (Hansen AJA).

^[76] Bowyer v Wood [2006] SASC 96: Inheritance (Family Provision) Act 1972 (SA) s7(1); Lloyd- Williams v Mayfield [2005] NSWCA 189; (2005) 63 NSWLR 1 (‘Lloyd-Williams v Mayfield’): Family Provision Act 1982 (NSW) s 7 – [32]. See also Lee v Hearn Callaway JA [5] as to the requirement to attend to the language of the statute.

^[77] In Vigolo v Bostin, the statute referred to adequate provision being made for the ‘proper maintenance, support, education or advancement in life.’

^[78] Lloyd-Williams v Mayfield [32] (emphasis added).

^[79] Reasons [188].

^[80] Ibid [191].

^[81] Ibid [193].

^[82] Ibid [181].

^[83] Ibid [193], [199].

^[84] See [9] above.

^[85] Property 1 was valued at $1.23 million and Property 5 at $775,000 making a total of $2.005 million. The proceeds of the Lifeplan policy have been shared equally between Constance, Edward and Phillip.

^[86] Ibid [206].

^[87] [1936] HCA 40; (1936) 55 CLR 499, 504–5 (Dixon, Evatt and McTiernan JJ).

^[88] Reasons [206]. See [57] above.