LSB July 2018_Web

WILLS & ESTATES
is “proper” and what is within a “moral
duty”, it appears that courts are quite
willing to interfere with a testator’s wishes,
meaning that applicants have a high chance
of success once they are eligible. There
were criticisms of this test. Whilst SALRI
ultimately recommended that the legal test
should remain as it is, it recommended that
a list of the relevant criteria for a court
to have regard to in the determination of
a claim under the Act should be added
to the Act. Factors would include, but
not be limited to, the reasons the testator
acted as they did when making the will,
claimant’s vulnerability and dependence on
the deceased, the claimant’s contribution
to the estate and a claimant’s character and
conduct. Such criteria will promote the
clarity and accessibility of the law as well
as providing timely guidance to not just a
court but succession lawyers, testators and
potential claimants under the Act.
SALRI heard of the extensive
implications arising from the complex
issue of costs in family provision claims
and it soon became evident that the
problem of costs is very closely related
to opportunistic and speculative claims.
There were many case examples provided
to SALRI of executors and relatives being
compelled to settle such opportunistic
claims in order to protect the estate from
further costs and delays. Many examples
were provided of cases where without
demonstrating need, even undeserving and
financially comfortable applicants were
able to walk away with $10,000 or $20,000
as “go away” money (some succession
lawyers used more colourful language).
It was often noted to SALRI that the
prohibitive costs of going to trial and the
uncertainty of outcome at trial means
that even speculative and opportunistic
claims are routinely (if reluctantly) settled
with the costs of the parties coming
out of the estate. Whether defended or
settled, these opportunistic claims result
in an unnecessary diminishment of the
estate size due to the excessive and highly
disproportionate legal costs that are usually
borne out of the estate. This is a particular
concern in small and farming estates.
Whilst SALRI recommended that the
current law relating to costs should remain
as it is, a number of recommendations
were made to deal with the problem
of costs. There was strong support in
consultation for a proactive and robust
pre-trial approach to be adopted by the
courts to build on existing measures.
SALRI’s recommendations included
providing the court with a specific power
to require either applicants commencing
claims or beneficiaries defending claims
under the Act to provide security for
costs in an appropriate cases; that further
measures be taken to promote and
enhance proactive, robust and timely
judicial mediation; a default loser pays
practice be adopted (rather than, as now
happens, costs routinely coming out of
the estate) and the introduction of a court
process to be adapted from the South
Australian Statutory Wills jurisdiction
under s 7 of the Wills Act 1936 (SA) into
the Act to expedite the process where an
application is not obviously without merit.
SALRI accepted that the issue of costs in
family provision claims should be largely
left to the court to resolve and was ill
suited for legislative intervention.
SALRI sought, as raised by Lady Hale
and others, to “distinguish between the
deserving and the undeserving” in this
area of the law and to balance between
respecting the testamentary freedom
of a deceased and allowing meritorious
claims from genuine claimants. SALRI
is grateful to the Law Society Succession
Law Committee and the many succession
lawyers who kindly contributed to this
reference.
Many people also expressed their
concerns during the consultation with
the role and operation of Powers of
Attorney and Advance Care Directives
and the financial exploitation of older
Australians resulting from the use of
these instruments. There appears to be
an opportunity for unscrupulous family
members to exploit other family members,
especially an elderly relative, through the
exercise of their powers. This exploitation
can continue over many years and there
is little recourse that can be taken against
the appointed attorney as a result of the
abuse of power as the person exploited
is generally mentally incapacitated, frail
and vulnerable and has a relationship of
trust with the attorney. There also appears
to be confusion and uncertainty in the
community about the role and operation
of these instruments and the relevant
legislation appears in need of review.
These issues did not fall within the scope
of SALRI’s family provision reference.
However, SALRI intends to look at the
diverse issues concerning both powers of
attorney and advance care directives in
another upcoming major reference.
With increased longevity, increasing
wealth, property values, compulsory
superannuation, ever more complex
and blended families and disputes and
changing social values and expectations,
succession lawyers are certainly in for
interesting times. It is important that the
law keeps up with these changes. B
Endnotes
1
Ilott v The Blue Cross [2017] UKSC 17, [49] (Lady
Hale). This case involved an estranged adult
daughter who brought a claim under the UK
family provision legislation against her mother’s
estate.
2 [2017] UKSC 17.
3 Ibid [62].
4 Victorian Law Reform Commission, Succession
Law, Final Report (2013); Queensland Law
Reform Commission, National Committee for
Uniform Succession Laws: Family Provision —
Supplementary Report to the Standing Committee
of Attorneys General, Report 58 (2004); New
South Wales Law Reform Commission, Uniform
Succession Laws: Family Provision, Report 110
(2005).
5 SALRI, Review of the Inheritance (Family Provision)
Act 2972 (SA) (Final Report 9), December 2017.
6 See, for example, Penfold v Predny [2016] NSWSC
472 (21 April 2016), [2] (Hallen J); Rosalind
Croucher, ‘If we could start again: Re-imagining
Family Provision Law in the 21st century’ (Paper
presented at the STEP Australia conference, 2–4
August 2017) 2.
7 Mark Minarelli and Russell Jones, ‘Family
Provision Claims in South Australia’ (Summer
Report, DW Fox Tucker, 2016) 19.
8 Inheritance (Family Provision) Act 1972 (SA)
s 7(1)(b).
July 2018 THE BULLETIN 35