Family provisions – “moral duty/claim"

The idea of freedom of testation is a relatively short-lived and flawed notion that as holders of property rights, such freedom to do with this property, we as citizens are entitled to do what we may with our assets during life and after death. This ideal of “freedom" of testation is a result of the gain and philosophical doctrine of property ownership amongst private citizens. With the revelations of Locke, Mill and Bentham, an individual’s rights vested in ownership of property allowed with it the control and by extension control to dispose of or rather distribute this property in any a manner that the owner so choose. Such right was an extension of the right of disposition inter vivos. Mill thought that:

‘The ownership of a thing cannot be looked upon as complete without

the power of bestowing it, at death or during life, at the owner’s

pleasure.’ [1] 

ORIGINAL TRADITION OF LINEAL INHERITANCE

The origin of the will can be traced back to early civilisation, and was seen as an entitlement to the family fortune. Dower, for widows, or Curtsey, for widowers, was an early version forced family provision made to surviving spouses. This entitlement ensured that the family unit could continue and any wealth in the family continues on. Since feudal times, the inheritance or succession of family property and heritage bound by lineage and legacy, was not too far from the powers found in the modern day Family Provisions Act, albeit legislatively structured and open to the interpretation of courts on a case by case basis. The notion of early succession law was that inheritance passes on his ‘bounty’ to whom he felt deserved it most (through their moral good behaviour). As such it was also a way for the testator to hold onto influence during his lifetime to ensure his dependants conducted themselves in a manner which was agreeable to the testator’s wishes. If automatic rights were given, there would not be necessary to aim to find advancement in life, safe in the knowledge of that family inheritance. Think of it as a form of family good behaviour bond. It was also a means to reward good behaviour and life choices and punish bad ones. [2] 

The traditional succession formula was calculated accordingly: One third to wife, one third to children, one third was free to dispose or referred to as ‘dead’ which was usually given to the church. In the event where the deceased is survived by only a wife or only children, the estate was divided into half shares [3] . Primogeniture or heirs-at-law was also a popular method of transferring of estate for many centuries. It allowed the passing on the family legacy to the first-born son. The alternative civil law systems in Europe like France and Germany understand that the protection of the family unit is an obligation which exists even beyond death as example above. Without a legislature which opens up disputes to a will like the FPA, the Europeans have fixed or forced shares which divide the deceased/testator’s estate into shared of which are designated to spouses and children. This however can have the effort of indiscriminately divides to those deserving and undeserving.

THE FIRST FAMILY PROVISIONS ACT

The first case of legislative Family Maintenance can be found in the landmark New Zealand bill which set up what is known today as family provisions in Australia, U.K [4] and Canada. Three bills were entered into Parliament before its initiation in 1900 by Robert McNab. The 1898 incarnation of this Bill stated:

‘Should any person die leaving a will, and without making therein due

provision for the maintenance and support of his or her wife, husband

or children the Supreme Court may ... order such provision as to the ...

Court shall seem fit shall be made ...’ [5] 

The resulting bills of which the 1900 Testators’ Family Maintenance Act was enacted finally went through Parliament on the basis that the court could refuse to make an order in favour of any person ‘whose character or conduct is such as, in the opinion of the court, to disentitle him or her to the benefit of an order.’ [6] Such disentitling behaviour is discussed below. The bill was quickly amended and finally became the Family Protection Act in 1908. This later act included an extension of time for which applications could be made, and the payment of provisions in the form of periodic or lump sum payments. Not long after Victoria, Tasmania and Queensland enacted similar Acts of which would form the foundation of the Family Provisions Acts used today [7] .

The Economic v Ethical Theory [8] 

During the contemplation of the initial Family Provisions Acts there was debate over the repercussions of altering a will and breaching the wishes of a deceased. This debate had two polar points, one being the economic theory and the other the ethical theory. An argument put forward for Family Provisions was that their outcome could relieve the State from the obligation of providing Social Security to disinherited, disadvantaged, widows and children. This is the economic theory which it can be argued then that a testator also has obligation in death to society as well as family, referring to their legacy after death and the impact of leaving dependants and spouses relying on the State welfare system and ultimately tax-payers. The ethical theory is the one which would seem much more familiar and will be discussed in this paper. The theory rests on the ethical complications of not providing for dependants and spouses after death. This position states that the ethical (moral) duty a testator has to his surviving family must be taken into account when administering a will, in a sense making it unethical to will away your entire estate to a non-family entity.

CONDITIONS OF APPLICATION UNDER FPA

The requisite conditions required for filing an application for provision under the Family Provisions Act 1982 is to first find if the applicant is eligible to do under as an ‘eligible person’ under s6. This section of the Act applies to the classification of which the applicant to be found. This includes spouses, children and any other dependants of the deceased. [9] 

After establishing an applicant’s eligibility, the Court then turns to “provision (if any) made in favour of the eligible person by the deceased person either during the person’s lifetime or out of the person’s estate… is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person [10] ."

This forms part of the Two Stage test set by the High Court in their decision in Singer v Berghouse [11] 

As terms ‘inadequate’ and ‘proper’ are not defined within the Act, these terms are ambiguous and because, on the issue of money, can cause a disparity amongst what is ‘adequate’ and ‘proper’ provision. In this event, there is the requirement of taking a subjective position in relation to what the testator ‘should’ have done. Section 9(3) of the Act requires that the Court have regard to anything at all that it considers to be relevant [12] .

Where the Court finds any provisions made to be inadequate, the next stage of the test is to decide what (if any) order for provision ‘ought’ be made [13] . The word ‘ought’ being even more subjective than ‘proper’ and ‘adequate’ poses another issue as to fulfilling the testators dying wishes. In dealing with such arduous interpretations, judges use the concepts of ‘moral duty’ and/or ‘moral claim’. In the early New Zealand case of Allardice v Allardice [14] , the presiding judge noted that the test of whether a deceased, whilst living, had acted in a way which was in ‘breach of that moral duty’ [15] to his or her surviving spouse and children after their death was the ‘moral test’ of such cases. This argument does not take into account the moral duty of which was performed during the testator’s life and his dealing with said surviving dependants. The test of true freedom of testation cannot be found to be true if even after death, there is a moral requirement for the testator to continue to provide for his/her dependants.

The Case of the ‘Moral Claim’

While there has been much debate over the powers of the Courts to decide such issues it was recently validated by a High Court decision in Vigolo v Bostin [16] . With this decision, the Courts had an established authority of which to rule FPA claims upon. This case involved an estate of approximately $1.9 million which was to be divided equally amongst the deceased four younger children. The applicant being the eldest of the siblings was excluded as a beneficiary of his father’s estate. However the applicant applying under a ‘moral claim’ to the estate, having assisted his father build up the estate in dispute, through his farming business was owed a duty to which was neglected in the deceased will. The Court however found that as the applicant was in a much greater financial position (assets worth approximately $1.5 million) than his siblings, through inter vivos contracts, the testator had made sufficient ‘proper maintenance and advancement in life’ for his eldest son. The issue of which decided the case was ‘need’ and who was in greater position of need.

DISENTITLING CONDUCT/BEHAVIOUR

The Family Provisions Acts set out to protect blood ties by taking into consideration many factors in deciding what is ‘adequate’ and ‘proper’ provisions for surviving family. The stronger the claim to the family fortune or need for provisions, the worse the conduct required to disentitle. There is a great moral obligation being handed down from the many judgements under the FPA and in it’s days of inception, “the Bill of 1900 included the proviso that the court could refuse to make an order in favour of any person ‘whose character or conduct is such as, in the opinion of the court, to disentitle him or her to the benefit of an order. [17] " This conduct is that of which is said to disentitle a beneficiary from additional provisions out of the estate. Disentitling conduct however in opposition to need must be quite heinous to forfeit the claim to family assets.

In the Victorian case of Herszlikowicz v Czarny [18] , the applicant, Mr. Herszlikowicz, was the youngest son of the deceased and had left what the applicant deemed was insufficient provisions. The plaintiff was found to have “a combination of mere foolishness, extravagance, excessive gambling... drug addiction, weakness of character and even moral turpitude attracting criminal convictions and penalties including a term of imprisonment." [19] He had had become estranged somewhat from his father over disputes regarding his conduct but was nonetheless in great need. Even in light of this damning character judgment, the judge was forced to consider the applicants financial and health condition in his ruling. He was awarded an extra $125,000 to be paid through trust. Such behaviours as drug addiction and imprisonment would normally deem a person unfit to work and travel let alone receive a benefit from the family estate. In the opposite circumstances found in Vigolo where the applicant was of decent character (in as much as he could amass a million dollar fortune) one would hope would be sufficient grounds to entitle a son to his family fortune. Although as Herszlikowicz shows (to a relatively minor extent) the worse character, the greater the claim to estate at the expense of other more deserving beneficiaries.

FAMILY vs. CHARITY

As discussed above, there are elements of behaviour and relationship which disentitle certain applicants from making successful claims to a deceased, however where do these gifts conferred on charities stand in relation to these claims? Is it possible for a system of family inheritance or succession to run concurrent with the notion of “freedom" of testation? The easiest way to understand the freedom a testator actually has in making his or her will can be distinguished by comparing gifts bequeathed to charities in a will and the effect family provisions or ‘moral’ claimants have on these gifts. Typically if a large portion of an estate is left to a charity, this gift may be the subject of action.

The case of Edwards v Terry [20] is an example of this being the case. In this case, the testatrix bequeathed the majority of her estate, 80% of the estate was donated to 2 separate charities, 5% to the executrix and the remaining 15% to her only child, an adult son aged 56. Edwards’ application for additional provision was allocated a share of 71% of the estate, with the executrix 5% leaving the charities a 24% share of the estate. The son gaining an extra 56% of the state at the expense of the charities. This in light of the fact that the son had a troubled relationship with his parents, which as well as assaults on both, included an A.V.O. against him. In consideration of the facts, the decision handed down by the presiding judge was a blatant destruction of the deceased will. Who would understand the need and position of the applicant better than the parents of the applicant?

The reasoning behind the decision was that the son’s condition, Attention Deficit Hyperactivity Disorder (ADHD) was adequate to forgive all indiscretions, including his violence, and this conforms to prior cases, which is clear as stated previously that a dysfunctional relationship with a parent does not necessarily disentitle an applicant to further provision. [21] Although the judge may have deemed his condition sufficient to forgive the applicant, it really is not his position to forgive him for his actions. Such are the issues in the altering in any way of a will made by a sane and cogent person.

CONCLUSION

In as much as the notional idea of freedom of testation seems like a logical extension of our individual property rights, the wealth generated within a family is indirectly forced to stay within those blood ties. The simple truth of freedom in testation is that it is a legal ideological fallacy.

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BIBLIOGRAPHY

Chesterman, Justice R N, 'Does morality have a place in applications for family provision brought pursuant to s41 of the Succession Act 1981?‘Speech QLS Annual Succession Law Conference, Sunshine Coast, 1 November 2008)

Hannah, Frances M. & McGregor-Lowndes, Myles (2008) From testamentary

freedom to testamentary duty: Finding the balance. Queensland University of Technology,

Liebhold, David, Relationship and moral claim after Nicholls v Hall (17 September 2008),

13 Wentworth Selborne Chamber

Mackie, Ken, Principles of Australia Succession Law, (2007), 1st ed, LexisNexis Butterworths.

[CASES]

Singer v Berghouse (1994) 181 CLR 201.

Vigolo v Bostin (2005) 221 CLR 191.

Edwards v Terry [2002] NSWSC 835.

Wheatley v Wheatley [2006] NSWCA 262.

Herlikowicsz v Czarny  [2005] VSC 354.