In this edition:

  • Solicitors’ duties to disappointed beneficiary
  • Forfeiture rule - conviction of defensive homicide
  • TFM/Family Provision – Claim by De Facto Partner
  • TFM/Family Provision – Claims by Grandchildren

Solicitors’ duties to disappointed beneficiary

Howe v Fischer [2014] NSWCA 286

This case concerned an elderly lady who gave will instructions to her solicitor, but died before a formal will could be prepared.

The solicitor Mr Howe attended her property to obtain instructions on 25 March 2010. They agreed that Mr Howe would draft a new will and return to visit Mrs Fischer in the week after Easter. Mrs Fischer agreed as she wished to have her son present on that occasion, and the dates suited his attendance.  Unfortunately, Mrs Fischer died on 6 April 2010, before a new will had been made.

The deceased’s son, Mr Fischer, sued Mr Howe for damages as a disappointed beneficiary.  At first instance, the Supreme Court of New South Wales found the solicitor Mr Howe was negligent and liable for damages to Mr Fischer.  Mr Howe appealed, and in this judgment, the Court of Appeal upheld an appeal in favour of Mr Howe.

The Court of Appeal held that the retainer did not extend beyond the preparation of the will. The evidence did not support the conclusion that there was a “not insignificant risk” that Mrs Fischer might lose her testamentary capacity before the scheduled return visit, or that the appellant knew or ought to have known about this risk.  Mr Howe was not responsible for the delay in the preparation of a formal will, as Mrs Fischer had expressly agreed to the scheduled visit which accorded with her desire that her son attend the meeting.  Therefore, there had been no breach of duty and judgement was entered in favour of the solicitor.

This case is a warning to solicitors and will-makers to consider signing the solicitor’s will instructions as an “informal will”, as a precaution where there is a chance that the will-maker may lose testamentary capacity before a formal will can be prepared.

Forfeiture rule - conviction of defensive homicide

State Trustees Ltd v Edwards [2014] VSC 392 (Re Edwards)

The Supreme Court of Victoria has considered the rigidity of the forfeiture rule in a recent case where the deceased died at the hands of his wife, Mrs Edwards.

The relationship between the deceased husband and his wife, Mrs Edwards, was characterised by domestic violence. The husband began acting violently towards her in 1999, and the violence was frequent and ongoing. Mrs Edward’s mental health declined and at the time of hearing, she suffered from anxiety and depression and was bipolar.

On the day of the incident, the deceased was drunk and threatened to set Mrs Edwards on fire to disfigure her. Mrs Edwards panicked in the moment and fired a spear gun at the deceased (which he had used it on her in the past). When the spear bounced off the deceased, he became extremely wild and angry and came towards Mrs Edwards with a kitchen knife. A struggle ensued and Mrs Edwards eventually grabbed the knife and stabbed the deceased.

Mrs Edwards pleaded guilty to defensive homicide on the basis that she believed her conduct to be necessary to defend herself from the threat of death or really serious injury.

Generally the forfeiture rule prevents a killer from taking a benefit brought about as a direct result of that killing. The question before the Court in this case was whether the rule is absolute or whether the Court has discretion not to apply the rule.

The Court determined that there was no discretion as to whether or not to apply the forfeiture rule. The forfeiture rule is unable to be modified to accord with what a particular judge thinks fair in all the circumstances. Mrs Edwards killed the deceased in circumstances that, but for her belief that it was necessary to defend herself, would have constituted murder. It followed that Mrs Edwards forfeited her interest in the deceased’s estate and it therefore fell on intestacy. The Court ordered that the estate be distributed to the deceased’s daughter as his surviving next of kin (after Mrs Edwards).

The Victorian Law Reform Commission conducted a review of the forfeiture rule earlier this year. The Commission’s report was tabled in the Victorian Parliament on 14 October 2014, recommending that certain offences that have a low level of moral culpability and responsibility be excluded from the scope of the rule.  To view the report, click here.

TFM/Family Provision – Claim by De Facto Partner

Poole v Barrow (2014) VSC 576

Geoffrey Barrow died intestate in 2012 and left an estate valued at $1,520,000.  He was survived by his daughter and his de facto partner of thirty two years.  Under the intestacy provisions, his daughter was entitled to $947,000 and the “widow” was entitled to $573,000.  Both had a loving relationship with the deceased.  The widow sought an order for further provision.

The widow had received $1,000,000 from the deceased’s superannuation.  She had already spent a substantial portion of that money prior to trial.  However, the widow was unable to explain where or how she had spent this money; rather she submitted the death of her partner was extremely emotionally challenging and that she was confused about her spending

McMillan J made some interesting points in her judgment:

  1. The general obligation of a deceased to his widow has often been said to be at least to ensure that she has a roof over her head.  That roof has been provided in various ways, e.g. matrimonial homes absolutely; sufficient funds to purchase another suitable residence; a life interest in a property; or a mere right of occupancy.
  2. Where a plaintiff has caused their own financial difficulties, it may reduce the moral obligation of the deceased to provide for those difficulties.  Furthermore, evidence that a plaintiff has a record of ‘squandering money’, or is a ‘problem gambler’, or is ‘penurious owing to their own lifestyle choices’, may influence whether a Court order money or property to be held on trust or upon a life interest.
  3. The Court should not make greater provision for a plaintiff simply because the beneficiaries are in a comfortable financial position.  To argue that the wealth of a beneficiary should count against them in the balancing act of moral obligations, misconceives the principles to be applied in this jurisdiction, directed to correcting abuses of testamentary freedom and not to the rewriting of the will as a whole.

McMillan J held that in failing to provide secure accommodation for the plaintiff, the deceased had not made adequate and proper provision for her.  McMillan J ordered the plaintiff was to have a life interest in the matrimonial home, with the option to sell the property if the property became unsuitable and to use the net proceeds of any sale to go towards alternative accommodation

TFM/Family Provision – Claims by Grandchildren

Two cases recently decided in the Victorian Supreme Court involved applications by grandchildren.

In both Re Davies (2014) VSC 248 and Feehan v Toomey (2014) VSC 488, the deceased had omitted to make provision for grandchildren whose parent had predeceased the will-maker. In Re Davies, McMillan J ordered further provision totalling $400,000 to each plaintiff. However, McMillan J dismissed the plaintiff’s claim in Feehan v Toomey.

The distinguishing factors between the two cases were the age and financial needs of the plaintiffs and the size of the deceased’s estate.

In Feehan v Toomey (2014) VSC 488, the estate was valued at $831,257.53 as at the date of death.Whilst the grand-daughter had a modest income of $51,000 per annum combined with various debts, rental expenses and two children, McMillan J found she was not ‘living in any real poverty’.  Her Honour also questioned the relevance of her children’s school fees in her submission as these are ‘discretionary’ costs.   In the end, McMillian J found that deceased’s will was not ‘callous and cruel, but was simply the exercise of her freedom of testation.’

Re Davies (2014) VSC 248 involvedan application by the deceased’s two grandsons, aged 15 and 17, seeking further provision from the deceased’s estate of $2,451,766.92.  Their father had predeceased their grandmother.  The will-maker left $10,000 to each of her three grandchildren, $12,000 to a charity and the residuary estate to her surviving son Stuart.

McMillan J found that the plaintiffs suffer from significant health and psychological issues largely as a result of their father’s death by suicide.  Evidence provided by the psychologist suggested these issues will likely be long-term, treatment is likely to be expensive and will likely affect employability in the future if they are not dealt with adequately. While McMillan J stated the responsibility to provide is on the parents and not the grandparents of the plaintiffs, the fact that their father had predeceased their grandmother was a relevant factor here.

Furthermore, unlike Feehan v Toohey, in this case McMillan J considered the previous wills made by the deceased were a relevant consideration.  Her Honour found that the deceased’s penultimate will, raised an expectation that the plaintiffs would be provided for.

McMillan J awarded each plaintiff $200,000 for their immediate short term needs and a further $200,000 each to be held in trust until each of them attain the age of 28 years.