Simonetto & Anor v Dick [2014] NTCA 4

The Northern Territory Court of Appeal considered whether a trial judge had made an error in determining that the deceased did not have a moral duty to provide for his two adult grandchildren.

The deceased died on 3 July 2010 leaving no provision in his Will for any of his grandchildren. He was survived by his daughter  and  her  three  adult  children  and the two adult children of his deceased son Paul, who died in 1995. The deceased’s Will stated  that  no  provision  had been made for Paul’s children because during his lifetime,  the  deceased  had  made  substantial gifts of real estate to his son which on his death had passed to Paul’s wife Margaret. The  deceased  also  owned  real  estate  in joint names with Margaret and it was his expectation that those assets would all pass to Paul’s children upon her subsequent death. On this basis, the deceased left his entire estate to his daughter.

Paul’s children applied under the Family Provision Act 1970 (NT) for provision from the estate of their grandfather. They were entitled to do so because Paul had predeceased their grandfather.

The grandchildren claimed that the deceased had a moral duty to provide for them on the grounds of their father’s contribution to building up the family estate. Throughout his working life, the deceased worked as a builder and property investor. After leaving school, Paul joined his father in the business and over the years, took an increasingly responsible role in the business activities. The deceased’s involvement decreased until his retirement in 1989 but the business continued to operate until Paul’s death in 1995. The business benefitted all family members and assets were acquired and held in various names without regard to who had contributed towards the cost of the acquisition of that asset. The deceased and Margaret did not have a good relationship which had deteriorated following Paul’s death. The grandchildren alleged that the relationship and estrangement with their grandfather was substantially, if not wholly, caused by him.

The trial judge could not find any evidence to find that the estrangement between the grandchildren and the deceased was in fact his fault. The winding up of Paul’s estate had been complex and difficult. A Deed of Settlement was executed in April 2000, which provided, among other things, that the deceased intended to deal with his assets in a fair and even handed manner between all of the grandchildren, taking into account benefits that had previously been provided to them.

The trial judge found that the grandchildren were not entitled to any provision from the deceased’s estate. On appeal, the Court of Appeal considered the size and nature of the deceased’s estate, the nature of the relationship between the grandchildren and the deceased, the relationship between the deceased and other family who may also have claims against the estate, the grandchildren’s financial position and the nature of the claims made by the grandchildren. The trial judge had required the grandchildren to establish that adequate provision was not available to them from anywhere or anyone else, including their mother. The Court of Appeal agreed that the financial position of Margaret was relevant as she could reasonably be expected to have direct responsibility to provide for her children’s needs as a parent. At the time of the deceased’s death, Margaret’s assets were worth approximately $1.7m.

The assets and income of the grandchildren was a relevant factor and their annual incomes which ranged between $65,000 and $214,000. The trial judge had found that the grandchildren were not forthcoming with details as to their financial interests and the provision of information as to relevant expenses or expenditure is a factor in the assessment of calculating adequate provision. This information was expected to be provided to the court as part of their obligation to full and frank disclosure. The Court of Appeal also agreed with the trial judge that there was no moral obligation upon the deceased to provide for the grandchildren and in the absence of special circumstances, there is no moral obligation upon a grandparent to make provision for the maintenance, support or advancement of grandchildren simply by virtue of such a relationship.

While there was estrangement between the grandchildren and the deceased, it was not established that that was due to the fault of the deceased and that the estrangement negated any moral duty that could have existed on the part of the deceased. Consequently, the appeal was dismissed, the grandchildren having not established that the deceased had any moral obligation to provide for them or that they should receive further provision from the estate.

Comment: Simply being aggrieved by a perceived failure of a moral obligation to be provided for in a Will overlooks the first and paramount jurisdictional question of whether an eligible claimant has adequate provision for their proper maintenance, education and advancement in life. As determined this will require an eligible claimant to lay bare their financial circumstances and resources before the court so as to determine this question.