Inadequate Provision in a Will

October 31st, 2015

In February 2015, the Supreme Court, in the matter of  Mead v Lemon 2015  WASC 71, considered whether adequate provision had been made from the estate of the late Michael John Maynard Wright. The claim was made by the deceased’s daughter. The estate was estimated to exceed $1 billion.

The deceased was survived by his current wife Mary, three previous wives and three adult children.

The claim was made pursuant to section 7 of the Family Provision Act 1972 (WA) as well as section 6 of the Act which is as follows;

  If any person (in this Act called the deceased) dies, then, if the Court is of the opinion that the disposition of the deceased’s estate effected by his will, or the law relating to intestacy, or the combination of his will and that law, is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion, on application made by or on behalf of any such person, order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose.

In the application of this section, the courts follow the approach adopted by Malcolm CJ in Bondelmonte v Blanckensee [1989] WAR 305 is to be applied as follows;

“On an application under this provision two issues arise. The first question is whether the disposition of the estate by the deceased was not such as to made adequate provision for the proper maintenance, support, education or advancement in life of the claimant. This is in effect a jurisdictional question, which is to be determined at the date of death of the deceased: Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494. If that question be answered in the affirmative, the court in exercising its discretion to make such provision as it thinks fit, must take into account the relevant facts as they exist at the time of making the order: Coates v National Trustees Executors & Agency Co Ltd (supra); Dun v Dun (1957) 99 CLR 325 at 331; Goodman v Windeyer (1980) 144 CLR 490.”

To simplify the position, the deceased set aside a capital sum of some $3M in a trust for the plaintiff but there was a provision in the trust deed which could have eliminated her entitlement. Specifically, if the trustee considered her to be an Excluded Person then she would cease to be  beneficiary. An Excluded Person was defined to include the following;

  14.1 Any person …..who:

14.1.3 has become an alcoholic and/or whose capacity for rational behaviour in a competent and satisfactory manner has been impacted by alcohol;

14.1.4 has at any time suffered a conviction relating to drugs, their use or any other illegal association therewith in any recognised form;

14.1.5 is or has been in the opinion of my Trustees recently suspected or knowingly had any involvement or association whatsoever in relation to illegal drugs;

14.1.6 in the opinion of my Trustees has become a drug addict or become involved with illegal drugs in the manner described in the preceding subclauses as a result of the legal use of drugs fur any reason whatsoever;

14.1.7 is in the opinion of my Trustees a member of or in any other way involved with any religious body other than the Roman Catholic, Anglican, Presbyterian, Baptist, Uniting or other similar traditional faiths; or

14.1.8 has been convicted of a felony at any time after the death of Michael John Maynard Wright or within 10 years preceding the death of Michael John Maynard Wright,

Taking into account the size of the estate and the uncertainty surrounding the interaction between the deceased’s will and the Trust as well as the terms of the trust itself, the court had no difficulty concluding that the deceased did not make adequate provision for the plaintiff in his will.

As to the question of what provision should have been made, the court has a discretion to make such provision as it thinks fit. There are three factors; “the size of the estate, the needs of the plaintiff and the interests of other parties having a legitimate call on the bounty of the deceased”.

The award was increased to $25M being an amount described by the court in the context of the size of the estate, as “little more than a rounding error”.