The Facts
Husband and wife divorce after 19 months of marriage
Dr and Ms L met in 1984 when he was practicing as a GP and she was his patient. Shortly after meeting, they commenced a relationship and their daughter was born in 1986.
Dr and Ms L married in 1988. However, the relationship was short and they separated in 1990, after 19 months of marriage.
Family Court proceedings were commenced in April 1992 and the property settlement was finalised in December 1992, with Ms L receiving 38% of the property pool.
The divorce was finalised in 1995.
Husband dies without leaving will and estate goes to daughter
Dr L died in June 2014, about 24 years after separating from Ms L. He did not leave a will, but did leave behind an estate worth $5 million.
At the time of his death, Dr L was estranged from his daughter, whom he had not seen in 13 years.
Following the grant of administration by the Supreme Court, the estate was distributed to the daughter under the rules relating to the distribution of an estate on intestacy.
Ex-wife successfully claims for family provision and daughter appeals
Ms L made a claim against her ex-husband’s estate under the NSW Succession Act 2006 (“the Act”), which allows a former spouse to make a family provision claim against an estate.
At the time, Ms L’s financial circumstances were poor, with her main source of income being the disability support pension that she had been receiving since being injured in a car crash in 2000. She also had ongoing health problems, including diabetes and chronic pain, as well as restrictions from the spinal injuries she had suffered in the car accident.
In 2017, the Supreme Court ruled in favour of Ms L and awarded her $750,000 out of her ex-husband’s $5 million estate.
The daughter made an application to the NSW Court of Appeal to appeal this decision.
Expert commentary on the court's decision
Court finds in favour of daughter, overturning $750,000 payment to ex-wife
In Lodin v Lodin [2017] NSWCA 327, the NSW Court of Appeal allowed the appeal of the daughter, Rebecca Lodin.
The court set aside the trial judge’s order that Rebecca’s mother, Ms Magdalena Lodin, receive $750,000 from the estate of her ex-husband, Dr Mohammad Masoud Lodin.
Former spouse can apply for family provision if factors warrant making of application
Under the section 57(1)(d) of the Act, a former spouse of a deceased person is eligible to apply for a family provision order.
Under section 59 of the Act, the court may make a family provision order in favour of that former spouse if three conditions are satisfied. One of these, as set out in section 59(1)(b), is that the court is satisfied that, having regard to all the circumstances of the case, there are factors which warrant the making of the application.
When do factors warrant a former spouse making an application?
The court laid out several propositions derived from previous caselaw that inform whether a former spouse has established that there are factors warranting the making of a family provision application.
While in most cases a final property settlement in the Family Court will terminate any moral claim of a former spouse to provision from the deceased’s estate, paramountcy will not always be given to the policy of a “clean break”.
The court found it difficult to see how a former spouse could establish that there were factors warranting the making of an application simply because the marriage once existed and now that person has unmet financial needs. This is so even if the estate is relatively large.
Something more is ordinarily needed, and because the facts of each relationship are unique, the circumstances which may give rise to a family provision claim will vary from case to case.
One factor which the court said is obviously relevant is the nature of the relationship between the ex-spouse and the deceased. In particular, it is relevant whether there were features of the relationship that created a moral obligation on the deceased to make testamentary provision for the ex-spouse.
Trial judge erred in concluding factors warranted making of application by ex-wife
The Court of Appeal found that the primary judge erred in concluding that there were factors warranting the making of Ms Lodin’s application.
First, the trial judge erred in finding that the “unbecoming” passing of the whole estate to the daughter, Rebecca, was a factor warranting the making of a family provision application.
The court said that a deceased person does not have “a moral responsibility to make testamentary provision for a former spouse simply because the estate is large and the sole beneficiary of the estate under the will or on an intestacy is a member of the deceased’s family for whom the former spouse had some responsibility”.
Secondly, the court found that it was not open to the primary judge to find that Dr Lodin was responsible for his ex-wife’s strained financial circumstances. Nor was it open to the judge to find that Ms Lodin’s persecution of Dr Lodin was due to a disability induced by his conduct.
According to the court:
Factors warranting making of family provision application not established
After finding that the trial judge erred, the court reconsidered the case.
The court concluded that the evidence did not establish factors warranting Ms Lodin’s application for a family provision order.
In arriving at this conclusion, the court considered a number of matters.
These included that the marriage was only short and ended 25 years before the hearing of the family provision claim.
The 1992 financial property settlement orders were also an important consideration counting against Ms Lodin’s claim. Dr Lodin had provided substantial child support for his daughter, as well as giving additional financial support over and above his legal responsibilities.
Ms Lodin’s financial circumstances were largely due to injuries sustained in motor vehicle accidents and her legal costs in pursuing Dr Lodin. The court said that Dr Lodin could not be said to have come under a moral duty to provide for her because of injuries entirely unrelated to their relationship.
Also, there was no evidence that Ms Lodin’s persecutorial behaviour towards Dr Lodin was caused by a psychiatric disability induced by Dr Lodin’s conduct. Therefore, her conduct counted against her establishing a moral duty owed by Dr Lodin.
Each family provision case is unique
The court emphasised that what a former spouse must show to establish the deceased’s moral obligation “cannot be defined with precision since all the circumstances have to be taken into account”.
Further, while some cases might be straightforward, other cases might involve more difficult evaluative judgment.
In the circumstances of this case, the court was not satisfied that Dr Lodin had a moral obligation to make testamentary provision for Ms Lodin.
The court, did, however, provide some examples of where the circumstances might suggest a moral obligation.
Although the size of Dr Lodin’s estate was not considered relevant, the court noted that the outcome might be different in circumstances where the deceased had failed to comply with child support obligations.
The court said that a former spouse might also establish a moral obligation on the part of the deceased where the parties, although divorced, had not reached a financial settlement prior to the deceased’s death.
Where the deceased physically or sexually abused the former spouse, causing him or her to suffer a disability and impairing the capacity to earn an adequate income, the court said that the former spouse might be able to establish a moral duty.
Ultimately, when considering whether a person might have a moral obligation to make testamentary provision for their former spouse, there are no absolutes and all the circumstances of the particular case have to be taken into account.