The Facts
Son sues mother’s estate seeking “notional estate” order
A case heard in the NSW Supreme Court of Appeal concerned a 43 year old electrician who sued his late mother’s estate. In her will, she gave everything to her husband (the man’s stepfather) and, in the event of both dying, equally to all of their children. The joint assets were worth in the vicinity of $3 million, meaning that the deceased mother’s share was approximately $1.5 million.
All assets were held in the mother and stepfather’s joint names, meaning that the jointly held assets would transfer directly to the husband. The deceased mother had two sons to a previous relationship, while her husband had two daughters to a previous relationship. They were a blended family and had one child of their own relationship.
Son not able to bring claim against stepfather’s estate in future if cut out of will
As current NSW laws prevent a stepchild bringing a claim against a stepparent’s estate (without additional factors such as being a member of the household and being wholly or partly dependent upon the stepparent), the risk was that the stepfather might change his will in the future to cut the man out of his mother’s estate.
Seeking to guarantee some of his inheritance, the man brought a claim and asked the court to make a “notional estate” order to reflect the joint assets. The court of appeal agreed that the man, as a biological child of the deceased, had standing to bring the claim.
Expert commentary on the court's decision
Son failed to demonstrate and quantify need to build up superannuation benefits
In the case Bates v Cooke [2015] NSWCA 278, the appeal by the son, Mr Bradley Bates, was dismissed. The court considered section 59 and section 60 of the Succession Act, which set out when a family provision order may be made over a deceased estate and the matters that are to be considered by the court.
The judges found that the son had failed to prove that his mother had not provided adequately for his “proper maintenance, education or advancement in life”.
The son’s entire case rested on his claimed need to build up his superannuation benefits. However, the evidence to demonstrate and quantify that need was described by the Court of Appeal as “scanty”.
Ultimately it was held that community standards would not have required his mother to make provision for him to build up his superannuation.
Son’s circumstances and stepfather’s intention to honour agreement with deceased
The features the primary judge took into account were the appellant’s age, his employment status, his good health, the absence of dependants, the manageable mortgage, the ability of his spouse to seek employment if she wished and their superannuation entitlements.
The primary judge also took into account that he was satisfied that the stepfather, Mr Robert Cooke, intended to honour the (unenforceable) agreement with the deceased – that is, his will – that their combined estate should ultimately pass to the five siblings equally.
Errors in calculation of projected growth of superannuation fund
The Court of Appeal also noted they would have dismissed the appeal on the basis that the son’s calculations regarding the need for further provision were flawed. The appeal judges identified at least six mistakes in the son’s calculations of the projected growth of his superannuation fund over the following 22 years.
This included the assumption of a very low interest rate being applied to the superannuation fund, an incorrect wage percentage for employer contributions and calculations based on after-tax, not pre-tax income.
It did not help the son’s case that all of the identified mistakes helped to understate the son’s likely financial position at retirement age. As one of the appeal judges noted: “It is difficult to reach any conclusion other than that each assumption was chosen so as to increase the apparent need to ‘top up’ the appellant’s superannuation.”
This alone would have been enough to dismiss his case at first instance due to the lack of need evidenced.
Mr Bates was ordered to pay the estate’s costs of the appeal, together with his own costs.
For more information about family provision claims, please see Family provision claims in NSW – spare us the details and curb your expectations.