This chapter is concerned with minor topics, none of which appear in all the legislation.

10.1 CONTRACTING OUT

It was held early on that the rights given by family provision legislation were inalienable and that it was contrary to public policy to hold a person disentitled to relief merely because that person had entered into some agreement with the deceased.¹ Similarly it is regarded as contrary to public policy to give effect to a provision in a will that a benefit will be forfeited if the beneficiary contests the will.² In New South Wales there is a specific provision enabling a person to contract out of the jurisdiction.³ The gist of the provision is that a person may release rights to make an application by instrument or agreement to execute an instrument.⁴ The release must be approved by the Court and only has effect to the extent of the Court’s approval.⁵ Proceedings seeking the Court’s approval for a release of rights to make an application may be commenced before or after the death of the person - that is, the instrument or agreement may be made before death but approval of the Court left to be sought after death.⁶

Section 31(5) of the Family Provision Act 1982 (NSW) provides:

In proceedings for the approval of a release, the Court shall have regard to all the circumstances of the case, including whether:

(a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release;

(b) it is or was, at that time, prudent for the releasing party to make the release;

(c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable; and

(d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.

The Court may approve of a release both in respect of the estate and the notional estate of the deceased.⁷

The remainder of the section enables the Court to revoke its approval in given circumstances.

Issue for consideration

Whether a provision to this end should be incorporated in all family provision legislation should depend on how successful it has been. That could be gauged by the success rate of applications.

10.2 MORTGAGING, CHARGING AND ASSIGNING AN INTEREST ARISING FROM AN ORDER OF THE COURT

In some jurisdictions there is specific provision preventing a person in whose favour an order has been made from mortgaging, charging or assigning the right given by the order.

Australian Capital Territory and Northern Territory

Section 19 of the Family Provision Act in each Territory⁸ provides:

A mortgage, charge or assignment of any kind whatsoever, of or over the provision made, or to be made, by an order under this Act, is of no force or effect unless that mortgage, charge or assignment is made with the permission of the Court.

Queensland

Subsection 41(11) of the Succession Act 1981 (Qld) provides:

No mortgage, charge or assignment of any kind whatsoever of or over such provision, made before the order is made, shall be of any force, validity or effect, and no such mortgage, charge or assignment made after the order is made shall be of any force, validity or effect unless made with the permission of the Court.

South Australia

Section 13 of the South Australian Inheritance (Family Provision) Act 1972 (SA) provides:

No mortgage, charge, or assignment of any kind whatsoever of or over the provision made by an order under this Act shall, unless made with the prior permission of the Court, be of any force, validity or effect.

Western Australia

Section 19 of the Inheritance (Family and Dependants Provision) Act 1972 (WA) is in slightly different terms.

No mortgage, charge, or assignment of any kind whatsoever which is given of or over any provision out of the estate of any deceased person granted by any order of the Court under this Act and which is given before the order of the Court is made shall be of any force, validity or effect; and no such mortgage, charge or assignment given after the order of the Court is made shall be of any force, validity, or effect unless it is given with the permission of the Court or the Court at the time of making the order otherwise directs.

There is no provision in Tasmania. It is significant that there is no similar provision in New South Wales, the State which has the most comprehensively revised family provision legislation.

It is clear that an applicant cannot charge or assign rights to make an application, or indeed prospective rights to a Court order. If a Court creates a trust of which an applicant is a life tenant, it appears that the applicant cannot assign or charge the life interest without the consent of the Court. On the other hand, it is equally clear that if the Court makes a final order and beneficial title to property is vested in the applicant following the order, the applicant has the same rights as any beneficial title owner and can do as he or she pleases with the property. Thus, if the matrimonial home is ordered by the Court to be transferred to the surviving spouse without limitation, the surviving spouse is not prevented from selling or mortgaging the home.

Issue for consideration

An issue for consideration is whether the provision should be retained or dropped. This depends on whether it is seen as useful. Is there any record of Court’s being asked to approve a charge or assignment in this context?

10.3 "PRESUMPTION OF DEATH"

In the Australian Capital Territory,⁹ the Northern Territory¹⁰ there is a provision entitled “Presumption of death”. There is a similar provision in New South Wales.¹¹ The gist of the provision is that where an order of the Court has been made although evidence of the death of the deceased is presumptive only, and in fact the deceased turns out to be alive, the Court may order a person in whose favour an order is made to undertake to restore property received in pursuance of the order, or to repay any amount of money received.

Issue for consideration

The issue for consideration is whether a similar provision should be inserted in all States’ legislation.

10.4 COSTS

A major problem of family provision law is the question of costs. In the case of smaller estates the cost of making an application for family provision is prohibitive. Perhaps a study should be undertaken to reveal what the average costs are of uncontested and contested family provision applications. The legislation is probably not really accessible in the case of an estate of less than $50,000. Worse than that, persons who may be formally eligible to apply for provision, but who may have no justifiable claim, can use their eligibility to apply to threaten action as a means of forcing a beneficiary to settle out of Court, for fear of the costs of resisting the application despoiling the estate and perhaps of the odium of mud slinging which can occur in some contexts.

Only in New South Wales is there some sentiment expressed by statute which might be said to have reference to an unworthy application.

Section 33(1) of the Family Provision Act 1982 (NSW) gives the Court a general power to order that costs may be ordered out of the estate or notional estate of the deceased. However, section 33(2) provides:

(2) The Court shall not order that the whole or any part of the costs, charges or expenses of or incidental to proceedings in respect of an application in relation to a deceased person made by an eligible person who is such a person by reason only of paragraph (c) or (d) of the definition of “eligible person” in section 6(1) be paid out of the estate or notional estate of the deceased person unless:

(a) the Court has made an order for provision in favour of the eligible person on the application; or

(b) there are special circumstances which make it just and equitable for the Court to do so.




The eligible persons referred to in section 6(1) are:


(c) a former wife or husband of the deceased person; or

(d) a person:

(i) who was, at any particular time, wholly or partly dependent upon the deceased person; and

(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of a household of which the deceased person was a member.

Issue for consideration

The issue of costs is extremely sensitive. New South Wales has made a start in identifying possible cases where the making of an application could constitute an abuse. Nevertheless it is confined to certain classes of applicants, who in some States and Territories have no right to make application at all. Whether the legislation should be realistic and give the Court jurisdiction to deny access if, having regard to the possible costs involved, the litigation cannot be economically justified, is another matter, perhaps not appropriate for consideration in the context of merely rendering uniform or consistent what already exists.

10.5 STAMP AND ESTATE DUTY

In some jurisdictions there are specific provisions about stamp and estate duty. The provisions are as follows.

New South Wales	section 34	Certain documents exempt from stamp duty
Queensland	section 43	Manner of computing duty on estate
South Australia	section 15	Method of apportioning duty on estate
Victoria	section 98	Adjustment of probate duty

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Issue for consideration

It is unlikely that provisions such as these could be rendered uniform or even consistent because they refer to other revenue legislation. They are not part of the mechanics of family provision law.

FOOTNOTES

1. Lieberman v Morris (1944) 69 CLR 69.

2. In Re Chester, Deceased (1978) 19 SASR 247; Shah v Perpetual Trustee Co 1981) 7 Fam LR 97.

3. Family Provision Act 1982 (NSW) s31.

4. Id s31(1).

5. Id s31(2),(3).

6. Id s31(4).

7. Id s31(6).

8. Family Provision Act 1969 (ACT); Family Provision Act 1970 (NT).

9. Family Provision Act 1969 (ACT) s14.

10. Family Provision Act 1970 (NT) s14.

11. Family Provision Act 1982 (NSW) s18. This section is entitled “Court may require undertakings to restore property if deceased found to have been alive”.