The recent Queensland Court of Appeal decision of Spink v Russell [2019] QCA 107 (“Spink”) provides valuable guidance regarding the relevance of a potential family provision application in a statutory will proceeding. Spink is only the second statutory will matter to have been heard by the Queensland Court of Appeal.[1]
What is a statutory will?
In order to make a valid will, a person needs to possess testamentary capacity. A person may lack testamentary capacity where, for example, the person is a minor, the person is incapacitated due to illness or injury or the person suffers from a mental disability. In these circumstances, the Court has power to make an order authorising a will to be made on that person’s behalf.[2] The Court also has power to make orders authorising the alteration or revocation of an existing will.
Why would a statutory will be needed?
A statutory will may be needed in order to adjust beneficial entitlements under an existing will or under the intestacy rules. The intestacy rules operate where a person dies intestate (without a valid will) and provide for a person’s estate to be distributed amongst the person’s next of kin in a set manner depending upon the person’s family circumstances.
Where a person lacks testamentary capacity, it may be necessary or desirable to have a statutory will made on their behalf to resolve problems that could or will arise under an existing will or the intestacy rules, to deal with various changes in the circumstances of the person and/or their family over time or simply for estate planning purposes.
Statutory will applications are often made on an urgent basis where, for example, an incapacitated person’s health is deteriorating rapidly. Importantly, the Court only has power to make an order authorising the making, alteration or revocation of a will (authorisation order) if the person is alive at the time of the order.[3]
Who can apply for an authorisation order and what is required?
The Court must be satisfied that the applicant is an “appropriate person”.[4] Generally, this will be a relative or a substitute decision-maker of the person without testamentary capacity.
The applicant first needs to obtain the Court’s leave (permission) to apply for an authorisation order[5] however the Court may, and often does, hear the substantive application with or immediately after the leave application is heard. The applicant is required to give the Court a wide array of information including the reasons why an authorisation order is being sought, evidence that the person lacks testamentary capacity and a draft of the proposed will, alteration or revocation.[6] Ultimately, the court may grant leave only if satisfied that, among other things, “the proposed will, alteration or revocation is or may be a will, alteration or revocation that the person would make if the person were to have testamentary capacity”.[7]
Relevance of potential family provision applications
Separately to its power to make an authorisation order for a living person, the Court also has power to order that provision (or further provision) be made from the estate of a deceased person for the proper maintenance and support of certain eligible persons.[8] The fact that the Court has made (or has not made) an authorisation order does not preclude a later family provision application being commenced.
In a statutory will application, the applicant is required to inform the Court of any available evidence of the likelihood that a family provision application will be brought against the person’s estate after their death.[9]
The approach of the Court in a statutory will application and the approach of the Court in a family provision application are almost completely opposite. In a statutory will application, the Court must aim to do what the person would have done if they were able to. In a family provision application, the Court must aim to effect the provision that ought to have been made for the applicant for provision.
The case of Spink
The difference in the above approaches was highlighted in Spink. Briefly, the background facts are as follows:
- At the time of the appeal, MAG was a 68 year old widow. MAG had two adult sons with her late husband (Tony) and two adult step-children (from Tony’s previous marriage). One of those step-children (Michelle) was the respondent in the appeal.
- MAG and Tony had been very successful in business. MAG had considerable wealth in her own right of approximately $100 million.
- MAG and Tony last made wills in 2014. The wills were in similar terms and provided, in brief, that the whole estate of the first to die would pass to the survivor. Relevantly, both wills also contained a substitute gift of $1 million to Michelle (the intention having been that this was all that Michelle would be left from the combined estates of Tony and MAG).
- Tony predeceased MAG such that MAG inherited Tony’s entire estate. Michelle did not bring a family provision application against Tony’s estate.
- MAG’s capacity subsequently declined and her appointed attorneys commenced managing her affairs.
- A deed of family arrangement was entered into by MAG’s attorney on her behalf in 2017. As a result, it became appropriate to consider a new will for MAG. By this stage, MAG no longer possessed testamentary capacity so MAG’s attorney brought a statutory will application.
- The proposed will presented to the Court retained the existing gift of $1 million to Michelle on the basis that MAG’s wishes in this regard had remained consistent since the 2014 wills were made.
- Michelle was among those required to be given notice of the application. Michelle threatened a family provision application against MAG’s estate if her gift in the proposed will was not substantially increased.
- The Judge at first instance granted leave to MAG’s attorney to make the application and ordered that a statutory will be made in the form proposed by MAG’s attorney with the exception that Michelle’s gift be increased to $4 million. The Judge took into account the toll a family provision application would take on the administration of MAG’s estate and found it probable that MAG was likely to have attempted to avoid this outcome by increasing the provision in her will for Michelle.
- MAG’s attorney appealed this decision on grounds which included that the Judge had erred in finding that MAG probably would have made a will leaving Michelle $4 million and sought orders that the statutory will be altered or revoked such that Michelle’s gift be reduced to $1 million.
In allowing the appeal, the Court of Appeal accepted the submission of MAG’s attorney that it was not open on the evidence available to the primary Judge to conclude that a will containing a gift of $4 million for Michelle was a will that MAG probably would have made. Support for this conclusion was found in the contemporaneous file notes made by the solicitor who prepared the 2014 wills, in a further contemporaneous letter of advice from the same solicitor warning of the risk of a family provision application by Michelle as well as in the absence of any evidence of a change in MAG’s intention thereafter. MAG’s instructions and subsequent conduct instead provided a reliable basis to infer that her testamentary intentions with respect to Michelle were firmly held. The authorisation order made at first instance was set aside and substituted with an order authorising a will in the form proposed by MAG’s attorney.
It seems almost inevitable that Michelle will ultimately bring a family provision application against MAG’s estate (assuming Michelle survives MAG). However, as was observed by the Court of Appeal in its reasons, the requirement to inform the Court of the likelihood of a family provision application does not mean that the Court must then evaluate potential family provision applications for the purposes of ensuring the will the Court authorises satisfies such claims.[10] The making of an authorisation order is an exercise of jurisdiction which is protective in nature and which is informed by what is for the benefit, and in the interests, of the person who lacks testamentary capacity.[11] While there may be instances where it is open to the Court to find that the person probably would make a will which satisfies or avoids a family provision application, where the evidence clearly precludes such a finding as in Spink, it will not be in the person’s interest for the Court to authorise a will which provides for such a contingency.[12]
[1] The first was GAU v GAV [2014] QCA 308
[2] Succession Act 1981 (Qld), s 21(1). In Queensland, the Court has had these powers since 2006 when the Succession Act 1981 (Qld) was amended to introduce provisions dealing with statutory wills. Although all Australian States and Territories have legislation concerning the making of statutory wills, this article is concerned only with the provisions applicable in Queensland.
[3] Succession Act 1981 (Qld), s 21(2)(b)
[4] Succession Act 1981 (Qld), s 24(a)
[5] Succession Act 1981 (Qld), s 22(1)
[6] Succession Act 1981 (Qld), s 23
[7] Succession Act 1981 (Qld), s 24(d)
[8] Succession Act 1981 (Qld), s 41(1)
[9] Succession Act 1981 (Qld), s 23(h)
[10] Spink v Russell [2019] QCA 107 at [67]
[11] Spink v Russell [2019] QCA 107 at [45]; GAU v GAV [2014] QCA 308 at [52]
[12] Spink v Russell [2019] QCA 107 at [68]
