I read, with interest, the recent case of Lodin v Lodin; Estate of Dr Mohammad Masoud Lodin  NSWSC 10, which dealt with a family provision claim by a former spouse of the deceased where a financial property settlement had been reached some 25 years prior to the deceased’s date of death.
In New South Wales, a claim for family provision may be made by a former spouse under section 57(1)(d) of the Succession Act 2006 (NSW). In determining a claim by a former spouse, the Court must be satisfied that the plaintiff is an eligible person, having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application and that adequate provision has not been made for the plaintiff (s59(1) Succession Act 2006 (NSW).
It may come as no surprise that the Court had to carefully consider the effect and importance of the claim in light of the fact that the plaintiff and the deceased had finalised a financial property settlement following their separation in 1990.
By way of background, the plaintiff met Mr Lodin when she consulted him as a medical practitioner in 1984. The plaintiff was in a relationship at the time and had a child of that relationship. She subsequently ended that relation and divorced from her previous husband shortly after commencing a relationship with Mr Lodin. Mr Lodin and the plaintiff lived together for a period of 18 months and had one child together, Rebecca. Whilst he had given instructions to prepare a will leaving his estate to his daughter and no provision for the plaintiff, the deceased did not execute the will and ultimately died intestate. Letters of Administration of his estate were granted to Rebecca to whom the whole of the estate worth more than $5 million devolves upon intestacy. Rebecca was the defendant in the proceedings.
It what appears to be a very difficult few decades between Mr Lodin and the plaintiff, the parties were involved in multiple disputes following their separation. Ultimately, the parties resolved their family court matter by judgement awarding approximately 38% of the pool to the plaintiff, equating to approximately $164,500.00. The plaintiff unsuccessfully appealed to the Full Court of the Family Court.
The Court was tasked with assessing the plaintiff’s claim for provision. It was evident that the plaintiff was of need as she faced both financial and medical challenges. The plaintiff and defendant were estranged. The Court commented that the plaintiff was “plainly in circumstances of need” and the estate was “ample to provide for her” and identified the critical issue as being whether there were “factors which warrant” the making of the application (paragraph 50).
The Court referred to a wide variety of judicial opinion in relation to whether the existence of the family property settlement should pose a significant obstacle to the claim noting that:
…typically it would be thought that the purpose of such a settlement (whether by agreement or order) is to enable each party to embark on a new life afresh, untrammelled by further obligations to the other. (para 52)
Referring to the case of O’Shaughnessy v Mantle (1986) 7 NSWLR 142, the Court noted that there was a “fifth class of case” where it was suggested, in that case, that there could be some special circumstance that would warrant such a claim by a former spouse where a financial settlement had been reached. Referring to Young J in that case, the Court quoted (at paragraph 149 of that case): “The one type of case in this category where there may be some special factor involved, is where there is a very small estate and whilst the parties are alive it was only possible to give a pittance to the claiming spouse because the other spouse needed funds to maintain his own life but that now one spouse is dead, the barrier to giving the other spouse the whole of the family property has vanished. However, I merely raise these matters and leave this fifth class case for decision if a case comes to the Court raising those particular problems.” [quoted at para 53 of this case]
Following the case of O’Shaughnessy v Mantle, the Court of Appeal decision of Dijkhuijs v Barclay (1988) 13 NSWLR 639 was quoted on references to public policy grounds and the impact of finality in such situations. At paragraph 56, the Court quoted a passage from Dijkhuijs v Barclay at paragraph 651F of that judgement:
There is no doubt that in most cases, the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Confronted by the news that he or she had been excluded from the will of the former spouse, the response would, in the overwhelming majority of cases, be: “Our marriage was dissolved. We settled our financial affairs. We can each start a new life. That was the whole point of the Family Court proceedings.” To this extent, I agree with what Young J has written in O’Shaughnessy and in this case.
However, that public policy, important though it is, must adapt itself to the new provisions of the Act, with its reforming inclusion of a specific entitlement of a former spouse to claim. That provision contemplates that there will be cases where such a claim will succeed, notwithstanding the public policy referred to by his Honour. As Young J acknowledged, the facts of each relationship are unique. The circumstances which may give rise to a claim for provision will vary in accordance with the circumstances of the case. Where the statute is expressed in such broad terms, there are dangers in attempting to limit the cases which may “warrant the making of the application” under s 9(1) of the Act to preconceived classes or categories. This danger exists even where the categories are described as non-exclusive “guidelines”. The “public policy” in finality of financial dealings by property settlements ordered by the Family Court must likewise now be read in conjunction with the competing public policy expressed by Parliament in the Act. This public policy could not be clearer. It is that, in certain circumstances and subject to certain procedures, former spouses may, notwithstanding such Family Court orders, seek orders for provision under the Act. A construction of the Act which impeded the achievement of this competing public policy would impermissibly afford primacy to the policy of finality which must henceforth compete “in all the circumstances of the case” with the claim by an ex-spouse for provision under the Act.
In considering the considered views of multiple judicial opinion on the topic, the Court determined that whilst the existence of such a financial settlement is important, it is not conclusive (para 61).
The Court acknowledged the uncertainty of the topic, noting:
This is an area in which there is wider than ordinary scope for differences of opinion between reasonable minds, and it could not be said that there was a clear single “community standard” as to when one divorced spouse will be regarded as having an undischarged obligation to the other. The O’Shaughnessy list merely provides some examples of where that is likely to be so. Ultimately, each class of case in that list is an illustration of circumstances in which it can be said that the moral obligations arising out of the marriage have not been fully discharged by the matrimonial financial settlement. [para 62]
Following the Dijkhuijs case in rejecting the concept that a change in circumstances post-financial separation could not provide factors warranting the making of a family provision application, the Court referred to comments made in a judgement of the Full Court of the Family Court, in Farmer v Bramley (2000) FamCA 1615, at paragraph 64, quoting from that judgement at paragraph :
While no doubt there are members of our community who would find it difficult to understand why an ex-spouse should share in the post separation good fortune of the other ex-spouse not all would agree. On the ABC TV’s Australian Story — “Daydream Believer” a man who had recently become very rich ($137m) was asked what he was spending his fortune on. After describing several luxury investments and the acquisition of homes for his children he said:
“And what else have I spent my money on, oh my ex wife I gave her something because I felt that she helped me get going in the early years when we used to live on minced meat and scrambled eggs.” (website: http://www.abc.net.au/austory/transcripts/s164937.htm)
In making an order in favour of the plaintiff, the Court said:
The unusual and enduring impact of the relationship and marriage with the deceased on the plaintiff, and its contribution to her current circumstances of need; the respective post-divorce deterioration in her circumstances, and great improvement in those of the deceased; the impact of her care responsibility for the defendant, for 15 years after the matrimonial property settlement, on her earning capacity, and her corresponding indirect contribution to the deceased’s estate; and the relative paucity of the matrimonial estate at the time of the property settlement, compared to the amplitude of resources now available; all in circumstances where the only other claim on the deceased’s testamentary bounty was that of the defendant, for whom ample estate will remain after making proper provision for the plaintiff; together amount to circumstances which made the plaintiff, at the time of the deceased’s death, a person who ought to have been an object of his testamentary recognition, and thus constitute circumstances warranting the making of her claim. (para 99)
The Court awarded the plaintiff a legacy of $750,000.00.
The case dealt with other disputes that arose throughout the course of the relationship between Mr Lodin and the plaintiff. I would encourage you to read the case to help understand the totality of the claim itself and the arguments raised by the plaintiff as elements worth of consideration.
You can read the case here.