Succession Law Update – Part IV claims and the meaning of ‘dependent’

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Succession Law Update – Part IV claims and the meaning of ‘dependent’

The Supreme Court of Victoria has finally provided its written reasons in the matter of Veniou v Equity Trustees Limited [2018] VSC 832, nearly a year after its initial decision to dismiss the matter.

The decision is a landmark in that it provides important guidance about the meaning of the word ‘dependent’ as it relates to a claim for provision from an estate.

Background

Part IV of the Administration and Probate Act 1958 (Vic) (“the Act”) permits the Court to make provision for an eligible person from a deceased estate for the proper maintenance and support of that person.  The Act was amended in 2014 with the amendments restricting who was considered eligible to make a claim against an estate.

The Act requires three key stages.  Those stages, in order, are:

  • the person making the claim must be an ‘eligible person’. This is a category-based requirement – if a person doesn’t fit into one of the specific categories provided for in the Act, then they are unable to make a claim; and
  • the Court must have the power to make an order for provision – the Court must be satisfied of various matters before the Court can make an order for provision (or greater provision) from an estate. Some of the matters considered are:
  • depending on the category of ‘eligible person’, some claimants must be able to show the Court that they were “wholly or partly dependent on the deceased” for their maintenance and support; and
  • the deceased had a moral duty to make provision for the person’s proper maintenance and support at the time of their death; and
  • that the deceased’s estate doesn’t make adequate provision for that person’s proper maintenance and support
  • the amount of the order to be made. Again, the Court make take into account various factors when considering the amount of provision to be made.  These include the degree to which:
  • the deceased had a moral duty to provide for the eligible person; and
  • the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person; and
  • an eligible person is not capable of providing adequately for their own proper maintenance and support (for some categories of eligible persons only); and
  • an eligible person was wholly or partly dependent on the deceased for their proper maintenance and support at the time of the deceased’s death (again, for some categories of eligible persons only).
    • The Act is very specific about the categories of eligible person and which of those categories require evidence of being ‘dependent’ on a deceased person.
    • This decision is the first reported case in Victoria to consider the meaning of ‘dependent’ since the 2014 amendments.

Facts

Mrs B died in 2017.  She left a Will which gave the majority of her $2 million estate to her two surviving children.  Sadly, one of Mrs B’s daughters had died before her.  Despite Mrs B’s daughter having two children, Mrs B was mostly estranged from those grandchildren and made no provision for them in her last Will.  Ms V, one of the estranged grandchildren, made a claim against Mrs B’s estate for one-third of her estate.

Ms V was resident in Greece and was 16 years old when her mother died.  Up until the time of her mother’s death, Ms V had a good relationship with Mrs B, which included Mrs B visiting Greece, Ms V spending some time in Australia, and letters between the two on a regular basis.  After the death of her mother, Ms V lived with Mrs B in Australia for a period of approximately six weeks before returning to Greece.

After she returned to Greece, Ms V’s relationship with Mrs B began to decline and, at the time of Mrs B’s death, it has been some 22 years since Ms V had seen her grandmother.  Telephone and letter communication had also dwindled from around 2004.

Ms V had the belief that Mrs B would take care of her and had expected to receive a share in her grandmother’s estate as Mrs B’s earlier Wills had made provision for Ms V and her brother.  At the time of Mrs B’s death, Ms V was struggling financially due to the economic downturn in Greece.

Court’s Decision

The Court considered the elements required for an order to be made in Ms V’s favour.

Ms V was an eligible person as she was the granddaughter of the deceased – the first stage was met.  However, Ms V was required to also meet the second stage requirements.

Being a grandchild of the deceased, Ms V needed to show that she was “wholly or part dependent on the deceased” for her maintenance and support, that Mrs B had a moral duty to make provision for Ms V and that inadequate provision was made for Ms V’s proper maintenance and support.

Ms V submitted that while she did not receive any material support while her grandmother was alive, her dependency was based on the reliance of a future event occurring – that is, an inheritance from Mrs B’s estate.

The Court considered that dependency on the deceased was the critical issue in this case.  As ‘dependent’ is not defined in the Act, the Court looked to common definitions of dependent.  The Court held that dependency required the eligible person to actually receive material aid from the deceased prior to the deceased’s death, “not a mere promise of some undefined financial aid in the future”.  Emotional support or the expectation of receiving a financial benefit did not make an eligible person ‘dependent’ for the purposes of an estate claim.

As Ms V couldn’t show dependency on Mrs B during her lifetime and, more importantly, at the time of Mrs B’s death, the Court did not consider the amount of any possible claim under the third stage.  The Court dismissed Ms V’s claim as she had no real prospect of her claim being successful.

Finally, the Court was of the view that previous principles about claims by grandchildren are still applicable.  A grandparent generally does not have a responsibility to make provision for a grandchild, even where the grandchild’s parent has died before the grandparent, unless there are special factors or unusual circumstances, and dependency is a critical factor.

How we can help you

Our team is experienced in the preparation of Wills, Powers of Attorney, Appointments of Medical Treatment Decision Maker, succession planning and claims against estates.

If you require further clarification of the above or any further information please contact a member of our Wills and Estates team:

Rob Allen

Special Counsel

D +61 3 8602 9268

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Joanne Jenkins

Senior Associate

D +61 3 8602 9226

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Marja Moore

Legal Executive

D +61 3 8602 9279

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