Written by Justine Taylor

Making an Application under s62 of the Succession Act 2006 (NSW)

In some instances, an urgent application may need to be brought seeking an advance or interim provision out of a deceased estate, where a plaintiff has brought proceedings and has urgent needs to be met.

Correspondence will usually be exchanged between the solicitors acting for the estate and the solicitors for the plaintiff in the first instance. However, if an agreement is not able to be reached with respect to any interim provision, an application can be made to the Court by the plaintiff under s62 of the Act, seeking an Order for interim provision to be made.

Such an application was recently considered in the decision of Byrd v Margiotta [2023] NSWSC 1556, by Justice Meek who reiterated the relevant principles that the Court will take into account, including:

1. The onus will be on the plaintiff to demonstrate that an interim Order shall be made;
2. Generally, eligibility should not be in dispute for the making of an interim application;
3. The plaintiff must be able to demonstrate that their case, at final hearing, is more than arguable that provision would be made;
4. It is necessary that on the balance of probabilities, after fully considering the untested evidence, that no less provision than what is proposed in the interim Order would be made in favour of the plaintiff at the final hearing;
5. The making of an interim Order is entirely discretionary, even if the other pre-conditions are satisfied. Such an Order is permissive rather than compulsive;
6. The discretion is fairly wide, but it is not unlimited. Such discretion will be exercised judicially (fairly and reasonably);
7. The Court will not be required to determine the precise Order for provision that the Plaintiff may receive at final hearing, and need only form the opinion that the plaintiff will receive no less than the provision by way of final Order;
8. A relevant consideration may be whether the plaintiff is able to repay the lump sum in the event the interim provision Order was revoked, although there may be cases where the Court would make an interim provision Order for an impecunious applicant;
9. An interim Order takes effect as a Codicil to the Will under s72 of the Act (in other words, it operates to amend the Will).

If pertinent information is required to assess the prospects or merit of an estate claim, it is important to obtain advice and assistance from a solicitor and UWE have specialists in wills & estates that can assist.

Written by Lucas McCallum. 

Trust is the true yardstick for every relationship.  How does your relationship measure up? 

In this Article, we discuss the recent decision by the Family Court of Australia in Khalif & Khalif and Anor [2020] FamCA 39

Catchwords: Constructive Trust, Common Intention Constructive Trust, Property Settlement, Family Law Act 1975 (Cth)

Everyone takes a gamble when they choose to arrange their finances with another person, business or entity.  The recent case of Khalif & Khalif and Anor highlights the complex legal issues that can arise when spouses choose to arrange their finances with members of their families and later separate.

The spouses in Khalif, were married and began living together as husband and wife in 2003.  They had their first child in 2006 and their second child in 2008.  In 2009, a property was purchased and became the parties’ home.

The crucial issue in this case arose because the home was purchased by and in the name of the husband’s brother, and not the parties themselves. The wife told the Court that when she queried the husband about those arrangements, he said to her at the time:

“Because we can’t get the loan in our name, this is [my brother]’s way of paying me back for all of my help I gave him prior to him purchasing [one of his businesses]. During that time I was driving taxis and giving him the money I earnt.”

[at 109]

The husband’s brother purchased the property for approximately 1.45million, fully funded by a loan obtained by the husband’s brother.

From around the time of the purchase in 2009 the parties began to live in the property and it became their home until their separation in 2016, during which time, they had their third child (in 2011).  The parties paid council and water rates and utilities in respect of the property and together they renovated and improved their home.

Over the course of their marriage, the parties, through various corporate entities controlled by the husband and his brother, paid periodic payments totaling approximately $800,000, during their occupation of their home.  The wife, based on the things said to her and done by the husband, understood those payments created a real interest in their home, much more than a right of occupation, which a mere tenant would enjoy.

Following the parties’ decision to separate in 2016, the husband vacated the home, leaving the wife and the children. Shortly thereafter and perhaps to her great shock, the wife received from her brother-in-law a Notice to Vacate, on the basis she was a tenant of the property.

A constellation of issues arose for the wife, including:

• Was she required to leave the home?
• Did she or her husband have any right to or interest in the home?
• Consequent on the answer to the issue in the preceding point, what would she be entitled to as a property settlement with her husband?

Dealing with these questions in turn, firstly, there were initially proceedings under NSW tenancy laws in the New South Wales Civil and Administrative Tribunal.  In those proceedings, the husband’s brother sought to evict the wife from her home.  The husband’s brother was not successful in those proceedings, following which, the wife obtained an order from the family law courts for sole occupation of the home and orders preventing its sale pending a property settlement between the husband and wife.

The next issue became the central issue in Khalif: what, if any, was the interest of the husband or the wife in the home?

The husband’s answer was that his brother was the legal owner of the property and that neither he nor his wife had any interest in it.  The wife’s answer was that the husband’s brother held a part of his interest in the property on trust for the husband.

For the reasons above, it was necessary to involve the husband’s brother in the proceedings, and so he became a party to the issue between husband and wife.

Ultimately, the Court looked to the common intention of the parties during their marriage and their respective evidence and contentions about how those intentions were formed and implemented.

The Court was critical of the husband and his brother in relation to the evidence they gave in respect of those matters and generally accepted the evidence of the wife where the husband and his brother’s evidence were in contest with the wife’s.

The Court determined that the husband’s brother held on trust for the husband an interest in the property equivalent to the sums paid by the husband to his brother during the course of the parties’ marriage and occupation of their home – $892,500.  The Court expressed this sum as a percentage of the purchase price paid for the home, and the husband was found to have a 61.25% interest in the home.

In family law proceedings for property settlement between separated spouses, the first step is identify (and where necessary or possible, value) the assets, liabilities and financial resources of each party.  This becomes legally complex when third parties, like the husband’s brother, are involved, and results in cost and delay for the parties.

For the wife, this involved the determination of these preliminary issues before the Court could decide the property settlement between the husband and wife – which is the third and final question, yet to be reported by the Courts.

For reasons which are made abundantly clear in this case, the most sensible course is to obtain specialist family law advice before arranging your financial affairs with your spouse.