Size Counts – Small Estate Litigation Cooper v Aitken

Headlines, like this one, capture our attention, the juicier they are the more likely we are drawn in.  Perhaps, that is why whenever there is a dispute over a large estate, it captures our attention. Only a small fortunate few have multiple millions to cavil over, when the rest of us must make do with the ordinary.  Rarely, if ever, do our newsfeeds fill up with the details of  claims on small estates, as they are not dissimilar to our own fortunes.  Yet they are litigated just as passionately as the larger estates.  The difficulty is that legal action is costly and small estates can rarely afford the impact of a litigation and it is this factor with which our courts are increasing grappling. 

The recent New South Wales Court of Appeal decision in Cooper v Aitken[i]  is reflective of this dilemma in the context of our modern families and community standards.  When the family provision legislation was first introduced[ii], our societal structure was very different. Today we live a lot longer, and that often brings with it multiple relationships and sometimes the darker side of human relationships. In Cooper the testator died in November 2017 at the age of 79. He was survived by his two natural born children and their children and his adult stepdaughter.

The Testator was married twice. The applicant was the adult child of his second wife. She came to the relationship at the age of 23 and lived with the testator and her mother for a short time.

The testator’s marriage to the applicant’s mother was a long one –  29 years.  They married in 1986 and remained married until the applicant’s mother died in 2015.  On her death the testator benefited in her estate by taking the matrimonial home through the right of survivorship.

Unlike Queensland, in New South Wales a stepchild does not come within the definition of child to secure eligibility to make a claim for family provision.  Instead, a stepchild must establish they come within s57(1)(e) of the Succession Act NSW.  That is, they must have been wholly or partly dependant on the deceased and also have been a member of the household of the deceased at any particular time.  Here the stepdaughter satisfied the eligibility criteria, because for a short time, in the early part of his marriage to her mother, she lived with the testator, before she left to go overseas in 1986.

She returned to Australia in 2015, on the death of her mother to attend her funeral. At that time she contemplated making a claim against her mother’s estate but elected not to do so. The evidence before the court was that the relationship between the testator and his stepdaughter was fraught, involving allegations of violence by the testator towards the applicant. There was also evidence of estrangement with the applicant having little to no contact with the testator after her mother’s funeral. 

The testator left a will and divided his estate variously between his two surviving natural children and his grandchildren. The applicant was not a beneficiary of his estate which was very small by most standards. At the date of his death, his estate was estimated at around $189,000. At the date of the hearing of the matter it had dwindled to $92,042 as a result of the impact of legal and administration costs. It’s hardly sheep stations at the best of times, let alone taking into consideration the number of beneficiaries in the estate.  Yet it was not a deterrent to the applicant. 

Primary judge found at [233] that it was “not a case where there was a close relationship, that is one which might be properly described as parent and child, or where she was brought up as a permanent member of the deceased’s family, or where she was ever a full-time member, as a child of the deceased’s family.”  He found that he acquiesced to her presence in the home for periods at a time.

Her position was that he was violent and that was a factor in the quality of their relationship.    The primary judge found that having regard to the relevant principles, including the value of the estate he dismissed the application describing it as “ruinous, and recriminatory, proceedings.”

The applicant took the matter on appeal.  There were 18 grounds of appeal, however, a significant portion  of the application for leave centred on how the primary judge dealt with the evidence of violence by the testator towards the applicant.

Leave was required due to the small size of the estate. For leave to be granted it requires there to be identified an issue of principle, a question of public importance, or a reasonably clear injustice going beyond something that is more than merely arguable.

In addressing that, at the heart of the appeal was that the primary judge found against the applicant on the basis of disentitling conduct relating to the issue of violence. The applicant submitted that [24] “that the primary judgment is not consonant with contemporary community expectations and standards with regard to the stated public policy that domestic violence or family abuse is anathema detrimental to community interests and society.” 

The Court of appeal found the primary judge’s finding did not take into consideration the question of disentitling conduct, instead his key findings involved the application of the usual principles, which the applicant herself conceded were applied correctly. The court of appeal noted the appellant accepted the primary judge applied the relevant principles correctly and that was a factor against the granting of leave to appeal.  It rejected the notion that the primary judge’s decision was flawed in terms of the weight given to the Domestic Violence issue. Instead, the determinative factor for small estates is proportionality. 

To that end one of the determinative factors for small estates is proportionality.  The Court of Appeal found the costs of the proceedings were disproportionate to the value of any order that could realistically ever have been made in favour of the applicant.  As to the remaining grounds of the appeal, they found they did not raise a question of public importance or an injustice which is reasonable clear.

In 2013 the Queensland Supreme Court was asked to consider a claim against a similarly small estate of about $300,000 in the matter of Cope v The Public Trustee of Queensland (“Cope”).[iii]  There the court found that despite each of parties being deserving, the estate was simply too small to divide up in a manner that would meet the needs of each eligible person and so they determined the whole estate should go to the deceased’s surviving spouse.  

While in Queensland we do not have a similar provision to s60 of the Civil Procedure Act NSW, however, since the decision in Cope, Uniform Civil Procedure Rule 700A was introduced.   It is designed to address the issue of costs in all estate matters but particularly in small estates and where parties to a proceeding do not adhere to the provision, they can expect a special costs order against them should they press a claim where the costs are disproportionate to the value of the estate.  Otherwise, parties might find they go broke trying to get rich.

[i] [2021] NSWCA 82 (13 May 2021)

[ii] See:  Testator’s Family Maintenance Act 1914 (Qld); Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW)

[iii] Cope v The Public Trustee of Queensland (as Administrator of the Estate of Zdzislaw Delmaczynski) Deceased [2013] QDC 176