The topic of statutory declarations being used in estate planning has been ongoing and [almost fiercely!] debated among succession lawyers. Litigators and planners both love them, but for very, very different reasons. In fact, it was a topic of conversation between Caite and I on The Heir Waves podcast here.
In the case of Hartley v Hartley [2021] QSC 323, an accusation of disentitling conduct was front and centre.
In this case, the deceased was survived by her four sons, Shane, Peter, Craig (the applicant) and Damian, and in her last will, she left 3 house properties to Shane, Peter and Damian, a car to Shane and the residue of her estate to Shane, Peter and Damien, leaving Craig expressly excluded from any provision from her estate. The deceased left a statement of reasons of why she excluded Craig from her estate and a statutory declaration.
The applicant was living ‘in hopeless circumstances’ and on the disability support pension after a sports injury many years ago. He had no assets and lived in community housing and argued that his circumstances were largely a product of a ‘disruptive and traumatic upbringing’ and quoted exposure to drugs, alcohol and abuse from an early age being a the centre of that upbringing.
The applicant had experienced his own challenges with drug and alcohol addiction and served time in prison for drug related offences including stealing from his mother.
The respondent, Shane as executor, defended the claim against the estate by the applicant and argued that the applicant should not receive any provision on the basis that his conduct was disentitling of any provision. The conduct argued to be disentitling included:
- stealing from the deceased
- hostility
- exposing the deceased to violence by drug associates
- damaging property
- physical domestic violence
- psychological stress and anxiety.
The estate mostly comprised the three properties, gifted to Shane, Peter and Damian, and was valued at approximately $1.2 million (less approx $50k in liabilities).
The Court held it was not satisfied that the conduct was disentitling, “but more of a demonstration of his lame duck status consequent upon his tumultuous childhood, physical, sexual and emotional abuse, exposure to drugs, and drug addicted reckless lifestyle” (para 5).
By way of background, the deceased had four children within 7 years to different fathers and had took in boarders, worked full time, sold cannabis from the family home, using the dining table to prepare it and even had recruited her sons to assist. The applicant was sexually abused by a nurse at a children’s home and later by a neighbour and had started smoking marijuana (specifically the butts from his mother’s marijuana joints) by age 13-14.
Throughout her son’s difficult drug afflicted time, the deceased experienced much of the offending and abuse toward her. The applicant was also said to have stolen his mother’s camera, jewellery, bingo winnings and more. The deceased left a statutory declaration referencing the stealing of her belongings and the applicant did admit to likely having done this (with the exception of the camera which was disproved).
The respondent gave evidence of physical violence and assault by the applicant of his mother, however the applicant denied this. In approximately 2014, a protection order was subsequently obtained against the applicant, in favour of the respondent and naming the deceased also. Notwithstanding the order, the deceased and the applicant remained in contact until 2016 when he was imprisoned. The applicant attempted to maintain contact, including sending cards and phoning, but his attempts were not accepted. The deceased later died, having lost her battle with cancer.
The content of the statutory declaration left by the deceased was largely corroborated by her surviving friends as they gave evidence of their conversations with the deceased shortly after her having made her will.
Addressing the different aspects of the applicant’s conduct, the Court said:
As to matter of stealing, whilst the deceased may have complained to others that applicant stole $1,400 or $1,600, her camera, her jewellery and $4,500 of her winnings from bingo in 2009, the evidence falls well short of disentitling conduct. The applicant also denied stealing bingo winnings or camera, and he denied stealing his grandmother’s antique sewing machine or jewellery. These were not of significant concern to the deceased since she made no mention in her statutory declaration that the appellant stole her jewellery and the hearsay evidence of Lyn Moore is inadmissible as to the truth of the statement. I accept that Damian showed the applicant the stash of $10,000 in bingo winnings at Pease Street, and the applicant admitted to probably taking some of the money, and little bits of his mother’s jewellery because he was “pretty bad back then”. It is also the case that the deceased kept large amounts of cash in the Pease Street house during her life, including while the drug and alcohol addicted defendant and girlfriend were living there. This was not a matter that warranted the deceased’s wrath in her statutory declaration.
Paragraph 69.
Then there is the applicant’s persistent and overbearing drug and alcohol addiction and misuse. In her statutory declaration, the deceased expressed concern about the propensity of the applicant and his then girlfriend spending her money on drugs. The applicant seeks to equate this behaviour to that of a “spendthrift” or gambler.[13] I disagree. Unlike a spend spendthrift and gambler, the applicant’s conduct was clothed in illegality. On my assessment I think that the defendant’s drug and alcohol addicted state and behaviour, when taken in its proper context, is not sufficiently serious and falls short of being characterised as disentitling conduct.[14] His character and lifestyle were shaped at an early age as he navigated a tumultuous childhood, physical, sexual, and emotional abuse, and exposure to drugs at home by his own mother. Ineffective parenting, and later adult influences entrenched his drug and alcohol addiction, which manifest in the behaviour now subject of complaint.
Paragraph 71.
The Court accepted the applicant’s evidence and his candor in regarding his conduct throughout the judgement. The Court also noted that the other sons’ positions were somewhat strained also and as such did not see a basis for providing anything more than something demonstrating equality between the four sons.
The Court concluded to to provide further provision in the form of a specific legacy to the applicant in the amount of $150,000 and invited submissions from the parties about the order and costs (if any).
Procedurally, this was not the end of the matter. In a subsequent hearing (Hartley v Hartley [2022] QCA 96), the executor (Shane) sought to appeal the decision, but could not do so as the primary judge had not so ‘ordered’ the provision, but had only invited submissions. Accordingly, the primary judge reopened the matter (Hartley v Hartley [2022] QDC 217) to finalise the order for provision by reading the Will as inserting a new clause providing for a specific gift to Craig, the applicant, of $150,000 and giving priority to that legacy over the gifts to the other three sons.
In doing so, whilst finalising the order accordingly, the Court said:
In the end, I place little weight on the deceased’s bare assertions in the statutory declaration, and I do not accept her evidence where it diverges from the matters made out by other evidence, which I do accept.
Paragraph 18, Hartley v Hartley [2022] QSC 217
The respondent’s main contest before and now relates to the issue of disentitling conduct pursuant to s 41(2)(c) of the Succession Act, which is relevant to the second stage (not the first as I wrongly proceeded in the original decision). The respondent has re-enlivened his opposition to any order for further provision because of the applicant’s disentitling conduct comprised of stealing from the deceased, hostility, exposing her to violence by drug associates, damaging property, physical and verbal domestic violence, and psychological stress and anxiety. I have discussed these matters at length in my original reasons and maintain my findings favouring the applicant albeit relevant to the second stage. Paragraphs [9] and [62]-[72] and associated paragraphs of the original reasons ought now be read as being referable to the second stage in so far as they go to my findings about the issue of disentitling conduct. I maintain that the applicant has not breached the threshold of disentitling conduct to warrant exclusion from adequate provision from the deceased’s estate under s 41(2)(c) of the Act.
Paragraph 24, Hartley v Hartley [2022] QSC 217
Finally, at paragraph 25 of the final judgement, the Court ordered the final assessment of $150,000 as further provision for the applicant.
In addition to the order for provision, the matter of costs was addressed and the applicant was ordered to have his costs paid from the estate, fixed at the amount of $114,066, with a further order to have a Ms Ford take steps to be appointed as the applicant’s financial administrator through QCAT for such legacy to be managed. The Court ordered the executor to be partly indemnified by the estate and partly bear his own costs.
You can read the initial judgement here, the appeal judgement here and the final judgement here.
The question of whether a statement of reasons should or shouldn’t be made is always a perplexing one. On the one hand, as we see in this decision, the list of conduct can be used to disprove (or prove, as the case may be) each of the allegations and/or ‘reasons’. Alternatively, it is an opportunity for those leaving their wishes recorded to provide context as to why and how they’ve come to make their testamentary decisions. It is always a fine line and the debate will likely continue. It is, as it will always be, an interesting legal area to follow.
