In Pillinger v Lees [2024] NSWSC 1067, Hmelnitsky J decided that the deceased did not make adequate provision for the Plaintiff. An order issued under s59 of the Succession Act 2006 (NSW) for additional provision, concluding sufficient provision consists of $1,500,000 designated for accommodation, $850,000 intended to generate income, and $400,000 for unexpected situations. The other heirs, specifically the deceased’s children, should equally share the responsibility for this additional provision.

Background

Hmelnitsky J’s decision significantly affects the distribution of the deceased’s estate, as it alters the original bequests and requires the other heirs to contribute to the additional provision. His Honour refrained from issuing final orders as the estate’s composition was still under consideration. The estate consists of:

  • (1) A property on Montague Street in Balmain (Montague Street). This two-story building includes a commercial shop on the ground floor and a three-bedroom residential apartment currently leased at market rates. 
  • (2) A three-bedroom house on Llewellyn Street in Balmain (Llewellyn Street) is currently rented at market rates.
  • (3) A property on Little Darling Street in Balmain (Little Darling Street). This small two-bedroom house is home to Khristine, her husband, and their four-year-old daughter. The Plaintiff is also currently living in this property. The estate is not receiving rental income from this property.
  • (4) A semi-rural land of about 10 or 11 hectares on Rotherwood Road, Razorback (Razorback). Although there is a small dwelling on the Razorback land, the main house was demolished in 2020 in preparation for a construction project that ultimately did not occur. Until his death, the deceased resided at the Razorback property with Anecia. The estate is not collecting rent for this property either.

Additionally, the deceased possessed cash and other assets valued at approximately $250,000. The deceased’s Will made the subsequent bequests to his family: 

  • (1) Llewellyn Street property to Gina. 
  • (2) Little Darling Street property to Khristine. 
  • (3) Montague Street property to David. 
  • (4) a one-third share of the Razorback property to Tyrone. 
  • (5) a two-thirds share of the Razorback property and any leftover assets to Anecia.

The primary intention of the Will was for each of the Plaintiffs and other beneficiaries to receive a specific property or a share in a property.

However, the necessity of providing additional support for the Plaintiff (a matter agreed upon by all parties) and the litigation expenses indicate that the beneficiaries cannot receive their property gifts unless they are prepared to and are financially capable of contributing to the estate to cover their portion of the litigation costs and other estate liabilities, in addition to their share of the obligation for further provision for the Plaintiff. Considering the financial situation of the beneficiaries, the sale of the properties might be required to enable the estate’s administration. This outcome, while necessary, respects the deceased’s wishes.

The matter

In Pillinger v Lees (No 2) [2025] NSWSC 97, Hmelnitsky J proposed a division of the estate that differed from the deceased’s Will. This proposal ensures each beneficiary receives a fair share, considering the additional provision for the Plaintiff. Under the proposed division:

  • Anecia will receive the Little Darling Street property as a specific bequest and extra cash provision.
  • Khristine is to acquire the Montague Street property as a particular bequest but with a necessary adjustment favouring the estate to ensure she does not receive more value than the deceased initially intended.
  • David instead gained a two-thirds interest in the Razorback property.

Under this scenario, issuing orders requiring the beneficiaries to contribute cash to the estate to finance the additional provision for Anecia would also be essential.

This solution has advantages but is unsuitable given the current evidence. Such an arrangement would allow Anecia to obtain the Little Darling Street property (which she desires), Khristine to acquire the Montague Street property (which she longs for), and Gina to receive the Llewellyn Street property (which she wishes for). Nevertheless, David would not obtain his preferred outcome. Still, Hmelnitsky J cannot identify any resolution to the stalemate that would permit David to receive the Montague Street property or cash equivalent to its value.

The Defendant objected to this approach, mainly arguing that it exceeded the powers granted to the Court by the Succession Act to modify the beneficiaries’ entitlements. Hmelnitsky J’s response to this objection was to consider the provisions of the Succession Act carefully and the matter’s specific circumstances, ultimately determining that the proposed division of the estate was necessary and well within the Court’s powers.

The decision

The parties had helpfully agreed on a form of order considering the possibility that Hmelnitsky J would arrive at the conclusions expressed in these supplementary reasons. They presented three potential outcomes regarding the estate’s distribution:

Option 1: A cash provision of $2,750,000 to the plaintiff from the estate’s asset sale.

 Option 2: Transfer the Little Darling Street property to the plaintiff along with a cash amount and sell other properties to cover beneficiaries’ shares. However, this option poses a significant issue as it takes the property away from Khristine, who was bequeathed in the Will.

Option 3: Similar to Option 2, this entails transferring the Little Darling Street property to the plaintiff with cash but adjusts rights. Hence, Khristine inherits the Montague Street property while David receives cash after his obligations. 

Overall, the Will’s original designations face challenges due to financial situations and the need for contributions from beneficiaries.

Therefore, Hmelnitsky J’s orders reflect Option 3 but with some minor adjustments. Given the complexity of the orders and because many are like directions or advice to the Defendant regarding the administration of the estate, Hmelnitsky J granted the Defendant the liberty to apply for further guidance for six months. The Court orders:

1. under s59 of the Succession Act 2006 (NSW), the Plaintiff shall receive a provision from the Estate of Bruce Arthur Pillinger (referred to as the “Estate” and the “deceased”) in place of the provision allotted to her in clause 3D of the deceased’s Will dated 9 May 2011, which comprises the following: 

  • (a) A complete grant of the real estate located at 20 Little Darling Street, Balmain in New South Wales (encompassing the entirety of the land in Identifier Folio 292/1009922) (“Little Darling Property”); and 
  • (b) A lump sum amounting to $962,500. 

2. By s59 of the Succession Act, s46(2) of the Probate and Administration Act 1898 (NSW), and r54.3(4) of the Uniform Civil Procedure Rules 2005 (NSW), the Court issues the orders and directions and advises the Defendant as detailed in Annexure A attached to these orders. 

3. that no interest shall accrue on the lump sum mentioned in Order 1(b) paid in compliance with these Orders; if not, interest shall apply to any outstanding amount, calculated at the rate specified by section 84A(3) of the Probate and Administration Act, on any unpaid portion of the lump sum from 28 days after the day following the due payment date, until following full payment. 

4. The Plaintiff’s legal costs of the proceedings, assessed on an ordinary basis, will be covered by the deceased’s estate. 

5. The Defendant’s legal costs of the proceedings, assessed on the indemnity basis, will be paid or retained as appropriate from the deceased’s estate. 

6. The parties are GRANTED LIBERTY to make applications in these proceedings for related and ancillary orders aimed at giving effect to and implementing the orders given herein for six months from the date of this judgment.

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