New court procedures to speed decisions in deceased estate cases
The Supreme Court (Court) announced on 22 May 2009 that changes to be introduced on 1 June 2009 will ensure family provision deceased estate disputes will be resolved faster, more easily and with less cost in the Court. The changes are not unexpected - the pending changes were talked about when the new family provision law was recently included in the NSW Succession Act 2006.
The Court has introduced new Practice Note SC Eq 7 (Practice Note) which will take effect from 1 June 2009. The new Practice Note will apply to all family provision applications under the NSW Family Provision Act 1982 and the NSW Succession Act 2006.
The new Practice Note provides for:
a requirement that certain documents must be served by the parties to a dispute;
a standard affidavit setting out the information required to be placed before the Court by a person making a family provision claim;
the information required to be included in the affidavit from the executor/administrator of an estate in response to a family provision claim against the estate;
the first directions hearing to be listed before a Registrar at least seven days after the summons is filed;
compulsory mediation of all disputes, unless the Court orders otherwise;
the management of cases online prior to a Court hearing, if appropriate;
costs penalties if irrelevant material is included in a party's affidavit; and
the possible capping of legal costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less that $500,000.
Annexure 1 to the Practice Note is the Court approved form of the plaintiff's affidavit which is to be adapted and used in all family provision applications. The usual information previously contained in the plaintiff's affidavit (such as the plaintiff's future needs) are still required but in a more concise and standardised format.
The plaintiff's present circumstances need to be included in the affidavit including their age, whether they live alone or with someone, their state of health and whether they received any gifts or benefits from the deceased. Details of assets and liabilities as well as monthly expenditure (excluding credit card payments) will be contained in annexures to the affidavit.
Significant changes include the requirement to:
annex copies of income tax returns and income tax assessments for the plaintiff for the past three years;
include a statement in the affidavit stating that the plaintiff has provided access to the other parties to his/her bank statements and credit card statements for the past three years;
provide details in the affidavit of real estate and shares purchased or sold by the plaintiff in the past five years;
provide details of gifts of amounts of $1,000 or more made by the plaintiff in the past five years;
provide details of property of $1,000 or more sold by the plaintiff in the past five years;
provide details of interests in companies or trusts and their underlying assets;
provide details of the assets (including superannuation and joint assets), liabilities and the past three years of income for the plaintiff's spouse/partner; and
provide details of any claim on the deceased's notional estate.
Annexure 2 to the Practice Note sets out the usual order for mediation that will be made at the time the matter is referred to mediation by the Court. It contains orders about the documents and information that must be filed and served prior to the mediation as well as documents that must be given to the Mediator not less than three working days prior to the mediation.
Annexure 3 to the Practice Note sets out the usual orders for directions by online hearings that the parties should expect the Court to make. An online hearing means a hearing conducted pursuant to s71 of the NSW Civil Procedure Act 2005 and Part 3.9 of the Uniform Civil Procedure Rules 2005 and in accordance with Practice Note SC Gen 12.
If the matter fails to settle at mediation, Annexure 4 to the Practice Note sets out the usual orders that will be made by the Registrar when setting the matter down for hearing. The orders include that any offer of compromise must be served not less than four weeks before the hearing date. There will also be orders made that deal with the dates by which required documents and information must be filed and served by the parties.
Review of Current Practice
The changes to be introduced by the new Practice Note are focussed on streamlining the procedures, reducing delay and minimising legal costs. It is important for solicitors and statutory trustee companies that are involved in family provision deceased estate disputes to review and amend their current practice to ensure compliance and to minimise the risk of costs penalties for non-compliance.
Author: Gerard Basha