Still a lot of shoes: Largest payout in Australian family provision history reduced on appeal

Mr Michael Wright died on 26 April 2012, aged 74, with what was described by the Supreme Court of Western Australia as a “colossal estate”, in excess of about $1 billion.

In his Will made 6 March 2012 Mr Wright left his daughter (from an earlier relationship), Ms Olivia Mead, the sum of $3 million, to be held on trust until Ms Mead attained the age of 30 years (and conditional upon a swathe of conditions, including that Ms Mead would be disentitled from receiving anything if she became an alcoholic or became involved in ‘untraditional faiths’).

By contrast, Mr Wright had left his other daughters born of a later marriage, Ms Baldock and Ms Burt, the sum of about $400 million.

At first instance the Court, upon a family provision application filed by Ms Mead, made a conditional order inserting a substitutory clause into Mr Wright’s Will, with the effect that Ms Mead would have instead received $25 million from Mr Wright’s estate.

Section 6(1) of the Family Provision Act 1972 (WA), under which Ms Mead’s application for family provision was then filed, stated:

“If any person … dies, then, if the Court is of the opinion that the disposition of the deceased’s estate effected by his will … is not such as to make adequate provision from his estate for the proper maintenance, support, education or advancement in life of any of the persons mentioned in section 7 as being persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion … order that such provision as the Court thinks fit is made out of the estate of the deceased for that purpose”

In reaching its decision at first instance, the Court reportedly had evidence before it that Ms Mead’s “need” for provision was calculated with reference to her anticipated future expenditure which included a $250,000 diamond encrusted bass guitar, a $1 million piano, a $2.5 million home, 20 pairs of $300 shoes (annually, for 75 years into the future), and Pilates classes until Ms Mead reached the age of 97.

On appeal, the Court reduced the sum granted to Ms Mead to $6.14 million, upon its finding that a lesser amount would be adequate for Ms Mead’s proper maintenance to ensure her financial security for the remainder of her life.

The Court of Appeal reached its decision upon a finding, amongst others, that the size of Mr Wright’s estate did not mean that the Court at first instance had an unfettered discretion to make such provision as it thought fit, but rather only as it thought fit for the purpose of ensuring that adequate provision was made for Ms Mead’s proper maintenance, support, education and advancement in life.

The Court was not entitled, it was held on appeal, to exercise its discretion on the basis that, having regard to the size of Mr Wright’s estate, Ms Mead could be “spoiled” or because there was a community expectation that required that Ms Mead should be more than adequately provided for or to “set her up for life”.

Ms Mead was only 16 years of age at the time of Mr Wright’s death, and the Court of Appeal found that evidence that she had given as to her anticipated future expenditure was unhelpful, did not assist her case, and was inevitably artificial and speculative because she was still a child and her needs into the future could not have been predicted with any certainty.

The Court concluded that a capital sum of $6.14 million would mean that Ms Mead would be able to purchase a $1.5 million reasonably substantial house in the Perth metropolitan area, and would provide her with an annuity of about $100,000 per annum to ensure that she received an income stream that was adequate and proper for her maintenance, for the remainder of her life.

The Court of Appeal’s decision is available here: Lemon v Mead [2017] WASCA 215

The Court’s decision at first instance is available here: Mead v Lemon [2015] WASC 71