Following
the posts over recent weeks relating to challenges against deceased estates,
this week’s post, with thanks to team member Hayden Dunnett, considers another
relevant decision, namely Hills v Chalk & Ors (as executors of the
estate of Chalk (deceased)) [2008] QCA 159. The case is important because
it starkly highlights the potential significance of a Binding Financial
Agreement (BFA) even where the BFA does not comply with the Family Law
Act.
As usual, a
full copy of the decision is available via the following link http://www.austlii.edu.au/au/cases/qld/QCA/2008/159.html.
Mr Hills
and Mrs Chalk entered into a ‘pre-nuptial’ agreement in 1994, which was before
the ability to make an enforceable BFA. The terms of the pre-nuptial
agreement were essentially contractually based and provided that in the event
of their separation, they were each to retain their own assets and make no
claim for property settlement, or maintenance from the other. The
agreement also recorded a joint intention to preserve their assets for their respective
families. Importantly, they acknowledged that each party should not seek
to defeat the intention of the other.
Mrs Chalk
died in February 2003, and probate was granted in April 2003 to the children of
Mrs Chalk. In September 2007, some 4 years after her death, Mr Hills made
an application for further provision from the deceased estate. In her
will, Mrs Chalk had given Mr Hills a right to reside in her house, and a legacy
of $20,000 in recognition of him caring for her during illness. The balance
of her estate was left to her children.
The court
refused Mr Hills’ application stating it was ‘distinctly improbable’ that
Mrs Chalk had failed to make adequate provision for Mr Hills.
In
particular, it was held that the ‘pre-nuptial’ agreement made by the parties,
although not of itself directly decisive against Mr Hills' claim, was of
significance to the assessment to be made by the court of Mr Hills' application
for further provision.
Following
the decision in this case it is generally accepted that a BFA, perhaps even if
not binding for Family Law purposes, will be taken into account in any claim
for further provision from an estate.
Until next
week.
Image credit: Leo Grübler cc