THE ROLE AND FUNCTION OF THE MASTER
From the Law Society Journal, April, 2004
[editors note: as from 15 June, 2005, Masters of the Supreme Court of NSW are now referred to as Associate Judges]
By Master John K. McLaughlin. This paper is an edited version of an address he gave to Wills and Estates Accredited Specialists of the Law Society in November, 2003.
SINCE THE COMMENCEMENT OF THE Supreme Court Act a little over 30 years ago the powers and functions of the Masters have greatly increased and have been constantly augmented by the amendments to the Supreme Court Rules. At present, one of the chief areas of work of the two Masters assigned to the Equity Division is in respect to the Family Provision Act 1982. As a matter of administrative arrangement within the Equity Division, almost all proceedings under that statute are dealt with by a Master. Only those family provision claims for which hearings are estimated to exceed five days are now heard by a judge. Since the hearing of most family provision claims occupies an average of two to three days, the vast majority of proceedings under the Act are heard by a Master.Increase in number of claims
In recent years there has been an enormous increase in the number of claims brought under this statute. For example, at the regular monthly Master’s callover for the allocation of hearing dates there are usually about 70 matters listed. Of those 70 matters usually between 55 and 60 (sometimes more) are claims under the Family Provision Act.
My personal experience would almost suggest that in NSW no will remains unchallenged. Of course, by definition, those contented families whose members are satisfied with the testamentary dispositions of a parent or spouse never come before the Court.
There are a number of possible reasons for the very large volume of claims under the Family Provision Act, being both a large number in absolute terms and a large number of estates in relation to all claims heard by the Court and also in proportion to the number of estates in which probate or administration is granted.Reasons for increase
One reason is, of course, the increase in population, now at 20 million.
Another reason is the expansion of categories of persons who are entitled to make such claims. When the Testator’s Family Maintenance and Guardianship of Infants Act (the statutory predecessor of the Family Provision Act) was enacted in 1916, the only persons entitled to make claims thereunder were widows, widowers and children (and able-bodied adult children had little prospect of success). It was only in 1938 that the Act was amended to allow a claim for provision to be made in an intestate estate, and even then such a claim could be made only by the widow or children of the intestate. The widower of a female intestate was left without redress.
When the Family Provision Act was enacted in 1982 categories of eligible persons included not only spouses and children, but also de facto spouses, former spouses, and those falling within paragraph (d) (s.6) of the definition of eligible person: being a person,
"(i) who was, at any particular time, wholly or partially dependent upon the deceased person, and
(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of a household of which the deceased person was member."
Although paragraph (d) was originally intended to provide mainly for either the case of of a stepchild who had been brought up as if he or she were a child of the testator or for the case of a grandchild who had been dependent upon the testator, many of the persons who now bring a claim under this category of eligible person have a far more remote and far more tenuous relationship with the testator. Almost any person who has ever lived under the same roof as the testator now considers that he or she is entitled to bring a claim for provision. Claims by nephews or nieces or distant cousins, claims by children of present (or, often, long forgotten former) de facto spouses of the testator are frequently encountered.
Many of these latter claims could fairly be described as a "try-on". The claim is frequently brought in the hope that the cost to the estate of defending such a claim and the UNLIKELIHOOD OF THE ESTATE RECOVERING ANY COSTS ORDER IN ITS FAVOUR will result in the estate buying off the unmeritorious plaintiff with some relatively small settlement offer.
Claims by plaintiffs in these categories, no matter how unmeritorious, appear to be instituted with increasing frequency. The former lodger or housekeeper claiming to be the de facto wife (even where the testator lived in another country for 51 weeks of the year); the children of a former de facto who lived in the same residence as the deceased for a matter of only a few weeks or several months and whose relationship with the deceased was so bad that they subsequently set fire to his residence and were charged, convicted and jailed in consequence, are instances of persons asserting that they are eligible persons within paragraph (d).
Even when such persons can establish eligibility, and thus the standing to bring proceedings, they must nevertheless fulfil the requirements of s.9(1) of the Act to establish that there are factors which warrant the making of the application. That requirement enables the Court to filter out some of the more outrageous unmeritorious of the claims.
Another reason for the increase in proceedings under the Family Provision Act is the fact that some practitioners actively encourage the bringing of such claims. In recent years this on occasion has taken the form of advertising in the media, both print and by radio (possibly also on television).
Doubtless, some persons with legitimate claims are totally unaware of their rights and of the existence of the Family Provision Act. Nevertheless, it is my impression that such wide-scale advertising results mainly in persons with unmeritorious or hopeless claims being encouraged to bring proceedings and to persist in their claims in the hope of pressuring the estate into a settlement, if only to meet the costs of the advertising solicitor, who usually offers to conduct the litigation on a no win-no fee basis.Family dynamics
Another reason for the increase in claims under the Act may have its source in sociological and psychological factors. We have all encountered instances where a claim is brought by one or more of the adult children of the deceased and is opposed by the other adult child or children of the deceased. That kind of claim usually concerns a piece of real property, often a rural estate, such as a farm or smallholding. The evidence adduced in claims of this nature, often encompassing personal relationships among family members extending over 50 years or even longer, although usually of little relevance to the claim advanced by the plaintiff, appears to have something of a cathartic effect for those parties and witnesses offering the evidence.
Fortunately, experienced practitioners are usually alert to the following salutory admonition of Windeyer J in the High Court of Australia in Blore v Lang (1960) 104 CLR 124 at 137, concerning the statutory predecessor of the Family Provision Act:
"The jurisdiction under the Testator’s Family Maintenance Act is to provide to deserving persons according to their requirements, not to reward past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasised at the expense of evidence directed to the central issues of the case."
Experienced practitioners in the main succeed in resisting the desire of their clients to cross-examine upon such evidence of family relationships and services to the testator.
Statements attributed to the testator are also a fertile ground for diverting the Court from the essential questions to be determined. It should never ne overlooked that testators are human. Some are duplicitous or devious, others enjoy exercising power and control over members of their family. The fact that one witness says that the testator expressed an intention to leave the estate to A, while another witness says that the testator expressed an intention to leave the estate to B, does not necessarily mean that either witness is not telling the truth. Many are the instances where, to suit his or her own purposes, a testator has told one member of the family that the entire estate will be left to that member. Similarly, a testator who has altered his or her will is usually unlikely to tell a former beneficiary that he or she is now omitted or that his or her benefit has been reduced.Evidence of needs
It is extraordinary how frequently an applicant for provision does not place before the Court evidence of his or her needs. Indeed, in many instances the applicant appears not to have considered what ir is that he wants. Sometime he says that he wants a residence for himself. But not even in general terms is such evidence identified, let alone the cost thereof, or how the acquisition might be funded. If the time and energy which is frequently devoted to the preparation of evidence relating to the services of the applicant to the testator and the relationship between the applicant and the testator, and also between the testator and the chosen objects of his testamentary beneficence (a somewhat curious approach), were devoted to placing before the Court specific evidence as to the needs of the applicants and the pecuniary cost of satisfying those needs, the limited resources of the Court could be used to greater advantage, and also THE COSTS OF THE PROCEEDINGS WHICH ULTIMATELY ARE PAID OUT OF THE ESTATE, could be somewhat reduced. Most practitioners will be aware that over the past few years the Court has required that claims under the Family Provision Act the solicitor for each party file and serve an affidavit setting forth an estimation of the costs of that party, and also serve that affidavit upon his own client. Often the costs are grossly out of proportion not only to the size of the estate but also to the nature of the proceedings. It now appears to be frequent that a solicitor for a plaintiff will estimate the costs of his client upwards of $50,000 in respect of a totally unexceptional claim by a surviving spouse or an adult child where the hearing occupies no more than one day and where the size of the distributable estate is in the range of $300,000 to $400,000.Costs may be capped
In consequence, it is likely that the Court will introduce appropriate rules which will have the effect of capping costs at maximum amounts in family provision claims. The Court is also giving consideration to whether such claims should be decided upon the papers without the necessity for a public hearing of the proceedings, and even, at least in the first instance, without written reasons for the Court’s decision and orders.
It will be apparent that litigation under the Family Provision Act is a growth industry. The Court should not deter those with genuine and legitimate claims from exercising their rights. However, while the purpose of the legislation is to benefit not merely widows and orphans, but also de facto spouses, adult children, and persons in certain other categories who fall within paragraph (d) of the definition, nevertheless, THE PURPOSE OF THE STATUTE IS NOT PRIMARILY TO BENEFIT THE LEGAL PROFESSION. The drumming up of cases in certain fields is something which seems to me to be a somewhat distasteful exercise. Able and experienced practitioners should be available to present the claims of their clients, but should not be doing so primarily for the benefit of the practitioners themselves.Other matters for Masters
As I have already observed, claims under the Family Provision Act now account for about three-quarters of the work of the Masters in the Equity Division. Only a small proportion of the work now relates to the taking of accounts in estates. The Masters, however, still exercise a statutory jurisdiction of the Court relating to the giving of judicial advice (under s.63 of the Trustee Act 1925) and to advantageous dealings (under s.81 of the same Statute).
From time to time the Masters deal with next-of-kin inquiries. But nowadays, these inquiries are not as extensive as that undertaken by Master Parker in the estate of the late Thomas Walker, a leading nineteenth century merchant, banker and benefactor. He died on 2 September, 1886 at his extensive Yaralla estate at Concord on the Parramatta River. By his will he set aside 100,000 pounds for the building and support of what later became the Thomas Walker Convalescent Hospital at Concord. The remainder of his enormous fortune he left on trust for his daughter. When she, Dame Edith Walker, also a great benefactor and philanthropist, died unmarried in October 1937 the fund, then about 800,000 pounds, was divided under Thomas Walker’s will, into two parts, one to go to next-of kin, the other to charitable trusts. None of Walker’s brothers and sisters had left children, and advertisement for next-of-kin brought more than 600 claimants, from Scotland, England, South Africa, the United States, France, Norway and most Australian States. Master Parker and a large number of leading members of the Equity Bar of NSW spent several months in the summer of 1939 in the wilds of Northern Ireland and remote corners of Scotland (where Thomas Walker had been born in 1804), in conducting the next-of-kin inquiry. Ultimately, 33 claimants established a fifth-degree blood relationship, and each received about 12,000 pounds; the entirety of the costs of the next-of-kin inquiry (including travel expenses for the Master and for counsel) of course being paid out of the estate of the testator. Would that such inquiries were conducted nowadays.
Another area in which the Masters have jurisdiction is in the field of charities and charitable trusts, especially in cases where a scheme must be directed in order o implement a charitable trust which is not sufficiently prescribed by the will; or where the trust should be implemented cy pres (enabling a failed gift to charity to go to another charity). Sometimes it is necessary for a Master in a family provision claim to deal with a conflict between a charity (often a deserving institution) and a relative (sometimes not so deserving).
The foregoing are the chief areas in which the Masters exercise to power of the Supreme Court of NSW in relation to wills and estate. There is no indication that the work of the Masters in these fields is likely to diminish.
A brief history of the office MasterThe office of Master of the Supreme Court of NSW in its present incarnation has existed only since the commencement of the Supreme Court Act 1970 on 1 July, 1972. Part 8 Division 1 of that Act provides for the appointment of one or more Masters, and for the powers of the Masters. Those powers are more fully set out in the provisions of Part 60 of, and Schedule D to, the Supreme Court Rules 1970.
However, the origins of the office are far more deeply embedded in the administration of justice in NSW. The Letters Patent of 1823 (known as the Third Charter of Justice) under which the Supreme Court was established in May 1824 provide for the appointment of various ministerial officers of the Court, including a Registrar, a Prothonotary, a Master a Keeper of Records.
The office of Master was filled by the appointment of William Carter as Master of the Supreme Court. The first Chief Justice, Francis Forbes, complained in 1827 that the office was a sinecure, saying that the Master had "comparatively very few duties, properly official, to perform in the Supreme Court" and that in three and a half years only eight cases of simple matters of fact had been referred to him. By that time the Master was largely regarded as being purely an officer in the Equity jurisdiction, and the Governor, in a despatch of December 1827, referred to carter by the title of "Master in Chancery".
The following year the office fell vacant when Carter was appointed Sheriff of NSW. However, when a new sheriff arrived in the colony in 1829 Carter lost no time in retrieving his former position as Master. When in 1832 Carter was declared insolvent and dismissed, the opportunity was taken to abolish the Mastership entirely. It was revived in 1840 by an Act of the local legislature; the office now being designated as "Master in Equity". Under that designation the office continued until the commencement of the Supreme Court Act 1970. The functions of the Master in Equity were both administrative and judicial. The judicial functions were of an essentially limited nature, and consisted mainly of matters referred by a judge in the Equity jurisdiction, usually in respect to inquiries (such as inquiries as to valuation of property, be it real property or investments (such as shares), or next-of-kin inquiries) or the taking of accounts (such as estate accounts or partnership accounts).
Like many legal concepts and institutions in Australia, the office of Master or Master in Equity had its origins in England and in the office of Master in Chancery, which office developed throughout the thirteenth and fourteenth centuries.
By the beginning of the fifteenth century the Masters ion Chancery were placed in order of precedence before the Chancellor and Barons of the Exchequer.
Their robes were yellow or mustard-coloured, and the Masters were provided with two sets of robes a year, one trimmed with fur for the winter and one with taffeta for the summer. They were also provided with 12 tuns of wine a year by the Queen’s butler, and many other emoluments, including a barge on the River Thames for travelling on official business. By the eighteenth century to office of Master in Chancery had become highly lucrative, and the office came to be sold for as much as 5,000 pounds (or even 5,000 guineas), an enormous amount of money in those days. Modern Masters are not enabled to traffic in their offices.
Released: 27 January 2008
Legal fees for cases involving disputes over wills are to be capped
to stop lawyers wiping out estates with excessive charges, said NSW
Attorney General John Hatzistergos.
Mr Hatzistergos said legal costs in family will disputes routinely
ran into tens or hundreds of thousands of dollars.
"Costs can wipe out a huge chunk of a deceased person’s will leaving
family members and dependents with virtually nothing," he said.
Mr Hatzistergos said the reforms could include:
Setting a sliding scale of the maximum amount of costs that could be
awarded in disputes over wills. The scale could take into account
factors such as the size of the estate and the number of claimants;
Setting out guidelines about the maximum amount of costs that can be
paid out of estates.
Mr Hatzistergos said the reforms were being examined in consultation
with the Bar Association and the NSW Law Society, and were part of
wider move to unify state and territory laws governing wills.
Mr Hatzistergos said that in one infamous 2005 case, known as
Sherborne Estate, the legal costs for three adult children combined
were $605,000 – which the judge said was more money than the
children had hoped to get from the will.
The case was so outrageous the judge described it as a ‘dark stain
on the administration of justice’ and compared it to the Charles
Dickens’ novel Bleak House, said Mr Hatzistergos.
He said that in another case involving three infant children the
bill came to $171,000 when a dispute about their deceased father’s
estate dragged out because of animosity between the children’s
mother and the father’s defacto wife.
Mr Hatzistergos said he had been advised that the Supreme Court had
said that some lawyers were billing their clients more than $30,000
for simple one day cases, while more complex cases regularly
attracted fees of more than $100,000.
Mr Hatzistergos said the reforms will not only cut down on excessive
legal fees but also encouraged lawyers to settle disputes out of
court.
