The Supreme Court of Western Australia handed down an award of $25 million to Olivia Mead, the daughter of Michael Wright, in a recent family provision decision. Mr Wright died in 2012 and was son of Peter Wright, the co-founder of Hancock Prospecting and Wright Prospecting with the late Lang Hancock. Before the decision was handed down we wrote about the case here.
Mr Wright died on 26 April 2012 aged 74. He was survived by his wife whom he married on 2 May 1997. He was survived by three adult children born of his earlier marriage, and Ms Mead.
Master Sanderson was quite accurate when he described the estate as “colossal”. The estate, although difficult to precisely estimate, was projected to be in excess of $1 billion. Master Sanderson was also correct in stating that “it is difficult for most people to comprehend such wealth”. For most Australians the concept of $1 billion of wealth is certainly not easy to grasp.
Mr Wright made his last will on 6 March 2012 and that will was altered by codicil on 11 March 2012. Ms Mead brought an application on the estate claiming she had been left without adequate provision under the terms of the will and codicil.
Where adequate provision has not been made from an estate for the proper maintenance and support of certain categories of persons relating to a deceased person, the Court may make an order that such provision be made out of the estate of the deceased for the applicant.
As a child of the deceased, Ms Mead is eligible to bring a family provision application pursuant to the relevant legislation in Western Australia. The legislation is largely mirrored in every Australian state and territory.
The Court has laid out a two stage process for deciding an application for family provision. In summary, the two stages are:
- Under the will or intestacy rules, is there inadequate provision for the applicant’s proper maintenance, education and advancement in life?
- If so, what if any, provision ought to be made out of the estate in favour of the applicant.
There are a number of factors relevant to the Court’s two stage enquiry as set out above. Traditionally, the predominant considerations for the Court are the financial and material circumstances of the applicant (or their ‘need’) and the nature of the relationship between the parties.
Master Sanderson in his decision stated “In my view it is clear the will of the deceased did not make adequate provision for the plaintiff” and exercised his discretion to make an order in favour of Ms Mead by way of a lump sum cash payment of $25 million from the estate. Master Sanderson justified his decision by averting to a number of matters, in particular, the incredible size of the estate. Master Sanderson appeared to be principally concerned with ensuring Ms Mead and her children, and perhaps even her children’s children, would not need to worry about money ever again. He stated “Wisely invested the fund will provide enough income so the plaintiff and her relatives will never want for anything again”.
The result of $25 million sent shock waves through the legal community. It is believed to be the largest family provision award ever made in Australia. The family provision jurisdiction has traditionally been a needs based jurisdiction. That is, predominantly based on the financial and material circumstances of the applicant. With that kind of legal backdrop the question begs – how could anyone possibly need $25 million?
Given the reaction of the legal fraternity and the amount of money involved it is not so surprising the decision of Master Sanderson is now under appeal. Many will be waiting with bated breath for the result of the appeal which may drastically change the playing field for family provision applications in Australia.
To find out more about family provision applications listen to our podcast interview.
Attwood Marshall Lawyers have a dedicated team of Wills & Estates lawyers that specialise in estate planning and estate litigation. Contact our Department Manager Donna Tolley on direct line 07 5506 8241 or freecall 1800 621 071.