Court awards claim in estate planning dispute over verbal agreement

It also concerned an application by George’s stepsons for family provision orders under the Succession Act 2006 (NSW).

The plaintiffs in the case, Paul and Karl Lucas were George’s stepsons from his marriage to Jill.

The first defendant in the case was John Salman, George’s brother and the nominated executor of George’s estate.

The other defendants were Jodie Salman, George’s wife at the time of his death and George’s biological children from his first marriage, Joanne and Paul.

Jill died in February 2016. Her assets at the time of her death were:

• A half share as joint tenant in an Illawong property which passed to George by survivorship.
• Superannuation of $202,000.
• Estimated assets of $50,000 for an import company Jill operated.
• Jewellery of unknown value.

On 5 April 2016, George made a will (the 2016 Will) which divided the residue of his estate equally between the plaintiffs and the third and fourth defendants.

In May 2016, George met the second defendant, Jodie, and started a relationship the same month.

On 15 October 2017, George made a new will (the 2017 will) which divided his estate:

(1) A red corvette to John.

(2) $100,000 to Jodie.

(3) The residue divided equally between Joanne and Paul Salman.

On 19 February 2019, George made his final will (the final will) which was in identical terms to the 2017 will except it increased the legacy to Jodie from $100,000 to $350,000.

Around June 2016, the plaintiffs alleged that George had offered to leave them one fourth of his estate and to repay their mother’s superannuation if they agreed not to make a claim out of their mother’s estate and allowed him to have her super.

The plaintiffs claimed that after speaking to one another they gave their consent to their purported agreement.

In an amended statement of claim, the plaintiffs sought a declaration that the late George Salman entered into a valid and enforceable agreement with the plaintiffs to leave a quarter of his estate by will to each of the plaintiffs and take steps as may be necessary to cause each of the plaintiffs to receive a half of his superannuation entitlements at death and a quarter of the proceeds of any life insurance policy he may have effected in respect of his life.

Alternatively, they sought a declaration that the deceased was estopped from denying that he would leave, a quarter of his estate by will to each of the plaintiffs and take such steps as maybe [sic] necessary to cause each of the plaintiffs to receive a half of his superannuation entitlements and a quarter of the proceeds of any life insurance policy he may have effected in respect of his life.

In his decision, Justice François Kunc noted there was a paucity of evidence to support the fact that the conversations between George and the plaintiffs in 2016 ever occurred.

“The only contemporaneous evidence of such an agreement comprised two or three conversations among family members. There was no written evidence recorded by either party to confirm its existence,” stated Justice Kunc.

The Court therefore could not be satisfied that any conversation had taken place in the terms alleged.

“There was inconsistency between the accounts of the plaintiffs and their witnesses as to the substance of the agreement. The only consistent aspect of any such agreement was in relation to Jill’s superannuation,” stated Justice Kunc.

“Even if the conversations had occurred as alleged, they did not rise to the level of contract because there was no intention to create legally binding relations between George and the plaintiffs,” he stated.

He did not accept that the George’s death benefit ever formed part of any agreement or discussion between George and the Plaintiffs or that there was any alleged agreement that the Plaintiffs would receive a quarter share each of George’s estate. 

“While absolute precision is not required in cases of oral contracts, the Court is reluctant to ascribe greater certainty to the promises of the deceased without corroboration,” he explained.

“While the Court is satisfied there was a representation with respect to superannuation, the Court cannot sever the superannuation from whatever any agreement as a whole may have been in order to find a contract.”

However, Justice Kunc did accept that there was a representation by George to the Plaintiffs in relation to Jill’s superannuation.

“I am satisfied that the plaintiffs have made out an estoppel. It is clear from the Court’s factual findings, that representations were made by George to the effect that he would give the Plaintiffs his superannuation in exchange for not making a claim against Jill’s superannuation and estate and the Court accepts this. I accept that the plaintiffs relied upon this representation,” he stated.

“Although the Court is also satisfied that representations were made in respect of the Plaintiffs inheriting a portion of George’s estate, those representations do not establish an entitlement to a quarter share of George’s estate. The balance of authority establishes a higher threshold for certainty in cases of promissory estoppel than in proprietary estoppel.”

Justice Kunc accepted the submission that the relevant detriment suffered by the plaintiffs was the loss of opportunity to pursue a claim against Jill’s superannuation and/or estate.

“The plaintiffs have succeeded in their estoppel claim and are entitled to receive an amount equal to the balance of George’s superannuation, being $211,892.84 with interest from the date of his death,” he stated.

“The defendants will be given an opportunity to determine among themselves how the moneys are to be paid.”