A person cannot contract out of their right to apply for further provision under the Family Provision Act 1972 (WA) FPA unless the family provision legislation provides to the contrary.1 The case authority in support of this proposition that is commonly cited is Lieberman v Morris (1944) 69 CLR 69. Further, in the High Court case of Smith v Smith (1986) 161 CLR 217, the court acknowledged the principle that unless a statute provides otherwise,2 any agreement to forgo a right to apply for family provision is void as being contrary to public policy.
The Law
The FPA establishes a discretionary power of the Court to provide proper maintenance, support, education, or advancement in life for the eligible persons in section 7 of the FPA.3
In Brooks v Burns Philp Trustee Co Ltd, Windeyer J stated the general proposition:
‘When a statute creates and confers rights and imposes corresponding duties, persons for whose benefit this was done may be contract waive or renounce their rights, unless to do so would be contrary to the statue. It may be seen that it would be so, because of an express prohibition against ‘contracting out’, or because the provisions of the statute, read as a whole, are inconsistent with a power to forego its benefits: or the policy and purpose of the statute may shew that the rights which it confers on individuals are given not for their benefit alone, but also in the publish interest, and are therefore not capable of being renounced’.4
Therefore, generally speaking, contracting out of an FPA claim may be void and unenforceable by reason of public policy—the contracting out may deprive an applicant of a statutory right, especially when the financial circumstances between the applicant and deceased have altered dramatically since entering into the contract.
The leading authority of the proposition that an FPA claim cannot be contracted out is Lieberman v Morris (1944) 69 CLR 69 (discussed below). However, a more recent High Court case on this point is Vigolo v Bostin (2005) 221 CLR 191, where Gleeson CJ stated5: ‘This Court has also relied upon a dominant legislative purpose of enforcing moral duties as a reason for refusing to give effect to an attempt to contract out of making a claim.’6
Lieberman v Morris (1944) 69 CLR 69
In Liberman v Morris, the respondent, Elizabeth Morris, at the age of 42, married Jacob Morris, then aged 78. Prior to the marriage, the parties entered into a deed agreement where Elizabeth covenanted that she would not institute any claim under the then family provision legislation of New South Wales. Jacob covenanted that he would devise or bequeath to her property to the value of not less than £500. By his will, he gave £500 to Elizabeth, and by a codicil left to her his household furniture and effects and a sum of £3 per week until death or remarriage.
Notwithstanding this agreement, Elizabeth made an application for provision. The High Court held that she was not precluded from doing so by reason of the agreement. The basis of the decision was that it would be contrary to public policy for such a contract to have effect. Williams J stated that:
‘The scope and policy of the Act … is to empower the court in the public interest to control for an important purpose the distribution of a testator’s estate. It is clear to my mind that to allow contracting out would prevent or tend to prevent the Act assuring to the dependants of a testator that fill and effective benefit which it expressly states to be its purpose … the Act gives to all persons within the enumerated class an unconditional right to apply
… to set up a contract as a bar therefore to the court exercising the whole or any part of its jurisdiction under the Act is to attempt to oust or fetter the discretion of the court entrusted with the application of the section.’7
The impact of contracts on the quantum of an FPA claim
It should be noted, however, that while such agreements contracting out of a FPA claim are void, the court will nevertheless take the contract into account in deciding whether or not an order should or should not be made.8
Section 95 of the Succession Act 2006 (NSW) provides that a person may agree, at any time, to waive their rights to apply for family provision. However, such a release is ineffective unless it is approved by the court. These proceedings for approval may be brought before or after the death of the deceased. The court is required to have regard to a number of factors in making its decision as to approval or otherwise, including whether at the time of the release it was financially or otherwise advantageous to the releasing party to enter into the agreement, whether the agreement was fair and reasonable, and whether the releasing party had and gave due consideration to independent advice. If a release is approved, then obviously the decision in Lieberman v Morris is not applicable.
1 See ‘5 Succession Act 2006 (NSW) – Contracting out of a FPA claim’
2 Ibid.
3 Family Provision Act 1972 (WA) s 6(2).
4 Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432, 456.
5 In the context of a claim under the then Inheritance (Family and Dependants Provision) Act 1972 (WA) which was renamed on 16 January 2013 to become the now known Family Provision Act 1972 (WA). 6 Vigolo v Bostin (2005) 221 CLR 191, [12]-[15], citing Lieberman v Morris.
7 Lieberman v Morris (1944) 69 CLR 69, 92.
8 Singer v Berghouse (1994) 181 CLR 201.