Antoun v Antoun

JUDGMENT

These reasons deal with two related proceedings in which the plaintiffs sought family provision orders out of the estate or notional estate of the same deceased person pursuant to s 59 of the Succession Act 2006 (NSW).
As most of the parties have the same surname, Antoun, I will with no disrespect intended refer to them by their given names.
One case, which I will call the "principal proceedings", being proceedings file number 2019/00118417, involves an application by Tarnya Antoun and Tamara Antoun (the plaintiffs). The application is made in relation to the estate or notional estate of their late father, Antoine (Tony) Antoun (the deceased), who died on 2 July 2018. Tarnya and Tamara are the eldest two daughters of the deceased by his first wife.
The deceased made a will on 12 January 2018 (the Will). The deceased made no gift to the plaintiffs in the Will. Instead, the deceased nominated his third and fourth daughters, Angelique Antoun and Ashleigh Antoun, as his executors, and left the whole of his estate to those daughters in equal shares. Angelique and Ashleigh are the deceased's daughters by a second marriage. Angelique and Ashleigh were named as the first and second defendants to the principal proceedings when they were commenced.
The deceased's second wife before their divorce is Mary Antoun. Mary is the mother of Angelique and Ashleigh and the fourth defendant to the principal proceedings. Mary was joined as a party because she is the registered owner of property that the plaintiffs wish be designated as notional estate of the deceased.
Angelique and Ashleigh have not sought probate of the Will. That is likely because the assets in the deceased's actual estate are insignificant.
As Angelique and Ashleigh did not obtain a grant of probate, they were not the appropriate parties to defend an application for family provision made by the plaintiffs. They declined to accept service of the plaintiffs' summons.
Consequently, in order to ensure that the proceedings were properly constituted, on 29 November 2019 Hallen J made an order that the third defendant, Joseph Hanna, an independent solicitor, be appointed as the representative of the estate for the purposes of the proceedings pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 7.10(2)(b). His Honour noted that Mr Hanna should be joined as the third defendant, and that Mr Hanna was prepared to act on a pro bono basis in order to ascertain or attempt to ascertain the nature and value of the deceased's estate.
The second claim, which I will call the "associated proceedings", being proceedings file number 2021/00121060, was made by Mary after the commencement of the principal proceedings. The associated proceedings have been discontinued by Mary, and the only remaining issue for decision concerns the costs order that should be made.
The principal proceedings are unusual in that the Court will be able to decide some issues but will have to defer final judgment until a number of essential further steps are taken. It will be necessary to explain why this is so before the Court embarks upon the determination of the issues that can now be decided.
That explanation will be clearer if given by reference to the procedural history of the two proceedings. I will set out some of the important background evidence in the context of when it became apparent to the plaintiffs.
As the plaintiffs did not have sufficient information as to the nature or value of the assets in the deceased's estate, if any, it was necessary for the plaintiffs to make certain applications to the Court for the purpose of gaining the necessary information. The deceased and Mary were divorced only months before the deceased's death. It was initially unclear to the plaintiffs how orders made by the then Federal Circuit Court concerning the property of the parties to the marriage had affected the deceased's estate.
On 6 March 2020, Hallen J made orders permitting Mr Hanna to inspect documents produced to this Court by the then Federal Circuit Court and the Family Court. The inspection that was authorised was limited to documents filed by or on behalf of the deceased. Mr Hanna was required to notify Mary whether there were any documents that he believed were relevant to the principal proceedings and to identify the nature of those documents. Mary was directed to notify Mr Hanna whether she had any objections to the disclosure of any of the documents that Mr Hanna considered were relevant to the proceedings. The principal proceedings were then stood over to another date for directions.
On 3 April 2020, Hallen J made further orders, including one requiring Mr Hanna to provide to Mary copies of all of the documents that he considered were relevant to the principal proceedings, with all of the information that was relevant to Mary redacted. Mary was then required to inform Mr Hanna whether she objected to any other parts of the documents that had not been redacted being provided to the plaintiffs.
On 6 July 2020, Hallen J made further orders that had the effect of permitting Mr Hanna to inspect certain subpoenaed documents, and that access be given to the plaintiffs to inspect the documents, but only after the evidence in chief of each of the plaintiffs was complete: Antoun v Antoun [2020] NSWSC 860.
By no later than 14 December 2020, Angelique and Ashleigh had appeared in person, and on that day, Hallen J directed them to serve any evidence upon which they intended to rely, and for Mr Hanna to do the same.
Following a number of extensions, and repeated failures of Angelique and Ashleigh to appear, on 3 May 2021, Hallen J made an order pursuant to UCPR r 7.8 that the conduct of the whole of the principal proceedings on the part of the estate and notional estate of the deceased be given to Mr Hanna. Hallen J directed Angelique and Ashleigh to make a formal application to participate further in the principal proceedings if they wished to do so.
On 30 April 2021, Mary filed a summons by which she commenced the associated proceedings seeking family provision from the estate and notional estate of the deceased. The defendants were Angelique, Ashleigh and Mr Hanna. Mary filed an amended summons on 7 June 2021.
At a directions hearing in the principal proceedings on 4 June 2021, Hallen J noted the associated proceedings and directed the plaintiffs to provide to Mary a copy of all of the affidavits intended to be relied upon in the principal proceedings.
Also on 4 June 2021, in the associated proceedings, Hallen J made an order pursuant to UCPR r 7.8 that Mr Hanna have conduct of those proceedings on the part of the estate and the notional estate of the deceased.
On 27 September 2021, Hallen J noted in the principal proceedings that the plaintiffs required access to financial information relating to the deceased contained in the Family Court file, and that Mary opposed access by them to the information. I note that some procedural orders made by Hallen J refer to the then Family Court and it is possible that the correct reference was to the Federal Circuit Court.
On 27 September 2021, Hallen J also made a note in the associated proceedings that Mary's only remaining claim for relief was her claim for a family provision order as a former spouse of the deceased.
On 18 October 2021, Parker J gave the plaintiffs leave to amend their summons so as to specify any notional estate of the deceased to be the subject of a claimed designation order.
On 20 October 2021, Parker J granted to counsel for the plaintiffs access to certain subpoenaed documents in order to inspect the documents and to mark for identification such documents as were considered relevant to the finances of the deceased and Mary: Antoun v Antoun (No 2) [2021] NSWSC 1331. Mary was given an opportunity to inform the Court whether she objected to the marked documents being made available to the plaintiffs' solicitor or to the plaintiffs before access was granted.
Hallen J, on 18 November 2021, granted leave to the plaintiffs to file and serve a further amended summons and directed Mary, who was to be named as the fourth defendant, to file and serve her evidence by a specified date.
On 19 November 2021, Hallen J made a note in the associated proceedings of the agreement between all parties that Mary would provide a copy of her financial statement filed in the Family Court proceedings, the affidavits filed in those proceedings, and the complete, unredacted final orders made in the Family Court proceedings involving the plaintiff and the deceased.
It appears that, as a result of the inspection process authorised by the Court, the plaintiffs became aware of the terms of orders made by the then Federal Circuit Court on 4 December 2017 (the family law orders) that adjusted the entitlement of the deceased and Mary to the property that they owned. The orders became Exhibit P4. Relevantly: 1. The Federal Circuit Court noted that the notations and orders were made by consent, in accordance with the document signed by the parties. 2. The orders recorded that the parties accepted appraised values for the real property that was owned by the parties to the marriage. There were four properties including the matrimonial home at St Peters. The matrimonial home was in the names of Mary and her sister in equal shares as registered proprietors. The recitals recorded that Mary claimed full equitable ownership in the property. In addition, there were three investment units registered in Mary's name. 3. The total value of the four properties was estimated at $2,930,000 and the total amount of the mortgages was $1,300,700, giving an equity of $1,629,300. 4. The property that has been called the Rosebery property in these proceedings was given an address at Mascot in the orders, with an estimated value of $450,000 and a mortgage of $160,700. The estimated equity was $289,300. 5. Mary was recorded as having total liabilities of $64,181.90 and the deceased owed a personal loan of $3,500. 6. Recital O recorded an agreement that Mary would transfer to the deceased the Rosebery property (implicitly unencumbered) together with a lump sum of $180,000. The result was that the deceased would receive a share of the matrimonial assets worth $630,000 but would remain liable for the personal debt of $3,500. Mary would remain the owner of the other three properties, after having raised the money necessary to pay out the mortgage on the Rosebery property. 7. The possible need for the parties to pay capital gains tax introduced some uncertainty into the final financial effect of the orders, but it is not necessary to consider the significance of that matter. 8. The minutes of consent orders made by the Federal Circuit Court included the following: 1. That the wife not later than 31 March 2018 a. shall discharge the mortgage on [the Rosebery property] and b. simultaneously with the discharge of the mortgage the wife shall transfer to the husband the whole of her right title and interest in the unencumbered [Rosebery property] and c. the wife shall give the husband vacant possession of [the Rosebery property] on the date of transfer. … 4. That the wife shall pay to the husband the sum of $180,000.00 [one hundred and eighty thousand dollars], [lump sum] not later than 30 April 2018… 5. That, subject to compliance with the preceding orders 1-4 hereof, the wife is declared to be solely entitled to all real property interests held in her name or on her behalf or in which she has any interest whatsoever, and for clarity this includes the proceeds of sale of such real property. … 10. That in the event that either party refuses or neglects to execute any deed or instrument, or do any act or thing reasonably required to give effect to these orders within a reasonable timeframe from the date of written request to execute such document or do such act or thing, then the person not in default shall be entitled to request that the registrar of the court pursuant to section 106A of the Family Law Act 1975, appoint an officer of the court or other person to execute the deed or instrument in the name of the person in default and to do all acts and things necessary to give validity and operation to the deed or instrument and request the court to make such order as it considers just as to the payment of the costs and expenses of and incidental to the preparation of the deed or instrument and its execution. …
The plaintiffs filed their further amended summons on 22 November 2021. They deleted Angelique and Ashleigh as parties to the proceedings. They added Mary as the fourth defendant. It will be convenient to set out the prayers for relief, as those prayers were current at the time of the hearing. The plaintiffs claimed: 1. An order that provision be made for the plaintiffs' maintenance, education and advancement in life pursuant to s 59 of the Succession Act 2006 out of the estate of and/or notional estate of Antoine Antoun (deceased), who died on 2 July 2018, late of St Peters in the State of New South Wales. 2. An order designating the following property held by the fourth defendant, Mary Antoun (also known as Mary Syriane); a. real property situate at and known as [the Rosebery property]; and b. the sum of $180,000; as notional estate of the deceased for the purpose of satisfying any order for provision in favour of the plaintiffs. 3. An order that the plaintiffs' costs be paid out of the deceased's estate. …
Prayer 2 was added to the plaintiffs' claims for relief because they apparently understood that Mary had not performed orders 1 and 4 of the family law orders. A view was apparently taken that this Court could designate the property that should have been transferred or paid to the deceased as notional estate of the deceased in exercise of its powers in Part 3.3 of the Succession Act.
On 4 March 2022, Hallen J made an order granting leave to the parties to have general access to the subpoena packets that were subject to the order for restricted access made by Parker J on 20 October 2021.
On 4 March 2022, Hallen J also granted leave to Mary to discontinue the whole of the associated proceedings against each of the defendants.
Mary filed a notice of discontinuance in the associated proceedings and on 2 June 2022, Hallen J noted that the only issue to be determined in those proceedings was how the costs of the proceedings are to be borne.
The principal and the associated proceedings were listed for hearing by me for five days commencing on 27 February 2023. The plaintiffs, Mr Hanna and Mary were represented by counsel. As a result of information that had become available shortly before the hearing, and following discussion between the Court and counsel, I decided that in order to comply with the requirements of s 56 of the Civil Procedure Act 2005 (NSW), it was necessary for the Court to proceed with the determination of the principal claim in an unorthodox way, which I will now explain.
The significant factors that the Court was required to accommodate were the following: 1. The evidence established that Mary had not transferred the Rosebery property to the deceased as required by order 1 of the family law orders, and she did not intend to do so voluntarily. 2. A valuation report for the Rosebery property obtained by Mr Hanna valued the property at $495,000 as of 10 February 2023. 3. Mary had not caused the mortgage over the Rosebery property to be discharged as was required by order 1 of the family law orders, and the mortgage had increased from $160,700 referred to in that Court's orders to about $225,000. 4. Consequently, Mary's equity in the Rosebery property as its registered proprietor was $270,000. 5. Even assuming that the Court had some power to designate the Rosebery property as notional estate of the deceased, such an order, as a practical matter, could only operate on the equity retained by Mary. It could not affect the rights of the mortgagee. The only way that the mortgage could be discharged is if a court with jurisdiction to do so ordered Mary to sell whatever property was in her name to fund the repayment of the loan secured by the mortgage. That course would assume that Mary had assets that she could sell that would raise the funds necessary to repay the loan. 6. Mary asserted (without the assertion being proved in any admissible way) that, notwithstanding the order for the dissolution of her marriage to the deceased and the making by the Federal Circuit Court of the orders that have been set out above, between the time the orders were made and the date of the death of the deceased, Mary and the deceased continued to cohabit. Mary asserted that the family law orders had ceased to be effective, notwithstanding that they remained formally in effect. 7. The evidence established that Mary had paid to the deceased $180,000 as required by order 4 made by the Federal Circuit Court. 8. The plaintiffs have not been able to obtain bank statements that show what the deceased did with all of the $180,000, although there is evidence that, on 27 March 2018, $100,000 was withdrawn from the deceased's St George Bank account to acquire a term deposit in the joint names of the deceased and Ashleigh that matured on 27 July 2018. As the deceased died on 2 July 2018, the term deposit would not have matured by the date of his death. 9. Title to the term deposit would have passed to Ashleigh on the deceased's death by survivorship. As noted above, prayer 2(b) of the plaintiffs' amended summons seeks an order designating the $180,000 paid to the deceased by Mary as notional estate of the deceased. No specific claim has been made that the $100,000 be designated as the notional estate of the deceased, notwithstanding the provisions of s 76(2)(b) of the Succession Act. As noted above, Ashleigh has been removed as a party to the principal proceedings. 10. Mr Hanna said in his 24 February 2023 affidavit that, putting aside any right of the deceased's estate to the Rosebery property and the term deposit, the only evidence was that the estate was comprised of $9.09 remaining in the deceased's Commonwealth Bank of Australia bank account, $3.95 that remained in the deceased's National Australia Bank account, and whatever may remain of $23,036.96 that Ashleigh stated in an affidavit dated 27 January 2021 was transferred to Angelique on 27 September 2018. The deceased's estate may therefore be worth no more than about $13.04. 11. The plaintiffs' solicitor provided evidence that the plaintiffs' costs and expenses to 22 February 2023 were $64,358.85, and the estimated additional costs to the end of a five-day hearing were $74,000 plus GST. Had the hearing lasted for that period, the plaintiffs' total costs would have been $145,758.85. The solicitor's retainer agreement with the plaintiffs is a conditional costs agreement and does not include an uplift fee. 12. Mr Hanna gave evidence that his costs and expenses to 24 February 2023 were $56,723.23, and that his additional estimated costs and disbursements, on the assumption that the hearing lasted three days, was between $26,750 and $32,750 plus GST. At the higher end of the range, Mr Hanna's total costs would have been $92,748.23. I have noted above that Mr Hanna originally agreed to provide his services for a limited purpose on a pro bono basis. It appears that Mr Hanna has been required to do significantly more work and has incurred greater costs than was originally expected, so I will assume that Mr Hanna will be entitled to receive all or a substantial part of these costs and expenses, assuming that funds are available in the estate or notional estate to meet them. 13. If the Court assumes that the parties' estimates of their costs for the hearing would have been incurred proportionally for each of the days allowed, then the plaintiffs' costs of the hearing on 27 February 2023 were about $16,280 and Mr Hanna's costs were $12,000, giving a total of $28,280. The total costs of the plaintiffs and Mr Hanna to the end of 27 February 2023 are therefore estimated to be almost exactly $150,000. 14. The plaintiffs had put before the Court all of the evidence that was necessary for them to prosecute their claims for family provision, save to the extent that there was uncertainty as to the position of the estate and the possible notional estate of the deceased, by reason of the consequences of Mary not having complied with the family law orders. 15. Not only had Angelique and Ashleigh not obtained a grant of probate, but they had not sought to defend the plaintiffs' claims by providing Mr Hanna with affidavit evidence, including as to their personal financial circumstances. To the extent that it may be relevant to the outcome of the plaintiffs' claims, the beneficiaries under the Will have not made an evidentiary contest of the plaintiffs' claims. 16. Counsel for both the plaintiffs and Mr Hanna provided written outline submissions to the Court that dealt with the plaintiffs' claims for family provision in a comprehensive way. 17. Recognising the reality of the circumstances of the deceased's estate, even assuming that the Court could make the most favourable orders for the designation of notional estate that would be possible, and having regard to the parties' costs, counsel for the plaintiffs made the realistic submission that, even though the plaintiffs could substantiate much greater need, they could only apply for orders in each of their favour that a lump sum of $100,000 be paid to them out of the estate or notional estate of the deceased. 18. If the Court made the orders sought by the plaintiffs, and allowing for the usual costs order in favour of the plaintiffs that they only be paid their costs out of the estate on the ordinary basis, even if the Court could make an order designating the equity in the Rosebery property retained by Mary, that property valued at $270,000 would be inadequate to cover the lump sum legacies sought by the plaintiffs and the costs incurred by them and Mr Hanna. The only way arithmetically that both the lump sums and the costs could be paid is if Mary were forced by an appropriate judicial order to cause the mortgage on the Rosebery property to be discharged.
It was in this context that the Court, in a provisional way, discussed with counsel for the parties the possible application of the notional estate provisions in Part 3.3 of the Succession Act in these circumstances. As noted above, while there may be a basis for designating the term deposit as being part of the deceased's notional estate, the plaintiffs have not claimed an order having that effect. So far as the effect of order 1 of the family law orders is concerned, the deceased had a right to enforce that order against Mary that survived his death, so that the right is part of the actual estate of the deceased. Angelique and Ashleigh could have enforced the orders had they obtained a grant of probate, but they did not do so and may not have wished to proceed against their mother, Mary. Mr Hanna was not appointed as the representative of the estate for the purpose of enforcing the family law orders. The plaintiffs have not had standing to do so themselves, because they will be strangers to the deceased's estate unless and until the Court makes a family provision order in their favour, and then the Court may have power to make an order that empowers the plaintiffs to represent the estate for the purpose of enforcing the family law orders.
Section 75(1)(a) of the Succession Act provides: "A person enters into a relevant property transaction if the person does, directly or indirectly, or does not do, any act that (immediately or at some later time) results in property being - (a) held by another person…and full valuable consideration is not given to the person for doing or not doing the act." It may be arguable that the failure of the deceased to enforce order 1 of the family law orders had the result that the deceased did not do and act that resulted in the Rosebery property being held by Mary.
Even if this gateway to the application of Part 3.3 is satisfied, there will be considerable cause for doubt that this Court should make a notional estate order that has the effect of enforcing an order of the then Federal Circuit Court in a way that circumvents the exercise by that Court of its own powers to enforce its orders. This was not an issue that was addressed by the parties at the hearing on 27 February 2023.
In any event, as has been explained above, an order made by this Court designating Mary's equity in the Rosebery property as notional estate of the deceased would not cause the notional estate to be sufficient to pay the lump sum legacies sought by the plaintiffs and pay the costs of the parties. Part 3.3 does not empower this Court to make an order against Mary that she comply with order 1(a) of the family law orders.
In all of these circumstances, I determined that the proper course for the Court to take was to receive the parties evidence on the substance of the plaintiffs' claims for family provision, and I did so. The parties were content to rely upon the opening written submissions that they provided to the Court, which I considered adequately dealt with the issues.
That would leave the Court in the position that it could only decide the plaintiffs' claims for family provision as a matter of principle, and it could not quantify any relief that should be made in the plaintiffs' favour, or actually make final orders, until the position of the estate and the notional estate of the deceased was finally determined. Given the circumstances in which the plaintiffs and the estate find themselves, it would not have accorded with the just, quick and cheap determination of the plaintiffs' claim for the hearing to be adjourned until all uncertainties had been resolved. It is possible that that final determination will not be able to be achieved until necessary steps are taken with the authority of the Court to cause Mary to comply with the family law orders.
I reserved judgment on this contingent basis, and made orders for the provision of further written submissions by the parties dealing with the notional estate issue and any other matter relevant to the recovery of property that in principle forms part of the estate of the deceased that may require the enforcement of rights that the deceased had at the date of his death.
In the circumstances that I have explained above, it is necessary for the Court to adopt a direct and practical approach to the resolution of these proceedings, though strictly in conformity with the legal principles that apply.
The first and primary issue that must be addressed is whether the plaintiffs have established on the evidence that the Court should exercise its power under s 59 of the Succession Act to make family provision orders in favour of the plaintiffs. If the plaintiffs' application for the making of those orders is dismissed, that will be the end of the matter, save for the issue of costs.
As children of the deceased, both plaintiffs are eligible to make their applications for family provision orders pursuant to s 57(1)(c) of the Succession Act. Section 59(1)(c) of the Succession Act requires that in each case the Court be satisfied at the time when it is considering the application, that adequate provision for the proper maintenance, education or advancement in life of the plaintiffs has not been made by the Will. If the Court is so satisfied, then, pursuant to s 59(2) of the Succession Act, the Court may make such order for provision out of the estate of the deceased as the Court thinks ought to be made for the maintenance, education or advancement in life of the plaintiffs, having regard to the facts known to the Court at the time the order is made. The first of these requirements is a question of fact that must be determined by an evaluative judgment made by the Court. The second requires the Court to exercise a discretion concerning the orders that should be made in the circumstances.
The Court's task in applying these principles has been simplified to an extent because Mr Hanna, who has been appointed by the Court to represent the estate of the deceased, has conceded in his submissions that both of the plaintiffs have established a valid case for the making of family provision orders in their favour.
However, Mr Hanna's position is that even though the needs that each of the plaintiffs has demonstrated would objectively justify the making of family provision orders giving each of them a legacy of $100,000, orders to that effect are not warranted because of the limited value of the deceased's estate. Mr Hanna's position is that even though Angelique and Ashleigh have not contested the plaintiffs' claims, and have not provided evidence of their own respective needs, they are nonetheless the chosen beneficiaries of the deceased in the Will, and that fact must entitle them to consideration by the Court. Mr Hanna submitted that the Court would not be justified in making orders that distributed the whole of what may be found to be the estate and the notional estate of the deceased to the plaintiffs.
It is not in the circumstances necessary for the Court to review in any detail the well-established principles that govern the determination of the present applications. I note that I have had regard to and applied principles set out by Hallen J in many judgments, including recently Page v Hull-Moody [2020] NSWSC 411 at [120]-[159], and Harris v Carter [2020] NSWSC 196 at [106]-[164]. Furthermore, as the plaintiffs are both adult children of the deceased, I have had regard to the principles set out by Hallen J in many cases, including Limberger v Limberger; Oakman v Limberger [2021] NSWSC 474 at [473]-[474]. It is necessary for the Court to give considerable weight to the assessment of a capable testator who has given due consideration to the claims on his estate: Sgro v Thompson [2017] NSWCA 326 at [6] (Payne JA). However, in this case the Will was made within six months of the deceased's death, the deceased was ailing, and there is no evidence that the deceased addressed the plaintiffs' circumstances, and their needs, and that he gave due consideration to the relative claims of all of his children on his estate. I have also had regard to the observations made by Hallen J in Sammut v Kleeman [2012] NSWSC 1030 at [137]-[139], concerning the significance of the failure of the nominated beneficiaries to contest the plaintiffs' claims by providing evidence of their own circumstances as a counterweight to the plaintiffs' claims. The Court is entitled to infer that the nominated beneficiaries have adequate resources upon which to live and that they do not wish to advance competing financial claims upon the bounty of the deceased to the claims made by the plaintiffs. Nonetheless, proper weight should be given to the fact that the nominated beneficiaries are the chosen objects of the deceased's testamentary bounty.
The silence of Angelique and Ashleigh is of practical significance in the present case because the plaintiffs have been able to demonstrate strong claims, having regard to the minimal value of the actual estate, as well as the uncertainties involved in the contingency that the rights of the deceased under the family law orders will be able to be enforced against Mary. Shortly put, in a contest as to how a small or uncertain estate should be distributed, the absence of a contest by the nominated beneficiaries may have the effect of enhancing the force of the plaintiffs' claims.
Although Mr Hanna has only contested the quantum of the family provision orders that should be made in favour of the plaintiffs, and he has not contested their entitlement to some relief, I should record briefly why I accept, on the basis of the evidence before the Court, that the plaintiffs have established good claims for further family provision orders that would justify legacies of $100,000 each, if the value of the actual estate and the notional estate warranted relief of that magnitude. In this regard, I accept the submissions made by counsel for the plaintiffs in her written submissions dated 22 February 2023 that were delivered before the commencement of the hearing.
Tarnya is not financially secure. She is a single parent living in rented accommodation. Tarnya can cover her outgoings on a monthly basis, but she has no financial reserves. She does not have paid employment. She has withdrawn the entirety of her $36,000 in superannuation funds in the last three years to maintain her household, which includes three minor children with serious health problems which variously include ADHD, hyperactive/impulsive type and Asperger's Syndrome, and Autism Spectrum Disorder. She has also paid the legal costs of the proceedings up to the date the matter was set down for hearing.
Tarnya is studying online at Griffith University for a Bachelor's Degree in criminology and criminal justice. That degree may be completed in or about June 2026, when the Tarnya will be 47 years of age. As a result of her accumulated HECS, Tarnya's assets are insufficient to balance out her liabilities, such that she has a negative asset balance, placing her in a dire financial position.
Tarnya gave evidence that she had a good relationship with the deceased and a reasonable expectation that he would provide for her from his estate.
Tamara is potentially in a worse financial position than Tarnya. She is also a single parent in rented accommodation. She has one dependent minor child. Tamara has few assets, minimal superannuation and no financial reserves. She withdrew the majority of her superannuation funds of $2,500 in 2022 to maintain her household. She earns income from a casual job, but her earnings are just enough to cover her costs on a monthly basis. The value of Tamara's assets is slightly higher than her liabilities, however, her overall asset position is estimated at less than $10,000.
The Court must proceed upon the basis that the readily realisable value of the actual estate is negligible. The Court was not provided with evidence of the actual value. As noted, Angelique and Ashleigh did not apply for a grant of probate, and they have withdrawn from these proceedings. Tarnya and Tamara were unable to find out what the value of the estate was using the Court's processes.
The actual estate does, however, include the deceased's right to seek to enforce the family provision order that obliged Mary to discharge the mortgage on the Rosebery property and transfer it to the deceased unencumbered. If that right were enforced against Mary, then the value of the actual estate would be $495,000, less the costs of recovery that could not be recovered from Mary.
I should note at this point that Mary claims that, notwithstanding the family law orders that were made on 4 December 2017, and that the deceased and Mary obtained an order for the dissolution of their marriage by consent on 27 April 2018, the family law orders had ceased to be valid because she and the deceased continued to cohabit until the time of his death. Mary went so far as to submit that the divorce was a sham. The family law orders are still in effect, and Mary has made no application that they be revoked. It is true that the deceased continued to live with Mary, but that may be explained by the fact that Mary refused to transfer to him the Rosebery property that would have given him an alternative home in which to reside. As I understand the evidence, the deceased was seriously ill during the time after the family law orders were made. In these circumstances, the Court cannot give any credence to Mary's claims. The simple fact is that Mary has refused to comply with the family law order that required her to transfer the Rosebery property to the deceased in an unencumbered state.
As matters stand, the Court must assume that, in principle, the family law orders remain enforceable against Mary by a person duly authorised to act for the deceased's estate in that regard. As recorded above, the debt secured by the mortgage on the Rosebery property at the date the family law orders were made was $160,700. Mary asserted that, by the date of the hearing, the debt that was secured had increased to about $225,000. The Court does not know what the true amount of the debt was, and it must be accepted that the debt may have increased since the date of the hearing. Compliance by Mary with the family law order that required her to transfer the Rosebery property to the deceased unencumbered would require her to refinance the mortgage or to sell the other properties that were referred to in the family law orders as being beneficially owned by Mary. The Court cannot know what the outcome will be of any attempt to enforce the family law orders against Mary on behalf of the deceased's estate. The Court is only too aware of the vicissitudes of litigation.
Nonetheless, it would be wrong for the Court to take a course that had the result that Mary would be released from the consequences of her contempt of the family law orders and her intransigence in her dealings with the deceased's estate.
There is an issue as to whether any part of the $180,000 that Mary paid to the deceased in accordance with the family law orders might be the subject of a notional estate order in these proceedings. Apparently, the deceased expended the money he received, save for the fact that he purchased a term deposit for $100,000 in the joint names of himself and Ashleigh. It may, in principle, be available for the Court to make a notional estate order in relation to the term deposit under s 76(2)(b) of the Succession Act, on the basis that the deceased did not act to sever the joint tenancy before his death. Had he done so, then he and his estate would have been entitled to half of the amount of the term deposit, or $50,000. The Court could not in these proceedings, however, make a notional estate order in respect of the $50,000, because Ashleigh has been removed as a party, and has not been given notice that the plaintiffs would apply for a notional estate order in respect of half of the term deposit. In any event, there is no evidence concerning the ability of Ashleigh to pay the $50,000 into the estate. It is probable that the delay and the costs involved in continuing these proceedings in the hope of getting a notional estate order against Ashleigh in respect of the $50,000 would not warrant the exercise. In the circumstances, I will proceed upon the basis that no notional estate order can be made in respect of half of the term deposit.
Notionally, if an order can be obtained on behalf of the deceased's estate against Mary that she transfer the Rosebery property into the estate unencumbered, the estate will have a value of $495,000, less the costs of these proceedings, the unrecovered costs of the proceedings necessary to obtain the transfer of the Rosebery property, and the costs of selling the Rosebery property in order to generate money for the purpose of distributing the deceased's estate to the persons who may be entitled to it as a result of the orders that the Court will make.
I have noted above, that the combined costs of the plaintiffs and Mr Hanna to the end of the hearing were estimated to be $150,000. I will arbitrarily assume that the costs of obtaining title to the Rosebery property will be a further $50,000. That may well be an underestimate, and it will depend upon whether the Federal Circuit and Family Court of Australia is prepared to act decisively in enforcing its orders. It will also depend upon the complexity of what will be involved in Mary realising the funds necessary to pay out the mortgage on the Rosebery property.
Accepting that the estimate of costs at a total of $200,000 is unreliable, the value of the estate may ultimately be in the order of $295,000.
If it be assumed that the deceased's estate will have that value after the family law orders are enforced against Mary, the question then is what family provision orders in favour of the plaintiffs would be proper.
One approach that might be available to the Court would be to balance the proved needs of Tarnya and Tamara against the rights of Angelique and Ashleigh as the nominated beneficiaries in the Will, and to treat each of the four daughters of the deceased equally. The result would be to justify family provision orders being made in favour of each of Tarnya and Tamara in the form of legacies for amounts slightly less than $75,000 each. Angelique and Ashleigh would then be entitled to share equally in the balance as beneficiaries under the Will.
However, upon consideration I have reached the conclusion that the approach of treating the deceased's four daughters equally would ignore a number of important and relevant factors. As I have noted, Angelique and Ashleigh had the opportunity as the deceased's nominated executors to obtain a grant of probate and then to take proceedings to enforce the family law orders in favour of the estate. On the assumptions made in these reasons, they may have recovered $495,000. It is a matter for speculation why Angelique and Ashleigh chose not to take this course. They may not have wanted to institute proceedings against their mother. However, the fact is that Angelique and Ashleigh have chosen not to attempt to get in an asset of the estate that may be worth $495,000. That conduct reinforces the inference that the Court is entitled to draw from the fact that Angelique and Ashleigh have not contested the claims of Tarnya and Tamara in these proceedings and have not put their financial circumstances in issue. The Court is able to draw a more positive inference that Angelique and Ashleigh's financial circumstances have not required them to take the steps necessary to gain their shares in the deceased's estate.
Furthermore, it is relevant that Tarnya and Tamara, in prosecuting their entitlement to provision from the deceased's estate, have had to suffer the increased costs and anxiety that will necessarily be involved in their attempt to recover assets that are in principle part of the deceased's estate. It is a relevant consideration when it is necessary for the Court to exercise a discretion as to how a fund should be divided between a number of different parties that only some of the parties have borne the costs and risks of creating the fund. The circumstances may justify the Court in preferring the parties who have created the fund, once the plaintiffs' entitlement to provision has been established.
Finally, it is relevant that, if Angelique and Ashleigh had obtained a grant of probate and taken proceedings to enforce the family law orders in the first place, the costs of the exercise would probably have been considerably less than will now be incurred, and the proceedings would have been completed earlier and with less risk that Mary's actions in the intervening period will have reduced the amount that will be recoverable by the deceased's estate.
In these circumstances I have concluded that the proper way for the Court to exercise its discretion under s 59(2) of the Succession Act would be for the Court to find that Tarnya and Tamara will be entitled to orders that they each be entitled to receive pecuniary legacies of $100,000 out of the estate of the deceased on the assumption that the net value of the estate after payment of all costs of these and any other proceedings is $295,000. If the value of the estate is ultimately found to be less than $295,000, the pecuniary legacy to which each of Tarnya and Tamara are to be entitled should reduce in proportion of the final net value of the estate to $295,000.
I should note that it is theoretically possible that the value of the deceased's estate will be increased as a result of the payment of costs orders made in these proceedings against Mary. As Mary has discontinued the associated proceedings, there is no good reason why the Court should not make an order that she pay the costs of those proceedings to Mr Hanna, who was the third defendant, and the representative of the deceased's estate, under UCPR r 42.19(2). There is a question as to whether Mary should be ordered to pay any part of the costs of the principal proceedings. She has only been joined as a defendant because the plaintiffs have sought a notional estate order in respect of the Rosebery property of which Mary is the registered proprietor. Mary has resisted the making of that order, but in the way that I have explained in these reasons, it has become apparent that the right to enforce the family law orders is an asset of the estate. I will consider below the issue of whether a notional estate order could be made against the Rosebery property subject to the rights of the mortgagee. For the moment, I observe that it would be difficult for the Court to justify the making of a costs order against Mary in the principal proceedings, if it did not make a notional estate order in respect of the Rosebery property. In any event, it would be too speculative for the Court to assume that the deceased's estate will be increased by the amount of costs orders actually paid by Mary. The enforcement of the family law orders against Mary is likely to be such a contentious exercise that it would be unrealistic for the Court to assume that after that has occurred, Mary will be in a position to pay any significant amount of costs into the estate.
I will now address the alternative possibility that no attempt is made to enforce the family law orders against Mary on behalf of the deceased's estate. That will leave alive the possibility that the Court could make a notional estate order against the Rosebery property. That might be justifiable on the basis that the deceased while he was alive had a right to take proceedings against Mary to enforce the family law orders. That arguably satisfies the definition of a relevant property transaction in s 75(1)(a) of the Succession Act, on the basis that the deceased did not do an act that resulted in property being held by another person, being Mary.
The application of Part 3.3 of the Succession Act dealing with notional estate orders is often, if not usually, complex and obscure. The issue was not fully argued by the parties in these proceedings. As I have already noted, such a notional estate order could only attach to Mary's apparent equity in the Rosebery property. The order could not affect the rights of the existing mortgagee. Complicated questions may arise under s 87 of the Succession Act concerning the appropriateness of making a notional estate order in these circumstances, given that the order might interfere with the rights of the mortgagee. It may be that the Court should not contemplate making an order of that nature without the mortgagee being joined and being given an opportunity to make submissions as to the appropriateness of the order. In any event, it may be arguable that, as a result of the family law orders, the beneficial ownership of the equity in the Rosebery property, after priority is given to the rights of the mortgagee, may lie in the deceased's estate, and not Mary.
In any event, if it is assumed that the amount of the debt secured by the mortgage remains $225,000, the value of the equity in the Rosebery property would be $270,000. That amount would be reduced by the cost of securing the sale of the Rosebery property and the necessary dealings with the mortgagee. If the Court arbitrarily allowed $30,000 for those costs, the balance would be $240,000. After payment of the parties' estimated cost of $150,000, the balance remaining in the estate would be $90,000. That amount, divided between the deceased's four daughters in the manner explained above at [68] would give Tarnya and Tamara about $30,000 each. That amount may be less than the margin for error in the assumptions that the Court has made, given the almost universal experience that legal proceedings cost more rather than less than the costs that are estimated.
These considerations cause me to conclude that the most rational way forward in these proceedings is for the Court to make the orders that will be necessary to enable proceedings to be taken on behalf of the deceased's estate to enforce the family law orders against Mary.
As it has happened, both the plaintiffs and Mr Hanna agree that the appropriate course is for the Court to make an order under s 74 of the Probate and Administration Act 1898 (NSW) appointing Mr Hanna as the independent administrator of the Will, for the primary purpose of empowering Mr Hanna to seek to enforce the family law orders, and to otherwise administer the Will, subject to any family provision orders that the Court may make in favour of the plaintiffs.
In principle, I am satisfied that such an order should be made. I note that, at the end of the hearing, Mary advised the Court of the possibility that one of the nominated executors under the Will would change her mind and make an application for a grant of probate. I do not know whether that application has been made in the interval between the date of the hearing and the publication of these reasons. There is no apparent good reason why one of the executors should now apply for a grant of probate, other than in some way to thwart the enforcement of the family law orders on behalf of the estate.
In the circumstances, the only course available is for the Court to make the order under s 74 of the Probate and Administration Act, and to see what happens, and to deal with any competition concerning the making of a grant of probate or administration if and when that need arises.
The most that the Court can fairly do is to declare that each of Tarnya and Tamara are entitled to the benefit of family provision orders that provide legacies to them each in the amounts specified.
In the circumstances, I will make an order that preserves the right of the plaintiffs to make a future application for the Court to make a notional estate order in respect of the Rosebery property, in the event that the property is not able to be brought into the deceased's estate.
It is obvious that the future of the deceased's estate and the outcome of any effort to enforce the family law orders on behalf of the estate is unpredictable, and it is possible that the exercise will become too difficult and expensive to be cost-effective. Leave will be given to Mr Hanna and the plaintiffs to apply to the Court, if necessary, from time to time for directions concerning the administration of the estate and the continuation of these proceedings.
There is a basis for concern that Mary might cause or allow the debt secured by the mortgage on the Rosebery property to increase in a way that will undermine the cost effectiveness of the proposed attempt to enforce the family law orders against her. As this issue was not addressed at the hearing, and as Mary has not been given any notice of any application that would prevent her from increasing the debt secured by the mortgage over the Rosebery property, the Court is not able to make any order against Mary now that would secure the potential value of the property to the deceased's estate. It will be a matter for the plaintiffs and Mr Hanna to consider whether any interlocutory application should be made to the Court to prevent any risk of the dissipation of any assets to which the deceased's estate may be entitled.
As the orders that I will now make will not complete these proceedings, I consider that the Court should make its processes available to assist Mr Hanna to ascertain the information that he will need in order to try to enforce the family law orders against Mary and to make proper judgments about the cost benefits of pursuing the proceedings. I will therefore give Mr Hanna leave to apply for the issue of notices to produce and subpoenas to assist him in performing his duties as administrator of the deceased's estate in respect of getting in the estate's assets in the most cost effective manner that is possible.
The Court makes the following orders: Proceedings No 2019/00118417 1. Order pursuant to s 74 of the Probate and Administration Act 1898 (NSW) that the third defendant, Joseph Hanna (the administrator), be appointed as the independent administrator of the will dated 12 January 2018 (the Will) of the late Antoine Antoun (the deceased). 2. Order that letters of administration with the Will annexed be granted to the administrator. 3. Order that the matter be remitted to the Senior Deputy Registrar in Probate to complete the grant. 4. Order that the need for any administration bond or sureties be dispensed with. 5. Order that the administrator is entitled to be indemnified for his costs of administering the estate of the deceased. 6. Order that no distribution of assets from the deceased's estate be made by the administrator until further order of the Court. 7. Declaration that each of the plaintiffs is entitled pursuant to s 59 of the Succession Act 2006 (NSW) to an order in due course that the plaintiffs receive a pecuniary legacy of $100,000 each on the assumption that the net value of the deceased's estate is found to be at least $295,000, on the basis that the value of each pecuniary legacy will reduce in proportion with the net value of the estate. 8. Grant leave to the plaintiffs to apply on seven days' notice to the other parties for orders of the Court giving effect to the declaration made in order 7. 9. Note that the Court has not made a final determination of the plaintiffs' application for orders pursuant to Part 3.3 of the Succession Act 2006 (NSW) for the making of notional estate orders or the plaintiffs' entitlement to further relief under s 59 of the Succession Act 2006 (NSW) and grants to the plaintiffs leave to apply on seven days' notice for the making of orders concerning the determination of those issues. 10. Order that the third defendant's costs of these proceedings calculated on the indemnity basis be paid out of the estate of the deceased and that such payment be made in priority to the payment of any other costs order. 11. Order that the plaintiffs' costs of these proceedings calculated on the ordinary basis be paid out of the estate of the deceased. 12. No order as to the costs of the fourth defendant of these proceedings to the intent that she pays her own costs. 13. Grant leave to all parties to apply to the Court on seven days' notice for the making of such orders as may be necessary or desirable to amend or give effect to these orders, or for directions to be given to the administrator concerning the administration of the deceased's estate. 14. Grant leave to the third defendant to apply to the Court on seven days' notice for the issue of such notices to produce and subpoenas that the third defendant considers desirable in order to assist in getting in the estate of the deceased. Proceedings No 2021/00121060 (1) Order the plaintiff following the discontinuance of the proceedings to pay the costs of the proceedings of all other parties on the ordinary basis.

At a glance

Court

Decision date

Before

Source

Judgment (7 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (7)

Cited By (2)