Beau Jacob Kazacos bht Shelley Kazacos v Kazacos & Ors [2002] NSWSC 878 | Case summary

1854/98 - BEAU JACOB KAZACOS, by his tutor SHELLEY KAZACOS v MICHAEL CONSTANTINE KAZACOS & ORS; Estate of late MICHAEL HARVEY KAZACOS JUDGMENT 1 MASTER: The plaintiff commenced proceedings on 26 March 1998 for an order that further provision be made out of the Estate of Michael Harvey Kazacos, deceased pursuant to s 7 of the Family Provision Act 1982. The plaintiff is the son of the deceased and is currently twenty-one years of age. The first defendant is the Executor of the Estate and father of the deceased. The second and third defendants are beneficiaries under the will of the deceased. 2 The deceased died sometime between 2 and 3 November 1996. Prior to his death he wrote a suicide note which made provision out of his Estate for the second defendant. Grant of Probate was made on 25 November 1999. There was litigation between the second defendant and the first defendant in relation to the suicide note. Ultimately, the suicide note was admitted to Probate as a codicil pursuant to s 18A of the Wills and Probate Administration Act by the Chief Judge in Equity in proceedings No. 104947/97. The provision that was made for the second defendant was a specific bequest of the deceased's interest in a business together with a property on the Gold Coast known as The Pacific Mirage. The third defendant received an unencumbered property of the deceased at Darling Point or, should the property be sold prior to his death, a specific bequest of $450,000.00. The Darling Point property was sold before the deceased's death. The residue of the Estate was to be divided equally between the plaintiff's grandparents and the plaintiff. 3 The plaintiff was born on 2 December 1980. At the time of his birth the deceased was married to the plaintiff's mother. They lived in Newcastle and he worked as a plasterer. Sometime in 1980 the deceased and the plaintiff's mother purchased a house in Wallsend for $15,000.00. The house was in a dilapidated state and required renovations to make it habitable. In January 1981 they moved into the property. By early 1983 the marriage had deteriorated. The deceased refused to work and gave no monetary support to his wife. She commenced proceedings in the Family Court of Australia in March 1983 for orders for care, control and maintenance of the plaintiff and an order to protect her undisturbed occupation of the home. By this time the plaintiff had been managing a brothel in Sydney. He offered to bring the family to Sydney to live on the premises. However, the plaintiff's mother found that to be totally unsuitable. 4 The deceased had fortnightly access to the plaintiff and it would appear that he exercised his access rights for a period of about six months after access orders were made. He would bring the plaintiff to Sydney each fortnight to be with him. However, it appears that after a period of time the plaintiff became distressed when the deceased would arrive to pick him up. On one occasion when the plaintiff was aged about three years he started to cry when the deceased turned up and said that he did not want to go. It is alleged that the deceased said to him: "If you're not coming with daddy now, daddy won't come any more". That was the last time there was any personal contact between the plaintiff and the deceased. 5 From late 1984 the deceased paid $30.00 per week maintenance for the plaintiff and in June 1987 this increased to $35.00 per week. This amount was paid until the plaintiff turned sixteen years of age. The deceased gave no other support or assistance to the plaintiff. The matrimonial home at Wallsend was subject to a property settlement in the Family Court of Australia and the outcome of that settlement was that the deceased's wife became the registered proprietor of the whole of the property. The plaintiff and his mother continued to reside in the property thereafter. The evidence is that the plaintiff remained living in the property with his mother until approximately March of this year when the plaintiff moved into a rented flat at Merewether. 6 The plaintiff attended school until Year 10. Thereafter he left school and commenced a panel beating course. It is unclear whether he finished that course. However, he did not pursue employment in that industry but subsequently commenced a carpentry course on a part-time basis. He made application to do a full-time carpentry and joinery course at Belmont TAFE but the application was unsuccessful. He has spent periods of time unemployed and being in receipt of either unemployment benefits or support from his grandfather, the first defendant. It is the plaintiff's desire to become a motor mechanic. 7 In April 2001 he started a traineeship as a trainee fibreglasser with a firm in Newcastle. He is still working with this company although he is no longer a trainee. He completed the traineeship and after a short time out of work, was re-employed by the company as a firbreglass laminator. His salary is now $500.00 per week. Whilst this skill enables him to undertake a variety of work involving fibreglass, his evidence was that he does not see this as his future career. He still wishes to become a motor mechanic. The plaintiff's evidence is that he has applied, on many occasions, to obtain an apprenticeship as a mechanic. However, as yet he has not been successful. He sees the only opportunity for him to obtain an apprenticeship is by acquiring a business which would enable him to employ a mechanic who, in turn, would train the plaintiff as a mechanic. 8 The plaintiff's evidence is that when he was about fourteen he went to Sydney to attempt to meet his father. The deceased was unaware that he was coming to Sydney and as a result the plaintiff was unable to find him. Therefore, there had been no contact between the two since the plaintiff last saw his father when he three years old. It has been suggested by one of the defendants that the lack of contact between father and son shows that there was no close relationship between the two and neither wanted to create a close relationship. Therefore, it is said that the deceased had no special obligation to make provision for the plaintiff. 9 However, in my view, the lack of contact has to be taken in the context of the relationship. The deceased died when the plaintiff was sixteen. The plaintiff was still at school when the deceased died. In my view, it was not the fault of the plaintiff that there was no relationship with the deceased. Throughout his life he was either a child of tender years or a teenager. The opportunity that he had to make contact with his father was limited. The opportunity the deceased had to contact the plaintiff was unfettered. There was no reason why the deceased could not have continued the access that had been granted by the Family Court of Australia and as the plaintiff got older, why they could not have enjoyed each other's company. However, the deceased made no attempt to contact his son. Therefore, failure by the plaintiff to make contact with his father, in my view, is no reason to reject the plaintiff's application. See Arratoon v Arratoon (unreported, Bryson J, 31 July 1995) and Cook v Cook (unreported, NSWCA, 17 October 1997). 10 The assets of the plaintiff consist of a motor vehicle valued at approximately $5,000.00 and a gift received from the first defendant, his grandfather, a sum of $150,000.00. There was some evidence concerning payment by the first defendant to the plaintiff of this sum. Initially, the plaintiff said that after these proceedings were determined he would have to repay the money to his grandfather. However, the first defendant, in his evidence, indicated that there were no conditions imposed on the payment of the money and that it was a gift. He did not expect and did not want to receive repayment of the $150,000.00 regardless of the outcome of these proceedings. The plaintiff also has an income of $500.00 per week and therefore the plaintiff's financial position is that he in employment earning $500.00 per week and has assets of approximately $155,000.00. 11 The plaintiff's evidence is that he has the following needs which require some assistance from his father's Estate. Firstly, he seeks to secure his employment and to achieve his goal of becoming a motor mechanic. I have already referred to the way in which the plaintiff wishes to achieve this goal. Secondly, he wishes to replace his current motor vehicle. It is a 1984 Holden Commodore. The plaintiff's evidence is that it requires about $1,500.00 to be spent on it to ensure its roadworthiness. The plaintiff, however, seeks a new motor vehicle. There is some suggestion that the type of vehicle that would be appropriate for him would be a utility which would enable him to carry his tools to and from work as well as using the vehicle for social and recreational occasions. The plaintiff, however, wishes to buy a Holden Commodore valued at approximately $50,000.00. The plaintiff has been in a relationship for the past eighteen months. He lives by himself at Merewether. However, his girlfriend stays with him most weekends. His evidence was, however, that there was no intention, in the immediate future, for the couple to become engaged. There was a suggestion that the plaintiff also needed provision for accommodation. However, that has not been pursued since the payment of the gift by the first defendant to the plaintiff. It is especially the plaintiff's desire to own a small business and become a motor mechanic. 12 Evidence was tendered of a Report by Glynis Byers from Human Resource Consultants. The Report was marked Exhibit "A". Miss Byers interviewed the plaintiff. Her conclusions were that he has a profile which indicates that he is practical, realistic and with a natural head for business or mechanics. Her conclusions relating to vocational choice are as follows:- "Beau believes that an option to gaining an apprenticeship would be to purchase a business and to hire a licensed mechanic to employ him as an apprentice. This is a model that he has seen work for a member of his family and he believes could work for him. It is quite a common model for the hairdressing profession, and in fact one that has a precedent in his close family. Should capital become available through the successful resolution of this action and the opportunity be available to purchase a motor mechanics workshop then there are a number of issues that should be addressed in the course of Beau's decision-making. Although the type indicator indicates that Beau would have the potential to manage a business he is quite naïve in a business sense. At this point in time he has little or no concept of the processes and costs involved in running a business. Although Beau speaks of being able to gain assistance from his grandfather who has business knowledge associated with retail pharmacies, he would need to avail himself of some professional help to analyse the worth of the business in terms of its purchase price and returns. There are a number of small suburban mechanics workshops that are struggling and would not produce sufficient returns to pay the overheads as well as the wage of Beau as an apprentice mechanic as well as a licensed trades person come manager. My advice would be to enlist the services of an Accountant and the assistance available from Hunter Business Enterprise Centre who can provide some training in small business management as well as to assist Beau to put together a business plan. This avenue would provide stop gap help, Beau would benefit from management training at a point further down the track. His immediate training needs would be to prepare for his apprenticeship as a motor mechanic." 13 Ms Byers has indicated that there is currently an opportunity to purchase such a business at Marylands for $60,000.00. This information, as I understand it, was obtained from Wilson's Business Brokers by Ms Byers. There was no challenge to the report and Ms Byers was not called for cross-examination. Therefore, in the absence of any material contradicting her conclusions, I adopt them. The Second Defendant

The third defendant's evidence is that in 1992 she married Sasha Brunelle. From that marriage there is one son. The marriage ended in July 1999. Since that date the third defendant has lived with her son in rented accommodation. She is currently employed as a pre-school teacher earning $546.00 per week. Her major weekly expenses, in addition to food and clothing, are rent and car repayments totalling $340.00 per week. She receives child support payments from the child's father in the sum of $80.00 per week. Once again, there is little evidence of the costs of food and clothing to the third defendant. The third defendant's intention is to purchase a property with the legacy she receives from the Estate of the deceased. However, there is no evidence concerning where she intends to live and what sort of accommodation she requires. One would assume that it would be at least a two bedroom unit, or in all probability, a two bedroom house. 14 The plaintiff is an eligible person pursuant to s 6(1)(b). The evidence is that other than complying with a maintenance order of the Family Court of Australia the deceased made no provision for the plaintiff during his lifetime. As a result of the property settlement in respect of his parents' divorce the plaintiff received no other form of indirect contribution from the deceased. Under the terms of the deceased's will, the plaintiff shares one-third of the residue of his Estate. The evidence of the first defendant is that currently the plaintiff's one-third share in the deceased's Estate will be approximately $44,000.00, see Exhibit "1". It is clear that there was inadequate provision made during the deceased's lifetime. The question is whether or not there has been adequate provision made for the plaintiff in the deceased's will. The plaintiff has received a gift in the sum of $150,000.00 from his grandfather, the first defendant. It is clear that the plaintiff by virtue of the gift of his grandfather is no longer in need of the support from the deceased's Estate that he would have otherwise been entitled to. The sum of $150,000.00 will enable him to put a substantial deposit on a property in Newcastle or alternatively, enable him to use part of it to acquire a business. The deceased's intention was that he did not want to see his son without money and it was also his intention that he should go to Newington College. At the present time, neither of those intentions were achieved by the deceased. The deceased played no role in the education of the plaintiff. As a result, the plaintiff has struggled to find work in Newcastle and has been unable, despite many attempts, to obtain an apprenticeship as a mechanic. Left without support of the deceased's Estate, the plaintiff is unlikely to be able to achieve his goal. 15 It has been submitted that no provision should be made for him in regard to this matter as there is no evidence that he would be able to manage a business and that any provision made for him may well be wasted. In my view, that would not be a proper basis to exclude the plaintiff from any further provision from his father's Estate. It would seem to me that with appropriate training and guidance, provision from the deceased's Estate would assist the plaintiff to secure his future. The fact that any business he enters into may ultimately fail should not be decisive of whether or not provision should be made for the plaintiff; see Ford v Birt [1999] NSWSC 919, Bryson J at para 54. The evidence of Ms Byers is that with adequate training the plaintiff has the potential of making a go of such a business. It is clear from the efforts the plaintiff has made to date, have not guaranteed him an apprenticeship as a mechanic. Ms Byers' evidence is that as at 14 March 2002 there was a business available for the purchase price of $60,000.00. The provision for the plaintiff, as it currently stands, will give him something less than $45,000.00. That clearly is not enough to purchase a business similar to the one referred to in Ms Byers' report. 16 The plaintiff's only other need is the provision for a new motor vehicle. In my view, it would not be unreasonable for such provision to be made for a motor vehicle to be used for recreational and social purposes and a motor vehicle to be used in the business. It was also submitted on behalf of the plaintiff that having regard to the size of the Estate, that some additional provision should be made for the plaintiff to enable him to achieve some degree of financial security. In Anasson v Phillips (Unreported, Young J, 4 March 1988) his Honour said as follows:- "…..the basis principles are the same, that is, the will can only be affected to the extent that it is necessary to discharge the moral duty by making adequate provision for the plaintiffs, but where there is a large estate competition between claimant and claimant, and claimant and beneficiary under the will is much reduced or eliminated. Further, there may be a more liberal assessment of the moral duty owed, to be reflected in what is proper provision for the plaintiffs". 17 Having regard to the size of the Estate and the inadequate provision during the deceased's lifetime for the plaintiff, it seems to me that the provision that has been made for the plaintiff is inadequate. But for the assistance from the first defendant, the plaintiff should have been put in a position by the deceased that would have enabled him to put down a substantial deposit on a home, enable him to continue his education and make some provision for his advancement in life. The gift by the first defendant goes, in my view, some way towards giving the provision to the plaintiff that should have been the duty of the deceased. In my view, because of the absence of provision for the plaintiff during the deceased's lifetime and the inadequate position the plaintiff finds himself in the amount provided under the will is not a proper or adequate provision. 18 In my view, provision should be made for the plaintiff which will enable him to purchase a motor mechanic's business, provide training for him, initially by undertaking a small business management course and then subsequently some provision to assist him with a TAFE course. Secondly, provision should be made which will enable him to purchase a motor vehicle to use in the business. Thirdly, a lump sum should be provided which will enable the plaintiff to use part of those funds to assist him during the start-up period of his business or for expenses during the period in which he undertakes a small business course and also be used as an investment fund which will enable him to obtain some financial security for the future. In my view, therefore, the plaintiff should receive out of the Estate of the deceased, by way of additional payment, the sum of $180,000.00. 19 Section 13 of the Act provides as follows:- "13. Burden of Provision out of Estate When a court makes an order for provision out of the estate of a deceased person it may specify the beneficial entitlements in that estate which shall bear the burden of that provision and, in relation to each of those entitlements, the part of the burden which it shall bear." 20 The major beneficiary of the Estate is the second defendant. On current values she will receive approximately $1,120,000.00. Included in the bequest is accommodation on the Gold Coast valued at $700,000.00 and cash in the sum of approximately $515,000.00. It seems to me that the second defendant's entitlements should bear the burden of the additional provision for the plaintiff. Therefore, I order that the sum of $180,000.00 payable to the plaintiff be paid from the money received by the executor from the sale of the deceased's interest in the company known as Interest Pty Ltd. It follows that the plaintiff is entitled to his costs out of the Estate on a party/party basis and that the first defendant is entitled to his costs out of the Estate on the indemnity basis. 21 The second and third defendants also seek to have paid out of the Estate their costs. 22 Both the second and third defendants received legacies out of the Estate of the deceased. Each was joined as a defendant in these proceedings. The second defendant contends that it was necessary for her to be a party to these proceedings because of the vigorous defence mounted by the first defendant in the Probate Application No. 104947/97. It is contended on her behalf that because of the way in which the Executor conducted the defence of those proceedings that it is not unreasonable for the second defendant to be concerned about his ability to fulfil his role as the executor of the Estate, namely to uphold the will. It was further contended that the Court must also look at the relationship between the plaintiff and the first defendant, namely grandson and grandfather. When those matters are considered it is submitted that it was reasonable for the second defendant to have some apprehension that the defendant would not perform his executorial duties as he should and therefore it was necessary to be joined as a party. 23 In Family Provision proceedings where the beneficiary does not seek to have additional provision made for him or herself the general position is that the beneficiary is not joined as a defendant. There had been a bitterly fought Probate application brought between the first and second defendants. Although there is no evidence that the first defendant would not perform his executorial duty in relation to the present proceedings, it is nevertheless, in the circumstances not unreasonable for the second defendant to wish to be heard on the application. It seems to me, however, that if an order is made for costs in the second defendant's favour against the Estate, those costs should only be limited costs. I am not of the view that the second defendant is entitled to recover costs to the extent set out in her solicitor's affidavit. It seems to me that those costs go to a full defence of these proceedings. In my view, the second defendant should only be entitled to costs which cover perusal of the affidavits filed on behalf of the plaintiff, the Executor's affidavit and an appearance at the hearing of the application. 24 The third defendant also seeks her costs payable be paid out of the Estate. In my view, her position is quite different from that of the second defendant. There has not been proceedings between the Executor and the third defendant. I have not seen any evidence which would suggest that there would be any apprehension by the third defendant that the Executor would not perform his executorial duties. In my view, there is no substance in joining the third defendant as a party to these proceedings. She is in no different position to any other beneficiary. If she seeks to be joined to the proceedings she does so at her own risk as to costs. Therefore, the order that I make in respect of the third defendant is that she pay her own costs. 25 The orders that I make therefore, are as follows:-

Beau Jacob Kazacos bht Shelley Kazacos v Kazacos & Ors

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (19 paragraphs)

Parties

Cases Cited (1)