Benz v Armstrong; Benz v Armstrong; Benz v Armstrong - [2022] NSWSC 534 - NSWSC 2021 case summary — Zoe

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Benz v Armstrong; Benz v Armstrong; Benz v Armstrong

[2022] NSWSC 534

Supreme Court of NSW|2021-10-22|Before: Ward CJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2021-10-22

Before

Ward CJ

Catchwords

La Valette v Chambers-Grundy (2018) ASTLR 64
[2017] WASCA 215 Lewis v Lewis [2001] NSWSC 321 Limberger v Limberger
Oakman v Limberger [2021] NSWSC 474 Lloyd-Williams v Mayfield (2005) 63 NSWLR 1
Dolman v Palmer [2005] NSWCA 361 Re Estate Grant, deceased [2018] NSWSC 1031 Re Estate Luce

Source

Original judgment source is linked above.

Catchwords

La Valette v Chambers-Grundy (2018) ASTLR 64[2017] WASCA 215 Lewis v Lewis [2001] NSWSC 321 Limberger v LimbergerOakman v Limberger [2021] NSWSC 474 Lloyd-Williams v Mayfield (2005) 63 NSWLR 1Dolman v Palmer [2005] NSWCA 361 Re Estate Grant, deceased [2018] NSWSC 1031 Re Estate Luce[1994] HCA 40 Smith v Johnson (2015) 14 ASTLR 175[2015] NSWCA 297 Soens v Rathborne [2018] NSWSC 302 Steinmetz v Shannon (2019) 99 NSWLR 687Byrne v Pickering [2011] NSWSC 572 Toscano v Toscano [2017] NSWSC 419 Underwood v Gaudron (2015) 324 ALR 641

Judgment (74 paragraphs)

[1]

ski [2016] NSWSC 976 Stott v Cook (1960) 33 ALJR 447 Szypica v O'Beirne [2013] NSWSC 297 Taylor v Farrugia [2009] NSWSC 801 Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572 Toscano v Toscano [2017] NSWSC 419 Underwood v Gaudron (2015) 324 ALR 641; [2015] NSWCA 269 Vasconelos v Bonetig [2011] NSWSC 1029 Verzar v Verzar [2012] NSWSC 1380 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Wardy v Salier [2014] NSWSC 473 West v Mann [2013] NSWSC 1852 Wheat v Wisbey [2013] NSWSC 537 Texts Cited: de Groot and Nickel, Family Provision in Australia (6th ed, 2021, LexisNexis,) Category: Principal judgment Parties: 2020/00101770 Anna Rosalba Benz (Plaintiff) Erlita Espanol Armstrong (Defendant)

[12]

Benz family upbringing

I have referred above to the Benz family members. The deceased was a surgeon (who practised up until only a few years before his death) with rooms for several years in a suite of offices at Bondi Junction (the deceased's one-quarter interest in that property - to which, with a separate lot comprising a car space in the relevant strata plan, I will refer as the Bondi Junction Property - forms part of the deceased's estate). The remaining interests in the Bondi Junction Property are held by Whitefold (as to one-half, which interest it is accepted is capable of designation as notional estate) and Erlita (as to one-quarter, following a transfer to Erlita within two weeks of the deceased's death on 20 March 2019). (Erlita's evidence is that this transfer occurred because the deceased wanted "to close" the Whitefold Trust - see at T 252.44-48.)
It is not disputed that the Benz children had a relatively privileged childhood, living in the Benz family home at Wahroonga (the Wahroonga Property), attending nearby private schools, and receiving a university education. Gwenneth, who also had qualifications as a medical practitioner, did not work during the children's childhood (although it is said that from time to time Gwenneth assisted the deceased in his practice). Gwenneth had a keen interest in music and encouraged that interest in her children (a number of whom had musical scholarships during their secondary schooling - see Andrew's evidence at T 112.44-112.47).
It appears that Gwenneth had some history of ill-health (see Andrew's affidavit affirmed 9 September 2020 at [85]; and Anna's acceptance in cross-examination that her mother had many medical ailments at T 49.50). Andrew referred in his affidavit to Gwenneth having gone through a period of depression (which he placed as being from about the time he finished school and started university) but in cross-examination he accepted Anna's description as being that Gwenneth had a period of "low mood". Anna, who is a qualified medical practitioner and presently undertaking training as a psychiatrist explained in her cross-examination that "depression" is a psychiatric diagnosis (see T 49.26; and there is no evidence of a formal diagnosis of depression). Whether Gwenneth suffered from depression as such (see Anna's explanation at T 49.8-49.34) or experienced periods of sadness or low mood is not here to the point; nor does it seem particularly relevant. I simply note, for completeness, that each of Anna, Catherine and Andrew gave evidence of their mother having periods of sadness in the mid 1980s (so, for example, it was the evidence of Catherine that in around 1987/1988 her mother was often in tears - see at T 81; and see Andrew's evidence at T 128.26), which coincides with the time at which the deceased commenced a relationship with Erlita (though it would be little more than speculation to postulate a causal link in that regard, particularly as it is not clear that Gwenneth knew of Erlita until some time around mid 1998 - see below).
It was clear from their evidence that each of the plaintiffs had a close relationship with Gwenneth.

[13]

Commencement of the relationship between Erlita and the deceased

There is some contention as to when Erlita and the deceased commenced cohabitation but there is no doubt that the couple's relationship commenced during the deceased's marriage to Gwenneth. Erlita places their cohabitation as commencing in 1986.
Contrary to the (implausible) evidence of Erlita on this issue (which I address in due course), the evidence of the plaintiffs is to the effect that Gwenneth was upset by the deceased's extra-marital relationship with Erlita. This is reinforced by the terms in which, towards the end of her life, Gwenneth withdrew her then intended severance in respect of the joint tenancy she held with the deceased of the Wahroonga Property - to which I will refer shortly.
Erlita's evidence is that she met the deceased in about 1982, when Erlita and her then husband, Colin, owned and operated a petrol station in Woollahra. Erlita, who emigrated to Australia from the Philippines, has book-keeping qualifications from the Philippines; and her evidence is that she worked at the garage as a book-keeper (see her evidence at T 308.46). As noted above, Erlita and Colin were divorced in 1985. (Erlita described Colin as a heavy drinker - T 311.52 and said both that she received little financially from the marital assets and that she did not want the money - T 311.)
Erlita's evidence is that she and the deceased commenced cohabitation in 1986 when she was aged 24. There was around a 27 year age gap between the two (though in some of the submissions it was said that the deceased was aged 50 at the time which would put the age gap slightly lower). Erlita says that they began living together in a unit at New South Head Road, Vaucluse and later, in 1989, moved into a unit at Cook Road, Centennial Park (the Centennial Park Property).
Erlita's evidence is that the deceased spent half of his time living with her in the unit (first, at Vaucluse and later at Centennial Park) and lived in the family home (with Gwenneth) at Wahroonga the rest of the time (see Erlita's affidavit sworn on 2 October 2020 at [7]-[8]; see also her evidence in cross-examination at T 300.7-300.34). (As I understand it, Erlita's evidence is that this proportional time sharing between the deceased's time with her and his time at the Wahroonga Property commenced very early in their period of cohabitation.) The plaintiffs dispute this (see Andrew's evidence in cross-examination at T 132.41-132.45; see also [104]-[105] and [122] of Andrew's affidavit affirmed on 9 September 2020; and Catherine and Anna's evidence is that they had no knowledge of their father's cohabitation with Erlita) and they say that Robert was living in the Centennial Park Property between 1988 and 1989 (see T 132.8; T 80; T 51.30).
Erlita seems to accept that Robert was living in the Centennial Park Property at some stage before she and the deceased moved into the property in 1989 (in that her evidence is that she called Robert to tell him that they were moving in and that Robert replied that he would tell the deceased that he needed accommodation for a couple of weeks - see at T 300.46-301.20). Erlita's evidence was that Robert gave her the keys to the property (or at least told her they were in the letterbox) (see at T 301.2) but then added that Robert was then very young (T 301.5) though presumably he was old enough to be at university and able to live on his own in the Centennial Park Property at that stage.
Erlita says that the deceased was "quite open about the relationship" (T 397.31) but this is inconsistent with the accounts given by the plaintiffs - and, in particular, with the account given by Andrew of a conversation with Gwenneth around the time of the deceased's acquisition of the Pymble Property in 1998 (see below).
The account of Erlita that the deceased was living half the time with her from around 1986 is implausible at least if the accounts of the plaintiffs are accepted, since it beggars belief that at least Catherine (who at that time was still living at home) would not have been aware if the deceased was away from the home for half of each week on a regular basis. (I discuss below my observations of the respective witnesses but suffice it here to note that I consider Catherine to have been a credible witness.) For Erlita, it is said that there was ample opportunity for the deceased to conduct a relationship with Erlita (since he worked at Bondi Junction and played golf at The Lakes Golf Club regularly during the week). However, to state the obvious, ample opportunity to carry on an affair is not the same as living away from the family home for half of each week over a lengthy period of time.
I note that Erlita's evidence in cross-examination was not wholly consistent on this issue but it seemed to me that this was most likely because Erlita was not paying close attention to the questions she was being asked. So, for example, there was the following exchange at T 300.15-300.32: Q. What I want to suggest to you is that at least until 1993, the deceased always returned home to [the Wahroonga Property] for the night, do you agree with me on that? A. Yes, but sometimes with me, yeah, sometimes, yes. Q. Sorry, can you repeat that answer a bit more slowly? A. I said sometimes with me, yes, sometimes with Mrs Gwen - Mrs Benz. Q. Okay, so you're disagreeing. What I'm saying is that until 1993, so between 1986 and 1993 I'm saying he always slept at [the Wahroonga Property] and-- … Q. Overnight. A. He always stay with me - I mean, sometimes he stay with me sometimes he stay there, yes.
In any event, nothing here turns on this because it is accepted by the plaintiffs that the deceased and Erlita were in a relationship for a considerable period of time and the couple were married in 2012, some seven years before the deceased's death.
Curiously, there was some suggestion that the deceased may have had other extra-marital relationships (Andrew referring to the deceased having bought a property for another woman that he thought was called Cindy - see T 132.17; and Erlita's Counsel's submissions at one point referring to "other relationships" that the deceased had - i.e., in the plural; see T 398.24) but there is no evidence of any such other relationship(s) and, again, nothing turns on it.

[18]

Attempted severance of joint tenancy in respect of Wahroonga Property

As noted above, the Benz family home for many years was the Wahroonga Property, the title to which was in the deceased's and Gwenneth's names as joint tenants.
Catherine has deposed to an occasion in 2010, which she places after Gwenneth's hospitalisation for the second time, when her sister Michele went to the Wahroonga Property and found that there were garbage bags containing Gwenneth's possessions in the driveway (and see Catherine's evidence in cross-examination at T 77.16, when she described this as "provocation"). Erlita does not appear to dispute that at some stage there were possessions in garbage bags in the driveway but she places this event as occurring later and says that the deceased had told the children to come and collect what they wanted (which seems to place this as being after Gwenneth's death). Erlita does, however, seem to accept that she was at the Wahroonga Property (she says carrying out repairs or renovations) at around this time (and Erlita was vocal as to the filthy state of the property at the time) but Erlita insists that she and the deceased were living at the Pymble Property and did not move into the Wahroonga Property until after Gwenneth's death.
In any event, while Gwenneth was at Andrew's house, Gwenneth obtained legal advice as to the severance of the joint tenancy in respect of the Wahroonga Property. Andrew's evidence is that Gwenneth asked him to arrange for her to receive advice from a solicitor; and that he did so (see from T 150.6). Andrew's evidence is that a solicitor came to Andrew's house to discuss severance (and the solicitor presumably received instructions as to the severance of the tenancy on that occasion as a document was then prepared to that effect). The document was executed on 27 October 2010. Andrew's evidence is that it was witnessed by a neighbour (T 150.16). On 29 October 2010, the notice of severance in respect of the joint tenancy was served.
Erlita's evidence, reiterated more than once, was that the deceased was very angry about this and said that he would disinherit the children. See the following exchange from T 305.13, where Erlita recounts having driven the deceased to Andrew's house (staying outside in the car) and saying that the deceased was there for so long that she panicked and rang the police: Q. When you talked to William after he was in the house, he said to you that his wife and children were trying to cheat him out of the [Wahroonga Property], is that right? A. That's right, yes. Q. He didn't want that, did he? A. He didn't want that, yes, he was angry. Q. Did he say anything to you about what he would do about that? A. He was just saying that he was so angry with the children that's trying to put it in - from they're not joined in as tenants in common. Q. Yes, and did he say he'd get that changed or he'd get that reversed? A. He didn't see, maybe he will get that reversed. He didn't see that he would get that reverse. But told the, the owner. That thing when he signed it she wasn't in sound mind. It was - she's not in sound mind. Q. He said when she signed it she wasn't in sound mind? A. Yeah. Q. I see, and he also said that it made him very angry? A. Yes, he did. He was very angry, and he say that when I'm fear, I don't trust anyone. When I finished with them, you know, he's not, not going to leave them anything because-- Q. He's not going to leave them anything? A. ...(not transcribable).. yes. He was very angry.
Anna has deposed (at [34] of her affidavit sworn on 2 April 2020) that the deceased and John persuaded Gwenneth to withdraw the notice of severance. Annexed to Anna's affidavit is a handwritten note dated 22 November 2010 (in what Anna recognised to be John's handwriting at T 30.38) and signed by Gwenneth, advising that she no longer wished to sever the joint tenancy "on condition that Ms Erlita Armstrong of Pymble never moves into [the Wahroonga Property], nor has any ownership whatsoever in any form of [the Wahroonga Property]".
The note is significant to my mind in that it makes clear Gwenneth's wish that Erlita should have no interest in the Wahroonga Property in the future (and to that extent belies the insistence by Erlita that Gwenneth was or remained acquiescent in or accepting of Erlita's relationship with the deceased - see at T 312.45-312.47; 313.45-131.48); and it is consistent with the plaintiffs' contention that Gwenneth was concerned to preserve the Wahroonga Property as an inheritance for the children. It also suggests a degree of at least indifference on the deceased's part to his then wife's wishes insofar as the deceased (presumably cognisant of the basis on which Gwenneth had withdrawn her severance of the joint tenancy) permitted Erlita (on Erlita's own evidence) to start repairing or renovating the Wahroonga Property even before Gwenneth's death (and, on the plaintiffs' account of events, permitted Erlita to move into the Wahroonga Property contrary to Gwenneth's wishes even before her death). The evidence of Anna is that the deceased told her that Erlita had changed the locks on the Wahroonga Property while Gwenneth was in the nursing home (after an incident when Anna went to the property and was unable to obtain access) (see T 52.20).
It is also relevant to note, in light of Erlita's evidence that the deceased threatened to disinherit his children, that the deceased (after Gwenneth's death and his marriage to Erlita) took steps to transfer an interest as joint tenant in the Wahroonga Property to Erlita, transferred or caused the transfer of a one-quarter interest in the Bondi Junction Property to Erlita, and made substantial inter vivos gifts of shares to Erlita (all of which had the effect of diminishing his actual estate on his death). (Indeed, the deceased transferred an interest as joint tenant in the Pymble Property to Erlita in 2000, before Gwenneth's death.) Erlita gave the following evidence: Q. After the joint tenancy was put back in place, so it's joint tenants again not tenants in comment [sic; scil common], I think the evidence you've just given is that the deceased said he didn't want to cent to go to any of his children? A. That's right. He was so angry. Q. What I'm suggesting to you is that him saying that was a reaction to the situation with [the Wahroonga Property], wasn't it? A. That's true, yes.
Although the transfer recorded consideration being paid for the transfer of the one-quarter share in the Bondi Junction Property to Erlita, her evidence did not establish whether there had been any such actual payment: Q. One quarter is in your husband's name, one quarter is in your name and half is in the name of that company Whitefold Pty Ltd? A. Yes. Q. Is your understanding that half, which is in the name of Whitefold Pty Ltd, is part of the family trust? A. That's true, yes. Q. The one quarter in your name and the deceased's name, would you accept that that was transferred out of the family trust to you and to your husband about two weeks before your husband died? A. Yes, cause he wanted to close the trust before we go to Europe. June 7 we supposed to fly. He wanted to close the trust obligation. … Q. I see. Can I ask you to focus on my question. Do you recall, do you remember $108,750 of your money being paid to the trust for this one quarter share in the Bondi property? A. No, but my husband-- Q. I see. A. --I don't know, I mean - Q. If you skip over to the next page, 143, this is the transfer of the car space, so this is 153/SP31337, do you see that at the top? A. Yes. Q. And again the transferor is Whitefold Pty Ltd and you are the transferee. Can you see all of that? A. Yes. Q. The date again is 20 March 2019, do you see that? A. Yes. … Q. The consideration, it says "The transferor acknowledges receipt of the consideration of $15,500, do you see that? A. Yes. My husband-- Q. Do you remember $15,500 of your own money going into the trust to pay for the one quarter share of the car space? A. No because my husband always arranged everything in financial things so he, yeah, he did himself, yeah. Q. I see, so-- A. And - sorry, and this Whitefold Pty Ltd, I think, I don't know if this is closed. I ask my accountant. Q. You're not sure if it's closed, is that what you said? A. Yeah, yes, I'll ask him, yes. It's supposed to be closed I think.
Thus, the events following the withdrawal of the notice of severance of joint tenancy would support the conclusion that the deceased was indeed arranging his affairs in a manner that would lead to the disinheritance of his children, albeit including them in his Will as residuary beneficiaries.

[20]

Litigation involving Whitefold Trust

After Gwenneth's death on 6 May 2011, Catherine and Michele were appointed executors of Gwenneth's estate by grant of probate on 24 January 2013. As executors they undoubtedly had a duty to call in the estate's assets. Unfortunately, it appears that their attempt to comply with that duty caused a further fracturing of the relationship between the deceased and at least some of his children. Indeed, Erlita contends that the most significant event in the relationship between the plaintiffs and the deceased was the service of a statutory demand (see at T 398.30) (see below) in respect of a debate allegedly owing to Gwenneth's estate. It is submitted for Erlita that up to that point the deceased was "generous to all he loved". (I consider that it is more likely that the more significant event fracturing the relationship was the attempted severance by Gwenneth of the joint tenancy given Erlita's evidence as to the deceased's reaction to this.)
On 15 October 2013, Catherine and Michele served on Harly (by then the trustee of the Whitefold Trust) a statutory demand in respect of unpaid entitlements recorded in Gwenneth's name in the accounts of the Whitefold Trust debt (i.e., for a debt allegedly owed by Harly to Gwenneth's estate).
This resulted in an application by Harly (the sole director of which was the deceased) to set aside the statutory demand. Relevantly, it was contended by Harly in that proceeding that moneys had been advanced on behalf of Gwenneth by the deceased (for living, medical and funeral expenses) and that Gwenneth's estate was indebted to the deceased in the sum of $106,633. The deceased assigned his rights in respect of that claim to Harly by an assignment dated 29 October 2013.
Harly's application was part heard by Black J on 25 March 2014, when his Honour directed the parties to submit an agreed form of order providing for mediation. On 8 May 2014, the statutory demand proceeding was dismissed by consent orders.
However, Harly had by them also commenced separate debt recovery proceedings in the District and Local Courts, respectively, against each of Catherine, Robert, Andrew and Michele for recovery of amounts recorded in the books of the Whitefold Trust as loans to them as beneficiaries. Pausing here, it is unsurprising that this litigation would have generated tension within the family when it is understood that this litigation related to claims for recovery of amounts expended on the children's education and the like over the years (which had been accounted for in the accounts of the Whitefold Trust as loans made to each of them). Hence, as I understand it, what Harly was seeking to recover was, inter alia, amounts expended during the children's upbringing for their own school fees (and presumably at a time when their consent could not effectively have been given to such a loan arrangement). There was no claim made against John in this respect (no doubt because the books of the Whitefold Trust recorded a substantial amount owing to him - which led to his own litigation in due course as I explain below).
That litigation was ultimately resolved by a Deed of Release dated 1 May 2014 between each of Catherine, Michele, Robert, Andrew, Harly and the deceased (Deed of Release).
The recitals to the Deed of Release set out the history of the dispute, which was defined in cl 2 of the Deed as follows: In this deed "Whitefold Trust Dispute" shall include all claims between the Trustee of the Whitefold Trust and Dr Benz or either of them (of the first part) and any or all of Catherine, Robert, Andrew, Dr Tridgell or the Estate of the late Gwenneth Jean Benz in respect of transactions, decisions, activities or omissions prior to the date of this deed involving: a) distributions of income or capital by the Whitefold Trust to eligible beneficiaries; b) payment or non-payment of moneys due to any eligible beneficiary; c) payment or non-payment of moneys due to the Whitefold Trust by any eligible beneficiary; d) payment of money or transfer of assets in specie by the trustee of the Whitefold Trust to any eligible beneficiary; e) loans to or by any eligible beneficiary; f) the legal and beneficial ownership of any real or personal property transferred by the trustee for the time being of the Whitefold Trust to any person; g) payments made by the Trustee of the Whitefold Trust to, for on behalf of any eligible beneficiary; h) amounts due to any eligible beneficiary on the taking of accounts of the Whitefold Trust as at the date of this agreement; and i) for the avoidance of doubt, includes the section 459G Proceedings, the Debt Recovery Proceedings, the Assigned Claim [each as separately defined in the deed] and their subject matter.
Pursuant to the Deed of Release, Harly agreed to pay the sum of $350,000 to the estate and the various proceedings were discontinued. Clause 9 of the Deed contains a broad release from Catherine, Michele, Robert and Andrew in favour of both Harly, as trustee of the Whitefold Trust, and the deceased.
Of the $350,000, the evidence is that this was distributed equally to Andrew and Anna (in effect, as I understand it, in an attempt to equalise the position as between the siblings in respect of the provision each had obtained during Gwenneth's lifetime). The result, as I understand it, is that none of the other siblings obtained any benefit out of Gwenneth's estate. The sum paid to each of Andrew and Anna was $168,000 (being half of the settlement amount of $350,000 less any costs, according to the evidence of Catherine at T 76.43). It appears that at some stage some of the siblings also contributed their own funds to provide moneys to Andrew and Anna (because one of Catherine's needs is to repay an amount to Michele which represented Catherine's contribution to such payments; see T 70.17 and Anna's affidavit sworn 2 April 2020 at [10]). (This is consistent with an understanding within the family of there being a need for equity in the siblings' share of provision from their parents' estates.)

[27]

John's respective proceedings

As noted above, John was not a party to the above litigation involving the Whitefold Trust; nor was he a party to the Deed of Release. After the deceased's death, John commenced proceedings on 15 May 2020 by statement of claim in this Court against both Whitefold and Harly, seeking to recover trust distributions that had been declared but not paid to him (the trust proceeding - 2020/145740).
There was a dispute as to the proper disclosure of distributions to John during the course of the Whitefold Trust from 1977. It was apparently conceded by the defendants (in that proceeding) that there had been a non-payment of declared distributions, the issue being the quantum of John's entitlement (i.e., the amount of the indebtedness). The 2018 Whitefold Trust statements prepared by Mr Batcheldor showed indebtedness from the deceased and his estate to the Trust of $2,017,228 and a loan account to William J. Benz (John) of $1,944,991.
John also commenced a separate family provision proceeding, claiming provision out of the deceased's estate ( 2020/00092199).
There was also a judicial advice application brought by Erlita, as executor of the deceased's estate, seeking advice about the relationship between the estate and the Whitefold Trust "and who owed whom what" (see T 392.34) (2020/284384). The costs of those judicial advice proceedings were ordered to be paid out of the estate.
John's respective proceedings were settled (though not before there had been a cross-claim brought by Harly in the trust proceeding against the various plaintiffs in the present proceeding). Mr Batcheldor then prepared the Whitefold Trust's 2020-2021 Financial Statements, showing the loan account for John for $2,000,000 (which included interest) and the debts due from the estate at $2,206,557 and from Erlita personally at $272,445. The statements record small entitlements due to John's two children and a sum of $860 due to Anna. However, as adverted to above, the 2021 Whitefold Trust's accumulated losses amount to $139,299. Thus, after the distribution to John, there are no assets left in the Whitefold Trust.
Complaint is made as to the manner in which Erlita responded to the claim by John in relation to the Whitefold Trust. In particular, Anna says that, instead of speedily settling John's claim, it was defended with vigour (including joining the present plaintiffs as cross-defendants and then Erlita commencing proceedings in her own name including them all as defendants). Anna says that the defendants filed submitting appearances but the cases continued until a few days before hearing when settlement was reached (on undisclosed terms). John's claim was dismissed with no costs order in his favour, but a deed was executed and a payment made to him sufficient for him to abandon his family provision claim. All claims against the present plaintiffs were also dismissed, with costs, but those costs are to be paid either from the estate or from what remains of the Trust fund (the latter being now said to be nil, albeit that it is noted that Erlita's updating material made no reference to any of this).
It is also relevant to note that the legal fees of the trustee of the Whitefold Trust incurred in relation to the trust litigation amounted to $253,000 (these amounts being included in the trust accounts as a liability) but that the trustee also has a liability to each of Anna, Andrew and Catherine in relation to their costs, which will not be able to be met out of the assets of the Whitefold Trust. The accountant who prepared the trust accounts (Mr Batcheldor) has given evidence that the reduction of the trust balance in the period from 1 July 2020 to 30 June 2021 is due to the payment of the Trustee's legal and accounting expenses and that the account is now in deficit (see Mr Batcheldor's evidence from T 170.14).
A spreadsheet was produced by Mr Batcheldor (see T 400.49) during the course of the hearing showing that assets and liabilities of the Trust in relation to the deceased's estate filed on 15 October 2021 as an annexure to the affidavit of Erlita Armstrong sworn 15 October 2021. Complaint is made that this is information that should have been disclosed by Erlita (as executor) at a much earlier time (and indeed that information as to dividends on shares and rent received should also have been included). Erlita blames, variously, her accountant or her lawyers for this.
Complaint is also made that Erlita has intermingled trust and estate assets (and that it has been a costly and time consuming exercise for the plaintiffs to seek to ascertain the true position in this regard). Erlita's evidence (and see Mr Batcheldor's evidence as well) was that she sold shares of the deceased (forming part of his estate) in order to pay liabilities of the Whitefold Trust, including the settlement amount payable to John (at T 233.35-233.48): Q. What I was saying to you is you haven't just sold your assets, you've sold estate assets to pay the liabilities? A. Yes, part of this money was sold to pay a lot of liabilities and to John as well, because the, the trust has got no money. Q. Yes. And before-- A. I didn't quite understand how I'm going to pay this if I don't sell the shares and, and I, I - I sold mine and I sold William too. Q. Yes, that might be so. My questions though relate to the fact that before this affidavit sworn and filed at 3.53pm on Friday, you didn't tell any of the other parties or the Court any information about this? A. Well, I - because as I said, I rely on all the advice from my lawyer and also my accountant who does the analysis of everything
The plaintiffs say (with justification in my opinion) that it has been difficult for them to ascertain precisely the position of the estate; and that there has been a lack of disclosure as to dividends earned on the estate shares (some $117,000 taken up in the bank statements in this regard). Indeed, the plaintiffs contend for special costs orders in this regard (see below).

[29]

Distributions out of estate assets

It is relevant here to note that, after the commencement of the family provision claims by Anna and Catherine; and after the parties had been ordered to mediation but before the mediation was scheduled to occur, there was a transfer to Erlita of $9,282,490 in shares in specie as a death benefit pursuant to the binding death nomination (see affidavit of Mr Batcheldor, sworn 12 October 2021).
To avoid confusion it should be noted that there are three sets of shares that have featured in the present application.
First, shares worth about $1.1 million (NAB and Westpac shares) that were transferred to Erlita on two different dates in January 2019 (i.e., prior to the deceased's death), that Erlita claimed were a Christmas gift from the deceased, although Erlita's evidence was somewhat inconsistent in that regard in that, in cross-examination she suggested that she had made payment for those shares. Ultimately, however, Erlita reverted to these being gifts (at T 228.1-228.11): Q. And the second reason is in your affidavit on page 495 you say they were transferred as gifts from him, so as gifts from your husband. A. Yes. Q. For that reason do you accept that it's more probable than not that you did not pay anything for these shares? A. Yes, because I don't know, I don't remember, because my husband do everything himself to transfer it and to, to give it to me, you know. After all I'm his wife so he can just do whatever he wants to do with whatever, but I, I don't..(not transcribable)..
Second, the shares that were transferred in specie pursuant to the death benefit nomination (in the order of $9.2 million).
Third, shares (the Scentre shares) (being estate shares) which were sold between 17 June 2020 and 3 September 2021 (without a notice of intended distribution of estate assets by Erlita) (the documents showing the value of shares reducing in that period from $3.4 million to $1.6 million). These are the shares that Erlita says were sold in order to meet the liability of the Whitefold Trust (i.e., not an estate liability) to John (and see Mr Batcheldor's evidence from T 200.8). The logic behind this seems to be that the estate had a liability to the Whitefold Trust and the Whitehold Trust had a separate liability to John, so Erlita caused estate shares to be sold to meet the liability to John.

[30]

Actual estate

As noted above, during May and June 2020, some $9.2 million worth of shares were transferred to Erlita out of the deceased's superannuation fund. Andrew values the shares transferred to Erlita from the deceased's superannuation fund during May and June 2020 at $10,825,634.67 as at 3 September 2021 (see [61] of his affidavit affirmed on 1 October 2021).
In her then capacity as administrator of the deceased's estate, Erlita filed an Affidavit of Administrator sworn 2 July 2020 disclosing the following estate assets: (i) a one-quarter share of the Bondi Junction Property (valued at $108,750); (ii) a one-quarter share in the garage which is a lot in the strata plan of the Bondi Junction Property (valued at $15,500); (iii) the Centennial Park Property (valued at $660,000); (iv) cash in the bank account ending #5092 ($233,886); (v) motor vehicles (valued at $75,750); (vi) a share in Whitefold (valued at $2.00); (vii) a share in Harly (valued at $2.00); (viii) furnishing and fittings and artwork (estimated at $10,060); and (ix) shares in public companies (valued at $3,409,177.83). The total value of the assets of the estate was thus said to be $4,513,127.60.
The expenses of the estate (totalling $2,031,533) were at that time said to be: (i) loan owed to Whitefold ($2,017,228); (ii) funeral expenses ($12,600, less paid; the balance being $400); and (iii) cemetery plot ($13,905).
The net value of the estate was thus calculated as at 2 July 2020 to be $2,481,594.60 (being assets of $4,513,127.60 less liabilities of $2,031,533). Following the settlement of the litigation initiated by John, the value of the net distributable estate is said to have been reduced to $2,278,463.
After the distributions made under the Will in favour of Erlita, the property left in the estate is the Bondi Junction Property, the motor vehicles, and the furnishing and fittings (valued at a total of $201,060).
As the residue of the estate ranks behind the specific gifts in the Order of Distribution in Part 2 of the Third Schedule of the Probate and Administration Act 1898 (NSW), Erlita acknowledges that the residual beneficiaries would expect to receive nothing from the estate.
In the updated Affidavit of Administrator sworn 11 October 2021, Erlita discloses the estate assets as being: (i) a one-half share in each of the Bondi Junction Property and the garage (together valued at $315,000); (ii) the Centennial Park Property ($849,500); (iii) three motor vehicles ($70,000); (vi) a share in Whitefold (valued at $2.00); (vii) a share in Harly (now valued at $1.00); (viii) furnishing and fittings and artwork (estimated at $10,060); and (ix) shares in public companies (now valued at $1,648,380.85). I explain in due course the change from the share identified as being the deceased's share of the Bondi Junction Property and garage (in the updated affidavit disclosed at one-half rather than one-quarter).
The updated value of the assets of the estate is thus now said to be $2,892,943.85. (I note that the updated inventory of property discloses assets owned solely, as tenant in common and jointly to the value of $6,650,176.45.)
The expenses of the estate in the updated affidavit are now said to be: (i) liabilities of the estate ($305,798.16) and (ii) tax on unrealised capital gains ($308,683), totalling $614,481.16.
As to the Centennial Park Property (which was registered in the deceased's sole name at his death) the difference between the parties is that the plaintiffs say that a recent appraisal of $1,275,000 should be preferred; whereas Erlita relies on a valuation of $849,500.
As to the Bondi Junction Property (including the lot for the car space), it is noted by the plaintiffs that: one-quarter of this property is actual estate (being registered in the deceased's sole name); one-quarter is registered in Erlita's name (but is capable of designation as notional estate having been transferred to Erlita by Whitefold about two weeks prior to the deceased's death); and one-half is held by Whitefold. The interest held by Whitefold was acquired in its capacity as the trustee of the Whitefold Trust (the discretionary family trust of which the deceased was the ultimate controller in his lifetime) but that interest does not appear to have been transferred to Harly when it was appointed as trustee. (Erlita's evidence is that there was a pre-signed transfer document - see T 256.13 - but it appears that there was no formal transfer ever registered nor any formal vesting order.) The position would seem to be that Whitefold still holds its interest in trust for the benefit of the Whitefold Trust although it is no longer the trustee of that trust (and Erlita did not appear to contend otherwise). The plaintiffs note that a recent appraisal estimates the value of the Bondi Junction Property (including car space) at $710,000; whereas, Erlita relies on a valuation of $630,000.
(Pausing here, I note the plaintiffs complain that there was late disclosure by Erlita as to the rent received from the Centennial Park Property and the Bondi Junction Property. In the spreadsheet annexed to Erlita's latest affidavit sworn on 15 October 2021, the proceeds of rent are identified as being $52,000 in respect of the Bondi Junction Property (including the carspace) and $40,220 in respect of the Centennial Park Property.)
As to the shares owned by the deceased in his sole name at the date of his death, the plaintiffs note that they had a disclosed value of over $3,400,000 as at 17 June 2020 (which it is said would have meant a present value at the time of the hearing of about $4 million) but that in Erlita's updating affidavit they were disclosed as being valued at about $1.6 million. In cross-examination, the difference was explained by reference to the sale of the Scentre shares to meet Trust liabilities, including the settlement payment to John. (The plaintiffs complain that there was late disclosure of the sale of the shares and any dividends earned on those shares. In the spreadsheet annexed to Erlita's affidavit sworn on 15 October 2021, those dividends have a value of $117,000.)
Thus, on the plaintiffs' calculations, thus, the actual estate is in the order of: one-quarter of $710,000 for Bondi Junction Property (about $177,000); shares valued at about $1.65 million; the Centennial Park Property at $1.275 million; and rental income of around $50,000 (allowing a one-quarter share of the rent for the Bondi Junction Property), thus (totalling around $3,102,050, although I am not attempting a precise arithmetical calculation here). Less the liabilities as calculated by Erlita (in the order of $615,000) that would leave a total of around $2.487 million. On Erlita's calculations, it would be slightly less (as the values of the Bondi Junction Property and Centennial Park Property are said to be less).

[31]

Notional Estate

Erlita's 2 July 2020 Affidavit of Administrator identifies the following as property that may be notional estate: (i) a one-half interest in the Wahroonga Property (valued at $1,300,000 as at 26 May 2020); (ii) a one-half interest in the Pymble Property (valued at $750,000 as at 26 May 2020); (iii) 23,889 shares in National Australia Bank ($452,935 as at 17 June 2020); and (iv) 17,148 shares in Westpac Banking Corporation ($311,236 as at 17 June 2020).
The updated Affidavit of Administrator sworn 11 October 2021 identifies the following property that may be notional estate: (i) a one half interest in the Wahroonga Property valued at $1,281,500 as at 30 September 2021 per the appraisal by National Property (previously valued at $1,300,000 as at 26 May 2020 per the appraisal by Soames Real Estate); (ii) a one-half interest in the Pymble Property valued at $1,140,000 as at 30 September 2021 per the appraisal by National Property (previously valued at $750,000 as at 26 May 2020 per the appraisal by Soames Real Estate); (iii) 23,889 shares in National Australia Bank (now valued at $650,736.36); (iv) 17,148 shares in Westpac Banking Corporation (now valued at $431,615.11).
As to the above, the Wahroonga and Pymble Properties passed by survivorship on the death of the deceased (the deceased having transferred to Erlita an interest in those properties as joint tenant with him after Gwenneth's death and in around September 2000, respectively); the NAB shares were transferred to Erlita on 10 January 2019 and the Westpac shares were transferred to Erlita on 23 January 2019 (see Erlita's affidavit sworn 2 July 2020 at [8]) (these being the two sets of shares amounting to $1.1 million - NAB shares $605,136; Westpac shares at $431,615). The plaintiffs say that the shares transferred from the deceased to Erlita inter vivos within the period have a present value of about $1,100,000 (and point out that there has been no disclosure of any dividends earned on those shares).
The plaintiffs say that the value of the Wahroonga Property is $5,125,000 (half being $2,562,500); and that the value of the Pymble Property is $2,325,000 (half being $1,162,500). Erlita, on the other hand, puts the value of the Wahroonga Property at $2,325,000 and the value of the Pymble Property at $2,238,000 (there being little difference between the valuations for the Pymble Property), with half interests in each being readily calculable.
While the plaintiffs say that the Whitefold Trust falls within the description of "a paradigm case for the intended application of the notional estate provisions" (noting that Erlita appears to accept that the assets of the Whitefold Trust are able to be designated as notional estate), given that there is now likely to be a deficit in the Whitefold Trust, this takes the plaintiffs nowhere. The 2020 Financial Report disclosed assets of over $1,800,000 and liabilities of about $1,500,000 but Mr Batcheldor has confirmed the current position in relation to the Whitefold Trust. On 15 October 2021, an affidavit sworn by Erlita as administrator on that date was filed to which amended financial statements of 2020 were annexed; and the plaintiffs appear to accept that, given the estate liabilities, the costs incurred in these proceedings and those involving John and the Whitefold Trust, the residue of the estate will be wholly exhausted. (The spreadsheet setting out the assets and liabilities of the deceased's estate includes Note 6 as to a transfer to Erlita of a loan owing by the estate, which is said to have been an adjustment to wind up the trust and extinguish the debt the estate owed to the trust and the debt owed by the trust to John - see in this regard Erlita's submissions at T 413.42-413.47.)
Erlita, in her updated Administrator's affidavit of 11 October 2021, deposes to her opinion that the proceeds of the deceased's superannuation fund do not form part of the deceased's notional estate. (The plaintiffs dispute this - as I explain in due course.) The deceased's superannuation death benefit of over $12,900,000 passed to Erlita by way of Binding Death Nomination and distribution.
On the plaintiffs' calculations (and including the death benefit as potential notional estate) that would mean that the amount capable of designation as notional estate would be in the order of $17.9 million (or $18.3 million if three-quarters of the Bondi Junction Property were to be included as notional estate opposed to the one-quarter that was transferred to Erlita two weeks before the deceased's death), comprised of: half of the Wahroonga Property at $2.562 million; half of the Pymble Property at $1.162 million; (at least) one-quarter of Bondi Junction Property valued at $177,000 (or alternatively three-quarters valued at $531,000); the "Christmas gift" shares valued at $1.1 million; and the death benefit superannuation funds valued at $12.9 million (with a distribution in specie having been made to Erlita of shares worth about $9.2 million).

[32]

Extension of time applications

As adverted to above, initially four of the deceased's six children filed a summons seeking family provision but John's summons filed on 24 March 2020 has been dismissed by consent.
Anna's summons was filed on 3 April 2020 within time.
Catherine's summons is recorded on JusticeLink as having been filed on 8 April 2020 (some three days late). An amended summons was filed on 3 June 2020 naming Erlita as the defendant. (It is not suggested that the amendment of the summons causes any prejudice. However, it was noted by Erlita that there is no prayer in the amended summons seeking to extend time for the commencement of the proceedings late nor was there any explanation for the delay in Catherine's affidavits.)
During the course of the hearing of the proceedings, Catherine adduced evidence that her summons was physically lodged (by being deposited in a filing box) with the Registry on 26 March 2020 (during the outbreak of the COVID-19 pandemic when the Registry was not open for business in the ordinary course). However, it was not stamped by the Registry as filed until 8 April 2020.
In Fitness First Australia Pty Ltd v Dubow [2011] NSWSC 531 at [81]-[84], albeit in a different context, I considered that a distinction may be drawn between the time at which a document is lodged and the time at which it is "filed", and I was of the view that the latter "must mean accepted (in some fashion) by the Registry staff for filing". Catherine accepted that if this were to be the case then leave would be necessary for her application and (out of an abundance of caution) sought leave to file an amended summons seeking an additional prayer extending the time for making an application (see T 92; 367). During the course of the hearing, I gave Catherine leave to file the amended summons (T 92.43).
Erlita's position in relation to Catherine's application for an extension of time summons was that she neither opposed nor consented to the application for an extension.
Andrew's summons was filed on 11 August 2020 (being about four months out of the time prescribed by s 58 of the Succession Act 2006 (NSW) (Succession Act)). There is a prayer in the summons seeking to extend the time for the late commencement of the proceeding. The position of Erlita was that the explanation for the delay in Andrew's affidavit (see below) is unsatisfactory. Moreover, it was contended for Erlita that there was prejudice in the late commencement of Andrew's proceeding because by then a mediation of the dispute had already occurred. I deal with this complaint below.
Andrew submits that sufficient cause can be demonstrated for the extension of time sought, noting that an assessment of sufficient cause involves consideration of: the strength of the claimant's ultimate case; the explanation as to why the application was not made within time; whether there would be prejudice suffered by granting the extension, including on behalf of beneficiaries whose interests might be affected; and whether there is any conduct of the claimant or the beneficiaries relevant to the determination.
Andrew submits that his case for provision is a strong one, emphasising the size of the deceased's estate and notional estate (which, as already noted, Andrew assesses as having a combined value exceeding $20,000,000) and that Andrew is named as a residuary beneficiary in the Will (which Andrew says demonstrates a recognition on the part of the deceased that provision ought be made for Andrew) but that, in the events that have happened, there is likely to be no residue available for distribution. It is submitted (as is abundantly clear) that Erlita has received, or will receive, the vast benefit of the deceased's estate and notional estate (in addition to generous inter vivos provision from the deceased), and thus has no competing claim from a financial perspective; and that generous provision to the adult children of the deceased, including Andrew, can comfortably be accommodated without that having any practical impact on Erlita's needs and resources.
As to the reason for the delay, Andrew deposes to an inability to obtain advice at an early stage in circumstances where information about the nature and value of the deceased's estate was not available or forthcoming; and says that, after being served with formal notice of proceedings commenced by his siblings and being told by them (rather than by Erlita) that the estate was substantial, Andrew promptly obtained advice and filed his claim. In cross-examination, Andrew made reference to two other reasons: the risk of costs associated with the litigation and a fear for his physical safety (for reasons to which he had deposed but which were not read).
Andrew submits that there is no prejudice that will be occasioned by the extension of time, noting that the estate was the subject of four sets of extant proceedings when Andrew's summons was filed and at that time probate had not yet been granted. Andrew says that Erlita is effectively the only person who will be affected by the proceeding and submits that the estate and notional estate is such that all of the claims (including Andrew's claim) can be met without depriving her of the ability to maintain a more than comfortable existence for the rest of her life.
Further, Andrew submits that the absence of full and frank disclosure by Erlita as to the nature and value of the estate and notional estate is conduct relevant to the reasons for delay.
Erlita, as adverted to above, submits that Andrew's explanation is not reasonable. It is noted that Andrew's evidence is that he received advice (of some description) even before the deceased's death, as to the potential need to make a family provision application and that (as Andrew accepted) he made a conscious decision not to commence proceedings within the requisite time.
Andrew's proceeding was commenced after a mediation had been held (on 16 July 2020) between the other plaintiffs and Erlita. It is said for Erlita that she would now be prejudiced (whatever was said or done at that mediation - and for obvious reasons I have no information as to this) if leave were now to be granted in terms of being deprived of the ability to resolve all claims at mediation.

[33]

Determination as to extension of time

In Moore v Randall [2012] NSWSC 184, White J (as his Honour then was) noted (at [39]) that the expression "sufficient cause" means "sufficient explanation or sufficient justification or excuse for the application not having been made within the prescribed period". See also John v John [2010] NSWSC 937 where I noted (at [37]-[38]) that the existence of a sufficient explanation was critical and referred to the observation by Hodgson J (as His Honour then was) in Lewis v Lewis [2001] NSWSC 321 that "sufficient" means "sufficient in all the circumstances to justify the granting of the extension of time".
The principles in relation to an application for leave for an extension of time were set out by Hallen J (at [84]-[90]) in Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572 and cited by his Honour again in Semitecolos v Semitecolos [2021] NSWSC 1508 (at [81]). Relevantly, his Honour noted that the prejudice to which the section looks is "any prejudice occasioned by the delay in lodging the claim rather than any disappointment that might occur consequent upon readjustment of the interests under the will in order to make provision for the applicant" (his Honour citing Cetojevic v Cetojevic [2006] NSWSC 431 per Campbell J, as his Honour then was; McCann v Ward [2010] VSC 452 at [11] per Dixon J; and noted that where there has been a long period since the death of the deceased that lapse of time might itself create prejudice in any fact-finding exercise, his Honour there citing Vasconelos v Bonetig [2011] NSWSC 1029 at [21] per White J, as his Honour then was).
In the present case, it is not suggested that there was a lengthy delay in the filing of the summonses from the date of death (both Catherine's and Andrew's summonses being filed within about three months of the period in which the statute provides for such claims to be brought and hence within 15 months of the death of the deceased).
In Catherine's case, the delay in the filing of the summons was minimal. Moreover, the explanation for the delay which was ultimately proffered (namely, that it was occasioned by the difficulties in attending to the filing documents in the Registry during the course of the pandemic) was in my view a reasonable explanation and I cannot see that any prejudice whatsoever will be suffered by the grant of an extension (nor was any suggested).
As to the position in relation to Andrew, a three month delay is of course longer, although not excessively so. More problematic to my mind is the fact that it appears from Andrew's affidavit that he had been advised as to the ability to make a claim for provision and he made a conscious forensic decision not to do so within the relevant time. Nevertheless, I do not accept that Erlita suffers any material prejudice from the delay. True it is that this meant that the regime for mediation of family provision claims did not operate as contemplated under the Practice Note (as there was not a mediation in which Andrew participated before the matter was listed for hearing - nor indeed by the time of the hearing itself, although as I understand it there was an unsuccessful attempt for a further court-ordered mediation). However, at most, that might have occasioned the incurring of costs of a further mediation (which as at the time of the hearing had not been arranged or agreed). Moreover, it cannot sensibly be suggested (nor was it suggested) that, had a mediation with all parties taken place prior to the hearing, it was likely that all the claims would then have been settled (obviating the need for costs of the hearing), since the parties have still not been able to reach an agreement despite a mediation in the period that the judgment was reserved and if that is indeed said to be the case it could be raised at the time of any submissions on costs. Nor could it be said that Erlita was prejudiced (as might otherwise have been the case) by having agreed to a settlement on the mistaken assumption that there would be no claim by Andrew, since no settlement at all was reached at the hearing in July 2020.
I by no means understate the importance for the just, quick and cheap resolution of disputes of participation in a timely way in the mediation process required under the Practice Note. However, I am not persuaded that in the present case the fact that there was not an opportunity to participate in a mediation with Andrew before the hearing amounts to prejudice in the requisite sense.
On the basis that I consider the delay not sufficiently prejudicial in either of the two cases, I consider that leave should be given for the extension of time that is now sought by both Catherine and Andrew; and will make orders to that effect.

[34]

Issues

The issues that arise in respect of each of the three plaintiffs (each of whom it is accepted is an eligible person) are: whether, considering the position as at the time of the hearing, the provision for the plaintiff was inadequate for his or her proper maintenance and advancement in life; if so, what orders should be made for his or her proper maintenance and advancement in life; and to what extent should property held jointly by, and superannuation of, the deceased be designated as notional estate of the deceased. The determination of these issues involves a multi-faceted evaluative judgment on the basis of the facts before the Court and having regard to all relevant factors including those set out in s 60(2) of the Succession Act.
The plaintiffs refer in this regard to what was said by Lindsay J in Re Estate Luce; Turch v Tripolone [2020] NSWSC 117 at [23]: In approaching the question for which section 59(2) of the [Act] provides, the Court must endeavour to place itself in the position of the deceased, and to consider what [the deceased] ought to have done in all the circumstances of the case, in light of facts now known, treating [the deceased] as wise and just rather than fond and foolish, making due allowance for current social conditions and standards and, generally, consulting the criteria set out in section 60 of the Act so far as they may be material.
The well-endorsed observations of White JA (with whom each of McColl JA and Payne JA agreed) in Sgro v Thompson [2017] NSWCA 326 must also be borne in mind. In that case, his Honour acknowledged (at [86]) the "superior position of the testator" and went on to say that while "the court's assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application", considerable weight should be "given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate". That said, in Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 at [974] Brereton J, as his Honour then was, noted that the statutory family provision jurisdiction is not to be exercised on the footing that it must be approached with caution because of its intrusion on testamentary freedom.

[35]

Relevant Provisions

Section 59 of the Succession Act provides that: 59. When family provision order may be made: (1) The Court may, on application of Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that: (a) the person in whose favour the order is to be made is an eligible person, and (b) in the case of a person who is an eligible person by reason only of paragraph (d), (e) or (f) of the definition of "eligible person" in section 57--having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application, and (c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both. (2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
Section 60 sets out a list of non-exhaustive factors that the Court may take into account (which I address in due course).
As to notional estate, s 63(5) of the Succession Act provides that: A family provision order may be made in relation to property that is not part of the estate of a deceased person, or that has been distributed, if it is designated as notional estate of the deceased person by an order under Part 3.3.
The "notional estate" of a deceased person is defined in s 3 of the Succession Act to mean property designated by a notional estate order as notional estate of the deceased person. The term "notional estate order" means an order made by the Court under Chapter 3 designating property specified in the order as notional estate of a deceased person.
Section 76 provides that: 76 Examples of relevant property transactions (1) The circumstances set out in subsection (2), subject to full valuable consideration not being given, constitute the basis of a relevant property transaction for the purposes of section 75. (2) The circumstances are as follows- … (e) if a person who is a member of, or a participant in, a body (corporate or unincorporate), association, scheme, fund or plan, dies and property (immediately or at some later time) becomes held by another person (whether or not as trustee) or subject to a trust because of the person's membership or participation and the person's death or the occurrence of any other event, … (4) For the purposes of this Chapter, in the circumstances described in subsection (2) (b), a person is not given full or any valuable consideration for not severing an interest in property held as a joint tenant merely because, by not severing that interest, the person retains, until his or her death, the benefit of the right of survivorship in respect of that property.
Section 77 provides that: 77 When relevant property transactions take effect (1) For the purposes of this Chapter, a relevant property transaction is taken to have effect when the property concerned becomes held by another person or subject to a trust or as otherwise provided by this section. … (3) A relevant property transaction consisting of circumstances described in section 76 (2) (b) or (e) is taken to have been entered into immediately before, and to take effect on, the person's death or the occurrence of the other event referred to in those paragraphs. (4) A relevant property transaction that involves any kind of contract for which valuable consideration, though not full valuable consideration, is given for the person to enter into the transaction is taken to be entered into and take effect when the contract is entered into.
Section 78 of the Succession Act permits the Court to make an order designating property as notional estate, but only for the purposes of a family provision order to be made under Part 3.2 or, if a family provision order is made in favour of the applicant, for the purposes of a costs order.
Section 80 of the Succession Act provides that the Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies.
Section 80 applies to relevant property transactions that took effect within one year before the date of the death of the deceased person and was entered into when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction, or a transaction that took effect or is to take effect on or after the deceased person's death.
The expression "relevant property transaction" is defined in ss 75 and 76 of the Succession Act.
Section 80 provides: 80 Notional estate order may be made where estate affected by relevant property transaction (1) The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies. Note- The kinds of transactions that constitute relevant property transactions are set out in sections 75 and 76. (2) This section applies to the following relevant property transactions- (a) a transaction that took effect within 3 years before the date of the death of the deceased person and was entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order, … (c) A transaction that took effect or is to take effect on or after the deceased person's death.
Sections 87, 88 and 89 of the Succession Act provide for limitations on the making of a designating order, including that the Court must not make a notional estate order unless it is satisfied that "the deceased's person's estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made" (see s 88(b)) or that "provision should not be made wholly out of the deceased person's estate because there are other persons entitled to apply for family provision orders or because there are special circumstances" (see s 88(c)); and may only do so to the extent necessary to satisfy the orders it makes.
Section 90 provides: 90 Restrictions on out of time or additional applications (1) This section applies to proceedings where- (a) An application for a family provision order is made later than 12 months after the date of the death of the deceased person, or … (2) The Court must not make a notional estate order in the proceedings unless- (a) It is satisfied that- (i) the property to be designated as notional estate is property that was the subject of a relevant property transaction or of a distribution from the estate of a deceased person or from the estate of a deceased transferee, and (ii) the person who holds the property holds it as a result of the relevant property transaction or distribution as trustee only, and (iii) the property is not vested in interest in any beneficiary under the trust, or (b) It is satisfied that there are other special circumstances that justify the making of the notional estate order.

[36]

Applicable principles

There was no dispute as to the relevant principles that are here applicable.
Reference is made by Erlita to the identification in Singer v Berghouse (No 2) (1994) 181 CLR 201; [1994] HCA 40 (Singer v Berghouse) (there in the context of the previous legislation) of two questions, being the jurisdictional question as to whether adequate provision had been provided to the claimant and then the question as to what provision ought to be made if the first question is not answered in the affirmative; and to the consideration of that decision in the context of s 60(2) of the Succession Act in Andrews v Andrews (2012) 81 NSWLR 656; [2012] NSWCA 308 and Keep v Bourke [2012] NSWCA 64.
The factors relevant in considering the adequacy of provision and the exercise of the statutory discretion if there has been inadequate provision include: the applicant's financial position; the size and nature of the estate; the totality of the relationship between the applicant and the deceased; and the relationship between the deceased and other persons who have legitimate claims upon the deceased's bounty.
The test established by s 59 of the Succession Act has regard not only to what is "adequate" by reference to the applicant's needs but also to what is "proper" in all the circumstances of the case, including the deceased's wealth, the applicant's means, competing claims on the bounty of the deceased and the applicant's conduct in relation to the deceased. In Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 (Vigolo v Bostin) at [122], Callinan and Heydon JJ observed that: Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all the relevant circumstances ... The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors.
In Wheat v Wisbey [2013] NSWSC 537 (Wheat v Wisbey) at [64]-[65], Hallen J noted that s 59(1)(c) of the Succession Act does not define the norm by which the determination is to be made as to whether the provision, if any, is inadequate for each applicant's proper maintenance, education and advancement in life and that such a determination has been described variously as dependent on a multi-faceted evaluative judgment (see Basten JA in Foley v Ellis [2008] NSWCA 288 at [3]) and an intuitive assessment (see White J, as his Honour then was, in Kay v Archbold [2008] NSWSC 254 at [126]). It was described by Stevenson J in Szypica v O'Beirne [2013] NSWSC 297 (at [40], citing Manuel v Lane [2013] NSWCA 61 at [9] per Emmett JA, with whom Meagher JA and I agreed) as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific". Hallen J made observations in Aubrey v Kain [2014] NSWSC 15 at [48] to similar effect.
The question of the inadequacy of provision is determined at the time the application is considered.
Relevantly, it is not part of the Court's function in determining a family provision application to achieve equity between various claimants or distribute the deceased's estate according to notions of fairness or equity, or to correct a sense of wrong felt by an applicant who may believe that he or she has been treated unfairly, and that the Court's role goes no further than the making of "adequate" provision in all the circumstances for the "proper" maintenance, education and advancement in life of an applicant (see Stott v Cook (1960) 33 ALJR 447 at 453-454 per Taylor J; Vigolo v Bostin at [10] per Gleeson CJ; Wheat v Wisbey at [119]-[121] per Hallen J).
Insofar as s 60 of the Succession Act sets out a range of factors that may be considered in determining whether there has been adequate provision and, if not, whether to make a family provision order, it is noted that those matters were characterised as "a multifactorial list" by Basten JA in Andrew v Andrew at [37], a "valuable prompt" by Lindsay J in Verzar v Verzar [2012] NSWSC 1380 (at [123]); and as a helpful checklist by Kunc J in West v Mann [2013] NSWSC 1852 (at [12]).
As to the concept of community expectations, it is noted that in Smith v Johnson (2015) 14 ASTLR 175; [2015] NSWCA 297 (Smith v Johnson) at [84]-[85], Sackville AJA, with whom Macfarlan JA and I agreed, cited Andrew v Andrew at [12], as authority for the proposition that accepted and acceptable community values permeate or underpin many, if not most, of the individual factors identified in s 60(2) of the Succession Act, including the concept of "financial needs"; and that in Steinmetz v Shannon, White JA (at [40]-[44]) said, of community standards or expectations, that they are not fixed or externally provable; rather, they are relative; and that if one is forced to use concepts of "moral duty" or "community standards", the former is preferable. The concept of "moral duty" was considered in Vigolo v Bostin at 228.
Reference is also made in the submissions to the observation by Basten JA in Neale v Neale [2015] NSWCA 206, with whom Macfarlan and Gleeson JJA agreed, that the concept of an "expectation" is "quite amorphous" but is apt to describe aspects of the "family or other relationship between the applicant and the deceased person" and to form part of the "obligations or responsibilities owed by the deceased person to the applicant" (at [17]).
As to the testamentary intentions of the deceased and testamentary freedom, it is said by Erlita that the testamentary wishes of the deceased are one of the more significant factors to be considered pursuant to s 60(2) of the Succession Act. Erlita points to the summary of principles articulated by Pembroke J in Revell v Revell [2016] NSWSC 947 in this context (at [5]-[9]).
As to the concept of testamentary freedom, in Re Fulop Deceased (1987) 8 NSWLR 679 McLelland J, as his Honour then was, said (at 680): In making these determinations, the following principles apply: first the Court should not interfere with the dispositions in the will (or, where applicable, arising under the laws relating to intestacy) except to the extent necessary to make adequate provision for the Plaintiff's proper maintenance, education and advancement in life, secondly, the expression "proper" in this context connotes a standard appropriate to all the circumstances of the case and thirdly the Court may take into consideration any matter which it considers are relevant to the circumstances …
However, in Steinmetz v Shannon, as noted above, Brereton J at [97] emphasised that the statute is to be given full operation according to its terms, notwithstanding that it encroaches on testamentary freedom, noting that testamentary freedom is constrained by the operation of the statutory jurisdiction, insofar as testators are obliged to make provision for those eligible persons for whom, according to community standards, they are expected to provide.
As to the position of claims by adult children, Erlilta maintains that the general proposition put forward by de Groot and Nickel in Family Provision in Australia (6th ed, 2021, LexisNexis) (that in practice adult children face a difficult task if they are in good health and able to support themself and any dependents and are unable to establish a special need or claim) is applicable in the present case due to the age of the plaintiffs and their ability to satisfy particular needs for their advancement in life.
The treatment of adult children was summarised by Brereton J, as his Honour then was, in Taylor v Farrugia [2009] NSWSC 801 at [57]-[59], and more recently by Hallen J in Limberger v Limberger; Oakman v Limberger [2021] NSWSC 474 at [473] and in North v Daniel [2021] NSWSC 828 at [162]. Included in those principles are the propositions that there is no need for an applicant adult child to show some special need or some special claim but also that, ordinarily (while the community expects parents to raise and educate their children to the very best of their ability while they remain children, probably to assist them with a tertiary education, and, where funds allow, to provide them with a start in life) the community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered "although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation".
Finally, as to the question of estrangement, Erlita notes that in Andrew v Andrew the issue of disentitling conduct or estrangement was considered at [35] (and Erlita accepts that there, the fact that there was a lengthy and bitter estrangement did not prevent the order for provision in favour of the claimant, the Court of Appeal rejecting a presumptive right to disinherit and holding that presumptions have no role to play in the evaluative exercise that must here be undertaken). It is noted that in Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 Ipp JA observed at [110] that mere estrangement should not ordinarily prevent the applicant satisfying the jurisdictional requirements of the Succession Act. Reference is also made to the decisions of Robb J in Lado Causillas v NSW Trustee & Guardian [2015] NSWSC 1204 and the Court of Appeal in Underwood v Gaudron (2015) 324 ALR 641; [2015] NSWCA 269 in this regard. Thus, estrangement alone is not a sufficient ground to disentitle an applicant for provision; rather the causes and circumstances of that estrangement will be considered.
The plaintiffs argue in this regard that a wise and just parent will recognise, as "a part of family life", that disharmony between parent and child is almost inevitable and that, in family relationships, hurts are inflicted, or suffered, sometimes consciously, and sometimes unconsciously. The plaintiffs say (and Erlita appears to accept) that the fact of estrangement is a matter to be taken into account but is not necessarily determinative; and that estrangement between a parent and child does not, on its own, ordinarily result in the child not being able to satisfy the jurisdictional requirement for making a successful claim.

[37]

Issue as to superannuation as notional estate

The issue was raised in submissions as to whether the superannuation proceeds (which amounted to a very substantial sum) could be designated as notional estate. On that issue, supplementary submissions were prepared by Erlita and, in response, on behalf of the respective plaintiffs by Andrew.
The dispute relates to the fact that the deceased executed a Binding Death Benefit Nomination form in favour of Erlita on 12 May 2016 more than 12 months and less than three years before his death on 5 April 2019. That Binding Death Benefit Nomination relevantly left all of the deceased's existing pension-based accounts to Erlita as his spouse. Hence, Erlita contends that she is entitled to the superannuation proceeds.
The provisions dealing with relevant property transactions have been set out above (they being contained in Pt 3.3 of the Succession Act). Erlita notes that the operation of Pt 3.3 in the context of superannuation was considered by Slattery J in Carr v Douglass [2016] NSWSC 854 (Carr v Douglass) (from [70]ff). In Carr v Douglass, it was contended that there were two potential relevant property transactions: first, a failure by the deceased to sever a joint tenancy (which his Honour accepted was a relevant property transaction) and, second, the deceased's failure to renew a binding nomination in relation to the superannuation fund in favour of his estate. His Honour concluded (at [71]) that the failure to renew a binding nomination did fall within s 76(2)(b), noting that the deceased had received no valuable consideration for not doing that act; and his Honour accepted that the failure to renew the nomination denied the estate the benefit of the deceased's interest in the superannuation fund (see at [74]).
However, at [73], his Honour concluded that the failure to renew the Superannuation Industry (Supervision) Act 1993 (Cth) nomination occurred not at the date of death (as that was not the moment at which any transaction involving the corporate trustee of the superannuation fund took effect); rather, his Honour held that the failure to renew the nomination occurred on an earlier date but within three years of the date of death. Hence s 80(2)(a) applied and it was therefore necessary that the failure to renew the nomination be with the intention stated in that subsection. His Honour concluded that the act (or failure to act) was not done with the requisite intention, stating (at [73]): … The failure to renew the SIS Act nomination occurs on 1 July 2011 within 3 years of the deceased's death. But s 80(2) (a) does not apply as the deceased on the evidence appears merely to have overlooked renewing the SIS Act nomination. He did not intend to limit provision being made out of his estate under the Succession Act by failing to renew the SIS Act nomination. He seems to have assumed in fact that it was still in place when he made his will.
In Kastrounis v Foundouradakis [2012] NSWSC 264 (Kastrounis v Foundouradakis), Hallen AsJ (as his Honour then was) said in relation to s 80(2)(a) of the Succession Act that the section refers to the deceased's intention (wholly or partly, of denying or limiting provision being made out of the estate of the deceased for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order) (at [108], citing Hildebrandt v Soncini [2007] NSWSC 1227 at [21]-[28]). His Honour considered the meaning of "intention" and said (at [110]) that "more than mere contemplation by the deceased is necessary" (citing Cunliffe v Goodman [1950] 2 KB 237 per Asquith LJ at 253). At [111]-[112], his Honour went on to say: 111. Whether the deceased has the necessary intention is a question of fact to be decided upon consideration of all the circumstances. One might expect there to be some language, written or oral, used, or adopted, by the deceased, from which the court is able to find, as a fact, the necessary intention prior to, or at, the time of, the relevant property transaction. 112. It is the intention with which the transaction was entered into, rather than the effect of that transaction, which is important. If that intention cannot be established, that the effect of the transaction is to wholly or partly, deny, or limit, provision, does not matter. It is not enough that the relevant property transaction has that particular result. In other words, what the subsection requires is not cause and effect, but intention and effect: Wilson v Wright (NSWSC, 25 February 1992, unreported), per Windeyer J.
More recently, in Stojanovski v Stojovski [2016] NSWSC 976 Hallen J said at [208]-[209]: 208. It is always difficult to assess the intentions of a person who has left no specific directions, or indications of that intention. The Court, in those circumstances, looks at such facts and circumstances as are available, in order to determine what was more likely to have been intended by the deceased. Regard may be had to all of the circumstances (whether before or after the time of the transaction) in determining whether, at the time of the transaction, the Court is satisfied that the deceased had the relevant intention. 209. It is for the party relying upon the section to establish clear and convincing proof that the deceased, by some act or words, demonstrated that it was her, or his, then intention to deny, or limit, the provision that might be ordered in a claim brought by an eligible person.
In Toscano v Toscano [2017] NSWSC 419 at [225] Robb J cited Hallen AsJ's observations in Kastrounis v Foundouradakis at [108]-[112] with approval, and went on to say at [228] that: Even where a deceased did in fact have the intention, when making a relevant property transaction, that would attract the application of s 80(2)(a), it may in some cases be very difficult for a claimant for a family provision order against the estate of that deceased to satisfy the burden of proving that the intention existed. The reason for the existence of this difficulty is obvious, as an intention is a subjective matter, and the content of the deceased's intention, particularly when that intention may have been directed to numerous objectives, may well not emerge obviously out of a consideration of the objective circumstances in which the transaction was put into effect. There may be no documents that record the deceased 's intention. If the deceased made oral statements as to their intention, the statements may have been made to persons who have no interest in disclosing the content of the statements for the benefit of the claimant, or the statements may have been made to the professional advisers of the deceased, who may feel or be subject to professional inhibitions against disclosing confidential information provided to them by the deceased. There is therefore a real chance that the objective of s 80(2)(a) will be thwarted in many cases because of difficulties of proof faced by claimants, who were not privy to the making of the relevant property transaction.
In the present case, Erlita submits that it is for the plaintiffs relying on the section to establish clear and convincing proof that the deceased by some act or words demonstrated that it was his then intention to deny or limit the provision that might be awarded in the claim brought by the eligible person. Erlita submits that it is the usual practice for superannuation entitlements to pass to the surviving spouse, and that this is the practice that was adopted by the deceased in respect of both his late wife Gwenneth and in respect of herself (referring in this context to the affidavit of Mr Batcheldor sworn 12 October 2021 and filed in Andrew's proceeding).
The plaintiffs on the other hand submit that the relevant property transaction (failure to revoke the binding death benefit nomination proper to his death and to make a replacement nomination) took effect for the purposes of s 77 of the Succession Act, either on the date of the deceased's death (at which time he was no longer entitled - or I would add, logically, able - to exercise the power to revoke his nomination) or on the resolution of the corporate trustee to accept that nomination on 12 May 2016, noting that both dates are within the statutory timeframe for prescribed transactions.
The plaintiffs say that the deceased had the capacity, at any time, to revoke his nomination and to give a replacement nomination; and that he omitted to do so. It is said that, had he exercised that capacity, the deceased could have directed that his superannuation be paid directly to one or more of his children, or to his legal personal representative to form part of his estate. The plaintiffs submit that, by omitting to revoke his nomination and/or give a replacement nomination, the deceased brought himself clearly within the purview of ss 75 and 76(2)(a) of the Succession Act.
Reference is made to the analysis of White J (as his Honour then was) in Wardy v Salier [2014] NSWSC 473 (Wardy v Salier) of the notional estate provisions so far as they concern omissions (in that case it arose in the context of the designation of the assets of a discretionary family trust). It is noted that his Honour affirmed the proposition that the purpose of the notional estate provisions is to extend the powers of the Court to the "full range of benefits and advantages controlled by testators" and, insofar as any question of construction presents a choice, a construction which will promote this purpose is to be preferred (at [113]).
In that context, his Honour held that, where a transaction involves an omission, what is required is either an omission of a deceased person which changes how property is held or an omission of a deceased person, who was entitled to deal with property so that it would become part of his or her estate, but omitted to do so, so that there was no change as to how the property was held (at [125]-[143]).
The plaintiffs say that this is clearly what happened here. It is said that the omission to revoke and renew the nomination led to the superannuation falling outside of the deceased's actual estate. The plaintiffs say that Erlita's evidence identifies that this was certainly the deceased's understanding (which she has adopted).
Further, it is said that Erlita's obligations under Practice Note SC Eq 7 required her to provide a description of the nature, and an estimate of the value of any property which is or may be the subject of a prescribed transaction or relevant property transaction; and that it is an inherent part of an executor's duty to the Court in family provision proceedings to assist the Court in identifying as fully as possible the actual and notional estate of the deceased person the subject of the proceedings, and putting before the Court any necessary material.
The plaintiffs argue (referring to Estate Grundy; La Valette v Chambers-Grundy (2018) ASTLR 64; [2018] NSWSC 104 at [118]-[119] per Lindsay J), that it is not appropriate, by limitation of information available to the plaintiffs about the size and composition of the estate and notional estate of the deceased, in effect to shut the plaintiffs out from advancing a case that the value of the deceased's estate and potential notional estate, including superannuation of $12,913,476, substantiates an award of family provision relief responsive to its size and with the benefit of information about the full amplitude of resources available to the deceased. Thus, it is submitted that this is a case that extends beyond concepts of particular financial needs.
I accept that the deceased's failure to revoke his nomination and give a replacement nomination is a transaction within the meaning of s 76(2)(a) of the Act. I note that the authorities cited by the plaintiff concern circumstances in which the deceased failed to make any nomination at all (see Re Estate Grant at [193]-[194]; Kelly v Deluchi [2012] NSWSC 841 at [240]-[245]), or alternatively in which the deceased failed to exercise the power to appoint or dispose of property in relation to trust assets (see Wardy v Salier at [108]).
I consider that the omission to revoke a nomination is analogous to an omission to sever a joint tenancy, in light of the fact that the deceased's nomination could be revoked at any time prior to his death pursuant to Superannuation Industry (Supervision) Regulations 1994 r 6.17A(5)(b). Indeed, the nomination form completed by the deceased included a term stating that the deceased could revoke the nomination at any time and give a replacement nomination (see Mr Batcheldor's oral evidence at T 165.27-165.35). Thus, it was not until the moment of death that the failure to revoke the Binding Death Nomination took effect.
This is consistent with the purpose of the Succession Act to "extend the powers of the Court to the full range of benefits and advantages controlled by testators" (see Wardy v Salier at [113]). To the extent that at his conclusion as to the time at which the failure to revoke a nomination takes effect is inconsistent with the reasoning in Carr v Douglass, a distinction may arguably be drawn between the omission to renew a nomination which was said to take effect when the nomination thus lapses and the failure to revoke or charge an extant Binding Death Nomination (which subsists up until the date of death). Moreover the reasoning in Carr v Douglass appears difficult to reconcile with Kelly v Deluchi and Re Estate Grant where, in the absence of a valid nomination, it was held that the transaction took effect upon the resolution of the trustee following the death of the superannuation member. Thus, it is not necessary to establish that the failure to revoke was with the intention (wholly or partly) of denying or limiting provision out of the estate within the meaning of the relevant sub-section.
I have thus concluded that the superannuation proceedings form part of the deceased's notional estate capable of designation for the purpose of making any family provision orders. (In this regard, I note that this accords with the understanding expressed by Mr Batcheldor as to the ability to revoke a binding death nomination prior to death - and the notation on the relevant form to that effect.)

[38]

Evidence

Briefly, I make the following observations about the respective witnesses.
Anna was measured in her manner and precise in her clarification of and answers to questions. Anna was frank about the stresses and difficulties of the psychiatric training that she is presently undertaking; and her concern that she is not measuring up to the standards required at present (see at T 41). Her explanation as to the uncertainty of future income was logical and coherent.
Anna accepted that she had received $168,000 from Gwenneth's estate (see T 37) and that she had received sums of $25,000 from Catherine and $64,608 from John. It was put to Anna, in effect, that she could use her current investment sum as a deposit for a home and (based on assumed purchase price and interest rates) would still be in a better financial position than if she continued to rent. Anna's response to this was credible - namely, a concern that there was a risk of future income and the need to plan for her retirement (see T 45).
On occasion, Anna appeared slightly argumentative (see for example at T 46) but I did not consider her to be overly confrontational and she did not overstate her position. (So, for example, Anna accepted that she did not see much of the deceased after Gwenneth's death - T 53; and Anna was matter of fact when she said that if awarded a significant sum she would purchase a property - T 46.) Anna had no knowledge of the deceased cohabiting with Erlita when she was living at the Wahroonga Property (T 51).
There is little doubt that Anna has firm views about Erlita - describing her as "very controlling" and saying that she was "everywhere" (T 53) - and an equally firm view that any suggestion that Gwenneth had a cordial relationship with Erlita should be rejected ("vehemently" opposing that suggestion at T 49).
Although some criticism was made in submissions for Erlita as to the fact that the plaintiffs would not accept that the deceased loved Erlita or as to Erlita's feelings, I consider that explicable by the fact that the plaintiffs were not in a position to assess the strength of the feelings between the deceased and Erlita; and I consider it not surprising that Gwenneth's children might be critical of the deceased's relationship with Erlita and conduct towards Gwenneth towards the end of her life.
As to Catherine, again I consider that she was measured and precise in her answers in cross-examination. Catherine was visibly upset during the course of her cross-examination (such as in answering questions as to the deceased's collapse on the golf course in 2016), which is consistent with continuing feelings for the deceased. At times, Catherine was somewhat of an advocate for Gwenneth (see for example at T 63 when she insisted that Gwenneth had contributed to the family trust) and she too accepted that she had seen very little of the deceased after Gwenneth died (see T 60) but describing Gwenneth's death as a very traumatic event.
Catherine readily accepted that the trust proceeding had escalated the conflict with the deceased but said (and I accept) that the relationship was strained from Gwenneth's first hospitalisation in April 2010 (and, as noted above, Catherine referred to the later "garbage bags" incident as provocation - see T 77).
Consistently with Anna's evidence, Catherine considered it would be completely out of character for Gwenneth to have responded in a friendly way to the conversation about which Erlita deposes (see T 79). As did Anna, Catherine would not speculate on the relationship between the deceased and Erlita. Relevantly, Catherine (the youngest child) disputed that the deceased was spending half of his time with Erlita during the period that Catherine was living in the Wahroonga Property (see T 79).
Catherine was clearly critical of the deceased having "continually" lied to Gwenneth about his relationship with Erlita (see T 82) but accepted that Gwenneth had forgiven the deceased (T 81) and was adamant that she (Catherine) still wanted to see the deceased notwithstanding his conduct (see T 84).
Catherine's evidence as to her concern as to lack of security of tenure in her present employment and whether it would remain a full-time position was credible; as was her explanation as to the need for the proposed home renovations (T 84).
Andrew was a much more discursive witness and prone to making didactic statements (or speeches) justifying his position (such as, for example, his lengthy account as to the circumstances in which he did not finish his graduate medical studies (see T 120-122); and see also at T 140). Andrew appears to have had some difficulty settling upon his chosen career, commencing as a medical student; then studying architecture; working as a part-time librarian; graduating in architecture and then taking up a position as a teacher; resuming medical studies as a graduate; and now teaching at a secondary school (see T 113ff). At times, Andrew gave impassioned answers (such as those in relation to the claim in the trust proceeding by Harly to recover "loans" in respect of school fees - T 112 - though I found this understandable in the circumstances). And Andrew was visibly emotional in the witness box, speaking from the heart with what I considered to be genuine emotion (at T 150) when he said that he always wanted his father's love.
Andrew did not shirk from the fact that he had decided not to pursue family provision litigation at the time he received advice as to the time for such an application to be made (see T 110; T 116).
Andrew resisted the proposition that his parents' marriage had broken down, being adamant that Gwenneth had stood by the deceased (T 128). As for his own relationship with the deceased, Andrew identified the pivotal moment as being when his father refused to have Gwenneth move back into the Wahroonga Property after her second admission to The San (T 147). Andrew readily accepted that he had had little contact with his father after that (T 151) but he maintains that "I was denied access to him". Andrew recounted the occasions when he had seen the deceased (those being when Gwenneth died - as he said Catherine insisted that the deceased come; at Gwenneth's funeral; and in hospital after the deceased's 2016 golf club collapse) (see T 151); and Andrew was again visibly upset in the course of this evidence (see at T 156).
In Erlita's case, Erlita had served an affidavit from John but did not read that affidavit and did not call him to give evidence. As to Erlita herself, she was a loquacious and voluble witness, with a tendency to place the responsibility for compliance with executorial duties or the like on her advisers (accountant or lawyers - see for example at T 194; T 245) or, when responding to what she had done in relation to transactions while the deceased was alive, to the effect that she left it to her husband to do everything (T 253.50-254.1). Erlita was quite clear, however, that she had sold (estate) shares in order to inject them through the trust and pay out John (see at T 200).
Erlita struck me as excitable (with a tendency to launch into impassioned speeches from time to time about a range of matters, including as to how she was tickling the deceased's feet while he was on life support; her description of the filthy state of the Wahroonga Property; her emotional statements as to how much she loved the deceased and visited his grave daily with food; and how "actually it hurts me that he father and the children are like, like they're not inn good terms" because of her - see for example at T 311) and volunteering information such as the pregnancies with the deceased that she says she aborted (T 313.4-17) and asserting that she could easily "trap" the deceased if she wanted to do so (see T 313.4). It did not appear to me that Erlita had much insight into how her relationship with the deceased would or was likely to have impacted on his wife and children (the suggestion that she rang Gwenneth in December 1987 and had the conversation she says she had with Gwenneth does not ring true; and the suggestion that the deceased told her that his children would love her cooking - or that she believed the deceased if he did say that - struck me as just as implausible).
I do not suggest that Erlita does not have genuine love and feelings for the man with whom she had an affair for several years and whom she ultimately married towards the end of his life; however, I consider Erlita was prone to exaggeration and I treat with some caution her protestations of devotion and her denials of "controlling behaviour" or the like. That said, it strikes me that, perhaps by reason of her excitable nature, Erlita might well have appeared to the plaintiffs to be more controlling than perhaps she was; and by all accounts the deceased was not someone particularly incapable of standing up for himself. (Indeed, the fact that he, together with John, was seemingly able to persuade Gwenneth out of her intended course of severing the joint tenancy over the Wahroonga Property suggests he was capable of forceful or cajoling behaviour when he wanted something.)
One matter of note is that the person who might have been in prime position to speak to her observations as to matters such as the nature and duration of the relationship between Erlita and the deceased would be the deceased's stepdaughter Maree, who was not called to give evidence (although at one point in the cross-examination Erlita seemed to suggest that the plaintiffs should do so). I do not, however, need to go so far as to draw any adverse inference from this, since I am satisfied that Erlita was a natural object of the deceased's testamentary bounty and since Erlita does not seek (or need) to set up any competing financial circumstances. On any view of things, Erlita was more than amply provided for both during the deceased's lifetime and under his Will.
However, it does appear that there has been a pattern of non-compliance by Erlita as executor, with the requirements for disclosure of information about the assets of the estate, identification of notional estate, and as to distributions made (without any notice of intended distributions) out of the estate (albeit for the purpose of meeting Trust liabilities - not for Erlita's own benefit as such). Erlita's explanation for this (apart from blaming her advisers) was in effect that she understood "property" to mean real property (not shares). However, it seems to me implausible that Erlita's solicitors would not have explained to her the duties and obligations of her office as executor. There was also non-compliance with a notice to produce issued in the course of the proceedings (but in the absence of further evidence it is difficult to see to what extent Erlita is personally responsible for that non-compliance).
It is not necessary to make any observations about Mr Batcheldor's evidence. Mr Batcheldor is a partner of Grant Thornton, who gave his evidence in an objective and balanced manner; and who made clear where there were limitations (if any) on that evidence (see for example at T 165 in relation to the binding death benefit nominations; and his evidence as to the apparent misdating of one of the documents to which he was taken). I accept his evidence as to the manner in which the transactions were recorded in the accounts of the Whitefold Trust. Relevantly, Mr Batcheldor described that what had happened was that, rather than the estate putting money into the Trust (in repayment of the debt owed to the Trust) and then for the Trust to pay that amount to satisfy the liability to John, Erlita had sold (estate) shares in order to allow the payment of that debt (see at T 337).
As to the real estate appraisals, there was no expert evidence as such; and hence no cross-examination of the real estate agents as to the basis of their appraisals. I place more reliance on the values attributed to the properties by the plaintiffs' real estate agents because the valuer for Erlita seems to have approached the matter by way of a computer algorithm without necessarily paying attention to a comparison by reference to features of the properties or relevant locations (see, for example, the debate at T 420). That said, ultimately nothing turns on this because the claims for provision can amply be met out of the estate and notional estate even if the lesser value for the respective properties proffered by Erlita were to be adopted.
With those observations, I turn to the substantive claims and I approach this by consideration at the outset of the respective factors enumerated in s 60 of the Succession Act.

[43]

Andrew

Andrew is the deceased's fifth (i.e., the second youngest) child. Andrew deposes that he and the deceased had a close, familial relationship throughout Andrew's childhood, with Andrew giving evidence of times spent with the deceased doing homework, discussing global events, playing golf, and going on family holidays, including to a country property then owned by the deceased and Gwenneth at Oberon. Andrew lived at home, at the Wahroonga Property, with Gwenneth and the deceased, until 1993.
There is a factual dispute between Andrew and Erlita as to the extent to which the relationship between the deceased and Erlita, during the deceased's marriage to Gwenneth, was tolerated by the deceased's family members. Andrew has deposed to the state of affairs, including as Gwenneth's health deteriorated, as a "complicated family dynamic". As adverted to above, Erlita says that Andrew had a poor relationship with the deceased. Erlita also referred to the situation as "complicated" (an observation that seems to me to be an understatement to say the least).
Andrew accepts that his relationship with the deceased deteriorated given the deceased's treatment of Gwenneth while she was dying, including in circumstances where Andrew says that: Gwenneth was prevented from returning to the Wahroonga Property after being hospitalised for the second time in 2010; Erlita moved into the family home at that time (although there is a factual dispute about when Erlita moved in to live there, as opposed to attending the premises to clean and renovate the property); the deceased showed a lack of sensitivity for Gwenneth and his children in the lead-up to Gwenneth's death; and there was a dispute between Gwenneth and the deceased about the ownership of the Wahroonga Property (including direct conflict as to the deceased giving that property to Erlita in a manner that would prevent the children of the marriage obtaining any ultimate benefit from the family home).
Andrew says that Erlita's evidence about the deceased's attitude and reactions around this time does not paint the deceased in a particularly sympathetic light. It is submitted that the deceased presents as the opposite of "wise" and "just" in his assessment of how his children were coping around the time of their mother's death, and in relation to their ultimate claims on his bounty.
Thus, while Andrew accepts that his relationship with the deceased was "marred by the dynamics associated with" the deceased's relationship with Erlita, Andrew says that this was explicable in the circumstances.
As to his relationship with the deceased after Gwenneth's death in 2011, Andrew accepts that this was limited. In that regard, however, Andrew points to the fact that the deceased, in his capacity as director of the then trustee of the Whitefold Trust, had commenced proceedings against Andrew in 2013 seeking repayment of moneys expended from the Whitefold Trust for Andrew's school and university fees; says that the deceased made no attempt to reach out to Andrew after Gwenneth's death; and says that he, Andrew, was juggling family and work commitments around this time. As adverted to above, Andrew's evidence is that he visited the deceased in hospital in 2016 (he says twice) and a number of times before he died in 2019.
Erlita argues that Andrew's disapproval of the deceased's relationship with Erlita is apparent in his affidavit. It is said that between 2010 and 2016 there was an estrangement. It is noted that Andrew was not invited to the deceased's wedding with Erlita and nor did Andrew attend the deceased's funeral. It is noted that Andrew was also a party in the litigation over Gwenneth's estate.

[46]

(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered

I have referred above to the nature and size of the deceased's estate.
The plaintiffs say that, in the events which have transpired, the deceased's actual estate comprises in the order of around $6,407,293.88 and the potential notional estate as being around $14,139,304.70 (including the superannuation funds of some $9.282 million) (see Andrew's affidavit of 1 October 2021), thus totalling around $20,789,481.10 (including the superannuation funds transferred in specie to Erlita in 2020). I have reached a not dissimilar conclusion (the only relevant differences being that I have included the total superannuation funds of $12.9 million and potentially would include the value of the Whitefold Trust's one-half interest in the Bondi Junction Property (as to which the deceased could, as controller of the trustee, made a relevant allocation to his estate, as notional estate)).
Apart from costs of the proceedings, which it is said (because of the three matters being heard together) will be far more than usual (although a significant sum has already been paid), legal expenses of probate and administration have been paid as have funeral expenses. It is accepted that the trust fund now held by Harly is in deficit (see the latest financial statements). Each of the plaintiffs has estimated around $100,000 or more for his or her costs. Erlita's costs are estimated at around $100,000, bringing the total costs to the end of hearing to about $400,000.
Thus, the plaintiffs say that if significant provision of the kind here sought by them is to be made for each plaintiff then it is likely that there will be a need to designate some property as notional estate but the plaintiffs submit that even very generous provision will not leave Erlita in any need.

[48]

Anna

Anna is a qualified surgeon, who is presently undertaking psychiatry training on a part-time basis through the Royal Australian and New Zealand College of Psychiatrists. Anna's evidence is that it is not financially viable for her to study full-time (which means that the estimated time for completion of her studies is not likely to be until she is in her 60s).
In her updated affidavit sworn 2 April 2020, Anna disclosed her assets and liabilities as comprising: a motor vehicle ($22,934); NAB bank account ($465,100); superannuation ($107,942). (The investment account and superannuation amounts have been further updated in cross-examination - see at T 98 - to $608,000 and $180,479.40 respectively.)
Anna's taxable income as a surgeon (pre-COVID) is disclosed at $11,270 per month ($135,420 per year). Anna is a single parent with one child aged 12, nearly 13 at the time of the hearing. Anna receives a family allowance. Anna does not receive child support from her son's father, although he provides some care for their son (and her evidence is that in the past he had paid a lump sum of $15,000).
Anna says that she has a reasonable earning capacity at present, albeit reduced significantly by the COVID 19 limitations on surgical procedures and that there are no guarantees that it will all continue. Anna's evidence is that the psychiatry training she is undertaking is arduous; that she works very long hours in several distant locations to maintain those earnings; that this is a difficult task being a single parent with no financial assistance from her son's father (although he does share equal parenting time); and that she is not currently meeting training expectations.
As to Anna's needs, Anna's principal need is identified as being that she does not own her own home and seeks to purchase her first home. Anna wishes to obtain a two bedroom unit (within the area in which she wishes to live, being close to her son's school) for $2,000,000 (see her affidavit of 1 October 2021). Anna has also identified, as part of her needs, amounts to cover her professional association registration insurance and studies as well as education fees for her son; and has identified future medical expenses, expenses of daily living, car insurance and entertainment and travel expenses. The amount of Anna's legal costs as a defendant and cross-defendant in the Whitefold Trust proceeding is also included in Anna's needs ($14,494.70).
It is noted by Erlita in this context (and noted above) that although Anna was not a party to the Deed of Release, she did receive $186,000 from Gwenneth's estate and two further payments from Catherine and John.

[49]

Catherine

Catherine is an art curator at a private secondary school. In her affidavit sworn 12 May 2020, Catherine discloses that her income for the year ending 2019 was $65,688. Her taxable income for the year ending 30 June 2020 was $76,399 (being $6,366 per calendar month or $5,002 after tax per calendar month). Catherine's estimated monthly expenditure is approximately $4,368.
Catherine's assets are disclosed as being as follows: a house at Darlinghurst (Erlita's submissions say valued at $725,000; Catherine's submissions say valued at $1.2 million as at 14 October 2021); bank accounts (Erlita says $47,863 but Catherine's submissions disclose two bank accounts with balances at 11 October 2021 of $60,387 and $1,739, respectively); superannuation (Erlita says $103,649 but Catherine's submissions disclose at $132,080.13 as at 30 June 2021); and a 2006 Mercedes Benz car purchased in 2020 for $1,500. Catherine's disclosed liabilities are: a loan from Michele ($50,000) and her home loan (stated to be $17,471 in her affidavit sworn on 12 May 2020; however subsequently reduced to the sum of $6,888 in her outline of submissions). (Catherine explained in cross-examination that the home loan was to enable her to give money to Anna - see T 84.)
The Darlinghurst Property was transferred to Catherine (see at [12] of her second affidavit) by Whitefold as the trustee of the family Trust in May 1992 for $10,999, the amount of the then first home buyer's grant. Catherine's evidence is that the Darlinghurst Property (a terrace) is old and in a bad state of repair. In particular, it is noted that there are no bathroom facilities on the bedroom level of the terrace and that both the bathroom and the kitchen are on the lower ground floor level beneath the living and dining room area of the house (these being the aspects of the property that Catherine wishes to renovate).
Catherine summarises her needs as being: private health insurance ($2,386 per annum); discharge of home loan to St George Bank ($6,888); home renovations ($722,000 per estimate of costs by Actus Group); new Subaru car ($52,640); repay rent of loan from Michele ($50,000); rental cost while renovations occur (variously put at $31,200 or $35,000); removal and storage costs while renovations occur ($5,908); legal costs of Trust proceedings 2020/284385 and 2020/145740 ($19,938.75); and a capital sum of $500,000 to add to her superannuation.

[50]

Andrew

Andrew is married to Fiona, with whom he has 4 children, aged between 13 and 22 years. Andrew has deposed that he was the primary caregiver for his children when they were younger but that he has recently returned to the paid workforce on a part-time basis, as a secondary school teacher.
Fiona is an orchestral musician. Fiona's salary was reduced during the COVID-19 pandemic. Andrew says that while Fiona's salary is not insubstantial, there is some level of uncertainty about her income in the short-term future. At [221] and [223] of his first affidavit, Andrew discloses Fiona's monthly income as $5,930 per month net ($71,160 net per annum).
Andrew's assets are cash in the bank ($2.00) and superannuation as at 7 September 2020 ($17,321). Fiona's assets are identified as: bassoon ($48,000) (as noted above, Fiona is a professional musician); three motor vehicles ($46,300); IAG shares ($11,507); and superannuation as at 7 September 2020 ($555,265). The couple's joint assets are their Oatley property ($1,500,000); personal effects and home contents ($148,400); savings account ($38,219). Their liabilities are their home loan joint mortgage ($496,350); credit card and HECs debts ($541 and $28,649).
The evidence is that the present mortgage balance for Andrew and Fiona's home in Oatley is subject to a mortgage with a present balance of about $480,000. Andrew says that the home (a three bedroom home) is in need of substantial repairs. Andrew has deposed to the nature of the repairs and renovations he says is required to rectify building defects and to increase the size of the home to a 4-5 bedroom house. Andrew alternatively gives an estimate of the costs associated with purchasing a new 4-5 bedroom house in a surrounding suburb.
Andrew's needs are identified (at [278] of his affidavit) as: building new home ($900,000); repay mortgage ($496,350); repay HECS debt ($28,649); replacement motor vehicle ($32,500); dental work ($18,000); a capital sum (up to $500,000) (totalling $1,975,499).
In his updating affidavit sworn 1 October 2021 Andrew deposes that his superannuation, and that of his wife, has increased but so have the costs of renovating his home.
Andrew refers in his submissions to Smith v Johnson at [84]-[85], where Sackville AJA recognised that accommodation is a financial need informed by factors such as age, earning capacity, financial or non-financial responsibilities to family members, and the standard of living encouraged by the deceased. In the present case, Andrew submits that: the nature and value of the estate warrants provision for the deceased's adult children, including Andrew, which accounts for a need for accommodation; and that Andrew's family circumstances ought to be accounted for in the evaluation of that need.
Erlita submits that Andrew had an earning capacity that he has not used and points out that his needs based on his family of six include two adult children (aged 22 years and 18 years of age, respectively). It is said that Andrew and Fiona have considerable resources in terms of Fiona's superannuation; and that (with the exception of the mortgage) Fiona is in a position to discharge the small debts referred to by Andrew and to service the home loan.

[64]

Plaintiffs' submissions

The plaintiffs jointly made submissions as to the facts and principles to be applied; and then separately made submissions as to their respective claims.
The plaintiffs submit that Erlita has failed to discharge her paramount duty to assist the Court in terms of identifying, with sufficient clarity: the assets of the deceased's estate; the assets capable of designation as notional estate; and her dealings with estate and notional estate assets, including distributions in the course of the proceedings. It is submitted that an inference should be drawn that Erlita's failures in this regard have been conscious and directed at misrepresenting the assets available to make good any order in the plaintiffs' favour. Complaint was made, among other things, that there had been no disclosure in the evidence (prior to the provision of the amended financial statements for the Whitefold Trust) as to how the resolution of the general equity proceedings involving John has affected the nature and value of the estate and notional estate.
As referred to above, the plaintiffs accept the inevitability that what comprises residue of the estate will be wholly exhausted. The plaintiffs say that the present case is one in which the estate and notional estate, even making allowances for liabilities and differences in value, is large enough comfortably to accommodate all the legitimate needs and aspirations of the plaintiffs without causing any (let alone any undue) hardship to Erlita. In this regard, the plaintiffs submit that this is a comparable case to that of Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189, and that it is appropriate to look well beyond the question of needs when considering the application of community standards and expectations as to the provision that ought be ordered. Reference is also made to Chan v Chan (2016) 15 ASTLR 317; [2016] NSWCA 222, where Basten JA (with whom Simpson and Payne JJA concurred) confirmed (at [22]) that the background to any consideration of an applicant's needs requires determination of the size of the estate and the claims of others on the beneficence of the testator.
The plaintiffs accept that none of them is destitute but their common submission is that their needs can be assessed by reference not only to "the bread and butter of life" but also to "a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit" (citing Fullagar and Menzies JJ in Blore v Lang (1960) 104 CLR 124 at 135). While the plaintiffs accept that the size of the estate does not justify unfettered intrusion into the deceased's testamentary intentions (and that the deceased's Will can only be affected to the extent that it is necessary to discharge the deceased's moral duty by making adequate and proper provision for the plaintiffs), they argue that concepts of competing needs as between the respective claimants and as between claimant and beneficiary are much reduced or eliminated due to the size of the estate; and they submit that, in this way, there may be a more liberal assessment of the moral duty owed, to be reflected in what is proper provision for the plaintiffs.
The plaintiffs submit that the deceased owed a particular moral duty to his children and gave rise to an expectation that provision would be made for them, referring in this context to: the inclusion of provision for the plaintiffs in the Will; the provision historically made to some of the deceased's children, including in the form of accommodation; and representations made to Gwenneth about the ownership of the Wahroonga Property to the effect that the family home would be preserved for the benefit of their family (i.e., the children of the marriage, including the plaintiffs).
It is said that, to the extent that the Will reflects a testamentary intention that the plaintiffs receive some provision, the statutory discretion ought be exercised in a manner which makes good that intention because, as it has transpired, the deceased's moral obligations are left undischarged (as is his testamentary intention).
Finally, as to the question of any estrangement between the deceased and one or more of the plaintiffs, it is said that any estrangement between the deceased and his children was not characterised by callousness or hostility. The plaintiffs argue that it is unsurprising that when the deceased (at the age of 50) commenced a relationship with Erlita (then aged 24), while continuing in his marriage with their mother, the deceased's children (then in their twenties themselves) found this confronting and difficult with which to deal. Nevertheless, they accept that estrangement, in an appropriate case, may operate to restrain amplitude in the provision to be made.
Pausing here, it cannot be concluded that the deceased's children became aware of the commencement of his relationship with Erlita at the time of its commencement (nor indeed as to the precise age differential). None of the plaintiffs professed any knowledge as to when the relationship commenced or as to when the cohabitation commenced. Indeed, Andrew seems to place knowledge of Erlita's existence as around the time of the acquisition of the Pymble Property. However, it seems clear that by the time of the fracturing or deterioration in the relationship in 2010 there was knowledge of the relationship between the deceased and Erlita (and the note withdrawing severance of the joint tenancy makes clear that at least Gwenneth and Andrew knew of Erlita's name at that time).
In any event, I have concluded that there was not such a position of estrangement as to amount to disentitling conduct. There is no evidence of callousness or hostility on the part of the deceased's children towards him.

[65]

Anna's submissions

I have already referred to Anna's submissions with respect to s 60(2) of the Succession Act. In oral submissions, Anna contends that her conduct has been at all times beyond reproach; that she sought to maintain a good relationship with the deceased and foster contact between him and her son, despite the hurtful events on both sides (T 356.39-43). Anna notes that she did this in spite of the defendant's "controlling approach" (T 356.44). Anna also emphasises that she was unlucky in the sense that "she didn't get the same hand up onto the property ladder that … all of the other siblings received" and this was solely due to "a matter of bad timing" (T 357.1-357.3; 357.11). It is said that, at the heart of Anna's claim, is Anna's wish to acquire her first property, and that there is no reason that it should not be done if the circumstances of the case make it an available option (T 358.41-358.46).
Anna submits that the deceased has satisfied the need to provide for his widow beyond any standard measure (indeed Anna says that Erlita "feathered her nest" very effectively), and Anna's case is that she does have a need to elevate herself to having a specialist qualification (T 357.40-357.50) in addition to a need for some financial assistance to maintain and advance herself and her son in life. Anna further argues that there were two things that the deceased should have taken into account: first, the wish of Gwenneth that Erlita obtain no interest in or live at the Wahroonga Property; and, second, the generosity the deceased showed to some but not all of her siblings (T 359.15-359.36).
Anna says that, given her age and need in the context of her financial responsibility for her son; and given the deceased's considerable wealth (albeit rapidly reduced before his death by gifts to Erlita), adequate provision would have been (as a minimum) a sum sufficient to enable Anna to have a capital amount which, together with some borrowing, would enable her to purchase a home rather than being "locked into" renting. It is noted that Anna is the only one of the deceased's children not to own her own property.
As indicated earlier, Anna wishes to acquire a two-bedroom unit in the Coogee area, where Anna has lived for several years and which is close to her son's school. Anna has obtained evidence of property websites which indicate that the "entry price" for units in the Coogee area is approaching $2 million plus stamp duty (a sum that Anna says has greatly increased while the proceedings were delayed by the Whitefold Trust litigation). Although Anna accepts that she has significant savings (now about $608,000), Anna says that she cannot service a "super-sized" mortgage, especially in what is likely to be her last ten to fifteen years or so of full-time work during which she must make every effort to supplement her modest superannuation fund (which was some $108,000 eighteen months ago and has more recently been updated to $180,000).
Anna submits that if she is to retain any fund for contingencies, and not be pressed beyond her ability to borrow and service a loan, her need is only met in a range above $1.6 million. It is said that there is sufficient in the estate to cover this minimum, albeit that if there is also to be provision for the other plaintiffs then designation of some property of Erlita as notional estate will be required.

[66]

Catherine's submissions

It is submitted by Catherine that the provision for her under the Will is inadequate, having regard to the size of the deceased's estate and notional estate and Catherine's limited employment opportunities and relatively low income, which do not enable her to generate significant savings (Catherine referring to the principles set out in Singer v Berghouse and Vigolo v Bostin and Cropley v Cropley [2002] NSWSC 349 per Barrett J, as his Honour then was to the effect intervention by the Court should only be to the minimum extent necessary to make adequate provision for the proper maintenance, education and advancement in life of an applicant).
Catherine submits that she had a reasonable relationship with the deceased until sued by Harly; and that, with the inclusion of the NAB and Westpac shares as notional estate, the estate is sufficient to meet provision for each of the three plaintiffs (and, if not sufficient to make provision for each plaintiff, then some of the superannuation fund can be designated as notional estate).
As to the proper provision for Catherine, it is submitted that the relevant factors are those set out in s 60(2)(a), (b), (c), (d), (g), (i) and (j) (as to which, see the submissions as set out above). Catherine refers to the authorities relating to the principles to be considered in the case of applications by adult children (North v Daniel at [162]; Limberger v Limberger at 473-474; 475-487 per Hallen J; and Page v Hull-Moody [2020] NSWSC 411 at [176]-[185] per Hallen J) and emphasises that the Court can be more "generous" to an applicant when the estate and notional estate is very large (citing Limberger v Limberger at 478-483 per Hallen J). Catherine submits that the provision she seeks will not deprive Erlita of the ability to maintain a more than comfortable lifestyle for the remainder of her life and there is no serious prejudice to the rights of Erlita (McCann v Ward & Burgess [2012] VSC 63 at [32] per Hargrave J).

[69]

Determination

Each of the plaintiffs is an eligible person and a natural object of the deceased's testamentary bounty. Having considered the so-called s 60 factors, and the submissions referred to above, I have concluded that inadequate provision has been made for each of the three plaintiffs in circumstances where each will receive nothing out of the deceased's estate given the lack of assets in the Whitefold Trust fund. The estate of the deceased is a large one; there are no competing claimants in respect of the estate of the deceased; and there was an expectation within the family (both at the time Gwenneth sought to sever the joint tenancy and as reinforced by the Will) that all children would share in the deceased's estate.
Relevantly, the evidence establishes a history within the family of assistance by the deceased (through the Whitefold Trust) in setting his children up in life with appropriate property holdings. There can be no doubt that, as events have transpired, the deceased's testamentary intention that his children receive an inheritance from him was not able to be discharged. In terms of the deceased's moral obligations to his children, it seems extraordinary to think that (absent some far more serious fracture in the relationship with his children) the deceased would have intended his children to obtain nothing at all from his very large estate, in particular when Erlita has already obtained substantial wealth both through the relationship and under the Will and where the deceased's step-daughter, Maree, resides rent free in an apparently not insubstantial property (the Pymble Property) which passed to Erlita by way of survivorship.
For these reasons, and in light of the matters set out above, I consider that in all circumstances that there was not adequate or proper provision made for any of the three plaintiffs.
As to what, if any, provision should now be made, I find as follows.
First, as to Anna, I consider that the proper provision should be a sizeable capital sum to enable her to acquire a suitable two bedroom apartment in the Coogee area close to her son's school. I accept that Anna already has a sizeable deposit but I also acknowledge the need to take into account the uncertainty as to future income and the need for sufficient superannuation or a capital sum as a buffer for the contingencies or vicissitudes of life, particularly as she has sole financial responsibility for son. I also note that the deceased had contemplated acquiring a home for Anna prior to Gwenneth's death; and that the events that followed Gwenneth's death (namely, the transfer of an interest as joint tenant in the property to Erlita) meant that Anna (and her siblings) obtained no interest in the Wahroonga Property under the deceased's Will (as it did not fall into residue).
If a capital sum enables Anna either to acquire a unit outright or to do so with a small mortgage, then her existing savings will be adequate to permit her to meet debts or contingencies and no further amount would be necessary (also noting that Anna has an increased amount in her superannuation fund). On the basis that a two bedroom apartment is likely to cost around $2 million, and having regard to the increased savings that Anna has, I have concluded that provision should be made for Anna in the sum of $1.9 million (which should enable her to acquire a $2 million unit but leaving approximately $500,000 for contingencies).
Second, as to Catherine, I accept that she has had the benefit of provision during the deceased's lifetime (including in particular the fact that Catherine was able to acquire her own property for the small amount able to be met through the first home owners' grant). I consider that it is not unreasonable for Catherine to wish to undertake renovations to the property in which she has lived for several years; and that there is a logical reason for the proposed renovations. I do not accept the criticism that the proposed renovations amount to an overcapitalisation of the Darlinghurst Property (but even if there is force to that submission, ultimately it is at her own risk). However, I consider that adequate provision would simply be to provide a capital sum out of which Catherine can prioritise her renovation needs (without necessarily meeting the entirety of the cost of the renovations) and her wish for augmentation of her superannuation. To the extent that the renovations can be carried out by use of sum provided by way of provision, then Catherine's existing resources would comfortably enable her to meet her other needs with a small sum as buffer for contingencies. Balancing those factors, I am of the view that Catherine should receive provision of $900,000 (which I have assessed as being around $750,000 for renovation costs and a contribution of $150,000 towards her superannuation; but which ultimately is a matter for Catherine to prioritise).
Andrew's needs are more difficult to assess because he and his wife have a reasonable income and joint assets of a reasonable amount; and the position in which Andrew is placed financially is in essence a product of life choices made by Andrew and his wife. Moreover, while I accept that the estrangement between Andrew and the deceased was explicable by reference to the family tensions to which Andrew has referred, the fact remains that he was not close to the deceased by the end of the deceased's life (as evidenced by the fact that he chose not to attend deceased's funeral). (I place less weight on the fact that Andrew was apparently not invited to deceased's wedding to Erlita since that seems to me to be explicable by disapproval on his part of relationship and also the possibility that it was Erlita herself who had played a part in preparing the guest list.)
While I accept that the authorities make clear that there is more scope to be generous or less "needs" focused in a large estate, I also bear in mind that the power to interfere with the testamentary dispositions is not unfettered - and that the task is to determine what is proper and adequate provision having regard to all the facts, in circumstances where the deceased (in this case as a result of the issues to which I have already referred) failed to do so (see in this regard Lemon v Mead (2017) 53 WAR 76; [2017] WASCA 215 at [220]-[232] per Buss P; and at [266]-[269] per Mitchell and Beech JJA).
Ultimately, I have concluded that the appropriate order for provision for Andrew is $900,000. This will provide him with a capital sum out of which he can discharge the existing mortgage and have a contribution towards the contemplated house renovations or to put this sum to some other use or retain it as a capital sum as provision for retirement.
As to the complaints made of the failure by Erlita to make full disclosure of the assets, and her dealings with the assets, in the estate and notional estate (and leaving aside for the moment the issue of the superannuation benefits), I consider that there is some force to those complaints. Erlita does not appear to have been forthcoming in her affidavits first as administrator and then as executor in relation to matters such as the manner in which settlement was effected with John; nor as to matters such as rental or dividend income in relation to estate assets. Indeed, Erlita acknowledges that her affidavit sworn 11 October 2021 was not comprehensive with respect to identifying the assets of the estate, because soon afterwards Erlita put on a second affidavit sworn 15 October 2021 (T 415-416). Erlita submits in this regard that there is a default but not a significant default (T 417.8). It seems to me that the significance or otherwise is debateable, having regard to what I say below as to the consequence of the failure. However, at least as to the position of the superannuation benefits, I accept that Erlita was acting with the benefit of legal advice at the relevant time and I do not criticise her for failing to identify the superannuation fund benefits as potential notional estate on that basis.
Nevertheless, the failure properly to identify the estate assets has obviously led to further costs being incurred by the plaintiffs and I consider that the plaintiffs should not bear the brunt of Erlita's failure. I will accommodate that in the costs orders to be made.
That means that the total provision that I consider should be made out of the deceased's estate amounts to $3.7 million (leaving aside the contemplated orders for costs). It is accepted by the parties that this will exceed the distributable amount of the actual estate (which is now very low having regard to the payment out of the estate shares for discharge of the Trust's debt to John and the liabilities of the estate for legal and other fees). It is also clear that there will be insufficient in the overall actual estate for such provision to be made. On my rough calculations (see [96] above), the actual estate on the plaintiffs' calculations is around $2.487 million (and it is less on Erlita's calculations).
I should add that the premature distribution of estate assets (i.e., the shares sold to meet the liability of the Whitefold Trust to John) is of relevance in this context in that in those circumstances one available course would be that referred to by Hallen J in Soens v Rathborne [2018] NSWSC 302 at [47], in which his Honour referred to what was said by Young CJ in Ernst v Mowbray [2004] NSWSC 1140 at [65]: However, I wish to make it quite clear that in my view that where there has been a premature distribution of the estate the Court is not obliged to consider questions of notional estate, but would make an order that the executors personally restore the money which they have taken into the estate with interest and then make an order out of the augmented actual estate.
There might therefore be an argument that Erlita should be ordered to repay the amount of the Scentre shares sold by her, in which case there would appear to be enough from the actual estate (the Centennial Park Property, a quarter of the Bondi Junction property and the rents and dividends of these properties) to make up the $3.7 million required for the legacies (although query whether that would be sufficient to meet any costs orders). No such suggestion was raised at the hearing (and were I to take that course then it would obviously be necessary for the parties to be heard on that issue). However, I raise it because it gives rise to the potential application of s 88(c) of the Succession Act, namely, that a notional estate order is not precluded if the Court is satisfied that provision should not be made wholly out of the deceased's estate because there are special circumstances.
The concept of "special circumstances" in s 88(c) was considered by Lindsay J in Re Estate Grant, deceased [2018] NSWSC 1031 and by White J, as his Honour then was, in Wardy v Salier.
In the former, Lindsay J said at [211] that the parties' agreement that a designation order could be made (there, in relation to the deceased's superannuation entitlements) "goes some way to establishing "special circumstances"; but, by itself, it is not enough". His Honour found that there were special circumstances based not only on that agreement but also on the desirability of not charging a particular property (for the reasons there set out); recognition that management of the corporate trustee of the superannuation fund by the administrators of the deceased's estate was deadlocked so as to preclude any orderly decision being made about payment of those entitlements; and the fact that designation of those entitlements might serve an incidental purpose of facilitation the deceased's estate by breaking the administrators' deadlock.
In the latter, his Honour found that there were special circumstances being (see at [222]) "[i]n particular, the complexity of the estate, the uncertainty as to the value of the gifts under the will, and the fact that the deceased had built up assets in the … family trust that could have been used to discharge the debts of the estate, in particular his debts for income tax".
In the present case, assuming that the deceased's actual estate could be augmented by reason of an order for restoration of the proceeds of sale of the Scentre shares, it seems to me that there are special circumstances that would satisfy the requirement of s 88(c) of the Succession Act, namely that: while there is not an agreement that the superannuation fund benefits are available to be designated as notional estate, there is no dispute as to the other assets forming part of the potential notional estate (and the main beneficiary, Erlita, has indicated her preference that any order for notional estate be made in respect of the shares not the properties); there is some complexity to the estate (including the different interests in the Bondi Junction Property); there has been uncertainty as to the precise assets of the estate; there is uncertainty as to the quantification of the costs orders that may be borne by the estate; and there is the added complexity as to how the settlement of the trust litigation with John might be affected by an order for repayment by Erlita of the moneys that were used to pay his entitlement as against the Whitefold Trust.
In those circumstances, I am satisfied that even if s 88(b) of the Succession Act would not apply (because an order could be made which would augment the actual estate such that there would be sufficient funds and assets in the estate for the provision I consider ought to be made out of actual estate), then s 88(c) would apply on the basis that I am satisfied that the provision ordered should not be borne wholly out of the actual estate by reason of the special circumstances referred to above.
Therefore, I consider that it is appropriate to designate as notional estate sufficient property as will enable the orders for provision to be made (after recourse is made to the remaining estate shares and the Centennial Park Property, which I consider should bear the burden of the orders for provision in the first instance). In this regard, Erlita's stated preference (if an order for notional estate were to be made) was for the designation of the "shares" (by which I understand her to be referring to the so-called Christmas gift shares (the NAB and Westpac shares worth about $1.1 million at the time of the hearing)). (I say this because Erlita did not appear to accept that the shares transferred in specie out of the superannuation fund were available to be designated as notional estate but it may well be that Erlita's preference for any designated notional estate to be drawn out of the overall pool of shares rather than there being recourse to property.) After this, Erlita identified, in order of priority: the Centennial Park Property (which is in fact actual estate not notional estate), the Pymble Property and the Wahroonga Property (Erlita's wish being to retain both the Pymble and Wahroonga Properties - see T 430.11; 431.33-431.35).
I have taken into account Erlita's wishes in this regard but simply note that, were I to be wrong in relation to the superannuation fund benefits being available to be designated as notional estate, then I would have designated so much of the one-half interests in each of the Pymble and Wahroonga Properties as was necessary to meet the provision to be ordered (and costs) as notional estate. (I have simply assumed that it will not be necessary to go beyond the property I have indicated should be designated as notional estate but if that be wrong then I would resort to the slip rule to amend the list so as to include the Pymble and Wahroonga Properties on this hypothesis.)
As noted above, I have concluded that the superannuation funds are capable of designation as notional estate on the basis that the time the relevant property transaction (i.e., the failure to revoke the binding death nomination and make another in favour of one or more of the plaintiffs or the estate) is the date of death (and hence it is not necessary that the failure to revoke be an omission with the requisite intention specified in s 80(2)(a) of the Succession Act). Just as failure to sever a joint tenancy takes effect at the date of death so it seems to me does the failure to revoke a binding death nomination. I consider that there is a distinction between this situation and the situation considered by Slattery J in Carr v Douglass of a failure to renew a nomination; but if that would be wrong then I would, with respect, not follow Carr v Douglass in this respect, in preference to the reasoning in the decisions to which I have referred above.
As indicated, I will make orders in relation to costs in relation to Erlita's failure to comply with her obligation to disclose fully the estate's assets. Otherwise, I will make directions for the filing of any further written submissions as to costs that the parties may wish to make. In circumstances where Erlita is effectively the sole beneficiary it seems unnecessary to make orders as to her costs out of the estate but if that be wrong then no doubt Erlita will make submissions to that effect.

[73]

In Andrew's proceeding 1. Extend time for the making of the plaintiff's application for provision under s 59 of the Succession Act 2006 (NSW) to 11 August 2020. 2. In lieu of the gift in the plaintiff's favour under the deceased's Will of a one-sixth equal share of the deceased's residuary estate, order pursuant to s 59 of the Succession Act 2006 (NSW) that there be further provision out of the estate of the late Dr William Benz in favour of the plaintiff, in the form of a legacy in the amount of $900,000. 3. Order that the plaintiff's costs be met out of the deceased's estate: as to the identification of the assets of the deceased's estate and notional estate, on an indemnity basis and, as to the balance on the ordinary basis. 4. Order that the burden of the legacy provided for in order (1) be charged as against one-third of the shares retained by the estate and the Centennial Park Property (as defined in these reasons). 5. Designate so much of the following assets (in the following order) as notional estate as is necessary for the purpose of enabling the executor of the deceased's estate to meet the order for provision and the order for costs in favour of the plaintiff: 1. the NAB shares transferred to the defendant on 10 January 2019; 2. the Westpac shares transferred to the defendant on 23 January 2019; 3. the $9.2 million worth of shares transferred in specie to the defendant from the deceased's superannuation fund; and 4. the Pymble Property, as defined in these reasons. 1. No interest is to be paid on the legacy if it is paid within 2 months of the making of orders; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), on unpaid legacies, is to be paid from that date until the date of payment in full. 2. Otherwise direct that any further brief written submissions as to costs be filed within 14 days, with a view to dealing with the matter on the papers if possible.

As noted above, at this stage the only order I will make in each proceeding is: 1. Direct the parties to file any brief submissions as to the form and content of the proposed orders so as to reflect these reasons within seven days.

Benz v Armstrong; Benz v Armstrong; Benz v Armstrong

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