Bovaird v Frost

CATCHWORDS : CONTRACT - where arrangement made between elderly woman (Monica), her son (Leon) and her brother (Max) to fund Monica's retirement accommodation and associated expenses, and to provide to Leon an interest free unsecured loan of $880,000 for a term of 10 years to fund the redevelopment of Monica's property - where Monica moves to retirement village in reliance on arrangements - where Max referred to ability to draw on his company AFM to meet his obligations - where Max's estate after his death does not provide agreed support or loan - whether arrangement sufficiently certain to be contractual - whether parties intended to create binding and enforceable legal relations - defences of unconscionability, undue influence and under Contracts Review Act not pressed - whether AFM was or became a party to the contract. - DAMAGES - Breach of contract - Assessment of damages for breach of promise to fund Monica's retirement accommodation and associated expenses for life - relevant discount factor - Assessment of damages to provide to Leon an interest free unsecured loan to fund the redevelopment of Monica's property - whether Monica and/or Leon entitled to damages - damages for failure to provide a loan - whether alternate loan available - onus of proof - FAMILY PROVISION - eligibility - dependency - where claimant has substantial assets and could fund own retirement accommodation - dependency in fact - circumstances warranting - actual dependency at date of death - relevance of deceased's promise of support - adequacy of provision - where claimant is elderly with ongoing periodic needs - whether provision should be by lump sum or annuity

(NSW) Civil Liability Act 2002 s 14 LEGISLATION CITED : (NSW) Contracts Review Act 1980 (NSW) Family Provision Act 1982 s 9, s 9(1)

Astor Properties v Tunbridge Wells Equitable Friendly Society [1936] 1 All ER 531 Bahamas (Inagua) Sisal Plantation v Griffin (1897) 14 TLR 139 Ball v Newey (1988) 13 NSWLR 489 Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61, (2001) 52 NSWLR 153 Churton v Christian [1988] NSWCA 23; (1988) 13 NSWLR 241 Custom Credit Corporation Ltd v Cenepro Pty Ltd [1991] NSWCA 68 Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 European Hire Cars Pty Ltd v Armstrong [2007] NSWSC 629 Griffiths v Westernhagen [2008] NSWSC 851 Horton v Jones (1935) 53 CLR 475 Jones v Padavatton [1969] 2 All ER 616 Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177 Manchester & Oldham Bank v WA Cook & Co (1883) 49 LT 674 Monaco v Keegan [2006] NSWSC 825 O'Sullivan v National Trustees Executors & Agency Co of Aust Ltd [1913] VLR 173 Palmer v Bank of New South Wales (1975) 133 CLR 150 Palmer v Bank of New South Wales [1973] 2 NSWLR 244 Parker v Clark [1960] 1 All ER 93 CASES CITED : Plunkett v Bull [1915] HCA 14, (1915) 19 CLR 544 Raffaele v Raffaele [1962] WAR 29 Re Fulop (deceased) (1987) 8 NSWLR 679 Re Gonin (deceased) [1979] Ch 16 Reynolds v McGregor [1973] 1 QL 314 Rosser v The Maritime Services Board of NSW (No 2) (NSWSC, Young J, 30 August 1993, BC9301829 Schaefer v Schumann [1972] AC 572 Scheps v Cobb [2005] NSWSC 455 Shiels v Drysdale (1880) 6 VLR (E) 126 Singer v Berghouse (No 2) (1994) 181 CLR 201 South African Territories Ltd v Wallington [1897] 1 QB 692 South African Territories Ltd v Wallington [1898] AC 309 Stewart v McDougall (NSWSC, Young J, 19 November 1987, unreported) BC8702350 Stinchcombe v Thomas [1957] VR 509 Tanner v Tanner [1975] 1 WLR 1346 TCN Channel Nine Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 Todd v Nicol [1957] SASR 72 Todorovic v Waller (1981) 150 CLR 402 Vigolo v Bostin [2005] HCA 11, (2005) 221 CLR 191 Vukic v Luca Grbin [2006] NSWSC 41 Wakeling v Ripley (1951) 51 SR (NSW) 183

2211/04 Monica Catherine Bovaird (plaintiff) Alan Maxwell Frost, (first defendant) Diana Catherine Fallon (second defendant) 3159/04 Leon Lewis MacGillivray Bovaird (plaintiff) PARTIES : Alan Maxwell Frost (first defendant) Diana Catherine Fallon (second defendant) AFM Developments Pty Ltd (third defendant) 1923/06 Monica Catherine Bovaird (plaintiff) Alan Maxwell Frost (first defendant) Diana Catherine Fallon (second defendant) AFM Developments Pty Ltd (third defendant)

FILE NUMBER(S) : SC 2211/04 ; 3159/04 ; 1923/06

COUNSEL : Mr R Harper SC w Mr M Condon (plaintiffs) Mr N Cotman SC (defendants)

SOLICITORS : Garland Hawthorn Brahe Solicitors (plaintiffs) MBP Legal (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

2211/04 Monica Catherine Bovaird v Alan Maxwell Frost, Estate of Maxwell Walter Allen Frost & anor 3159/04 Leon Lewis MacGillivray Bovaird v Alan Maxwell Frost & ors 1923/06 Monica Catherine Bovaird v Alan Maxwell Frost & ors

JUDGMENT 1 HIS HONOUR: In proceedings 2211/04 ("Monica's family provision claim"), the plaintiff Monica Catherine Bovaird claims provision for her maintenance and advancement in life pursuant to (NSW) Family Provision Act 1982 out of the estate of her late brother Maxwell Walter Allen Frost who died on 26 November 2002, leaving a Will dated 19 July 2002 - probate of which was on 2 May 2003 granted to the executors named in it, his son the first defendant Alan Maxwell Frost and his daughter the second defendant Diana Catherine Fallon - by which he left the whole of his estate amounting to some $835,000 to a charity, the Australian Cancer Research Foundation. In proceedings 1923/06 ("Monica's contract claim"), the plaintiff Monica originally claimed specific performance but now claims only damages for breach of a contract allegedly made in or about May 2001 between her and Max (whose executors are the first and second defendants) and the third defendant AFM Developments Pty Ltd, to the effect that in consideration of her agreeing to move from her home at XX Cecil Street, Gordon to a retirement unit, Max or AFM would pay for her aged care accommodation, and on-going expenses for the rest of her life, and lend her son Leon Lewis MacGillivray Bovaird the sum of $880,000 for the purpose of financing the redevelopment of Cecil Street. In proceedings 3159/04 ("Leon's contract claim") the plaintiff Leon originally claimed specific performance and now claims damages for breach of the same contract. A cross claim by Max's executors, claiming an order setting aside any such agreement for unconscionability, or as an unjust contract under the (NSW) Contracts Review Act 1980, was not seriously pressed. (As several of the protagonists share the surnames Frost and Bovaird, I trust I shall not be considered discourteous by referring to them for convenience, as indeed they often did themselves, by their first names). 2 In Monica's family provision claim, the issues are:

· Whether Monica is an "eligible person" in respect of Max within category (d) of the definition of that term - that is to say, a sometime member of the same household as, and sometime dependent of, the deceased; · If so, whether there are "circumstances warranting" the making of her application, for the purposes of Family Provision Act , s 9; · If so, whether she has been left with inadequate provision for her maintenance and advancement in life, and · If so, what provision should be made for her out of Max's estate. 3 In both contract claims, the issues are:

· Whether there was a binding contract, and its terms; · Whether AFM was a party to any contract; · Whether relevant terms of the contract were void for uncertainty; · Whether the contract is voidable for unconscionability, undue influence, or ought to be set aside under the (NSW) Contracts Review Act 1980; · The amount of any damages for breach.

Family history 4 Monica was born on 7 September 1916 and is now 92 years of age. She had two siblings, Leon Lewis Frost born 9 August 1920 who died as an infant, and Max, who was born on 18 October 1922. Monica first married in 1940; her first husband was killed in war action on 14 May 1943. She became a registered nurse on 9 October 1947. Max at some stage married Margaret, from who he later became estranged, but it appears that they remained on relatively cordial terms. 5 Monica and Max's father Walter Lewis Frost died on 22 September 1948; Max was one of two executors and trustees of his Will. In late 1948, Max told Monica that he was "now in charge of things" in respect of their late father's business, and that there was nothing left for Monica. 6 In 1949, Monica and her mother Margaret Louise Frost travelled to England, and Monica subsequently moved to Hong Kong, where she married Bert Bovaird on 28 April 1951. 7 On 8 September 1951, Max informed Monica that she had in fact inherited some Bank of New South Wales and BHP shares from her father, and she subsequently was notified of the transfer of those shares into her name in May 1952. 8 Monica's son Leon was born on 12 February 1954, and Monica ceased nursing at that time. In 1964, Leon commenced attending boarding school in Australia. In 1967, Bert, Monica and Leon permanently left Hong Kong and moved into XX Cecil Street, Gordon, which was the home of Monica and Max's mother Margaret Louise Frost, who transferred Cecil Street to Monica absolutely in July 1967. 9 From 1992, at a time when Bert's condition was deteriorating, Leon began to assist Monica in the management of her affairs. Bert died on 19 May 1994. Monica required surgery on her knees and subsequent extensive treatment in August 1997, and Leon's role in her care progressively increased. Subsequently, in March 1998, she had ophthalmic surgery. By 1999, Leon was becoming more involved in the management of Monica's financial affairs. In June 1999, Monica injured her right arm; this resulted in Leon providing additional care to her. 10 Max made a number of benefactions to Monica. In February 1999, Max gave Monica a sum of $7,000, to pay an outstanding account owed to her then solicitor. In February 2000, Monica had a motor vehicle accident. Max told Leon that he would buy Monica a new car, and subsequently, on 14 February 2000, Max purchased a new car for her, for $16,500.

The April 2001 arrangements 11 During 2000, Leon was exploring the possibility of redeveloping Cecil Street as a dual occupancy by renovating the existing home, and building a second house. He discussed his ideas with his friend Bill Jamieson, and they concluded that about $800,000 plus GST would be required for that purpose. 12 As a result of his discovery, in or about January 2001, of some old letters, Leon formed the view that Max had maladministered his father Walter's estate, to the detriment of Monica, and in particular had failed to provide to Monica benefits to which she was entitled under Walter's Will. Although he did not reveal to Monica the full details of his suspicions, he discussed the matter with her and obtained her approval to approach Max about it. In this context, on 2 April 2001, Monica executed a general power of attorney in favour of Leon. 13 Leon then arranged to meet Max for lunch, in the company of Bill Jamieson, on 19 April 2001. In Bill Jamieson's presence, Leon informed Max of his allegations, and deployed at least some of the supporting evidence. He then demanded that if Max wished to avoid litigation and the associated publicity, he agree to (1) pay for retirement accommodation and on-going expenses for Monica, (2) provide Leon with a loan of up to $880,000, unsecured and interest free for a term of 10 years, to fund the redevelopment of Cecil Street, and (3) provide an accounting of his dealing with his father's estate. Max agreed to these terms. The following morning, he informed Leon that he had spoken to a lawyer and had arranged to consult him over the weekend. 14 The next Monday, Max attended at XX Cecil Street and, having confirmed that Leon had not mentioned the matter to anyone, told Leon that he had had a meeting with the lawyer, and wanted to settle the matter without having to air any dirty laundry. He said that he would provide and pay for retirement accommodation, care and medical expenses for Monica and whatever else she needed for the rest of her life. He asked if the retirement accommodation could be bought in the three names of Monica, his estranged wife Margaret and himself; and said that he wanted Margaret to be entitled to live in the new house to be erected at Cecil Street if she wished to do so. Leon agreed to this, on condition that Max continue to honour the agreement to look after Monica for the term of her natural life, provide $880,000 funding to complete the development at Cecil Street, and account for the balance of the moneys of which Monica had been deprived. Max suggested "I might do the loan to you through AFM Developments, is that a problem?", to which Leon assented. 15 Leon says he asked Max to explain their agreement to Monica, and on the morning of Saturday, 19 May 2001, Max visited Cecil Street and, in Leon's presence, told Monica: Mon, you, Marg and I aren't getting any younger you know. I think it is time you should look at considering moving into some retirement accommodation where you will be amongst people our age, rather than being here all alone apart from being with Leon. I know you can't afford to buy anything without selling this place, which Leon has told me you don't want to do at this stage, so Leon and I have made an agreement. I'm going to put up the money to buy you an apartment in a retirement village. Leon needs a bit of a life of his own now. Leon is going to help you to find a place, and negotiate on it for you where you can be looked after but be around some people your own age. Leon and I are going to have a bit of fun and do up the old place and build another place down the back so he can rent the old place out, and get a place over where it's all happening nearer the city. 16 Leon acknowledged that what Max had said was "pretty well as we discussed", and Monica indicated assent to the proposal. 17 Some days after Saturday 19 May 2001, Bill Jamieson attended at Cecil Street at Leon's request. Monica told him that Max had promised her that, if she moved out of Cecil Street, he would buy an apartment of her choice in a retirement village and pay all the costs, and for all her aged care, medical and other expenses wherever she may need to be; he was going to look after her for the rest of her life, and give money to Leon to develop Cecil Street. 18 Leon wanted to ensure that there were available witnesses to the arrangement. He told Max that he needed to have a few close friends hear their agreement from Max, in case anything happened to himself. Max said that he did not want anything in writing but agreed that, as well as Bill Jamieson, another friend of Leon, one Peter Hawkes, might be told of their agreement.

19 In June 2001, Max confirmed orally to Bill Jamieson that he would fund Monica's aged care for the rest of her life, and the property development at Gordon, and that he had promised to look after her, buy her an apartment in a retirement village, pay for all her aged care and medicals and whatever else she needed, if she promised to move out of her house. Also in June 2001, while Peter Hawkes was staying at Cecil Street, Leon told him that he had told Max that he needed someone in addition to Bill Jamieson to know what the agreement was, "in case I went under a bus and there was no-one looking after mum's interests". Mr Hawkes agreed to be the witness. Leon had written out the terms on a piece of paper, which cannot now be found, but which Leon says was to the following effect: Max promised Mum that if she agreed and promised to move out of Cecil Street and into aged care accommodation of her choice that Max promised her: 1. to buy Mum an apartment in a retirement village and make all the on-going payments for her food, cleaning, maintenance of the apartment and all medical costs whether that was at the first place she moved to or, whether she needed greater aged care and needed to be relocated to a hostel or nursing home in the future. 2. to provide Leon with an unsecured loan of $800,000 + G.S.T. to renovate and refurbish the existing residence and build a second residence on the rear land under a Dual Occupancy application with a view to making an application to subdivide the two properties upon completion of the project. The $880,000 loan is to be repaid 10 years after the day the Cecil Street property development is completed. 20 According to Mr Hawkes, the paper had words to the following effect written on it: Max promised if Mum agreed and promised to move out of Cecil Street and into aged care accommodation: 1. to buy Mum a retirement village villa and he would pay for all the monthly on-going costs for food, cleaning etc. at the retirement village whether it is at the first place mum moves to or later when she might have to move elsewhere because she needed greater medical and aged care such as a hostel or nursing home. 2. provide an unsecured loan to Leon for $800,000 plus GST, to fix up and renovate the existing house at Cecil Street and to build a second house on the rear land under a dual occupancy application with a view to then make application to subdivide the two residences on completion of the development. The $880,000 loan is to be for ten years and start from when the property development works are completed. 21 The material difference between the two versions is that Mr Hawkes' version does not specifically refer to medical expenses.

22 According to Mr Hawkes, he met Max at Cecil Street in June 2001, in the presence of Monica and Leon. Mr Hawkes said to Max: As I have been told by Monica and Leon, you promised, with Monica's agreement, to move Monica out of Cecil Street and into aged care accommodation and: 1. to buy Monica a retirement village villa and you pay for all the monthly on-going costs for food, cleaning etc. at the retirement village whether it is at the first place Monica moves to or, later when she might have to move elsewhere because she needs greater medical and aged care, such as a hostel or nursing home. 2. to provide an unsecured loan to Leon of $800,000 plus GST, to fix up and renovate the existing house as Cecil Street, and to build a second house on the rear land under a dual occupancy application with a view to make application to subdivide the two residences on completion of the development. The $880,000 loan is to be for ten years and start from when the property development works are completed. 23 Max replied: That is correct, but I am going to do the development through my company AFM Developments. Leon has agreed to that, and also if my ex-wife wants to live in the new residence she can. 24 According to Leon, in about August 2001 he had a telephone conversation with Max's son Alan, in which Alan said: Max told me the other day that he is going to buy Monica an apartment in a retirement village and look after her for the rest of her life as well as lend you the money to develop the property at Gordon. I really don't understand it. He ignores his sister and you for over thirty years and now wants to do all this. He must be feeling guilty about something. 25 Alan himself deposed to having had five or six conversations with Max between 2001 and 2002, in which Max said: I'm thinking about the possibility of redeveloping the vacant land at the rear of the Cecil Street property. I'm thinking about giving Leon some money to build another place at the rear of it. 26 Alan says that, in this context, Max only ever used the word "give", and not "lend" or "loan". He says that in or around October 2002 - not long before Max's death - they had a conversation, in which Max said: I've just been thinking about the Cecil Street place. You know I don't have a very high opinion of Leon, he doesn't have much idea about running a business or doing developments but I'm thinking about giving him a hand to build another small house at the rear of Cecil Street. No more than $200,000, just to build something small and maybe subdivide the land at some stage. I'm trying to drum up some work for Vlado and Gregor at Scaffold 2000, they are good mates of mine and could use the work. As you know I've already made arrangements to get some architectural and landscaping plans drawn up but I think it could be a real opportunity. I might put the expenses through AFM Developments. What do you think? 27 However, Alan never denied the August 2001 conversation attributed to him by Leon. Monica moves to Lindfield Manor 28 In December 2001, Monica was diagnosed with what was described as a "total heart blockage", and had a pacemaker inserted. In February 2002, she was examined by Dr Kuo for the purpose of the preparation of a report to support an application for accommodation in Northhaven Retirement Village. In March 2002, Max confirmed to Peter Hawkes that, if Monica had to move to enable her to receive a higher level of care, "I will make sure it's all taken care of … as you know I have told Mon and Leon that I would make arrangements to meet all her aged care costs for the rest of her life". 29 Monica was examined by an Aged Care Assessment Team on 8 March 2002. In April 2002, she selected accommodation at Lindfield Manor. Leon says that, in the same month, Max again confirmed to him that he would take care of Monica's accommodation and other needs. 30 The lease for the Lindfield Manor unit and associated resident's contract were executed, with Monica, Max and Margaret as joint tenants, on 26 July 2002. (The proprietor of Lindfield Manor would permit the three names to be on title only as joint tenants, not as tenants-in-common). According to Leon, Max told him, before the lease was executed: Neither your mother nor Margaret will have to pay any on-going costs. I certainly don't expect that your mother or Margaret will ever have to make any payments for Lindfield Manor. I will pay for everything associated with the unit.

31 On 3 August 2002, Monica moved out of Cecil Street and into Lindfield Manor. In about August 2002, Max told Lynette Talbot, a manager at Lindfield Manor, that he had promised Leon and Monica to pay all Monica's costs for the rest of her life wherever that may need to be; that accounts for levies should be sent to him; and that he was responsible for all of Monica's expenses until she died. In August or September 2002, Max contacted Scott McGregor of Lindfield Manor and requested that all accounts incurred by Monica be sent to him for payment. On 11 September 2002, he met Jennifer Evans of Lindfield Manor and requested that all accounts be sent to him for payment. Having been pressed by Leon to establish that he would be able to meet his obligations under the arrangements between them, Max in October 2002 agreed to show Leon his dividend statements for certain shareholdings, and agreed that Leon could monitor those share portfolios. Max reiterated that he would look after Monica "for the rest of her life no matter wherever she needs to be".

The Cecil Street redevelopment 32 Meanwhile, in May 2002, Leon had contacted Robert Beck to obtain initial designs for the redevelopment of Cecil Street, saying that "funding is going to be arranged by my uncle". In June, Max had told Alan that he was making arrangements for draft architectural and landscaping plans to be drawn up for Cecil Street. 33 On 3 August 2002 - the day Monica left Cecil Street - following a meeting with Felix Tavener (an architect), Vlado Stark (a builder) and Leon at Cecil Street, Max asked Mr Tavener to prepare plans for the redevelopment. On 6 August, Leon provided Mr Tavener with old (1968) architectural drawings of Cecil Street, and associated documents. By mid-August, Mr Tavener had provided Max with architectural drawings with Max then forwarded to Leon. The drawings prepared by Mr Tavener were annotated with the words "Mr M Frost"; Mr Frost instructed him that the client was AFM Developments, and subsequent amended drawings were marked "Proposed Alterations XX Cecil Street, Gordon for AFM Developments Pty Ltd". 34 In September 2002, Leon attended Ku-ring-gai Council had been told that a contour survey of XX Cecil Street would be required. Mepstead & Associates were retained for that purpose, and on 28 September 2002 Leon gave Max copies of a contour survey and Mepstead's invoice for $1595, which Max paid on 10 October 2002, by debiting his loan account with Ultimate Apparel Pty Ltd. Further steps in connection with the proposed redevelopment of XX Cecil Street proceeded during October, including the preparation by Mr Tavener of a draft environmental impact statement. Andrew Lane commenced preparation of a landscape plan and prepared a fee proposal, made out to AFM Developments Pty Ltd, which Max signed (as a director of AFM) on 26 October 2002. Also in late October 2002, Max provided a completed environmental impact statement to Mr Tavener, again signed by Max as a director of AFM.

After Max's death 35 Max died on 26 November 2002, having made his last Will, in favour of the Australian Cancer Research Foundation, on 19 July 2002. 36 On 2 December, in a conversation with Leon, Alan said that he had withdrawn $200,000 from Max's loan account with Ultimate Apparel, to look after Monica. On 11 December 2002, Alan and Diana Fallon met with Leon and Peter McCrohon, solicitor, at the offices of MBP Legal. In the course of the meeting, Mr McCrohon made an observation to the effect that the payments being made by Max for Monica's benefit were voluntary and not contractual; Leon did not respond. In a telephone conversation on 28 January 2003, Alan told Leon that, after discussion with Mr McCrohon, $200,000 had been allocated to him and $400,000 to Monica. 37 On 3 April 2003, Margaret executed a notice of death the effect of which would be to remove Max's name from the title to Lindfield Manor, which would thereupon pass to Monica and Margaret by survivorship. Subsequently - the evidence does not disclose when - the joint tenancy has been severed, so that Monica and Margaret now hold as tenants in common in equal shares. 38 Also on 3 April 2003, solicitors acting for Leon and Monica wrote to MBP Legal (acting for the estate), asserting that they were contractually entitled to on-going support for Monica, and the Cecil Street development loan.

39 Probate of Max's Will was granted to Alan and Diana on 2 May 2003. On 18 August 2003, MBP responded to the letter of 3 April, denying that Max was entitled to bind AFM, but observing: Alan Frost, one of the executors of the estate and the son of Max Frost was aware, based on his conversations with his father that the deceased and Leon Bovaird had had some discussions concerning a loan by the deceased to Mr Bovaird with a view to designing and constructing a second residence on the rear portion of XX Cecil Street, Gordon. Based on those discussions it was Mr Alan Frost's understanding there were certain discussions about a ten year interest free loan from Max Frost to Leon Bovaird. Consequent upon those discussions Max Frost had placed a condition on the offer of loan that the plans be as approved by him, the work be carried out by Max Frost's building associate, Mr Vlado Stark and that another of his associates design the dwelling and act as project manager. We are instructed that the relevant plans for a modest dwelling were drawn up but when presented to Mr Bovaird the plans and the offer and the terms as set out above were rejected by Leon Bovaird. Mr Max Frost thereafter communicated to his son approximately two weeks before his death that the project with Leon Bovaird was not proceeding and that Max Frost had decided not to proceed with the loan. We are also instructed that the proposed project did not any time extend to the refurbishment of the existing dwelling at XX Cecil Street Gordon. 40 Alan said, in supplementary oral evidence in chief, given after he had been examined, cross-examined and re-examined, that he had first heard any suggestion of a loan as distinct from a gift in the weeks following his father's death, from Leon, but the record made in August 2003 is more likely to be accurate than his current recollection more than five years later.

41 On 29 May 2005, Monica suffered a serious fall at Lindfield Manor and was admitted to the Sydney Adventist Hospital, where she underwent surgery for a fractured femur. On 8 June she was transferred to Lady Davidson Private Hospital, where she suffered a further fall on 17 June. She was discharged from Lady Davidson on 18 July 2005, and admitted the following day to Terrey Hills Nursing Home. On 19 September 2005, she was declared a permanent resident of Terrey Hills Nursing Home. Leon on her behalf executed an accommodation bond agreement in the sum of $250,000, which provided for the charging of interest on the amount of the bond until it was paid.

42 The executors of Max's estate continued to pay Monica's accounts at Lindfield Manor until 12 July 2005, but not thereafter.

43 On 27 November 2006, Diana made an application, which was ultimately unsuccessful, to the Guardianship Tribunal, for the appointment of a financial manager in respect of Monica. However on 1 March 2007, in the course of the proceedings before the Guardianship Tribunal, Diana said: I have a lot of respect for Monica which includes her husband Bert. Dad was quite close to Monica and certainly I agree exactly with what Monica said, Dad said he would look after her for the rest of her life and put things in place accordingly. Was there a contract: evidence, uncertainty and contractual intent 44 As one of the terms of the alleged contract involved a promise to provide for Monica's needs for the rest of her life, and as Monica's legal rights under any such contract would be highly relevant to whether she had been left with inadequate provision, it is appropriate to consider first the contract claims.

45 Courts subject to close scrutiny claims made against the estates of deceased persons based on the evidence of the claimant of an arrangement said to have been made between them during life [Plunkett v Bull [1915] HCA 14; (1915) 19 CLR 544, 548-9]. In evaluating such claims, it is important to consider whether the claim is clearly made out - albeit that the standard of proof does not rise higher than the ordinary civil standard of the balance of probabilities [European Hire Cars Pty Ltd v Armstrong [2007] NSWSC 629, [4]] - and in this exercise, corroboration is an important aspect.

46 In the present case, there is substantial corroboration of Leon's evidence. First, there are typewritten notes prepared by Leon in anticipation of the 19 April lunch meeting, which rehearsed his grievances and anticipated the terms that he was going to seek - including aged care at whatever level might be required and medical expenses for the term of Monica's life, and an interest free unsecured loan of $800,000 plus GST to renovate Cecil Street. Secondly, Leon's version of the discussions on 19 April 2001 is corroborated by Bill Jamieson, whose version confirms that Max agreed to pay for aged care accommodation and medical costs for Monica, and to provide Leon with an interest free unsecured loan of $880,000 for a term of 10 years, to fund the redevelopment of Cecil Street. Thirdly, Monica gave affidavit evidence (sworn on 23 September 2004; due to her deteriorating dementia, she was not cross-examined) that Max repeated to her the relevant terms, including that Leon and he had agreed that Max would fund the purchase of an apartment for her in a retirement village, that he and Leon were going to renovate Cecil Street and build a second house there, and that he would make all the ongoing accommodation, food, medical and other payments to look after her for the rest of her life. Bill Jamieson also corroborated Monica's evidence of this conversation. Fourthly, Max acknowledged the terms to Peter Hawkes, who read them to him from the piece of paper prepared by Leon; these included that if Monica agreed to move out of Cecil Street and into aged care accommodation, Max would buy her a retirement village villa and pay for all the monthly on-going costs for food, cleaning etc. at that or any later aged care accommodation, and provide an unsecured loan to Leon for ten years of $800,000 plus GST, to renovate the existing house at Cecil Street and build a second house on the rear land as a dual occupancy. Fifthly, Max admitted - to a number of persons who have no interest in the proceedings - his obligation to pay Monica's costs of care, none of whose evidence was challenged: Lynette Talbot, of Lindfield Manor, in August 2002; Felix Tavener, on 3 August 2002; Jennifer Evans, of Lindfield Manor, on 11 September 2002; and Scott McGregor, of Lindfield Manor, in September/October 2002. Sixthly, Max in fact funded the acquisition of a unit in Lindfield Manor for Monica's occupation and aged care, and from August 2002 paid the on-going costs and levies of Monica's accommodation in Lindfield Manor. Seventhly, Diana Fallon admitted to the Guardianship Tribunal that Max has said that he would look after Monica for the rest of her life and put things in place accordingly. Eighthly, Max paid Leon $2,600 on 5 October 2001 to cover initial costs for the Cecil Street redevelopment, and also paid the costs of surveyors retained to work on Cecil Street; he executed an environmental impact study for the Cecil Street redevelopment; he executed Andrew Lane's fee proposal in respect of Cecil Street; and he took a number of other steps associated with the prospective redevelopment of Cecil Street. Ninthly, the executors' solicitors' letter of 18 August 2003 acknowledged discussions about a ten year interest free loan to design and construct a second residence at Cecil Street. 47 To my mind, foremost among those circumstances is the evidence of Peter Hawkes - which was not only uncontradicted (unsurprisingly, since Max was not alive to contradict it), but more importantly was also unchallenged, and consistent with Leon's evidence, and with Max's contemporaneous conduct.

48 The defendants submitted that these arrangements were insufficiently certain to be contractual, at least in two respects: as to how the precise amount of the loan, which was said to be for "up to $880,000", was to be ascertained; and as to the content and extent of the support to be provided to Monica. As to the first of these, there is no difficulty: Max was to provide a loan for the amount required by Leon for the purpose of the redevelopment, up to a maximum of $880,000.

49 As to the second, it is true that there are cases involving arrangements under which a plaintiff has agreed to look after an elderly person for the rest of her life in return for a rather vague promise of future reward, in which it has been held that the arrangement was too uncertain to be contractual [Shiels v Drysdale (1880) 6 VLR(E) 126; Horton v Jones (1935) 53 CLR 475; Stinchcombe v Thomas [1957] VR 509; Reynolds v McGregor [1973] QL 314. However, in other cases - in particular where significant steps have been taken under the agreement - such arrangements have been upheld [O'Sullivan v National Trustees Executors & Agency Co of Aust Ltd [1913] VLR 173; Palmer v Bank of New South Wales [1973] 2 NSWLR 244 (affirmed on other grounds (1975) 133 CLR 150); Wakeling v Ripley (1951) 51 SR (NSW) 183]. The various accounts of the discussions between the parties leaves some scope for dispute as to what exactly was envisaged, and in particular whether medical expenses over and above those associated with residence in the retirement accommodation were to be included. Thus, although Leon's versions generally explicitly refer to medical, food and other expenses, Peter Hawkes' version of the written note given by Leon to him, which he repeated orally to and was acknowledged by Max, did not explicitly refer to medical expenses.

50 In my view, what was agreed is illuminated by what in fact happened, without complaint, subsequently. Max acquired the Lindfield Manor unit in the names of Monica, Margaret and himself as joint tenants, and paid the on-going levies and fees. In the context in which the agreement was made, envisaging as it did that Monica would move from her home to retirement accommodation and be supported there, illuminated by the subsequent conduct of the parties, it can be said that Max undertook at least to fund Monica's retirement accommodation, at whatever level might be required from time to time, and all the expenses associated with her care at that accommodation. On the other hand, there was no intention that Max be bound to enhance Monica's estate with capital, whether in the form of an asset in the retirement unit or otherwise. 51 For the defendants, Mr Cotman SC contended that whatever arrangements were made between Max and Leon, they were informal arrangements made between family members, and were not intended to give rise to binding legal relations.

52 There is a rebuttable presumption of fact that relatives such as husband and wife, and parent and child, do not intend their agreements to be contracts, relying rather on "family ties of mutual trust and affection" [Jones v Padavatton [1969] 2 All ER 616, 621]. There are, however, many cases involving promises by elderly or disabled persons to confer benefits on a friend or relative in consideration of the latter taking up residence with the former or rendering household or personal services, in which the requisite intention to create legal rights and obligations has been found - particularly where implementation involved the promisee leaving existing advantages or selling an existing residence [Wakeling v Ripley (1951) 51 SR (NSW) 183; Todd v Nicol [1957] SASR 72; Parker v Clark [1960] 1 All ER 93; Schaefer v Schumann [1972] AC 572; Tanner v Tanner [1975] 1 WLR 1346; Raffaele v Raffaele [1962] WAR 29; Re Gonin (deceased) [1979] Ch 16; see also Scheps v Cobb [2005] NSWSC 455, [29]]. 53 I am amply satisfied that Max, and Leon on his own behalf and on behalf of Monica, intended to create binding legal relations. The indicia of this intention are manifold. First, the parties were not husband and wife or parent and child, but more distant relatives; the presumption applies with diminishing force the remoter the familial connection. Secondly, the genesis of the arrangements lay in allegations by Leon of breaches by Max of fiduciary obligations owed to his family members in connection with the estate of his and Monica's father; in such a situation reliance on family ties of trust is improbable. Thirdly, the arrangements were conducted against the background of a threat by Leon to consult lawyers and institute proceedings unless Max agreed to his terms; this points to a legal resolution. Fourthly, at the commencement of the discussions on 19 April, Leon produced the power of attorney he held from his mother; that is a clear sign that he was conducting the negotiation in a legal context with the intention that the result be legally effective. Fifthly, the presence of Bill Jamieson as an independent witness, and Leon's insistence that Max repeat the terms to Peter Hawkes (in case he "fell under a bus") tells powerfully in favour of the view that Leon intended and Max understood that their arrangements were to be formal and enforceable. Sixthly, the language used - with reference to "a deal" and "promises" - favours an intention to be bound. Seventhly, Max apparently consulted a lawyer shortly after 19 April about the arrangement. 54 Mr Cotman SC argued that Leon's repeated indications that, if Max did not perform his promises, Leon would resort to lawyers and litigation, showed that there was no binding compromise, and that Leon reserved his rights to enforce his original claims if Max did not perform. However, repudiation of an agreement for compromise gives the innocent party an election to enforce the compromise or to sue on the original claim; there is nothing inconsistent in Leon's threats to pursue his original claims if Max did not perform, with the existence of a binding compromise agreement. Next, reference was made to the circumstance that when, following Max's death, the estate's solicitor Mr McCrohon opined that Max's payments for Monica's benefit were voluntary and that there was no binding obligation, Leon did not object or assert the contrary. However, Mr McCrohon was not acting for Leon or Monica; he was not apparently aware in any detail of what had taken place between Leon and Max; and Leon's explanation - that he did not respond because Mr McCrohon was not acting for him - is not incredible. Finally, it was suggested that it could hardly have been contemplated that there was a binding obligation on Monica to leave Cecil Street. However, in the context of a promise by Max to purchase and fund retirement accommodation for her, once Monica indicated assent to that proposal she was in my view bound to perform her part of the obligation. The wording of the written note prepared on her behalf by Leon and provided to Peter Hawkes supports this. Alternatively, the contract may have been conditional upon her leaving Cecil Street for retirement accommodation, but if it was, that condition was satisfied. 55 As Mr Harper SC (for the plaintiffs) submitted, in many situations it can be seen that there is a contract, although it may be difficult to analyse at precisely what point in time there was an exact correspondence of offer and acceptance [Rosser v The Maritime Services Board of NSW (No 2) (NSWSC, Young J, 30 August 1993, BC9301829, p 8; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61, (2001) 52 NSWLR 153, 177 [74] (Heydon JA); Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523]. Although it may be unclear whether there was an intention immediately to be bound on 19 April - on one view, Max was to be allowed a few days to consider his position and obtain advice - it is clear that at least by the time of the conversation between Max and Peter Hawkes, the parties were acting on the basis of binding legal relations between them. 56 Accordingly, the evidence establishes that Max contracted with Leon and Monica at least to fund Monica's retirement accommodation, at whatever level might reasonably be required from time to time, and all the expenses associated with her care at that accommodation, and to provide to Leon an interest free unsecured loan of $880,000 for a term of 10 years, to fund the redevelopment of Cecil Street. Although defences of unconscionability, undue influence and under the Contracts Review Act were pleaded, they were not pressed in submissions - unsurprisingly so, given the uniform evidence that Max was a domineering, hard-nosed businessman, and that he consulted lawyers immediately after 19 April before finally committing to the arrangements.

Was AFM a party? 57 The next question is whether AFM was a party to the contract. Mr Harper SC submits that it can be inferred that at all times Max intended that AFM be a contracting party. 58 According to Leon, when Max telephoned him on Monday 23 April 2001 and confirmed his acceptance of Leon's terms, he asked that Margaret might be permitted to occupy the second dwelling, and added: "At this stage I might do the loan to you through AFM Developments, is that a problem?", to which Leon responded: "No". When the terms were put to Max by Peter Hawkes, Max said: "Yes, that's correct but Leon has agreed that my company AFM Developments is going to do the property development and that if my ex-wife wants to live in the new house down the back then she can". Later, in about April 2002, when Leon pressed Max as to his ability to meet his obligations, Max said, "I also have loan account with Ultimate Apparel where I am owed a lot of money and I can also call in whatever amount of money I want from AFM. I can easily afford it. I can easily look after your mother for the rest of her life". When pressed on the same topic again in October 2002, by Leon asking, "Max, what happens if you personally run out of money?", Max replied by offering to show Leon his dividend statements. He did so about a week later, and agreed to Leon monitoring his shareholdings. Leon again asked "What happens if … you live to be 100 years of age and mum also reaches 100 years of age and you personally run out of money?", to which Max is said to have replied: "AFM Developments is my company, as you know. It is owned by my company, Max Frost Pty Ltd which is in turn controlled by Terrificus, which is trustee of the kid's trust. You know that. If I want to change that, it's all up to me. I'm the boss, if I say to my kids 'jump', they will just ask, 'how high'. Everything they have was given to them by me. They know that only too well". Leon responded, "So, you are saying whatever you say goes with AFM Developments?", and Max replied, "Of course I speak for AFM. I am the managing director and also the company secretary. … ". For the purposes of the redevelopment of Cecil Street, Max informed Felix Tavener that AFM was to be the client. Several other steps in the development were taken in the name of AFM. 59 However, no reference was made to AFM in the 19 April 2001 discussions. On any view, the contract had been made before the 2002 discussions mentioned above. No consideration is apparent for any variation of the contract in 2002 by which AFM might have been added as a party, nor for any collateral contract by which AFM might have agreed to assume or guarantee Max's obligations. Moreover, nothing attributed to Max conveyed that AFM was a contracting party, or was assuming or has assumed obligations in connection with the contract. What Max said indicated no more than that he might perform some of his obligations through the vehicle of AFM as his agent, or that AFM was a source of funds to which he could have recourse if required to fund his obligations. 60 AFM was not a contracting party. The case against it must fail.

Breach and damages 61 The plaintiffs contend that: · in breach of the obligation to fund Monica's retirement accommodation, at whatever level might be required from time to time, and all the expenses associated with her care at that accommodation ("the accommodation care term"), although Max, and after his death (until June 2005) his estate, paid Monica's expenses at Lindfield Manor, it has not since done so, and the estate has not funded Monica's accommodation at Terrey Hills Nursing Home, which has been funded from her own resources, including ultimately a loan on the security of Cecil Street; and

· in breach of the obligation to provide to Leon the Cecil Street redevelopment loan ("the redevelopment loan term"), Max did not provide the Cecil Street redevelopment loan during his lifetime, and his estate refuses to do so 62 Outstanding and ongoing charges at Lindfield Manor. Since Monica vacated the Lindfield Manor unit, charges of $46,016 have been incurred in respect of it, and they continue at the rate of $963 per month; in addition the arrears are accruing interest at the rate of about $380 per month. These expenses have not been paid by Max's estate.

63 As has been mentioned, the Lindfield Manor unit was acquired in the names of Max, Monica and Margaret as joint tenants, and following Max's death, his interest passed to Monica and Margaret by survivorship. However, although there is no formal evidence of it, the parties have informed the court that the joint tenancy has since been severed, so that Monica and Margaret now hold as tenants in common in equal shares.

64 As to how account should be taken of the benefit that Monica has received in the form of her one half interest in the unit, which she no longer needs for accommodation, there are a number of possible analyses. One is that - either pursuant to a resulting trust (Max having provided the purchase money), or as a result of her ceasing to reside there and being entitled to support from Max for accommodation elsewhere - the beneficial interest in Lindfield Manor reverted to Max's estate, in which case his estate would also be bound to pay the associated out-goings. An alternative is that Monica's interest in Lindfield Manor is beneficial, but in circumstances where she no longer resides there, should be treated as a provision made by Max for her to be credited against his outstanding contractual obligations. A third analysis is that - while, when the unit was held by Max, Monica and Margaret as joint tenants it enabled Max to provide not only for Monica's aged care accommodation but also in due course for Margaret or himself, it conferred no real capital benefit on Monica (since, in the event of her prior death, it would pass to Max and Margaret) - it is only as a result of decisions made subsequent to his death and without reference to his contractual obligations that Monica has become entitled as a tenant in common to one half of the unit, which is therefore not referable to nor to be credited against Max's contractual obligations.

65 Ultimately, I think the third of those analyses is the correct one. Monica claims her half interest, said to be worth $72,000, as an asset. Max's estate does not claim the unit, and does not contend that it was or is held upon resulting trust for him or his estate. The purchase in the three names as joint tenants also points against a resulting trust. The severance of the joint tenancy was effected after Max's death, between Monica and Margaret, without reference to any contractual obligation of Max.

66 However, the retention of Monica's interest in the unit after she left it was not necessary to provide her with accommodation. In those circumstances, I do not consider that Monica had a continuing entitlement against Max's estate in respect of levies etc at Lindfield Manor after she vacated it. She has a right of contribution against Margaret, as co-owner, for half of the past and ongoing liabilities to the proprietor of Lindfield Manors; and she has an asset, in the form of her interest in the unit, which is no longer required for her accommodation, from which those liabilities can be satisfied.

67 I would therefore not find that the failure to pay the outgoings associated with Lindfield Manor after Monica vacated it was a breach of the accommodation care term, and it follows that Monica is not entitled to damages in respect of the outstanding and ongoing fees due in respect of Lindfield Manor.

68 Accommodation at Terrey Hills. Provision of accommodation at Terrey Hills Nursing Home required: · payment of an accommodation bond of $250,000, due upon admission with interest payable at 8.825% per annum on any unpaid balance until paid. The bond is refundable when Monica dies or ceases to reside there, subject to reduction by $3,186 per annum (for a maximum of 5 years) until then. (An alternative was to pay $69.15 per day, representing interest at 8.825 % on $250,000 ($60.42) and a daily (1/365) proportion of the retention ($8.73); and · payment of monthly care fees, which at the date of the hearing in February 2009 were $5,777 per month. 69 It is clear that Max undertook not merely to provide Monica with the accommodation she might initially require on moving from Cecil Street, but to change or upgrade this as her needs changed. His (and his estate's) obligation was therefore either to provide the accommodation bond, and to pay the interest while it remained unpaid, or to pay the daily amount of $69.15, and to pay the monthly care fees. However, Max's estate has not contributed at all to the costs of Monica's accommodation at Terrey Hills Nursing Home. Monica paid the bond of $250,000 from the proceeds of a mortgage of Cecil Street in December 2008, from which she also discharged some arrears of interest. Until January 2009, Monica incurred total charges at Terrey Hills - comprising interest, retention and care fees - of $308,826. 70 If the estate had provided the accommodation bond, then it would have been entitled to recover it, less the retention amount, when Monica ceased to reside in the nursing home; neither Max nor the estate was obliged to enhance Monica's estate, but only to provide accommodation. Monica having now herself provided the accommodation bond, she or her estate will recoup it (less the retention) upon her ceasing to reside in the nursing home; and it would therefore be wrong to allow the full amount of the accommodation bond of $250,000 as damages. In respect of the accommodation bond, the benefit to Monica of Max's promise was relief from the need to pay interest on it while it remained unpaid, and to suffer its reduction by the retention. For the purposes of assessment of damages, assessing the estate's liability on the basis that it was bound to pay the on-going interest and retention charge, being $69.15 per day, for her lifetime, encompasses all this; it is also (save for the proportion attributable to the retention) a proxy for interest on the $250,000 that Monica has now herself provided.

71 As to the care fees, these continue from February 2009 at the rate of $5,777 per month, which is $1,333.15 per week.

72 According to the evidence of Dr Ogle, contained in her affidavit of 27 January 2009, Monica had an "average life expectancy" of 4.6 years from September 2007, "but she could live as long as 6 to 7 years". 4.6 years from September 2007 is about May 2012, which is 3.25 years from the date of hearing. As to the observation that she might live for as long as six or seven years, it must equally be observed that it is inherent in the concept of "average life expectancy" that she might also live shorter; for the purposes of assessing damages according to the balance of probabilities, the correct approach is to use what Dr Oates called her "average life expectancy".

73 As this is not a case to which the Civil Liability Act, s 14, applies (it not involving an award of "personal injury damages" within that Act), it is appropriate to calculate damages using the conventional 3% discount rate [Todorovic v Waller (1981) 150 CLR 402]. The 3% multiplier for 3.25 years is 161. The interest and retention charge at $69.15 per week capitalised for that period is $11,133, and the care fees at $1,333.15 per week capitalise to $214,637.

74 Monica claims past and future costs of personal grooming, past and future pharmaceutical expenses, and future estimated health fund and medical expenses. However, I am unpersuaded that Max's obligation extended to these matters. While versions of several of the relevant conversations referred to medical expenses, in Leon's version of the note provided to Peter Hawkes it was "and all medical costs whether that was at the first place she moved to or, whether she needed greater aged care and needed to be relocated to a hostel or nursing home in the future", and at the highest contemplated cost of medical care charged by the nursing home, not external medical providers or health fund contributions; but more significantly Mr Hawkes' version, to which I give great weight, did not mention medical expenses at all. While in some of the conversations reference was made to provision of "whatever else she needed", this appeared in neither version of the note provided to Mr Hawkes, and it is improbable that any party would have intended that Max pay all Monica's personal expenses, when she had considerable assets and some income of her own. Monica also claims an allowance for gratuitous care, past and future, provided by Leon for her at the nursing home. In my view, there is no basis for supposing that Max's promise extended to paying or making provision for such care.

75 Finally, Monica claims the costs of obtaining a mortgage loan over Cecil Street, which she used to fund the accommodation bond and pay some arrears of care fees. Had the estate paid the accommodation bond or the interest charge, and the care fees, as it was bound to, Monica would not have had to raise funds to that extent and incur these costs. As the very purpose of Max's promise was to avoid Monica having to sell Cecil Street or resort to her own assets to fund her retirement accommodation, these costs were a sufficiently foreseeable consequence of breach to be recoverable, and in principle I allow them. 76 However, these costs, which amount to $55,666.13, include prepaid interest of $37,287.50; to allow this interest component as well as the ongoing interest charge in respect of the accommodation bond would be double compensation; so only the valuation fee, brokerage fee, legal costs and stamp duty, which total $18,379. Moreover, of the total amount of $785,000 borrowed, only $285,000 was applied to liabilities which the estate ought to have funded ($250,000 to the Accommodation Bond, and $34,153 to arrears of fees). I will therefore allow 285/785 of those costs, which is $6,672.

77 Accordingly, Monica is entitled to damages for breach of the accommodation care term as follows: · Interest and retention on accommodation bond, and care fees, to January 2009: $308,826; · Interest and retention charge on accommodation bond at $69.15 per week for 3.25 years from February 2009: $11,133; · Care fees at $1,333.15 per week for 3.25 years from February 2009: $214,637; · Mortgage costs: $6,672;

78 The Cecil Street redevelopment loan. The plaintiffs case is that, had Max or his estate performed its contractual obligation to provide the loan, the redevelopment of the property via a dual occupancy subdivision, refurbishment of the existing home and building of a new home would have been completed by 1 April 2004, so that Monica would now have real property worth $2,870,000, against which Leon would have an obligation to repay the construction costs ($838,704 in about five years from now, at the expiration of the ten year term - $723,801 in present value). Instead, Monica retains only the property in its present condition, worth $1,320,000, a difference of $826,198. The plaintiffs claim that difference, and in addition the rental income that would have been derived from the property since completion. 79 There is uncontested expert evidence that Cecil Street was capable of redevelopment in this way, and that the redevelopment could have been completed by 1 April 2004. I accept that if Max or his estate had performed its obligation, there is a high degree of probability that the Cecil Street redevelopment would have proceeded and been completed. While this falls short of certainty, if it were necessary to evaluate the prospects I would have assessed them at not less than 85% [cf the discount of 23 to 25% applied in Custom Credit Corporation Ltd v Cenepro Pty Ltd [1991] NSWCA 68]. 80 At the commencement of the hearing, the defendants amended their defence to allege a failure to mitigate loss by obtaining a loan from an alternative source. I accept that onus of proving a defence of failure to mitigate is borne by the defendant who propounds it [TCN Channel Nine Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, 158 (Hope JA)]. But special considerations pertain to the award of damages for breaches by a lender of contracts for the loan of money, the normal measure being the cost to the borrower of going into the market and obtaining a substitute loan, less what would have been the cost of the contractual loan. Damages will vary according to the circumstances, and may be nominal if the plaintiff, being of good credit, can readily obtain a loan elsewhere, but "if he cannot obtain the money accept at a higher rate of interest, or for a shorter term of years, or upon other more onerous terms, the damages would be greater and might be very substantial. The burden of proving the amount of the loss sustained rests on the plaintiff" [South African Territories Ltd v Wallington [1897] 1 QB 692, (CA), 696-697; affirmed [1898] AC 309]. In Bahamas (Inagua) Sisal Plantation v Griffin (1897) 14 TLR 139, it was said that in measuring such damages it must be assumed that, when the borrower applied elsewhere for an advance, it remained one with ordinary credit, so that if by reason of circumstances it had fallen into disrepute and bad financial odour, the defendant was not responsible for that. Exceptionally, damages may be recovered for the loss of a contract dependent upon the loan, if the defendant was aware of the purpose for which the plaintiff was obtaining the loan. Thus in Manchester & Oldham Bank v WA Cook & Co (1883) 49 LT 674, the bank had agreed to lend money to fund the purchase of an interest in a colliery but failed to find the money, and the plaintiff being unable to obtain the money elsewhere and complete the purchase was held entitled to damages in respect of the loss of the colliery purchase, it being stressed that "the bank had express notice of the purpose for which the money was required". And in Astor Properties v Tunbridge Wells Equitable Friendly Society [1936] 1 All ER 531, the loan was to be used to fund the purchase of a property, the plaintiff recovered damages for the lost rents that would have been obtained from the property during the delay before it obtained the property with a substitute loan. 81 The position was comprehensively stated in Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153; BC200606017 by E M Heenan J, as follows: Damages for failure to pay money as agreed

[230] The essential nature of the obligation of an underwriter under an agreement such as that of 2 December 1996 in this case, is to pay money for the issue of the shares or other securities which are to be underwritten if they are not fully subscribed. That character of the obligation has many similarities to the role of a lender under a contract of loan where the obligation is to pay money. In the latter case the payment of money by the lender results in a debt which is fully repayable on agreed terms, with or without interest, whereas in the present situation there would be no repayment ever made or expected, but nevertheless the contract of underwriting has many of the other characteristics of contracts for the payment of money. While these are governed by all the general principles of law of contract there are particular features of them, due to the fungible nature of money, which have an impact on the nature of damages which may be recoverable - Halsbury: "Laws of England", Vol 32, 4th ed reissue [115].

[231] So it is that default in repaying a loan on time or at all means that the amount recoverable is the amount of the debt together with such interest from the time when it becomes payable under the contract, or by statute, or as the court may allow, regardless of the inconvenience the plaintiff has suffered from the failure to pay on the due day: Fletcher v Tayleur (1855) 17 CB 21 at 29, notwithstanding that this rule was said to be unreasonable by Jessel MR in Wallis v Smith (1882) 21 Ch D 243 at 257 CA. However, where the circumstances are that a special loss is foreseeable at the time of the contract as a consequence of delayed payment, or a refusal to pay, damages may be recoverable for that loss - Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297 at 306, and also at first instance at [1952] 1 KB 285 at 224 - see also Monarch Steamship Co Ltd v Karlshamns Oljefabriker AB [1949] AC 196 and Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528.

[232] Similarly, damages for breach of a contract to lend money may be nominal or substantial according to the circumstances which will, in each case, determine the reasonable contemplation as to the loss which is likely to result from the breach. Here, too, a distinction is recognised between the measure of damages for non-payment of a money debt and breach of a contract to lend money or to accept bills - Prehn v Royal Bank of Liverpool (1890) LR 5 Exch 92 and also Trans Trust SPRL v Danubian Trading Co Ltd (supra). Therefore, the costs of raising money elsewhere may be recoverable as a natural result: Prehn v Royal Bank of Liverpool (supra) and Astor Properties Ltd v Tunbridge Wells Friendly Society [1936] 1 All ER 537. Commissions payable for a temporary, as well as a permanent, loan will not always be allowed - see Astor Properties (supra) at 534.

[233] Where the defendant had knowledge of other probable consequences of his breach, he may have to render full compensation for the loss thereby inflicted upon a plaintiff: Manchester and Oldham Bank Ltd v W A Cook & Co (1883) 49 LT 634; South African Territories Ltd v Wallington [1898] AC 309; Wallis Chlorine Syndicate Ltd v American Alkali Co Ltd (1901) 17 TLR 656. Damages for breach of contract to make a loan may, however, be only nominal - Western Wagon and Property Co v West [1892] 1 Ch 271 at 277. Where allowed, damages may include loss of business profits where such loss was within the parties' contemplation: Trans Trust SPRL v Danubian Trading Co (supra). [234] "McGregor on Damages", 16th ed (2003) says, at [25-024]: In contracts for the loan of money the normal measure of damages for the lender's failure to provide the money is the amount required by the borrower to go into the market and effect a substitute loan for himself less the amount that the contractual loan had required. It has been said by Day J in Manchester and Oldham Bank v Cook (1883) 49 LT 674 at 678 that 'Nominal damages … are usually given in the case of a breach of contract to lend money, for the reason that usually if a man cannot get money in one quarter he can in another'. Thus in South African Territories v Wallington [1897] 1 QB 692 affirmed [1898] AC 309, since the claimants gave no evidence showing a loss beyond this, nominal damages were awarded. But the Court of Appeal recognised that the damages could be substantial for failure to provide the loan. [235] The learned author goes on to describe how, in addition, there may be consequential losses. So the damages may include the cost of raising the money elsewhere. However, where two sets of such costs were claimed in Astor Properties v Tunbridge Wells Equitable Friendly Society (supra) one for a temporary and the other for a permanent loan, two sets were held not to be within the reasonable contemplation of the parties and only one was allowed in damages - compare Duckworth v Ewart (1864) 2 H & C 129 (a complex set of facts not precisely a contract of loan, where the cost of an aborted mortgage was allowed as damages but, by a majority, nothing further).

[236] Further, a claimant may recover the loss of any contract which hinged upon the loan if the defendant was aware of the purpose for which the claimant was entering into the loan - Manchester and Oldham Bank v Cook (supra) where the claimant asked the defendant bank for a loan to enable him to purchase an interest in a colliery. In that case the defendant agreed but failed to find the money and the claimant was unable, apparently, to obtain the money elsewhere and so unable to complete the purchase. It was held that he could recover damages in respect of the loss of the colliery purchase, the court stressing that "the bank had express notice of the purpose for which the money was required", at 678 and 679.

[237] In Astor Properties v Tunbridge Wells Equitable Friendly Society (supra) where the money to be lent was to be used by the claimant for a purchase-money mortgage, damages were allowed for the estimated loss of the rents that the claimant would have obtained from the property for the period of delay before the claimant obtained the property by means of a substitute loan.

[238] In Australia there has now been specific recognition of the fact that damages for a breach of contract for the provision of a specific sum of money, may include losses arising from the unavailability of the use of the money which should have been paid - Hungerfords v Walker (1989) 171 CLR 125 - see also Garraway Metals Pty Ltd v Comalco Aluminium Ltd (1993) 114 ALR 118; Simeone v Pesatura General Contractors Pty Ltd (1993) 60 SASR 453; Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Office (1998) 148 FLR 441; Bonic v Field Air (Deniliquin) Pty Ltd [1999] NSWSC 636 and Hart v Mossensons [2000] WASC 295.

[239] These authorities have also been examined in "Contract Law in Australia", 3rd ed, by Carter and Harland at [2151]. Of the earlier rule that only interest or nominal damages would be recoverable in the event of a breach of contract to repay money or to repay it on time, the learned authors said that the rule is not relevant where the contract is terminated for repudiation. In those cases the defendant becomes liable to pay loss of bargain damages, even if its principal obligation was only to pay money - Trans Trust SPRL v Danubian Trading Co Ltd (supra). In view of the decision in Hungerfords v Walker (supra) it is unnecessary in the present case to determine that proposition because Hungerfords v Walker (supra) effected a more direct modification of the rule. Because of the loss of the use of the money the plaintiffs in Hungerfords' case had been deprived of the opportunity to invest or, alternatively, had incurred a borrowing cost and suffered loss by having to borrow money to pay their tax - see also Sanrod Pty Ltd v Dainford Ltd (1984) 54 ALR 179 at 171. In Hungerfords the High Court made it clear that recovery was based on the first limb of the rule in Hadley v Baxendale (1854) 9 Exch 341 ; 156 ER 145, namely that the defendant was regarded as having contemplated such loss possibly resulting according to the usual course of things by reason of the defendant's breach. 82 Against this background, there are three major obstacles to the plaintiff's claim for consequential loss arising from the non-implementation of the Cecil Street redevelopment: the first is that Max's promise was to provide the loan to Leon, but the purpose was to benefit property of Monica (albeit property that it was anticipated might in due course devolve to Leon); the second is that the opportunity of redeveloping Cecil Street has not forever been lost, but remains open; and the third is that the plaintiffs have not shown that a loan was not or is not available from another source.

83 Max's promise was prima facie to provide the loan to Leon, but the purpose of the loan was ultimately to benefit property of Monica. Although Monica had indicated that Leon could do with the property as he pleased, there was no suggestion by any party that she had assigned the property in equity to Leon, and her wish not to sell at that stage - acknowledged by Max - tells against it. This gives rise to some conceptual difficulties in the analysis of the damages claim. The arrangements between the parties, as appear in the terms in which it was put to Monica - that Leon and Max were going to "have a bit of fun" redeveloping Cecil Street - do not import any contractual obligation on Leon to implement the redevelopment, nor any contractual right on the part of Monica to have the redevelopment carried out. However, the contemplation of the parties was that, with the benefit of the loan, Leon would carry out the redevelopment, which would benefit Monica (though presumably, ultimately, Leon).

84 As a party to the contract, Monica was entitled to have Max perform terms that benefited another party (and which would indirectly benefit her). Had the loan proceeded, the ultimate enhancement in the value of the property would have accrued to Monica. Thus it was not just Leon who was entitled to enforce the promise to make the loan: Leon and Monica were both entitled to have the loan made to Leon, to enable Leon thereby to fund a development for the benefit of Monica.

85 But would Monica have had to repay the loan, when she was not to be the borrower, and only Leon was? On one view, had the loan proceeded, although the ultimate enhancement to the value of the property would have accrued to Monica, she would have had no liability herself to repay it. However, as the property remained hers, and any benefit from redevelopment would accrue to her, the preferable analysis is that Leon was her agent in connection with the redevelopment loan term as well as the accommodation term. Alternatively, if he borrowed the funds and incurred the liability to repay them for Monica's benefit and with her consent, he would have a restitutionary claim against her, and she reciprocally would be liable to make good the liability he had incurred for that purpose.

86 Accordingly, Monica may sue for breach of the redevelopment loan term. However, any award of damages to her must take into account, if it otherwise relevant, the liability to repay the loan, and the plaintiffs did not contend otherwise.

87 However, Monica (and, to the extent it may be relevant, Leon) have not forever lost the opportunity of conducting some such redevelopment of Cecil Street as was envisaged: if they could raise the funds by other means, they could still carry out such a redevelopment; and if awarded damages, they could use the proceeds to carry out the redevelopment, and have both the redeveloped property and the damages for the lost opportunity of redeveloping it. This demonstrates the flaw in treating their loss as the difference in value between the property as it is and as it would have been if redeveloped.

88 Far from establishing that it was impossible to obtain a replacement loan, the evidence is that Monica was able to borrow $785,000 from Rothlands Pty Limited on 30 December 2008 on the security of Cecil Street. This shows that funds could have been borrowed from another source; at the very least it leaves unproved the contention that a replacement loan could not be obtained. In the light of that evidence, I do not accept that it was incumbent on counsel to put affirmatively to Mr Bovaird that alternate finance could have been obtained, when there was no evidence that it could not. The circumstance that Rothlands required Leon's guarantee does not detract from this, as he was to be responsible for repayment of the loan from Max in any event. I am unpersuaded by the argument, unsupported by evidence, that lenders would be averse to lending to Monica at her age for the purpose of redevelopment, in circumstances where a loan for no particular apparent purpose was made to her in late 2008, and in any event the loan would have been negotiated by Leon under the power of attorney, and if necessary supported by his guarantee. I do not accept that there would have been significant delay in obtaining an alternative loan had it been sought: as the loan would have been drawn down progressively as required to meet building expenses, it is not apparent that any delay would in fact have been suffered, and the burden of proving that some delay would have been incurred rests on the plaintiffs, and was not discharged by any evidence. 89 However, I accept that any such alternative loan would have been on commercial terms, far less generous than those agreed to by Max. The real benefit of Max's promise was that, if honoured, there would have been an interest free loan for a term of ten years, when any commercial loan for that or a shorter period would have borne interest, and there would have been legal and other costs of obtaining the loan. (Although any substitute loan might well have been for a shorter term, that is covered encompassed by allowing for the interest saving over a ten year term). A substitute loan on commercial terms would have involved interest at then prevailing commercial rates. The Rothlands loan in December 2008 was at 9.5%, for a term of two years with six months' interest prepaid. From 2002 until 2006, the rate prescribed by the rules of court was 9%, increasing to 10% in 2006. Mr Harper SC submitted that a figure of 6.5% over ten years was appropriate, and the material to which I have just referred more than justifies that rate. For a term of ten years, on a loan of $880,000, that would amount to $572,000. The only evidence of borrowing costs is the Rothlands loan - which transaction in my view is closely comparable to the hypothetical commercial loan that might have been obtained - and which incurred costs of $18,379 (excluding pre-paid interest). 90 It follows that Monica's damages for breach of the redevelopment loan term are:

· Interest on alternate commercial loan for 10 years at 6.5%: $572,000; · Borrowing costs on alternative commercial loan: $18,379; · Total: $590,379 . Conclusion as to damages

91 Accordingly, I assess damages for breach of contract as follows:

· For breach of the accommodation term, Monica is entitled to damages in the sum of $541,268 ; · For breach of the redevelopment loan term, Monica is entitled to damages in the sum of $590,379 ;

· Leon is entitled to nominal damages only for breach of the redevelopment loan term.

Monica's family provision claim 92 On an application under the Family Provision Act for provision out of the estate of a deceased person, the Court must consider, first, whether the plaintiff is an "eligible person" (and, if only by reason of category (c) or (d), whether there are factors warranting the making of the application); secondly, whether the plaintiff has been left with inadequate provision for his or her proper maintenance, education and advancement in life; and thirdly, if so, what if any provision (or further provision) ought to be made out of the estate for those purposes.

Eligibility (and factors warranting) 93 Monica claims standing as an "eligible person" within category (d) of the definition of that term in the Act, namely, a person who was at any particular time wholly or partly dependent upon the deceased and was at that or any other time a member of a household of which the deceased was a member. It is not controversial that, at least while they were children, Monica and Max were members of the same household. The issue as to eligibility is whether Monica was at any time wholly or partly dependent upon Max.

94 Dependency carries with it notions of need and reliance. In Ball v Newey (1988) 13 NSWLR 489, Samuels JA said (at 491): The ordinary sense of the word means the condition of depending on something or someone for what is needed. …

I assume that dependency involves the total or partial satisfaction of need. But the need is not restricted to the requirements of basic necessity or sustenance … Whether dependency, total or partial, exists is a question of fact: Aafjes v Kearney (1976) 50 ALJR 454, 8 ALR 455. It is not to be determined upon theoretical considerations. It is 'the actual fact of dependence or reliance on the earnings of another for support that is the test': per Gibbs J, as he then was in Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177 at 189. 'The standard of support is set by the parties themselves' (at 190). 95 That dependency involves more than the mere receipt of support, but also reliance on it, was affirmed by Hamilton J in Griffiths v Westernhagen [2008] NSWSC 851, [58]: For a relationship of dependency to be established, there must be more than the mere giving of money. Rather there must be a relationship where one party relies on the other for what is required for their ordinary living. 96 In Kauri Timber Co (Tas) Pty Ltd v Reeman, Gibbs J explained that a person could be dependent in fact on another notwithstanding that the former had property or income with which he or she could have provided self-support (at 189): Although there is little authority on the question that now falls for decision, it has repeatedly been emphasised, in cases in which workers compensation legislation similar in effect to that of Tasmania has been considered, that the question of dependency is governed by factual and not by theoretical considerations. It has been held that a mother may be dependent on a son who has no legal obligation to maintain her but who in fact contributes to her support: Hodgson v West Stanley Colliery [1910] AC 229. On the other hand, a wife would not be dependent on her husband simply because she had a legal right to be supported by him: New Monckton Collieries Limited v Keeling [1911] AC 648. The fact that a daughter was physically able to support herself by her own exertions did not prevent her from being held to be wholly dependent on her father: Simms v Lilleshall Coal Co [1917] 2 KB 368. the effect of the authorities was summed up in a sentence by Fullagar J in Fenton v Batten [1948] VLR 422, at p423, when he said: 'If the evidence establishes that the alleged 'dependent' relied or relies on another as the source, wholly or in part, of his or her means of subsistence, then dependency is established'. The principle underlying these authorities is that it is the actual fact of dependence or reliance on the earnings of another for support that is the test. It follows that the fact that a woman has some property and income of her own does not prevent her from being wholly dependent on the earnings of her husband, if in fact she wholly depends on those earnings for her support, and does not partly support herself out of her own resources. 97 Accordingly the court (Barwick CJ, McTiernan J and Gibbs J; Menzies and Stephen JJ dissenting) held that the widow of a deceased worker - who claimed compensation on the basis that, before his death, she had been "wholly dependent upon his earnings", in circumstances where she had a small income from property of her own out of which she had purchased and maintained a motor vehicle, but did not use any part of it for ordinary household expenses, which were paid by the deceased worker who otherwise supported her out of his weekly earnings - was wholly dependent upon the worker's earnings for her support, and the fact that she had some property and income of her own did not prevent her from being wholly dependent where in fact she wholly depended on his earnings for her support and did not partly support herself out of her own resources. 98 I do not accept that Max's payment of Monica's solicitor's bill in February 1999, nor his purchase for her of a motor vehicle in February 2000, makes a case of dependency. Isolated acts of benefaction such as these do not establish a dependency in fact. Nor do I accept that Max's promise to support Monica for the rest of her life itself makes a case of dependency: as Kauri Timber shows, dependency is a question of fact, not of obligation. A promise of support is not dependency in fact. At the highest, such a promise may inform the question of reliance. 99 However, from the time when, in August 2002, Monica moved into Lindfield Manor, she occupied accommodation of which Max was a co-owner, and in respect of which he paid the levies and outgoings. Albeit for that relatively short period of three months or so, that support was on-going. Although Monica had resources (including a portfolio of shares and stock worth nearly $500,000) from which she could herself have paid the outgoings at Lindfield Manor, in fact she did not do so; she relied upon Max to pay them.

100 In Kauri Timber, the court was concerned with the concept of total dependency; all Monica needs to establish for the purpose of the Family Provision Act is partial dependency. I am satisfied that from 3 August 2002 until his death on 26 November 2002, Monica was in fact at least partly dependent upon Max - for provision of the accommodation she occupied at Lindfield Manor, including payment of the associated outgoings. It follows that Monica is an eligible person in category (d).

101 Because she is eligible only by reason of paragraph (d) of the definition, the court must also determine before proceeding to determine her application, whether having regard to all the circumstances of the case there are factors which warrant the making of her application: Family Provision Act, s 9(1). There will be such factors if, having regard to the whole of the circumstances of the relationship, it may be said that the applicant was - unlike others who might fall within the terms of paragraph (d) - one who would generally be regarded as a natural object of the deceased's testamentary recognition [Churton v Christian [1988] NSWCA 23, (1988) 13 NSWLR 241 (Priestley JA); Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639; Re Fulop; Monaco v Keegan [2006] NSWSC 825].

102 The mere fact that Monica was Max's sibling - even his only surviving sibling - would not ordinarily place her in the class of those who would be regarded as natural objects of his testamentary recognition. And in circumstances where Monica's mother had given her the family home, I am unpersuaded that the fact that Max during his life enjoyed the predominant benefit of their father's estate would be such a factor. But the facts of dependency as at the date of Max's death, and that Monica had arranged her affairs on the basis of a promise made by Max to support her for the rest of her life, provide the requisite circumstances. The community expects testators to make provision for those actually dependent on them at the time of their death, and to recognise the claims of those to whom they have made promises of support, particularly if those promises have been relied upon. 103 Accordingly, there are factors warranting the making of Monica's application under the Act. Adequacy of provision

104 As the High Court Australia has explained in Singer v Berghouse (No 2) (1994) 181 CLR 201, there are two stages in this question: the first requires a determination of the jurisdictional fact whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life; and the second, which arises only if the first is resolved is resolved affirmatively, involves a discretionary assessment as to what provision ought to be made out of the estate for the applicant. However, as the High Court explained, similar considerations inform both stages of the process (at 209-10): The determination of the first stage in the two stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's 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 his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. 105 Because the considerations relevant to both stages overlap in this way, consideration of an application under the family provision act does not always divide neatly into the two questions, as Callinan and Heydon JJ pointed out in Vigolo v Bostin [2005] HCA 11, (2005) 221 CLR 191 [122].

106 The relevant principles were concisely described by McLelland J (as the later Chief Judge then was) in Re Fulop (deceased) (1987) 8 NSWLR 679: In making these determinations, the following principles apply: first, the Court should not interfere with the dispositions in the will … 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 (whether existing or occurring before or after the death of the deceased) which it considers relevant in the circumstances, including (a) the nature and quality of the relationship between the plaintiff and the deceased (b) the character and conduct of the plaintiff (c) the nature and extent of the plaintiff's present and reasonably anticipated future needs (d) the size and nature of the estate of the deceased (e) the nature and relative strength of the claims to testamentary recognition by the deceased of those taking benefits under the will of the deceased … and (f) any contribution, financial or otherwise, direct or indirect, by the plaintiff to the property or welfare of the deceased. 107 In Stewart v McDougall (NSWSC, Young J, 19 November 1987, unreported) BC8702350 his Honour explained that the court's role was limited to making adequate provision for an eligible person's proper maintenance and advancement: It is important to state what the Family Provision Act permits a court to do and what it does not permit a court to do. The Act recognises that Australians have freedom to leave their property by their will as they wish, with one exception. The exception is that a person must fulfil any moral duty to make proper and adequate provision for those whom the community would expect such provision to be made before they can leave money as they wish. Thus in these cases one does not ask is the will fair, one does not ask why did the testatrix not divide her property equally, one does not as a judge say how would I have made a will had I been the testatrix? What must be asked is whether the testatrix by her will failed in her moral duty to those who had a claim on her? Even if the court comes to the view that that question should be answered in the affirmative, the court still does not remake the will, but only alters it to the extent that proper and adequate provision is made to the eligible person in respect of whom the testatrix failed in her moral duty. 108 It is common ground that Max's estate is worth $834,603. Under the Will, the Australian Cancer Research Council is entitled to the whole of it. Max made provision for his children Alan and Diana during his lifetime and they assert no claim against the estate. 109 Monica retains Cecil Street (worth $1,320,000), a portfolio of listed shares and units (now worth $144,132), cash at bank - being the remaining proceeds of the loan raised on Cecil Street ($365,120), the accommodation bond at Terrey Hills Nursing Home (less 41 months retention at $265.50 per month, $239,114), and a half interest as tenant in common in unit XX at Lindfield Manor (worth $72,000) - a total of $2,140,366. Her liabilities are the mortgage loan ($785,000), outstanding interest payable to Terrey Hills Nursing Home for the period until the accommodation bond was lodged ($72,312) and miscellaneous creditors ($1,000) - a total of $858,312. Jointly with Margaret Frost, she is liable to Lindfield Manor for $46,016 unpaid levies and interest; her half share is $23,008. Before providing for legal costs, her net asset position is therefore approximately $1,259,000. Her costs of these proceedings paid to date amount to $442,773, and her unpaid costs, including estimated costs of the trial, are a further $247,157. 110 Monica is in receipt of a war widow's pension of $1,209 per month, a pension from her husband's former employer of $1,385 per month, and interest from her investments of $503 per month, a total of about $3,097 per month. Her expenses were never satisfactorily proved as a whole, but it can be said that she has pharmaceutical expenses of about $66.00 per month, personal grooming expenses of about $43.00 per month, and fees for accommodation and care at Terrey Hills Nursing Home of $5,777 per month; in addition she is jointly responsible with Margaret Frost for levies for Lindfield Manor of $962.80 and interest payable on the debt to Lindfield Manor of $379.42 per month. Presumably there would also be outgoings associated with Cecil Street. 111 Although her monthly expenditure of $6,558 therefore exceeds her income of $3,097, she has ample assets - exceeding $1.2 million, including Cecil Street and her half interest in the Lindfield Manor unit which are no longer required for her accommodation - so that, were it not for Max's promise, whether it could have been said that Monica had been left with inadequate provision for her proper maintenance might have been debatable. But in my view, his promise, relied upon as it was by Monica in leaving Cecil Street, imported an obligation to make provision for her aged care accommodation for the rest of her life. In Vukic v Luca Grbin [2006] NSWSC 41, I referred to the significance of promises made and expectations raised by testators in this field: [38] Promises made and expectations raised by testators have always been regarded as relevant to the ascertainment of what is proper provision for a claimant [ Re Anderson (deceased) (1975) 11 SASR 276 at 284; Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134 at 148]. This is particularly so where a claimant has relied to his or her detriment on any such promise or expectation. The requirements of conscionable behaviour which inform the doctrine of equitable estoppel are philosophically closely analogous to the concept of 'moral duty' which has traditionally informed the exercise of jurisdiction under the Family Provision Act and its predecessors and, some of the observations in Singer v Berghouse (No 2) notwithstanding, continues to do so [ Vigolo v Bostin ; Palmer v Dolman [2005] NSWCA 361, [74]]. Thus, although a claim under the Family Provision Act is to be distinguished from one for a constructive trust or equitable estoppel and some different considerations apply (including in particular the interests of beneficiaries under the Will, and other eligible persons) [ Vigolo v Bostin , [76]-[78]], nonetheless the conclusions expressed above as to the requirements in the circumstances of conscionable behaviour are highly relevant also to what is proper provision for the Plaintiff [cf Lewis v Lewis [2001] NSWSC 321 at [76]].

112 Were the matter to fall for consideration under the Family Provision Act, rather than as a matter of contractual entitlement and damages, I would have regard to Monica's ability to use her own resources for her own support. I would also take into account that Monica retains the benefit of her interest in Lindfield Manor, the acquisition of which was funded by Max, and in this context should be treated as provision already made for her. Adequate provision for Monica's proper maintenance would not require that she be funded to pay outgoings incurred by her retention of Cecil Street or Lindfield Manor when they are unnecessary for her accommodation. As the accommodation bond for Terrey Hills Nursing Home - which Monica could have and ultimately has funded herself - will eventually revert to her estate, "adequate provision" for the purposes of the Act would not require that she be funded to provide that bond. And as it is not apparent why Monica could not herself have provided the accommodation bond much earlier than she did, "adequate provision" would not require that the estate should pay the interest in respect of the bond while it remained unpaid, all this is all the more so given the plaintiff's considerable delays in bringing the matter to trial.

113 In the light of the scope of the actual dependency at the date of Max's death, and his promise, adequate provision for Monica's proper maintenance involved provision of the ongoing costs of her aged care accommodation. Thus, had the matter fallen for consideration only under the Family Provision Act, the order I would have made for provision out of Max's estate would have involved a legacy in the approximate amount of the accumulated cost of care and accommodation at Terrey Hills Nursing Home to December 2008 ($308,826) - offset by the net benefit to Monica of her interest in Lindfield Manor ($72,000) - and periodical payment of an amount sufficient to cover those fees for Monica's life ($69.15 + $1,333.15 per week). In the context that the periodical fees involve substantial amounts of on-going expenditure over her remaining years, when her actual remaining years may vary either way and relatively considerably from her "average life expectancy", an annuity rather than a lump sum in this respect would be the more just approach, involving the least risk of the injustice of a windfall to Monica's estate (if she dies earlier), or premature exhaustion of her support (if she lives longer). 114 Accordingly, I would have made an order that Monica receive from Max's estate a legacy in the sum of $235,000, and an indexed annuity of $6,250 per month. But the award of damages Monica will receive on her contract claim considerably exceeds the value of such an order, in which light she will not have been left with inadequate provision, so that no further order is necessary or appropriate. Conclusion 115 My conclusions may be summarised as follows: 116 Max agreed with Leon and Monica at least to fund Monica's retirement accommodation, at whatever level might reasonably be required from time to time, and all the expenses associated with her care at that accommodation, and to provide to Leon an interest free unsecured loan of $880,000 for a term of 10 years, to fund the redevelopment of Cecil Street. However, there was no intention that Max be bound to enhance Monica's estate with capital, whether in the form of an asset in a retirement unit or otherwise. The parties intended by this agreement to create binding and enforceable legal relations. Although defences of unconscionability, undue influence and under the Contracts Review Act were pleaded, they were properly not pressed.

117 AFM was not and did not become a party to the contract, and the case against it must fail.

118 For breach of the accommodation term, Monica is entitled to damages against Max's estate in the sum of $541,268 (being the care fees, and interest and retention in respect of the accommodation bond, incurred at Terrey Hills Nursing Home to January 2009, and thereafter capitalised for her life expectancy of 3.25%, and the cost of raising a loan to provide the accommodation bond; I do not allow damages in respect of the outstanding and ongoing fees due in respect of Lindfield Manor, nor for gratuitous care, nor for medical expenses over and above those provided as part of the aged care facility). For breach of the redevelopment loan term, Monica is entitled to damages against Max's estate in the sum of $590,379 (being the cost of a substitute loan on commercial terms at then prevailing interest rates of about 6.5%, for a term of ten years on a loan of $880,000 and borrowing costs). 119 Leon is entitled to nominal damages only for breach of the redevelopment loan term. 120 There should be judgment for AFM on all claims against it.

121 From 3 August 2002 until his death on 26 November 2002, Monica was at least partly dependent upon Max - for provision of the accommodation she occupied at Lindfield Manor, including payment of the associated outgoings. It follows that Monica is an eligible person in category (d). The facts of dependency as at the date of Max's death, and that Monica had arranged her affairs on the basis of a promise made by Max to support her for the rest of her life, constitute factors warranting the making of Monica's application under the Act. Particularly having regard to Max's promise, relied upon as it was by Monica in leaving Cecil Street, he had an obligation to make provision for her aged care accommodation for the rest of her life. In the light of the scope of the actual dependency at the date of Max's death, and his promise, adequate provision for Monica's proper maintenance involved provision of the ongoing costs of her aged care accommodation. 122 Had the matter fallen for consideration only under the Family Provision Act, the order I would have made for provision out of Max's estate would have involved a legacy in the sum of $235,000 (approximately equivalent to the total charges incurred to January 2009 in respect of care and accommodation at Terrey Hills Nursing Home, less the benefit conferred on her of her interest in the Lindfield Manor unit), and an indexed annuity of $6,250 per month (to cover those fees for the remainder of her life). But as the award of damages Monica will receive on her contract claim considerably exceeds the value of such an order, in which light she will not have been left with inadequate provision, no further order is necessary or appropriate.

123 I will afford the parties an opportunity to make submissions as to arithmetic, interest and form. Subject to any such submissions, I would propose to make orders as follows: A. In proceedings 2211/04: (1) Order that the proceedings be dismissed.

B. In proceedings 3159/04: (1) Give judgment that the first and second defendants pay the plaintiff the sum of $1;

C. In proceedings 1923/06: (1) Give judgment that the first and second defendants in their capacity as executors of the estate of Maxwell Walter Allen Frost pay the plaintiff the sum of $1,131,647;

124 I will also make directions for submissions on the question of costs. **********

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