Cahn v Kosmin - [2022] NSWSC 751 - NSWSC 2022 case summary — Zoe

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Cahn v Kosmin

[2022] NSWSC 751

Supreme Court of NSW|2022-05-19|Before: Meek J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2022-05-19

Before

Meek J

Source

Original judgment source is linked above.

Judgment (55 paragraphs)

[1]

Solicitors: P Williams and Company Lawyers (Plaintiff) Kosmin & Associates (First Defendant) Crompton + Walsh Pty Limited (Second Defendant) File Number(s): 2021/37100

[2]

TABLE OF CONTENTS Family details - paragraph 4 The deceased's estate - paragraph 8 Costs - paragraph 68 The deceased's Wills - paragraph 75 These proceedings - paragraph 93 Evidence - paragraph 101 Credit - paragraph 111 Early background details - paragraph 124 Some details regarding Tracy and Stewart - paragraph 135 Stewart's business dealings - paragraph 148 Michael's and Stewart's business involvement - paragraph 177 Michael's death - paragraph 209 Stewart's financial difficulties - paragraph 220 Events leading up to the penultimate Will - paragraph 237 Events from the penultimate Will until Tracy's bankruptcy - paragraph 262 Tracy's bankruptcy and subsequent events - paragraph 295 Tracy's financial position - paragraph 318 Tracy's needs - paragraph 342 Tracy's health - paragraph 346 Isabelle's health - paragraph 350 Stewart's financial position - paragraph 357 Stewart's health - paragraph 374 Cross-examination of Tracy on various issues Tracy's health - paragraph 375 Tracy's bankruptcy - paragraph 392 Tracy's financial position and resources - paragraph 401 Tracy's assets and the value of Tracy's business - paragraph 403 Tracy's income - paragraph 413 Absence of tax returns - paragraph 424 Costs of Isabelle's education - paragraph 429 Tracy's expenses generally - paragraph 454 Absence of the NAB "trust account" - paragraph 463 Cross examination regarding Tracy's claim for provision and needs School trip to Israel - paragraph 483 Holiday allowance - paragraph 486 Tracy's further education - paragraph 491 Isabelle's educational costs - paragraph 496 Claim for accommodation - paragraph 497 Legal principles - paragraph 508 Tracy's submissions - paragraph 529 Stewart's submissions - paragraph 580 Income and expenditure schedule - paragraph 603 Determination - paragraph 619 Conduct of the parties - paragraph 626 Testamentary intentions - paragraph 645 Tracy's contribution to the deceased's property and welfare - paragraph 651 Tracy's health and ability to work - paragraph 655 Tracy's post 2017 financial misfortune - paragraph 667 Tracy's financial resources - paragraph 684 Tracy's claim for provision - paragraph 699

[5]

The deceased's estate

The deceased had an interest by way of a fractional holding as tenant in common in two units (unit 1 and unit 2) in Dumaresq Road Rose Bay (the Dumaresq units).
The rights regarding the interest were governed by a co-ownership deed dated 15 February 1988.
It appears that there was no specific or distinct interest in each of unit 1 and 2, rather an interest in both units.
On 13 April 2022 the Court directed the parties to provide an agreed schedule as to assets and liabilities and costs. The parties in compliance with the direction prepared a joint schedule which was marked without objection as Ex JS1.
There were some aspects in relation to the figures for costs in the joint schedule which lacked clarity when regard was had to the updating costs affidavit of Jacques Kosmin sworn 7 April 2022: CB 375. During the hearing I asked for that to be checked: T141-142.
Subsequent to the hearing by email dated 30 May 2022 to my Tipstaff, Stewart's solicitor in response to my query provided: 1. a further affidavit of Jacques Kosmin sworn 27 May 2022 correcting errors in an earlier affidavit sworn 26 April 2022 (Kosmin correcting affidavit); and 2. an updated agreed schedule of assets and liabilities and costs.
It was agreed by the parties that the Kosmin correcting affidavit would be read by Stewart, without objection.
I have marked the updated agreed schedule as Ex JS2.
In referring to dollar amounts in the judgment I have in most instances omitted reference to cents, rounded figures, and otherwise approximated some of the figures.
As at the date of the deceased's death she held an interest in the Dumaresq units. The inventory of property attached to the grant of probate (which I will refer to below) allocated a value of $1,050,000 to unit 1 and $700,000 to unit 2.
According to both Ex JS1 and Ex JS2 the deceased's assets at the date of death were as follows: 1. Property at Dumaresq Road Rose Bay - $1,750,000 2. St George Bank cash management account - $24,063 3. St George Bank retirement access account - $2,095 4. Yellow Brick Road (Investment Account) - $105,526 Total: $1,881,684.
The deceased had a liability being an ANZ loan account in respect of the units in the sum of $168,237.
There were funeral expenses of $7,285 and other expenses paid out of the estate of the deceased included an Emanuel Synagogue Account in the sum of $1,818 and outstanding strata levies in the sum of $13,828.
The Dumaresq units were sold following the deceased's death and the net proceeds of sale were $4,008,192.
An interim distribution of $2.5 million in the sum of $1.75 million to Stewart in December 2021 and $750,000 to Tracy on 22 April 2022 was made.
It transpired that the figures in Ex JS1 regarding the monies held in a controlled monies account and for costs were incorrect. The agreed position as appears from Ex JS2 is that as at 27 May 2022, the deceased's assets comprised: 1. Monies held in trust $77,197.64 2. Monies held in controlled monies account $1,500,041.49 Total: $1,577,238.13
Ex JS2 disclosed liabilities as follows: 1. unpaid costs of executor incurred to date $6,532.75 2. anticipated future costs of executor $6,148 3. possible/potential further liability of the estate $14,500
Those amounts total $27,180.75.
Ex JS2 records a net distributable estate of "$1,555,058.13" apart from certain disputed assets (see below). That figure is a typographical error and should be $1,550,057.38.
That figure is in addition to the $1.75 million distribution to Stewart and $750,000 distribution to Tracy.
Both Ex JS1 and Ex JS2 record there is some dispute in relation to a number of assets of the deceased including: a Hyundai Getz motor vehicle; proceeds of a claim made on the deceased's insurance contents policy after the deceased's death in the sum of $9,416; the contents of the deceased's home and the deceased's personal effects (the disputed assets).
Paragraph 17 of the Kosmin correcting affidavit refers to three amounts in addition to the net figure of $1,550,057.38 described as: "a. plus $14,500 if the Plaintiff's claim for reimbursement of storage expenses is not pressed or is not successful); b. plus $9,415 if the insurance claim is recovered as an asset of the estate; and c. plus the realisable value of any of the Deceased's personal items and household goods as are recovered as an asset of the estate."
Regrettably, the issues regarding this were left in an unsatisfactory state.
Regarding storage costs Mr Williams, Tracy's solicitor emailed Jacques Kosmin on 8 September 2021. The email (CB 672-673) stated: "I am instructed that: 1. The items are stored at KSS Storage at Moore Park 2. There are two storage units, being A104 and C036, at a cost of $453 & $264 respectively. 3. There were establishment and administrative costs of $273. 3. Storage commenced prior to the passing of the deceased, in December 2019. 4. The estimate of total expenditure to date is approximately $14,500. Ms Cahn is in the process of obtaining the relevant records regarding the storage units. It is the case that this is an expense that should be borne by the estate, and would be pleased if you could confirm receipt of this email and advise as to what further information and documentation you require to proceed with payment."
The affidavit of Gary Komin, the executor, on the same date (8 September) indicated that this was a potential liability of the estate as claimed by Tracy.
On 9 September 2021, Mr Crompton, Stewart's solicitor emailed Jacques Kosmin (CB 675) in response to an email about estate expenses and said: "2. He is not presently able to for a view about whether the storage costs etc (totalling ~$14,500) are properly expenses of the administration of the estate. To begin to consider that question, he would initially require the following (please provide this material): a. An written inventory of what is in the 2 storage units. b. A copy of the contract with the operator of the storage units, KSS. c. When were the items placed in the storage units? d. What firm (of removalists I couriers I etc) transported the items to the storage units e. Are the items (or any of those items) in the storage units insured? If so, what is the name(s) of the insured? f. Are any of the items on the attached valuation in the storage units? g. A copy of each invoice said to comprise the estimated $14,500 expense 3. Unless and until he is able to form a view about the issue identified in 2 above and advises you otherwise, he is not agreeable that the storage costs etc should be paid from estate funds."
Mr Skinner cross examined Tracy regarding storage fees (for items of the deceased's property), the insurance claim (for damage to the curtains) and the Hyundai Getz motor vehicle.
In relation to the storage fees, Tracy agreed that she had rented premises since June 2020 to store goods and chattels specifically "Fridges, tables, my mother's personal effects, some of my mother's furniture, household goods": T79. She accepted that the expense for doing that is quite significant. She was asked whether an alternative was to sell some of the items: T80.
That led to an exchange in cross examination in which Tracy for her part indicated that she could not "sell the items because they're part of her [mother's] estate".
Tracy indicated that she could not communicate directly with Mr Kosmin because "he will only take communication from my solicitor" then asserted that "Mr Kosmin has not been communicating with my solicitor for at least ‑ almost ten months, if not more": T80.
Tracy stated "My brother and I had a discussion where we agreed to store her furniture until we decide what to do with it": T80. On further questioning it appeared that no decision had been made as between Tracy and Stewart regarding sale of the furniture: T80.
Tracy agreed that she had not produced a list of the items currently in storage: T80. It was suggested to her that Mr Kosmin had written in December (2021) asking the questions about the whereabouts of the estate property and that he had had no response. Tracy indicated that she did not believe that Mr Kosmin had sent it to the right place and that Mr Kosmin had not written to her solicitor: T81.
The matter was taken up again by Mr Skinner on the second day of the hearing: T87-89. Whilst there appears that there were issues with letters being sent to the incorrect email address for Mr Williams (CB 680), other correspondence touching upon the inventory of property does appear to have been addressed to the correct email for Mr Williams (Mr Compton's letter 1 December 2021: CB 681; letter from Mr Kosmin 13 December 2021: CB 686).
Tracy did not adduce in evidence any documents matching the description of "the relevant records regarding the storage units" referred to in Mr Williams email dated 8 September 2021.
In relation to the insurance claim for damage to the curtains, Tracy denied that she had made a claim for $7,000 for damage to curtains belonging to her mother on her behalf: T81.
There is in evidence a "remittance advice" from APIA dated 25 July 2020 directed to the deceased regarding payment of an insurance claim for curtains in the amount of $9,415.44: CB 690. The remittance advice states, "This amount has been credited to your nominated bank account". That letter is dated at least five months after the deceased's death. Mr Kosmin by letter dated 13 December 2021 provided the remittance advice to both the parties' solicitors noting that the payment belonged to the estate and that unless he received details as to where the payment was banked, the executor would be obliged to make further enquiries of the insurance company "which will [obviously] incur additional costs": CB 686.
On 14 August 2020, Jacques Kosmin wrote to Stewart's then solicitor Ian Day (CB 670) noting "We have written to Australian Pensioners Insurance Agency Pty Limited (APIA), requesting them to provide to us details of the account to which payment of $9,415.44 has been made on 25 July 2020. To date, we have not received a reply."
There is no record of any amount of $9,415.44 appearing on or about 25 July 2020 in the statements for Tracy's NAB Classic Banking account (Classic Banking account) and NAB iSaver account (iSaver account) (see Ex TFC-3 pages 18 and 55). However, there are no records produced by Tracy for her ANZ Access Advantage account (ANZ account) for the period covering July 2020, notwithstanding request for production of that material: CB 822.
In relation to the car, it does appear as if the deceased made a payment out of her St George portfolio cash management account on 24 June 2016 in the sum of $5,000 with an annotation "Hyundai" with a further amount coming out the following day of $600 also with the annotation "Hyundai": see paragraph 3 and annexure "G" to Stewart's affidavit affirmed 10 May 2022. Tracy was cross examined about the purchase of the car and asserted that the deceased had received from Tracy an amount of about $4,000 and may have put that in a different account: T97. There was a dispute about it.
Tracy accepted that it had been transferred into her name: T82. She claimed its value is approximately $2,000 "which is the whole value of the car which has been scratched to death by various people on the property and which is probably worth a lot less now": T82.
Stewart was also cross examined regarding the car: T135-136. It was put to him that Tracy told him that she proposed that it be used for Isabel to be learning to drive. He responded "She mentioned she would have liked the car and I said that's a matter for the executor to decide. I would have not had any objections to it": T136.
In light of the production by the parties after the hearing of the revised schedule Ex JS2, I enquired whether is it now agreed, that subject to the paragraph 17a-c items that the net distributable estate (in addition to the amounts of the interim distributions) is $1,550,057.38.
I noted that apart from paragraph 25 in Stewart's outline of submissions dated 10 May 2022 (DS) there did not appear to be particular submissions made in relation to the above-mentioned three items in paragraph 17a-c.
I enquired whether the parties proposed to make any particular submissions in respect of those items. I asked the parties that if not, to advise if no determination is sought in respect of those items. I indicated that if so, any such submissions should be provided by 4pm on Thursday 2 June 2022.
Each of Stewart's and Tracy's counsel availed themselves of the opportunity to provide submissions.
Other than as follows, Mr Skinner indicated that he did not wish to make any submissions in respect of the three items in paragraph 17a-c.
Mr Skinner submitted (on this issue) that there is insufficient evidence to determine the issue of potential liability (of the disputed assets) and that ultimately, they will be a matter for the executor to pursue and determine.
He further submitted that as matters stand, Tracy has in her possession items of personalty belonging to the estate and has declined to provide an inventory. Mr Skinner submitted that the Court is simply not able to make findings as to whether the value of the disputed assets should be considered in determining the value of the estate: Stewart's submissions 31 May 2022.
Tracy's counsel by submissions (on this issue) dated 1 June 2022 stated: "The Plaintiff agrees that there is insufficient evidence before the Court to determine the three items in question (i.e. storage fees, insurance proceeds and personal effects). It is observed though that, if the First Defendant is not proposing on paying the storage fees, then the Court should proceed on the basis that the amount available for distribution is $1,564,557.38 (Mr Jacques Kosmin's latest affidavit, para 17(a)). The figure of $1,550,057.38 referred to in Mr Kosmin's affidavit at para 14 assumes that the storage expense of $14,500 has been paid from the estate, whereas the import of the Second Defendant's submissions appears to be that it will not be paid. It is further submitted that, in relation to the insurance claim, the Court should make a finding that the Second Defendant's claim that insurance monies belonging to the estate were paid to the Plaintiff was not proven. The Second Defendant has maintained up to and including the hearing that it would prove that the Plaintiff received these funds (see for example the letter dated 28 April 2022 CB tab 39 page 818 at para 5(b)). There is, however, no evidence that she received any such payment. Where the Second Defendant maintained an allegation that the Plaintiff had received this sum, but he failed to prove the allegation, the consequence of the lack of evidence should be that the claim is rejected. The Court would be concerned with the suggestion implicit in the Second Defendant's submission that the executor may embark on further processes after the hearing to pursue the alleged $9,415 insurance distribution, presumably at the expense of the estate (especially given that the executor has given sworn evidence to the Court as to what is available for distribution)."
The value of the disputed items is relatively minimal in light of the size of the estate.
A purpose of directing the parties to provide to the Court an agreed schedule of assets and liabilities and costs, is to facilitate the just, quick and cheap determination of the real issues in dispute and the proceedings: s 56 Civil Procedure Act 2005 (NSW).
There was no formal claim in the proceedings by the executor for recovery of the disputed assets nor any formal claim by Tracy for reimbursement from the estate for storage fees.
Whilst there was some cross examination of Tracy on the issues regarding the regarding storage fees, the insurance claim and the Hyundai Getz motor vehicle as I have noted above, there was not any cross examination of Stewart in respect of the items other than the car. Nor did Tracy's counsel seek to cross examine the executor and Jacques Kosmin regarding the items.
With respect to the figure of $14,500 for Tracy's claim for reimbursement of storage expenses, there does not appear to be correspondence resolving the issue. There are no receipts in evidence for the claims and no evidence supporting the reasonableness of the figure.
Regarding Tracy's 1 June 2022 submission, I do not think it is correct to say that the executor is not proposing on paying the storage fees. The executor was not cross-examined about that.
In circumstances in which, each parties' counsel agreed in post hearing submissions that there is insufficient evidence before the Court to determine the three items in question (i.e. storage fees, insurance proceeds and personal effects), I do not propose to proceed to resolve those issues by making findings in particular the findings urged by Tracy's counsel.
Apart from the submissions of all counsel that there was insufficient evidence before the Court to resolve the issues, there were other impediments to findings urged by Tracy's counsel.
In relation to the insurance claim, in circumstances in which there were complaints made by Stewart regarding some lack of production of Tracy's bank accounts I do not regard it as being appropriate to make a finding that Stewart's claim that insurance monies belonging to the estate were paid to Tracy was "not proven", if what is meant by that, that I should determine the claim. I say more about Tracy's lack of production in relation to bank accounts below.
The total value of the disputed items is not entirely clear, but in any event not significant. The paragraph 17a&b items are asserted as having a value to the extent of $23,915 apart from any realisable value of the deceased's personal items and household goods.
For the above reasons, I am not prepared to proceed on the basis that the net value of the deceased estate is so significantly different than the net figure of $1,550,057.38, as to have any material difference for the necessary determination of Tracy's claim for provision.

[7]

The deceased's Wills

The deceased made a number of Wills.
In a Will dated 25 February 1991 the deceased appointed Michael as executor and in the event that he survived her left him the whole of her estate, with the exception of items of jewellery and personal adornment which were gifted to Tracy.
In the event that Michael did not survive her, the deceased appointed a solicitor Gary Kosmin as executor and gave: 1. an interest in a unit at Ocean Avenue Double Bay (the Ocean Avenue unit), jewellery and items of personal adornment to Tracy; 2. an interest in two properties in Riley Street East Sydney to Stewart; and the residue to Tracy and Stewart in equal shares as joint tenants.
On 18 May 2011 the deceased made a further Will by which she appointed Gary Kosmin as executor and gave: 1. her interest in unit 2 to Stewart; and 2. the residue to Tracy and Stewart as tenants in common in equal shares.
On 13 November 2013 the deceased made her final Will by which she appointed Gary Kosmin as executor.
The substance of the gifts under that Will provided for Stewart to have the sole benefit and use of unit 2, and for both Stewart and Tracy to have equal shares as tenants in common of the benefit and use of unit 1.
The Will provided for sale of the deceased's interest in the Dumaresq units and after payment of legal fees and real estate commission for the balance to be divided 70% to Stewart and 30% to Tracy.
The deceased gave the residue of her estate to Tracy and Stewart as tenants in common in equal shares.
On 15 July 2020 probate of the 13 November 2013 Will was granted to Gary Kosmin.
In relation to Tracy's entitlement under the deceased's Will, Tracy's counsel had in pre-trial written outline of submissions dated 9 May 2022 (PS) made a calculation as to Tracy's entitlement under the Will in light of the size of the estate based on her percentage entitlement from the sale of the Dumaresq units and an amount from the deceased's cash resources: PS [47].
The pre-trial submissions on behalf of Tracy in relation to what provision ought to be made for her whilst at one point indicated that she was not seeking an amount greater than half the available estate (PS [50]), at another point claimed that an order distributing to her 50% of the available estate ought to be made: PS [55].
When I sought during the hearing to understand what was meant by the submission that Tracy does not seeking an amount greater than half of the available estate, there was discussion about the figures: T147-148.
However, in light of the further affidavit of Jacques Kosmin sworn 27 May 2022 the figures that had been advanced by Tracy's counsel during the hearing had to be revised.
As I understand it, the position is now set out in an email dated 31 May 2022, received from Tracy's junior counsel and that Mr Skinner agrees with that position, subject to the issue regarding the disputed assets that I have noted above. I have marked that email MFI 3.
Based on the net distributable estate of $1,550,057 it is agreed that Tracy's entitlement under the Will (apart from the existing proceedings) is approximately $1,215,017, comprising the amount of $750,000 of the interim distribution and an amount of approximately $465,017 (being 30% of the balance remaining).
Whilst the earlier calculation from Tracy's counsel (PS [47]) had included a component of cash as being part of Tracy's entitlement, the parties now agree that there are no cash resources in the residue of the estate (clause 3(b) of the Will) and the only cash available for distribution (leaving aside the disputed assets) is the remaining net proceeds of sale of the Dumaresq units: Ex JS2.
Thus, in light of the revised figures, in MFI 3 Tracy's counsel did a recalculation of the amount referenced in PS [55]. The recalculation was a figure of approximately $2,025,029.
However, despite the revised figure Tracy counsel have indicated that they do not propose to argue that the maximum entitlement for Tracy should exceed an amount of $1,901,352.50: MFI 3.

[8]

These proceedings

On 9 February 2021 Tracy filed the summons in these proceedings (just within time) naming Gary Kosmin in his capacity as executor as the first defendant.
The summons sought a family provision order to which I have referred and in addition an order restraining the executor from dealing with the estate of the deceased pending determination of the family provision claim. The summons additionally sought payment of costs of the application.
On 5 April 2021 Stewart filed a summons in proceedings 2021/93277 seeking a family provision order for additional provision out of the deceased's estate. That summons was abandoned and dismissed by consent on 1 September 2021, including a consent costs order that Stewart pay a sum of approximately $16,000 to the estate, which has been paid: T138, 142-143.
On 1 September 2021 Tracy was granted leave to file and serve an amended summons joining Stewart as a second defendant. Further orders were made pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 7.8 to permit Stewart to have the conduct of the proceedings on behalf of the deceased's estate and noting that Gary Kosmin as executor agreed to be bound by any order entered or made in the proceedings.
The orders further provided for the costs of the executor and in particular costs in relation to the filing and serving of prescribed affidavits to be paid out of the estate on the indemnity basis.
A specific order was made directing that the costs of Stewart acting on behalf of the estate (and notional estate of the deceased in the conduct of the hearing) be reserved. The order appears to have been framed in that form on the basis that Stewart had sought to be joined in order to protect his own interests under the deceased's Will.
On some occasions in family provision proceedings procedural arrangements are made for an executor to play, for want of better description, a neutral role in the proceedings by filing and serving affidavits prescribed by the Practice Note SC Eq 7 or as otherwise directed by the Court and otherwise playing a limited or observational role in the proceedings and leaving the substantive defence of the proceedings to a beneficiary who is particularly interested in the outcome: see for example Mitchell v Hamilton [2005] NSWSC 1097 at [41] per Macready M.
On hearing of these proceedings consequent upon the order made in September 2021 Gary Kosmin did not appear at the hearing or otherwise provide submissions. The defence of Tracy's claim was left to Stewart as Second Defendant.

[9]

Evidence

The affidavit evidence in Tracy's case included five affidavits affirmed by her respectively on 9 February 2021, 31 March 2021, 6 September 2021, 2 May 2022 and 17 May 2022. There were two exhibits TFC-1 & TFC-2 to the 2 May 2022 affidavit and another exhibit TFC-3 to the 17 May 2022 affidavit. Tracy was cross-examined as noted below.
There were two affidavits read from Tracy's solicitor Paul Williams. The first, affirmed on 5 April 2022 related to costs. The second, affirmed on 3 May 2022 related to the circumstances of an interim distribution of the estate made by the executor. Mr Williams was not cross-examined.
Stewart read in the proceedings the executor's affidavits, being affidavits in accordance with the provisions of the Practice Note and updating affidavits. The affidavits included four affidavits from the executor Gary Kosmin, three of which were sworn on 12 April 2021 (paragraph 9.1, 9.3 & 9.4 Practice Note SC Eq 7) and an updating 9.1 affidavit sworn 8 September 2021. There were four affidavits sworn by Jacques Kosmin, the first two dated respectively 9 April 2021 and 7 April 2022 relating to the costs of the proceedings and the third was dated 26 April 2022 being an updating 9.1 affidavit. The fourth affidavit being the Kosmin correcting affidavit.
Neither Gary Kosmin nor Jacques Kosmin were cross-examined.
The affidavit evidence in Stewart's case included three affidavits affirmed by him. The first affidavit affirmed 5 April 2021 had been filed by Stewart in the proceedings brought by him for family provision relief (2021/93277).
There was no objection to Stewart having leave to adduce that affidavit as evidence in these proceedings. An exhibit SBC-1 to that affidavit was tendered. The other two affidavits relied upon by Stewart were affirmed on 6 April 2022 and 10 May 2022. Two exhibits SBC-1 & SBC-2 to the 6 April 2022 affidavit were tendered.
Stewart was cross-examined as noted below.
There were two additional affidavits read in Stewart's case being an affidavit of costs from his solicitor David Crompton affirmed on 6 April 2022 and an affidavit from Melissa Anne Dean (Ms Dean) sworn on 10 May 2022.
Neither Mr Crompton nor Ms Dean were cross-examined.
Various documents were tendered by Tracy and Stewart, and became exhibits in the proceedings (in some cases subject to limitations on the use of the evidence).

[10]

Credit

Tracy was at times somewhat combative and argumentative in giving her evidence. At times she volunteered information beyond the remit of the question. A number of examples of these types of responses emerged from her cross examination: 1. T38: "Q. .. At the end of the day when you were made bankrupt the property was sold, wasn't it? A. Correct. Q. So, that was the logical end to the body corporate getting paid, wasn't it? A. I'm not sure what we're trying to establish here. I don't understand your line of questioning." (My emphasis) 1. T44: "Q. So, there were no steps taken by you to actively market the property for sale at any stage, were there? A. Well, given that we were trying to go through other means we hadn't quite reached that stage yet. There was ‑ that doesn't say anything about intent. It just means we hadn't got up to that stage yet. We were trying other means of doing it. Q. That stage was available to you, I suggest, as early as 2018? A. It may have been available. Q. That is, to place the property on the market? A. Mm‑hmm. Q. You just didn't do it, did you? A. I don't agree with your line of questioning so I'm not going to answer that." (My emphasis) 1. T76-77: "Q. So it's open ended as to how many trips at $10,000 you would like to spend for Isabel to travel to the United States? A. It's open ended as to the amount of time she wishes to see her father, and I don't see why any restriction should be put on that whatsoever. Given that she may only see him once a year. Q. Isn't one of the restrictions whether you've got the money or not? A. I'm not going to answer that question. (My emphasis) .. I find it insulting that you're suggesting that my daughter should not see her father. I mean, sorry, but I can't continue with this line of questioning. It's very upsetting for me and I'm just going to - I'm just going to stop right now. I can't. I can't go on with somebody asking me questions that intimate that my child shouldn't see her father. I think it's unreasonable, it's unethical and it's amoral and I refuse to answer any more questions and I'd like to recess right now." (My emphasis) 1. T80-81: ".. I just think I'm not breaking the law and I can't afford to break anymore laws or do anything that Mr Kosmin deems I can't. I've been given no instruction as to what to do with the furniture, end of story. You could say the same for the other side. It is not my decision. It's a joint or mutual decision. I'm sorry if that upsets you." (My emphasis) 1. T98: "Q. Has your daughter had Facetime contact with her father? A. Of course, she has. Q. You don't refer to that anywhere in your evidence, do you? A. I don't refer to every single second of my life. You can't ‑ I mean, a phone call could be Facetime, it could be a video call. It could be anything. I mean, I don't see the relevance of that question or the point, to be honest." (My emphasis)
Tracy is no stranger to litigation and as noted below, the evidence in the proceedings revealed snippets of information relating to a variety of proceedings in the Local Court involving neighbours of Tracy and in the New South Wales Civil and Administrative Tribunal (NCAT) involving strata disputes and also bankruptcy proceedings.
In her evidence, Tracy revealed a degree of hostility and anger regarding people she had conflict with.
For example, in relation to questioning of Tracy regarding NCAT proceedings, the exchange in cross-examination included the following (T92-93): "Q. The proceedings in NCAT to which you refer were proceedings you and the body corporate relating to a dog, were they not? A. No. There was different proceedings relating to their ‑ their biased taking me to Court significant times for bankruptcy for ridiculous sums of money and then throwing lawyers' fees at me. So, there was more than one NCAT proceeding and at the time, the strata, the owners of the strata ‑ and this is incredibly well‑documented and I could even bring a witness in ‑ the owners of the strata were asked to pay ‑ pay for their own legal fees because there were ‑ there was not a general agreement or a by‑law made about that dog case and, so, it was really up to a couple of corrupt members to pay for it themselves, but they managed to get off that, too. So, if ‑ you know. So, there is certainly another side to this story." (My emphasis)
In particular, Tracy viewed the terms of the deceased final Will as being unfair and made allegations that her mother was manipulated by both Stewart and Jacques Kosmin. This included the following exchanges in cross-examination: 1. T99: "Q. You now know the contents of your mother's 2013 will? A. Yes. Q. And you know that your mother specifically refers to a bequest to you of the Ocean Avenue property, doesn't she? A. That was specifically given to me in my father's will along with the two properties that were given to my brother in my father's will. Now suddenly those two properties disappeared into the ether and all of a sudden the only property that was given was mine which should have been given to me at the age of 24, but it was used in their business to support their mortgages and their costs and their funds, so I don't accept that my mother willingly gave over 30% to myself. In fact, at the end of her life she wanted to give Isabel 30%, me 30% and her son 30% because she was very well of the fact that she was manipulated into that position. (My emphasis) Q. I won't deal with that answer, your Honour, as being non‑responsive. A. I don't care if you want to deal with it or not, to be quite honest." (My emphasis) 1. T101-102: "Q. You understood from the terms of your mother's will that she was making an adjustment between you and your brother to take into account the fact that you had already been gifted the property in Ocean Avenue? A. That's incorrect. Q. Well, I'm sorry, madam A. Well, you asked me. That's my answer. Incorrect. .. Q. Can I suggest to you, finally, that your mother's attempt in writing her will in 2013 was to achieve equality between you and your brother subject to adjustment due to the fact you had been given the Ocean Avenue property? A. Not all because that was never equal. I was ‑ I never had as much as my brother did. Ever. And I was given the property as I should have been in the beginning and there would have been no argument had my father kept his promise and his will been allowed. Q. Finally‑‑ A. My mother was completely manipulated. She would never had done that to me or my daughter. (My emphasis) Q. You've not advanced one skerrick of evidence in these proceedings to suggest your mother was manipulated, have you? A. I don't know. Read the ‑ manipulation is very hard to pinpoint if you know anything about narcissistic emotional abuse. It's not always obvious. In fact I have produced my father's will which shows my mother was incorrect in her assumptions. My mother never had a good head for finances. My brother considered that she owed him when she owed him nothing. He acted like it was his house. So, you're incorrect in that assumption, sir. This whole thing's a travesty of justice. My poor dead mother would roll over in her grave if she saw this, as would my father. He never would have divided things unequally. It's disgusting. I don't see any psychiatric attempt at looking at what's wrong with my brother. (My emphasis) Q. You recall yesterday that I referred you to a letter from Mr Kosmin written to your mother recording the fact that at the outset of writing the will in 2013 you alleged undue influence. You recall that letter? A. Yes, I do recall that letter. Which I've just seen for the first time. He didn't send it to me and I have no record of my mother's letters. Mr Kosmin could have been covering ‑ is covering for himself. I can see the undue influence. Every single person who's ever known or met my parents could see the undue influence. And I don't believe Mr Kosmin acted without impropriety. (My emphasis) Q. So, Mr Kosmin you accuse of impropriety? A. Absolutely." (My emphasis)
In relation to relatively uncontroversial matters, on the whole, I accept that Tracy attempted to give a truthful account in her evidence.
However, where the questioning focused upon aspects of her disputes with others, in particular strata disputes, I doubted her account was objective.
I deal below with submissions regarding Stewart's involvement in respect of the deceased's last Will. Suffice to say, I reject any suggestion that Stewart manipulated the deceased in respect of her Will.
I reject Tracy's evidence in respect of any impropriety of Jacques Kosmin in respect of the deceased's last Will. There was no credible evidence of any impropriety in that respect.
One main concern that I had regarding Tracy's evidence, and it focuses upon a fairly critical matter, was in relation to the accuracy of her estimation of her expenses and lack of clarify regarding the income available to her - particularly having regard to relatively contemporaneous documentary materials in Ex 2D2 being the documents produced by the Emanuel School and her lack of production of recent income tax returns.
I refer to this more below.
Stewart, in contrast to Tracy, gave evidence in a calm, deliberate and considered way.
Other than as I comment below regarding some aspects of his evidence, I accept that Stewart attempted to give a truthful account in his evidence.

[12]

Some details regarding Tracy and Stewart

Tracy was educated at Rose Bay Primary School and then went to Dover Heights Girls High School for four years and finished her last two years of high school at Moriah School.
Stewart attended Rose Bay Public School. He later attended high school but did not finish high school or attend university.
Each of Tracy and Stewart provided evidence of their relationship with the deceased growing up. There are a number of differences in their description of the relationships although both of them indicate that their relationship with their mother was somewhat difficult. Tracy noted this was due to the fact that her mother was always agitated and anxious especially in Tracy's younger years. Each in somewhat different ways state that their relationship with the deceased improved after they had left home.
After Stewart left school in 1979 he worked initially as an office junior for International Artists it seems for approximately 18 months.
At that point he commenced working for his father's company Showcase Publications for approximately 6 months as an assistant and then as a room service waiter at Noah's Hotel in North Sydney for approximately 6 to 9 months.
It was during this period that he suffered a knee injury whilst playing football.
In about 1981 Stewart moved out of home.
From 1981 until August 1986 Stewart worked for Donald Knight (Mr Knight) in Paddington. His role was to sell advertising space in publications. He was paid commission only and provided his services as a contractor through a company Stewart Cahn Enterprises Pty Ltd (SCE). The job was suggested to him by his father who had previously worked with Mr Knight.
In about 1983 while riding a push bike to work Stewart was knocked off the bike by a bus and ultimately received compensation of $12,000 from State Transit.
Tracy attended the University of New South Wales from 1980 and graduated with a Bachelor of Arts (Psychology) (Honours) in 1983.
She took a gap year in 1984 and then returned to University of New South Wales in 1985 to undertake research and tutoring in psychology.
In June 1984 or thereabouts Stewart purchased a unit at Beach Road Bondi for $60,000 (Bondi unit). The purchase was funded by a loan of $55,000 from the ANZ Bank (ANZ).
Stewart was involved in a relationship with Ms Dean for approximately 10 years from 1985 until the mid 1990s. She deposed to the fact that Stewart and she had lived together in a domestic relationship after the early parts of that period.

[13]

Stewart's business dealings

In relation to Stewart's business dealings and property purchases from the mid 1980s, each of Tracy and Stewart gave an account in their affidavits regarding this. There was also documentary evidence regarding the dealings. What I set out below is taken from the affidavit and testimonial evidence. In particular I have placed reliance upon the contemporaneous documentary material.
The main dispute regarding this aspect of the background history focused upon Stewart's financial dealings with his parents and the extent of the assistance he received from them.
In August 1986 Stewart had dealings with Alan Hyman (Mr Hyman) (who was working with Stewart for Mr Knight).
By deed made on 11 August 1986, Stewart through SCE and Mr Hyman through Alan Hyman Enterprises Pty Ltd (AHE) purchased from Mr Knight trading as Don Knight & Associates a publishing business (essentially the rights to publish the publications they had been selling to customers for Mr Knight on commission) for $450,000. The purchase price was to be paid as the sum of $12,500 on the execution of the deed, a further sum of $12,500 on expiration of 14 days from the date of the deed, with the balance to be paid over a period of 4 years from the date of the deed.
The price of $450,000 was later reduced by about $40,000, by agreement with Mr Knight, in consequence of some publications not transferring: CB 397. When Stewart informed his father regarding the agreement to purchase the rights from Mr Knight, his father arranged for Stewart to speak with a contact at the ANZ regarding establishing an overdraft to cover expenses. His father agreed to guarantee an overdraft of $3,000 which was granted.
According to Stewart, within a short time of commencing trade the business repaid the amount of the overdraft and his father was never called upon to pay anything to the ANZ in respect of that overdraft.
In 1987 Tracy commenced part time at the University of New South Wales studying a Masters of Commerce degree in Marketing and Human Resource Management.
After graduating Tracy worked in the human resources area and consulted to large corporations for a number of years.
In about 1987 Michael and the deceased sold the Diamond Bay unit and purchased the Dumaresq Units.
Each of the units were two bedroom units.
The parents moved into unit 1 which was the larger of the two units. Additionally, they closed off the door of a second bedroom of unit 2 and opened the door from that bedroom into unit 1, making unit 2 a one bedroom unit.
Tracy claims that her parents supported and assisted Stewart in a number of ways. Stewart began to work in Michael's business.
In 1987 Michael, according to Tracy, purchased the Ocean Avenue unit, which was a two-bedroom unit for $74,000: CB 9-10.
There were some discussions between Tracy and her father regarding the Ocean Avenue unit. Tracy states that she was told by her father that the Ocean Avenue unit was in her name. However, Tracy further states that the Ocean Avenue unit was actually held in both parents' names (CB 10), which appears supported by the fact that in both parents' Wills dated in February 1991, they gifted their interest in the Ocean Avenue unit to Tracy: CB 260, 715.
Whether the Ocean Avenue unit was held by the parents in joint tenancy or as tenants in common is not clear. However, what is clear is that title to the Ocean Avenue unit was transferred into the deceased's name consequent upon Michael's death in 2000: CB 10. After the 1987 purchase of the Ocean Avenue unit Tracy moved out of the family home and into the Ocean Avenue unit where she resided for about 25 years (until about 2012).
In about mid 1988 Mr Hyman told Stewart that he had lost interest in the business and asked Stewart whether he wished to buy him out, which he did.
At about the time that Stewart was negotiating to buy Mr Hyman out of the joint venture he spoke with his father and enquired whether his father wished to take over Mr Hyman's share so that they could run the business as equal partners. His father agreed to this: CB 399.
Sometime prior to Mr Hyman indicating to Stewart that he wished to sell his interest in the venture, Mr Hyman and Stewart bought two terraces in Riley Street, Darlinghurst.
Michael not only paid funds to purchase Mr Hyman's share of the business but also bought out Mr Hyman's share of the Riley Street properties at the same time: CB 399.
On 14 May 1988 Stewart and Mr Hyman (or their companies) entered into a consulting agreement with Constable Care Children Safety Program Ltd in relation to certain promotions in Hong Kong.
On 23 August 1988 Stewart, Mr Hyman and their companies entered into a deed to terminate the partnership which deed also provided for AHE to sell its one half share in the partnership to SCE for $50,000.
At about the same time in August 1988, Stewart purchased a property at Tamarama for $650,000 (Tamarama property): CB 397, 515, 631. His bank manager assisted with organising the loan facility (interest only commercial bills) for $525,000. Stewart sold the Bondi unit for $169,000 and used the net proceeds of sale to enable him to complete the purchase of the Tamarama property: CB 398.
Stewart initially rented out the Tamarama property, the rental of which largely covered the loan payments, and then later in 1991 moved in with Ms Dean to the Tamarama property: CB 398.
In his affidavit Stewart stated that he had no recollection of asking his parents to provide any financial assistance in respect of the purchase of that property or for servicing the borrowings: CB 398. Stewart was cross examined regarding this.
When Stewart was challenged in cross examination regarding the assistance of his parents to acquire the Tamarama property, he stated that "They provided no direct financial assistance". When asked whether the provision of a second registered mortgage was indirect financial assistance, he stated "No, I don't believe so.": T119.
He was then challenged about his disbelief that provision of a mortgage to support a facility provided to him is indirect financial assistance, in the context of his being a property manager for a real estate company. He stated that he did not understand the question: T119. I asked a number of questions regarding the facility.
It appears clear from the contemporaneous ANZ documents (CB 32-43) that Michael and the deceased did provide in support of Stewart's borrowings, second registered guarantee mortgage over the Dumaresq units, a guarantee and a letter of support: CB 33.
Stewart's answer about indirect financial assistance perhaps reflected some lack of full appreciation of the support or benefit that was provided by his parents to enable funds to be borrowed.
Although it is not entirely clear from the evidence it would appear that in the process of the refinancing in perhaps 2001 or in any event by 2010 the deceased had become directly liable for the debt.

[14]

Michael's and Stewart's business involvement

In May 1990 Stewart's partnership with his father was formalised when they formed SMC Media Services Pty Limited (SMC) to conduct business. ("SMC" stood for Stewart and Michael Cahn): CB 399.
An investigation report dated 19 April 2000 from an administrator later appointed to SMC states that on 17 May 1990 SMC incorporated as a trustee company for the Advertising Sales Trust. The report goes on to indicate that on 26 June 1990 it was acquired [by Michael and Stewart] as a shelf company to trade the business previously carried on by SCE: CB 534.
On 26 June 1990 Stewart and his father were appointed as directors of SMC each holding 50 of the 100 shares in the company.
At that point the business operated at Elizabeth Street Surry Hills.
Stewart states that they used a separate company Adrema Pty Limited (Adrema), which traded as "National Sports Marketing" to operate the production functions of the business: CB 399.
The April 2000 investigation report (see below), suggests that SMC was the registered proprietor of the business name "National Sports Marketing" and traded under this name for the purpose of sports related promotional marketing: CB 534. Notwithstanding that, it seems that at least by November 1999 the business name "National Sports Marketing" was, according to Stewart, exclusively utilised by Adrema: CB 534.
Apart from SMC, SCE and Adrema, there was also a partnership operated as "SB Cahn & M Cahn".
SCE operated as a marketing, public relations promotions and sponsorship coordinator, primarily involved in telemarketing and promotions by way of promotional products such as T shirts, books, badges and the like: CB 534.
The business was often marketed through the character "Constable Care" visiting schools and hospitals teaching child safety and raising brand awareness through the distribution of sponsored books and T shirts: CB 534.
Stewart claimed that the title to the character "Constable Care" resided with him personally and was licensed to the company for its use: CB 534.
In or about June 1990 Michael and Stewart applied to the ANZ for a revision of their loan facilities. The details of the application and indicative terms and conditions are set out in a letter from the ANZ to Michael and Stewart dated 15 June 1990 together with annexures: CB 32-43.
One of the facilities provided was the existing loan of $525,000 provided by way of commercial bill to Stewart personally.
The security for Stewart's commercial bill facility included a first registered mortgage over the Tamarama property and a second "Registered Guarantee mortgage" over the Dumaresq units. Stewart's parents provided a guarantee in support of that borrowing limited to a principal sum of $150,000 plus interest and bank fees.
A particular aspect of the borrowings was a commercial bill in the sum of $380,000 provided to SCE and/or the partnership.
As at June 1990 the guarantee provided by Michael and the deceased for the ANZ borrowings was limited to principal of $150,000.00 plus interest: T 116.
During 1989-1991 Tracy moved to Europe where she lived and worked in London and Paris.
In late 1991 Tracy returned to Sydney and worked in human resource management for Price Waterhouse and then Nestle.
For approximately 3.5 years in total during her relationship with Stewart Ms Dean was employed by SMC and also in a business run by Stewart called "Community Screen and Print" (CSP). Tracy says that she did not work at SMC and was not paid a salary by it: CB 143. In her affidavit Ms Dean recounts her observations of Tracy's attendance at the Newtown premises of CSP. Ms Dean was not cross examined. I accept Ms Dean's account that Tracy attended at the premises whether she was paid for doing so or not.
In 1994 SMC secured a significant contract to supply promotional materials and staging of events for the NSW Fire Brigade. That rapid expansion caused some cash flow issues which Stewart and his father were managing. They sold the Riley Street properties at about this time.
In about 1994 the Australia Taxation Office (ATO), according to Stewart, ruled that all of the contractors that provided sale services to SMC, who had been paid commissions on invoices, were treated as employees. This resulted in SMC being assessed to a very significant PAYE tax liability. Stewart was not able to recall the precise amount but suggested that it was in the order of $800,000 or $900,000.
Stewart had a number of discussions with his father and an accountant Bob Lowy regarding this.
Ultimately the accountants were able to negotiate an arrangement with the ATO pursuant to which the ATO agreed the liability could be repaid by an initial lump sum and monthly instalments until the balance of it was repaid.
On 25 October 1994 Stewart sold the Tamarama Property for $945,000.00 (CB 632) and moved to a rented unit in Bondi: CB 401.
After repaying the ANZ Loan facility he was left with an amount in the order of $420,000 (or more) which he paid to the ATO: CB 401.
The arrangement with the ATO required SMC to pay $6,000.00 per month to the ATO. SMC met those payments until some point in early 2000: CB 401; T120.
In 1995 Tracy returned to the University of New South Wales part time to undertake her Masters in Psychology, graduating in 1999. She worked in human resources for Morgan & Banks part time, where she did both recruitment and psychological testing.
Stewart states that in 1996 the stress resulting from the financial difficulties led to the breakdown of his relationship with his then partner Ms Dean who left him.
Later in 1996, or thereabouts, as noted above, Stewart commenced a new relationship with Sally and their child James was born in August 1997.
On 27 June 1997 Michael ceased to be a director of SMC (CB 535), some two and a half years before his death. Michael's resignation was consequent upon a recommendation by the accountant Bob Lowy.
Following Michael's resignation as a director he continued to hold his shares in SMC and he continued to work in the business coming into the office daily until he became unable to work approximately three to four months before he died in January 2000.
On or about 30 June 1999 the loan facility from the ANZ was refinanced through the National Australia Bank Ltd (NAB): CB 524, 527, 535.
The NAB's security for the facilities of SMC included a registered mortgage, debenture over all the company's assets and undertaking, and a guarantee an indemnity given by Michael, the deceased and Stewart and a first registered mortgage given by Stewart's parents over their residential property: CB 527.

[15]

Michael's death

Michael died, after a short hospitalisation, due to chronic lymphatic leukemia: CB 393.
Consequent upon Michael's death in 2000 his Will (dated 12 February 1991) appointed the deceased as executrix and left the whole of his estate to the deceased.
Stewart in his affidavit evidence stated that his father did not leave a Will: CB 393. However, it became clear in cross examination that in the course of preparation of the proceedings he became aware that his father had made a Will in 1991: T128.
Michael's Will dated 12 February 1991 formed part of Ex TFC-1: CB 260-263. Under that Will his estate was left to the deceased. A consequence of that was that the deceased received whatever interest or share Michael had in Michael's business interests with Stewart.
Precisely what the deceased's received from Michael's estate is not clearly disclosed in the evidence. There is no copy of any grant of probate or inventory of property regarding Michael's Will or estate in evidence.
Nonetheless, some details emerged in the evidence.
Upon Michael's death in 2000 Stewart made arrangements with the funeral directors to pay for his funeral. Funeral directors invoiced him for the cost of the funeral ($4,375). At the time Stewart did not have the funds available to pay for the invoice and ultimately the funeral directors commenced proceedings and obtained a judgment against Stewart. Stewart having confessed to the claim, sought and was granted leave to pay the debt by instalments: CB 627.
Tracy claims Stewart took Michael's 1968 Mercedes after their father passed away: CB 144.
Tracy also states that when her father died he had approximately $35,000 in an account and that her mother had other "accountants" (sic) which shortly after her father's death had in excess of $50,000: CB 16.
Michael at least held an interest with the deceased in the Ocean Avenue unit at the time of his death which, subject to the nature of the holding, was either transferred to the deceased upon Michael's death pursuant to his Will or was received by the deceased as a result of her surviving Michael.
Subsequently, the deceased gifted the Ocean Avenue unit to Tracy in 2008.

[16]

Stewart's financial difficulties

Within months of Michael's death at the end of January 2000 the businesses that had been operated by Stewart and his father got into financial difficulty (or perhaps existing difficulties came to a head).
On 29 March 2000 Stewart, who was a director of SMC appointed Ron Dean-Willcocks as voluntary administrator of SMC.
The company was trading at Little Collins Street Surry Hills. The premises were leased pursuant to a lease agreement which was proposed to be assigned to Adrema. The company's assets were secured by a fixed and floating charge in favour of the NAB. The investigator's report dated 19 April 2000 refers, as I have noted above to there being an issue regarding the intellectual property "Constable Care", which Stewart had advised was held by him personally: CB 534.
The investigator's report dated 19 April 2000 indicates that Stewart had claimed that the financial difficulties may be attributed to "Aggressive recovery procedures by the ATO": CB 535.
As at the date of the appointment of the administrator the net asset deficiency was in the order of $903,024: CB 538, 545.
By the time SMC was put into voluntary administration the amount for which the deceased was contingently liable as guarantor had risen to about $179,000: T121-122.
Shortly after the administrators were appointed to SMC in April 2000 Stewart had a conversation with the deceased. The conversation is set out in paragraph 120 of his affidavit at CB 402-403: "Me: One of the reasons I called the administrators in is because I couldn't take the stress anymore. Trying to run the business and continue to pay the mortgage on for this property and have enough money to live just got too much. I already paid more than my share of the tax debt when I sold Tamarama. Dad was supposed to be looking after the remainder of the debt and making up to me what I had lost. Mum: What the fuck are you talking about? Me: I told you. The deal I had with Dad when I sold Tamarama was that he would make it up to me and get me another house near the beach. And, if he could not do that, he would give me the $400,000 I paid to the tax office from his estate. Mum: How can that happen? This is my house. Me: That's what Dad promised me. The accountant says I should be claiming from Dad's estate. And its worse. Now that the business is no more, the mortgage over this house will need to be paid or the bank will sell it. Mum: I cant afford to be paying a bank. Me: Mum, you have to face realities. Dad always kept these things away from you but he is no longer hear [sic] to do that. So you will need to accept the debt owing to the bank is yours not mine - I have well and truly paid my share. Mum: I cant understand how this could be. What are we going to do? Me: If you acknowledge that the bank debt is yours, not mine, and agree to give me unit 2 out of your estate first before Tracy and I divide the rest, I will live with that and not claim against Dad's estate. Mum: That's fair. Done. Me: In that case, I wont make a claim, and to help, I do my best to pay the bank for the moment until we know what is going on with the business. But you have to make a will - don't leave me holding the bag like dad did."
The conversation was admitted into evidence subject to a limitation under s 136 Evidence Act 1995 (NSW), limiting the effect of the evidence to be proof of the words spoken and not as to the truth of their contents.
Stewart was cross examined regarding the conversation: T124.
It was put to Stewart that as a result of saying to the deceased "You will need to accept the debt owing to the bank is yours not mine" that she agreed to become directly liable as a borrower rather than merely contingently liable as a guarantor. Stewart responded that "She made the decision": T124.
Following further questioning it appeared that Stewart's rationale for his approach to, and conversation with, the deceased was that he regarded the total debt of SMC that had to be repaid to the ATO as being his and his father's, for which he had contributed to from the proceeds of a sale of the Tamarama property "well in excess of my share of the debt": T125.
It was in the context of Stewart's evidence that he paid in excess of one half of the share of the ATO debt, that he regarded the deceased as being responsible for his father's part: T125.
Whilst he accepted that his mother was not a director of SMC and she had no involvement in the running of SMC he noted that "She provided the guarantee with my father": T125.
In late 2001 the loan over the Dumaresq Road units was refinanced by Howard Finance Ltd.
In mid-2001 (or thereabouts) Stewart became aware that Adrema was carrying on a business for which a travel agent's licence was needed, which Adrema did not hold. He caused Adrema to be placed in liquidation.
Proceedings were brought against Stewart and another employee of Adrema by the Department of Fair Trading which subsequently resulted in an adverse judgment against him and the other employee.
At about the same time, Sally left Stewart (with James, then aged 4) and Stewart suffered "a physical collapse": CB 401. Tracy says that the separation occurred in about 1999: CB 11. I accept Stewart's evidence as to the timing of separation.

[17]

Events leading up to the penultimate Will

Since the early 2000s Tracy has worked as a psychologist in private practice.
Tracy states that after her father's death in 2000 she became "my Mother's sole companion as my brother Stewart rarely socialised with my mother and Stewart did not travel with my Mother".
Stewart states that after he commenced to live in unit 2 from 2001, he and the deceased "each began to accept the faults of the other and formed an adult relationship which developed into being a close one": CB 392 (Tracy CB 14).
It is clear that Tracy was involved in at least some arrangements for booking and paying for trips which she undertook with the deceased.
This included a trip in September 2001 where Tracy travelled with the deceased to Israel, London and Paris.
There was some dispute regarding a trip on the Queen Mary 2. Tracy states that she made all of the bookings and payments for the trip (CB 134) though Stewart disputes that Tracy paid for the trip and states that he had paid for it. He dated the trip as being in 2000 (CB 387) whereas Tracy states that the trip was occurred in June 2007: CB 14, 134. Tracy's basis for dating the trip as later is that she says that Isabelle went on the trip and was aged two at the time: CB 14, 134. She produced an itinerary dated in June 2007 and photos of herself a mother and Isabelle on the vessel: CB 179 - 185.
I accept that the inherent likelihood is that Tracy did in 2007 arrange the bookings and made at least some payments for the trip.
Tracy organised other trips with her mother including to Cains, Port Douglas and the Gold Coast.
In approximately late 2001, in order to re-establish an income, Stewart entered into an agreement with a friend and former colleague Rod Newland to produce publications on shared profit basis.
Stewart continued in this business for some time until Mr Newland died in 2009.
In about 2003 Tracy started going out with Joe (an American) who was a property manager and developer. He then started to live with Tracy in the Ocean Avenue unit.
Joe did not have permanent residency and he had travel back to the United States at different times and Tracy also travelled to the United States and lived with Joe in Colorado.
From Isabelle's birth in 2005 Joe resided with Tracy and Isabelle as a family up until 2009.
When in Australia Joe regularly travelled up and down the eastern seaboard undertaking property research for investment and development.
When the global financial crisis occurred, Tracy recounts that Joe's investments were decimated and he was made bankrupt: CB 11.
In 2008 when the deceased gifted the Ocean Avenue unit to Tracy, according to Tracy, the Ocean Avenue unit was valued at approximately $450,000: CB 14.
In 2009 Tracy was diagnosed with breast cancer and had treatment in Australia. Her relationship with Joe was put under difficulties as a consequence of her health and his financial bankruptcy and they separated at that time: CB 12.
Tracy indicates that at no point has Joe ever provided assistance for Isabelle's education, welfare and maintenance and that since 2009 he has only had a limited relationship with Isabelle and does not have any active involvement in her upbringing, although Tracy acknowledges that Joe regularly telephones Isabelle on a weekly/fortnightly basis.
In 2009, following Mr Newland's death Stewart carried on the business for a few more years until he closed the business in 2012.
Stewart then engaged in several part-time jobs including painting, cleaning, coaching rugby and working as a surf instructor.
Eventually through a friend, Stewart was offered a job as a property manager at Ray White, Elizabeth Bay which he accepted. Stewart has held that job since that time until the present day.
In about 2010, Challenger (which Howard Mortgage Ltd had become known as) corresponded with the deceased to the effect that the loan would need to be refinanced.
As noted above, it would appear that in the process of the refinancing in perhaps 2001 or in any event by 2010 the deceased had become directly liable for the debt.
In 2010 Tracy accompanied her mother on a trip to Fiji with Isabelle and states that she paid for the flights and accommodation.
In 2011 Tracy and the deceased went on a trip to Vittel France, where the deceased's mother was buried in order to place a new headstone on the grave.

[18]

Events from the penultimate Will until Tracy's bankruptcy

On 18 May 2011 the deceased made her penultimate Will.
In June 2011 there were further financing proposals involving Stewart and the deceased.
On 20 June 2011 Australian Securities Ltd wrote to CGA Commercial Group (Australia) Pty Ltd stating that it had conditionally approved a loan for $235,000 on terms contained in an attached loan application and financial services guide.
The document was shown to Stewart in cross examination. He agreed it had been signed (on 23 June 2011) by him as a proposed guarantor and by the deceased as a proposed borrower: T126. Stewart agreed he would have assisted the deceased (regarding the application) in trying to refinance the existing loan, although stated that the "loan was never executed" and "it was never taken up on": T126-127. The document became Ex P3: T127.
On 21 October 2011 Stewart corresponded with Tracy by email regarding the inherited debt which had been secured over the units. The emails were admitted on a limited basis pursuant to s 136 Evidence Act as being evidence of Stewart's statements and not evidence as to the truth of them. Stewart indicated that he had been trying to have the debts restructured for nearly two years and had been unable to do so.
He appeared to be requesting Tracy's assistance in respect of securing refinancing.
On the same day Tracy responded by email indicating that she was "organising for a mortgage to be done on the property" [Ocean Avenue unit] and requested the name of Stewart's mortgage broker stating "and I [sic] we can go from there": CB 550.
In late 2011 Tracy sold the Ocean Avenue unit for $580,000: T41 (Stewart said the figure was $581,000: CB 406) and she purchased a unit at New South Head Road Rose Bay (NSHR unit) for $875,000: T41 (Stewart claimed the amount was for more than $900,000: CB 406).
Tracy states that by way of background she had initially rented the NSHR unit so she could be near her mother, visit her daily and help look after her. The owner of the NSHR unit died in about 2011 and Tracy was offered by the estate the opportunity to purchase the unit: CB 19.
There was some lack of clarity regarding the size of the mortgage that Tracy took out with the NAB to complete that purchase. It was suggested to her in cross examination that it was for $250,000. She indicated that she did not know if that was correct and thought "it was more $400,000 because a lot of reparations had to be done to the unit": T41.
On 29 March 2012 (some 5 months later) Jacques Kosmin wrote to the deceased regarding "two very important matters involving yourself, being the property at Dumaresq Road and your Will": CB 448.
The letter was admitted on a limited basis as evidence of what was said in the letter and not as truth of the contents.
The letter contained certain details of what Mr Kosmin indicates to the deceased were statements of which Stewart had informed him including the following (admitted on the limited basis): "In addition, Stewart informed the writer that Tracy had been allowed to live rent free for a period of 20 years and was then 'given' the unit in Double Bay which she subsequently sold and used the proceeds to purchase her current residence. In addition, Stewart 'lost' his home to pay back joint debts of Stewart, your late husband and yourself in the sum of $480,000.00 which amount Stewart repaid in 1992. Further, the current debt of $200,000.00 secured over your property was also the result of a joint debt of Stewart, your late husband and yourself. In the circumstances, Stewart may have claim against you for one half of the amount he paid out together with the interest since 1992 and for one half of the current loan!"
The letter went on to add: "In the circumstances, Stewart has requested that if you are not prepared to transfer the title to the property to Stewart (subject to life estate in your favour), then your Will should be amended to provide for Stewart to receive all your interest in the property and the balance of your Estate to be divided equally between Stewart and Tracy."
Whilst there appears to have been some discussion between Stewart and Mr Kosmin, who had written the letter, it is not entirely clear whether Mr Kosmin was conveying precisely what Stewart had said to him or Mr Kosmin's own interpretation of what Stewart had said.
Mr Kosmin was not called for cross examination and accordingly it remains unclear whether the contents of the letter record a direct quote from Stewart or merely represent Mr Kosmin's interpretation of discussions with Stewart.
On 4 July 2012 the ANZ wrote to the deceased confirming approval of "your application for a home loan for $230,000": CB 552.
Between 11 March 2013 and 28 October 2013 there was a series of correspondence from Jacques Kosmin to the deceased regarding the provisions of her Will and the ANZ mortgage. The letters, 11 March 2013 (CB 730), 31 March 2013 (CB 732), 17 June 2013 (CB 733), 9 July 2013 (CB 450) and 28 October 2013 (CB 735) provide some context as to the genesis of the 13 November 2013 Will.
Those letters, other than the letters dated 31 May 2013 and 9 July 2013, were admitted pursuant to s 136 Evidence Act on a limited basis as evidence of what Stewart said and not as to the truth of what he said.
In January 2016 Tracy travelled with her mother and Isabelle to Club Med in Bali and paid for the accommodation (including a deluxe room with a terrace) and for the flights.
In about late 2017/early 2018 over the Christmas New Year period the deceased was hospitalised with renal failure and kidney issues for over two weeks: CB 15. Tracy states, and I accept, that she spent every day with her mother keeping her company, and after her mother was discharged from hospital, provided care for her for many weeks.
As I noted below, Tracy was made bankrupt in 2018.
Having regard to the significance of that on her financial circumstances, one might have expected that there would be quite a degree of detail and documentation explaining the circumstances of that.
There was some though not a great deal of detail in Tracy's initial affidavit affirmed 9 February 2021. It is possible that one reason for that is that, the affidavit discloses on the cover sheet (CB 5) at that stage Tracy was self-represented.
The context for the lead up to Tracy's bankruptcy appears at least in part from later evidence including some of the documents in Ex SBC-2.
The catalyst appears to have been, a dispute or a number of disputes which Tracy had with the owners of the strata plan/body corporate (OSP) for the NSHR unit.
There is an OSP ledger commencing at 1 July 2015 going through to 1 October 2018: CB 646-654. The ledger appears to show entries for both the unit lot and garage lot.
The first page for the unit lot discloses entries commencing on 1 July 2015 and ending 1 July 2017 recording at the foot of the page (CB 646) levy arrears and owner invoices due in the sum of $15,354 and interest on arrears in the sum of $1,218.
The OSP commenced proceedings against Tracy in the Local Court at Sydney.
On 1 August 2017 they filed a notice of motion for default judgment for the total sum of $16,165 and on the following day, 2 August 2017, judgment was entered against Tracy for that sum.
In cross examination Tracy gave evidence that there were two bankruptcy notices: T42. She stated that she paid out the first one although the second one "… I didn't because I was not given sufficient time to find the money and pay for it, and I was unrepresented, which was a big error on my part": T42.
Tracy states that she was made bankrupt due to non-payment of strata levies and that prior to the bankruptcy she requested the assistance of the deceased to pay the sum of approximately $7,000 and then later $15,000 but that the deceased refused to assist: CB 18.
Tracy asked the deceased to assist in relation to payment of debts relating to the NSHR unit but she declined, Tracy stating "She denied it. She said she had no money": T42.

[19]

Tracy's bankruptcy and subsequent events

On 30 July 2018 on the application of the OSP a sequestration order was made against Tracy's estate in the Federal Circuit Court of Australia: CB 655. Tracy was made bankrupt. All proceedings under the sequestration order were stayed for 21 days. Tracy was ordered to pay the respondent's costs fixed in sum of approximately $13,219.
Tracy initially indicated in cross examination that the mortgage with the NAB only fell into arrears after she was made bankrupt (T41) but when asked what caused the NAB to change the locks on her property in 2016 or 2017 stated "I may have been in arrears at that time also, but I don't recall specifically what happened": T41.
On 31 August 2018 the OSP (via Le Page Lawyers) lodged a proof of debt in total amount of approximately $43,705 comprising an updated amount of the debt then due for outstanding strata levies, interest and expenses in the sum of $30,486 and a sum of $13,219 relating to the Federal Circuit Court costs order.
The final page of the OSP ledger (CB 654) discloses that as at 1 October 2018 the then current position of levy arrears and owner invoices was an amount due in the sum of $41,408 with interest on arrears in the sum of $1,274.
Tracy states that in addition, whilst she was bankrupt, the mortgagee took possession of her NSHR unit and sold the unit "for undervalue at $1,300,000 during the height of Covid, the estimated market value was $1,800,000 - $2,000,000": CB 18. No independent evidence was adduced to support the assertion of a sale at an undervalue.
It is common ground that Stewart was involved in some arrangements to potentially refinance the loan.
Tracy asserts that Stewart decided not to go ahead at the last possible moment and made the deceased pay for his legal costs and sought that Tracy pay the legal costs of the solicitor for the incoming mortgagee: CB 19.
Tracy accepted that her mother knew about her bankruptcy (T42, 43). When the NSHR unit was sold by the NAB as mortgagee, Tracy turned to the deceased requesting to live in unit 1, Dumaresq units which request was granted: T42.
It was suggested to Tracy in cross examination that she refused to take steps to cooperate in the sale of the NSHR unit, at the request of the trustee: T43.
Tracy initially accepted that "It may have been" open to her to cooperate in the sale but denied that the trustee had in fact invited her to join in the sale. She accepted that in any event the trustee left it to the NAB to sell the NSHR unit. She agreed she had complained that the NAB had sold the NSHR unit at an undervalue: T43.
On 24 August 2018 the deceased sent an email to Tracy thanking Tracy for a message and stating that she wished to send a letter to Isabelle on her 13th birthday. The email requested Tracy to "Please send this and I'll sign it and leave it with you for safekeeping".
The text of the message which the deceased wished to relay was as follows: "My darling Isabelle I want you to know how much i love you and now proud i am of you for completing your batmitzvah. You have carried the legacy from our family well As a present in the future I am going to leave you a third of my estate and give your mummy and uncle a third each I want you to carry on the line of our family so that the holocaust will always be remembered, and so too. your great grandparents Be the best woman you can be my darling and we will always watch you from heaven when we are gone. thank you for letting me help your class remember my story much love nana xxx"
The email appears at CB 77A being an annexure to Tracy's affidavit affirmed 9 February 2021.
The reference in the last line of the message thanking Isabelle for letting the deceased help her class remember the deceased's story is connected to some evidence in a later affidavit of Tracy affirmed 2 May 2022 under the heading "My mother's intentions towards Isabelle".
Tracy states that her mother had a very close relationship with Isabelle and saw Isabelle on a daily basis and was actively involved in Isabelle's schooling, helping her with homework and picking her up if necessary if Tracy could not do it. Tracy states that the deceased frequently expressed words to her to the effect of "I wish I could have contributed towards Isabelle's education as I did with James [Stewart's son]" and "I wish that she had a father around her".
Tracy goes on to say that the deceased told her on a number of occasions words to the effect "In my will, I would like to leave 30% to Isabelle". Tracy exhibited a USB stick with a video as an example of the interaction between the deceased and Isabelle: CB 136.
The video runs for a little over 3 minutes.
The parties had not separately arranged for equipment to be brought to court to enable the video to be played in open court. I do not say that critically. However, it was in that context that I was encouraged by counsel to view the video outside of court times privately in chambers (T7, 15). The USB containing the video was tendered and admitted without objection becoming Ex TFC-2. I did after the first day of the court hearing view and listen to the video in chambers.
I noted on the morning of the second day of the hearing that I had done that: T85.
The video shows a delightful interaction between the deceased and Isabelle sitting facing one another in which Isabelle asks the deceased a number of questions relating to where she was born, where she grew up, her favourite childhood memories, whether the deceased had any special artifacts passed down to her (the deceased had no artifacts other than a birthday card that had been given to her for her fifth birthday) and a question regarding what the deceased thought Isabelle would be when she grew up (to which Isabelle responded that she might like to be a photographer or a veterinarian). Finally, Isabelle asked the deceased whether she had any words of wisdom which she would like to pass on. Questions were self-evidently prepared for a school project. I accept the video discloses mutual affection between the deceased and Isabelle for one another.
The last time Isabelle saw her father was in New York in 2019. That interaction did not end well: T76.
In or about October or November 2019 Tracy and Isabelle, together with Tracy's dog and three parrots moved into unit 1 of the Dumaresq units.
On 15 September 2020, Tracy's bankruptcy was annulled with creditors paid in full: T35. On the same day there is recorded in the Tracy's Classic Banking account statement a deposit in the sum of $137,550 with the particulars described as "Paul Cook & Associates Macquarie Bank": p 23 Ex TFC-3. That was effectively the net proceeds of sale received by Tracy after of the NSHR unit and discharge of creditors.

[20]

Tracy's financial position

In Tracy's initial 9 February 2021 affidavit, she gave a summary of her assets and liabilities: CB 19.
She disclosed assets being: 1. Savings approximately $100,000 2. Motor vehicles estimated $22,000 3. Furniture and personal effects $25,000 4. Superannuation with BT estimate $10,000.
Tracy had no liabilities.
Tracy indicated her current net monthly income was $2,500 and that she received a Centrelink Newstart Allowance. Tracy indicated she had average weekly expenses relating to herself in the sum of $945 and relating to Isabelle in the sum of $577.
In an affidavit affirmed on 2 May 2022 Tracy provided a further update of her financial position. She disclosed her assets as being: 1. Savings approximately $88,000 2. 2012 BMW estimated $21,000 3. 2008 Hyundai Getz $3,000 4. Furniture and personal effects estimated $50,000 5. Superannuation with BT estimate $10,000.
The Hyundai car was noted as being that previously driven by her mother which Tracy stated she was keeping for Isabelle.
By this stage Tracy's solicitor had received into his trust account the interim distribution of $750,000 from the deceased's estate.
Other than her liability for legal expenses in the proceedings she had no other liabilities: CB 147.
Tracy estimated her average gross monthly income as being $4,000 including benefits she received from Centrelink: CB 147. She then set out in a detailed schedule a summary of expenditure covering 29 items totalling $209,655 per annum plus $10,000: CB 147-153.
In December 2021 Tracy's Centrelink payments ceased for a period of time but resumed in March 2022: Ex 2D2 p 48; T68.
In an updating affidavit affirmed by Tracy on 17 May 2022 (the day before the commencement of the hearing) Tracy provided an update of her circumstances including a new place of residence, income, some bank statements and details of Centrelink payment history.
On 9 May 2022 Tracy received notification that her application for rental of premises in Queens Street, Woollahra had been approved for a tenancy term of 12 months commencing on 30 May 2022 with a rent per week of $1,220 and a bond required of $4,880: Ex TFC-3, p 1.
In terms of her income, Tracy provided an update that her income was a combination of payments for her services as a psychologist and payments from Centrelink. Tracy stated that the payments for her services as a psychologist (which payments comprise a Medicare component and an additional payment by the client) varies from time to time and are paid into an account that she maintained with the NAB.
Tracy also provided copies of some bank statements for three separate bank accounts being: 1. the Classic Banking account for the period from 7 August 2019 to 6 April 2022 (being statements 12-27); 2. the iSaver account for the period from 7 March 2020 to 4 September 2020 (being statement 18) and 3. the ANZ account for the period from 27 January 2021 to 25 March 2022.
Those accounts appear in Ex TFC-3 (see pp 3-130). Some additional account statements for the Classic Banking account and the ANZ account were located in part of an exhibit, Ex 2D2, tendered during Tracy's cross examination.
During the hearing itself I was not taken to any particular detail in Tracy's bank account statements in Ex TFC-3. However, it does appear from a perusal of the Classic Banking account that there are credit entries from various persons who appear to be clients and from Child Think Pty Ltd: see e.g. p 23 Ex TFC-3. The Revised Schedule draws upon the statements in Ex TFC-3 and Ex 2D2.
On 15 September 2020, there was a receipt in the Classic Banking account statement of a deposit in the sum of $137,550, and the following day there is a payment out of that account to Tracy with a description online (reference number) and "Mortgage": p 23 Ex TFC-3. I mention this further below.
That would appear to be the sum which was paid into a separate NAB account.
In the Classic Banking account statements in Ex TFC-3 there are other credit entries of some significance including on 9 October 2020 in the sum of $11,299.80 with a reference "Stac Ks Goudk" (p 25); on 9 November 2020 a credit in the sum of $14,500 with the reference "Paul Efron" (p 26); on 22 April 2021 a credit of $5,000 with a reference "Barrister" (p 36); on 1 June 2021 a credit of $3,000 with a reference "Vindon barrister" (p 37). Below the last two mentioned amounts there are payments out to the barrister.
On 1 July 2021 there is another credit of $10,000 and below that a payment out to the barrister of $5,000: p 40. On 3 August 2021 there is a credit of $5,000.00 and another payment out to the barrister for $3,000.00: p 41. On 30 August 2021 there is a credit of $3,000.00 and two payments out again apparently for legal purposes: p 43.
There are no particular transactions of significant value in the single statement produced for the iSaver account.
In relation to the ANZ account there are various deposits including from Centrelink, from Australian Family Government Family and Job Seeker payments with occasional payment deposits from other miscellaneous sources. A general perusal of those ANZ account statements does not disclose any particular transactions of significant value.
However, as noted in Ex 2D2 the bundle of documents on which Tracy was cross-examined, there were copies of further bank statements for the ANZ account, including for the period of 26 November 2019 to 24 January 2020.
On 22 January 2020 there was a deposit to that account of $7,800 with a reference "from WPACDE" with a reference a number. It is not clear what that deposit reference relates to: p 87, Ex 2D2.

[21]

Tracy's needs

In her initial affidavit Tracy claimed financial needs including for secure accommodation for herself and Isabelle and a sum for exigencies of life: CB 17. She also disclosed needs regarding medical issues including breast cancer, anxiety and depression and for education to complete her further "Master's [sic] Degree Psychology": CB 18. That seems to be a mistaken reference to desire to pursue a PhD in psychology.
At that stage she suggested that a more equitable distribution of the estate would be that she receive a distribution of unit 1 of the Dumaresq units and that Stewart receive unit 2 and the balance of cash monies of the deceased's estate could be distributed essentially two thirds to herself and Isabelle with the balance to Stewart: CB 18.
By affidavit affirmed 6 September 2021 Tracy provided more detail in relation to her requirements for accommodation for herself and Isabelle. She annexed as Annexure B printouts from realestate.com.au of four properties that had recently sold for between $1,077,500 and $1,176,000 that whilst having two bedrooms she regarded as being unsuitable for her. She further annexed as Annexure C printouts of four properties which had recently sold that she regarded as being suitable for herself and Isabelle to live in ranging from between $1,264,000 and $1,760,000.
Towards the end of Tracy's affidavit affirmed 2 May 2022 she provided an update as to her present and future needs. She set out a table covering six categories of expenses which in summary were as follows: 1. expenses - $209,655 per annum plus $10,000 (for Isabelle's school trip to Israel); 2. accommodation - purchase price $1.855 million to $2.1 million plus stamp duty of $86,900 to $100,375; 3. Replacement vehicles at a sum of $55,000 with an estimate of $40,000 for a vehicle for Tracy and a figure of $15,000 to replace the Hyundai Getz vehicle for Isabelle 4. University fees for Isabelle in the sum of $80,000 to $180,000 5. an amount to pursue a PhD in Psychology for Tracy in the sum of $144,000; and 6. a lump sum for exigencies in the sum of $200,000 CB 154-155.

[23]

Isabelle's health

In or about mid 2020 Isabelle was referred to doctor Jenny Harasty as speech and language pathologist and cognitive neuro behavioural therapist to assess her for the possibility of an autism spectrum disorder, auditory processing and attention deficit disorder. Isabelle was assessed by Dr Harasty in late May 2020 and early to mid June 2020. There is a report from Dr Harasty which is undated (apart from referring to the date of assessment). It seems to have been produced at some point on or after 15 June 2020.
The background referred to in the report discloses that Isabelle had been reporting extremes difficulties completing her work, affecting her academic progress. Prior to seeing Dr Harasty, Isabelle had psychiatrist and psychologist interventions for an anxiety disorder: CB 44. She had been prescribed anti anxiety medication by her psychiatrist who was also considering prescribing Ritalin for Isabelle's difficulties with attention. Isabelle's father was reported to have features of high function autism.
The report made a number of recommendations (commencing at CB 72) including that Isabelle: 1. receive a routine vision assessment by an optometrist/ophthalmologist and hearing assessment by an audiologist; 2. urgently receive funded frequent therapy supports including twice to three times a week speech language pathology, occupational or vocational therapy and neuro behaviour therapy through NDIS funding including core supports for community participation and vocational training; 3. urgently receive therapy supports including capacity building therapy through the NDIS with a high intensity approach; 4. urgently receive frequent therapy supports including once to twice a week capacity building and core supports (to be integrated with her school and home clinic learning program); 5. urgently receive NDIS funded respite care to help support her every year for 5 weeks to ensure that during school holidays she begins to learn skills of self help and self care in accommodation settings out of home; and 6. continue to receive psychiatrist care, and routine vision assessment by an optometrist/ophthalmologist and hearing assessment by an audiologist.
It was further recommended that Isabelle's psychiatrist and GP consider medication for the inattentive attention deficit disorder that Isabelle was self reporting on the standardised Vanderbilt scale: CB 72-74. Dr Harasty notes in the report that Isabelle has a diagnosed autism spectrum disorder with adherence to certain specified DSM-V criteria: CB 60.
Apart from autism spectrum disorder, Tracy notes that Isabelle has been diagnosed with social anxiety and has been prescribed a small dosage of Lexapro: CB 12.
No updated report was provided in respect of Isabelle. During Tracy's cross examination it was clarified that Isabelle receives benefits from NDIS for what she described as "Psychiatric expenses, not medical expenses": T25. There is no cost to Tracy for the psychiatric benefits received by Isabelle: T26. Tracy belongs to a medical fund, though indicated in cross examination that the fund does not cover expenses for Isabelle: T26. Thus, Isabelle has dental, eye and general health needs that are not covered by the NDIS: T26.
Later in cross examination Tracy clarified that the private health insurance with HCF did in fact list Isabelle as a child under the policy (T27), though Tracy noted that "They don't cover a lot of the medical expenses": T27.

[24]

Stewart's financial position

Stewart's current occupation is that of a property manager. He had resided in Unit 2, Dumaresq units. He currently resides at a unit in New South Head Road, Rose Bay (current unit): T113.
In Stewart's affidavit affirmed 5 April 2021 he provided an outline of his financial resources. He disclosed assets totalling approximately $68,000 including cash of $18,000 (approximately) and superannuation of $12,000 (approximately).
He disclosed liabilities of $31,375 (estimate) including a car loan, personal loan and credit liability. He had then current net monthly income of $5,887 and average monthly expenditure of approximately $3,317: CB 419-420.
The expenditure did not include an amount for residential accommodation and he estimated that the cost of renting premises equivalent to unit 2 in the same general area to be $2,800 per month: CB 384.
Stewart disclosed the fact that he held all of the issued shares in a company The Big Bamboo Production Company Pty Ltd (Big Bamboo) of which he is the sole director. He stated that the net realisable assets of Big Bamboo were less than $10.
Stewart provided evidence in affidavit affirmed on 6 April 2022 updating his position.
As a result of the distribution of $1,750,000 to Stewart his financial circumstances increased markedly.
In November 2021 he purchased his current unit for $2,100,000 (plus stamp duty and conveyancing costs) which he paid from a private loan of $105,000 from a friend to fund the deposit, a further loan of approximately $650,502 (including lender's fees) and cash receipt from the interim distribution. The loan for $650,502 is a short term loan due for repayment in June 2022.
As at April 2022, Stewart continued to be in employment with a net monthly income of $5,887: CB 572. He provided an updated summary of his present monthly expenditure which totals $7,842 of which a monthly mortgage payment of $3,792 is the largest component: CB 579.
Stewart provided a degree more detail regarding his interests in Big Bamboo. He states that the amount owed to him by Big Bamboo is approximately $25,000 although expresses doubt about the ability of Big Bamboo to repay that amount to him: CB 573.
Stewart in the affidavit disclosed an updated asset and liability position as at 30 March 2022. He has assets of $2,241,000 including his current unit ($2,100,000), money in an ANZ access account ($63,000) and superannuation (approximately $50,000).
He has liabilities of $691,959 including a private funding loan of $650,000 (principal) and the private loan from a friend in the sum of $15,000 (having repaid $90,000 of the $105,000 from cash he received from the interim distribution): CB 578.
Stewart made some disclosure of his then present and likely future needs as at April 2021, which then included purchase of alternative accommodation, purchase of a reliable car, repayment of personal loan and credit card debt and funds to supplement an aged pension in retirement and costs associated with future knee surgery and recouperation: CB 385-386.
In his affidavit affirmed 6 April 2022, Stewart confirmed that he is now in a position to meet his present and likely future needs, including the purchase of his home, from his income and his entitlements to the deceased's estate. He stated he is able to meet his debts as and when they fall due, including mortgage repayments on a credit card debt, but excluding repayment of the principal on the loan of approximately $650,502 from his income from the balance of the interim distribution from the estate which he holds in his bank account: CB 572.
In contradistinction to an applicant, beneficiaries (who are not making a claim) are entitled to elect not to make disclosure about their financial resources and needs.
Notwithstanding the disclosure of his financial position it was confirmed during the hearing that Stewart was not a competing financial claimant: T162.
Section 61(1) Succession Act 2006 (NSW) provides that a beneficiary's interests cannot be disregarded. The Court may not disregard the deceased's freedom of testamentary disposition and the deceased's preferable disposition to the beneficiary, regardless of his or her financial position or needs. The position is helpfully explained by Justice Hallen in Jodell v Woods [2017] NSWSC 143 at [29]-[31] citing his Honour's decision in Sammut v Kleemann [2012] NSWSC 1030 at [137]-[140].

[26]

Tracy's health

Tracy was cross examined regarding her medical conditions. One of Tracy's claims for provision related to expenditure in respect of seeing a psychologist every two weeks. The cross examination revealed that, apart from what Tracy described as "various mental health issues", the purpose of seeing the psychologist included the fact that in a professional sense psychologists are expected to have a relationship with other psychologists for their own personal growth, albeit that is an optional matter, rather than a mandated requirement for professional registration: T28-29.
Tracy was cross examined regarding her claim to suffer from PTSD.
Mr Skinner sought to establish through cross examination and in particular by reference to the medical reports at CB 86-96 that there is no specific reference or diagnosis of PTSD in any of the reports: T29-32.
The genesis for the report of Jade Couquaux dated 24 July 2020 appears to have been in the context of a dispute Tracy had in relation to neighbours "About a water fountain that I allegedly stole, which was my own" (T32).
Whilst the exact details of the nature and chronology of the proceedings did not emerge in cross examination, what did emerge according to Tracy was that her neighbours had made a false complaint against her practice apparently to the Australian Health Professionals Association, claiming that she was not fit to practise: T32.
Tracy states that the proceedings were dismissed. There were either in those proceedings or related proceedings a number of AVOs taken out by each of Tracy and her neighbours against each other.
The matter has seemingly not entirely resolved as Tracy claimed in cross examination that the allegations of the neighbours had no basis and that she intended to run "a defamatory case" against her neighbours: T32.
The report of Jade Couquaux does not, at least expressly, make any diagnosis of PTSD.
It does indicate "We have discussed the following psychological difficulties" and then by dot points refers to Tracy's "• Traumatic reaction • Acute anxiety and distress • Irritability • Depressed mood • Excessive worrying • Difficulty focusing"
The report goes on to state that Tracy "has been provided with a differential diagnosis of (Adjustment Disorder with mixed Anxiety and Depressed Mood (309.28) (DSM-V-TR)". It is not clear whether Ms Couquaux or someone else made that diagnosis.
The report of Dr Neilssen dated 10 March 2021 recounts a history provided by Tracy.
Dr Neilssen noted that Tracy, upon examination, presented with no obvious signs of neurological disorder, apart from mild agitation while distressed. He stated that her underlying mood was assessed to be anxious, though there were no abnormal patterns of speech or abnormal beliefs suggesting an underlying psychotic illness: CB 94.
Dr Neilssen further commented that her concentration was assessed to be unimpaired and her registration and retrieval of information assessed to be intact. Dr Neilssen provided a diagnosis of anxiety disorder and a further diagnosis of a depressive illness best described as an adjustment disorder with depressed mood.
Dr Neilssen stated the factors contributing to Tracy's depression included the disruption of migration in childhood, her father's death in 2000, the effects of treatment for cancer, including the side effect of ongoing treatment with Temafloxacin and the breakdown of "her own relationship" [seemingly a reference to her relationship with Joe]. Dr Neilssen also ventured that Tracy was also affected by the intergenerational trauma that is well described in the children of holocaust survivors, who often have high trait of anxiety and that the immediate precipitant was the deceased's death four weeks before and "the effect of the documented campaign of harassment by neighbours [named] and her family": CB 95.
Dr Neilssen concluded that Tracy has a combination of disorders that generally respond well to evidence based treatment and recommended that she: remain under the care of her general practitioner; take antidepressant medication as prescribed; continue counselling with Jade Couquaux and attend appointments at intervals recommended by her: CB 95.
The report of Dr Huber dated 23 March 2021 states that from the time of Tracy's breast cancer approximately 11 years prior, Tracy has suffered from, and been treated for, anxiety. Dr Huber states that this has been managed by medication, psychiatric and psychological consultations. The report concludes that "Due to the multiple aggravating factors to her generalised anxiety disorder, her capacity for work has been severely limited": CB 86.
Tracy was cross examined regarding her ability to return to full time work. It was put to her that nowhere in the medical reports she had produced to the Court "is there any verification of your ability to return to a busy fulltime practice": T33. In context the tenor of the question was that she had not produced medical evidence that she was unable to work fulltime. When asked on what basis she said that she could not work in a full time practice she stated "Because of my health": T34.

[27]

Tracy's bankruptcy

There was flavour in the cross examination of Tracy regarding her disputes with the OSP and her dealing with the bankruptcy trustee that she might have taken some steps or action to avoid the sale of her property and that her financial misfortune was self-inflicted: T36-T42.
On Tracy's side she intimated that Stewart had been potentially in a position to assist her to avoid the misfortunate.
It was put to Tracy that she took no steps between 2017 and when her bankruptcy was annulled to sell the NSHR unit. She denied that: T43. She stated that she took a couple of steps including applying for a loan to pay out the mortgage which loan was withdrawn in December 2019 by the bank: T42.
She stated she then approached Stewart, explaining the situation to him and that he came forward and offered to take out a loan to pay off the bank though, in a period where various deeds were drawn up to make that deal, she asserted "At the last minute he pulled out and the bank sold the house": T44.
Tracy was questioned about the fact that part of context in which Stewart ultimately declined to assist was that the trustee in bankruptcy wanted an indemnity against other creditors (though she denied that there were other creditors) and wanted funds to pay for expenses: T44.
In Ex SCB-2 there was a bundle of correspondence between 18 March 2019 and 10 April 2019 relating to attempts to secure funds and to lead to an annulment of the bankruptcy.
It was suggested to Stewart in cross examination that a draft deed proposed in an email from Jo-Anne Weiner to Jacques Kosmin dated 10 April 2019 setting out a number of terms to facilitate the annulment (CB 662) were regarded by Jacques Kosmin as reasonable conditions: T134.
Stewart was shown a letter dated 11 April 2019 from Mr Kosmin to him which although commenting that the conditions being imposed on Tracy appeared reasonable required Stewart to urgently advise after he had received legal advice: T134.
However, Jacques Kosmin was not acting for Stewart but only for Tracy: CB 661. Stewart did consult independent legal advice from Ian Day: T134-135. The issue of whether Stewart acted reasonably or not in declining to assist Tracy and indemnify the trustee was not further pursued in cross examination. Ultimately, the letter was not tendered: T135.

[29]

Tracy's assets and the value of Tracy's business

On 19 November 2019 Tracy completed a questionnaire for the school for financial assistance for the 2020 school year for Isabelle: Ex 2D2 pp 62-71.
The detail of the assets and liabilities on page p 68 Ex 2D2 disclose assets totalling $2,245,000.00 including figures of house property at $1.7 million, motor vehicles $5,000.00, household effects $250,000, value of business $100,000.00, value of insurance $120,000 and current balances of all superannuation funds held $70,000.
The liabilities totalled $700,000 including home mortgage of $670,000, a business loan of $20,000, credit cards totalling $10,000.
Tracy was challenged as to the figure inserted of $250,000 for the value of her business as at 2016: p 20 Ex 2D2. Her response was that "It was a guess. It's not a proper valuation. It's advice I might have received from someone who suggested that. It's not actually based on any reality": T60 (My emphasis).
Tracy was further cross examined on a financial assistance application form, signed by her on 3 March 2021, to be used for assistance for the 2022 school year.
Tracy had inserted the following figures for assets (p 36 Ex 2D2): 1. Bank - savings/cheque: $2,100 2. Bank - investments: $90,000 3. Motor vehicles: $30,000 4. Household effects: $200,000 5. Value of business: $150,000 6. Superannuation: $10,000.
Tracy was asked about the figure for household effects and stated "It's a figure made up by the insurance company to cover the possibilities of flooding, which includes all internal fixtures. I've had it for years because I've had several floods": T63.
When questioned about her value for the business at $150,000 she said "Again, another guess".
When it was suggested to her that it was an "appalling guess" her response was (T64): "That may be appalling, but, I'm sorry, I don't have anything to base it on. It may be worth nothing, but, I mean, it's just an estimate. They don't ask me to produce - ask why. I just came up with a figure. I'm probably way out. It might be worth $10" (My emphasis).
Tracy's responses in relation to the figures particularly for value of her business in the questionnaires did not fill me with confidence that she had provided accurate or reliable information in relation to value of the business in 2016 or 2021.

[30]

Tracy's income

Tracy was cross examined regarding the financial assistance application which in the printed form appears to be for the 2016 school year: Ex 2D2 p 14. The figure 2016 has been crossed out and the year 2018 inserted in handwriting. Tracy denied that was her handwriting. Having regard to the whole of the document I am satisfied that the detail in the document does in fact relate to the 2016 year. Isabelle was in year 5 which is indicated on page 14. On page 19 of the exhibit there are references to gross annual income for the 2014 and 2015 years. That detail has been typed in. It discloses gross annual income of $135,000 for 2014 and $91,100 for 2015.
In the questionnaire completed by Tracy on 19 November 2019 for the school for financial assistance for the 2020 school year (Ex 2D2 pp 62-71) Tracy was questioned regarding the figure of $5,500 as monthly income after tax: p 67 Ex 2D2.
When asked about that figure Tracy responded "Those figures are all over the place here" and when it was put to her that was an amount higher than she had disclosed for purposes (I understood "of the proceedings" - because her answer cut the question off) she stated "it's probably completely incorrect because it was an estimation of income and then my income varied greatly, so it was an incorrect estimate…" (my emphasis): T72-73.
Tracy was then questioned regarding the figure for gross annual income of $100,000 approximately on the following page.
Her response was (T73): "But we weren't expecting COVID and a complete breakdown of my - of my business at that stage, so as I see it these were an estimate and myself and Gillian had many conversations relating to what was in these documents and they make a decision based on an estimate, not a reality. So these figures were just a rough guess, and, as you can see, I've got question marks there so I'm not really sure."
Tracy's reference to a "Gillian" was not expressly explained in her evidence.
There was no question mark along the side the figure for gross annual income rather the question marks on the page related to the value of fringe benefits per annum.
In submissions when I asked Mr Davidson SC regarding the estimate of income of $5,500 he pointed to the fact that someone apparently in pencil had annotated the detail on p 67 with the words "Not verified + unlikely given history" (which was not in Tracy's handwriting) and suggested that someone from the school who had a real idea of her history had been sceptical about the figures being over stated and had no difficulty in appreciating that Tracy was in need of considerable financial assistance.
Further, he submitted (T144): "She has, doing the best she can, estimated 4,000 a month and then in her most recent exhibit, with the bank statements, one can see all the entries of the Medicare payments and so forth … I think I can indicate to your Honour that there's nothing in those bank terms where the payments are made ‑ there he is ‑ the payments are made are more than she has estimated. So, we are confident that your Honour would be comfortably satisfied that she's not earning more than she has said and, indeed, she may have overstated it."
Tracy did not annotate the questionnaire form she had completed on 19 November 2019. It was not established by evidence as to who had annotated the document at Ex 2D2 p 67.
However, even assuming for the moment that it was some unidentified person from the school, the fact that someone else had noted that the figures were unverified and unlikely (to be accurate) does not to my mind, assist Tracy's case. First, because it still leaves Tracy's figures as being questionable. Secondly, because it is not clear what I can reasonably act upon in respect of annotations from some unidentified person.

[32]

Costs of Isabelle's education

In Tracy's expenses schedule (CB 150) in relation to the costs of Isabelle's education Tracy had indicated (item 12): "High school. Currently I pay approximately $28,200 per year for Isabelle to attend Emanuel School in Randwick. Based on past experience for school fees over time, I estimate that school's fees would be similar or greater in the future. Additionally, for this coming year, Isabelle has a school trip to Israel planned. It will be a 4 week tour. The cost will be $10,000."
Tracy was challenged in relation to the figure that she currently paid approximately $28,200 for Isabelle to attend Emanuel School and it was suggested that that figure was just plainly wrong.
Tracy responded (T75): "Well, with all the adjustments it's a different figure now. It's a different figure."
It was put to her that she had made no adjustments whatsoever when she completed the table by way of an estimate of future expenditure to which she responded (T75): "Because future - because - no, I haven't made any adjustments because there are - up until the end of this year I don't know what the future will hold."
This aspect of Tracy's cross examination on the costs of Isabelle's education gave me a degree of concern regarding the reliability of her evidence in respect of her expenses. It became clear that over time Tracy has received some degree of subsidisation of expenses for Isabelle's school fees: see e.g. letter dated 15 March 2018, Ex 2D2 p 5.
On 27 August 2015 Emanuel School wrote to Tracy offering Isabelle a place in the 2016 year 5 opportunity class with a 25% scholarship commencing from the time that Isabelle would start high school: p 102, Ex 2D2.
In 2016 Isabelle indeed attended Emanuel School for year 5: T21.
In 2017, when Isabelle was in year 6 she received a fund award of $5,000. When Tracy was asked about this, she said "It could be. I'm not aware of exactly how much she received because they never sent me all the details": T21. When pressed on this, regarding the figure of $5,000 for year 6, she said "Well, if they said that's right, then that's correct". When it was suggested to her that she would know, she responded "No, I wouldn't know ..": T22.
For the following year, 2018, Tracy accepted in cross examination that she had made an application under the hardship provision to the school and was granted a subsidisation of 30% for Isabelle's school fees: T22.
On 13 January 2020, Tracy accepted she had signed a fee assistance agreement with the school for the 37% subsidy.
Tracy accepted that on 21 April 2020 there could have been an increase granted in subsidisation by the school although was not sure of the exact nature of it.
Tracy further accepted that on 3 March 2022 the school made an offer to clear her outstanding fees of $8,501 and they gave Tracy a subsidisation allowance for the year 2022 of 50%: T22-23.
When it was put to Tracy that she had never revealed in her five affidavits any particulars of receiving subsidies from the school (for Isabelle's fees) her response was "Well, the school was being subpoenaed so I didn't think that I had to provide that information": T23.
The obligation of a witness is to tell the truth and the whole truth. Tracy's assertion that she was currently paying fees of approximately $28,000 per annum was clearly incorrect and her failure to refer to any aspect of receiving subsidisation or relief from payment of school fees, other than being confronted by questions regarding that in cross examination, I consider to be less than frank disclosure on her part.
As at 14 January 2022 the statement of account with Emanuel School disclosed fees due in the sum of approximately $15,760 (being $7,858 current and $7,902 overdue): Ex 2D2 p 52.
On 3 March 2022 the director of finance and operation for the school wrote to Tracy advising that the financial assistance sub committee had reviewed her application on the information supplied and approved clearing the outstanding 2021 school fees of "$8,501.53" as well as a subsidisation of 50% for Isabelle for 2022: p 120, Ex 2D2.
Mr Skinner asked Tracy about this in cross examination. He directed her attention to the letter in the exhibit and asked whether he was correct in reading the first paragraph (as being) that the school waived outstanding fees of $8,501.
Tracy's response to that was curious to say the least. She said (T74): "I don't know what, 'Approved clearing of the outstanding school fees', actually means, so I only know from what I can read which is the same as everyone else. I do not know what that means."
I do not accept that Tracy did not understand that there was a waiver of fees for Isabelle.
During the cross examination, I directed counsel's attention to the final page of a transaction history for the account relating to Isabelle's fees and expenses and other payments in respect of the school for period from 3 January 2020 through to 22 April 2022: pp 23-28, Ex 2D2.
The final page of the document (p 28) discloses that as at 22 March 2022 there was a balance due for Isabelle's fees and other expenses of $14,148.24. However, taking into account a number of further transactions on that day including a scholarship subsidy of 25% and two fee assistance payments, that sum was reduced to $5,815.42.
Further on the following day 23 March 2022 there is noted a fee adjustment in the sum of $8,501.53 (which I take to be referable to the figure appearing at p 120 of the exhibit). The balance in respect of Isabelle was in fact reduced to a negative figure such that as at 22 April 2022 the account relating to Isabelle's expenses in the school ledger was actually in credit in Tracy's favour in the sum of "$2,983.61": p 28, Ex 2D2.
The adjustments for the statement of account for Isabelle's education at the school had occurred on 22 and 23 March 2022 leaving the account with a credit balance as at 24 April 2022, well before Tracy came to affirm her 2 May 2022 affidavit.
Ultimately Tracy was pressed by Mr Skinner cross-examination (T75) "Q. The figure that you've recorded of $28,200 per annum does not reflect the past history, does it? A. That's just a figure of the total fee for the school."
The estimate of school fees of approximately $28,200 per year (CB 150) was plainly false.

[33]

Tracy's expenses generally

Tracy was cross examined regarding her estimate of average weekly expenses which is an annexure to her initial affidavit (CB 77), which annexure document also appeared in the material produced by Emanuel School at p 54 of exhibit 2D2. It was put to her that that figure was dramatically lower than the expenses she disclosed in her affidavit affirmed 2 May 2022: T69-70.
Her answers regarding this again did not fill me with confidence regarding her ability to accurately place before the Court details of her expenses.
In responding generally to the question that the detail of the average weekly expenses in Annexure D (CB 77) was dramatically lower than that she had disclosed in her 22 May 2022 affidavit, her response was (T70): "This again is just an estimate and I think it came from a previous document that we estimated many years before that. So, it wasn't based on any particular current figures other than something that I had in the past." (My emphasis)
I note that in the financial questionnaire which Tracy had signed on 19 November 2019 the overall monthly expenditure listed by Tracy on page 67 of Ex 2D2 was $5,612 (i.e. $67,344 per annum).
When it was suggested to Tracy that the reality is that those figures, provided to the school, were significantly less than what she now said were weekly expenses, her response was (T70): "By how much? This is - I talk about monthly expenses or yearly expenses. Not weekly expenses. And things change. As you know in car insurance goes up, the number of cars I had changed. Car maintenance is variable. As is medical, dental and optical, and insurance. I mean, these figures aren't absolute and they change over the years. You know. That's all I can say. I didn't do anything deliberately to under or over estimate. They are just a reflection of a particular point in time, and I may have not put any thought into that at all, as I recall." (My emphasis)
Tracy was then asked "Are you suggesting you have no idea where those figures came from" and she responded (T70): "No. I'm suggesting that I didn't put - I didn't use exact numbers. I used a guess or an estimate. That's the truth. Yes. I was very - it was very hard for me to pull all that together at the time."
I consider that Tracy's answers in this respect reflected some degree of a lack of appreciation to the important task of placing accurate information before the Court.
Whilst the Court in family provision matters does not require absolute precision with the estimate of expenditure, it does expect that an applicant for provision will take steps to use relatively current source material to estimate expenses and take some care in ensuring that there is a reasonably accurate figure placed before the Court.
Tracy's comments to the effect that her estimates were not based on any particular current figures other than an estimate that had come from a previous document "many years before that" (T70), and that she may not have put any thought into the estimate at all, left me in the position that I could not have confidence in Tracy's estimate of expenses as being a reasonably accurate representation of the current financial position.

[34]

Absence of the NAB "trust account"

Although Tracy produced in the proceedings in her final affidavit a number of bank statements, of some significance is the fact that the statements for a particular bank account, into which net proceeds of the sale of the NSHR unit by the mortgagee, and presumably after monies had been paid to effect annulment of the bankruptcy were paid, had not been provided by Tracy in her evidence in chief.
As noted above, on 15 September 2020 there is recorded in the Tracy's Classic Banking account statement a deposit in the sum of $137,550 with the particulars described as "Paul Cook & Associ[ates] MacQuarie Bank": p 23 Ex TFC-3. The following day there is a payment out of that account to Tracy with a description online (reference number) and "Mortgage": p 23 Ex TFC-3.
When Tracy was asked in cross examination regarding the monies she was left with as a net result of being made bankrupt and from the sale of the property by the NAB, she accepted that all she was left with was a sum of $137,000: T45; CB 81.
When she was asked how much of the $137,000 was left, her answer was $95,000: T45. She stated that sum was in a "trust account" with the NAB.
It was evident that Tracy had not produced any bank statements in relation to that account. Whilst she had the day before the hearing produced some bank statements in relation to the two other NAB accounts and ANZ account, she had not produced statements in respect of this other "trust account".
Mr Davidson SC at that point provided a document being a single page printout which became Ex 2D3 in the proceedings.
The printout disclosed an available balance of $95,382. The details below that figure showed that the account had a balance of $91,382 and that there had been a credit payment to the account of $4,000 at some point after 29 April 2022 possibly on the day before the hearing (17 May 2022) bringing the balance of the account up to the $95,382 figure.
The payment of $4,000 was an online payment apparently from a linked account. Of some significance is the fact that there was not produced in Ex TFC-3 a statement from any account from which the $4,000 payment had come from: T46-T48.
When questioned about the linking of the account Tracy indicated that it was linked to one of the two other NAB account and then identified it as being linked to the Classic Banking account: T48.
The last entry for the Classic Banking account in the statements produced was for 5 April 2022 and at that point there was a credit balance of $1,196.37: p 54.
Tracy was questioned about her failure to produce a single record evidencing the fact that she still held $95,000 out of the proceeds of sale following her bankruptcy of the property to which she responded "Because it's been put in all the affidavits so far": T47. It was then suggested to her that there was not a single bank record verifying the amount of money that she had in her possession since 15 September 2020 to which she responded (T47): "Well, then, it's - it's an omission. I don't get bank statements for it and, so, I don't - and I rarely put any money in or out of the account. So, it's - I don't get the statements. So, they weren't readily available to me".
I accept Tracy's evidence that in her affidavits she did disclose that she has savings (being savings of approximately $100,000 described as "balance of mortgage surplus - annulment" affidavit 9 February 2021 CB 19; savings of approximately $88,000 described as "balance of mortgage surplus - annulment" affidavit 2 May 2022 CB 132) which in all likelihood are referable to some of what is currently the $95,000 amount in the "trust" account.
In relation to the $95,000 figure Tracy was asked what she proposed to use those monies for, to which her response was "Probably lawyers' fees" and "Legal fees": T49. Tracy was asked "Isn't this Classic account an offset account for a mortgage loan?". She denied that. When asked was she sure she answered (T49): "Yeah, I just named it mortgage because I just put that in there, because it was an old - it probably related to the old mortgage loan that I had. I do not own a mortgage at all."
When Tracy was asked whether she had set aside that $95,000 for any specific purpose, her response on the first day was "Not other than paying my legal fees."
Tracy's initial description of the account (with the $95,000 balance) as a "trust account" was somewhat intriguing.
On the second day of the hearing, I asked Tracy questions regarding Ex 2D3. When I noted that she had described the account in which those monies were held as a trust account, her response was (T107): "Well, that's what I call it. It's, like, it's not meant to be touched, after a certain term. It could be - sorry - I'm not - I'm not so sure of the exact details of what the account is."
She accepted that it was an account opened up by her: T107. She indicated that her understanding of a trust account was "An account held in trust for somebody": T107.
When I asked further about the description of the account as a trust account, she said "Yes, for my own purposes. It may not be an actual trust account": T107.
When I asked whether the reason why she had described the account for her purposes as a trust account is because she intended that she would hold the monies in that account on trust for some other person, the response was "Yes, for my daughter" (Isabelle): T107.
Later during the course of submissions I asked Mr Davidson SC regarding Tracy's designation of the account as a trust account. I asked whether I was right in understanding the evidence as being that she had not made a declaration of trust in relation to Isabelle in relation to those funds. Mr Davidson SC confirmed that that was case, there had been no declaration of trust in relation to Isabelle and that legally the funds were available for Tracy to use as she desires, whether she uses it for Isabelle's support or not: T170.

[40]

Claim for accommodation

Tracy 's was cross examined regarding her claim for accommodation.
At the time of the hearing, she was still living in unit 1 at the Dumaresq units.
The Dumaresq units have been sold. However, Tracy has remained in possession. Her basis for remaining in possession was not made clear during the proceedings. She accepted that the owner had commenced proceedings against her for possession of the property: T50. It appeared that she had as a consequence of those proceedings had discussions with the owner to agree on a date for herself and Isabelle to leave the property and to take up occupation of the premises in Queens Street, Woollahra: T50.
Tracy was asked whether she had looked at any area other than Queens Street Woollahra to rent and indicated that she had looked in areas of a 5 to 8 kilometre circumference of Isabelle's school: T50. The school is located in Stanley Street, Randwick.
Tracy was asked whether the premises in Queens Street, Woollahra was the only property she could find. She indicated "No, I found many properties. I just wasn't accepted to them": T50.
It was suggested to Tracy that she could rent in Randwick where the school is (T50) "Q. The nearest property you could have rented, presumably was in Randwick where your daughter's school is? A. Yes. Well, yeah, that's closest."
When asked how much properties are being rented for within the area of Isabelle's school, she indicated between $1,000 and $1,200: T50.
Mr Skinner then suggested to her that as a result of a search of Domain rental properties, the median rent for houses in Randwick for two bedrooms is $780 per week to which she responded (T50): "No, absolutely the market's completely different from that."
She confirmed that she had searched for two-bedroom houses in the Randwick area: T51.
Ultimately, Mr Skinner tendered a single page extract from Domain.com.au for two-bedroom properties for rent in Randwick which became Ex 2D4. The extract lacked detail but did indicate that the median for a two-bedroom houses in Randwick was $780 per week.
When Mr Skinner pressed Tracy regarding whether she was unable to find any real estate by way of two bedrooms in the Randwick area for less than $1,000 per week, Tracy responded (T51): "I was not accepted to any property other than Queen Street, Woollahra. I made many applications, at least two to three a week, for many months. There was a shortage of properties over the Christmas period and I couldn't look due to COVID restrictions."

[41]

Legal principles

The question as to whether a family provision order ought to be made, is whether the Court is satisfied as to the adequacy of the provision for the proper maintenance, education or advancement in life made in the Will in the favour of the applicant at the time the Court is considering the application (s 59(1)(c) Succession Act) and, if so, what family provision order, if any, ought to be made having regard to the facts known to the Court at the time that the order is made: ss 59(1) & (2): PS [28].
The details of the statutory scheme are set out by Hallen J in Georgopoulos at [255]-[308]. I respectfully agree with what his Honour set out therein. Tracy's counsel directed my attention to the decision in Hinderry v Hinderry [2016] NSWSC 780 and particular aspects of issues as to whether a family provision order ought to be made, the concept of provision and advancement in life, the notion of what is adequate and proper, and the relevance of an applicant's needs.
The question as to whether an applicant has been left with inadequate provision for her proper maintenance, education or advancement in life involves a finding of fact, albeit one that is, in light of the substantive character of the matter to be decided, evaluative. It does not involve an exercise of discretion: see Strang v Steiner [2019] NSWCA 143 at [76] per Macfarlan JA and at [131] per White JA; Georgopoulos v Tsiokanis [2022] NSWSC 563 at [256] per Hallen J.
It was submitted that the financial resources (including earning capacity) and financial needs, both present and future, of the applicant and of any beneficiary of the deceased person's estate are criteria to which the court may have regard to under s 60(2)(d) Succession Act).
Tracy's counsel submitted that in s 59(1)(c) there is no longer any sanction to consider the provision made by the deceased during his or her lifetime for an applicant (contrasting s 9(2) Family Provision Act 1982 (NSW)) and citing Hinderry at [211]-[214].
Whilst s 59(1)(c) does not expressly reference inter vivos provision, I do not read s 59(1)(c) nor the comments of Hallen J in Hinderry at [211] as indicating that any prior provision for the applicant is irrelevant to the question of whether to make a family provision order. I note that the Court may have regard to the matters set out in s 60(2) for the purpose of determining whether to make a family provision order and the nature of any such order: s 60(1)(b).
One of the matters that may be considered by the Court on that question includes any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate: s 60(2)(i).
The submissions in respect of the decision in Hinderry directed my attention to passages in Hinderry regarding the exercise of the discretion under s 59(2) and s 60(1)(b) Succession Act: see PS [29]-[40] citing passages from Hinderry at [207]-[245].
It was noted that the statutory task is not to achieve an overall fair disposition of the estate or to be resolved with reference to idiosyncratic notions of what is fairness, at the expense of the freedom of the testator to dispose of his or her property: PS [41] citing passages in Hinderry at [251]-[266].
In this regard I also bear in mind the observations of Bryson J in Gorton v Park (1989) 17 NSWLR 1 at 6B.
His Honour indicated that there is no need for orders to produce an overall fair division of the estate or to put the testator's children in a position where each receives much the same benefits as the others, or in a position where after receiving benefits and adding them to what they had before each is in much the same position. His Honour noted that it would be wrong to attempt any of these exercises: at 6B.
Although those observations were made in the context of a family provision application under the Family Provision Act 1982 (NSW), they are in my opinion, as generally apt to a determination of a claim under the Succession Act, as a claim under the Family Provision Act 1982.
As Hallen J noted in Georgopoulos the specific matters (or criteria) enumerated in s 60(2) has been described as a "multifactorial list" and as "a valuable prompt" to which the Court may have regard, together with "any other matter the Court considers relevant" for the purpose of determining, relevantly whether a family provision order should be made, and if so, the nature of any such order: at [298].
Further, as noted by Hallen J the section does not prioritise the catalogue of matters that may be taken into account and the weight of each of the matters specified in the section, which may taken into account, will depend upon the facts of the each particular case: at [300].
In relation to a claim by an adult child there are a number of decisions which summarise what might be described as principles or guides pertaining to claims by adult children.
Tracy's counsel directed my attention to the summary of Hallen J in Hinderry at [271]. See also comments of Hallen J in Georgopoulos at [309].
What I have noted above might be described as "principles" or "guides" are, as Hallen J as observed not to be elevated into rules of law, propositions of universal application or rigid formulae: see Georgopoulos at [273]-[275].
I accept that if an applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that would be a relevant factor in determining what is an appropriate provision for the maintenance of an applicant: Hinderry at [271]. I further accept that an adult child's lack of reserves to meet demands, particularly of ill health, which will become more likely with advancing years, is a relevant consideration: Hinderry at [71].
Because Tracy's claim for provision includes significant components for accommodation, I have had particular regard to the submission of Tracy's counsel regarding the obligation of a parent of an adult child in respect of provision of accommodation as set out in the written submissions at PS [42(b)] citing the passage from Hinderry at [271(b)] in the following terms: "It is impossible to describe, in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her child up in a position where she or he can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801 at [57]; Kohari v Snow [2013] NSWSC 452 at [121]; Salmon v Osmond [2015] NSWCA 42 at [109]."
Tracy's counsel also in the same part of the written submissions made reference to the following passage in Hinderry at [271(c)] as follows: "Generally, also, the community does not expect a parent to look after his or her child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute: Taylor v Farrugia at [58]."
As noted by Basten JA in Chan v Chan [2016] NSWCA 222; (2016) 15 ASTLR 317 at [22], it is important not to elide the distinction between needs and adequate provision; the former is but one indicator of the latter. The adequacy of provision is not to be determined by a calculation of financial needs.

[42]

Tracy's submissions

The claim advanced for Tracy in relation to her claim for provision was set out at PS [49].
The claim correlated to close degree to the way that Tracy had set out her claim for provision in her affidavit affirmed 2 May 2022.
The claim included claims for accommodation, parental obligation to support Isabelle, costs of living expenses, medical/dental expenses, mental health expenses, education for both Tracy and Isabelle, vehicles for Tracy and Isabelle and a buffer for exigencies.
In their written submissions Tracy's counsel outlined two scenarios as potential claims for provision, the first scenario of which included a capital sum for the purchase of a property (after a year of Tracy renting) and the second scenario proceeded on the basis that the Court might reject a claim for a capital sum for the purchase of property.
The first scenario was set out in PS [51].
It includes various capital needs for rental of a property for a year ($62,400) and adding the cost of purchase of a property after a year including stamp duty ($1,941,900 to $2,200,375).
It added the cost of replacement vehicles ($55,000). It then added costs associated with the remainder of Isabelle's secondary education and the cost of tertiary education for her four years (totalling $164,400 to $264,400). It included the cost of a PhD for Tracy in psychology ($144,000) and added an amount of $200,000 for exigencies.
The sub total came to $2,567,700 to $2,926,175.
On top of that claim for capital needs there is added under the first scenario figures for recurring needs for Tracy and Isabelle including transport, living support for Isabelle's disabilities, living expenses and health/medical/psychologists fees altogether totalling $116,055 per annum.
Tracy's recurring needs are estimated as being claimed for a life expectancy up to 25 years, such that the costs of recurring needs were projected as totalling $2,901,375.
The total of Tracy's capital needs and recurring needs under the first scenario is a lump sum of $5,469,075 to $5,827,550.
The submissions went on to calculate and then deduct what was said to be Tracy's projected income and pension entitlements.
The estimate for income for Tracy up to a retirement of age of 67 was calculated as $4,000 per month for 7 years totalling $336,000 and additionally an estimated pension across the balance of Tracy's estimated lifetime of $987.60 fortnightly for 18 years totalling $462,197.
The subtotal of the projected income and pension entitlements is $798,197.
The total of the capital and recurring needs less Tracy's projected income and pension entitlements gave a net total of needs for the first scenario of "$4,670,878.20 to $5,029,353.20".
The second scenario proceeded broadly speaking under the same headings of identifying Tracy's capital needs and recurring needs and then deducting her estimated income and pension entitlements.
Under the second scenario (PS [52]), Tracy's capital needs are identified as being the same as those in the first scenario extracting out the figures for rent for a year and the cost of a property.
Thus, under the second scenario Tracy's capital needs are identified as being the cost of replacement vehicles, the cost of Isabelle's secondary and tertiary education, the cost of Tracy's PhD in psychology and an amount for exigencies. The sub total was $563,400 to $663,400.
Under the heading "Recurring needs" for the second scenario, the claim included each of the four components or recurring needs under the first scenario with the addition of rental accommodation in the sum of $62,400 per annum. That gave a subtotal of $178,455 per annum which was estimated over a life expectancy of up to 25 years resulting in an amount of recurring needs projected of $4,461,375.
The total needs under the second scenario as a lump sum is indicated as being $5,024,775 to $5,124,775 from which is deducted the estimated figures for Tracy's income and pension entitlements, resulting in net figure of needs being "$4,226,578.20 to $4,326,578.20".
It is evident from the way that Tracy's case was put in the pre-trial submissions that the costs of her recurring needs under both the first and second scenarios had been calculated by multiplying the subtotal by an estimated life expectancy of 25 years without any discounting factor.
The submissions encouraged me to consider that the estate is not a small estate and to consider that based on the above mentioned figures a number of conclusions could be drawn including: 1. on either scenario, Tracy's present gross income [said in the pre-trial submissions to be $48,000] is substantially less than the cost of her recurring needs (under either scenario one $116,055 pa or two $178,455 pa), even without taking into account the capital sums; 2. on either scenario, the present estimated distribution to Tracy under the Will is substantially less than her needs expressed as a lump sum calculated with reference to her estimated life expectancy less her projected income/pension; and 3. the situation in reality is only going to deteriorate with time given the effects of, inter alia, inflation, Tracy's reduction in income when she retires in 7 years and increased medical expenditure as she ages: PS [53].
It was in those circumstances that it was submitted that the evidence "robustly supports the proposition" that the provision for Tracy's proper maintenance, education or advancement in life is not adequate within the meaning of s 59(1)(c) of the Succession Act.
In relation to the second issue of what provision, if any, ought to be made for Tracy, the submissions proceeded to address each of the factors pursuant to s 60(2) Succession Act.
Detailed submissions were made in relation to the s 60(2) Succession Act criteria. I will not set out the full detail of those submissions. I have considered the submissions. It suffices for me to summarise those matters.
In relation to the nature and duration of the relationship between Tracy and the deceased (s 60(2)(a)) it was submitted that the evidence showed that Tracy was substantially involved in the deceased's life, that they were very close and that they supported each other. It is noted that Tracy was the deceased's main companion after her father's death in 2000 and that they spent time together undertaking joint activities, travelled together and that Tracy often paid for a number of matters associated with the travel: PS [58(b), (c)].
I have referred to the details of the travel above.
It was submitted that Tracy looked after the deceased when she was unwell in 2007 and 2017-2018: PS 58(d). It was further submitted that Tracy participated in and celebrated with the deceased their Jewish faith together and assisted the deceased to apply for and obtain compensation from the Commission for Compensation of Victims of Spoliation as a victim of the holocaust: PS [58(e)&(f)].
In relation to the nature and extent of the obligations or responsibilities owed by the deceased to Tracy (s 60(2)(b)) it was noted that Tracy is a single mother, had been dependent upon accommodation provided by the deceased and had the full time care and custody of Isabelle who has high needs "owing to her diagnosed disabilities": PS [59(a)-(c)].
Reference was also made by Tracy's counsel to the statement by the deceased in an email dated 24 August 2018 to the effect that the deceased was going to leave Isabelle a third of her estate and give Tracy and Stewart a third each: PS [59(d)].
Tracy's counsel made reference to Stewart's position and the fact that Stewart had accommodation in Rose Bay and a modest loan from which he would be able to "easily" repay from his inheritance and taxable income which was reasonably good and able to meet his present and future needs. It was also submitted that Stewart's son James is an adult and does not live with Stewart. However, I note that on the second day of the hearing when I asked whether James lived with Stewart or lived independently, Stewart responded that "He's moving back in today": T137.
In relation to the nature and extent of the deceased's estate (s 60(2)(c)), Tracy's counsel pointed to the fact that the executor had estimated a certain figure for the net distributable estate after the interim distributions and allowing for the executor's future costs (though not those of Stewart or Tracy that might be borne by the estate): PS [61]. That figure has been revised in light of Ex JS2 and MFI 3 and the net distributable status now agreed to be $1,550,057.
In respect of the financial resources and needs both present and future of Tracy (s 60(2)(d)), her counsel submitted that Tracy's present gross income was $48,000.00 per annum which is substantially less than the cost of her recurrent needs: PS [62(a)]. Her counsel further submitted that Tracy's entire income and financial resources will be depleted paying for the recurrent expenditure and are insufficient to pay for the amount she requires by way of "proper provision for capital expenditure": PS [62(b)].
Reference was then made to Tracy's needs projected across her estimated life span of 85 years and converted into a lump sum. The submission noted that the calculations (which I have referred to above) represents an under estimate of what the actual position will be because it assumes no inflation, uses Tracy's gross income (rather than net), factors the aged pension into the analysis and assumes that Tracy's expenses will remain static: PS [62(c)&(d)].
In relation to Tracy's health (s 60(2)(f)) her counsel referred to her physical health and mental health issues: PS [65]-[68].
It was submitted on Tracy's behalf that these conditions require ongoing treatment and have also negatively impacted upon her ability to earn an income: PS [69].
In relation to contribution to the property and welfare of the deceased (s 60(2)(h)), it was submitted that Tracy made a number of financial contributions (e.g. payments for travel and holiday arrangements), and also substantially contributed to the welfare of the deceased through her love and support: PS [75].
In respect of provision made for Tracy during the deceased's lifetime (s 60(2)(i)), reference was made to the benefit Tracy had received from initially living in the Ocean Avenue unit from 1987 until the property was ultimately gifted to her by the deceased in 2008 and the fact that in 2011 Tracy used the proceeds of sale of that unit to purchase a new property. It was further acknowledged that following Tracy's bankruptcy, Tracy moved back in with her mother to unit 1 of the Dumaresq units and had the benefit of accommodation there since late 2019: PS [77].
It was submitted on Tracy's behalf that there is no one else, such as a spouse, who has a primary obligation to look after her; that she has been a dependent of her parents in respect of accommodation for the vast majority of her life and that she has suffered a string of misfortune (the submissions referencing Joe's loss of investments in the GFC, Tracy's diagnosis with cancer and other long term health related problems and needs, her separation from Joe, her bankruptcy and loss of her home). It was stated that she has "a pellucid need for assistance to avoid destitution": PS [79].
In respect of expressions of the deceased's testamentary intentions, the submissions on Tracy's behalf referenced the 1991, 2011 and 2013 Wills. It was submitted that the otherwise possible importance of the reference in cl 8 of the 2013 Will to the 2008 gift of the Ocean Avenue unit to Tracy is considerably lessened by the loss of the NSHR unit following her bankruptcy in 2018: PS [81].
Reference was also made to a number of conversations since 2013 in which the deceased stated that her estate was split equally three ways between Isabelle, Tracy and Stewart; to the email dated 24 August 2018 and the fact that on a number of occasions (albeit unidentified by date or approximate date) Tracy indicated that the deceased had expressed words to the effect that in her Will she would like to leave 30% to Isabelle: PS [82].
In respect of maintenance of Tracy by the deceased, Tracy's counsel referred to the extent of provision of accommodation (to the extent that that might be characterised as a species of maintenance). It was accepted that the deceased had made ad hoc payments "here and there" for expenses of Tracy or Isabelle from time to time although it was stated that there was no regularity in this regard: PS [84].
In respect of the character and conduct of Tracy before and after the death of the deceased (s 60(2)(m)), it was submitted on her behalf that she had been a loving daughter that had cared for the deceased and been heavily involved in the deceased's life taking her on holidays, arranging reunions with friends and family, looking after her when she was unwell and providing daily practical support and generally endeavouring to give her mother emotional fulfilment and enjoyment in life. Reference was made in this regard to the evidence summarised in the context of their relationship (regarding s 60(2)(a)): PS [86].
In relation to the conduct of any other person before and after the date of death of the deceased (s 60(2)(n)), Tracy's counsel acknowledged that whilst Stewart no longer pressed his family provision claim, he is the other beneficiary under the Will and will be affected by any family provision order in favour of Tracy: PS [87].
Particular submissions were made on Tracy's behalf regarding Stewart's conduct. First, it was submitted that Stewart did not conduct himself well vis-à-vis the deceased. It was stated he left home at an early age, had a poor relationship with the deceased and did not give her the time, family interaction or assistance that she wanted or needed from Stewart and that he sought in the proceedings to mischaracterise the deceased's degree of religious devotion, being an important aspect of her identity: PS [88(a)]. I address this below.
The pre-trial written submissions for Tracy asserted that the change in the deceased's Will from its original 50/50 structure as between Tracy and Stewart was a consequence of the pressure from Stewart upon the deceased. The submission went to state that he procured the deceased to take out a loan to pay a business debt, that Tracy submits the deceased had no obligation to pay, where the deceased did not receive any of the proceeds of the loan and that he also impressed upon the deceased that she had some form of obligation to leave him more than a half share of the estate, owing to alleged business transactions entirely unknown to her: PS [88(b)]. I address this below.
In the written submissions on behalf of Tracy, the claim for the amount of the additional provision which I have outlined above, was sought by her counsel to be supported by reference to the outcome in Bindoff v Trust Company (Australia) Ltd [2016] NSWSC 1100.
It was properly acknowledged by Tracy's counsel that each family provision case turns on the particular circumstances before the Court at the time of determination. However, it was submitted that the decision in Bindoff does provide a rough yardstick given some degree of similarity between the position of the (respective) applicants and, furthermore, the distinctions between the two cases serves to demonstrate a greater comparative need on the part of Tracy: PS [92].
I note that in Bindoff the deceased had left a net distributable estate of more than $6.5 million and had given his adopted daughter a legacy of Woodside Petroleum shares (worth $155,684) plus accrued dividends of $15,430: at [3].
In submissions there was some discussion as between myself and Mr Davidson SC regarding the relevance of the Bindoff decision: T149, 152. A particular difference is that in the circumstances of these proceedings Tracy under the terms of the deceased's Will starts from a position in which (subject to the effect of costs) she is entitled to benefits in the order of $1.215 million.
I do not regard the decision in Bindoff as providing any real assistance to determining the outcome of this matter.

[43]

Stewart's submissions

DS, (the pre-trial outline of submissions of Stewart's counsel) addressed a number of aspects of Tracy's claim.
My attention was drawn to the terms of the Will of the deceased and in particular cl 8 of the Will containing the statement: "I have specifically gifted 70% of the net proceeds of sale of my interest in Units 1 & 2/[x] Dumaresq Road, Rose Bay to my son and only 30% to my daughter as I gifted all my interest in [strata title reference] to my daughter in 2008."
The strata title reference above is a reference to the Ocean Avenue unit.
It was submitted that the disparity between the bequests is due not only to the gift (of the Ocean Avenue unit) in 2008 but to several other factors including what was said to be numerous gifts to Tracy by her father including cash payments set out in Stewart's affidavit: DS [7]. However, the reference to that evidence was to a passage which ultimately not read in the proceedings and I have not had regard to that part of Stewart's affidavit accordingly.
It was submitted that no attempt has been made by Tracy to explain the reasons for her bankruptcy: DS [9].
I am reminded by Mr Skinner that there is a difference between what a plaintiff desires by way of provision as opposed to what he or she needs: DS [11] citing Smith v Johnson [2015] NSWCA 297; (2015) 14 ASTLR 175.
In Smith v Johnson it was noted that an assessment of needs, particularly where it is directed to such an important matter as the nature and cost of accommodation required by an applicant, must have a sound evidentiary foundation: at [85] per Sackville AJA, Macfarlan JA at [1] and Ward JA at [2] agreeing.
In relation to Tracy's claim for accommodation Mr Skinner submitted that she steadfastly refuses to countenance that it is open to her to reside in locations other than Rose Bay: DS [14] citing the entirety of Tracy's affidavit affirmed 6 September 2021 which was said to be based upon the value of real estate in Rose Bay. That affidavit was objected to and admitted subject to relevance.
Mr Skinner submitted that there was no explanation for the need for Tracy to reside in Rose Bay only, other than it is a wish of Tracy noting that the basis advanced is "fanciful": DS [14]. It was further submitted that the benefits afforded to Tracy by her occupation of the deceased's property in the previous gift of real estate appears to have been simply ignored by her and it is difficult to escape the conclusion that her attitude is grounded upon an inflated sense of entitlement divorced from reality and insight: DS [15].
Further it was submitted that there is a practical obligation on an individual to make decisions logically and in her best interests. For example, living in an affordable area: DS [16].
Mr Skinner submitted that Tracy's income which, having regard to her affidavits affirmed 9 February 2021 (at CB 20) and affirmed 31 March 2021 (at CB 84) was stated to be $2,500 per month, almost entirely made up of Centrelink payments. He noted that for "unexplained reasons" Tracy's level of income had in May 2022 risen to $4,000 per month: CB 147; DS [17].
It was submitted that there appears to have been no genuine effort by Tracy to earn an income commensurate with her age and qualifications: DS [17].
It was further submitted that Tracy's claim or desire to undertake a PhD in psychology is simply fanciful, particularly given the lack of income earned by her since 2000: DS [17].
Leaving aside Tracy's claim for the sum of $10,000 for Isabelle to undertake a school trip to Israel, Mr Skinner submitted that it is unexplained how Tracy's estimate of annual expenses at $209,655 "can be reconciled with the reality of an income of $48,000 per annum and annual rent of $62,400 per annum": DS [18].
Mr Skinner noted that Tracy's need for two replacement motor vehicles lacks any proper foundation: DS [19].
Mr Skinner submitted that Tracy adduced no evidence as to how the totality of issues of her medical conditions has impacted on her working ability: DS [20]. I address this below.
Criticism was made by Mr Skinner of the unexplained basis for Tracy to incur the cost of $6,500 per annum for visits to a psychologist every two weeks: DS [22].
It was submitted that the treatment and benefits from such consultations is not explained: DS [22]. There is as noted above some explanation. There is no direct evidence from a psychologist Jade Couquaux as to the need for Tracy to continue to see her for various mental health issues or professionally.
In relation to the claim for costs associated with caring for Isabelle, Mr Skinner's submissions specifically focused on the cost of private school education of $28,000 per annum, further costs of $3,000 per annum after NDIS payments and the cost of a future 4 year university course: DS [23].
Mr Skinner submitted that underlying the history of Tracy's dealings with the wider community has been a constant theme of antagonism, lack of cooperation, obstinacy, highhandedness and hostility on her part, the most recent example being "her refusal to vacate the Ocean Avenue unit": see DS [5]). It was further submitted that the most likely explanation is that Tracy harbours a misconceived sense of fairness based entirely on the notion that she has been "hard done by": DS [24].
Mr Skinner in the pre-trial submissions outlined made reference to the proceeds of an insurance claim purportedly made on behalf of the estate for damaged curtains which appears to have been appropriated by Tracy and also the appropriation of the deceased's motor vehicle (the Hyundai Getz) which was transferred to Tracy without the knowledge of the executor submitting that no accounting had taken place in respect of those items: DS [25].
In his written submissions Mr Skinner submitted that a consideration of the evidence leads to an almost inevitable conclusion of forfeiture of any moral claim on the part of Tracy to any further provision out of the deceased's estate: DS [27].
Mr Skinner ultimately submitted that Tracy's summons should be dismissed: DS [30].

[44]

Income and expenditure schedule

In a context in which cross examination shed some doubt on the accuracy of Tracy's income and expenditure. I made a direction at the end of the hearing giving Tracy an opportunity to provide a summary schedule for the provision of income and expenditure for Tracy between the years of 2017 and 2022 (to include reference to any of the evidence supporting of the figures), and an opportunity for Stewart to respond to the schedule.
The discussion in relation to the schedule related to both income and expenditure: T171.2-.49, as did to the direction made by the Court on 19 May 2022.
Tracy's counsel provided on 26 May 2022 a "SUMMARY OF GROSS INCOME AND BENEFIT RECEIPTS DERIVED FROM EVIDENCE" (Schedule). Mr Skinner on 27 May 2022 provided a response to the Schedule.
The Schedule contained no summary details in relation to expenditure.
Tracy's counsel provided by email on 30 May 2022 a revised schedule sent to the Associate to Meek J being "SUMMARY OF GROSS INCOME AND BENEFIT RECEIPTS DERIVED FROM EVIDENCE" and "SUMMARY OF EXPENDITURE ESTIMATE BY FINANCIAL YEAR DERIVED FROM EVIDENCE" (Revised Schedule). I have marked the email as MFI 4.
The email explained in relation to the Revised Schedule: 1. that the omission to provide a summary of expenditure was inadvertent and accordingly summary of expenditure was provided as an attachment; 2. an amendment was sought to be made to the income summary based on additional data in Centrelink records regarding receipt by Tracy in TFC-3 in the months of February to April 2022 that should be included in the calculations (resulting in an amendment of the estimated gross income and benefits for the year 1 July 2021 to date, revising that figure down from $54,234 to $48,928); 3. that for the financial year 1 July 2017 to 30 June 2018 there was insufficient information in the admitted evidence to provide a reliable estimate (of income and benefits) for that financial year.
I granted leave to Tracy's counsel to substitute the Revised Schedule and leave for Mr Skinner to further respond by 4pm on 31 May 2022.
The first summary page of the Revised Schedule provided by Tracy's counsel is as follows: Estimated Income year Gross Income Evidence Reference and Benefits 1.7.17 to 30.6.18 N/A N/A N/A 1.7.18 to 30.6.19 $41,126.16 Income receipts of $1,785.63 for a 1 month period. ANZ Account - Schedule B Extrapolate to $21,427.56 for a 12 month period. Benefit receipts of $3,283.10 for a 2 month period. Extrapolate to $19,698.60 for a 12 month period. ANZ Account - Schedule B Total estimate for financial year = $41,126.16 1.7.19 to 30.6.20 $35,153.18 NAB Account - Income receipts of $9,741.45 for an 11 month period. NAB Account - Schedule A Extrapolate to $10,627 for a 12 month period. Benefits - $943.33 per fortnight. Extrapolate to $24,526.18 for a 12 month period. ANZ Account - Schedule B Total estimate for financial year = $35,153.18 1.7.20 to 30.6.21 $55,952.34 NAB Account - Income receipts of $26,093.29 for a 12 month period NAB Account - Schedule A ANZ Account - Receipt of benefits of $17,417.78 for a 7 month period. Extrapolate to $29,859.05 for a 12 month period. ANZ Account - Schedule B Total estimate for financial year = $55,952.34 1.7.21 to date $48,927.76 NAB Account - Income receipts of $19,805.49 for a 9 month period. NAB Account - Schedule A Extrapolate to $26,407.32 for a 12 month period. ANZ Account - Receipt of benefits of $18,767.03 for a 10 month period. Extrapolate to $22,520.44 for a 12 month period. ANZ Account - Schedule B Total estimate for financial year = $48,927.76

[45]

The second summary page of the Revised Schedule provided by Tracy's counsel is as follows Income year Estimated Calculation Reference expenditure 1.7.17 to 30.6.18 N/A N/A N/A 1.7.18 to 30.6.19 $57,873.26 ANZ Account #1 - $2,105.34 of expenditure for the period 16.1.18 to 5.2.18 (3 weeks). Exhibit 2D2, 001-004 Extrapolate to $36,492.56 for a 12 month period. ANZ Account #2 - $3,563.45 of expenditure for the period 25.1.18 to 26.3.18 (2 months). Extrapolate to $21,380.70 for a 12 month period. Exhibit 2D2, 007-013 Total estimate for financial year = $57,873.26 1.7.19 to 30.6.20 $79,624.44 NAB Account - $25,726.47 of expenditure for an 11 month period. Exhibit TFC-3, 003-017 Extrapolate to $28,065.24 for a 12 month period. ANZ Account - $8,593.20 for a 2 month period (26.11.19 to 24.1.20). Extrapolate to $51,559.20 for a 12 month period. Exhibit 2D2, 080-088 Total estimate for financial year = $79,624.44 1.7.20 to 30.6.21 $91,622.07 NAB Account - $69,547.30 of expenditure for a 12 month period. Exhibit TFC-3, 018-040 ANZ Account - $12,876.95 of expenditure for a 7 month period. Extrapolate to $22,074.77 for a 12 month period. Exhibit TFC-3, 057-083 Total estimate for financial year = $91,622.07 1.7.21 to date $88,666.36 NAB Account - $41,608.19 of expenditure for a 9 month period. Exhibit TFC-3, 040-055 Extrapolate to $55,477.59 for a 12 month period. ANZ Account - $24,891.58 of expenditure for a 9 month period. Extrapolate to $33,188.77 of expenditure for a 12 month period. Exhibit TFC-3, 055-128 Total estimate for financial year = $88,666.36

[46]

The supporting figures for each of the first and second pages of the Revised Schedule is said to have been drawn in part from Ex TFC-3 and Ex 2D2.
Mr Skinner on 27 May 2022 provided a response to the initial schedule regarding the summary of gross income and benefit receipts. His responses in relation to that summary was as follows (paragraphs renumbered for convenience): "(1) Firstly, the Schedule provided by the plaintiff omits any reference to the year 1 July 2017 to 30 June 2018 without explanation. (2) Secondly, the Schedule omits any reference to expenditure by the plaintiff. (3) The Schedule provided comprises much in the way of extrapolation. The only available inference is that the plaintiff has failed to provide all source documents. There is every likelihood of other bank accounts which have not been disclosed. For example, one page only of a Classic NAB Account was produced. (4) Assuming the correctness of the estimate of income derived by the plaintiff for the past two financial years, namely $55,952.34 and $54,233.81, the second defendant says that present level of income exceeds that plaintiff's most recent evidence of earning $4,000 per month ($48,000 per annum). See Plaintiff's affidavit of 2 May 2022 at [51]. (5) The plaintiff, despite the service of two Notices to Produce, has simply failed to demonstrate that her income is inadequate to a degree whereby she requires additional provision out of the estate of her late mother. This is so, in circumstances where the plaintiff has not attempted to explain the manner in which she has disbursed her past income. It would have been a relatively simple exercise to demonstrate, (if it were the case,) that the plaintiff's expenditure exceeded her income by a computed and identifiable monthly figure. (7) The Court is simply not in a position to make an assessment as to whether the financial position of the plaintiff is such that her present entitlement under the will of a sum exceeding one million dollars is inadequate to meet her future needs. (8) Finally, one might well have anticipated a much greater reduction in the plaintiff's savings if there was in fact a significant disparity between the plaintiff's earnings and expenditure. The second defendant repeats the previous submission that the claim lacks a cogent and proper financial basis."
I accept Mr Skinner's responses in (1), (2) and (5). I accept the comment in (3) that the Schedule comprises much by the way of extrapolation. In relation to the nondisclosure of bank accounts, there is, as I have noted above only one statement of the iSaver account (cf Classic Banking account) produced (TFC-3 pp 55-56). There is also as I have earlier noted only the single page extract of the account described by Tracy as the "trust account".
The response in (4) relation to the estimate of Tracy income needs to be considered in light of the Revised Schedule which adjusted down the estimate of income for the current financial year to date.
I note the submissions in (6) and (7) and have taken them to into account in relation to my determinations regarding provision.
Mr Skinner on 30 May 2022 provided a further response to the Revised Schedule. His responses in relation to that summary was as follows: "1. An Amended Summary Schedule for the provision of income and expenditure of the plaintiff between the years 2017 to 2022 has been filed by the plaintiff's legal advisors. 2. The further Summary provided in regard to expenditure again comprises much in the way of extrapolation. The only available inference is that the plaintiff has continued to decline to provide all source documents. There is every likelihood of other bank accounts which have not been disclosed. For example, one page only of a Classic NAB Account was produced. 3. The fundamental deficiency inherent in the estimates of expenditure is that there has been no attempt to distinguish between one-off items and recurrent expenses. 4. Assuming that the estimate of expenditure bears some relationship to what the plaintiff has spent from 1 July 2018 to date, the conclusion to be drawn is that the estimated future annual expenditure of $209,655 (not including a school trip of $10,000), nominated by the plaintiff is simply an exercise in exaggeration. 5. As previously submitted, the Court is simply not able to make an assessment as to whether the financial position of the plaintiff is such that her present entitlement under the will of a sum exceeding one million dollars is inadequate to meet her future needs. 6. Again, repeating a previous submission, one might well have anticipated a much greater reduction in the plaintiff's savings if there was in fact a significant disparity between the plaintiff's earnings and expenditure. Moreover, no attempt has been made to explain, for example, how the plaintiff funded a deficiency of $39,738.60 between income of $48,927.76 and expenditure of $88,666.36 from 1 July 2021 to date. 7. The second defendant repeats the previous submission that the plaintiff's claim lacks a cogent and proper financial basis. For this reason, the summons should be dismissed."
I note the further submissions and have taken them to into account in relation to my determinations regarding provision.

[48]

Conduct of the parties

In relation to the submissions made on Tracy's behalf regarding Stewart's conduct, I reject the submission at PS [88(a)].
As the case was opened by Mr Davidson SC, in a manner commendably consistent with an intent to facilitate the just, quick and cheap resolution of the real issues in the proceedings (s 56(1) Civil Procedure Act), Mr Davidson SC submitted that both Tracy and Stewart might each have had an undue focus on their perceived character flaws and indicated that submissions would focus on issues of most relevance for a family provision claim, hoping to avoid temptations to respond in kind to what Tracy's counsel might say are some of the harsh character assessments made of Tracy by Stewart. Mr Davidson SC accepted and submitted that this case is not a character assessment of which child was the better or more deserving in the eyes of their parents: T2.
As Mr Davidson SC came to cross examine Stewart he noted he did not anticipate there being any Browne v Dunn (1893) 6 R 67 points taken against him in an effort to be more abbreviated in cross examination to enable the case to finish within the allotted time: T113. I made reference to the decision of Campbell J in West v Mead [2003] NSWSC 161.
Campbell J (as his Honour then was) noted (in the context of the obligation of procedural fairness), that if it is intended to impeach the credibility of a witness on a particular matter, whether the cross-examiner ought to give the witness an opportunity whilst he is giving evidence, to make any explanation which is open to him on the matter, will depend upon the nature of the pre-trial preparation there has been, and whether that pre-trial preparation has been sufficient to give notice to a witness of the submission ultimately intended to be put to the Court: at [98].
His Honour noted that even where there has been an exchange of affidavits or statements, the rule in Browne v Dunn will require a cross examining counsel to put to a witness the implications which counsel proposes to submit can be drawn from the evidence if those implications are not obvious from the evidence, or from other pre-trial procedures, or the course of the case: [99].
I noted before Mr Davidson SC embarked upon cross examination that if there is some particular matter of any significance that he may consider it appropriate to specifically put that, simply as a matter of fairness to the witness: T114.
During, the course of his cross examination, Mr Davidson SC did not put to Stewart matters the subject of the pre-trial written submissions in PS [88(a)] (poor relationship, mischaracterisation of the deceased's degree of religious devotion).
It is in the above context, including Mr Davidson SC's flagged intention to focus on the real issues in dispute, which appeared to be an entirely understandable forensic decision, I formally do not accept the submission in PS [88(a)].
In relation to the submissions (see PS [88(b)]) regarding Stewart's conduct in respect of (a) the financial arrangements as between Stewart and his father and Stewart's discussion with the deceased giving rise to her becoming more directly liable for a loan facility and (b) the subsequent change in benefit between the May 2011 Will and the November 2013 Will, Mr Davidson SC did cross examine Stewart on these matters. I find as follows.
It is clear that Stewart did have discussions with the deceased regarding the debt of SMC following Michael's death and I have set out earlier in this judgment the evidence regarding that.
As noted above, it was in the context of Stewart's explanation that he paid in excess of one half of the share of the ATO debt, that he regarded the deceased as being responsible for his father's part: T125. As noted earlier I do not regard the deceased's decision to come more directly liable under the refinancing arrangement as counting against Stewart in light of his explanation.
Stewart denied that he encouraged the deceased, over the years, to change her Will to favour him until the time that she signed the final Will: T127. Stewart accepted that he had expressed dissatisfaction to the deceased regarding terms of previous Wills, though indicating that the dissatisfaction was as to how the deceased documented her ownership of the property: T127-128. That is independently borne out by the letters which Jacques Kosmin wrote to the deceased leading up to her final Will in 2013.
Stewart denied that he was concerned to get a larger share of the estate than the earlier Wills were providing to him: T128.
The letters from Mr Kosmin to the deceased leading up to the making of the 2013 Will (whilst accepting the limited basis upon which those letters were admitted into), clearly reflect requests from Stewart of the deceased regarding her testamentary intentions and the borrowings.
However, if the suggestion be that the change in provision reflected in the deceased's ultimate Will from the prior 2011 Will was as a result of "pressure from Stewart on the deceased" I reject the suggestion that any conduct on the part of Stewart was untoward, beyond mere putting forward his views and request.
Mr Skinner's submission regarding the theme of Tracy's dealings with the wider community being marked by matters such as antagonism and lack of cooperation leading to a misconceived sense of fairness that she had been hard done by, in a sense only really bites in a financial sense in respect of the submissions that the financial misfortune was to a degree self-inflicted. I make findings in respect of that below.
There are obviously examples in the evidence of Tracy having conflict with a number of people. Without being exhaustive that appeared to include neighbours in the NSHR unit, the OSP, complaints against the NAB in selling of her property at an alleged undervalue (T43) and Jacques Kosmin.
Tracy accused Mr Kosmin of impropriety: T102. However, there was no attempt to make good in the proceedings such a serious allegation.
I raised with Tracy's counsel Mr Davidson SC the fact that there was in evidence allegations of a very serious nature made against a whole number of professional people. Mr Davidson SC noted that there was a great deal of anger (from Tracy) beyond the level of irritability that one can experience when something is "not liking": T161. I noted that using Mr Davidson SC's expression of "a great deal of anger" that there was nothing in the evidence and nothing for last 14 months from any medical professional to indicate that there was a medical basis for that. Mr Davidson accepted there was nothing beyond what appears in those (now dated) reports: T161-162.

[51]

Tracy's health and ability to work

A difficulty with Mr Skinner's submission that there has been no genuine effort by Tracy to earn an income commensurate with her age and qualifications (DS [17]) is that apart from the references that I have noted above in the evidence to historic per annum income for Tracy, I simply do not know, and have not been provided with, any reference or standard to indicate what income might be said to be commensurate with Tracy's age and qualifications.
It can be seen that the reports regarding Tracy's health and medical conditions are somewhat dated, the reports of Dr Huber and Dr Neilssen being approximately 14 months prior to the hearing.
There were no updating report(s) by either of Doctors Huber and Neilssen nor any later report from Jade Couquaux other than the report dated 24 July 2020. None of those reports at least expressly provided any prognosis regarding Tracy's capacity for work going forward. Rather, the reports appear to speak to the point of time of the reports (Dr Huber stating "her capacity for work has been severely limited"). In any event, as I note, the reports have been not been updated.
Assuming Tracy followed the treatment plan of Dr Neilssen it would appear that she is able to function and at least earn some remunerative income despite her conditions.
It is clear from other evidence including some cross examination of Tracy regarding her travel patterns and references to deposits to bank accounts that Tracy goes to some courts for work (T53) and continues visit and see clients (T53-54) and gain income through those means.
Having made that observation, I note that during her cross examination Tracy presented at times at other times with irritability, particularly at some of the questioning by counsel for Stewart. I have mentioned this above.
It appeared to me that at least the irritability difficulty referred to by Jade Couquaux (CB 88) and the inability to relax and irritability that Tracy had described to Dr Neilssen (CB 92) were still manifest to some degree.
Whilst there was no updated medical evidence regarding Tracy's condition and any prognosis for the future, I accept that she might continue to suffer from some symptoms of inability to relax and irritability.
I have referred above to Tracy's evidence in cross examination regarding the need to see a psychologist. She accepted she was not able to nor had produced receipts for expenditure of $250 per visit. Her reasons for seeing a psychologist, whilst described by Tracy as being "Many reasons" (T28), were essentially two-fold. First, as being treatment for various mental health issues that Tracy has and, second, as an optional requirement for maintaining a professional relationship with a psychologist: T28-29.
There is no updating report from Ms Couquaux further to the report dated 24 July 2020 which was prepared for the purpose of Local Court proceedings. Thus, whether there is a specific need for Tracy to continue to incur the cost of fortnightly visits is not clearly established. However, the amount that I contemplate by way of provision (see below) coupled with Tracy's savings ought to enable Tracy to continue to see a psychologist should she choose to do so at least on some regular basis, even if not fortnightly but at some longer time interval.
Whilst I am prepared to accept that Tracy's physical and mental health conditions require some degree of ongoing treatment, and I am also prepared to accept that they have to some unquantified extent negatively impacted upon her ability to earn income to this point, the medical reports that I have referred to do not give the Court any clear indication as to the extent to which (if at all) the conditions will impact upon Tracy's ability to earn income for the future.
I accept that it is possible that from time to time Tracy's physical and mental health might have some impact reducing her ability earn income. However, in the absence of any updating material or particular prognosis for the future and the failure of Tracy to update the medical evidence for the purposes of the hearing, I am not prepared to accept that her physical and mental health conditions would be "severely limited" for the future or would substantially impact her ability to earn income.

[52]

Tracy's post 2017 financial misfortune

In relation to the submissions that there had been no attempt made by Tracy to explain the reasons for her bankruptcy, I have outlined to some degree the factual context above.
It is true that Tracy's initial affidavit affirmed 9 February 2021, was "light on" in detail regarding the bankruptcy. As I have noted at that stage, Tracy was self-represented.
Further, as I have earlier noted, the context for the lead up to Tracy's bankruptcy appears at least in part from later evidence including some of the documents in Ex SBC-2.
First, there was a dispute about Tracy having a dog on the premises, which dispute went to NCAT: T35. Surprisingly, Tracy, when asked what happened regarding the NCAT case and who won, stated that she was not actually sure who won and that there was some dispute as to whether the OSP were allowed to make a by-law: T35-36.
There was clearly some dispute about non-payment of strata levies: T36.
However, it is unclear whether that dispute arose because Tracy did not have the means to pay for strata levies or other strata fees, or whether she did have the means but declined to pay for them because of a dispute with the OSP, or for some other reason.
Tracy referred to the fact that the "body corporate continually added huge strata fees that were unforeseen": T38-39. Tracy was asked whether during the time that she was in dispute with the body corporate before NCAT she was paying the strata levies, to which she responded "Yes, I paid them off many times": T40.
When Tracy was further cross examined on the second day relating to the strata disputes she appeared to suggest that at least part of the dispute related to the fact that there were fees charged to her which were beyond quarterly levies for matters such as spandrels and legal fees: T89.
She asserted in one answer that (T89-90): "..In fact, an extra $6,000 for spandrels, in fact it has been shown in the NCAT Court that they specifically targeted me and unfairly took legal action against me in spite of everybody else and significant other parties being behind in their levies. The reason I was behind in some cases was that they refused to ‑ and this was in a Court hearing and although I don't believe this is a hearing about this particular issue I will explain that it was noted in Court that there was significant prejudice towards me from that building. As a result we challenged the Owners Corporation and they were thrown off for such behaviour. Now, that's just additional information that you might wish to consider."
When I asked about use of the words "spandrels", Tracy gave a response referring to a special levy in respect of that and outlined details of charges concluding (T90): ".. All of this was absolutely corrupt at its, at the least, and the entire body corporate was dismissed as a result of myself and another person taking them to Court."
A little later Tracy referred to the fact that is an NCAT judgment regarding some of these matters stating in part (T92): ".. there is judgment about the bias of these people which is, again, as I repeat, resulted in their dismissal in the strata - strata choices dismissal from the building following that particular situation."
Later, during the course of submissions, I referred to the fact that reference had been made to proceedings in NCAT and judgments and I asked counsel whether there was any proposal to provide to the Court copies of the judgments.
Ultimately the position was that I was informed that I should proceed on the basis that neither party proposed to provide information about those judgments: T139-140.
Tracy accepted the fact that she had not disputed at least in the bankruptcy proceedings the judgment on which the bankruptcy notice was based, nor disputed the amounts in the ledger (commencing at CB 646) she was cross examined on. However, clearly in her mind there remains some residual concern as to whether it was correct or fair: T92.19-24.
In the above context, given the lack of detail regarding the merits Tracy's dispute with the body corporate and the precise reasons for the default which led to the mortgagee sale of the Ocean Avenue unit, I do not think I can in light of the answers given by Tracy in cross examination and in the absence of further information make any specific finding adverse to Tracy regarding the reasons for her financial difficulties which led to her bankruptcy.
Despite the evident intent of Mr Skinners' cross examination of Tracy, I am not prepared to accept that Tracy acted in a way to be the author of her financial misfortune since 2017, or at least not substantially so.
On the other hand, I am not prepared to accept that Stewart acted unreasonably in declining to commit to the conditions proposed by the bankruptcy trustee. In this regard I have already referred to the evidence that Jacques Kosmin was not acting for Stewart. As I have noted the issue of whether Stewart acted reasonably or not in declining to assist Tracy and to indemnify the trustee was not further pursued in cross examination: T135.

[53]

Tracy's financial resources

The extent to which the figures in the scenarios put forward on Tracy's behalf both as to Tracy's capital needs and recurring needs can be relied upon are connected to the reliability of the estimates by Tracy of income and expenses.
Tracy's initial disclosure of income was stated to be $2,500 per month, almost entirely made up of Centrelink payments, and Mr Skinner noted that for "unexplained reasons" Tracy's level of income had in May 2022 risen to $4,000 per month: CB 147; DS [17].
However, Tracy in her affidavit affirmed 31 March 2021 indicated that whilst she had disclosed her income as being the Centrelink Newstart allowance of $2,500 per month, she was trying to return to work and (then) currently managed about 10 hours per week on average. She stated that she recently had around $600 per fortnight from her work resulting in a corresponding reduction of her new start allowance such that her monthly income remained around $2,500: CB 84. She then expressed a hope that she could slowly increase her hours of work "but I cannot hope to return to a busy, full time practice".
In Tracy's 2 May 2022 affidavit the estimate of average gross monthly income as $4,000 included benefits she received from Centrelink. One possible explanation, for the increased amount, although not expressly advanced by Tracy in that affidavit, is simply that she has been successful in securing work that has increased her level of income.
Whilst I note that the Revised Schedule altered the income figure for the financial year commencing from 1 July 2021, I otherwise accept Mr Skinner's responses (referred to above) in (1), (2) and (5) regarding the income details in the schedule. I also accept the comment in (3) that the Schedule comprises much by the way of extrapolation.
Another difficulty with Tracy's failure to produce the bank statements for the "trust account" (Ex 2D3), and with the late production of only a single page indicating the current available balance, is that there was no disclosure in the proceedings of the transactions on that account during the 20 month period from September 2020 when the amount of approximately $137,000 was transferred to the account until 17 May 2022 when the account had the balance of approximately $95,000.
Clearly amounts have come out of the account. It is possible that amounts might have been deposited to the account including, some income amounts. I simply do not know. In Tracy's affidavit affirmed 17 May 2022 at [8] she stated that payments for the services as a psychologist are paid into an account that she maintains with NAB. That evidence does not necessarily establish that all income or other financial benefits for Tracy were exclusively banked to the Classic Banking account.
In any event, no reason was advanced to me as to why the statements for the "trust" account had not been produced other than Tracy's answer in cross examination noted above. The fact that she herself did not get bank statements for the "trust" account does not really explain why she did not seek to obtain and produce the statements in response to the notices to produce or otherwise for the purposes of the proceedings.
It leaves the Court in a position in which it has no evidence as to whether Tracy has received monies that have been deposited to that account over that 20 month period.
That is of some significance because, apart from what I have mentioned above, the transactions on the other three accounts for which she did produce statements, do not disclose balances anywhere near the level of the amounts that is in what Tracy described as this "trust account".
I have concern over Tracy's estimate of her annual expenses ($209,655 plus $10,000: CB 153). The indication of that level of expense having regard to an income of $48,000 per annum (the figure referred to by Tracy's counsel in submissions but revised by Tracy's counsel by reference to MFI 4 to a level of $55,952 for the financial year ended 30 June 2021 and $48,927 for the financial year post 1 July 2021 to date), is somewhat extraordinary. Expenses of that level are in the order of 4 times the amount of an income of approximately $48,000 (gross) per annum.
Whilst, Tracy's counsel did attempt to provide some calculations in the Revised Schedule regarding her expenses, I regard Mr Skinner's criticisms that the expenditure part of the Revised Schedule comprises much in the way of extrapolation and does not attempt to distinguish between one-off and recurrent expenditure as having real force.
As I have noted above Tracy's answers to the cross-examination regarding her expenses did not fill me with confidence regarding her ability to accurately place before the Court details of her expenses. It left me in the invidious position that I could not have confidence in Tracy's estimate of expenses as being a reasonably accurate representation of the current position.
As is evident, I remain troubled and a degree unconvinced regarding the accuracy of Tracy's financial resources, particularly in the context in which she clearly had opportunity to put before the Court details of the bank statements relating to the account she described as a "trust account" (Ex 2D3) and when the cross examination demonstrated that estimates of her expenditure in particular the costs associated with Isabelle's schooling were substantially inaccurate.
I further bear in mind the fact that there were no income tax returns produced by Tracy, despite requests from Stewart's legal representatives, noting that some returns which apparently had been prepared were not produced and other returns had not been prepared.

[54]

Tracy's claim for provision

I asked during the hearing asked whether the (total) sum of $1.9 million was the figure that Tracy was actually seeking.
Mr Davidson SC indicated that that was an interesting question and that there was a related question as to whether the extent to which he ought to be giving a view about the figure that should be awarded: T148.
As I have noted in the initial part of this judgment, the subsequent revision of the figures (see MFI 3) has not resulted in variation of the submission on Tracy's behalf to argue that Tracy's a maximum entitlement should exceed the figure of approximately $1.9 million.
I had a brief exchange with Mr Davidson SC regarding the decision of Hallen J in Limberger v Limberger [2021] NSWSC 474 noting that the Court of Appeal in Bassett v Bassett [2021] NSWCA 320 had approved his Honour's comments: T148.
Ultimately Mr Davidson SC, apart from marking out the total of $1.9M as a maximum figure, did not put to me any specific figure or specific range of figures by way of suggested provision for Tracy. I did not press him to do so.
The submission that Tracy's claim or desire to undertake a PhD in psychology is simply fanciful, to my mind does have some force. In relation to her claim for funds to study for a PhD, I do not regard it as being appropriate that she should be given additional provision at an apparent cost of $144,000 to undertake a 3-4 year PhD course in circumstances where while she claims the benefit to her is "Unlimited" (T20) she has not "anticipated" (by way of any quantifiable estimate), what additional income she might receive as a result of undertaking a PhD degree (T20) and there is no other evidence quantifying in any clear way what financial benefit might accrue to her from doing that.
I do not propose to make any specific provision for other expenses for the cost of replacement vehicles for Tracy's claim.
I have addressed earlier the problematic issue of Tracy's estimate of costs for Isabelle's schooling. The current position is Tracy's account with the school is in credit and it seems that Tracy, with the assistance of subsidisation of fees and some waiving of fees, has been able to cover Isabelle's school education.
I have no difficulty in accepting that the payment for Isabelle to go on the school trip is an appropriate and reasonable expenditure for Tracy. Nonetheless, it is a somewhat different question as to whether any specific provision ought to be given for that by way of Court order.
In circumstances in which the deceased did not have a history of funding Isabelle's school expenses, for which Tracy has received considerable assistance from the school, I do not regard it as being appropriate for Tracy to be given any specific funding to cover the costs of Isabelle's remaining high school education.
In any event, the award of provision which I contemplate below, ought permit Tracy to pay the balance of the $10,000 amount for Isabelle's overseas trip, noting that $2,000 of that $10,000 amount has already been paid, being provided out of the distribution of the $750,000 which Tracy received: T76.
There is no certainty that Isabelle will attend university. I do not regard it as being a potential need that ought to be specifically included in the award of provision out of the deceased's estate for what would be a contingent expense.
Should Tracy seek to supplement in some way any cost associated with that in the event (which is yet uncertain) that Isabelle determines to attend university, then that is a matter for Tracy.
I have already referred to the cross examination of Tracy regarding at least the cost of rental accommodation in Randwick. In the proceedings, Tracy only provided evidence regarding the cost of purchase of accommodation in Rose Bay.
Despite Mr Skinner's submission, it is not entirely correct to suggest that there is no explanation for Tracy's need to reside in Rose Bay other than it being her wish.
In Tracy's affidavit affirmed 6 September 2021, in reference to pricing regarding unit 1 Dumaresq units, Tracy outlined a number of reasons as to why that unit ("our current home") was then suited to the requirements of Isabelle and herself notably, as the unit: 1. has two bedrooms; 2. has off street parking, necessary for transporting Isabelle to and from school and other appointments on a daily basis; 3. has both a balcony and a courtyard, which provide additional space for herself and also necessary for their dog (noting that the dog provides companionship and security for Isabelle and it is important that any future home can accommodate a dog); 4. is located in Rose Bay, which is an area and suburb with which Isabelle is familiar and is comfortable for her given her Asperger's and her anxiety; 5. has a suitable area for her office, which although not a separate room, is separate from the living areas of the home and allows Tracy to undertake her professional commitments as required (noting that Isabelle also utilises this area from time to time to complete her homework and study); 6. is close to Tracy's friends and close to Isabelle's friends CB 98-99.
However, I understood Mr Skinner's point to be that each or most of those factors could easily be said to be applicable to accommodation in Randwick or its surrounds. There is force in that.
Apart from the details set out in her affidavit affirmed 6 September 2021, the only updating details of costs of accommodation in Rose Bay was provided in Tracy's affidavit affirmed 2 May 2022 referring to two further sales in Rose Bay (CB 154, 282). One of those properties was the sale of a two bedroom unit in the avenue at Rose Bay in May 2021 for $1.855 million. The other was the purchase by Stewart of his current unit in November 2021 for $2.1 million.
During Tracy's cross examination she indicated that in terms of looking for properties to rent she looked in areas of a 5 to 8 kilometre circumference of Isabelle's school.
Stewart did not adduce in evidence the cost of properties for purchase in Rose Bay or any other area. During Tracy's cross examination the only material that was forthcoming regarding accommodation related to the cost of rental of properties in Randwick.
I was not provided with any evidence regarding the cost to purchase available properties within the Randwick area.
I was left in the position that the only evidence regarding costs for purchase of accommodation related to properties in Rose Bay and not to other areas such as Woollahra, to where Tracy will shortly be moving and Randwick where Isabelle's school is.
One of the properties that Tracy identified in her affidavit affirmed 6 September 2021 which she stated would have been suitable for Isabelle and herself to live in having regard to their needs was a property in Hamilton Street Rose Bay that had been sold in September 2020 (being a two bedroom, one bathroom unit with a sunroom/study and parking) at a price of $1.264 million: CB 100. Tracy noted that the stamp duty on a property purchased for $1.2 million is approximately $50,567: CB 100.
Tracy has already had from the hands of her parents and in particular from the deceased significant provision both during the deceased's lifetime and pursuant to her Will.
Tracy has had the benefit of living in the Ocean Avenue unit from approximately 1974 until 2008 when it was gifted to her by the deceased. At that stage it was valued at approximately $450,000. Tracy continued to live in the property until 2011 at which point of time it was sold for $580,000. She then used the proceeds of the sale that property to purchase the NSHR unit. Thus, as at 2011 Tracy had received not only the benefit of living rent free in the Ocean Avenue unit for decades, she also had the use of a capital sum of $580,000 from the sale of that property.
That sum coupled with her entitlement under the estate of the deceased in the sum approximately $1.215 million amounts to capital sum benefit of $1.795 million from the hands of the deceased (both inter vivos and testamentary).
Such provision by any account is very significant provision for a parent to give to an adult child such as Tracy who is very well educated.
The amount of those benefits both inter vivos and testamentary coupled with my concern regarding the lack of reliable detail in respect of Tracy's expenses counsels against an award of provision in the order seemingly sought on her behalf for multiple needs from the deceased's estate up to a maximum of approximately $1.9 million.
Clearly Tracy has a need for accommodation. Overall, I consider that some further provision ought to be provided for Tracy to enable her to have a reasonable prospect of securing appropriate accommodation for herself and Isabelle to purchase. In saying that I am not suggesting that provision should be given to cover the entire cost of accommodation of Tracy's preferred choosing.
I do not consider that the entire cost of accommodation in the order of that sought by Tracy should be funded out of the deceased estate by an additional order for provision, particularly in circumstances in which there was a lack of reliable evidence adduced by Tracy about the extent of her income and expenditure.
Clearly there are areas other than Rose Bay which Tracy could reasonably live with Isabelle. Tracy gave evidence in her affidavit of 6 September 2021 of two-bedroom properties sold in or March-April 2021, which although she stated was not suitable for her, were sold at prices between $1,077,500 and $1,176,000: CB 99. Of the properties in Rose Bay which Tracy asserted were suitable to her there was a two-bedroom unit with parking and a sunroom/study sold in September 2020 for $1,264,000: CB 100.
Whilst that material is somewhat dated, Tracy did not adduce more recent material regarding the cost of accommodation.
To the extent that Tracy's claim for provision is based on a significant gap between unfunded recurring needs and income, in light of my findings, I'm not prepared to accept that any provision should be made based on the scenarios put forward by Tracy's counsel.
As a general guide, though not a rule, adult children should not expect a level of provision that funds them into unencumbered accommodation, supplements a gap between their income and expenditure (and at least not for the balance of their expected life) and additionally provides them with a fund for contingencies.
Bearing in mind the unsatisfactory evidence regarding Tracy's financial position, but recognising she has need for suitable accommodation (though not the ideal she seeks) doing the best I can, I consider that in light of all the circumstances, Tracy should receive an amount of provision out of the deceased's estate a sum of $1.45 million from the net proceeds of the sale of the Dumaresq units in lieu of the provision that Tracy receives under the Will.
Based on the figures for Tracy's existing entitlement of approximately $1.215 million, that represents an additional provision of approximately $235,000.
I envisage that that amount together with her disclosed resources and earning capacity will enable Tracy to be able to secure appropriate accommodation and leave her with other funds to allocate as may be appropriate to at least some of her other claimed needs including a buffer for exigencies.
The award of $1.45 million would permit Tracy to purchase either outright or purchase with some degree of borrowing accommodation in the order of $1.2 million plus stamp duty.
Ultimately it would be a matter for Tracy whether she chose to spend $1.2 million for accommodation or in excess or underneath that.
I consider that there is a good degree of force in Mr Skinner's submission that there is a practical obligation on an applicant to make decisions logically and in their best interests including living in an affordable area, and otherwise managing the budget to live within her or his means.
If accommodation is purchased by Tracy for about $1.2 million or $1.25 million including stamp duty, provision of $1.45 million would leave her with an amount of respectively $250,000 or $200,000 which coupled with her savings of $95,000 would provide her with a lump sum of $345,00 or $295,000 as a buffer for contingencies.
The amount awarded, if appropriately handled by Tracy to live within the means available to her, would permit her to make choices as to what expenditure she deploys to matters such as replacement vehicles or education or health expenses apart from accommodation.
In the result I have determined that in lieu of provision given to Tracy under the Will of the deceased that she should receive a legacy of $1.45 million from the net proceeds of the sale of the Dumaresq units, being approximately $235,000 more than the approximately $1.215 million, estimated to be her entitlement under the Will.
I note that Tracy has already received a distribution of $750,000. Thus, the amount Tracy should further receive as a further distribution from the estate is an additional $700,000.
The intent of the order is that Stewart should receive the balance of the net proceeds of the sale of the Dumaresq units.
The final impact of the order for both Tracy and Stewart will no doubt be affected by the question of costs.
Both parties indicated that the question of costs should abide the ruling of the court. I will follow that course.
The orders of the Court are: 1. In lieu of provision given to Tracy under the Will of the deceased that she should receive a legacy of $1.45 million from the net proceeds of the sale of the Dumaresq units to the intent that Stewart should receive the balance of the net proceeds of the sale of the Dumaresq units. 2. The matter is stood over to 9:30 AM on 22 June 2022 to enable the parties to address on the question of costs. 3. In the event that the parties are able to agree on the question of costs they have liberty to provide my Associate with proposed orders in that respect. 4. In the event the parties are unable to agree on the question of costs they should provide a short outline of submissions 48 hours in advance of the above-mentioned listing date.

Cahn v Kosmin

At a glance

Court

Decision date

Before

Source

Judgment (55 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (17)

Cited By (1)