Plaintiff's financial position
94 At the time of hearing, the plaintiff deposed that she had caused Holly Campbell Advertising Pty Limited (the company which carried on business under the name Holcam Creative) to wind down its business. She had terminated the employment of the employees of the business. The last permanent staff designer, a Ms Agnieska Rozycka, had given notice of resignation of her employment on 24 September 2009 effective on 23 October 2009. In cross-examination it was put to the plaintiff that she had closed down the business of the company in order to maximise her claim on the estate. The plaintiff denied that this was so and I accept her denial. I accept that the plaintiff decided to close the business of the company for good business reasons. It had lost work from a major client and had been unsuccessful in winning a tender from that client. Its regular flow of work from real estate agents in the eastern suburbs had diminished and the plaintiff did not expect that the work available from that source would be sufficient to meet overheads. Between 6 and 13 November 2009 the plaintiff advised clients and suppliers of Holcom Creative that it would not be taking further work.
95 In the financial years ended 30 June 2008 and 30 June 2009 the Holly Campbell Advertising Trust made profits of $83,534 and $119,263 respectively. These profits were distributed to the sole beneficiary of the trust, Holly Campbell Services Pty Limited. No distribution was physically paid. Instead, the trustee of the trust acknowledged a liability to Holly Campbell Services Pty Limited of $218,552. The plaintiff is the sole shareholder of both Holly Campbell Advertising Pty Limited and Holly Campbell Services Pty Limited. The former shares have no value as Holly Campbell Advertising Pty Limited only carries on business as trustee. The value of the plaintiff's shares in Holly Campbell Services Pty Limited depends upon its ability to recover the debt owed to it by Holly Campbell Advertising Pty Limited. The balance sheet of the trust as at 30 June 2009 showed that Holly Campbell Advertising Pty Limited had total liabilities of $518,552. Apart from the liability to Holly Campbell Services Pty Limited it owed $300,000 to St. George Bank. That debt is guaranteed by the plaintiff. The balance sheet disclosed that it had total assets of $518,553 as at 30 June 2009. This consisted of cash of $130,984, receivables of $305,094, and property, plant and equipment of $79,427. Preliminary expenses were also brought to account as a non-current asset of $3,048 but they are not realisable. Of the receivables of $305,094, the principal debt owed to Holly Campbell Advertising Pty Limited is a debt of $200,192 owed to it by the plaintiff. In other words, as at 30 June 2009 the debt owed by the trustee to Holly Campbell Services Pty Limited was only about $18,000 more than the debt owed by the plaintiff to Holly Campbell Advertising Pty Limited.
96 In the financial year ended 30 June 2009 Holly Campbell Advertising Pty Limited paid a wage to the plaintiff of $90,783. That was her only income for the year.
97 The plaintiff produced draft profit and loss statements per Holcam Creative prepared on a cash rather than an accruals basis for the period from 1 July 2009 to 16 November 2009. This showed a net profit for that period of $26,138.57. There were profits (calculated on a cash basis) for the months of July and August 2009, but losses from September to November.
98 As at mid-November 2009 two bank accounts held in the name of Holcom Creative with the St. George Bank had credit balances totalling $93,938.83. This was a reduction of $37,045 from the cash held at bank as at 30 June 2009.
99 Holly Campbell Advertising Pty Ltd held a lease of its office in Stanley Street, Darlinghurst at a rent of $44,000 per annum. The lease expires on 16 February 2011. It was also the lessee of a Canon printer for which the yearly lease fee was $17,437.20 plus GST. The plaintiff personally guaranteed the performance of Holly Campbell Advertising Pty Ltd under both leases. At the time of the hearing it was not known whether the plaintiff would be able to arrange for an assignment of the lease of the office premises. The plaintiff expected that the printer would not realise any significant amount on resale.
100 Although the final position on the winding-up of the affairs of Holly Campbell Advertising Pty Limited is not known, it is unlikely that the company would have sufficient funds without calling up the debt owed to it by the plaintiff, to discharge its liability to St. George Bank and meet its other liabilities to non-related creditors. Given that the plaintiff has personally guaranteed the significant liabilities of the company to non-related creditors, her financial position can be reasonably assessed by excluding from consideration her liability to Holly Campbell Advertising Pty Limited and the value of her shares in Holly Campbell Services Pty Limited and Holly Campbell Advertising Pty Limited. It is likely that the cash resources of Holly Campbell Advertising Pty Limited will be consumed in meeting its liability to the landlord of its office premises and meeting its liability under the lease of the printer and reducing the debt payable to St. George Bank. So far as these matters can be assessed, I think it probable that at the end of the day, after the assets of Holly Campbell Advertising Pty Limited are exhausted, the plaintiff will face a liability of at least $200,000, and possibly up to $300,000, under her personal guarantees.
101 The plaintiff owns a unit in Fairfax Road, Bellevue Hill valued between $1.1 million and $1.2 million. It is subject to a mortgage to St. George Bank which secures two debts, namely the debt of $300,000 owed by Holly Campbell Advertising Pty Limited and guaranteed by the plaintiff, and a further debt, which, as at 31 October 2009, amounted to about $511,000.
102 The plaintiff held minimal amounts of cash and shares of no material value. She estimated that the value of her household effects was $20,000. She has two superannuation accounts. One account, as at 30 June 2008, had a balance of approximately $82,000. The second account was a self-managed superannuation fund. In the financial year ended 30 June 2008 the plaintiff transferred $30,000 from her first superannuation fund to her personal superannuation fund. The balance of the first fund of $82,189.24 was the balance after that payment. In the following financial year the plaintiff transferred a further $38,000 from her first superannuation fund to her self-managed fund. Her personal superannuation fund purchased artworks for a total sum of $64,810. It otherwise had approximately $6,500 in cash investments. The payment of $38,000 would have diminished her first superannuation fund by that amount. I infer that the total value of the plaintiff's superannuation is approximately $120,000 of which approximately $65,000 is invested in artworks.
103 In addition the plaintiff owns antique furniture and artwork having a value of between approximately $104,000 and $139,000.
104 Despite her youth the plaintiff is in need of surgery to both hips. The estimated costs associated with the replacement of her right hip is approximately $52,000. The estimated cost of the operation to the left hip is approximately $27,000. Her hearing is also deteriorating. She has hearing aids and is paying off a debt of $6,595 for the hearing aids by instalments of $250 per week. She also has other medications, the cost of which she estimates to be about $50 per week.
The plaintiff's claim for provision
105 In her affidavit of 12 July 2008 filed on the commencement of the proceedings the plaintiff said that she sought a provision which she would apply to reduce the mortgage secured over her Bellevue Hill unit, to undertake renovations to the unit, to set aside a fund to meet contingencies, and to provide a fund should she close the business of Holcom Creative. She has since taken steps to close the business of Holcom Creative. She said that when Holcom Creative ceases to trade and if she were unable to obtain alternative employment, she would no longer need to reside in the eastern suburbs and would prefer to reside in the northern beaches. She referred to advertisements for houses in the northern beaches which had level access (desirable because of her hip problems) and which ranged in price from approximately $900,000 to $2 million. She sought a provision which would provide her with an income. She calculated her weekly expenses to be $1,556. Her accountant's report calculated that a capital sum required to meet such ongoing expenses if the capital were invested to achieve an interest rate of 4.605 per cent per annum for a period of 34 years would be $1,637,853. The plaintiff's counsel submitted that provision of a further $500,000 would be an appropriate sum for future contingencies. Counsel for the plaintiff submitted that a provision of at least 50 per cent of the deceased's net distributable estate would be no more than what was adequate to provide for the plaintiff's proper maintenance and advancement in life.
Defendant's financial position
106 The principal assets the defendant inherited from the deceased were the properties known as Collingwood and Collingwood Farm and 53 shares in Scuderia Veloce Pty Ltd. The defendant lives in the cottage on the property known as Collingwood (being Lot 1 in DP 1054556). The agreed value of that property at the time of hearing was $710,000. The property known as Collingwood Farm (being Lot 3 in DP 1077545) was valued in April 2009 by a registered valuer, Mr Oliver, at $1.8 million. Approval has been given to the subdivision of that lot into two separate lots. Another valuer, Mr Ryan, valued Lot 3 at $1.7 million, but said that on subdivision of Lot 3 into two separate lots, the separate lots would have values of $720,000 and $1.2 million. Mr Oliver agreed with these assessments and said that if anything, $720,000 was conservative. The subdivision of Lot 3 has been completed. It is reasonable to value the two lots formerly comprising Lot 3 at $720,000 and $1.2 million. The real estate has a value of about $2,630,000.
107 The defendant owns all 100 of the issued shares in Scuderia Veloce Pty Ltd. She owned 47 shares before the deceased's death. He had given them to her. The defendant inherited the remaining 53 shares. The assets of the company include a non-interest bearing loan owed by the estate of the deceased of $609,822.73. That can be excluded for present purposes, because if the loan were repaid by the estate of which the defendant is the sole beneficiary, it would increase the value of assets available for distribution to the defendant as shareholder. The company's balance sheet of 30 June 2009 disclosed that it also held cash (including interest-bearing deposits) of $492,669. Apart from some property, plant and equipment of negligible value, its other assets included shares in public companies and investments in National Income Securities. These were shown at cost of $732,124.48. At the time of hearing the value of those shares and investments was $1,692,242. Apart from a provision for income tax of $18,872, the only liability of the company was a debt payable to the defendant of $379,450. The defendant's shares in Scuderia Veloce Pty Ltd and the debt owed to her by the company are worth about $2,164,000.
108 In 2007 the defendant sold the shares she inherited in Telstra and IAG. Apart from Collingwood, Collingwood Farm, the debt owed by Scuderia Veloce to her, and her shares in Scuderia Veloce, the defendant has superannuation which, as at 30 June 2009, had a value of $957,667. This was in the form of a term deposit of $548,322, investments in National Income Securities of $371,200, and cash of $38,145. At the time of the hearing the value of the National Income Securities was $404,224. Thus the defendant has approximately $990,000 in superannuation.
109 In addition the defendant owns in her own right antique furniture insured for replacement value of approximately $340,000, a motor vehicle purchased in 2008 for $26,000 and two bank accounts with the National Australia Bank, one called the "Collingwood Account" and the other the "NAB Retirement Account", having a combined credit balance of a little under $141,000. Her total assets exceed $6.25 million.
110 The defendant is in receipt of a non-taxable pension paid fortnightly from the Department of Veteran Affairs of about $1,490 per month. She also receives a taxable pension from Switzerland. In the financial year ended 30 June 2009 she received $29,622 from Switzerland. She derived rent from letting the Collingwood Farm, but the rent received was less than the expenses. She made a marginal income from primary production. It appeared from her cross-examination that many ordinary living expenses are paid through Scuderia Veloce.
Extent of the provision to be made
111 Sections 7 and 9 provide for a two-stage process. The court may not make any order for provision in favour of an eligible applicant unless it is satisfied that the provision, if any, made in favour of the applicant by the deceased either during his lifetime or out of his estate is, at the time the court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the applicant. There is no dispute that the first stage of the two-stage process is satisfied. That is, there is no issue that the court has jurisdiction to make an order for provision under s 7. In deciding what provision out of the notional estate of the deceased ought to be made for the maintenance, education or advancement in life of the plaintiff, I must address all of the circumstances relevant to determining what provision would constitute "proper" maintenance and advancement in life of the plaintiff (Singer v Berghouse (No. 2) [1994] HCA 40; (1994) 181 CLR 201 at 209-210; Wentworth v Wentworth (1995) 37 NSWLR 703 at 737-738). Subsection 9(3) provides:
" 9 Provisions affecting Court's powers under secs 7 and 8