(2012) 81 NSWLR 656
Andrew v Andrew [2011] NSWSC 115
Bates v Cooke [2015] NSWCA 278
Boettcher v Driscoll [2014] SASC 86
Zuckerman v Public Trustee [1951] NZLR 135
John v John
John v John [2010] NSWSC 937
Kavalee v Burbidge
(1962) 107 CLR 9
R (on the application of M) v Slough Borough Council [2008] UKHL 52
Source
Original judgment source is linked above.
Catchwords
(2012) 81 NSWLR 656
Andrew v Andrew [2011] NSWSC 115
Bates v Cooke [2015] NSWCA 278
Boettcher v Driscoll [2014] SASC 86Zuckerman v Public Trustee [1951] NZLR 135
John v JohnJohn v John [2010] NSWSC 937
Kavalee v Burbidge(1962) 107 CLR 9
R (on the application of M) v Slough Borough Council [2008] UKHL 52[2008] 1 WLR 1808
Re Buckland, Deceased [1966] VR 404
Salmon v Osmond [2015] NSWCA 42
Singer v Berghouse [1994] HCA 40(1994) 181 CLR 201
Slack v RoganPalffy v Rogan [2013] NSWSC 522[2015] NSWCA 269
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin (2005) 221 CLR 191
Judgment (25 paragraphs)
[1]
Background Facts
In a claim for a family provision order, factual context is necessary. It is next convenient to begin with a statement of background facts, since these provide that context. For the most part, the facts stated are not controversial. In relation to any matters that were in dispute, to which I refer, the facts set out hereunder should be regarded as the findings of the Court.
The deceased married Joan Mary Grace Callinan in February 1958. They were divorced in September 1963. There was one child of the deceased's first marriage, being the Plaintiff, who was born in March 1959 and who is now 58 years of age.
Joan predeceased the deceased, having died in about May 2005. Following her death, the Plaintiff inherited, pursuant to Joan's Will, about $700,000: T32.35 - T32.44.
Joan and the deceased separated in 1958 or 1959, but the Plaintiff was not aware of his existence until she was introduced to him, for the first time, in about 1969, when she was 10 years old. I shall return to the nature of their relationship later in these reasons.
The Defendant was born in September 1938. She is nearly 79 years of age.
The deceased's relationship with the Defendant commenced at the end of 1958. At that time, she was already pregnant with her son, Peter, who was born in November 1958. The Defendant says that, from this time, she and the deceased "were inseparable". She gave evidence that she did not know, then, that the deceased was still married to Joan.
Shortly after Peter's birth, the deceased moved into a home in which the Defendant and Peter then lived. It was at this time that the deceased informed the Defendant that he was married to, but separated from, Joan.
The Defendant and the deceased were married in September 1975 and remained married until his death in December 2014. Accordingly, their relationship spanned 55 years.
Tino was born in February 1973 and Monique was born in March 1974.
The Plaintiff married her first husband, Robert, in 1980. There was one child of the marriage, Dominica, who was born in August 1980. The marriage ended in about 1985.
The Plaintiff married her second husband, Andrew Lees, from whom she is now separated, in 1997. From this marriage, there were two children, namely Finnian, who was born in April 1998, and Luca, who was born in July 1999.
As stated, the deceased left the whole of his estate to the Defendant. The Plaintiff was not mentioned directly, or indirectly, in the deceased's Will. (Although "my children" were identified as substitute beneficiaries, in the event that the Defendant did not survive the deceased, the Plaintiff did not fall within the definition of that term set out in Clause 2.2 of the Will.) Accordingly, the Plaintiff received no provision out of the estate of the deceased.
The deceased explained his reasons for omitting the Plaintiff as a beneficiary. I shall return to this topic later in these reasons.
As there has been no grant of Probate, there was no Inventory of Property identifying the deceased's estate at the date of death. However, the Defendant, in an affidavit sworn in March 2016, stated that the estate then consisted of a motor vehicle ($2,000) and a Family Vault at Castlebrook Memorial Park, Rouse Hill. In the affidavit, she could not attribute a value to the Family Vault, although she stated that the deceased had purchased it, in June 2003, for $190,000. She had attempted to sell it one year prior to the deceased's death, but had not received any interest from potential purchasers.
In the affidavit, the Defendant also acknowledged that there was property that could be designated as notional estate. She identified the deceased's interest as a joint tenant in real estate situated at Lancelot Street, Five Dock, a suburb of Sydney ("the Five Dock property") ($1,250,000); a one half interest in real estate situated at Old Pitt Town Road, Box Hill, NSW ("the Box Hill property"), which interest the deceased had transferred to the Defendant in June 2012, pursuant to which transfer, she and the deceased held it as joint tenants ($1,425,000); the deceased's interest as a joint tenant in the Box Hill property ($1,425,000); and the deceased's joint interest in moneys held in two bank accounts ($86,051).
In a subsequent affidavit, sworn in February 2017, relied upon at the hearing, the Defendant stated that the actual estate still consisted of the motor vehicle and the Family Vault. Whilst the Plaintiff, by her counsel, asserted that the Family Vault had some value, no evidence was given as to its current value. In any event, there is no suggestion that it could be sold. I am satisfied that the Family Vault has some value, but for the purposes of these proceedings, it may be ignored as property from which a family provision order in favour of the Plaintiff could be satisfied.
In the same affidavit, the Defendant described the nature of the property (and gave its estimated value) that the Court may be able to designate as notional estate. She identified the property as follows:
Description Name Value $
One half interest of the deceased as joint tenant with me at the date of death in the proceeds of sale in the Five Dock NSW Shirley Margaret Carusi $ 746,570
One half interest of the deceased in the Box Hill property transferred by the deceased to the Defendant on 17.6.12 Shirley Margaret Carusi $1,875,000
One half interest of the deceased as joint tenant with the Defendant at the date of death in the Box Hill property Shirley Margaret Carusi $1,875,000
One half interest in Westpac Joint Cheque Account due to deceased's failure to sever joint tenancy Shirley Margaret Carusi $ 111,039
TOTAL $4,496,570
[2]
The Five Dock property was sold in May 2016. The mortgage secured on the Five Dock property was discharged, and the Defendant received $1,493,141, being the balance of the proceeds of sale. However, Capital Gains Tax (CGT) is said to be payable and it has been estimated to be $168,915. At the date of the hearing, the CGT had not been paid.
At the hearing, the parties agreed that the available net proceeds of sale of the Five Dock property that could be designated as notional estate was $662,113 (being one half of the net proceeds of sale of the Five Dock property ($746,570) less one half of the estimated CGT ($84,457), together with the cash in bank, which was $111,039, making a total of $773,152.
The Defendant also gave evidence that Tino had paid $74,356, on account of nursing home fees for the deceased, which amount had not, as yet, been repaid to him. As it would appear that the actual estate will not satisfy the payment of debts, funeral and testamentary expenses, the Defendant, herself, may have to meet the repayment. It should be borne in mind that the Defendant may be required, personally, to bear the liability when her financial circumstances and resources are considered.
Usually, in calculating the value of the deceased's estate and notional estate finally available for distribution, the costs of the proceedings should be considered with circumspection, since, unless the overall justice of the case requires some different order to be made, the plaintiff, if successful, normally would be entitled to an order that her, or his, costs and disbursements, calculated on the ordinary basis, should be paid out of the estate of the deceased, while the defendant, as the person representing the estate of the deceased, irrespective of the outcome of the proceedings, normally will be entitled to an order that her, or his, costs, calculated on the indemnity basis, should be paid out of the estate.
As Basten JA put it in Chan v Chan [2016] NSWCA 222 at [54]:
"In considering an amount by way of provision, it is appropriate also to have regard to the diminution of the estate on account of legal costs."
However, this statement does not mean that parties should assume, in all cases, that this type of litigation can be pursued, safe in the belief that costs will be paid out of the estate: Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) (2010) 28 VR 635; [2010] VSCA 195; Harkness v Harkness (No 2) [2012] NSWSC 35.
The Plaintiff's costs and disbursements, calculated on the ordinary basis, of the proceedings, were estimated to be $123,000, inclusive of GST, and on the basis of a two day hearing. Of this estimated amount, she has paid $99,827. In addition, there is the amount of $5,000 in her solicitors' trust account which amount is being held on account of her costs.
It follows, if the Plaintiff is successful, and if an order for her costs to be paid is made, and the estimate of costs, calculated on the ordinary basis, proves accurate, she will be reimbursed all, or at least some, of the costs that she has paid.
(I should mention that the Plaintiff's costs and disbursements, calculated on the indemnity basis, were estimated to be $163,530. One is required to suppress the gasp for breath that such a large amount of costs provokes in what is, essentially, a relatively straightforward case. Why such a large amount has been incurred in costs was not explained. That the amount is extremely high for the Plaintiff's costs, calculated on the indemnity basis, is further demonstrated when one compares the Defendant's costs and disbursements which, whilst high, are significantly less, even taking into account that senior Counsel appeared for the Defendant at the hearing.)
The Defendant's costs and disbursements, calculated on the indemnity basis, of the proceedings, were estimated to be $113,325, inclusive of GST and on the basis of a two day hearing. Of this estimated amount, the Defendant has paid $63,000, from funds that she has, leaving $50,525 left to be paid.
The parties agreed that in the event that the Plaintiff is successful, the usual costs orders should be made unless, within 14 days of the making of orders, a different order for costs is sought by either of them: T108.23 - T108.44. (I have taken this agreed position into account in framing the order proposed at the conclusion of these reasons.)
The combined estimate of the parties' costs is, therefore, $236,325. Neither party asked me to make a specified gross sum costs order instead of costs to be assessed, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Therefore, I shall not determine the quantum of the Plaintiff's costs that should be paid out of the notional estate of the deceased, in the event that an order for her costs is made. That will be a matter for the parties after judgment is delivered.
The only persons described as eligible persons, within the meaning of the Act, are the Plaintiff, the Defendant, Tino, Monique and Peter. Only the Plaintiff made an application for an order under the Act, and as I understand it, none of the Defendant's children wish to make an application that would reduce the entitlement of their mother. Each, except Peter, is a witness whose affidavit was read in the proceedings. However, only the Plaintiff, the Defendant and Tino were cross-examined.
At the hearing, counsel for the Plaintiff did not cross-examine Monique. He sought leave to re-open the Plaintiff's case after he had elected not to cross-examine her (T95.42 - T95.44), but, after some debate, counsel for the Plaintiff did not persist with the application.
The Defendant has not made an application for an order under the Act. She did raise her financial and material circumstances in the proceedings, upon which she was cross-examined. The Court may not disregard the deceased's freedom of testamentary disposition, and the preferable disposition to her as the sole beneficiary, regardless of her financial position or needs. Section 61 of the Act provides that her interests, as a beneficiary, cannot be disregarded, even though she has not made an application.
Similarly, as will be referred to later, the Court, in considering property to be designated as notional estate, must also consider a number of matters which relate to the Defendant's position as the sole owner of that property: s 87 of the Act.
[3]
Deceased's Testamentary Intentions
The deceased made a number of Wills during his lifetime, in each of which, other than the last, he had made provision for the Plaintiff.
By his Will, made on 25 May 1996, the deceased gave 25% of his residuary estate to the Defendant and divided 75% equally between his three children and Peter (part of Ex. 1). It follows that under this Will, the Plaintiff would have received about 19% of the deceased's estate.
By his Will, made on 22 November 2004, the deceased provided a legacy of $500,000 to the Plaintiff, 25% of the balance to the Defendant and the balance of his residuary estate to Peter, Tino and Monique in equal shares (part of Ex. 1). This is, on any view, a significant lump sum by way of provision made for the Plaintiff.
By his Will made on 14 September 2009, the deceased provided a legacy of $500,000 to be divided equally between the Plaintiff, Dominica, Finnian and Luca. He left his residuary estate, after payment of debts, funeral and testamentary expenses, as to 40% to the Defendant and as to the balance to be divided equally between Peter, Tino and Monique (part of Ex. 1). This is less provision, by way of a lump sum, but would have amounted to a legacy of $125,000.
By his Will made on 20 August 2010, the deceased left the Plaintiff a legacy of $50,000, in addition to legacies of $50,000 each being left to Dominica, Finnian and Luca, the latter two legacies to be paid when each attained the age of 25 years (part of Ex. 1).
I have dealt with the deceased's last Will earlier in which no provision was made for the Plaintiff.
It can be seen that the deceased's testamentary intentions appear to reveal that, as time passed, the deceased reduced the provision made for the Plaintiff. (Of course, at the date of each of the earlier Wills, the estate of the deceased would be likely to have had a greater value than it currently has since the transfer of the Box Hill property did not occur until 2012.)
In a Statutory Declaration made by the deceased on 4 December 2004 (Ex. 2), the deceased wrote:
"1. In making my will I have made provision of $500,000 for my daughter Zena.
2. I have done this because of previous provision that I have made for her during her lifetime.
3. When she purchased a house in Drummoyne I gave her the sum of $400,000 of which she repaid $200,000. This made a net gift of $200,000.
4. Further I gave her $50,000 to buy a car.
5. I also gave her one gift of $100,000 which she needed for different things.
6. I also gave her another $150,000 in various parcels of $5,000, $10,000 and $20,000.
7. All of these gifts were made after I sold Parklea.
8. Thus I believe the provision of $500,000 made in my will is just and adequate."
On the day the deceased made his last Will (3 July 2013), he wrote (Ex. 3):
"To whom it may concern -
I, Agostino Phillip Carusi have over the years extended significant financial support to my daughter, Zena Carusi-Lees providing her with financial assistance estimating over $1 million dollars to purchase cars, houses & overall wellbeing & lifestyle.
I feel I have assisted her greatly during this time more so than any of my other children.
Subsequently it is my wish & request in my last Will & Testament that my daughter, Zena Carusi-Lees under any circumstances, is not the beneficiary of my present or future assets."
There is no doubt that evidence of the intentions of the deceased in respect of provision for an applicant are admissible in family provision proceedings: Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at [481]-[482]. The Court may also have regard to any evidence of the testamentary intentions of the deceased, including evidence of statements made by the deceased for the purpose of determining, relevantly, in this case, whether to make a family provision order and the nature of any such order: s 60(2)(j) of the Act.
However, it is to be remembered, as well, that merely because a statement is made by the deceased concerning the applicant for provision, it does not, unquestionably, have to be accepted as true. Such a statement may be just as inaccurate, or as unreliable, as a statement of a living witness, whether as the result of mistake, or failure of memory, or deliberate untruth: Worsley v Solomon [2008] NSWSC 444 at [35].
I bear in mind, also, what was said by the Court of Appeal of New Zealand in In re Green, deceased; Zuckerman v Public Trustee [1951] NZLR 135 at 141, (which passage was approved by the majority of the High Court of Australia in Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134 at 152):
" ... the testator should not be allowed from the grave to condemn the child and to impose upon that child the positive duty of disproving the allegations as an essential preliminary to prosecuting the claim."
Earlier, at 149, Gibbs J had written:
"Such a statement is admissible as original evidence to prove the knowledge, motive or other state of mind of the testatrix should that be relevant."
In Pincius v Wood [1998] TASSC 46, Cox CJ noted, at 4:
"A reason based on a belief proved to be mistaken may well be relevant in support of an applicant's claim. Thus, if the reason advanced for inclusion is a mistaken belief in the prosperity of an applicant who enjoyed a good relationship with the testator that could properly be taken into account and would be a strong reason for interfering with the will…"
In Diver v Neal [2009] NSWCA 54 at [61], Basten JA wrote:
"There will be cases in which intervention in the distribution of the estate will be justified on the basis that the testator was not fully aware of all the relevant circumstances when he or she made his or her will: see, eg, In re Allen (deceased); Allen v Manchester [1922] NZLR 218 at 220-221 (Salmond J). On the other hand, too much weight should not be given to the testator's expressed intention. The Court is not limited to considering the circumstances as they existed when the will was made, or when the testator died. Rather, s 9(2) requires the adequacy of provision to be determined as at the date of the hearing of the application. Furthermore, whatever the semantic phraseology, the authorities are unanimous that the Court is required to apply an objective standard in assessing the adequacy of the provision made."
More recently, in Brimelow v Alampi [2016] VSC 135, McMillan J wrote, at [15] (although the terms of the relevant section are different):
"It has always been the case that the courts have taken into account the terms of any expressions of the deceased in admissible form. In respect of applications made where a deceased died after 20 July 1998, the Court may accept any evidence of the reasons of a deceased for making the disposition in his or her will (if any) and for not making proper provision for an applicant, whether or not the evidence is in writing. By mandating that the Court must take such expressions into account it is not intended that such evidence, by will or in other evidence, suddenly takes on some higher status. The weight to be attached to such statements will depend on the circumstances. Reasons can be shown to be incorrect or misconceived, which may enhance or boost the strength or defence of a claim."
Finally, I repeat what I wrote in Andrew v Andrew [2011] NSWSC 115 at [25]:
"While the Court will consider any explanations given by the deceased in the will, or elsewhere, for excluding a particular person as a beneficiary, such explanations do not relieve the court from engaging in the enquiry required by the Act: Slack-Smith v Slack-Smith [2010] NSWSC 625 at [27]. What an explanation may do is cast light on the relationship between the deceased and that person, at least from the deceased's perspective."
In this case, there was some dispute about the nature of the provision made for the Plaintiff during the lifetime of the deceased, which was a matter that seemed to have permeated the reasoning of the deceased in making the provision that he made for the Plaintiff in a number of his Wills, and which provided a reason for omitting her completely in the last Will.
The Plaintiff accepted that the deceased had been "very generous and very kind and very loving" towards her (T67.16 - T67.18); acknowledged that in the period between 1985 and 1992, he had sent cheques for amounts of $1,000 or $2,000 on several occasions to assist with hospital expenses; had given her the various amounts that he had itemised in the Statutory Declaration (Ex. 2), with the exception of the amount in Paragraph 6, in respect of which she said she was not sure if that was the amount, but that it "would be close to that amount" (T70.04 - T70.08); that in respect of the loan of $400,000, it had been completely interest free; that when the Drummoyne home had been sold, she and her husband had made a profit of some hundreds of thousands of dollars (T72.24 - T72.44); and that even after 2004, he had provided her with some money, including in 2013, when he gave her financial assistance which went towards, amongst other things, her wellbeing and lifestyle and her day to day expenses. However, she did not agree that she had received "over $1 million dollars" from the deceased.
It was not put to the Plaintiff that amounts that she had received from the deceased after 2004 (as set out in Ex. 2) had amounted to more than an additional $500,000 (making it over $1 million as had been stated by the deceased in Ex. 3.
I raised this matter with senior counsel for the Defendant (T78.35 - T79.37):
"… If I add up all the figures in exhibit 2, which are not loans that have been repaid and excluding any interest that would have accrued on the loans, on my calculations it comes to $500,000. Do you agree?
ELLISON: 350 plus 150 is 500.
HIS HONOUR: Yes. Now, then if I go to exhibit 3, despite what was said in 2004 in the statutory declaration, in this document it suggests financial assistance estimating over $1 million. Is there to be any evidence from your side to demonstrate any additional amounts that have been paid or advanced to the plaintiff--
ELLISON: Not by way of--
HIS HONOUR: --after 2004 that would--
ELLISON: Raise it from 500.
HIS HONOUR: --raise it from 500,000 to a million dollars?
ELLISON: No, not by way of documentation, your Honour. I am reminded that in Monique's evidence she refers to the fact that she would write cheques for the - in para 15(c), for instance, of Monique's affidavit she says, in relation to 2003 - I can't be precise but she may have given additional money but I can't point to anything that takes it from 500 - directly takes it from 500 to a million. All I can do is say the deceased might have thought that his largesse benefitted her, for instance and I'm just making this half by way of submission, enabled her to make a profit on real estate, things like that.
HIS HONOUR: But that isn't what he says. He says that he has extended financial support, providing her with financial assistance estimating over $1 million and all I'm really trying to enquire is whether there is any evidence that extends the $500,000 that he has been very, very specific about in exhibit 2--
ELLISON: Not directly, no.
HIS HONOUR: --to get it to the million dollars in exhibit 3.
ELLISON: No, your Honour.
HIS HONOUR: No, thank you. So at the moment, if the evidence remained as it is and bearing in mind the admission of the plaintiff, he appears to have made financial provision for her during his lifetime of about $500,000, subject to anything else you can establish, is that right?
ELLISON: 500 - I mean, I'm--
HIS HONOUR: Plus the interest--
ELLISON: Interest foregone.
HIS HONOUR: Yes.
ELLISON: Yes."
The Defendant acknowledged that what had been stated by the deceased in Ex. 2 was an accurate list of the amounts that he had provided to the Plaintiff, at least until 2004. She also accepted that, as far as she knew, the deceased had made no further gifts to the Plaintiff after the date of the Statutory Declaration: T72.13 - T73.40.
There was some cross-examination of the Defendant about whether the the reference to "cars [and] houses" in Ex. 3 was accurate. She did not seem to know (T88.46 - T89.32). I do not think anything turns on the use of the plural rather than the singular. More important appears to be the inability to establish to the Court's satisfaction that the deceased had provided the Plaintiff with "financial assistance of over $1 million".
(There was also some evidence by Tino, who was cross-examined, but not about this topic, that in 2010, the Plaintiff's husband, Andrew, had asked the deceased to lend him and the Plaintiff $250,000 to cover expenses for "the house, school fees and general expenses", but that the deceased had refused the request.)
Taking all of the evidence into account, I am satisfied that the Defendant was not able to demonstrate that the statement made by the deceased in Ex. 3, was accurate, so far as it related to the total of the amounts said to have been advanced to the Plaintiff. Nor can I be satisfied that the Plaintiff's evidence that she had not received as much as the amount asserted by the deceased was wrong.
Yet, on any view, as acknowledged by the Plaintiff, the deceased had been extremely generous, financially, towards her during his lifetime and had assisted her, financially, over a long period of time.
[4]
The Statutory Scheme
Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. As the Plaintiff's eligibility and the commencement of the proceedings within time is not in issue, the only questions for the Court to determine are whether the Plaintiff has been left with inadequate provision for her proper maintenance, education and advancement in life and, if so, what, if any, further provision ought to be made out of the estate of the deceased for those purposes.
It is this mandatory legislative imperative that drives the ultimate result, and it is only if the Court is satisfied of the inadequacy of provision that consideration is given to whether to make a family provision order (s 59(2)). Only then may "the Court… make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made". The Act stipulates no automatic entitlement to provision and the deceased's Will applies unless a specific application is made to, and acceded to, by the Court.
The parties were largely agreed as to the principles to be applied on this topic so it is not necessary to re-state them in detail. I have dealt with them in many cases, one of which is Hinderry v Hinderry [2016] NSWSC 780.
Whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, education or advancement in life of the Plaintiff will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's "needs" that cannot be met from his, or her, own resources on the other: Hunter v Hunter (1987) 8 NSWLR 573 at 575.
"Provision" is not defined by the Act, but it was noted in Diver v Neal at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
Neither is the word "maintenance", nor the phrase "advancement in life", defined in the Act. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, said, of the words "maintenance", "support" and "advancement":
"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."
In Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), said at [18]:
"'Proper maintenance' is not limited to the bare sustenance of a claimant…but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility."
Although discussed in the context of legislation in the United Kingdom that has a few similarities, (and omitting parts of the reasons that, clearly, would not apply to the Act) in Ilott v The Blue Cross & Ors [2017] UKSC 17 at [14] - [15], the following passage in the judgment of Lord Hughes (with whom Lord Neuberger, Lady Hale, Lord Kerr, Lord Clarke, Lord Wilson and Lord Sumption agreed) appears:
"The concept of maintenance is no doubt broad… It must import provision to meet the everyday expenses of living…
The level at which maintenance may be provided for is clearly flexible and falls to be assessed on the facts of each case. It is not limited to subsistence level. Nor, although maintenance is by definition the provision of income rather than capital, need it necessarily be provided for by way of periodical payments, for example under a trust. It will very often be more appropriate, as well as cheaper and more convenient for other beneficiaries and for executors, if income is provided by way of a lump sum from which both income and capital can be drawn over the years… Lump sum orders are expressly provided for... There may be other cases appropriate for lump sums; the provision of a vehicle to enable the claimant to get to work might be one example and, as will be seen, the present case affords another. As Browne-Wilkinson J envisaged (obiter) in In re Dennis … there is no reason why the provision of housing should not be maintenance in some cases…"
Although the existence, or absence, of "needs" which the applicant cannot meet from her, or his, own resources will always be highly relevant and often decisive, the statutory formulation, and, therefore, the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for her or his proper maintenance, education and advancement in life: Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 227.
"Need", of course, is also a relative concept: de Angelis v de Angelis [2003] VSC 432 at [45]. It is different from "want" and does not simply mean "demand" or "desire". The latent difference between the words was stated by Lord Neuberger of Abbotsbury (now President of the Supreme Court of the United Kingdom), in the House of Lords decision, R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808 at [54]:
"'Need' is a more flexible word than it might first appear. 'In need of' plainly means more than merely 'want', but it falls far short of 'cannot survive without'."
In Boettcher v Driscoll (2014) 119 SASR 523; [2014] SASC 86 at [41], David J added:
"'Need' is not so synonymous with 'want' such that the two are interchangeable."
As Callinan and Heydon JJ emphasised in Vigolo v Bostin at [122], the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies. The whole of the context must be examined.
If the Court is satisfied that, at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, it determines whether to make an order for provision and what provision ought to be made.
The questions posed arise under s 59(2) and s 60(1)(b) of the Act. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse, at 211, affirmed that the decision made involves an exercise of discretion in the accepted sense. The fact that the Court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.
Section 60 of the Act provides:
"(1)The Court may have regard to the matters set out in subsection (2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the applicant) is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the court:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) 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,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."
It can be seen that s 60(2) enumerates 15 specific matters, described by Basten JA in Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [37], as "a multifactorial list", and by Lindsay J in Verzar v Verzar [2012] NSWSC 1380 at [123], as "a valuable prompt" to which the Court may have regard, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order.
In Chapple v Wilcox [2014] NSWCA 392; 87 NSWLR 646 at [7], Basten JA wrote:
"Section 60 of the Succession Act spells out the matters which the Court may have regard to in determining whether the claimant 'is an eligible person' and whether to make a family provision order: s 60(1). Most of the factors listed in s 60(2) will be irrelevant in relation to whether the applicant is an eligible person, a matter largely dependent upon the language of s 57. The matters set out must be available considerations in relation to both limbs of s 59(1) dealing with a family provision order, namely par (b) and par (c). Section 60 provides no assistance in relation to the different considerations which may arise in respect of each paragraph of s 59(1). The factors are also relevant to the determination of the 'nature of any such order', which presumably includes the discretionary element to be found in s 59(2): s 60(1)(b)."
The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of each of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
The section also does not say how the matters listed are to be used to determine the matters identified in s 60(1). Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the Court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical.
A reference to some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary, whilst others do not. Importantly, also, many of the matters in sub-section (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
Section 65(1) of the Act requires the family provision order to specify:
1. the person or persons for whom provision is to be made, and
2. the amount and nature of the provision, and
3. the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and
4. any conditions, restrictions or limitations imposed by the Court.
The order may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner the Court thinks fit" (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
Unless the Court orders otherwise, any family provision order under the Act takes effect as if it were a codicil to the will (s 72(1)(a) of the Act). I shall make an order that the order in favour of the Plaintiff should not have that effect.
Section 78(1)(a) has the effect that the court may only make an order designating property as notional estate for the purposes of a family provision order to be made under Part 3.2 of the Act. Thus, it is necessary to determine whether a family provision order should be made in the Plaintiff's favour.
Section 99(1) of the Act provides that the Court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate in such manner as the Court thinks fit.
There are some other general principles that should be identified for the benefit of the parties, although I have repeated them in many cases.
The Court's discretion in making an order is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation: Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 at 19; McKenzie v Topp [2004] VSC 90 at [63].
In Stott v Cook (1960) 33 ALJR 447 at 453-4, Taylor J, although dissenting in his determination of the case, observed that the Court did not have a mandate to rework a will according to its own notions of fairness. His Honour added:
"There is, in my opinion, no reason for thinking that justice is better served by the application of abstract principles of fairness than by acceptance of the judgment of a competent testator whose knowledge of the virtues and failings of the members of his family equips him for the responsibility of disposing of his estate in far better measure than can be afforded to a Court by a few pages of affidavits sworn after his death and which only too frequently provide but an incomplete and shallow reflection of family relations and characteristics. All this is, of course, subject to the proviso that an order may be made if it appears that the testator has failed to discharge a duty to make provision for the maintenance, education or advancement of his widow or children. But it must appear, firstly, that such a duty existed and, secondly, that it has not been discharged."
Of the freedom of testamentary disposition, in Grey v Harrison [1997] 2 VR 359, Callaway JA said, at 366:
"... [I]t is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused that right. To do so is to assume a power to take property from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the wide terms found in s 91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent."
In Vigolo v Bostin, at [10], Gleeson CJ pointed out that the relevant legislation did not confer new rights of succession and did not create legal rights of inheritance. Rather, his Honour explained:
"It preserved freedom of testamentary disposition, but subjected that freedom to a new qualification".
In Goodsell v Wellington [2011] NSWSC 1232 at [108], I also noted that:
"Freedom of testamentary disposition remains a prominent feature of the Australian legal system. Its significance is both practical and symbolic and should not be underestimated."
As Pembroke J said, in Wilcox v Wilcox [2012] NSWSC 1138 at [23]:
"The court does not simply ride roughshod over the testator's intentions… The court's power to make an award is limited. The purpose of the discretionary power under Section 59(1) is to redress circumstances where 'adequate provision' has not been made for the 'proper maintenance, education or advancement in life' of the claimant. The adjectives 'adequate' and 'proper' are words of circumspection."
White J referred to these principles in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522; (2013) 85 NSWLR 253 at [127]:
"In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and (2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will."
In relation to a statement made by the deceased, in Hughes v National Trustees Executors & Agency Co of Australasia Ltd at [7], Barwick CJ wrote:
"…When attempting to decide what a particular testator or testatrix ought as a just and wise father or mother to have done, those reasons which that testator or testatrix actually entertained for his or her decision cannot, it seems to me, justly be ignored. Of course, if the evidence in the matter does not support such reasons, they cannot be acted upon simply because the deceased asserted or entertained them."
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep); Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
In Henry v Hancock [2016] NSWSC 71 at [69], Brereton J wrote:
"Formerly, the yardstick which was applied was that of the wise and just testator. Nowadays, it is fashionable to couch it in terms of "community standards", although I am not at all sure that this is any different from the moral obligation of a wise and just testator and, as has not infrequently been pointed out, there is no ascertainable external community standard to guide the decision, which involves a broad evaluative judgment unconstrained by preconceptions and predispositions, and affording due respect to the judgment of a capable testator who appears to have duly considered the claims on his or her testamentary bounty - subject to the qualification that the court's determination is made having regard to the circumstances at the time of the hearing, rather than at the time of the testator's will or death."
In all cases under the Act, what is adequate and proper provision is necessarily fact specific.
All of the financial needs of an applicant have to be taken into account and considered by reference to the other factors referred to in the Act and in Singer v Berghouse. What is proper provision is not arrived at by adding up all of the identified financial needs: Hyland v Burbidge [2000] NSWSC 12 at [56]. Nor does it follow that, if the Court decides it is inappropriate to make a specific provision in respect of one identified head of claim, that any identified financial need, even a contingent need, in relation to that claim becomes irrelevant to the final assessment: Mayfield v Lloyd-Williams [2004] NSWSC 419 at [89].
The size of the estate or notional estate is a significant consideration in determining an application for provision. However, its size does not justify the Court in rewriting the will in accordance with its own ideas of justice and fairness: Bowyer v Wood [2007] SASC 327; (2007) 99 SASR 190 at [41]; Borebor v Keane [2013] VSC 35 at [67].
In relation to the Plaintiff's claim, being a claim for provision by an adult child, I have set out the following principles in many other cases, which are also useful to remember:
1. The relationship between parent and child changes when the child attains adulthood. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
2. 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": Taylor v Farrugia [2009] NSWSC 801 at [57]; McGrath v Eves [2005] NSWSC 1006; Kohari v Snow [2013] NSWSC 452 at [121]; Salmon v Osmond [2015] NSWCA 42 at [109].
3. Generally, also, "the community does not expect a parent to look after his or her children for the rest of [the child's life] and into retirement, especially when there is someone else, such as a spouse, who has a prime 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 parents 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].
4. If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland, Deceased [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co of Australasia Ltd at 148; Goodman v Windeyer [1980] HCA 31; 144 CLR 490 at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons: Re Buckland, Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams at [86].
5. There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker [1957] HCA 82, (1957) 97 CLR 566; Kleinig v Neal (No 2) at 545; Bondelmonte v Blanckensee [1989] WAR 305; Hawkins v Prestage (1989) 1 WAR 37 at 45; Taylor v Farrugia, at [58].
6. The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 at [179]-[182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17].
7. The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149.
A very similar statement of these principles, which I set out in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111], was cited with approval in Chapple v Wilcox at [21]; and at [65]-[67]; and was referred to, with no apparent disapproval (although in that appeal there was no challenge the correctness of those principles), in Smith v Johnson [2015] NSWCA 297 at [62].
The role of the Court is not "to address wounded feelings or salve the pain of disappointed expectations" that the Plaintiff might feel: Heyward v Fisher (Court of Appeal (NSW), Kirby J, 26 April 1985, unrep).
In Foley v Ellis [2008] NSWCA 288 at [88], Sackville AJA noted that Singer v Berghouse "strongly suggests that the court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased's bounty". The only other claimant on the bounty of the deceased in the present case is the Defendant.
The Defendant, of course, is not an applicant for provision. She does not have to prove an entitlement to the provision made for her in the deceased's Will, or otherwise justify such provision. However, she is the widow of the deceased. Their marriage was of almost 40 years duration, and their relationship, as stated, spanned 55 years. But there is nothing in the Act itself which confers a privileged position upon a spouse of the deceased. It is as the beneficiary named in the Will of the deceased, and the joint holder of property, that the Court is not entitled to disregard her interest.
[5]
Qualifications on "Principles"
As long ago as 1980, in White v Barron (1980) 144 CLR 431; [1980] HCA 14, at 440, Stephen J wrote:
"[T]his jurisdiction is pre-eminently one in which the trial judge's exercise of discretion should not be unduly confined by judge-made rules of purportedly general application."
As I have stated in a number of cases (see, for example, Bowditch v NSW Trustee and Guardian), I do not intend what I have described as "principles" or "general principles" to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction should be unduly confined, or the discretion should be constrained, by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered. I do not intend a guide to be turned into a tyrant.
It is necessary for the Court, in each case, after having had regard to the matters that the Act requires it to consider, to determine what is adequate and proper in all the circumstances of the particular case. In addition, in each case, a close consideration of the facts is necessary in order to determine whether the basis for a family provision order has been established. Every case is different and must be decided on its own facts. As Lindsay J said in Verzar v Verzar at [131]:
"Whatever guidance one might draw from analogous cases all analogies, and any guidelines drawn from a pattern of similar cases, must yield to the text of the legislation, the duty of the Court to apply that text to the particular circumstances, and the totality of material circumstances, of each case. Preconceptions and predispositions, comforting though they may be, can be the source of inadequate consideration of the jurisdiction to be exercised: Bladwell v Davis [2004] NSWCA 170 at [12] and [18]-[19]."
The importance of the qualifications to which I have referred in the last two paragraphs have been stressed in Chapple v Wilcox by Basten JA, at [18]-[20], and by Barrett JA, at [66]-[67]; Burke v Burke [2015] NSWCA 195 at [84] - [85]. They must be remembered.
[6]
Notional Estate
It is not necessary to spend too much time on this aspect of the case.
The notional estate provisions of the Act are dealt with in Part 3.3 of the Act. However, in s 3 of the Act, "notional estate" of a deceased person is defined as meaning "property designated by a notional estate order as notional estate of the deceased person". "Notional estate order" means "an order made by the Court under Chapter 3 designating property specified in the order as notional estate of a deceased person".
It has been said, in respect of the notional estate provisions in the former Act, that an applicant for provision "may now apply in the same proceedings for orders for relief and designating property as "notional estate" thereby compelling the "disponee" of a "prescribed transaction" to provide money or property for the purpose of making financial provision for the applicant": Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422 at 441. The same principle applies in respect of a person to whom property has been distributed.
Section 63(3) of the Act provides that a family provision order may not be made in relation to property of the estate that has been distributed by the legal representative of the estate in compliance with the requirements of s 93, except as provided by subsection (5).
Section 63(5) provides that a family provision order may be made in relation to property that is not part of the estate of a deceased person, or that has been distributed, if it is designated as notional estate of the deceased person by an order under Part 3.3 of the Act.
Importantly, the power to make a notional estate order does not arise unless the Court is satisfied that (a) the deceased person left no estate, or (b) the deceased person's estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, or (c) provision should not be made wholly out of the deceased person's estate because there are other persons entitled to apply for family provision orders or because there are special circumstances (s 88).
Furthermore, the Court must not designate as notional estate, property that exceeds what is necessary, in the Court's opinion, to allow the provision that should be made, or, if the Court makes an order that costs be paid from the notional estate under s 99, to allow costs to be paid as ordered, or both (s 89(2)).
Section 78 (1)(b) of the Act provides:
"(1) The Court may make an order designating property as notional estate only:
(b) for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate of a deceased person be paid from the notional estate of the deceased person.
Section 79 of the Act, relevantly, deals with the designation of property where the estate of the deceased has been distributed. The section provides:
"The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that on, or as a result of, a distribution of the deceased person's estate, property (whether or not the subject of the distribution) became held by a person (whether or not as trustee) or subject to a trust."
The effect of a notional estate order is that a person's rights are extinguished to the extent that they are affected by a notional estate order (s 84).
Section 85 provides:
"The Court may make one or more notional estate orders in connection with the same proceedings for a family provision order, or any subsequent proceedings relating to the estate of the same deceased person."
The Court's power to make a notional estate order is circumscribed by other sections. Section 87 provides:
"The Court must not make a notional estate order unless it has considered the following:
(a) the importance of not interfering with reasonable expectations in relation to property,
(b) the substantial justice and merits involved in making or refusing to make the order,
(c) any other matter it considers relevant in the circumstances."
In John v John; John v John [2010] NSWSC 937 at [118] - [120], Ward J (as her Honour then was) said:
"What amounts to "reasonable expectations in relation to property" was considered in Petschelt v Petschelt [2002] NSWSC 706, at [68], by McLaughlin M (as the Associate Justice then was), who said:
That phrase does not, however, indicate the person by whom those reasonable expectations are held. Clearly the Court must consider the reasonable expectations of the First Defendant in relation to property. By the same token, however, the Court should also consider the reasonable expectations of the Deceased herself in relation to property, and also, possibly, the reasonable expectations of the Plaintiff.
In D'Albora v D'Albora [1999] NSWSC 468, at [53], Macready M (as the Associate Justice then was) gave examples of the circumstances which might give rise to reasonable expectations for the purposes of this section:
Under s 27(1)(a) the Court has to consider the importance of not interfering with the reasonable expectations in relation to the property. Such reasonable expectations may well occur in a number of circumstances. For example, a beneficiary who receives a property may have spent money on the property or worked on the property … Another common area where one often sees in this matter is where there is a promise in relation to the property and the acting by an intended beneficiary on the fact of that promise.
Similarly, in Wentworth v Wentworth [1992] NSWCA 268, Priestley JA, with whom Samuels AP and Handley JA agreed, referring to the "more general precautionary provisions" in ss 26 and 27 of the Family Provision Act, said:
"s 27(1) for example, says the Court shall not make an order designating property as notional estate unless it has considered, amongst other things, the importance of not interfering with reasonable expectations in relation to property. If someone is in possession of property, otherwise than by gift, after having given up something of equivalent value in order to obtain that property, it would be entirely reasonable for that person to expect to remain in possession of it."
I have little doubt that the Defendant is a person whose "reasonable expectations" should be considered since she is the widow of the deceased, and in the events that happened, the person who came to hold all of the jointly held property by survivorship.
The "substantial justice and merits" referred to in s 87(b) are linked to the making, or refusing to make, an order designating property as notional estate: Smith v Woodward (Supreme Court (NSW), 9 September 1994, unrep).
The position of all parties should be considered in respect of s 87(b) and (c).
In determining what property should be designated as notional estate of a deceased person, the Court must have regard to the value and nature of any property the subject of a distribution from the estate of the deceased, any changes in the value of property of the same nature as the property referred to, in the time since the distribution was made, and any other matter it considers relevant in the circumstances: s 89.
I am satisfied that there is property that could be the subject of a notional estate order. Although senior counsel for the Defendant did not specifically concede that a notional estate order should be made, it seems to me that he did not really dispute that such an order could be made, in respect of property consisting of cash held by the Defendant, arising from the payment to her of the balance of the proceeds of sale of the Five Dock property, and the jointly held cash in bank (in total $773,152).
The Defendant was content to proceed upon the basis that any order made in favour of the Plaintiff would be met by her. In all the circumstances of this case, that is a sensible approach to have been adopted and I shall allow her that opportunity.
[7]
Additional Facts
I set out additional facts I am satisfied are either not in dispute, or that, in my view, have been established by the evidence. I do so by reference to s 60(2) of the Act. Where necessary, I shall express the conclusions to which I have come. I have taken this course, not "to dwell on particular matters as if they were, in themselves, determinant of the broad judgments required to be made under s 59" (Verzar v Verzar at [124]), but in order to complete the recitation of facts that will assist me to determine the questions that must be answered.
[8]
(a) any family, or other, relationship between the applicant and the deceased person, including the nature and duration of the relationship
As stated, the relationship between the deceased and the Plaintiff is that of child and father. That relationship existed throughout the Plaintiff's life, although they did not have much to do with each other until the Plaintiff was about 10 years old. The Plaintiff's mother and the deceased separated in the year of the Plaintiff's birth. (Clearly, the Plaintiff did not cause this lack of contact and nothing turns on it.) The deceased spoiled her "with gifts, fancy restaurant meals and holidays".
For most of the time prior to 1980, the Plaintiff lived in Queensland.
From the time that she met the deceased until 1985, they kept in regular contact. Between 1985 and 1992, however, there was little contact between them. It may be that this was caused by a misunderstanding between them, but the reasons are unimportant since there is no suggestion that there was a complete breakdown in their relationship, or that they were completely estranged during this period.
In any event, in 1985, the Plaintiff moved back to Brisbane. She remained living there until about 2002. She says that during this period, "it became harder for me to continue my relationship with Dad but I flew to see him as often as I was able to afford and time at work allowed".
However, after 1992, the relationship between them was a reasonably close one and it endured until the death of the deceased. When the Plaintiff married Andrew in 1997, the deceased attended the wedding and walked the Plaintiff down the aisle.
They remained in contact thereafter throughout the Plaintiff's life, with the Plaintiff visiting the deceased on occasion and otherwise keeping in contact with him.
I accept Monique's evidence that the Plaintiff did not visit the deceased as often as the Plaintiff had alleged, after he moved into the nursing home. This is hardly surprising bearing in mind the circumstances of the Plaintiff's marital relationship, to which I shall refer to later in these reasons.
I also accept Monique's denial that the Plaintiff provided the deceased with emotional support and guidance. This was a somewhat vague suggestion made by the Plaintiff, and I consider, that it is virtually unsupported by the Plaintiff's evidence.
Importantly, in Ex. 3, the deceased does not attribute, as a cause for omitting the Plaintiff as a beneficiary in his last Will, a strained relationship as parent and child.
However, it is clear, from all of the evidence, that as the years passed, the deceased grew weary of the Plaintiff's requests for money. This is demonstrated by, amongst other things, the deceased's question to Monique "How much money is enough?" It is also supported by the evidence of Tino.
As stated previously, the deceased had made significant provision for the Plaintiff, at least until 2004.
[9]
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate
There is no definition of the words "obligations" or "responsibilities" to which the sub-section refers in the Act. Each word is to be understood in its ordinary, grammatical meaning as the condition of being morally or legally bound.
The responsibility of the deceased was expressed by Lord Romer in Bosch v Perpetual Trustee Co Ltd, at 478-479:
"Their Lordships agree that in every case the Court must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father. This no doubt is what the learned judge meant by a just, but not a loving, husband or father."
Leaving aside any obligation, or responsibility, arising as a result of their relationship as parent and child, the deceased did not have any legal obligation to the Plaintiff as a child, once she became an adult, imposed upon him by statute or common law. Yet, an obligation or responsibility to make adequate provision for the proper maintenance, education or advancement in life, continues to be recognised.
In Flathaug v Weaver [2003] NZFLR 730 at [32], the origin of the obligation which underpins the Act's recognition of the duty owed by a parent to a child was put in this way:
"The relationship of parent and child has primacy in our society. The moral obligation which attaches to it is embedded in our value system and underpinned by the law. The Family Protection Act recognises that a parent's obligation to provide for both the emotional and material needs of his or her children is an ongoing one. Though founded on natural or assumed parenthood, it is, however, an obligation which is largely defined by the relationship which exists between parent and child during their joint lives."
As counsel for the Plaintiff submitted, "the deceased expressed an awareness of that obligation on many occasions over the course of the Plaintiff's life, including by making some provision for the Plaintiff in his will dated 20 August 2010".
Yet, as earlier stated, there is no "presumptive testamentary entitlement of an [adult] offspring": Underwood v Gaudron [2015] NSWCA 269 at [73].
This matter, if relevant, requires a balancing of potentially competing obligations as between the applicant and the beneficiary.
I have earlier referred to the deceased's obligation to the Defendant, his widow of an extremely long marriage. It cannot be forgotten that the Defendant and the deceased had a relationship that spanned over half a century.
The Plaintiff accepted that the deceased had an obligation to make "generous" provision for the Defendant, but submitted that, in light of the nature and value of the estate and potential notional estate, as well as the financially-secure circumstances of the Defendant, "substantial" provision, nevertheless could be made for the Plaintiff.
[10]
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered
I have earlier dealt with these matters. The value of the property that may be designated as notional estate is quite large.
[11]
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate
The Plaintiff, currently, is employed as a Master Teacher at a State High School in Queensland. Her tenure in that position will come to an end in the current calendar year. She believes that she will be unlikely to find another position as a Master Teacher. She believes that her annual salary will be reduced by approximately $10,000 from the beginning of 2018. I am satisfied that the Plaintiff retains an earning capacity, albeit if her status as a Master Teacher changes, her income will be reduced. In any event, it is improbable that she will be able to make savings from her income that improves her present position.
The Plaintiff's net income, currently, is $5,845 per month, whilst her monthly expenditure is said to be $14,687 (of which $5,750 represents her mortgage repayments). It is clear that the Plaintiff is living well beyond her means. How she meets the expenditure is not fully explained, although some of her liabilities suggest that she has needed to borrow funds to do so.
The evidence of the Plaintiff as to how she has come to find herself in the current financial position demonstrates that she (and Andrew), for some years, have lived well beyond her means. As senior counsel for the Defendant submitted:
"The Plaintiff and her husband spent $430,000.00 on development costs, legal costs and renovations in respect of the Drummoyne property (paragraph 95). She had inherited a net $700,000.00 from her mother which also went on a car, credit cards and towards the Drummoyne mortgage. $30,000.00 was spent on the wedding of daughter, Dominica. $200,000.00 was borrowed for a short time from daughter, Monique in 2006.
Drummoyne was sold in June 2011 for $1.7 million with a mortgage of $1.045 million being paid out. After other costs, $250,000.00 was set aside to buy a property in Brisbane. $280,000.00 "plus our savings" were applied towards personal debts, school fees, rent and tax totalling $302,000.00. The detail set out in the Plaintiff's affidavit, paragraph 99, demonstrates a lifestyle clearly where the Plaintiff and her husband had been living beyond their means on borrowed money and borrowed time.
The Plaintiff says (paragraph 100) in May 2013 she and her husband paid $1.22 million for a Brisbane house which as at November 2015 had a mortgage indebtedness of $1,091,000.00."
The Plaintiff attributed much of the blame regarding the financial predicament in which she now finds herself, to Andrew. In particular, she attributes credit card debts of $250,000 to personal expenditure by him.
The Plaintiff currently has the following financial resources:
1. Home in East Brisbane $1,375,000
2. Motor vehicle $ 9,000
3. Shares in publicly listed companies $ 8,000
4. Home contents $ 40,000
5. Superannuation $ 575,631
TOTAL $ 2,007,631
I have ignored the Plaintiff's money in bank because it is said to be "nominal". However, I have earlier referred to the fact that if an order for her costs is made, the Plaintiff will be reimbursed for some of the costs that she has already paid. (I say some of the costs because the quantum of the Plaintiff's costs may be disputed and, in any event, she may have to pay an amount towards those costs and disbursements calculated on the indemnity basis.)
The Plaintiff has the following liabilities:
1. Home mortgages $1,091,000
2. Personal loan from daughter Dominica $ 30,000
3. Credit card debt $ 4,000
4. Legal fees $ 60,000
5. Legal fees AFSA proceedings $ 1,493
6. Outstanding and future school fees for Luca $ 80,000
7. Estimated income tax and capital gains tax $ 10,000
TOTAL $ 1,276,493
The evidence reveals that the Plaintiff's marriage has irretrievably broken down, and that she and her estranged husband have entered into a property settlement, the effect of which is that she is to receive the whole of the property in which she, and their children presently live, subject to the mortgages which secure the debts of almost $1.1 million. Her husband is currently bankrupt. (The former matrimonial home will remain in the names of the Plaintiff and Andrew until such time as it is sold or the Plaintiff is able to refinance the loan secured on that property.)
The Plaintiff was cross-examined, extensively, by senior counsel for the Defendant about the home in which she and her two children live. It is described in Ex. 4 (being a real estate advertisement) as " a stylish home situated on a 534 sq. metre block in one of the most desirable inner city suburbs of Brisbane" and as an "awe inspiring home [that] combines quality fixtures and finishes with a clever design". It is said to have "an impressive steam room, gym (denied by the Plaintiff) and large kitchen… a spacious walk in butler's pantry, extensive bench tops, ample storage space, quality cabinetry, breakfast bar and a full range of quality stainless steel European appliances". It has an in-ground pool. It has five bedrooms and what appears to be a two car garage.
The Plaintiff denied that the home was too big for her and her two children. She said that she requires the additional space because when her daughter and husband visit with their two children it means that they have somewhere to stay: T41.45 - T41.49. The Plaintiff says that they visit a few times each year for several days. She would like to remain living there because it has been the only home that she and her children have had since they arrived in Brisbane. She says that she is established there, has good neighbours, it is very close to the school at which she teaches and the parish.
Despite her evidence, the Plaintiff did give evidence of the cost of alternative accommodation. It was only in answer to a question from the Bench that she gave evidence that if she were able to pay off her son's school fees, if she was just living off her wage essentially, with no school fees or legal fees to repay, she "would probably be able to manage a mortgage of about $300,000": T43.37 - T43.44.
In addition, the Plaintiff has provided evidence that in September 2016, she had received correspondence from the Australian Financial and Security Authority ("AFSA") "advising that Andrew had filed for bankruptcy and asserting a claim, on behalf of Andrew's creditors, to Andrew's interest" in their former matrimonial home.
In early February 2017, she had received further correspondence advising that its investigations would probably be completed by the end of February 2017. She also stated that "[U]ntil AFSA's investigation is concluded, I have no way of knowing whether I will retain possession of" the former matrimonial home.
Even without the claim by AFSA, it seems highly unlikely that the Plaintiff will be able to continue to afford the repayments that she currently is required to make on her current mortgage in order to retain the home in which she and her children live.
Counsel for the Plaintiff submitted that "[T]he plaintiff is in need of secure accommodation and a fund against contingencies". In oral submissions, the amount of the provision sought was said to be $500,000: T100.21 - T100.24.
The Defendant's net income, earned from interest on cash at bank, is approximately $4,400 per month (although this may be an underestimate, as the Defendant also stated that she expects to earn income from the funds that she has invested with Tino), whilst her monthly expenditure is $7,234. (These expenses include $960 per month for home and pool maintenance.)
The Defendant was cross-examined about details appearing in a number of copy tax returns, lodged between 2012 and 2014, which disclosed that in those years, each of the deceased and the Defendant received income totalling approximately $160,000 each year from a trust. The Defendant responded that she was not aware of that as the deceased had dealt with those matters: T91.35 - T91.43.
In addition, the Plaintiff tendered (Ex. D) a copy letter dated 15 July 2016, that referred to the Defendant's response to a Notice to Produce dated 8 April 2016 and that "no individual tax return or Notice of Assessment was produced in respect of Shirley for 2015. Please provide those documents." In addition, a request was made in the letter, for the Defendant to produce "a copy of the individual tax return prepared for Shirley and any Notice of Assessment for the 2016 year (if available now, or when available)". Other documents were also sought in the letter, including a copy of the superannuation fund trust deed (and any variations thereto) relating to the Shirley Carusi Super Fund.
There was no evidence that documents in answer to these requests, in particular, had been produced by, or on behalf of, the Defendant.
The Defendant gave evidence of the following financial resources:
1. Home in Box Hill $ 3,750,000
2. Two cars $ 40,000
3. Savings in bank accounts $ 1,558,321
4. Funds invested with Tino $ 600,000
TOTAL $5,948,321
(Of the amount currently in the bank, about $746,570 forms part of the proceeds of sale of the Box Hill property.)
The Defendant has the following liabilities:
1. Nursing home fees (owed to Tino) $ 74,354
2. Capital gains tax on Five Dock $168,981
TOTAL $243,335
In an affidavit sworn 10 February 2017, the Defendant acknowledged that as a result of the sale of the Five Dock property, there has been a reduction of her monthly expenses. She also wrote that she intended to pay the CGT at the conclusion of the proceedings.
She also stated that her living expenses "are greater than my income" and that she intended "to invest the net proceeds of sale of the Five Dock property to provide me with an income to fund my current and future living expenses and also to provide me with funds for any contingencies that may arise".
Finally, she stated that there were expenses which were likely to be incurred in repairing, or maintaining, the Box Hill property, including repairs to the swimming pool, to the roof, to ceilings in three of the bedrooms, to the bathrooms, and the complete renovation of the kitchen.
I am a little troubled by the Defendant's apparent failure to disclose documents that reveal her income for the financial year ending 30 June 2016. Her reliance upon her children, who assisted her, in this regard, does not alleviate my concern.
[12]
(e) If the applicant is cohabiting with another person - the financial circumstances of the other person
The Plaintiff is the sole provider for her sons, Finnian and Luca. Finnian resides with the Plaintiff, whilst Luca resides at boarding school during the school term. Since the beginning of 2017, Andrew no longer resides with the Plaintiff and the children.
Finnian suffers from a range of mental health issues (said to be Attention Deficit Disorder, Autism Spectrum Disorder, and generalised anxiety). The Plaintiff deposes that he suffers from significant learning difficulties and behavioural issues.
He is unemployed and, currently, on Centrelink benefits ($433 per fortnight of which $155 (or perhaps, more recently, $95), is garnisheed to pay court fines and fees, which total several thousand dollars). On occasion, Finnian contributes to the household expenses, but his contribution is intermittent. He is currently serving a two year Probation Order, as a result of his conviction for various drug-related offences.
Even though Finnian is an adult, he remains, at least partially, dependent on the Plaintiff. It seems like this partial dependency may continue for some time.
Luca has no financial resources of any significance and does not contribute to the household expenses. He, too, is likely to be dependent upon the Plaintiff for some time.
[13]
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated
The Plaintiff has had a history of anxiety and depression. She was hospitalised for depression in about 1999. Her evidence is that her present circumstances, including her acute financial insecurity in the wake of the bankruptcy of her estranged husband and the claim by AFSA, are causing her extreme emotional, and mental, anxiety. Her treating doctor has referred her to a psychologist, but, currently, she is unable to pay for treatment, so has been unable to receive therapy. She is taking an increased dosage of anti-depressant medication on the prescription of her treating general practitioner.
Despite these difficulties however, the Plaintiff acknowledged that she has still been able to continue in her employment (T63.8 - T63.14).
[14]
(g) the age of the applicant when the application is being considered
The Plaintiff is aged 58 years.
[15]
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant
As a child of the deceased, I think it likely that the Plaintiff made some contribution to the welfare of the deceased. However, any such contribution appears to have been, for the most part, some years before the deceased's death. Although she says that she provided emotional support, companionship and guidance to the deceased, I do not accept that she did so, to any significant extent, in the last years of the deceased's life. To the contrary, it appears that for a number of years before his death, her requests for financial assistance, caused the deceased significant stress. In addition, Andrew's request in 2010, for financial assistance, naturally, caused the deceased such concern that he left it to Tino to deal with.
There is no evidence that the Plaintiff contributed to the acquisition, conservation, and improvement, of the property that may be designated as notional estate of the deceased person. Rather, the Defendant gave evidence of her significant financial, and other, contributions, which she made to the acquisition, conservation, and improvement, of the property. There was no challenge to the Defendant's evidence.
[16]
(i) 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
I have dealt with the financial assistance provided to the Plaintiff by the deceased earlier in these reasons. As stated, it was significant financial assistance. No provision, however, is made by the deceased's Will for her.
(There was other financial assistance provided by the deceased to the Plaintiff about which she gives evidence in her first affidavit at Paragraph 88(a), (b), (d) and (f), which is unnecessary to detail.)
[17]
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
I have dealt with the testamentary intentions of the deceased. It is clear that in all but the deceased's last Will, he made financial provision for her.
[18]
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so
The Plaintiff was not being maintained, wholly or partly, by the deceased immediately before his death. I have referred to the provision made for the Plaintiff during the deceased's lifetime.
[19]
(l) whether any other person is liable to support the applicant
Whilst the Plaintiff's estranged husband has an obligation, in law, to support the Plaintiff "to the extent that [he] is reasonably able to do so if [she] is unable to support herself adequately" (see, s 72(1) of the Family Law Act 1975 (Cth)), it is unlikely, as a bankrupt, that he will be able to do so.
[20]
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate and proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased.
In Collicoat v McMillan [1999] 3 VR 803, at [40], Ormiston J wrote, in relation to the manner in which an applicant's behaviour towards the deceased is to be considered:
"Ordinarily each of the persons who have a statutory right to make [an] application are entitled to have their position considered by a testator but their behaviour (right or wrong) towards the testator may only provide a basis for measuring appropriately the testator's obligation to make provision for each of those applicants. Their sins are irrelevant except in so far as a testator might properly take exception to their behaviour."
The troublesome aspect of the Plaintiff's conduct during the lifetime of the deceased relates to her requests for financial assistance, which for a number of years prior to his death, the deceased found burdensome and stressful. Otherwise, there does not appear to be any relevant conduct of the Plaintiff.
It is clear that, at least in part, the Plaintiff and her husband were living far beyond their means. In cross-examination, the Plaintiff accepted that, during the period prior to the breakdown of her marriage, she and her husband had spent significant sums on several holidays, and also other non-essential goods and services, in circumstances where (on the Plaintiff's own evidence) the family was having difficulty meeting its debt-repayment obligations on the family home. In part, at least, her current financial circumstances have been caused by the lifestyle that they lived.
However, as was written in Bates v Cooke [2015] NSWCA 278 at [66] - [67]:
"The appellant's financial circumstances, whatever their causes, were factual matters that the Court might be expected to take into account in making the determination required by s 59(1) of the Succession Act.…
…the Court should not be deflected from considering the circumstances of the case and the words of the statute by applying a constraint that does not find its source in the Succession Act."
In Bates v Cooke, the Court was concerned with "well-intentioned, but improvident, investment decisions". I am satisfied, considering all of the facts of the present case, that the lifestyle choices made by the Plaintiff and her husband (to the extent that they were expenditure on the family rather than on her husband alone), do not disentitle the Plaintiff to some provision out of the notional estate of the deceased.
I should mention that I do not accept the Plaintiff's submission that there were promises of significant provision made by the deceased to the Plaintiff. Even if she was aware of the terms of any of the deceased's Wills in which provision was made for her, it must have been clear, by 2010, that the deceased had become weary of having to deal with her requests for money.
[21]
(n) the conduct of any other person before and after the date of the death of the deceased person
I have no doubt that the Defendant, was a loving and dutiful wife of the deceased. Indeed, no contrary submission was put by counsel for the Plaintiff.
[22]
(o) any relevant Aboriginal or Torres Strait Islander customary law
This is not relevant.
[23]
(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
Andrew's bankruptcy in September 2016, it would seem, was a consequence of him having amassed a large amount of credit card debts (said to be approximately $250,000).
The Plaintiff gave evidence that Andrew had exclusive access to his credit cards, and that, as a result, she did not as a result receive the statements. She asserted that she was not fully aware of the extent of his credit card debts until about 2013. The Plaintiff also said that she had been of the belief that the credit card debt was paid off when the Drummoyne property was sold, and that the debt had only been in the order of $40,000 - $50,000.
At the hearing, counsel for the Defendant pressed the Plaintiff on her claim that she was unaware of the extent of her husband's debts prior to 2013 (T47.48 - T48.23, T68.50 - T69.28, T76.1 - T76.26). I must say, I found some of the Plaintiff's answers to questions about her investigations of the level of indebtedness somewhat disingenuous.
Counsel for the Plaintiff contended that, however foolish it may appear (especially at the present time), the trust placed by the Plaintiff in Andrew, who was her husband of many years, ought to be accepted by the Court as the main reason for the Plaintiff's part in her family's financial demise.
As stated, the Plaintiff and Andrew have entered into final orders as to their matrimonial assets, which provide the Plaintiff retains possession of the matrimonial home at East Brisbane, on the basis that she is to refinance the property and is solely responsible for the mortgage payments. Given the small amount of equity that is currently available in the property, it may be that the claim by AFSA will not proceed.
[24]
Determination
As I have recently written in Morier v Liem [2016] NSWSC 582, the fact that the Plaintiff does not receive any provision under the Will of the deceased, of itself, does not bespeak inadequacy. That fact is not all that the Court is required to consider. The totality of the relationship of the Plaintiff and the deceased, the age and capacity of the Defendant, as the deceased's widow of a very long marriage, the claim of each on the bounty of the deceased, and the size of the estate and notional estate, are very relevant factors in determining the answer to the question whether the Court is satisfied, for the purposes of s 59(1)(c) of the Act, that the deceased did not make adequate provision for the proper maintenance, education or advancement of the Plaintiff.
Basten JA wrote in Chan v Chan [22], that the Court must remember:
"A significant set of factors in many cases is that identified as "the financial resources (including earning capacity) and financial needs, both present and future, of the applicant…". However, 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. The background to any consideration of the appellant's needs required determination of the size of the estate and the claims of others on the beneficence of the testator."
Thus, in determining what is adequate for the proper maintenance, education or advancement in life of an applicant, the Court also considers the nature, extent and character of the estate and the other demands upon it, and also what the deceased regarded as superior claims or preferable dispositions.
It is beyond argument that the deceased made generous provision for the Plaintiff during his lifetime. It is undisputed that he provided her, over the years, with amounts which together totalled $500,000. He did not make any provision for her after about 2004, or if he did, it was not substantial.
However, the level of provision made during the lifetime of the deceased for the Plaintiff, alone, cannot determine what is "proper" on the deceased's death. Of course, the fact that generous provision has already been made is one of the matters to be taken into account in determining what is "proper". The situation must be looked at when the Court is determining the Plaintiff's application.
The Defendant is the only other person who has any relevant claim on the deceased's bounty. She has alleged a financial claim on that bounty but, in reality, it is not a very significant competing financial claim. The Court must not ignore her claim as a beneficiary, being the principal chosen object of the deceased's testamentary bounty, and also as his wife of a very long marriage. Furthermore, her competing claim founded upon her significant contributions to the deceased, both financially, and in other ways, during the marriage must not be ignored. These matters are very relevant on the issue whether the provision made for the Plaintiff is inadequate. They are also relevant on the issue of the designation of property as notional estate.
Bearing in mind her current financial and material circumstances, one cannot but reach the conclusion that the provision made for the Plaintiff in the Will of the deceased is inadequate for her proper maintenance and advancement in life. The Plaintiff is self-reliant. Whilst she has a home of reasonable value, it is almost fully encumbered. She has the significant responsibility of raising two children. Whilst she is not impecunious, her means are now modest.
Accordingly, the Court's jurisdiction to make an order is established.
Then, one turns to the provision, if any, that ought to be made. In my view, some provision ought to be made for the Plaintiff. She is not in need of additional education, but her claim for provision comes within the concepts of maintenance and advancement in life (as referred to above).
In Grey v Harrison at 366-367, Callaway JA observed:
"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."
The Plaintiff accepts that it is unlikely she will be able to continue to service the mortgage over the East Brisbane property on her current income, and that in such an event she will be forced to sell the property. The Plaintiff has deposed that she would like to remain within the East Brisbane/Kangaroo Point areas, as this is where she has resided for the last 6 years. She gives evidence that the median purchase price for a house in this area is "around the $900,000 mark".
The Plaintiff has also looked at properties that are some 5 to 20 kilometres from her current residence, where the median property price is reported to be "around" $800,000, which she acknowledges is also beyond her current means. The Plaintiff estimates that the costs and expenses of sale of the East Brisbane property, and including stamp duty on the purchase of alternative accommodation, would be about $75,000.
The equity in the Plaintiff's property is currently about $284,000. (I have assumed, in this regard, that no claim will be persisted with by AFSA.)
I am of the view that the Plaintiff should receive a lump sum of $400,000. This will enable her to pay off some of her liabilities in full ($110,000, being the loan from her daughter and the outstanding school fees). The balance ($290,000) will provide her with a sum to put towards the purchase of another home, in which she and her children can live, or can be used as a capital sum for exigencies of life, or, if she considers it appropriate to reduce, but not completely eradicate, her current mortgage debt.
It seems to me that purchasing alternative accommodation might be the most realistic alternative. Assuming that her current home is sold and the debt secured by the mortgages paid off, there is a net equity of about $284,000 in her current home. With the balance of the provision made for her, she will have, in total, $574,000. If she is then able to borrow about $300,000, she will have, in total, $874,000 to purchase alternative accommodation and pay for the associated costs and expenses of the purchase. (I have earlier stated that the community, ordinarily, does not expect a parent to provide an unencumbered house for an adult child.)
The sum that I have considered to be adequate and proper, in all the circumstances, will reduce the Defendant's cash by $400,000, the costs of the Plaintiff calculated on the ordinary basis and the balance of the costs payable to the Defendants solicitors. The balance of the proceeds of the Five Dock property and the cash to which I have referred will be sufficient to meet the order for provision and the costs of the parties.
In reaching my conclusion, I have not forgotten that the Plaintiff has a significant amount of superannuation ($575,631) which will, in due time, come to be available to her.
I shall give the parties 14 days to consider the following form of orders that I propose:
1. Having found the Plaintiff to be an eligible person; that the proceedings were commenced within time; and that the provision made for her in the Will of the deceased is inadequate for her proper maintenance or advancement in life, she is to receive a lump sum of $400,000 out of the notional estate of the deceased.
2. Pursuant to s 72 of the Succession Act 2006 that the family provision order made in favour of the Plaintiff not take effect as if the provision was made in a codicil to the Will of the deceased.
3. The Plaintiff's costs calculated on the ordinary basis of the proceedings, and the balance of the Defendant's costs, calculated on the indemnity basis, of the proceedings, are to be paid out of the estate, or notional estate, of the deceased.
4. Provided that the amount to which the Plaintiff is entitled is paid within 28 days of the making of orders by the Court, or such other time as the parties agree in writing, no interest is to be paid on the lump sum to be paid to the Plaintiff; otherwise, interest at the rate prescribed under s 84A(3) of the Probate and Administration Act 1898 (NSW) is to be paid from that date.
5. Being satisfied that the deceased's actual estate is insufficient for the making of the family provision order, and the costs orders, that should be made, orders that the burden of the provision made for Plaintiff, any interest thereon, and the costs, should be borne out of property to be designated as notional estate of the deceased unless otherwise paid by the Defendant.
6. That liberty is granted to any party to apply, in these proceedings, for consequential and ancillary orders for the purpose of, or with respect to, giving effect to, and implementing, the family provision order made in favour of the Plaintiff including the designation of an amount of cash held by the Defendant in bank as the notional estate of the deceased.
7. The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10) and Practice Note No SC Gen 18 (Para 22).
The parties, within 14 days are to consider whether any amendments to the proposed orders are required. The matter is stood over to a convenient date for any argument as to the nature and form of the orders proposed. Otherwise, any agreed amendments to the proposed orders may be forwarded to the Court, for consideration, in Chambers, or if no amendments are required, the orders proposed will be entered and the adjourned date vacated.
[25]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 May 2017
Hinderry v Hinderry [2016] NSWSC 780
Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134; [1979] HCA 2
Hunter v Hunter (1987) 8 NSWLR 573
Hyland v Burbidge [2000] NSWSC 12
Ilott v The Blue Cross & Ors [2017] UKSC 17
In re Green, deceased; Zuckerman v Public Trustee [1951] NZLR 135
John v John; John v John [2010] NSWSC 937
Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Kohari v Snow [2013] NSWSC 452
MacGregor v MacGregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82, (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Morier v Liem [2016] NSWSC 582
Pincius v Wood [1998] TASSC 46
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808
Re Buckland, Deceased [1966] VR 404
Salmon v Osmond [2015] NSWCA 42
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522; (2013) 85 NSWLR 253
Smith v Johnson [2015] NSWCA 297
Smith v Woodward (Supreme Court (NSW), 9 September 1994, unrep)
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stott v Cook (1960) 33 ALJR 447
Taylor v Farrugia [2009] NSWSC 801
Underwood v Gaudron (2015) 324 ALR 641; [2015] NSWCA 269
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11
Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep)
Wheat v Wisbey [2013] NSWSC 537
White v Barron (1980) 144 CLR 431; [1980] HCA 14
Wilcox v Wilcox [2012] NSWSC 1138
Worsley v Solomon [2008] NSWSC 444
Category: Principal judgment
Parties: Ms Zenuccia Mary Carusi-Lees (Plaintiff)
Mrs Shirley Margaret Carusi (Defendant)
Representation: Counsel:
Mr D Liebhold (Plaintiff)
Mr L Ellison SC (Defendant)
Preliminary Issue
The Plaintiff sought an order under s 91 of the Act.
The section applies, since this is a case in which an application has been made by a person for a family provision order, in respect of the estate or notional estate of a deceased person, or deceased transferee, respectively, in relation to which administration has not been granted. The Court may, if it is satisfied that it is proper to do so, grant administration in respect of the estate of the deceased person, or deceased transferee, to the applicant, for the purposes only of permitting the application concerned to be dealt with, whether or not the deceased person or deceased transferee left property in New South Wales.
I dealt with the issues that arise in a case where there has been no grant of administration in Wheat v Wisbey [2013] NSWSC 537 at [29] - [60]. I shall not repeat what I wrote in that case. However, in summary, I concluded that there would be circumstances in which it was "proper" to make an order under s 91, and circumstances in which it was not. In any event, the making of a family provision order is independent of whether to grant probate or administration under s 91.
Senior counsel for the Defendant proposed "…if the case gets that far, the defendant would take advantage of an opportunity to … raise the funds in her own way, to discharge any obligation": T6.27 - T6.33.
Even though the making of an order under s 91 was not opposed, it seems to me, as it did, in Wheat v Wisbey, since the Defendant (who is the executrix of the deceased's Will) is a party to the proceedings and has agreed to satisfy any family provision order and costs order that may be made in favour of the Plaintiff, that it is unnecessary, and, therefore, it is not proper, to grant administration under s 91 in this case.
However, as I did in Wheat v Wisbey, since an order under s 91 is not to be made, but the holder of property that may be designated as notional estate is a party to the proceedings, I shall make an "otherwise order" under s 72 of the Act (to which I shall refer), permitting the Plaintiff to proceed against the Defendant, as holder of property to be designated as notional estate, in the event that any family provision order made in the Plaintiff's favour is not paid in accordance with the terms of the order.
(I should mention that not very much was said in the submissions by either counsel about the topic of designating property as notional estate. Senior Counsel for the Defendant did not concede that an order designating property as notional estate should be made. In fact, he reminded the Court of s 87 of the Act to which reference will be made later in these reasons.)