The plaintiff's financial position
87 The evidence of the plaintiff's financial circumstances independent of the moneys which she will inherit from the deceased's estate was unsatisfactory. She receives a pension of $469 per fortnight. Her expenses are modest. She estimates that they are $248 per week. There is thus a shortfall of about $14 per week between her income from the pension and her everyday living expenses.
88 Prior to April 2003 the plaintiff had a 50% interest as tenant in common with her daughter and her daughter's husband (who together held the other 50% interest) in a property at 14 Reynolds Avenue, Labrador on the Gold Coast. That property was sold on 28 April 2003 for $291,000. From that sale she received at least $138,000. She may also have received her half share of the deposit of $14,550. In her oral evidence the plaintiff confirmed that she received a half share of the proceeds of sale and said that from those proceeds she paid $20,000 to her daughter and her daughter's husband and $4,000 to her brother to repay debts which she had incurred to them to fund the costs of the proceedings.
89 In her affidavit sworn on 10 July 2003 she swore that she had a one third interest as tenant in common in that property and that that interest had a value of $75,000. That evidence was shown to be incorrect to a significant degree. The property had been sold when she swore her affidavit. She had a one half interest, not a one third interest in the property. She had received at least $63,000 more than the value she attributed to her interest.
90 The plaintiff's credit was challenged in the course of cross-examination not only on this issue, but also on her failure to produce bank statements as required under a notice to produce. She gave oral evidence that she had $60,000 in a bank account with the National Australia Bank and no other accounts. She said that she had left the bank statements at home. After the evidence had closed the plaintiff was given leave to re-open her case to tender additional documents. The documents tendered showed that in July 2003 the amount of $138,000.38, being the same amount as had been distributed to her from the sale of the Labrador property in May 2003, was deposited into a joint account of the plaintiff and Mr Harrison (her son-in-law). Thereafter two withdrawals in the amounts of $4,000 and $138,000 were made, but there was no evidence of where the moneys went. There was also tendered a bank statement with the National Australia Bank showing a credit balance of $60,542.75. The account was in the name of "Louisa Discretionary Trust care of Donna Harrison".
91 I infer from this evidence that the plaintiff is an object of a family discretionary trust in which her daughter and son-in-law have an involvement either as trustees or discretionary objects, or both, and that the plaintiff has taken steps to ensure that she does not have substantial cash assets recorded in her own name. I am not satisfied that the only cash deposit to which she is beneficially entitled amounts to approximately $60,000. Given the plaintiff's failure to adduce evidence as to how the balance of $138,000 received from the sale of the Labrador property was dealt with after paying debts of $24,000, I think it probable that she has assets either in cash, or as debts owed to her by persons to whom money has been transferred, of about $114,000. She may have other valuable rights as an object of a family discretionary trust, but no evidence about that trust or any other financial dealings she has had with her daughter and son-in-law was adduced.
Family Background to Children's Claims
92 The deceased carried on business as a newsagent in Melbourne until about 1968. He and his first wife then moved with their family to Hervey Bay in Queensland where he bought a milk run and leased his newsagency business in Melbourne to his brother. The deceased became a professional fisherman. In about 1975 or 1976 they returned to the newsagency business in Melbourne.
93 That business was sold in 1987. The deceased and his wife Valerie and their two younger children Anthony and Tina then moved to Banora Point near Tweed Heads on the North Coast of New South Wales. The deceased and Valerie separated in 1990. They had acquired two properties at Banora Point. As part of the property settlement Mrs Valerie Hoobin kept the family home, which was only two blocks away from where the deceased lived in Castlecrag Avenue, Banora Point. It is clear that the deceased's attitude to at least some of his children is attributable to his view that they had supported their mother, rather than him, in and following the separation.
94 In the next section of this judgment I describe the circumstances of the three claimants. I have generally accepted their evidence where it conflicted with the plaintiff's evidence. I did not consider the plaintiff to be a reliable witness. I have already commented on the unsatisfactory nature of her evidence concerning her financial position. At times she affected a distress which I did not think was genuine.
Claim of Carole Sarahan
95 Carole Sarahan is the deceased's eldest child. She has three children aged, 20, 17 and 7. The younger two are financially dependent on her. In 2002 she married an Egyptian citizen, Mr Sarahan. According to Mrs Sarahan her husband does not have assets with which to support her. At the time of the hearing he was in Egypt but was due to be coming out shortly to take up residency with his wife in Australia. He is a young man of 23 who has studied in hotel management and tourism and hopes to find employment on the Gold Coast where Mrs Sarahan lives.
96 Mrs Sarahan finished school at the end of first term in Grade 10. She has no other educational qualifications. Apart from working in her parents newsagency business when she was a child and subsequently, from the time she was 14, in the milk run which her father purchased in Hervey Bay, she has had only casual employment from time to time as a waitress. She and her former husband managed her parents' newsagency business for about three months of each year between about 1977 and 1987 to enable her parents to travel to Queensland. At that time Carole was married and living at Hervey Bay. She and her husband visited Melbourne from time to time and helped out in the newsagency business.
97 The deceased represented Australia in cycling at the 1948 Olympic Games. He won the 1950 World Championship in cycling. In about 1991 Carole arranged for an introduction which resulted in his being inducted in Melbourne into an organisation called the Hall of Fame. I infer that this is an enterprise devoted to the glorification of sporting success. He and three of his daughters, Carole, Christine and Leanne (who lived in Melbourne), attended a dinner in honour of his induction in Melbourne in 1991. It appears that whilst his health permitted the deceased attended these dinners annually, or at least regularly. They were a source of pride for him.
98 For about two years after her parents' separation in 1990, Carole and her children regularly visited her father. Carole lived about 45 kilometres from Banora Point. He made Carole aware that he was unhappy about her visiting her mother at this time.
99 For two years after her parents separated Carole spent every weekend with her father helping with the housework, washing, ironing and cooking and talking to him. Until about 1994-1995 there was regular contact between them.
100 From 1994 until her father died Carole's contact with him became very limited. She sent cards to her father for a couple of years after 1994 but received no response. She visited her father when he was in hospital in 1996 in Tweed Heads. She was advised by her sister Christine not to telephone her father when he was in hospital in Brisbane in 1996 with heart surgery. She was told that the plaintiff had said that the deceased's children should keep away and that no phone calls were allowed into the hospital at that time.
101 The reasons why Carole lost contact with her father from about 1994-1995 were not made clear. One reason was that her father disapproved of a man with whom she was then living (Errol), who was the father of one of her children. In about 1995 her father refused to come to her house because Errol was living there.
102 Carole Sarahan receives a Centrelink pension of $235 per week. She receives monthly allowances for maintenance of her younger son of between $200 and $380. As a result of a property settlement with her first husband she owns the house in which she lives which has a value of about $250,000 and is subject to a mortgage of $72,000. That loan was taken out in 2000 and has since been reduced from $80,000 to its present level. The house needs painting inside and out and the stove is in need of repair. She has no savings, no superannuation and a credit card debt of about $1,500. She owns a motor vehicle with an estimated value of $1,500. Her household appliances are nearing the end of their working life. She has a need for clothes and shoes for herself and her children. She says that she spends her income only on absolutely essential items.
103 Mrs Gilmour submitted that adequate provision for Mrs Sarahan's maintenance and advancement in life would be approximately $86,500, being a sum sufficient to pay off her mortgage and credit card debt and to provide her with a capital sum for clothes, household appliances and a replacement car. Counsel accepted that the size of the estate and the competing claims on it were such that a proper provision for Mrs Sarahan's maintenance and advancement in life would be less than what was adequate.
Christine Soden
104 Christine Soden is the second eldest daughter of the deceased. She has four children aged 28, 23, 8 and 6. She has recently divorced her husband. There has been a property settlement, but there was little property to divide. In October 2003 when she swore her affidavit in these proceedings and at the time of hearing, she was living with her mother because she did not have the money for a rental bond. She receives social security payments by way of parenting payments, family assistance and a carer's allowance totalling $959.30 per fortnight. She receives child support of $102 per month. The rent which her mother charges her has been reduced from $180 to $120 per week. She says that she and her children struggle to make ends meet, that they have to buy the cheapest food available and cannot afford to buy the clothing and shoes they need. She has a TV that is almost twenty years old. She does not have a washing machine or a dryer. Such whitegoods as she has need replacing. She needs beds and most of her furniture needs replacing. Her car is fifteen years old.
105 Her marriage broke down in March 1999. Shortly afterwards her son Ben was diagnosed as suffering from autism. He attends a public school at Banora Point which has a special education unit. Although the government covers most of the cost, Mrs Soden says that he has needs, on which she did not elaborate, for his education and development which she cannot afford.
106 Christine was 11 when the family moved from Melbourne to Hervey Bay. She helped her father in his milk-run and when he later became a fisherman she, along with the other children, helped in pulling fish from nets and packing them for the markets. She married in 1974. In 1976 her parents returned to Melbourne. In 1977 she moved to Brisbane from Hervey Bay where she lived until 2000. She continued to see both her parents after their separation in 1990. In the year that the deceased met the plaintiff, 1994, the deceased spent a week with Christine whilst he played in a golf tournament in Brisbane. The plaintiff also stayed at Christine's house at this time. In February 1995 the deceased attended her son's christening. When her father was admitted to hospital in Brisbane for heart surgery in 1996 she visited him at least once a day usually with her family. She kept in contact with him after his release from hospital. Later that year, in November 1996, the deceased and the plaintiff stayed in her home in Brisbane to care for her children when she was in hospital having her youngest daughter. The plaintiff and the deceased saw Christine and her family at Christmas time in 1996. She was the only one of the deceased's children whom the plaintiff invited to the deceased's 70th birthday party in 1997.
107 Christine became pregnant again in 1998. The plaintiff gave evidence that at that time she tried to help Christine but Christine became annoyed with her. The deceased then became annoyed with Christine and told the plaintiff that he wanted to sever all contact with her. Whatever passed between the plaintiff and Christine Soden, it is difficult to understand how it could have justified the deceased's reaction. Christine Soden lost her baby at 22 weeks on 19 August 1998. Her child lived for about an hour after his birth. One can understand that she would be highly distressed. The deceased's attitude showed no sympathy for, or understanding of, his daughter.
108 In March 1999 Christine Soden's marriage broke down. Shortly after this her second youngest child was diagnosed as suffering from autism. Christine tried to telephone her father on numerous occasions in 1999 but on each occasion the plaintiff spoke to her and she was not able to speak to her father. She did not visit her father at this time. She was not aware that he had been diagnosed with cancer.
109 Mrs Gilmour described Christine Soden as cheerful, honest and uncomplaining. So far as these qualities can be assessed in a witness I am inclined to agree. I am less certain of the relevance of this submission. However it is clear that the wish of the deceased to sever his relationship with his children could not reasonably have been due to any lack of attention which Christine showed him. His reaction to her plight following the loss of her child in 1998 was not that of a man who could be relied on to make a fair assessment in his will of the needs and merits of those with claims on him.
110 Mrs Gilmour submitted that adequate provision for Christine's financial needs would extend at least to $6,500 to clear her debts, a further $4,500 to repay her debt to her mother to the extent that that was not covered for any order for costs, $15,000 towards the cost of a new car, and further provision up to a total of about $80,000 to $100,000 towards part payment of a house or otherwise to provide her with a capital sum to meet her future needs to support herself and her two infant children. Mrs Gilmour submitted that as Christine Soden has a child of 8 who is autistic she faces the prospect of looking after that child for the rest of her life. It was submitted that she has no prospect of obtaining employment.
Tina Hoobin
111 Tina Hoobin is the youngest of the deceased's children. She is unemployed. She also left school in Year 10. Her only training is that she did a bar course. Since leaving school she has worked in her parents' newsagency and has also worked in the hospitality industry, as a barmaid. She has a casual cleaning job once a fortnight. She has three children, aged 13, 11 and 5. She receives a carer's allowance for her youngest child, but there was little evidence about the circumstances of that child except that she has needed surgery to correct an abnormal growth in her skull. Her children are entirely dependent upon her. She receives no maintenance from their father who is himself unemployed and on sickness benefits. She receives $50 per fortnight after tax from her work as a cleaner. Her after tax income from social security payments consisting of parenting payments, family assistance and carer's allowance is $1,120.16 per fortnight: a total of $1170.16 per fortnight. Her family expenditure usually exceeds her income although she spends only on essential items. She has no motor vehicle. She has savings of about $120. She has a computer, furniture and personal effects valued at $3,000. She has credit card debts of about $11,000. She owes her mother $4,200 for legal expenses. Her rent is $200 per week. Her expenses include money for school uniforms, school excursions and children's sport. She says, and I accept, that she cannot afford to buy her children new clothes and shoes which they need. Most of her whitegoods are old and need replacing. She says she urgently needs a new car.
112 Tina Hoobin was about 8 when her parents left Hervey Bay in Queensland to return to Melbourne. She worked in the newsagency business from the time she was about 9. (All of the children worked in their parents' businesses from time to time during their childhood.) After she left school she found paid employment in another newsagency but worked for her parents in the business on weekends in lieu of board. When she was 18 or 19 her parents and Anthony moved to Banora Point. She moved back to Melbourne for eighteen months but was homesick for her family and returned home to Banora Point in about 1989. When her parents separated in 1990 she was about 21 or 22. She rented a flat with her boyfriend Chris Mainwaring, the father of her children. Her first child was born in November of that year. After her parents separated her mother lived in the flat with them until the property settlement in 1991. Under the property settlement her mother obtained the family home and her father moved into the Castlecrag Avenue property. Tina visited her father about once a week at this time but also kept in close touch with her mother. It is the plaintiff's evidence that the deceased told her that after his property settlement with his first wife Valerie, he went to the bank to sort out his affairs and that he there found Tina and her mother trying to withdraw all the money that was in Valerie's and the deceased's joint account. He said to the plaintiff "I will never forgive or forget what Tina did that day".
113 This incident suggests that the deceased formed the view that as Tina provided support for her mother, by accompanying her to the bank, she was not to be forgiven, and her transgression in his eyes would not be forgotten.
114 Tina continued to see her father during 1994 and 1995. She estimates that she visited him about once a week although the plaintiff says that she came to see her father from time to time but not regularly or frequently. As Tina was living in Banora Point I think it likely that she did visit her father regularly. She also visited him on Father's Day, his birthday and on Christmas Day at this time.
115 In 1996 before the plaintiff commenced living with the deceased, Tina Hoobin continued to visit her father in his house. After the deceased's admission to hospital in 1999 she visited him regularly.
116 I am conscious that I have not heard the deceased's story and do not know all the circumstances (Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20). Nonetheless, I think it would be wrong to attribute the fact that in the last six years of the deceased's life he had diminishing contact, and at times little contact, with a number of his children as being due to a failure on their part to act towards their father in a way which the community would expect children to do.
Inadequate Provision on Intestacy
117 Section 7 and ss 9(2) of the Family Provision Act require a two-stage enquiry. The first question is whether the provision made out of the estate of the deceased on intestacy for each of the three applicants is inadequate for her proper maintenance, education and advancement in life. (ss9(2)). In Singer v Berghouse (No. 2) (1994) 181 CLR 201 at 209 Mason CJ, Deane and McHugh JJ said:
"The determination of the first stage of the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty."
118 If the Court concludes that at the time of the determination the provision made for the applicant out of the estate of the deceased is inadequate for her proper maintenance, education and advancement in life then, and only then, may it determine under s 7 what order ought, having regard to the circumstances at the time the order is made, be made for the maintenance, education or advancement in life of the claimant. The second stage involves similar considerations to the first.
119 In a case such as the present involving a comparatively small estate, and competing claims on it, proper provision for the applicants' maintenance, education and advancement in life may well be less than what is adequate.
120 Both Christine Soden and Tina Hoobin have great financial need. Each has young children including a child with a disability. They have almost nothing in the way of assets and are dependent on social security payments to support themselves and their children. They barely make ends meet. Their financial needs are such that they could not be adequately met out of the estate. Carole Sarahan's needs are not so great. She has a house and is meeting mortgage repayments. However she has no savings and has a need for a capital sum which would enable her to buy a replacement car and whitegoods and provide a buffer against the vicissitudes of life.
121 In considering the competing claim of the plaintiff upon the bounty of the deceased, Mrs Bridger submitted that the plaintiff had a paramount claim on the estate as the deceased's widow and that no provision should be made which would disturb her ownership of the matrimonial home which she and the deceased shared at his death. If that submission is made good, the burden of any order for provision of the three claimants would have to fall entirely on the other two children and would be limited to the amount they will inherit on intestacy.
122 I was referred to the observations made by Powell J in Luciano v Rosenblum [1985] 2 NSWLR 65 at 69-70, and later decisions in particular that of the Court of Appeal in Bladwell v Davis [2004] NSWCA 170. In Luciano v Rosenblum Powell J said that as a broad general rule it was the duty of the testator to his widow, to the extent to which his assets permitted, and absent special circumstances, that she be "secure in her home". Mrs Bridger submitted that the reference to "her home" in this and other cases dealing with the claims of widows meant that a widow should be secure in the matrimonial home, not merely that she should have secure accommodation in a suitable home.
123 In this case the deceased and the plaintiff lived in the property in Castlecrag Avenue, Banora Point until 1998. It is a three-bedroom home whereas the property in Lochlomond Drive is a four bedroom home. It has established gardens. It is a split-level property. The living areas are on the bottom level and there are five steps to the bedrooms and bathroom. There is no evidence that the plaintiff is unable to manage steps, or suffers from any medical condition which is likely to mean that within any particular time frame she could not manage the steps. I can infer that as she gets older the steps will become more difficult for her to manage. But as Mrs Gilmour submitted, by such a time, wherever the plaintiff is living, she might have to move to a retirement village necessitating the sale of whichever property in which she then lived.
124 The reason the plaintiff gave for preferring the Lochlomond Drive property was that it was the home which she and the deceased bought together. Also the additional bedroom was advantageous when her family came down to visit her. The evidence did not support the claimed need to have an additional bedroom for family visits. Both properties are in the same area. The property at Castlecrag Avenue would provide suitable accommodation for the plaintiff.
125 In Bladwell v Davis [2004] NSWCA 170 the Court of Appeal rejected the notion that there was a general rule that the claims of widows had paramountcy over the claims of children or others. As Bryson JA said at [12] the Court cannot resign the functions which it has under s 7 of the Act in favour of rules of thumb. His Honour said:
"…….there is an inconsistency between an approach, in the context of competing claims, to treating the claims of widows as paramount, and the application to the facts and circumstance of each case of s 7 and the approach established by Singer v Berghouse . Preconceptions and predispositions are likely to be the source of inadequate consideration of the process required by the Family Provision Act 1982."
126 Stein JA agreed with these comments whilst also agreeing with the following additional observation of Ipp JA:
"… where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others."
127 The reasons of Bryson JA have particular point in this case where the relationship between the deceased and his widow was not of longstanding. They lived together for about four years and had known each other for about six and a half years. The fact that the plaintiff obviously had a close and loving relationship with the deceased and that she provided comfort and care to him, together with the fact that the deceased intended that she inherit all his property, are important considerations in weighing her competing claim. So also is her own financial position upon which I have already commented. However, I do not think that the plaintiff's claim has paramountcy over the claims of the deceased's children such that I should refuse to make what would otherwise be proper provision for the financial needs of the three claimants, because the consequence may be that the plaintiff has to move to the Castlecrag Avenue property. Regrettably, there is little prospect of the three claimants materially improving their financial position in the future. It is quite possible to make provision for the three claimants and still ensure that the plaintiff has secure accommodation in an adequate house which she will own, to provide her with a capital sum which will make up the current deficit between income and expenditure and also provide a further, albeit modest, sum to meet contingencies, being a sum additional to the money she already beneficially holds.
128 In considering the matters referred to in Singer v Berghouse and set out in s 9(3) of the Act, those which are of the most significance are the financial needs of the three children, particularly Christine Soden and Tina Hoobin. I also take into account the relationship of all three children with the deceased not just over the last six years of his life but throughout their lives. There was no evidence of his having provided for them otherwise than in maintaining them in their childhood. For their part they worked without payment during their childhood in the family's businesses. Their conduct towards the deceased was not such as to disentitle them from being considered as proper objects of his testamentary bounty.
129 In the case of all three, on the basis of the figures and assumptions made by the parties in calculating their entitlement on intestacy, I am satisfied that a provision which they would obtain from the estate on intestacy if the plaintiff exercises her right under s 61D of the Wills, Probate and Administration Act is inadequate for their proper maintenance, education and advancement in life. I shall assess the provision which would be proper for their maintenance, education and advancement in life having regard to the size of the estate and the competing claims on it on the basis of those agreed figures. That determination cannot be reasoned to reach a precise figure. It involves a discretionary judgment which is essentially instinctive, but which has regard to all of the matters to which I have referred.
130 As I have noted in paragraph 79, the parties had previously agreed that it was not necessary for any of them to obtain a grant of administration under s 41A of the Wills, Probate and Administration Act. Presumably they reasoned that orders for provision could be made to take effect immediately after the grant of probate or letters of administration. However there is a difficulty in the way the proceedings have been brought, which does not depend only on the fact that as yet there is no grant of administration. The difficulty is that the plaintiff has not yet made an election under s 61D.
131 No order can be made until a grant of representation is obtained. It is however appropriate that I indicate what orders I will make on the basis that the plaintiff does or does not make her election under that section. It is appropriate to do so because the proposed orders for provision may influence the plaintiff's decision.
132 If these proceedings had been commenced after a grant of representation had been made and after the plaintiff had made her election under s 61D, no order for provision could have been made which could compel the plaintiff to sell the Lochlomond Drive property unless an order were made designating that property as notional estate. Such an order could be made under s 24 of the Family Provision Act, as the property would then be distributed estate. However before an order could be made designating the Lochlomond Drive property as notional estate the Court would have to be satisfied as to the matters in ss 27 and 28 of the Act.
133 So far as relevant, ss 27 and 28 provide as follows:
27 Designation of property as notional estate - matters to be considered
(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered:
(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; and
(c) any other matter which it considers relevant in the circumstances.
(2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to:
(a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person;
…..
(e) any other matter which it considers relevant in the circumstances;
28 Designation of property as notional estate - powers and restrictions
(1) On an application in relation to a deceased person for an order for provision in favour of an eligible person, the Court shall not make an order designating property as notional estate of the deceased person unless the deceased person left no estate or unless it is satisfied:
(a) that the estate of the deceased person is insufficient to allow the making of provision that, in its opinion, should be made, or
(b) that, by reason of the existence of other eligible persons or the existence of special circumstances, provision should not be made wholly out of the estate.
(2) On an application in relation to a deceased person, the Court shall not make an order designating as notional estate of a deceased person property in excess of that necessary to allow the making of provision that, in its opinion, should be made;
…..
(5) On an application in relation to a deceased person, being an application:
(a) made pursuant to an order under section 16 allowing the application to be made, or
(b) …..
The Court shall not make an order designating property as notional estate of the deceased person by reason of a prescribed transaction or a distribution unless it is satisfied:-
(c) that:
(i) the property was the subject of the prescribed transaction or distribution;
(ii) the person by whom it is held holds the property as a result of the prescribed transaction or distribution as trustee only; and
(iii) the property is not vested in interest in any beneficiary under the trust; or
(d) that there are other special circumstances (including, in the case of an application made as referred to in paragraph (a), the incapacity, during any relevant period, of the person by or on whose behalf the application is made) which justify the making of an order so designating the property.
Orders to be made if plaintiff were to exercise her election under s 61D
134 I shall first deal with the provision which I would order if the plaintiff were to exercise her election under s 61D. For the purpose of indicating what order I would make in that event, I shall assume that a grant of letters of administration has been made to the plaintiff and she has exercised her right under that section.
135 In the case of Christine Soden and Tina Hoobin I consider that a further provision from the estate or the notional estate of $50,000 each, whilst still inadequate, is the proper provision which, having regard to the present circumstances, and the competing claims upon the deceased's bounty, ought to be made for their maintenance and advancement in life. In the case of Carole Sarahan I consider that a further provision of $15,000 from the estate or notional estate of the deceased would be proper provision for her. In reaching those figures I have had regard to the totality of their relationship with the deceased as I have described it, as well as their financial position. I have also had regard to how the burden of the provision should be borne, the claims upon the estate of the deceased's other two children and their financial position, and also the claim of the plaintiff and her financial position. Those sums will go some way to enabling the applicants to discharge their debts and to pay for some of life's necessities, such as household appliances and clothing for themselves and their dependent children. Christine Soden will be able to afford a rental bond. The provision may enable each applicant to acquire a needed replacement car, or in the case of Tina Hoobin, a car. Depending on their level of expenditure on such items, there should be a modest capital sum available to Christine Soden and Tina Hoobin to meet life's contingencies. Carole Sarahan has such capital in the equity in her house.
136 It will be necessary to make an order under s 14 of the Act that the provision not take effect by way of a legacy. The provision has been assessed having regard to the three children's likely shares on intestacy on the assumption that the plaintiff has exercised her right under s 61D of the Act. Were the provision to take effect as a legacy the calculations would be thrown out. The legacies would reduce the value of the intestate estate by $115,000 and that burden would be borne by the children. Each of the children's share on intestacy would be reduced from $26,400 to $3,400.
137 I am only able, under s 14, to direct that an order for provision out of the estate of the deceased take effect otherwise than as if the provision had been made in the deceased's will if I am satisfied that compliance with the order would not adversely affect any creditor of the deceased. I am so satisfied. In this case there is no question of any creditor's right being affected by the order.
138 If orders for provision in favour of the three children are made, interest should not run on the provision until 30 days after the date orders are made. Thereafter interest should run at the rate prescribed from time to time under Regulation 6(2) of the Wills, Probate and Administration Regulation 2003 as the rate of interest payable on legacies.
139 Section 13 of the Family Provision Act provides that where the Court makes an order for provision out of the estate of a deceased person it may specify the beneficial entitlements in the estate which shall bear the burden of the provision and, in relation to each of those entitlements, the part of the burden which it shall bear. The discretion is a wide one. In an appropriate case weight may be given to what the particular testator or deceased person would have wished. (Re Seery & Testator's Family Maintenance Act (1969) 90 WN (Pt 1) (NSW) 400 at 408-409; Kleinig v Neal [1981] 1 NSWLR 462 at 464-5; Cantrell v Williams [2004] NSWSC 579 at [7]-[8].) However the discretion should be exercised having regard to "rules of reason and justice" with due regard to the whole of the surrounding circumstances. Where, as here, the Court is not satisfied that the deceased's likely preference would be informed by those rules, his likely actual preference carries little weight. Postulating a hypothetical wise and just testator does not provide particular guidance as to how the discretion should be exercised. In this case I make the assessment principally, but not solely, by reference to the proper claims on the deceased's bounty of the plaintiff, Anthony Hoobin and Leanne Pritchard, which in turn includes a consideration of their financial circumstances.
140 Anthony Hoobin is married and has one daughter aged 10 or 11. He did not complete his secondary school education and has no other educational or trade qualifications. Nonetheless he obtained full-time regular employment from 1991 until 2003 with a chain of clothing stores becoming the general manager of the business. In 2003 he lost that employment but in January 2004 obtained employment as a salesman for a BMW Motor Dealer. At the time of hearing he was paid a salary of $30,000 per annum plus a $5,000 car allowance and was entitled to commission upon cars sold. He had not been employed in his position long enough to assess what was the likely amount of monthly or annual income he would receive by way of commission. He believed that the average commission would be about $200 to $250 per car sold. At the time of hearing his wife worked one day a week. He lives in a house which has an estimated value of $350,000 and is subject to a mortgage of about $220,000. He and his wife own two motor vehicles with an estimated value of $70,000, but subject to a debt of the same amount. In addition to the family home, they own land valued at about $185,000 and have $113,000 in savings. He has other debts of $55,000. He intends to build on the block of land and intends that he and his family will move to that property when the house is built.
141 After he left school in 1985 Anthony Hoobin worked for a year in the family's newsagency business in Melbourne. He moved with his parents and his youngest sister to Banora Point in 1987. He lived with his parents for about eight months at Banora Point and then returned to Melbourne for about twelve months. He then returned to Banora Point and lived with his parents until he was 23, that is, until about 1990 or 1991.
142 He was married in 1993. His father refused to attend his wedding. He played golf with his father from the time he was about 17 but during the 1990s, as his work commitments grew, he was able to play less frequently. Mr Hoobin impressed me as a frank witness. I accept his evidence in preference to that of the plaintiff as to the extent of contact which he had with his father after 1994. It is not necessary to go into the details of that evidence. He stopped playing golf with his father before his father's heart operation in 1996. He continued to see him on average about eight to ten times a year. He was not guilty of any conduct which should disentitle him from consideration as an object of his father's testamentary bounty.
143 Leanne Pritchard resides in Melbourne. Her husband is a builder. She has three children aged 27, 16 and 13. The latter two are financially dependant on her and her husband. Her family home is valued at $840,000 and is subject to a mortgage of about $17,000. She and her husband own a holiday house valued at about $280,000. The combined family income for the year ended 30 June 2003 was about $75,000. She and her husband own shares, furniture and motor vehicles, and have superannuation to a combined value of more than $110,000. They owned a boat which they sold in about February 2004. They received about $30,000 or $40,000 on the sale of the boat. It seems that the money was used to reduce their mortgage. She was separated from her father by distance, but within that constraint had continued contact with him. She did not act towards her father in a way which should disentitle her from being a proper object of his testamentary bounty.
144 For reasons which I explain below, I am of the view that the substantial part of the burden of the additional $115,000 provision to be made in favour of the three children should be borne by the plaintiff. It will be recalled that on the assumptions on which I am working she would be entitled to an asset valued at $482,500, or $472,900 if sold, and that Anthony Hoobin and Leanne Pritchard would each inherit $26,400.
145 On the assumption that the plaintiff exercised her election under s 61D, I could not make an order which would have the effect that the plaintiff bore such a burden without designating the Lochlomond Drive property as notional estate. If that election is made, I will make an order designating the Lochlomond Drive property as notional estate. I have considered each of the matters in ss 27(1)(a) and (b) and the value and nature of the Lochlomond Drive property as required by s 27(2)(a). The other relevant matters which I have considered are as set out in these reasons.
146 If the plaintiff exercises her election under s 61D, the estate of the deceased will be insufficient to allow the making of the provision which I think ought to be made in favour of the three children. Further, the situation of Anthony Hoobin and Leanne Pritchard is such that it is not appropriate that the whole of the estate in which they would otherwise share be applied to making provision in favour of the three applicants. Accordingly I am satisfied of the matters in s 28(1).
147 Subsection 28(5) would however preclude the making of an order designating the Lochlomond Drive property as notional estate under an application made pursuant to an order for the extension of time under s 16 unless there are "other special circumstances" which justify the making of an order so designating the property.
148 I am satisfied that there are such special circumstances. For the reasons that I have previously given, the primary responsibility for the delay in the bringing of the applications is attributable to the plaintiff or her legal advisers. It would be unconscionable for the plaintiff to obtain an advantage from that delay and from an election under s 61D, so as effectively to defeat the applicants' claim for provision.
149 For these reasons, if the plaintiff exercises her election under s 61D, the orders which I will make will include an order designating the Lochlomond Drive property as notional estate.
150 On the sale of the Lochlomond Drive property the plaintiff, on the agreed figures, would receive $472,900. She could purchase the Castlecrag Avenue property from the estate for $330,000 plus the costs of purchase. The costs of purchase, including stamp duty, should not exceed $13,000. Were she to purchase the Castlecrag Avenue property for that amount, or were she to buy an equivalent property in the area, she would have a property which was suitable for her needs plus a sum of about $130,000. If an order were made that her costs be paid on an indemnity basis from the estate, she would recoup the sum of $21,034 which she has already paid as part of the costs of these proceedings. As noted in paragraph 91, she has financial resources of her own in the order of $114,000.
151 The average life expectancy of a female of the plaintiff's age is fourteen to fifteen years. On the 3% tables a capital sum of $25,000 will yield $40 per week after tax for that period. Such a sum would move the plaintiff to a position where her income exceeded her everyday expenses.
152 I regard the competing claims of the deceased's children as sufficiently strong as to displace the plaintiff's claim on the estate beyond an amount of $375,000 plus the benefit of an order for indemnity costs in relation to the proceedings. Such a provision would be sufficient for her to acquire a suitable house at a purchase cost of $343,000, together with a capital sum of $25,000 to address the deficiency between her income and expenditure, whilst supplementing her existing resources by a further $28,000.
153 As on the exercise of her rights under s 61D she would receive property she could sell for $472,900, I am of the view that if the plaintiff makes her election under s 61D, the burden of the provision for the three children should be borne as to $97,900 by the plaintiff and that the Lochlomond Drive property should be designated as notional estate to the extent necessary to enable that amount of provision to be paid. That would leave the plaintiff with $375,000 from the estate plus the benefit of the indemnity costs order.
154 That leaves an amount of $17,100 required to meet the balance of the provision to be made for the three applicants. The burden of that provision should be borne by Leanne Pritchard. As between her and Anthony Hoobin, she is in the better financial position to bear the burden. The effect would be to reduce her share of the intestate estate from $26,400 to $9,300.
155 In assessing how the burden of the provision should be borne as between the plaintiff, Anthony Hoobin and Leanne Pritchard, I have also taken into account that after her husband's death the plaintiff assumed the role of executor de son tort in dealing with the property of the estate.
156 Prior to the deceased's death the property at Castlecrag Avenue had been let at a rent of $50 per week, well below the market rent. I understood the reason for this was to ensure that her husband did not earn income from the property which might interfere with their pension entitlements. The plaintiff took over the management of the rental property after his death. For two years she continued to allow the tenant to pay only $50 per week. During that period the property fell into disrepair such that about $7,000 had to be spent from the estate funds to put it into a proper condition. Since October 2002 it has been let at a market rent of $230 per week. Had she taken steps to ensure that the property was let at an appropriate rent to a suitable tenant, the estate would have been better off by up to $25,000.
157 Having taken that matter into account as a relevant factor in determining what provision should be made and how the provision should be borne, it would be inappropriate for any of the deceased's children to commence proceedings against the plaintiff to recoup any of the rent foregone by the estate or costs incurred by the estate in connection with the property at Castlecrag Avenue. It will be a condition of the order for provision in favour of the three children that they not commence any such proceeding. I shall invite Anthony Hoobin and Leanne Pritchard to give an undertaking that they will not institute any such proceeding. In the absence of such an undertaking I will have to reconsider my assessment as to how the burden of the provision should be borne so as not to expose the plaintiff to double jeopardy in this respect.
Orders to be made if Plaintiff were not to exercise her election under s 61D
158 As noted in paragraph 11 the defendants did not maintain a claim for provision under the Family Provision Act if there were an intestacy and if the plaintiff did not exercise her election under s 61D. Thus if the plaintiff decides not to make that election, I will make no order for provision in favour of any of the defendants. There may well be arrangements of which I am unaware between the defendants as to how as between themselves they will divide their shares of the estate on an intestacy.
159 However if the plaintiff does not exercise her election under s 61D, she propounds her claim for provision unde the Act. There was no objection to an extension of time under s 16 of the Act for her claim.
160 As set out in paragraph 19 above, on an intestacy and assuming that all of the estates assets are sold, and assuming that all of the costs are paid from the estate, on the agreed figures the plaintiff would receive a distribution of $395,950. This is $20,000 more than she would receive if I were to make orders for provision in favour of the three children on their application.
161 For the reasons previously given, I do not consider that such a provision is inadequate for the proper maintenance, education and advancement in life of the plaintiff having regard to the competing claims on the estate. I would therefore dismiss the plaintiff's claim for provision.
Conclusion
162 It may be that as a result of these reasons, the plaintiff will not make an election under s 61D. Pursuant to Schedule D of the Wills, Probate and Administration Act she has twelve months after the grant of letters of administration to make that election. However, the resolution of the estate should not wait that long. I will stand over the proceedings until after the grant of letters of administration to the plaintiff. I direct the plaintiff to re-list the proceedings before me within 28 days after the grant has been made. On that occasion, if the plaintiff undertakes to the Court that she will not make an election under s 61D, I will make orders dismissing all claims under the Family Provision Act. If the plaintiff at that time has already made her election under s 61D, I will make orders for provision and for the designation of the Lochlomond Drive property as notional estate and other ancillary matters as set out in these reasons. If the plaintiff does not give the undertaking and has not made the election, I will make orders for provision on the basis that she will make that election. In those circumstances it will not be necessary to make orders designating property as notional estate, but it will be necessary to make orders in accordance with these reasons as to how the burden of the provision should be borne. Depending on what course the plaintiff takes counsel should bring in their proposed short minutes of order in accordance with these reasons.
163 Finally, it is necessary to say something further about costs.
164 The paramount consideration is that future costs be minimised so far as possible. The parties have presented figures on an agreed basis and I have had no other basis on which to calculate a proper provision. The costs assessments have not discriminated between the Probate and Family Provision Act proceedings. The first matter of concern is whether all of the plaintiff's estimated costs relate to the three proceedings. I do not think that the defendants should bear either directly or indirectly any of the plaintiff's costs in relation to the misguided application for a grant of probate in common form, or the proceedings which arose from it (other than the three current proceedings), or that the costs order already made be disturbed. On any assessment of the plaintiff's costs of the Probate proceedings, only the costs of and reasonably incidental to those proceedings (which will include the costs of obtaining the statements annexed to the plaintiff's affidavit of 17 May 2001), and costs necessary for the obtaining a grant of letters of administration, should be included.
165 Because it was common ground between the parties that the costs of all parties of the three proceedings on a trustee basis should be paid from the estate, and because the intricate calculations of shares on intestacy under s 61B and on the plaintiff making an election under s 61D would be disturbed if I proceeded otherwise, with a consequent need for further evidence and submissions and therefore further costs, I am reluctantly prepared to act on that basis, although it involves a departure from the usual practice of the Court. (See Hodges (dec'd), Re Estate of; Shorter v Hodges (1988) 14 NSWLR 698 at 709-710; Re Bardon v Florence; Shekelton v Bardon (Holland J, 15/12/1983 unreported at p 3); Giunti v Cavallaro [2004] NSWCA 62 at [69]; Moore v Moore [2004] NSWSC 587 at [43]-[44]). This course is not to be taken as a precedent for future cases. See Moore v Moore [2004] NSWSC 587 at [43]-[44]. However, the only parties affected are those before the Court. To depart from the common basis on which the parties presented their cases would result in the further diminution of this modest estate in costs or the further incurring of costs from the parties' own pockets. The costs orders to be made on the disposition of the proceedings under the Family Provision Act should include an order that the parties' costs of all three proceedings payable out of the estate be capped at the figures referred to in paragraph 13.
166 I therefore order that in the Probate Proceedings No. 114192 of 2002 the application that probate of the will of 29 January 1999 be granted to the plaintiff be dismissed; that there be a grant of letters of administration to the plaintiff and that the proceedings be referred to the Registrar to complete the grant. The costs of both the plaintiff and the defendants of those proceedings are to be paid from the estate on a trustee basis.
167 No orders can be made under the Family Provision Act until there is a grant of letters of administration.
168 I stand over the proceedings No. 2009 of 2002 and No. 1230 of 2003 until a date to be arranged with my associate within 28 days after the completion of the grant of letters of administration. I direct the plaintiff to re-list the proceedings accordingly. At that time I will make orders for the final disposition of those proceedings in accordance with these reasons.