Kohari v NSW Trustee & Guardian

Supreme Court of NSW|2017-07-18|Before: Parker J

Judgment

This is an application for a family provision order from the estate of the late Paul Kohari, who died in August 2014. The application is made by the plaintiff, Robert Kohari, who is a son of the deceased. Without disrespect, I will refer to the parties other than the deceased by their Christian names.
Paul Kohari was born in Romania in August 1947. He migrated to Australia with his parents in November 1964 at the age of 16.
In December 1974, at the age of 27, the deceased married Julie-ann Darhy ("Julie"). She already had a son, David, born as a result of a previous relationship. David later took the Kohari name as his surname. The deceased and Julie had two children of their own, Joseph Kohari, born in September 1975, and the plaintiff, Robert Kohari, born in December 1978.
In late 1980, the deceased and Julie separated. At the time, Robert was about 18 months old. The deceased and Julie were divorced and their divorce was eventually finalised in about 1989. The deceased had no contact with Robert for the rest of his life. The deceased believed that Julie was unfaithful to him during their marriage and that Robert was not his son. There is an issue as to when the deceased formed that belief, which is discussed in more detail below.
In about 1988, the deceased formed a relationship with Julia Santa ("Julia"). Julia had been born in April 1948 in Hungary and had migrated to Australia in 1970. At the time they formed their relationship, the deceased was about 41 years old and Julia was about 40.

Deceased's estate

The main source of information concerning the deceased's financial affairs and the assets he acquired over his lifetime came from his 2011 affidavit. On its face it is plausible, and no party suggested that I should not rely on it. Except where otherwise indicated, the following findings are based on the affidavit.
After arriving in Australia with his family in November 1964, the deceased completed his final year of high school in 1965. He then undertook an apprenticeship as a fitter/turner/toolmaker at Ultimo Technical College. On the completion of his apprenticeship in 1970, he obtained work as a toolmaker with a company known as AEM where he worked alongside his father who was also employed there. At about the same time, the deceased and his father established a business, which they undertook outside normal working hours, manufacturing plastic boxes for jewellery.
The deceased first purchased property in the form of a block of land at Leura, which he bought as an investment in 1967 for $250 and sold in about 1970 for about $4,400. He then purchased a factory building at Sims Street, Darlinghurst, where the jewellery box manufacturing business with his father was carried on. The purchase was financed partly from the profit the deceased made on the Leura property and partly by mortgage.
From 1968, the deceased had lived with his parents. This continued for about three months after he married Julie in December 1974. They then moved to rented accommodation and later bought a house in O'Brien Street, Bondi. The affidavit does not say when the Bondi property was bought, what its purchase price was and how the purchase was financed. Julie said in evidence that the house was bought shortly after Joseph was born (September 1975) and was paid for by her parents.
The deceased sold the Darlinghurst property in about 1978 for a profit of $25,000, of which he gave $5,000 to his parents and retained $20,000. In about 1980, the deceased purchased a business called "Bargains Galore Ashfield". This purchase was financed partly by the $20,000 left over from the sale of the Darlinghurst property and partly by way of loan.
After the deceased separated from Julie, he moved back in with his parents for approximately one year. Thereafter, he rented accommodation for about four years.
In about April 1985, the deceased's father decided to retire and the business he operated with the deceased was sold. The deceased received nothing from the sale. The deceased closed down the Bargains Galore business at about the same time.
The deceased purchased the St Peters property in about August 1985. There was no evidence as to the purchase price or how the purchase was financed.
Julie acknowledged in her evidence that when her divorce from the deceased was finalised, she received a sum of money by way of settlement. Evidence to which I refer below suggests that this was in July 1989. Julie applied that sum of money to the purchase of a home at Canley Heights in western Sydney. Julia asserted in her evidence that the money came from the sale of the Bondi property and that the deceased received $56,000 with Julie receiving the rest. Julia also asserted that there had been $20,000 for Robert. Julia of course would not have been aware of the figure from her own knowledge. She said that she had documents to support this but they were not available when she was being cross-examined and the point was not taken further by either side. I accept that the money would have come from the Bondi property but I am left with no evidence as to how much Julie received and no reliable evidence of how it was made up.
The deceased's affidavit contains no information on his work history after the closure of the family jewellery box manufacturing business and the Bargains Galore business in about 1985. According to Julia's evidence before me, the deceased dabbled in small scale trading of electronic equipment, at least during the initial stages of their relationship. However, he "was unable to work full-time" and at least at one point he was receiving unemployment benefits. She said that from about 1995 he was receiving a disability pension. The deceased's 2011 affidavit disclosed pension receipts which were higher than those he disclosed for Julia, who was receiving the age pension.
As already mentioned, the deceased and Julia bought the house at Eagleby in about 1990. According to Julia, each contributed 50% of the "purchase price". There is no evidence as to what the purchase price was. It may be that the sale of the Bondi property left some money over for the deceased after he paid the settlement to Julie. However, this is speculation. If mortgage finance was ever used, it had been paid off by the time the deceased died.
When the deceased's father retired in 1985, the deceased's parents had moved to a house at Helensburgh on the southern outskirts of Sydney. The deceased's father died in early 2010 and under his will, his interest in the Helensburgh property passed to the deceased's mother. She died in October of the same year. Her will provided for the Helensburgh property to be shared equally between her acknowledged grandchildren, Joseph and the three children of the deceased's sister.
In 2011, the deceased commenced proceedings in this Court concerning his mother's estate. The proceedings were determined by the Court in May 2013 (Kohari v Snow [2013] NSWSC 452). The parties agreed that I could have regard to the judgment not only as evidence of what the Court decided but of the facts recorded as the basis for the decision.
There were two aspects to the proceedings. One concerned a holding of 3,219 shares in Westpac Banking Corporation. They were held in the joint names of the deceased and his mother. The deceased claimed that he was the beneficial owner of the whole holding. According to the deceased's evidence, he had previously banked with the St George Building Society and purchased shares when it was converted into St George Bank in about 1992. He said he bought the shares in his and his mother's names for the purpose of protecting them against a possible claim by Julia. St George Bank was subsequently taken over by Westpac and shares in Westpac were issued as consideration for the takeover. Some further shares may have been acquired by way of dividend reinvestment. The deceased said that his mother had made no financial contribution to the acquisition of the shares (indeed, it appeared that she had been unaware the holding had even been registered in her joint name). The deceased's claim to the shares was upheld.
The deceased also sought a family provision order out of his mother's estate. The main asset of the estate was the Helensburgh property which was sold for approximately $475,000 net. The deceased's mother had told Joseph that she and the deceased's father wished the Helensburgh property to go to their grandchildren, because the deceased and his sister already had their own homes and were adequately provided for. This was not consistent with the deceased's father's will, which contained a gift over of the Helensburgh property in favour of the deceased and his sister, but it did reflect the deceased's mother's will. Nevertheless, an order for provision was made in the deceased's favour in the sum of $55,000.
In the judgment, concern was expressed about the level of costs incurred in the proceedings, but the issue was reserved for later determination and there is no evidence before me as to what costs orders were ultimately made, or what costs were ultimately charged to the estate. It is safe to assume, however, that the effect of the deceased's proceedings was to deplete substantially the benefit received by Joseph and the deceased's sister's children from his mother's estate.
The deceased evidently retained the Westpac shares, because he still owned them at the date of his death. There is no evidence as to how much the deceased ultimately received of the provision of $55,000, after allowing for his own costs. The deceased's reserves of cash when he died were only about $2,000 more than the reserves he disclosed in his 2011 affidavit. It may be that there was very little, if anything, left over.
As at the date of the deceased's death, his principal assets were: (a) the St Peters property (then valued at $750,000); (b) a half share of the Eagleby property, which passed by survivorship to Julia (the half share being worth approximately $125,000); (c) the shares in Westpac, which were sold for $98,000; (d) bank accounts containing approximately $12,000.
The sale of the Westpac shares is likely to have given rise to a capital gain which would be subject to a capital gains tax ("CGT"). However, there is no evidence before me quantifying that tax liability. If the Eagleby property is sold, as an investment property, any gain on it would likewise be subject to CGT. Because there is no evidence of what the property cost, it is impossible to say whether there will be any gain, and if so, how much.
The compulsory sale of the St Peters property has realised significantly more than the property was worth at the time of the deceased's death. The total amount, net of selling costs, and including a "solatium payment" to which the deceased's estate is entitled, is approximately $1,130,000.
In addition to the usual testamentary and administrative expenses, family provision claims were made on the estate not only by the plaintiff but by his half-brother, David. David's claim was settled for $40,000. Allowing for the receipt of the solatium payment and the payment of the defendant's costs of defending the balance of these proceedings, the net cash value of the estate is approximately $1,040,000 (less whatever CGT is payable on the Westpac shares).
Pursuant to the orders made by the Court on the application for a DNA test to establish Robert's paternity, the estate is liable for Robert's costs of that application. On the other hand, at one point the proceedings had been fixed for hearing and had to be vacated as a result of the plaintiff's application: the plaintiff was ordered to pay the costs thrown away as a result. There is no evidence before me as to the quantum of these cross costs orders. Nor at this stage is it known whether the plaintiff will receive an order for payment of his general costs of the proceedings out of the estate.

Deceased's family life and testamentary intentions

In her evidence before me, Julie said that following his separation from her, the deceased regularly visited Joseph. The arrangement was that the deceased would pick him up from the Hakoah Club in Bondi Junction and return Joseph to Julie's parents who lived at Potts Point. At some later point, Joseph went to live with the deceased, which he did for about six years or so until he reached about Year 11 at school (Joseph having been born in 1975, this would presumably have been in about 1991). Julie also said that Joseph lived with her parents after living with the deceased.
Julie's evidence on this was somewhat vague. She also said that when the marriage broke up she went to live with her parents at Potts Point. On balance, however, it seems to me to be most likely that she continued to occupy the Bondi property (perhaps having moved out for a period of time while the marriage was failing).
Julie said she had no real involvement with Joseph's upbringing, and saw very little of him after he started living with the deceased. This rather surprising arrangement was not explored further in the evidence.
I have already referred to the deceased's contention that Robert was not his son. This was reflected in the testamentary arrangements made by the deceased's parents. The deceased's father's will was made in February 1989 and his mother's will was made in October 1991. Both wills contained express statements excluding Robert (and David) from any inheritance on the ground that he was not a "blood relation". I infer this was a result of what the deceased told his parents.
The Public Trustee will instruction sheet from October 1989 contained a section dealing with the possibility of claims being made under the then Family Provision Act 1982 (NSW). It referred to Robert as a "possible claimant" describing his relationship to the testator (the deceased) as "son - 11 years" (in fact, Robert did not turn 11 until December 1989). The reason for exclusion or inadequate provision from the will was given as: Divorced 1983 Provision was made on 17/7/89 for the welfare & mtce [maintenance] of Robert. Presumably, this was a reference to the property settlement between the deceased and Julie.
Counsel for the defendant submitted that I should find that the deceased had, through the property settlement, already made provision for Robert. Despite the unsatisfactory evidentiary situation, I accept that the settlement is likely to have contained some provision for the costs of maintaining Robert. The legal presumption is (and was in 1989) that Robert, having been born during the wedlock between the deceased and Julie, was the deceased's son. Julie would have been entitled to contend that Robert was the deceased's son (as, in fact, he was) and the deceased ought in any settlement to have provided for supporting him. I can see no reason to think that she would not have done so.
Counsel for the defendant submitted that the deceased had not immediately rejected Robert, relying on the description of Robert as the deceased's "son" in the 1989 will instruction sheet. Counsel submitted that the deceased only rejected Robert at some point after 1989 when, according to Julia, Julie told her during a visit she made to Julie's new home at Canley Heights that Robert was not the deceased's son. Julie denied this conversation and I am not satisfied that it took place. Furthermore, it is clear from the deceased's father's will, which was made in February 1989, that the deceased must have rejected Robert before then. In his 2011 affidavit, the deceased said (emphasis added): Whilst we were married my first wife [Julie] gave birth to a male whose known as Robert Kohari and who is currently aged about 32 years of age. I have always been of the belief that Robert Kohari is not my son.
I see no reason not to accept this statement at face value; moreover, it is consistent with the fact that the deceased visited (and later looked after) Joseph but not Robert. I find that the deceased rejected Robert from the outset.
Julia described the deceased during their life together as a "committed alcoholic". She said that, apart from his car, expenditure on alcohol consumed the whole of the welfare payments he received. She said that she did all of the housework and paid for food and other household supplies from her earnings and later from her pension. She said that the deceased was a difficult man, but nonetheless he respected her and they had a loving relationship.
I have already referred to the deceased's will of October 1989. At that time, the deceased's relationship with Julia had only begun a year or so before. Joseph would still have been living with the deceased and was 14 years old. The deceased left the whole of his estate to Julia, but provided that if she did not survive him, the estate was to go to Joseph. The will was made in contemplation of marriage to Julia, but was not conditional on the marriage taking place.
As already mentioned, when the deceased acquired his shareholding in St George Bank in about 1992, he put the holding into his and his mother's names on account of the possibility of a claim being made against him by Julia. This seems difficult to reconcile with his October 1989 will in which he left his whole estate to Julia. At all events, there is no evidence he changed his will in this regard. Ultimately, he left the shares to Julia as part of his estate. Whatever his attitude may have been in 1992, there is no reason to doubt that by the time he died, this is what the deceased wanted.
The deceased was very unwell during the last decade or so of his life. According to Julia, he was an invalid for the last nine years. He was morbidly obese with diabetes, osteomyelitis, liver and kidney problems, vascular disease and poor circulation. He also had an operation to remove a lung tumour. His eventual cause of death was a combination of cirrhosis, renal failure, liver failure and tumours. Over this period Julia cared for him, helping him with showering and other functions, washing his clothes and preparing all his meals.
I have already referred to the deceased's final will which was made in December 2011 and which left his estate to Julia. The will provided that if she did not survive him, the estate was to be divided among four animal charities. There is nothing in the evidence to suggest why the gift over in favour of Joseph was changed.
Julia was cross-examined on the records of consultations between her and a doctor in July 2011 and May 2014. The July 2011 notes recorded that she had left the deceased for a man who lived at Lightning Ridge. The May 2014 notes recorded that Julia had told the doctor that they were to be married at the end of August. In response, Julia denied that she had left the deceased and maintained that she visited the man at Lightning Ridge because he was assisting her with hot springs treatment for her ailments. She said there was no sexual element to it at all.
I found Julia's evidence on this subject hard to follow and difficult to reconcile with what was recorded in the notes. However, the deceased's last will, which left everything to her, was made five months after July 2011, and I infer that she did not in fact leave him and he was quite satisfied with their relationship. The evidence also makes it clear that in fact no wedding took place in late August 2014 (in fact, the deceased died only a few weeks before) or at any other time.
In the circumstances, I think it unprofitable to attempt to determine what the explanation is of the notes. I am satisfied that they do not detract from the overall conclusion that Julia did what would properly be expected of a wife over a long period of time and under trying circumstances.

Plaintiff's circumstances

After the deceased left when he was approximately 18 months old, Robert was brought up by his mother, Julie. Initially, I infer, this was at the Bondi property and, from 1989, at Canley Heights. Julie has formed a new relationship and now lives in Queensland.
Robert's wife is called Kristie. They have four children. The oldest was born in May 2000 and is therefore 17 years old. The others are 16, 12 and 11.
Robert and Kristie own no property. They live with their children in rented premises at Schofields on the north western outskirts of Sydney. They drive a 1999 motor car which is said to be worth $1,000.
There are in evidence credit bureau reports for Robert and Kristie. These identify loans in default in the sum of approximately $13,000, made up of debts owed for rental of appliances ($11,000) and debts for electricity and other household services ($2,000).
Before his relationship with Kristie, Robert worked as a supermarket hand for David Jones at Bondi Junction. He left that job in about 2000 because it took too long to travel to and from work.
Robert joined the NSW Rural Fire Service as a volunteer in 2001. This involved fighting bush fires, cleaning up after storm damage, and other such activities. Initially he was not able to climb onto roofs, for which a certificate was required. In about 2011, he obtained the necessary certificate but never had occasion to use it. In 2016, he left the Rural Fire Service after he was charged with assault following a domestic incident with one of his daughters.
Apparently both Kristie's father and mother were ill towards the end of their lives and Robert obtained a carer's pension for looking after them. Kristie's father died in about 2006 and her mother in about 2015.
Robert is now 39 years old. He is grossly obese and suffers from asthma, sleep apnoea and (more recently) cellulitis. Julie is also obese. She has asthma, depression and a heart condition. All the children have medical or behavioural difficulties of some sort.
Robert's medical problems are aggravated by his obesity. He is seeking, as part of the provision which he claims, a sum of money to pay for a gym membership and gastric banding surgery, but there is no evidence that financial constraints prevented him from trying to lose weight in the past.
Robert has not had a paying job since leaving David Jones 17 years ago when he was 21 or 22. Clearly, his involvement with the Rural Fire Service shows he was not incapable of working. Robert said that he looked for work closer to home, but that hardly explains why he has been unemployed for 17 years.
Robert and Kristie live on welfare. Centrelink benefit statements for Robert and Kristie as at June 2017 are in evidence. The statements show Kristie as being entitled to carer payments, family tax benefits (for the children), rent assistance and other supplements, totalling $2,100 per fortnight ($55,000 annually). Robert is entitled to a Newstart Allowance (a type of unemployment benefit) and supplements totalling $490 per fortnight ($13,000 annually). This results in a gross income between them of $68,000 annually. However, the Centrelink statements also show deductions which are unexplained by the evidence: they may result from previous overpayments. I do not know what income-sharing arrangements apply to Robert and Kristie, and therefore have not attempted to calculate the tax on their income. The result is that it is not possible to determine what their net income is.
In an affidavit sworn in May 2015, Robert gave his and Kristie's average monthly expenditure as $5,000 per month or $60,000 per year. This is likely to have exceeded their net income by some margin. In a further affidavit sworn in June 2017 for the purposes of the hearing, the expenditure estimate given was $3,700 per month or $44,000 per year.
There was no evidence as to how Robert and Kristie have supported themselves in the past or whether Kristie inherited anything from her parents. There is no evidence as to Julie's income and asset position, whether she helps Robert and Kristie financially, or what her testamentary intentions are.
Apparently Robert and Kristie previously had two horses at the Schofields property, but one of the horses died and action was taken against Robert for ill-treatment of the horses by the RSPCA which resulted in the other horse being surrendered. Robert was challenged in cross-examination about failing to disclose these horses as assets in his evidence for this case. I have already mentioned that the evidence of Robert and Kristie's financial position is vague and incomplete in various respects. I accept that they have, between them, no assets of any value and that they have no source of income apart from welfare payments. Despite the fact that their gross income exceeds their current expenditure and there is no evidence of what their net income is, I also accept that they are probably struggling to make ends meet. But the evidence contains no explanation for why this situation has arisen.
As I have mentioned, Robert did not see the deceased after the deceased left when he was 18 months old. When he was young, Robert was discouraged by Julie attempting to contact the deceased. Julie said that the deceased was a violent man who beat her when he was drunk. His grandmother (Julie's mother) told him that the deceased was a "dole bludger".
Nevertheless, Robert did make an attempt as a teenager to contact his father. His evidence was that he sent a letter to his father seeking contact, but there was no reply. He said he was later encouraged by Kristie to make a further attempt to contact the deceased. He sent a letter introducing himself, Kristie and their children but it was returned marked "return to sender". This evidence was not disputed and I see no reason not to accept it. It is consistent with the deceased's own evidence of rejection of Robert.
Robert learned from David of the deceased's last illness. He said that he made plans to visit the hospital but the deceased died before the visit. He did not attend the deceased's funeral: he said that was because nobody told him where and when it was, but he made no attempt to find out either.

Julia's circumstances

As already mentioned, Julia was born in Hungary and came to Australia in 1970. She worked as a pastry cook until she developed diabetes in or before 1997. She then received an "invalid pension". Since turning 65 (in 2013) she has received an age pension.
Julia is now 69 years old. She has diabetes, and as a result needs regular eye treatment to avoid cataracts. She has varicose veins, rheumatism, and osteoarthritis. She also has blocked arteries and "women's health issues".
As already mentioned, when the St Peters property was compulsorily acquired, Julia moved to Queensland to live at the Eagleby property. She does not want to stay there but is living there because, the estate being tied up by this litigation, she has nowhere else to live. She wants to find a new home and go back to renting the Eagleby property out.
In her affidavit evidence, Julia said she did not wish to move back to Sydney but that she did wish to move to the Central Coast where she would be closer to services, including medical services. However, in her oral evidence she said this was very expensive and she wished to live in Moree. She said there was a hot spa there which would be helpful for her medical conditions.
Outside her interest in the estate and the Eagleby property which passed to her by survivorship, Julia's assets are as follows: Furniture and personal effects $5,000 Cash at bank and on deposit $12,500 She has no liabilities.
Julia's age pension is currently $810 per fortnight ($21,000 per year). Before she moved to the Eagleby property, she was receiving $600 per fortnight from the Eagleby property, net of expenses ($16,000 annually). After tax this would have yielded an annual net income of $33,000. Since Julia has moved to Eagleby, her pension would have yielded a net income after tax of $21,000 annually. Her estimate of expenditure is $545 per fortnight ($14,000 annually).

Plaintiff's eligibility

In view of the result of the DNA test, the defendant did not dispute at the hearing that the plaintiff was an eligible person: Succession Act 2006 (NSW), s 57(1)(c).

Adequacy of provision

The Court is required to determine whether "adequate provision for the proper maintenance, education or advancement" of Robert was made under the will: s 59(1)(c). If the failure to make any provision was inadequate, then the Court "may" make an order for provision in terms of the provision which "ought to be" made: s 59(2). These matters are to be determined not as at the date of death but as at the date of the hearing.
In determining whether the requirement in s 59(1)(c) is satisfied, the term "proper" sets the standard by which the appropriate level of provision is to be determined and the term "adequate" involves a financial judgment by reference to the standard so determined: Devereaux-Warnes v Hall (No 3) (2007) 35 WAR 127 at [77].
The level of maintenance, education or advancement which is "proper" is, therefore, critical. This question (and the related question as to whether, if adequate provision has not been made, what provision "ought to be made") involves a value judgment: Underwood v Gaudron [2015] NSWCA 269 at [96]. That value judgment used to be expressed in terms of what a "wise and just" testator would have done; it is now expressed in the language of "community standards": Henry v Hancock [2016] NSWSC 71 at [69]. The relevant "community standards" are elusive and, probably, undefinable. The Court is obliged to apply principles drawn from previous authority and, to the extent not governed by authority, the Court's own conceptions as to the proper way for a testator to distribute his testamentary bounty.
Counsel for the defendant argued that although the deceased was "not a nice man" he had done one proper thing in his life, namely making provision for Julia out of his assets, and the Court should respect that decision. It is true that the determination of what is "proper" is a matter for judgment which may strike different people in different ways and there may be factors heading in conflicting directions, and the Court is, therefore, slow to overturn an apparently responsible decision by a testator who has fairly considered the relevant claims on his bounty: Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253 at [127].
However, I do not think this principle assists the defendant in the present case. The deceased's refusal to acknowledge Robert was not only wrong in fact, but wrong-headed. Even if Julie had been unfaithful to him (and there is no evidence to suggest that she was), that did not justify the deceased's categorical denials, which he apparently also conveyed to his parents, of Robert's paternity. He must have been aware at least of the possibility that he was Robert's father. Furthermore, in his final will the deceased completely excluded other members of his family, including his acknowledged son, Joseph, even from the benefit of the gift over should Julia not survive him. This was in circumstances where the deceased had benefited from his own mother's estate. I am not satisfied that the deceased, in making his 2011 will, gave any proper consideration to whether his relatives should benefit after adequate provision had been made for Julia, and he clearly did not consider Robert at all.
But although the deceased's views as expressed in the will are of no weight, consideration must still be given to the proper level of provision for Julia. It is common ground between the plaintiff and the defendant that the deceased's relationship with Julia should be treated as a marriage. It is, therefore, unnecessary for me to consider whether the fact that it was only a de facto relationship makes any difference to the deceased's obligations: cf Calverley v Green (1984) 155 CLR 242 at 259-260.
By the end of the hearing, counsel for the plaintiff conceded that a certain minimum level of provision had to be made for Julia, and that such provision would take priority over any entitlement the plaintiff would otherwise have for provision. Counsel conceded a minimum entitlement for Julia of $620,000 made up of $350,000 for a property and a capital sum of $270,000 (calculated on the life tables at a 5% discount rate to yield a weekly income of $400 ($21,000 annually before tax)). Counsel for the defendant contended that the appropriate level of provision for Julia was approximately $630,000 for the purchase of a house on the Central Coast together with $490,000 (calculated by reference to an investment return of 5% so as to yield an annual income of $43,000 before tax).
I do not find the type of calculation undertaken for assessing damages for personal injury useful in this case. In Vigolo v Bostin (2005) 221 CLR 191, Callinan & Heydon JJ said at [115] that the concept of maintenance for family provision purposes may imply continuity of a pre-existing state of affairs. In my view, when assessing the minimum appropriate provision to be made by the testator to a surviving spouse following a long marriage such as this, the dominant consideration is indeed continuity in this sense. But the deceased and Julia had no children and at no stage was Julia dependent upon the deceased. She had her own source of income and the household expenditure was defrayed from that income and from the net receipts of letting out the Eagleby property. I think Julia had a legitimate expectation of being able to continue to live in the St Peters property, but her own continuing pension income and the income from the Eagleby property, which has now passed to her from survivorship, would provide, in my view, a proper level of continuity. On the evidence, it would be amply sufficient to cover Julia's expenditure. However, Julia had no wish to continue to live at the St Peters property even before it was compulsorily acquired. In the circumstances, I think the best expression of continuity would be to recognise a minimum provision for Julia in the sum of $750,000, being the value of the St Peters property before the windfall associated with its compulsory acquisition for the WestConnex project. This would be ample to permit Julia to live on the Central Coast, or at Moree if she so chooses. The result is that there would still be $290,000 (less whatever CGT is payable on the Westpac shares) left in the estate, which is sufficient to allow for at least some provision for Robert.
Robert is an independent 39 year old man with a wife and family of his own. That does not mean that the deceased had no obligation to provide for him, but the nature of the provision was necessarily different from that which would be expected for a dependent child: Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 147; Hunter v Hunter (1987) 8 NSWLR 573 at 578-580; Gorton v Parks (1989) 17 NSWLR 1 at 6D-8A.
In Butler v Morris [2012] NSWSC 748, Hallen AsJ (as his Honour then was) said at [106(b)]: 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 children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.
His Honour spoke of a testator's obligations to raise and educate their children "whilst they remain children". I think it would be inappropriate to see the deceased as having been under an obligation to make provision by will for Robert's maintenance or education. The relevant concept is advancement, in the form of "assistance" or a "start in life".
As I have noted, Robert has no memory of the deceased, having been only 18 months old when the deceased severed his relationship with Robert and his mother. For practical purposes, this is a "bare paternity" case. But the deceased could not escape his responsibility to make proper provision for Robert's advancement by severing all personal contact with him: Gorton v Parks at 9E-10D; Nicholls v Hall [2007] NSWCA 356 at [45]. The deceased may have provided something for Robert's maintenance as a child, but at no stage did he give him any assistance (financial or otherwise) towards making his own way in adult life. The deceased's actions also caused Robert to be excluded from the deceased's family (and from the benefit which he would otherwise have presumably received under the deceased's mother's will). In my opinion, the failure to make any provision for Robert's advancement in the deceased's will was prima facie not "proper".
I think the case for making some provision for Robert's advancement is strengthened by the fact that the deceased himself challenged his mother's will and obtained a provision out of her estate, thereby intercepting monies which she had intended to flow to her (and the deceased's) relatives. At the time the deceased obtained that provision, he was 64 years old and financially independent. Having obtained the advantage of a provision by way of advancement from his mother's estate, I think community expectations require that the deceased should, if possible, have made some sort of provision for his own children.
It is true that Robert had no contact with the deceased during the deceased's lifetime, but that was because of the deceased's attitude. Although Robert made only two attempts, on the evidence available before me he acted entirely reasonably in concluding that the deceased (irrationally) was refusing to have anything to do with him. I am not concerned by the fact that Robert did not attend the deceased's funeral: having regard to the deceased's attitude towards Robert during his lifetime, I think this is of no significance. The deceased's obligation towards Robert to provide some level of advancement turns, in my opinion, on factors which are quite independent of the existence or otherwise of a relationship between them.
I therefore conclude that the deceased's failure to make provision in his 2011 will for Robert, judged by reference to the circumstances revealed at the hearing, was not "proper".

Provision which ought to be made

Counsel for Robert suggested that his deprived circumstances could be traced to the conduct of the deceased and that this was something which could be taken into account for the purposes of determining what provision ought to be made. I do not agree. For reasons I have given, I think the deceased probably did make provision for Robert's maintenance. That does not alter the fact that the deceased's conduct in cutting Robert off and falsely impugning his paternity was deplorable. However, the deceased is in no way responsible for Robert's present financial circumstances which seem to me to depend, at least in part, on Robert's own choices, in particular his decision to give up paid work and his apparent unwillingness to do what was necessary to obtain paid employment thereafter.
Counsel for the defendant argued, based on the 1989 will instruction, that the settlement provision made by the deceased to finalise his divorce from Julie should be seen as having discharged his obligations to Robert. However, I have found that the evidence only goes so far as to show that the deceased made some provision for Robert's maintenance when he was a child. This says nothing about any additional obligation for advancement.
The argument for the plaintiff concerning the appropriate provision tended to focus on Robert's "needs". The suggestion was that having regard to Robert's and Kristie's lack of financial resources, their health difficulties and those of their children, Robert's "needs" were such as to require a lump sum of more than $600,000, representing the cost of a house ("no less than" $500,000), a new people-mover motor car (the cost of which was agreed to be between $55,000 and $65,000), payment of debts, medical expenses, etc ($35,000), and a capital sum for contingencies ($50,000).
Counsel for the defendant maintained that no provision should be made, but that, if a provision was to be made, Robert's "needs" would be assessed as being much more modest: it was said that a used people-mover motor car would be sufficient together with a relatively small sum to clear his debts and to meet medical costs and some other living expenses with something left over for contingencies; the figure suggested was approximately $66,000.
I disagree with the approach adopted by counsel for the plaintiff (and, to an extent, by counsel for the defendant). In a family provision application, the Court is entitled to take the plaintiff's "needs" into account (Succession Act, s 60(2)(d)), but is not obliged to do so. I accept that an applicant's "needs" must usually be relevant, because, as the outcome in Vigolo v Bostin shows, an applicant who is already comfortably established in life will usually, if not invariably, not require anything more by way of "proper" provision. I also accept that Robert has "needs" in this sense: he is not set up in life. But once that is established, I do not think an appeal to his "needs" is helpful in determining what level of provision "ought to be made" for his advancement.
In this case, Robert's "needs" have nothing to do with the conduct (or misconduct) of the deceased. If anyone is responsible for them, it is Robert himself. Even if Robert's "needs" could be seen as the result of a failure by the deceased during his lifetime to make provision for Robert's advancement, they would also have to be seen as the result of equivalent failure on the part of Robert's mother, Julie. I do not think that family provision should operate as a supplementary system of social welfare on which a child may claim when a parent dies to satisfy the "needs" which have arisen during the parent's lifetime. Similar observations apply to the "needs" of Kristie, and of Robert and Kristie's children.
In my opinion, the appropriate level of provision in this case is a relatively modest figure designed to acknowledge Robert's status as the son of the deceased, and which might be used by Robert as a starting point for making provision for himself and his family.
I think there are three financial assessments which might inform the selection of the appropriate figure.
The first focuses on what might have been done by way of giving Robert a start in life. In my view, the provision of a house would be quite excessive in the circumstances, but an amount for a deposit could be appropriate. As the value of the property which Robert is said to "need" is "not less than" $500,000, a 10% deposit would be $50,000 or so.
Secondly, there is the $55,000 provision obtained by the deceased from his mother's estate. As Joseph has not made a claim in these proceedings, it is not necessary to consider whether it would be appropriate to make a notional division of this amount to reflect the fact that Robert is only one of the deceased's children.
A third approach would be to focus on the loss which was suffered as a result of the exclusion of Robert from his grandmother's will. It is reasonable to suppose that if the deceased had acknowledged Robert, he would have shared with Joseph and his three cousins in the Helensburgh property. The property was worth approximately $450,000; divided five ways instead of four that would have resulted in a legacy of $90,000.
Of these three approaches, I find the third most satisfying. It might be argued that such a notional legacy would have been reduced by a one-fifth share of the provision made by the Court for the deceased and a one-fifth share of the costs of the proceedings ultimately borne by the estate. However, as these reductions to the value of the estate resulted from the deceased's own actions, I would ignore them.
Taking into account the passage of time, I think that provision ought to be made in the sum of $100,000. I think that such provision would appropriately be made by way of pecuniary legacy out of the deceased's estate.

Conclusions and orders

I have concluded that: (1) the deceased's will failed to make adequate provision for the maintenance, education and advancement, and specifically the advancement, of the plaintiff; (2) provision should be made in the plaintiff's favour in the sum of $100,000, taking effect as a legacy.
I will hear the parties on costs.
The orders of the Court are:
Order that provision be made for the plaintiff out of the estate of the deceased by way of legacy in the sum of $100,000.
Direct that any application with respect to the costs of the proceedings be made within 28 days.

Amendments 19 October 2017 - inserted "(No 2)" in case title 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: 19 October 2017

Family Provision Act 1982(NSW)

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