Magur v Brydon

Supreme Court of NSW|2014-09-25|Before: Robb J

Introduction

The plaintiff, Daria Magur, seeks an order that provision be made for her maintenance and advancement pursuant to s 59 of the Succession Act 2006 (NSW) (the "Act") out of the estate of her mother, Julia Wasyleha, who died on 19 February 2013.
I will refer to the deceased as Mrs Wasyleha, and without meaning any disrespect, I will refer to the other persons involved by their first names.
The defendant, Andrew Daniel Brydon, is the son of the plaintiff and the grandson of Mrs Wasyleha. He is the executor under the will of Mrs Wasyleha made on 28 February 2011. Probate of the will was granted by the Supreme Court of Victoria on 19 September 2013, and resealed by the Supreme Court of New South Wales on 14 April 2014.
Mrs Wasyleha had two daughters, the plaintiff and Halyna (sometimes called Helen) van Ewyk. As well as Andrew, the plaintiff has three other children, by a different father, called Ilona Magur, Julia Magur and Nicholas Magur. Halyna has two daughters, Elke van Ewyk and Nadya van Ewyk. Andrew has two children, Oliver Brydon and Xavier Brydon.
Daria is eligible to make this application for a family provision order under s 57(1)(c) of the Act.
All other eligible persons were served with due notice of the proceedings, or were otherwise aware in good time that the proceedings would be heard on 25 September 2014.

An earlier will

On 25 May 1992 Mrs Wasyleha made a will, in which she appointed Daria to be her executor. She gave her estate to Daria and Halyna in equal shares.
Daria obtained a grant of probate from the Supreme Court of New South Wales on 23 October 2013 of the will dated 25 May 1992. By order made by the Court on 14 April 2014, the grant of probate of the earlier will was revoked. Daria said in cross-examination that she sought probate of the 1992 will because; following Mrs Wasyleha's death on 19 February 2013, nobody else had propounded any later will by October of that year. It was put to her in cross-examination that she ought to have made enquiries as to whether any later will existed, including of Andrew. Daria said that she sought legal advice, and acted in accordance with that advice. I do not think that there is anything sinister or inappropriate in Daria's conduct in not contacting Andrew, as she has been completely estranged from Andrew for many years.

The estate

The principal asset in the estate was a property at 129 Hector Street Sefton. The property was sold on 22 August 2014 for $671,000. As submitted by Andrew's counsel, after payment of Andrew's legal costs on the indemnity basis, and Daria's costs on the ordinary basis, the amount available for distribution will be $389,794.

Family history

Mrs Wasyleha was born in Ukraine. She left Ukraine when she was 15 years old because of the Russian occupation and fled to Europe. Halyna was born in 1946. Daria was born in Belgium in 1948. The parents immigrated with their daughters to South Australia from Europe in 1952 or 1953. Mrs Wasyleha separated from her husband in 1954.
Mrs Wasyleha met a Ukrainian man, Michael Wasyleha, in 1963, and married him. In 1965 Mrs Wasyleha and her husband bought their first hospitality business in Melbourne. Thereafter, they operated various catering businesses until around 1992 or 1993 when they got divorced. The first business was called "The Celtic Club" and was a dining area in the city. They set up a business called "Wasyleha Catering", and for a period the parents did all of the catering for the Ukrainian Hall in Russell Street, Essendon. Later in 1971 or 1972 they purchased a property at 18 Aberfeldie Street, Essendon, from which they operated "Avon Court Receptions". Daria referred to this property as the "Reception House".
The property at 18 Aberfeldie Street was in a residential area. It was a substantial three-bedroom property, on a double block, and it was the practice of Mrs Wasyleha and her husband to cater for functions for their clientele at the property. It had a commercial kitchen.
The businesses operated by Mrs Wasyleha and her husband generally involved catering for functions such as weddings, engagements, 21st birthday parties, christenings and other parties. Many of the couple's clientele came from the Melbourne Ukrainian community.
Daria left school at 17 ½ years of age, and worked as a receptionist and later as a secretary. She went to night school to study human resources, and subsequently secured a job in that industry.
Halyna moved out of home in about 1967 to work overseas. When she returned to Australia, Halyna moved to Sydney.
Daria's evidence was that, throughout the time that Mrs Wasyleha and her husband conducted their catering business, she was expected to, and did, work as a waitress. Halyna did likewise until she left home to go to Europe. Daria said that the purpose of the sisters working was to enable the parents to save money on waitressing staff. Daria said that she was not paid for the work that she did, save that she was given leftover food.
Daria said that she moved out of home in 1969, and that Andrew was born in September of that year. She returned home about 6 to 8 months later, as Andrew's father was violent towards her. She found a babysitter for Andrew and went back to work full time, 5 days a week.
After the parents purchased 18 Aberfeldie Street, Daria moved in with Andrew and lived there. The parents continued to run Wasyleha Catering while the property was being renovated. After the renovations were complete, the parents conducted commercial functions at the property.
Daria said that, for the next few years, she worked every weekend, sometimes Friday nights as well as Saturday nights. She commenced work setting up the tables with Mrs Wasyleha on Saturday mornings, with the reception normally commencing in the afternoon and continuing on to midnight. Normally they were 12 hour shifts. The other waitresses were paid around $5-$6 per hour. She said that this subjected her to intense pressure and stress, because she was holding down a full-time job at the time, and had very little time on the weekend to spend with her son and to unwind. Nonetheless she kept helping her parents to build up the business.
Daria married Louis Magur in 1973. The couple moved with Andrew to a house in Bundoora. The couple had Ilona in 1977, Julia in 1982 and Nicholas in 1986. Louis babysat the children on Fridays and, or, Saturdays whilst Daria worked in her parents business.
The couple struggled financially to support their four children, as Daria was not paid for working for her parents' business. Much of the leftover food that Daria received from her mother had to be thrown away as she considered it too dangerous to feed the food to her children.
Daria said that her parents were uneducated and relied upon her completely to look after the books and accounts, which she did after hours at home. She was not paid for any of this work. Daria also said that she accompanied her mother to all of her important appointments, as English was not her first language, and assisted her with basic things like writing, typing up letters, and anything else of an administrative nature. Mrs Wasyleha required her assistance with all of the businesses that she ran over the years.
Daria's evidence was that it was culturally expected of her that she assist her parents by working for them for no pay, and that she was obedient to her parents' wishes. Her mother "always" gave explanations to her such as: "Don't worry, it will all be yours one day", or "It's the family business and it is your duty to do this work as it would one day be yours". Daria said that her mother was a very controlling woman, and if Daria did not do as her mother wanted, her mother threatened that she would never talk to Daria again.
At a time, which appears to be during the 1980s, Mrs Wasyleha saw a shop sign advertising the sale of a dress shop in the Bundoora Arcade. The sale price was very cheap, and included stock, as the business was run down. Mrs Wasyleha said: "We will make some money from this business". The business was purchased in the name of Daria and her mother. Daria said that she worked long hours in the business from Monday to Saturday for about 2 to 3 years. Mrs Wasyleha did not work in the business. The business made losses in the first couple of years, and they finally managed to sell it off to break even and repay the bank overdraft. Daria and her mother did not make any money from the sale. Daria drew a minimum wage out of the business, as she was trying to build it up. The business was not at all profitable.
Daria said that her parents were very sociable people, and used to regularly throw parties at the Reception House. They both often drank to excess, and they had many fights over the years.
After the parents divorced in around 1992 or 1993, they sold 18 Aberfeldie Street for about $650,000, and divided the money equally.
After the divorce, Mrs Wasyleha moved in with Daria and her family for approximately a year, while she decided what she wanted to do. Daria said that during this period she and her mother were very close, and their relationship was strong. Mrs Wasyleha considered building a unit behind the home in which she could live permanently.
Mrs Wasyleha moved out of Bundoora after she decided to move to Sydney to live near some Ukrainian friends. She used what remained of her half of the sale proceeds of 18 Aberfeldie Street to purchase 129 Hector Street Sefton.
Daria said that she visited her mother many times with her children in Sydney, and they continued their relationship until about 2004 or 2005.

Initial relationship between Daria and her mother

Daria said that she and her mother spent many years together in a wonderful relationship. They were very similar in personality and character, although Mrs Wasyleha was the more demanding and very stubborn. Despite the hard work in the business, Daria and her mother had a loving relationship and Mrs Wasyleha and the stepfather regularly came to Daria's family home for get-togethers. As the four children grew up, the families were in constant touch by phone or visits. This relationship continued until after Mrs Wasyleha moved to Sydney.

Daria becomes estranged from Andrew

Daria and Andrew became estranged when Andrew was in his early 20s. There is some evidence of the reason for that estrangement, but the issue is contentious, and the reasons for the estrangement are irrelevant. It is neither necessary, nor appropriate, that I make any finding on this issue. It seems to be likely that the estrangement has been accompanied by some bad feeling, at least on Andrew's part.

Estrangement of Daria from her mother

Daria gave the following evidence concerning the circumstances of her estrangement from her mother. She said that sometime in the early 2000s her mother telephoned her. She sounded very angry. The following conversation occurred: Me: "What's happened?" Mother: "Andrew told me that you have befriended and visited your stepfather and his Russian wife. You are a traitor to me!" Me: "None of that is true! I have never met his Russian wife." Mother: "Yes you have. Andrew told me. I never want to see you again!"
Daria said that she was distressed, and over the next few months she tried to talk to her mother and reason with her. Her efforts were unsuccessful. She said that over the next few years she continued to try to contact her mother. She sent her money in her Mother's Day card, and also on her birthday. Daria never reconciled with her mother.
There is evidence that Mrs Wasyleha developed an aversion to the idea of meeting Daria again.
There is some uncertainty as to the time when the estrangement of Daria from her mother began. Andrew's counsel put it to Daria in cross-examination that it began in 2002 and 2003. She agreed that she had been estranged from her mother for at least 10 years. The estrangement may in fact have begun somewhat earlier. I have referred above to the letter prepared on behalf of Mrs Wasyleha in connection with the making of her will. Mrs Wasyleha confirmed the contents of the letter at the time she made her 28 February 2011 will. However, the original letter was dated 12 January 2001, and states that it was referred to in Mrs Wasyleha's will of the same date. The clear purpose of the letter is to justify why Mrs Wasyleha has left Daria out of her will. The date of the letter suggests that Daria and her mother were, from the perspective of Mrs Wasyleha, estranged from no later than 12 January 2001. However, in my view, the precise length of time that Daria was out of contact with her mother is not material.
Daria said in cross-examination that she had a "beautiful" relationship with her mother before the estrangement. It is not possible in the context of a contested hearing to make reliable judgments about the accuracy of a sentiment such as this. Intimate relationships between family members are often complex and multifaceted. The passing of time transforms recollections. There are, however, objective indicators that broadly support Daria's evidence. In 1992 Mrs Wasyleha made a will in which she made Daria her executor, and left half of her estate to her. Louis confirmed that in the early 1990s Mrs Wasyleha seriously contemplated increasing the accommodation available at Bundoora so that she could live permanently with Daria.
Mrs Wasyleha was 87 years old at the time of her death. At the time the estrangement began Mrs Wasyleha was about 74 years old, and Daria was about 53. Of those 53 years, Daria worked regularly in her mother's catering business, probably most weekends, for little reward, for a period of about 27 years, until 1992 or 1993.
The evidence as to what caused the estrangement between Daria and her mother is scant. Daria believes that, after her estrangement from Andrew, he said untruthful things to his grandmother, which caused her to fall out with Daria.
There is overwhelming evidence that Andrew formed a very close bond with his grandmother. He was an exceedingly devoted grandson. He went out of his way to provide emotional, financial and residential support to his grandmother. A number of witnesses vouched this relationship. Andrew, and his partner, provided sustained and devoted care for Mrs Wasyleha during the period leading up to her death.
It seems to be clear that Mrs Wasyleha took her grandson's part, rather than her daughter's. The cause of this can no longer be known, and whatever reasons there may have been are lost in time. I am satisfied that, whatever the causes of the estrangement may have been, they cannot be laid at the feet of Daria. There is no evidence of Daria having said or done anything that may have triggered Mrs Wasyleha's decision not to have further contact with Daria. It was Mrs Wasyleha's decision. Daria made attempts to reconcile with her mother, until constant failure caused her to give up. This was the cause of considerable sadness to Daria.

Credibility of Daria's evidence

Andrew challenged aspects of Daria's evidence. He said that functions were not held at 18 Aberfeldie Street as frequently as Daria's evidence would suggest. Andrew said there would be 1 to 2 functions per month each year. He said that he started working for his grandparents at about age 16. He said that there were only a couple of occasions while he was working that his mother did so also. He also gave some evidence that he witnessed his mother receiving payment on occasions for the work that she did for her parents. Andrew also claimed that the relationship between his grandmother and mother was not as warm as the latter asserted.
Daria's response to this evidence was that she could not recall Andrew working in the business. The business was no longer in operation by 1992, when Andrew was 23 years of age. For most of the business's life, Andrew was a minor. He did not work in the business, nor did he possess the required skills to prepare food, to set tables or serve alcohol. Daria and Louis would not have allowed Andrew to work in the business in the atmosphere where people consumed large amounts of alcohol. It was also about 45 minutes' drive from Bundoora to the Reception House. Andrew was in bed long before Daria got home in the early hours of the morning. At the time, Andrew was passionate about playing football. He played for the Preston Football Club every Saturday, and then met the boys afterwards.
Louis Magur, Daria's ex-husband, swore an affidavit in support of her case. He corroborated her evidence concerning Daria's support for her parents' catering business. He said that Daria supported her parents in the day-to-day running of the business, dealing with any paperwork, accounts, tax, and correspondence, and that she also worked in the business almost every weekend as a waitress. Daria worked until the early hours of the morning, with functions ending well after midnight, and it being necessary to clean up afterwards. Louis also confirmed that, to the best of his recollection, Daria was not paid for the work, and was given groceries and food that were left over after functions. He said that Daria's relationship with her parents was harmonious, and that she had a great relationship with her mother "even though [Mrs Wasyleha] was an emotional person and got pretty aggressive at times when it suited her". He also confirmed that, after Mrs Wasyleha separated from her husband, Daria and she discussed building a granny flat or adding another level to the house in Bundoora. Louis and Daria separated in 1994. Louis was not cross-examined.
Julia also gave evidence that Daria and her grandmother had a very close relationship.
The present is not a case where findings as to the credibility of the different witnesses are important. The cross-examination of Daria and Andrew was not intense. Daria was clearly upset during various parts of her cross-examination, as she had to face her estranged son, and was dealing with the fact that her mother had cut her out of her will. Having heard Daria give her evidence, I find her generally to be a credible witness. I formed the opinion that she made a genuine effort truthfully to answer the questions put to her, notwithstanding that she found the proceedings to be emotionally fraught.

Benefits conferred on Daria by her mother

Daria gave evidence in chief in which she responded to her mother's list of benefits said to have been given to Daria in her mother's 12 January 2001 letter.
She accepted that many family birthday parties, christenings, communions and the like were held at the Reception House. She said that her mother was very heavily involved in the Ukrainian community, and insisted that the events were held at the Reception House. Daria discussed with her mother that she would have preferred the events to be more intimate, and to be held at her home. She said that her mother said to her words to the effect: "If you do not have the party at the Reception House, I will never speak with you again". Daria also said that when she married Louis in 1973, despite her wishes, her mother insisted that there be a large wedding at the Reception House. Mrs Wasyleha invited many people from the Ukrainian community, and Daria said that she did not know half the people at her wedding. Daria also agreed that, after her wedding to Louis, while the house at Bundoora was being finished off, she and Louis lived for a couple of months with her parents. Daria said that she and Louis would have preferred to live with his parents, as planned, but Mrs Wasyleha insisted that they live with her.
Daria denied that her mother provided her with a sum of $10,000 for the shop. She said that her mother found the dress shop, to which reference has been made above, in the mid-1980s. The purchase price was in the order of $9000. As I have recorded, the business was purchased in the names of Daria and her mother, but Mrs Wasyleha did not work in the business. Daria worked long hours in the business from Monday to Saturday for about 2 to 3 years. Daria did not make any money out of the business, and it was ultimately sold for about a breakeven price.
Daria said that there was only one renovation of the Bundoora house, in 1982. She accepted that her mother gave her a total of $6500 to assist with the costs of carpet and renovation. Daria said that she and her husband paid the $1500 cost of renovating the bathroom, which I infer included the spa bath. Daria said that her mother gave her $1700 in about 1992 or 1993 to finally pay off the mortgage on the Bundoora house. In total Daria accepted that, of five items in her mother's letter concerning improvements to the Bundoora property totalling $23,900, she received $8200 from her mother.
Daria denied that her mother paid $3000 for a computer, although she accepted that her mother gave her about $200 for repairs to a computer that Daria bought second hand for her children for about $300-$400. Daria also denied that her mother paid $1200 for new lino for the kitchen floor. She said that her son had damaged the lino, which was replaced with the proceeds of insurance. Daria denied that her mother paid $1200 for a washing machine, but had accepted that her mother paid for a clothes dryer as a gift. She also denied that her mother gave her $2000 in cash to visit the mother in Sydney. She accepted, however, that her mother assisted with the payment of Andrew's school fees. Daria said that, after her mother's divorce in 1992 or 1993, she lived with Daria's family at Bundoora for about a year. Daria said that her mother did not contribute to utility bills or living expenses during that period. Daria accepted that her mother painted some of the inside walls of the house (although not the children's bedrooms).
There is no objective evidence to support either Mrs Wasyleha's or Daria's version concerning the amounts that Mrs Wasyleha paid from time to time for Daria's benefit. In Grundel v Registrar-General (1990) 5 BPR 11,217, McClelland CJ in Eq spoke of the need to treat with considerable caution evidence given by a plaintiff without corroboration, in a claim against an estate, of oral representations made by the deceased. That is because of the danger of estates of deceased persons being subjected to false or exaggerated claims. The Court should be cautious, if not suspicious about such evidence, will scrutinise it with great care, and only act upon it if convinced of its truth.
In the present case the issue has not been propounded by Daria, but has been introduced by Mrs Wasyleha confirming the 12 January 2001 letter as an adjunct to her 28 February 2011 will. That has made it necessary for Daria to respond. The Court does have the benefit of Mrs Wasyleha's statement of position as to having provided benefits to Daria during her lifetime. The situation is not as extreme as that considered in Grundel. However, to a degree the same considerations arise, but in a more attenuated way. Daria is in a position to give a sworn response to her mother's letter, but the issue of what payments were, or were not, made cannot properly be litigated. The absence of corroboration is of little moment in a case like this, as it would be unusual for either party to retain records of the conferral of benefits of this type within a family.
Notwithstanding that I generally accept the credibility of Daria's evidence, I do not regard the evidence as being sufficient to permit the Court to make specific findings as to which benefits were, or were not, conferred by Mrs Wasyleha on Daria, or how much was paid for those benefits. The total amount of the payments identified by Mrs Wasyleha is $42,600. Mrs Wasyleha did not place a value on a number of the benefits that she said she gave to Daria. If the benefits were all provided, that occurred over a period in excess of 20 years. Some of the benefits at least would ordinarily be regarded as true gifts, rather than payments for Daria's maintenance and advancement in life. Furthermore Mrs Wasyleha seems to have left entirely out of account the 27 odd years of assistance that Daria gave her in the conduct of her catering businesses.

Daria's circumstances

As mentioned above, Daria is now 66 years of age. She is on the cusp of retirement. Daria is presently employed as a property manager in a real estate office. She described her position as being probationary. She is not sure whether her employment will continue, as she is concerned that employers in the property market usually prefer younger employees. In any event, Daria has an aspiration to be able to retire sometime within the next year, if her finances permit it.
As at 13 March 2014, when Daria swore her first affidavit, Daria's assets and liabilities were as follows: Assets 32/56 Beach Road, Hampton, Victoria $460,000 (E) Dunvegan Crescent, Macleod, Victoria $540,000 (E) Superannuation with VicSuper $25,000 Motor vehicle $3,000 Total (estimated): $1,028,000 Liabilities Mortgage over Dunvegan Crescent, Macleod $500,000 Credit card $10,400 Total liabilities: $510,400 Estimated net assets: $517,600
There is an issue as to the value of Daria's home, which is estimated at $460,000 in her statement of assets and liabilities. Daria tendered two market appraisals by real estate agents in August and September 2014, which appraised the property at $535,000 and $540,000 respectively. Andrew also put into evidence information obtained from websites concerning present asking, and past sale, prices for various units at 56 Beach Road, Hampton. If I understand the printouts correctly a current 'guesstimate' for 26/56 is $687,000-$775,000, and for 38/56 is $890,000-$990,000. Going back only to the beginning of 2010, a number of units in the building have sold for $545,000, $571,000 and $700,000. Daria gave evidence in cross-examination that the two units that are currently for sale are considerably more attractive than her unit.
Practice Note SC Eq 7 par 21(a) permits parties in family provision applications to give evidence of a kerbside appraisal by a real estate agent of any real property, and par 21(c) permits evidence of Internet advertisements of the asking price of real estate. In my view the former is likely to be more reliable than the latter when the issue is the actual value of particular real property. The latter can be very useful when the question is: what type of property may a particular party be able to acquire with a given sum of money? Where the Court has to determine a value for a given property, printouts of the asking prices, or even sale prices, of different properties are likely to be uncertain evidence of value. Unless the properties the subjects of the printouts are clearly comparable with the relevant property, it is unlikely that the Court, without the assistance of expert evidence, will be able to make a reliable comparison between the location and amenity of the different properties in order to form a proper assessment of the value of the subject property. In the present case I propose to accept the evidence of the appraisals obtained by Daria in preference to the unexplained internet printouts put into evidence by Andrew. I will proceed upon the basis that the value of Daria's residential unit is in the order of $540,000.
In her 12 September 2014 affidavit Daria explained that she has now sold the Dunvegan Crescent property for a price of $590,000. Out of the proceeds of sale, she has repaid her mortgage of $500,000, and costs and expenses of $26,000. From the balance she will repay credit card debts that total $14,000. She will pay an estimated amount of $27,800 for a new Mazda 3 vehicle, as she needs a reliable car for the purposes of her employment. She will then have $22,000 left from the sale proceeds of her investment property.
At the end of this process Daria will own her residential home unit worth about $540,000; she will have superannuation of $25,000, a vehicle worth approximately $30,000, and $22,000 cash. She will therefore have assets worth $617,000, and no liabilities.
Daria was cross-examined about her statement of income and expenditure in her 13 March 2014 affidavit, which included expenses related to her investment property. That statement was, however, superseded by the equivalent statement in her 12 September 2014 affidavit, from which expenses concerning her investment property have been removed. Daria's net income from her wage is presently about $4000 per month, and her expenses are approximately $3840. Daria's list of expenses look reasonable, and they were not challenged by Andrew. Daria is therefore at present able to cover her expenses from her income.
That state of affairs will not continue if Daria loses her present employment, or when she retires.
The evidence suggests that Daria will be entitled to an age pension of about $850 per fortnight, when she is no longer employed. It is difficult for the Court to be precisely sure of pension entitlements, where the only available information is a printout from a website conducted by the Australian Government Department of Human Services. This fortnightly pension equates to an income of about $1840 per calendar month. That is less than half of Daria's current monthly expenses. Daria expressed particular concern about being able to fund the cost of maintaining her home, which is presently a total of $760 per month for strata levies, council rates, electricity gas and water, and contents insurance.
According to Daria her apartment is in bad need of repair and all of the appliances such as the stove and hot plates, the range hood, the dishwasher, the heater and the hot water service are slowly failing. The property needs updating and repairing, especially the shower and the carpet. Daria would like to install a split system air-conditioner/heating unit as the very hot days and the very cold days in Melbourne are affecting her health. She estimates the cost of such a unit to be approximately $3500 including installation.
Daria said that she has medically diagnosed anxiety and depression for which she is prescribed medication and receives treatment. Sometimes, as a result of this condition, she has to take time off work. Her thyroid gland collapsed about 15 years ago, and she is on Oroxine which is a replacement therapy for the rest of her life, as the gland does not function. The condition affects her nervous system, and also increases her anxiety levels. Daria suffers from asthma and has periodic attacks. She takes Zertec and Polaramine at night, and has also been prescribed anti-allergy medication to minimise outbreaks.
By letter dated 17 June 2014 Daria's doctor said: Ms Magur is a patient of this clinic and I am familiar with her medical conditions. She has a hypothyroidism and worsening osteoarthritis and is currently being investigated for worsening respiratory symptoms. She has declined since a fall earlier this year and is having ongoing problems with her right knee since then. She also has depression and anxiety, compounded by work and other external stressors. In light of this I support her looking towards retirement within the next 12 months and in this setting getting some financial support from her Mother's estate to allow her to do so.
Daria expressed a desire to obtain the extras cover on her health-insurance to assist in payment for optical expenses such as eye tests and glasses as her eyesight is failing.
Daria's teeth need urgent repair as they are breaking away due to age. She has 17 upper and 16 lower teeth that need capping. Daria tendered a letter dated 11 August 2014 from her dentist, which estimated the cost of the dental work at approximately $57,000, with a possible variation of 10%. This is a significant sum, but was not challenged by Andrew.
Daria expressed the desire to be able to go on a holiday around Australia, which would cost around $3500.

Financial circumstances of the other beneficiaries

Both Daria and Andrew agreed that the Court should not make any order that disturbs the gift of $60,000 to Halyna. Counsel for Andrew specifically accepted that, if it comes to the point of deciding the amount of a family provision order that should be made in Daria's favour, it would not be necessary or appropriate for the Court to compare the circumstances of Daria and Halyna. It is therefore not necessary to summarise the evidence concerning Halyna's circumstances.
Andrew did not put his financial circumstances into issue, and there is no evidence on that subject.
I have referred to the relationship between Andrew and his grandmother above, and accept his counsel's submission that the relationship was extraordinarily close, caring and supportive.
Oliver was born on 8 September 2009, and is currently 5 years old. The evidence is to the effect that Mrs Wasyleha adored her great-grandsons. That is natural.
Elke, who is the granddaughter of Mrs Wasyleha, is 36 years old and still lives with Halyna. She works part time and is also studying at TAFE. Her income is $387 per week including income from casual employment and Ausstudy. Apart from a car and $54,000 of superannuation she has no significant assets. She owes $10,800 on her car and $2800 on a credit card. She requires dental work with a cost of $25,000. Elke maintained a relationship with Mrs Wasyleha.
Nadya is also the granddaughter of Mrs Wasyleha. She is 34 years old and lives with her mother. She works part time and is also studying at TAFE. Her income is $825 per week. She has a car and a small amount of superannuation but no other significant assets. She owes $28,000 on her car and $1000 on a credit card. She maintained a relationship with Mrs Wasyleha.

Legal principles relevant to Daria's claim

It is now necessary to consider whether Daria has demonstrated that she is entitled to the benefit of a family provision order, and if so, what the terms of that order should be. Chapter 3 of the Act governs these issues, as Mrs Wasyleha died after 1 March 2009.
As I have noted above, Daria is an eligible person for the purposes of s 57(1)(c) of the Act, and she commenced these proceedings within 12 months of Mrs Wasyleha's death, as is required by s 58(2) of the Act.
The next step in the process requires the Court to identify what provision has been made by Mrs Wasyleha by her will for the proper maintenance, education or advancement in life of Daria.
This requirement arises out of the terms of ss 59(1)(c) and (2) of the Act. The first relevantly provides: "(1) The Court may…make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that… (c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person…"
"Family provision order" is defined in s 3 of the Act to mean" "an order made by the Court under chapter 3 in relation to the estate or notional estate of a deceased person to provide from that estate for the maintenance, education or advancement of an eligible person."
Section 59(2) then provides: "(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made."
The question is whether, at the present time, Mrs Wasyleha has not by her will made adequate provision for the proper maintenance, education or advancement in life of Daria. That is why it is necessary to start by identifying the provision that has been made by Mrs Wasyleha.
In the present case Mrs Wasyleha has made absolutely no provision for her daughter, Daria, at all.
The next step is whether the Court is satisfied, at the present time, that the provision is not adequate for the proper maintenance, education or advancement in life of the applicant? That question arises out of the terms of s 59(1) of the Act. I propose to treat this question as being a separate question to that raised by s 59(2) of the Act, and for that purpose will follow the conclusions stated by Hallen J in Underwood v Gaudron [2014] NSWSC 1055 at [163] - [165].
Hallen J has set out important principles relevant to determining the answer to this question in Underwood v Gaudron at [130] - [153]. I respectfully adopt those statements of principle, and will state in summary form the principles that I consider to be material to the present application.
In the present case Daria is not in need of additional education, but her claim for an additional provision comes within the concepts of maintenance and advancement in life.
Section 59(1)(c) requires that the Court determine whether the will has not made adequate provision for the proper maintenance, education or advancement in life of Daria. The question is not simply whether the provision is adequate. The meaning of the terms "adequate" and "proper" are crucial. As Hallen J stated in Aubrey v Kain [2014] NSWSC 15 at [63]: "The word 'adequate' connotes something different from the word 'proper'. 'Adequate' is concerned with the quantum, whereas 'proper' prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 W.A. are 127, per Buss JA, at 145 [72], [77]." Hallen J set out extracts from authorities that have considered the difference in meaning of the two words at [63]-[70].
It will be sufficient to set out the following extract from the judgment of Dixon CJ and Williams J in McCosker v McCosker (1957) 97 CLR 566, at 571-572 in relation to how the Court should apply the concept of "proper": "It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the Court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the Court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
In Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), said at [18]: 'Proper maintenance' is not limited to the bare sustenance of a claimant…but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility.
The Court must assess the provision made by the testator from the perspective of whether it is "wise and just". Testamentary power lies principally in the testator. The size of the estate available is an important consideration, because the testator is limited in his or her determination of what is wise and just by the extent of the property available for distribution, and accordingly a provision may be "proper" in the circumstances of a particular estate, when that would not be so if the testator had available more assets for distribution. The testator is also entitled, and required, to consider all of the competing claims upon his or her bounty and their relative urgency.
As Hallen J noted in Aubrey v Kain at [50], in cases identified by his Honour, judges of this Court have used the following expressions to describe the mental process involved in deciding whether a provision made by a testator is relevantly adequate and proper; being that the state of satisfaction "depends upon a multi-faceted evaluative judgment" (Basten JA); it involves "an intuitive assessment" (White J); and it is "an evaluative determination of a discretionary nature, not susceptible of complete exposition"; and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific" (Stevenson J).
In Butler v Morris [2012] NSWSC 748 at [106] Hallen J set out principles that are "useful to remember" that may be relevant where the applicant for a family provision order is an adult child. I respectfully agree with the observations that his Honour made. I will limit the following extract from his Honour's observations to the factors that are relevant to the present case: [106] In relation to a claim by an adult child, the following principles are useful to remember: (a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. (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…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. (c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so... But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia… (e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2) at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45. (f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181] and [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASC 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17]. (g) The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149. (h) Although some may hold the view that equality between children requires that "adequate provision" not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court's determination of an applicant's case.
If the requirement in s 59(1)(c) is satisfied, then the Court is empowered by s 59(2) of the Act in terms that it "may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made." It is clear that the effect of the inclusion of the word "may" is that the Court has a true discretion as to whether any order should be made, and if so what order ought to be made: Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 20 at 212 per Mason CJ, Deane and McHugh JJ.
Section 60(2) of the Act sets out a list of factors that the Court "may" consider in determining whether to make a family provision order and the nature of any such order. The matters that are listed in s 60(2) are a helpful list of factors that may be taken into account, but the section makes plain that the Court can have regard to any other matter that it considers relevant, and the factors are not necessarily determinative in any case: West v Mann [2013] NSWSC 1852 at [12(10)].
In a general way, many of the matters listed in s 60(2) are material to Daria's application: The following matters may be considered by the Court: (a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship, (b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate, (c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate, (e) if the applicant is cohabiting with another person - the financial circumstances of the other person, (f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated, (g) the age of the applicant when the application is being considered, (h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant, (i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate, (j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person, … (p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
I have omitted the paragraphs contained in s 60(2) that do not appear to me, and were not submitted to be, significant to the present application.
Two features of the present case require special consideration. The first is the total estrangement of Daria from her mother for a period of somewhat more than 10 years before Mrs Wasyleha's death. The second concern is the significance of the fact that Daria worked in her mother's catering business on the majority of weekends for some 27 years without proper pay, and looked after the accounting and administrative needs of the business. As to the former, Andrew submits that while the estrangement does not terminate the obligation of Mrs Wasyleha to provide for Daria, it will operate to restrain the amplitude in the provision to be made: Keep v Bourke [2012] NSWCA 64 per Barrett JA at [50]. As to the latter Andrew submits that the object of the jurisdiction under s 59 of the Act is to provide for deserving persons according to their requirements, rather than to reward past services: Blore v Lang (1960) 104 CLR 124 at 137.
It was common ground that the general principles concerning the significance of estrangement were correctly summarised by Hallen J in Underwood v Gaudron at [230] - [244]. In the circumstances it will be convenient to set out only the following part of his Honour's reasons: [231] Because, in this case, there is a factor raised by the deceased (and by Mary and Kathryn) that bears on the quality of the relationship, being that Helen was estranged from the deceased for about 20 years before death, it is necessary to set out some other general principles which should be remembered: (a) The word "estrangement" does not, in fact, describe the conduct of either party. It is merely the condition that results from the attitudes, or conduct, of one, or both, of the parties to the relationship. Whether the claim of the applicant on the deceased is totally extinguished, or merely reduced, and the extent of any reduction, depends on all the circumstances of the case: Gwenythe Muriel Lathwell, as Executrix of the Estate of Gilbert Thorley Lathwell (Deceased) v Lathwell [2008] WASCA 256, at [33]. (b) The nature of the estrangement and the underlying reason for it is relevant to an application under the Act: Palmer v Dolman ; Dolman v Palmer[2005] NSWCA 361, at [88]-[94]; Foley v Ellis. In Palmer v Dolman, Ipp JA, after a review of the cases, observed, at [110], that: … the mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act. (c) There is no rule that, irrespective of a Plaintiff's need, the size of the estate, and the existence or absence of other claims on the estate, the Plaintiff is not entitled to "ample" provision if he, or she, has been estranged from the deceased. The very general directions in the Act require close attention to the facts of individual cases. (d) The Court should accept that the deceased, in certain circumstances, is entitled to make no provision for a child, particularly in the case of one "who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility": Ford v Simes [2009] NSWCA 351, at [71], per Bergin CJ in Eq, with whom Tobias JA and Handley AJA agreed… (f) Even if the applicant bears no responsibility for the estrangement, its occurrence is nevertheless relevant to the exercise of the Court's discretion under s 59(2) of the Act to make a family provision order where the jurisdictional requirements of s 59(1) are met. That the applicant had no relationship with the deceased for some years, and that there did not, therefore, exist between them the love, companionship and support present in normal parent/child relationships, during those years, is a relevant consideration: Keep v Bourke [2012] NSWCA 64, per Macfarlan JA, at [3]. (g) The poor state of the relationship between the applicant and the deceased, illustrated by the absence of contact for many years, if it does not terminate the obligation of the deceased to provide for the applicant, may operate to restrain amplitude in the provision to be made: Keep v Bourke, per Barrett JA, at [50]. (h) Where the applicant has been estranged from the deceased, the application of the Act requires that the estrangement be appraised and its causes considered. In addition, s 60(2)(m) permits the Court to consider the character and conduct of the applicant at the second stage of the process. Care should be taken not to oversimplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically the behaviour of one party or the other. Events viewed years later through the cold prism of a Courtroom may give a different impression than when the events are set in the context of raw emotions experienced at the time: Foley v Ellis, at [102].
I have recently considered the situation where a plaintiff, who is a child of the deceased, has provided substantial services to the deceased over many years for little or no reward: see Pang v Fong [2014] NSWSC 1425. For the Court to take this factor into account does not necessarily mean that it is acting on the basis that the child is entitled to be rewarded for past services provided to the deceased: see Blore v Lang per Windeyer J at 137; and Raiola v Raiola [2014] NSWSC 967 per Black J at [69]. In relatively unusual cases, whether by ad hoc arrangements between parent and child, or because of cultural expectations, the child may provide substantial assistance to the parent over many years, for little or no reward commensurate with the value of the services. There may develop an assumption, or a cultural expectation, that the child will ultimately receive a benefit for his or her labours that reflects the value of the contribution to the building up of the parent's business or other assets. In some cases an expectation in the child to that effect may be encouraged by express assurances given by the parent. If the Court takes circumstances such as these into account, when determining whether the child has established that adequate provision for the proper maintenance, education or advancement in life of the child has not been made by the will of the parent, for the purposes of s 59(1) of the Act, the Court is not merely rewarding the child for past services to the parent. The Court is recognising that the circumstances are relevant to the call that the child has on the bounty of the parent. Ultimately, the Court must be satisfied on all of the evidence that adequate provision has not been made; but in making that determination the Court should give due weight to the contribution made by the child in the acquisition of the parent's estate, as well as the legitimate expectation of the child that the circumstances have created. That must be inherent in the requirement that the provision made in the will must be "proper".

Was adequate and proper provision made for Daria?

The evidence satisfies me that Daria has established that the will of Mrs Wasyleha has not made adequate provision for her proper maintenance or advancement in life.
Daria owns the home unit in which she lives outright. It is valued at about $540,000. No attempt was made in this case to establish that Daria could reasonably sell her present home, and buy a satisfactory alternative home at a lower price that would leave her with a substantial amount of money to cover her future needs in life. In the circumstances I find that Daria's present accommodation is reasonable and appropriate for her situation in life.
At present, while she is working, Daria's income just covers her living expenses. As she is now 66 years old, there is a substantial possibility that, even if she is able to keep her present employment, she will need to retire in the next year or so. Not only does Daria wish to retire, but the medical evidence that is available suggests that relatively early retirement would be in her best interests.
When Daria ceases to work, the evidence suggests she will be entitled to an age pension, which will bring in slightly less than half her present living expenses. Daria has $25,000 in superannuation, and she will have $22,000 left over from the proceeds of sale of her investment property. (I note, however, that the evidence suggests that the last-mentioned sum is approximately equal to the difference between Daria's actual legal costs of the proceedings, and the amount she is likely to receive if an order is made that her costs be paid out of the estate on the ordinary basis). It is clear that Daria will not have sufficient resources to meet the shortfall in her means that will occur when she stops working.
I accept that there is a real likelihood that Daria will not be able to continue to pay the costs of maintaining her present home after she is forced to go on the pension. That is likely, as she claims, to exacerbate the level of stress and depression from which she suffers.
Daria will have no fund to deal with the contingencies of life, and the possibility of her declining health. She will not be able to make any improvements to her home unit. She will not be able to pay for any of the dental work that she needs.
On the subject of the significance of the estrangement between Daria and her mother, it follows from the conclusions that I have reached above, that Daria bears no responsibility for that state of affairs. In using the word "responsibility", I do not have in mind the issue of blameworthiness. It is simply that, whatever event or events caused Mrs Wasyleha to reject her daughter, those events were not caused by Daria and were beyond her control. I accept Daria's evidence that she attempted to reconcile with her mother, but was rejected.
Even if it is true that estrangement may lead to an attenuation of the amplitude of a parent's obligation to make adequate provision for the proper maintenance and advancement in life of a child notwithstanding that the estrangement is entirely beyond the control or responsibility of the child, the present in my view is a case where the justification for any attenuation is very slight.
In any case the fact of the estrangement should be balanced against the history of Daria's working for her mother and supporting her business by providing services for little or no reward over a great many years. No more can be said than that those events must have contributed significantly to the capacity of Mrs Wasyleha and Daria's step-father to acquire and pay off the property at Essendon.
It is necessary for the Court to balance the call that Daria has on the bounty of her mother's estate, against the equivalent calls of the other beneficiaries.
As I have recorded above, both parties have accepted that Halyna should retain her gift of $60,000.
The evidence as to Andrew's relationship with his grandmother clearly establishes that he had a call on Mrs Wasyleha's bounty that would support him receiving one quarter of the distributable estate, which is the same proportion of the residuary estate that he was given in Mrs Wasyleha's will, before the need for Daria's application has had the consequence that the amount available for distribution has been reduced by the costs of the proceedings.
The real issue arises in relation to the position of Mrs Wasyleha's grand- daughters, Elke and Nadya, and her great-grandson, Oliver. It is true that the two grand-daughters maintained a relationship with Mrs Wasyleha, which I infer was loving and respectful. Both are in their mid-30s. They are both studying, and are in receipt of an income. They both live with their mother. Neither, however, has significant assets. They have a small amount of liabilities, although it must be noted that Elke has a need for dental work that will cost $25,000. Both grand-daughters have the balance of their lives to live. As to Oliver, he is still a small child. It is difficult to form any view about his circumstances, given that Andrew did not put his own financial circumstances in issue, and there is no evidence on that matter.
I have concluded that, when the circumstances of Daria are compared with those of Elke, Nadya and Oliver, it is Daria that has the preponderant call on Mrs Wasyleha's estate. The position of the latter three beneficiaries is not such as to justify a finding by the Court that, by reason of the insufficiency of the estate, the absence of any provision made in favour of Daria must be considered to be adequate, because of the competing needs of the other beneficiaries. Accordingly, I find that Daria has satisfied the requirements of s 59(1) of the Act.

What provision should be made in favour of Daria?

Daria has her own home. When she is retrenched, or retires, she will be eligible for the age pension. The pension will not be adequate to support her present level of recurrent expenses, and come what may she will have to find some way to reduce her expenditure. Subject to her apparent need to pay part of her legal costs, she will have no more than about $47,000 as a fund to meet contingencies. The nature of the provision that is clearly called for in the present case is the creation of a fund to protect Daria against the ordinary vicissitudes of life, and to meet necessary dental and other expenses, as envisaged by Hallen J in Butler v Morris at [106(f)].
Mrs Wasyleha's property at Sefton was sold for $671,000. As I have noted above, after payment of a small amount of debts and expenses, and after allowing for the costs of these proceedings, the amount available for distribution will be $389,794. The nature and extent of the estate is one of the factors that s 60(2)(c) of the Act suggests that I may take into account.
After Halyna's gift of $60,000 is deducted, the amount remaining is $329,794.
As I have found that Daria has satisfied the threshold for the making of a family provision order in her favour, an appropriate order will be made for the payment of both her and Andrew's costs out of the estate. A consequence will be that Daria and the beneficiaries under Mrs Wasyleha's will must share the burden of the legal costs.
As I have found that Andrew's relationship with Mrs Wasyleha supports the gift that she made in his favour of one quarter of her residuary estate, I think it is proper to proceed upon the basis that he should receive at least one quarter of the remaining amount, which is about $82,000. That leaves $247,794.
In my view the provisions in Mrs Wasyleha's will should be adjusted so that a substantial legacy is paid to Daria. In forming that view I have had particular regard to the factors listed in s 60(2)(d), (f) and (g) of the Act.
I have not ignored the suggestion in s 60(2)(j) of the Act that I should have regard to any evidence of the testamentary intentions of the deceased, including evidence of statements made by the deceased. The primary thrust of Mrs Wasyleha's statement prepared when she made her will was that she had already made ample provision for Daria during her lifetime. I am satisfied that Mrs Wasyleha did make some provision for Daria, although for the reasons I have given above, I have not found it possible to make any precise findings as to the benefits that Mrs Wasyleha gave to Daria, or the value of those benefits.
I do not regard the evidence concerning the benefits as being sufficient to prevail over the evidence as to the countervailing benefits that Daria provided to Mrs Wasyleha over some 27 or so years in relation to her mother's businesses. Mrs Wasyleha's statement of testamentary intentions leaves those benefits entirely out of account, which is not only a factor that s 60(2)(h) of the Act permits me to take into account, but is a significant factor in this case.
I do not, however, accept the submission made by counsel for Daria that, apart from the legacy to Halyna, and the payment of legal costs out of the estate, a large part, if not most, of the estate should be a legacy in favour of Daria. I have already given my reasons why Andrew should remain entitled at least to the same proportion of the residuary estate that remains after payment of costs that Mrs Wasyleha specified in his favour in her will. The exceptional nature of the relationship between Andrew and his grandmother requires that her testamentary intentions be respected at least to that extent. Notwithstanding my findings concerning the circumstances of the estrangement between Daria and her mother, I do not think that I should ignore the fact of that estrangement entirely. Furthermore, it is likely that Mrs Wasyleha's gift to Oliver is a reflection of her feelings for Andrew; and the circumstances of Elke and Nadya that I have outlined above show that they also have some needs, which should not be ignored entirely.
In the circumstances, exercising my discretion as carefully as I can, having regard to all of the circumstances that I have discussed above, I have concluded that Mrs Wasyleha's will should be adjusted to provide for a legacy of $170,000 to Daria. The amount of that legacy has been significantly constrained by the substantial amount of the legal costs that have been incurred by both parties in these proceedings. The residuary gifts made to Elke, Nadya and Oliver should bear the creation of the legacy in favour of Daria equally.
Consequently, orders will be made that have the effect of adjusting Mrs Wasyleha's will so that Halyna's legacy of $60,000 remains undisturbed, a legacy is created of $170,000 in favour of Daria, Andrew will receive about $85,000 (as he will not bear any of the cost of providing the legacy in favour of Daria), and the remaining three beneficiaries will share equally in the residue. According to my calculations, and subject to the actual amounts that are paid out of the estate in respect of legal costs, those three beneficiaries should receive about $25,000 each.

The parties' legal costs

According to my calculations, the evidence is that Andrew's legal costs will be $105,283.80. That total has not been confirmed by the parties, and has been reached by my adding up the costs based upon my review of the evidence. Daria's legal costs may total $132,902. I recognise that Daria's costs may in fact be slightly less, because the hearing of the matter took only one day, and Daria's solicitor only provided evidence of a single estimate of counsel's fees for the hearing on the basis that it would last two days. I have not been able to determine on the evidence what Daria's legal costs in fact will be.
If I assume that the parties' costs will be as stated, the total will be $238,185.80. That is just short of 40% of the $618,618.80 that would have been available for distribution had the proceedings not been commenced. (I have taken this amount from par 10 of Andrew's counsel's written submissions, by adding back to the net value of the estate as at early September 2014 the $80,783.80 that I have calculated was paid out of the estate for Andrew's legal costs up to that time).
I trust it is obvious, but in the case of an estate worth little more than $600,000, a combined amount of almost 40% of the estate in legal costs could only be justified in exceptional circumstances.
In the present case Daria's solicitor provided a cursory explanation in her affidavit that the matter has been particularly intensive, and has involved the filing of 16 affidavits between Daria and Andrew, and "other affidavits which we have decided not to use with a view to trying to limit the issues in the proceedings and the issues raised". In Andrew's case there was a substantial amount of very detailed and corroborated evidence directed to establishing, successfully as I have found above, the exceptionally close and supportive relationship between Andrew and his grandmother. Not only was there no challenge by Daria to that evidence, but because of the circumstances of her estrangement from both her mother and son, she was not in any position to contradict the evidence. The point could easily have been established with much less evidence.
The procedures followed by the Family Provision List Judge in managing his list are in no small part directed to ensuring that family provision applications are conducted as inexpensively as possible. Part of the purpose of Practice Note SC Eq 7, where in pars 6(c) and 17 the parties are required to provide estimates of their costs up to mediation and hearing, is to force the parties to focus on the costs that are likely to be incurred in the proceedings, as an incentive to their minimising those costs, and appreciating the benefit of compromise in appropriate cases.
Another purpose in requiring the parties to prove the amount of their likely costs for the purposes of the hearing is that a significant aspect of family provisions applications is that there is a particular and limited fund out of which orders can be made in favour of all parties who have a claim against the deceased's estate. As it is generally the case that the legal costs of a successful plaintiff are ordered to be paid out of the estate on the ordinary basis, and the costs of the defendant are paid on an indemnity basis, the only rational way for the Court to approach its determination of the orders that should be made in cases where the plaintiff is successful is to first reduce the value of the estate by the total of the costs orders that will be paid out of the estate. This approach is obvious, and is reflected in the submissions that the Court customarily receives from the parties.
Parties to family provision applications should reflect upon the fact that, at some point in the Court's deliberation, the judge will focus very specifically on the amount of costs that the parties estimate will be incurred in the conduct of the proceedings. In that respect family provision applications may be exceptional. It is natural and unavoidable that, with increasing experience, judges who hear family provision applications will begin to develop a sense of what level of costs is reasonable to be incurred given the amount of a particular estate, and the nature of the issues that are involved.
Experience suggests that there is a substantial degree of variability between the amount of costs incurred by parties to family provision applications, depending upon the identity of the legal representatives that they happen to retain. It is often difficult for the Court to equate a particular level of estimated costs with the amount of legal work that appears to have been involved in the preparation of the matter for hearing. Sometimes the amount of costs is admirably conservative, but unfortunately it is not always so.
When costs appear to be too high, the vice lies not only in the burden that it places on the parties, but it can often have the effect of preventing the Court making optimal adjustments to the will of the deceased, where it is decided that the making of a family provision order is justified, for the simple but telling reason that, after the costs have been deducted from the available estate, the amount that remains makes it difficult, if not impossible, for the Court to adjust the balance in a way that adequately provides for the plaintiff, without unduly reducing the entitlements of the remaining beneficiaries.
Legal costs are a necessary and unavoidable fact of life, but it must be recognised that without great care, and studious monitoring of the progressive accumulation of legal costs, the result may substantially undermine the policy and application of Ch 3 of the Act.
Practice Note SC Eq 7 par 24 permits the Court to make orders capping the costs that may be recovered by a party in circumstances which include, but are not limited to, cases in which the net distributable value of the estate is less than $500,000. The availability of this power will often not meet the problem, as it will leave the parties personally to bear a proportion of their legal costs, when the real problem is that it is the level of the costs that is excessive.
Ordinarily, in cases where legal costs are excessive, the problem may be met by an appropriate process of assessing the legal representative's costs. That process is available in family provision proceedings, and its availability will provide encouragement for legal advisers to moderate the costs that they incur. However, it is a process that occurs, if at all, after judgment. Its availability does not solve the problem that the Court faces from time to time, when it has to decide finally the provisions that will be made as between all just claimants against the estate, and when the amount available for distribution appears to have been reduced excessively by the amount of the costs that will be charged to the parties.
It must also be recognised that the usual rule that the legal costs will be paid out of the estate should act as a brake on excessive legal costs being incurred because the parties, if rational, should appreciate that the more that the battle causes them to drive up costs, the likelihood is the less that will be available to all contestants for ultimate distribution between them.
In extreme cases s 99 of the Civil Procedure Act 2005 (NSW) permits the Court, of its own motion, to deprive a legal practitioner, in cases where costs have been incurred without reasonable cause, in circumstances for which the legal practitioner is responsible, of the entitlement to be paid those costs, or, where appropriate, to order the legal practitioner to pay the costs.
I do not suggest in the present case that the circumstances might justify the engagement of s 99.
In fact, the case appears to have been professionally prepared, and immediately before the hearing, counsel for both parties agreed upon a joint memorandum that reduced the amount of evidence that each party would rely upon, which consequently reduced the necessary hearing time, and may have been responsible for the hearing being completed in one day. Furthermore, counsel agreed that they would not cross-examine identified witnesses, and their failure to ask questions would not be held against them. Counsel conducted the hearing with admirable efficiency.
I am therefore faced with the reality that I do not wish my comments to be taken as critical of any of the parties' legal representatives, but I am still left with the strong impression that the legal costs on both sides are too high, and that they are disproportionate to the value of the estate and the nature of the issues in the proceedings.
It is not practicable for the Court to act as the regulator of the level of costs that legal representatives charge the parties in family provision matters. The Court takes the steps that it can during the case management process, and the formal procedures for assessment of costs are available to the parties. Moreover, the Court must recognise that the cause of apparently excessive costs may be the passion of the litigants as much as the enthusiasm of the lawyers. Issues of legal professional privilege will often intrude into any attempt by a trial judge to monitor the costs that are incurred, and are likely to make the exercise futile. The limitations on the information that is available to the Court create the risk that, if it intervenes of its own motion in relation to the amount of the legal costs that the parties have been charged, it will risk acting inconsistently from matter to matter, so that it would be unwise and impracticable for the Court to act as a policeman in relation to costs.
The question remains: what is the Court to do when, albeit superficially, it appears to the Court that the costs incurred by the parties are higher than they should be?
My answer to that question is that I will simply require the relevant legal representatives to appear before me, after judgment, to provide an appropriate explanation for the costs that have been incurred. If authority is needed for that course of action, I will rely upon the use of the word "cheap" in s 56(1) of the Civil Procedure Act. I will make an order to that effect in the present case. As the Court will take this step of its own motion, I will not make directions as to steps that the parties should take before the proceedings are relisted before me. I propose to hear the parties as to costs, and invite their legal representatives to say what they wish concerning the amount of legal costs that have been incurred by the parties.
The exercise will not involve mere inquisitiveness on my part. The orders that I will make will involve three of the beneficiaries under the will sharing equally in the amount that remains from the net estate after the payment of legal costs and the sums which Daria, Andrew and Halyna will receive. It is those three beneficiaries who have a real interest in the matter, as, if any of the legal costs are greater than they should be, it will be those three beneficiaries who suffer accordingly. For my own part I am likely to be less passive in accepting apparently high legal costs where the burden of those costs will fall on beneficiaries under the will whose interests in the proceedings, while protected by the executor, are not the subject of independent representation. The Court should be prepared in appropriate cases, at least in a guarded way, to intervene as, where the estate is relatively small, it will be difficult for the parties to justify initiating a formal assessment of legal costs for the benefit of beneficiaries who have a relatively small stake in the outcome.
The legal representatives of the parties in family provision applications should never lose sight of the possibility that they will be called upon to justify, albeit in broad terms, the amount of their costs as a proportion of the value of the estate.
I propose in due course to make the following substantive orders: 1. Having found that the plaintiff, Daria Magur, is an eligible person and that the making of no provision for her in the will of the deceased was inadequate for her proper maintenance or advancement in life, order that provision be made in favour of the plaintiff by way of payment of the sum of $170,000 out of the estate of the deceased. 2. Order that the burden of the provision made for the plaintiff should be borne equally by the share of the estate passing to each of the beneficiaries Elke van Ewyk, Nadya van Ewyk and Oliver Brydon.
I will defer actually making the orders until I deal with the issue of costs. The parties may comment on the form of the proposed orders if they wish.
I will stand the matter over to a date that is convenient to the parties and to the Court to deal with the outstanding questions concerning the costs of the proceedings.
I order that the exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.

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: 05 March 2015

Civil Procedure Act 2005(NSW)ss 56(1), 99

Succession Act 2006(NSW)ss 3, 57(1)(c), 58(2), 59, 60(2)

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