Megerditchian v Khatchadourian

Supreme Court of NSW|2019-11-19|Before: Parker J

Judgment (issued 27 December 2019)

This is a family provision application under the Succession Act 2006 (NSW). The plaintiff, Vanoush Megerditchian, seeks provision out of the estate of her late father, Souren Mihran Khatchik Khatchadourian, who died in May 2018 at the age of 91. For convenience and without disrespect I will refer to the parties and the members of their families, apart from the deceased, by their Christian names.
The deceased was married to Archaluis Khatchadourian, who predeceased him. They had two children, both of whom are still alive. The elder is their son Hampartzoum Khatchadourian. The younger is their daughter Vanoush.
The deceased's last will was made in 2007. Under that will, the deceased left a legacy of $10,000 to Vanoush and the rest of his estate to Hampartzoum. Hampartzoum was appointed as the executor.
At the time he made his will, the deceased's major asset was the family home, a house in Mowbray Road, Willoughby. The property was originally bought in 1970 in the names of the deceased and his wife Archaluis as joint tenants. The deceased and Archaluis lived there, together with Hampartzoum, and later, Hampartzoum's family, from then onwards.
Archaluis died in 2006. On her death, her share of the Mowbray Road property passed to the deceased by survivorship. Shortly after making his will in 2007, the deceased transferred the property into the names of himself and Hampartzoum as joint tenants. The transfer was a gift from the deceased to Hampartzoum.
On the deceased's death, his share of the property passed (subject to any orders the Court may make in these proceedings) to Hampartzoum. No formal transmission application has been made and the property remains registered in the names of the deceased and Hampartzoum.
The actual estate of the deceased consisted only of approximately $5,000 held in two bank accounts. This amount was insufficient to meet the funeral expenses, which were apparently paid by Hampartzoum. There were no funds to pay the $10,000 legacy to Vanoush under the will.

Issues for determination

The proceedings were begun in October 2018, within the statutory time period. Hampartzoum was named as the defendant. Given the lack of assets in the estate, Hampartzoum had never made a formal application for probate of the deceased's will.
In February 2019 Hampartzoum suffered a brain haemorrhage. Subsequently, the Court made an order that Souren Khatchadourian, Hampartzoum's son, act as his tutor to represent the estate's interests in the proceedings.
Although Hampartzoum had recovered sufficiently by the time of the trial to give evidence before me, he continues to be affected by the haemorrhage. Souren continued as his tutor for the purpose of conducting the proceedings and representing the estate.
Vanoush is now 70 years old, and a widow. She contends that she is entitled to a provision of between $975,000 and $1,320,000. Given the lack of funds in the estate, she seeks an order designating a half share of the Mowbray Road property as notional estate under the Succession Act, Part 3.3. In fact, a half share of the property is worth between $900,000 and $950,000, and thus represents an upper bound to what the Court could award in her favour.
There is no dispute that Vanoush is an "eligible person" for the purposes of the application: Succession Act, s 59(1)(a). The first question raised by the application is whether the provision made by the deceased for Vanoush is not "adequate" for her "proper maintenance, education or advancement": s 59(1)(c). If I am satisfied that it is not, I must decide what provision, in the circumstances, "ought to be made" for Vanoush: s 59(2).
Finally, I must consider whether to make an order designating as notional estate a half share, or some lesser portion, of the Mowbray Road property. The parties agree that, even if I consider that some further provision should prima facie be made for Vanoush, whether to designate the property as notional estate to meet that provision gives rise to its own separate considerations.

Chronology of key events

The deceased was born in December 1926. He and Archaluis married in 1946 or 1947 in Cairo, where they lived until migrating to Australia. Hampartzoum was born in May 1948. Vanoush was born in June 1949.
In 1969 the family (together with Archaluis' mother) migrated to Australia. At the time Hampartzoum was 20 or 21 and Vanoush was 19 or 20. The members of the family arrived several months apart. There was some disagreement between Vanoush and Hampartzoum in their affidavits about who came at what time, which it is unnecessary to resolve.
The Mowbray Road property was bought in 1970. At that stage the house had two bedrooms. Archaluis and the deceased slept in one bedroom, and Vanoush and her grandmother slept in the other. Hampartzoum slept in the sunroom.
In late 1970, or early 1971, Vanoush decided to marry Vrej Megerditchian. Their engagement party was hosted by the deceased and Archaluis at the Mowbray Road property, and they married in August 1971. After the wedding (or perhaps slightly before), Vanoush moved out of the Mowbray Road property to live with Vrej and other members of his family. Later Vrej and Vanoush established their own household. They had two children: a son, Ara, born in July 1972, and a daughter, Taline, born in March 1975.
It seems that the deceased and Archaluis had been opposed to Vanoush marrying Vrej. An open rift later developed between Vanoush's family and the deceased's family. The evidence on this is fragmentary and somewhat conflicting; I discuss it in more detail below.
The deceased had worked as a diamond cutter in Cairo before migrating to Australia. Once in Sydney he established a gem cutting workshop in the CBD. In about 1972 the deceased, Archaluis and Hampartzoum opened a jewellery shop as partners. The business was called Echo Diamonds and the shop was located in Chatswood.
In about 1981, Hampartzoum married his wife, Marlene, whom he met while on holiday in Lebanon. Marlene migrated to Australia and moved in to the Mowbray Road property with Hampartzoum and his parents.
Hampartzoum and Marlene have two children. Their son, Souren, was born in 1983 and their daughter, Mary, was born in 1984.
The house at Mowbray Road was later renovated and extended, resulting in the construction of three additional bedrooms, a bathroom and laundry. According to Hampartzoum, this work was done in about 1992. Hampartzoum said that the cost was shared between the deceased, Archaluis and himself. He said that he and the deceased did some of the labour themselves. This evidence was not challenged.
In 1997 the deceased, Archaluis and Hampartzoum shut down the Echo Diamonds business because the shop from which it operated was to be demolished. The deceased (who would then have been about 70) and Archaluis retired. Hampartzoum found other work.
Souren turned eighteen in 2001, and Mary turned eighteen in 2002. Both of them continued to live at the Mowbray Road property with their parents and grandparents. They still live there today. Neither of them is married.
In 2005 or early 2006 Archaluis was diagnosed with a brain tumour. She was hospitalised for an operation, returned home, but then later went into palliative care. She died in November 2006. During her illness, she was cared for by the deceased, Hampartzoum, Marlene, Souren and Mary.
At the time of Archaluis' death, the deceased was almost 80. In 2012, he had a fall, after which his mobility was limited. Hampartzoum, Marlene, Souren and Mary provided the additional care that was required. The deceased eventually died in May 2018.
Vanoush's children Ara and Taline are now in their forties. Ara is a mortgage broker and property investor. Ara married his wife, Noushig, in the late 1990s. They had two children in the early 2000s.
Taline works as a communications director and also invests in property. She is unmarried and has no children.
Vrej died in February 2017. For the last twenty years of his life, he was in poor health. Since 2005 or 2008 (the evidence on the point is contradictory) Vanoush has lived with Taline.

Witness evidence

Vanoush was the main witness in her case. Evidence was also given by Ara and Taline. Each of them was cross-examined, Ara and Taline less extensively than Vanoush.
In final submissions, counsel for Hampartzoum attacked Vanoush's credit. Part of the attack concerned her alleged non-disclosure of an interest in the family trusts controlled by Ara. For reasons which I give below, I do not accept this criticism. But there were further aspects of Vanoush's evidence which raised some concerns.
One of the factual issues in the case concerned the nature and extent of past financial and property dealings involving Vanoush and members of her family. I was left unsure about how much Vanoush knew about these dealings at the time, but on one point (concerning the proceeds of the Altona Avenue property: see [114] below) she was contradicted by Ara and Taline and I am satisfied her evidence on that point was incorrect. Overall, I do not know whether I received a full account from her on this issue.
In her affidavit evidence Vanoush made allegations against the deceased of heartless behaviour towards her, almost amounting to mistreatment, when she was a girl. In the face of contradiction of these allegations by Hampartzoum, Vanoush's counsel did not ask me to make any findings on them. Although the end result was to leave the allegations unproven rather than disproved, this did not inspire confidence. Vanoush's account of the later family rift omitted some potentially significant details attested to by other witnesses.
Vanoush had a general tendency in cross-examination to try to interrupt and cut off the questions that she was asked. Her evidence may not have been consciously incorrect but I got the impression that she was more focussed on saying what she thought would advance her case than in searching her recollection and relaying the full detail of what she could recall. One example of this referred to in the judgment is Vanoush's evidence under cross-examination about a pendant the deceased made for her in about 2006 (see [73] below).
For all of these reasons, I have reservations about the reliability of Vanoush's evidence. I am not inclined to accept it where it is not corroborated by other evidence.
Counsel for Hampartzoum made a similar attack on Taline concerning her interest in Ara's trusts as they made on Vanoush. Counsel also suggested that Taline had been reluctant to disclose financial information. I consider that there is nothing in these criticisms. No other challenge was made to Taline's evidence. There was no attack on Ara's evidence.
Marlene, Hampartzoum and Mary gave evidence by affidavit for the defence. Marlene and Hampartzoum were cross-examined. Counsel for Hampartzoum had foreshadowed that he might experience some difficulties in cross-examination as a result of his brain haemorrhage. But although Hampartzoum spoke very slowly, he seemed able to respond to the questions and to deal with them. In final submissions, no attack was made on his credibility or that of Marlene. Mary was not required for cross-examination.
As is usual, the events which were the subject of the proceedings go back many years and it is not to be expected that any of the witnesses would necessarily have had perfect recall of every detail. But subject to that limitation there is no reason not to accept the evidence of Hampartzoum, Marlene, Ara and Taline, so far as it goes.

Deceased's assets and testamentary intentions

According to Hampartzoum, when the Mowbray Road property was bought in 1970 it cost $20,000. Hampartzoum said that initially his father paid for maintenance, expenses, rates and other outgoings on the property, but that he took over paying these expenses in about 1972. There was no historical search of the property in evidence so it is unclear whether the purchase of the property was financed with a mortgage. If it was, the mortgage debt must have been repaid by 2007 at the latest when the property was transferred into the joint names of the deceased and Hampartzoum.
In his affidavit, Hampartzoum said that, as well as outgoings, he paid for all of the household groceries from 1971 onwards. But in cross-examination he spoke of expenses being shared. The picture which ultimately emerged was of a family living together and pooling their resources so as to meet living costs and individual expenses according to need. For instance, shortly before the deceased died he transferred a small holding of shares worth a few thousand dollars to Mary. Mary gave evidence that she had previously provided money to her parents when they needed it, and in transferring the shares to her the deceased was returning the favour at a time when she was in some need.
Archaluis' last will is in evidence. It was made in February 1985, about fourteen years after Vanoush left the family home to marry Vrej. At the time Archaluis' assets would presumably have consisted of her share of the Mowbray Road property.
In the will, Archaluis left a legacy of $10,000 to Vanoush, and the residue of her estate to the deceased. In the event that the deceased predeceased her, Hampartzoum was to receive the residue of her estate. Archaluis appointed the deceased as sole executor, or, should he not accept the appointment, Kevork Pezikianm, a friend.
There was no evidence about how much the deceased, Archaluis and Hampartzoum earned from the jewellery business while it was operating. Nor was there any evidence about whether there was any cash surplus when the business was closed down in about 1997. Certainly it seems that neither the deceased nor Archaluis ever had any substantial property or share investments. After the business closed down, both the deceased and Archaluis went on the age pension.
In an affidavit sworn in February 2019, Vanoush gave evidence that the deceased kept several "cases" of gold, gemstones and cash in a wardrobe at the Mowbray Road property, the value of which (as estimated by her) was in the hundreds of thousands of dollars. She said that for some reason the deceased did not like to deposit such assets with a bank. Her evidence did not contain any explanation of where the assets had come from.
Vanoush said that other members of the family were aware of the deceased's collection of gold, gemstones and cash. On her account it was actually Archaluis who showed her the "cases" in the wardrobe. Vanoush also recounted a conversation with Mary in late July 2018 in which she said that she proposed to Mary that Hampartzoum use the collection to satisfy her claim on the estate.
Vanoush's evidence about the deceased holding a collection of gold, gemstones and cash only emerged in her affidavits in reply, by way of response to Hampartzoum and Marlene's evidence of their assets. It was not put to Hampartzoum or Marlene in cross-examination and in final submissions counsel for Vanoush did not seek any finding that any such collection existed. This leaves me with little confidence in the assertion itself and no proper basis to act on it. In the circumstances, I have disregarded Vanoush's evidence on the point.
I have already referred to the terms of the deceased's 2007 will. The will was dated 30 May 1997. This was only nine days before the transfer of the Mowbray Road property into the joint names of the deceased and Hampartzoum, which was dated 8 June. The stamp duty on the transfer was approximately $11,000; there was no evidence as to who paid it. I assume it would have been Hampartzoum as he was the person benefiting from the transfer and he was still in employment at the time.
The transfer recorded the receipt of a consideration of $350,000. In his oral evidence Hampartzoum stated, however, that no money changed hands, and the transfer was a gift.
According to Hampartzoum, the transfer was the deceased's idea. Hampartzoum said that the deceased told him: The house is yours, no one can touch it.
There was an element of redundancy involved in making a will under which Hampartzoum was to receive the residue of the deceased's estate, and at the same time transferring a half share in the property to him as joint tenant. Be that as it may, the deceased's intention was clearly that on his death his half share of the Mowbray Road property would pass to Hampartzoum.
It may be that the deceased's plan went back well before 2007. There is a clear parallel between the deceased's 2007 will and Archaluis' 1985 will. But if the deceased did make an earlier will in favour of Hampartzoum, the evidence does not reveal it.
There is also no evidence about whether, at the time the will was made, the deceased even had $10,000 to meet the legacy to Vanoush. As I have mentioned, the deceased transferred a shareholding (valued at $3,000) to Mary shortly before his death, and at his death his only assets were the contents of two bank accounts totalling approximately $5,000.
On the first day of the trial I was informed that on the preceding Friday the solicitors for Hampartzoum had written to the solicitors for Vanoush indicating that he would make an "ex gratia" payment of $10,000 to her on account of the legacy in the deceased's will. I was told on the second day of the hearing that the payment would be made within seven days, and I assume that it has now been made.

Relationship between Vanoush and the deceased

In her initial affidavit, Vanoush stated that at no time during her life did the deceased ever give her any material or emotional support. She said that the deceased would buy presents for Hampartzoum but never for her, and that when she was about eight years old she asked for help with her arithmetic homework whereupon he refused and beat her. She said that the deceased told her that she had to do chores in order to cover the cost of the food that she consumed, and that when she was married she would receive no further financial assistance, nor would she receive an inheritance.
Vanoush also said that the deceased refused her offer to contribute to the cost of Archaluis' funeral in 2006. In a further affidavit in October 2019, Vanoush added that she was not informed of the legacy given to her under Archaluis' will, and did not receive anything from Archaluis' estate. The same was so for the deceased's estate until the recent "ex gratia" payment.
In her initial affidavit, Vanoush referred to the opposition by the deceased and Archaluis to her marriage to Vrej. According to Vanoush, she was compelled to leave the family home shortly prior to the wedding, but permitted to return four days later.
Vanoush said that the deceased never acknowledged her children. According to Vanoush, after they were born she asked for help to look after them and the deceased said that Archaluis would only take care of any children her brother might have. He also refused to pass on his knowledge of gem cutting to her or her children. Indeed, according to Vanoush, the deceased never demonstrated any interest in having contact with her children or their children (Vanoush's grandchildren).
Vanoush stated that despite the deceased's attitude she sought to maintain a relationship with him. She said that she saw him from time to time in her car, and would offer him a lift which he often accepted; although she said that when they would arrive at the Mowbray Road property, the deceased would never invite her in. Vanoush also said that during the deceased's time in hospital prior to his death she visited him regularly.
In a reply affidavit sworn in February 2019, Vanoush repeated this evidence. She added that she had never severed her relationship with her mother. Vanoush said that when her mother was hospitalised in 2005 or early 2006 she visited her in hospital almost every day. She said that after her mother was discharged, she also visited her mother at home with Ara's elder daughter (Vanoush's granddaughter and Archaluis' great-granddaughter) on one occasion, but was never invited to visit again.
Vanoush said that some time later she was telephoned by Marlene, who said that Archaluis could not move, and that she went to the Mowbray Road property to help with the ambulance. Vanoush added that, shortly before her mother's death, she and Vrej visited her mother in hospital and Archaluis said to Vrej that she was "very sorry for the way we have treated you. Please forgive me".
Vanoush said that when her father was in hospital following his fall in 2012, she insisted that her children visit him. She said that on one occasion Ara brought his children for them to meet their great-grandfather for the first time. She said that the deceased was fully conscious but remained unresponsive, not saying a single word to any of them during the visit.
Ara gave evidence that he asked his grandfather to be taught about cutting gem stones, but was rebuffed. He also recounted the hospital visit in 2012, although on Ara's account those who visited were Taline and himself; he did not mention his children.
In her evidence, Taline described a visit to the Mowbray Road property in about 2004 organised by Vanoush, Marlene and Archaluis. She said that the deceased was there but ignored Vanoush, Ara and herself, and that Hampartzoum eventually, albeit unwillingly, entered the room but also ignored them. Taline said she has never visited the Mowbray Road property since.
Taline also referred to the 2012 hospital visit in her evidence. She said that she was present with Vanoush, Ara and his children at the hospital. In Taline's recollection, her cousins, Souren and Mary, were also there. She said she tried to kiss her grandfather but he did not respond and made no meaningful conversation either with her, Ara or Vanoush.
In his affidavit, Hampartzoum confirmed that the deceased had opposed Vanoush's marriage to Vrej. Hampartzoum attributed this to the fact that Vrej was considerably older than Vanoush (in fact, almost as old as Archaluis, Vanoush's mother). Hampartzoum also referred to some disrespectful conduct at the engagement party which was held at Mowbray Road about five months before the wedding (Vanoush denied any such disrespectful conduct on Vrej's part). Hampartzoum said that he and his parents attended the wedding but did not attend the reception.
Contrary to Vanoush's account of the days prior to her wedding, Hampartzoum presented Vanoush as having left the family home by her own choice. But on his account contact continued after the wedding; indeed Hampartzoum said that the deceased assisted Vrej and Vanoush in their coffee shop business (see [92] below) with advice and assistance in dealing with the landlord. Hampartzoum also said that Vanoush and her family would regularly visit the Mowbray Road property prior to the rift arising between the two families.
On Hampartzoum's account, the rift arose at some point in the mid to late 1990s, which he said was around the time that Ara got married (although it had nothing to do with Ara's marriage). He said that he did not know the full story but recounted an incident at the Echo Diamonds shop when Vrej said to the deceased and Hampartzoum that they were "just waiting for the apple to fall". Hampartzoum said that his father was very offended by this comment.
In her affidavit, Marlene said that prior to 1997 Vanoush would regularly visit Mowbray Road with her family, but that she stopped visiting at about that time. She said that Ara occasionally picked the deceased up at Chatswood and dropped him off at Mowbray Road, and that this continued to happen occasionally after the deceased had his fall in 2012. She said that on the last occasion that Ara dropped the deceased off, he came inside for a coffee. The implication was that he was free to do so and the fact that he had not visited before was his own choice.
Marlene also referred to an occasion "about fifteen or sixteen years ago" when the deceased made pendants for each of herself, Mary and Vanoush. She said that this was when her mother-in-law was still alive.
Mary also said in her affidavit that her and Vanoush's family would visit each other regularly before Ara's wedding. In particular, the deceased, along with the rest of the Mowbray Road household, attended a New Year's Eve party at Vanoush's house every year. They also attended Ara's wedding. She said that then in about 1996, when she was in primary school, Vanoush and her children stopped talking to her and the family, and also stopped visiting.
Mary confirmed that when Vrej died, the deceased, along with the rest of the family attended the funeral. But despite the rift which had developed between the families, Mary said that she did resume contact with Vanoush. She said she spoke to Vanoush frequently after Vrej's death. When the deceased died, Mary said that she called Vanoush and told her the news. She said that Vanoush appeared to show no emotion whatever, and this surprised her.
In reply, Vanoush disputed the conversation about waiting for the apple to fall. She said that instead the conversation concerned a request from Hampartzoum to borrow money from the deceased to buy a car. She said that she and Vrej relayed the request to the deceased and the deceased was upset with them about it. This was odd, because the supposed loan would have been between the deceased and Hampartzoum, so there would have been no reason for Vrej and Vanoush to intercede, and no reason for the deceased to be irritated with them, rather than Hampartzoum, if they did.
In cross-examination, Vanoush was asked about Marlene's evidence about the deceased making her a pendant. Initially Vanoush appeared reluctant to accept that the deceased had done this. But in the end she accepted that she was present at the hospital with Archaluis when the deceased brought her a pendant. She presented this as something done by the deceased at Archaluis' request, the implication being that the deceased did it for Archaluis rather than for Vanoush herself. Overall I thought her evidence on this subject was somewhat evasive and her demeanour somewhat defensive.
Conclusions: Counsel for Vanoush did not cross-examine any of the defence witnesses on the differences between her account and their accounts of the rift between the two families. Apart from asking about the pendant, counsel for Hampartzoum did not cross-examine on the subject either. This, together with the fact that the witnesses did not fully join issue with each other on all aspects of the evidence, makes it difficult to reach comprehensive conclusions about the relationship between Vanoush and the deceased.
As already noted, Vanoush gave evidence by affidavit that the deceased treated her in a degrading way as a child, but this evidence was contradicted by Hampartzoum and he was not challenged on the subject in cross-examination. When I raised this with counsel for Vanoush in final submissions, he accepted that he could not ask me to find that Vanoush's allegations were established, and I have not considered them for the purposes of my conclusions.
It is common ground that the deceased did not approve, at least initially, of the marriage of Vrej and Vanoush. But on Vanoush's own evidence, the disapproval was not limited to the deceased; her mother, Archaluis, also did not approve of the marriage.
Vanoush's claim that she was asked to leave the family home before the wedding was contradicted by Hampartzoum who was not challenged on the point in cross-examination; again I cannot be satisfied that Vanoush was correct. In her evidence Vanoush did not mention any further contact with her parents or Hampartzoum, or, later, Hampartzoum's family, thereafter. But other witnesses' evidence was to the effect that contact continued. Regular visits between the two households were attested to by Marlene and Mary, as well as Hampartzoum, until a rift developed around the time of, or after, Ara's wedding in the late 1990s. Mary's evidence clearly presented the cutting off of contact as coming from Vanoush's side of the family. None of this evidence was challenged by way of cross-examination.
In my view the failure to challenge Mary's evidence is of particular significance, since on Vanoush's own evidence she maintained (or resumed) contact with Mary and they remain friendly. It is notable that neither Ara nor Taline suggested that there was no contact at all between themselves and the members of the Mowbray Road household, before the rift emerged in the second half of the 1990s.
In these circumstances I think I must conclude that there was some socialisation between the two families after Vanoush and Vrej had established their own household, and it was only later that contact was completely severed. Indeed Vanoush herself in other parts of her evidence appeared to accept that this is what happened. Of course this does not mean that the relationship before the rift arose was necessarily a close one: Vanoush's parents' initial disapproval of the marriage may well have created an ongoing chill.
Vanoush's evidence of the "silent treatment" the deceased gave her was corroborated by Ara and Taline. None of them was asked about this in cross-examination. On Taline's evidence, the silent treatment was witnessed by Souren and Mary, but Mary said nothing about it in her affidavit. The state of the evidence is not very satisfactory but on balance I am inclined to accept what Vanoush, Ara and Taline said.
Clearly the rift was, or became, mutual between the deceased and Vanoush. But this still leaves two important questions to be considered: what triggered the rift and whether any steps were taken on either side to heal it.
As to who was responsible for the rift, I am not satisfied that Vanoush's explanation concerning the supposed loan to Hampartzoum to buy a car (see [72] above) is correct. It does not make much sense. I think it is more likely that the immediate cause of the rift lay in some comment made by Vrej which was offensive to the deceased, such as that recounted by Hampartzoum (see [67] above).
As to the continuation of the rift, I am satisfied that the deceased did indeed make a pendant for Vanoush in 2005 or 2006. I find it impossible to say whether this was only because of a request from Archaluis, as Vanoush suggested. There is no independent evidence to corroborate Vanoush's evidence that Archaluis regretted, and apologised for, the way in which Vrej had been treated. I am not prepared to accept Vanoush's word alone on this point. The same may be said of Vanoush's evidence that she offered the deceased occasional car rides home. It was not clear what period of time Vanoush was referring to and it does not sit comfortably with other evidence of what happened during the rift.
The evidence that the deceased and his family attended Vrej's funeral was not challenged. Nor was Mary's evidence of Vanoush's coldness on hearing of the deceased's death. This is difficult to reconcile with the idea that Vanoush remained fond of the deceased and wished to heal the breach with him.
In final submissions counsel for Vanoush suggested that the real rift may have been between the deceased and Vrej, with Vanoush being dragged into it by being forced to take sides. The suggestion was plausible, but it is not a proper basis upon which the Court can make findings. If this is what happened, Vanoush should have given evidence about it.
In the end, the evidence is simply too incomplete to allow the Court to make any reliable findings on the precise course of events and who was responsible for the breakdown of Vanoush's relationship with the deceased. In particular, I am not satisfied that the breakdown was solely the deceased's responsibility.

Vanoush's family life and financial history

After (or perhaps before) Vanoush and Vrej were married in August 1971, Vanoush moved into a house in Artarmon Road, Willoughby, where Vrej and other members of his family lived. The other members of the household were Vrej's mother and father, Nouritza and Aharon; Vrej's brother Vasken; and his sister Varsenig. The property had been bought the previous November by Aharon, Vrej and Vasken, with each owning a one third share.
In February 1974 the household moved to a house in Wyalong Street, Willoughby. That property was also purchased by Aharon, Vrej and Vasken in equal shares. The Artarmon Road property was rented out.
In 1975 Taline was born and Vasken married his wife Eugenie. The Wyalong Street property could no longer accommodate the now expanded household, and Vrej, Vanoush and their children moved back to Artarmon Road. The Wyalong Street property became Vasken and Eugenie's family home. The evidence does not identify where Aharon, Nouritza and Varsenig lived after that.
Vanoush said that in later years, whilst Ara and Taline were in primary school, she assisted her parents at the Echo Diamonds shop on Tuesday mornings. Vanoush said she did this in response to a request from her mother to allow Hampartzoum some time off, and she was not paid.
In June 1985, Aharon died; his interest in the Wyalong Street property passed to Vasken and his interest in the Artarmon Road property to Vrej. Vasken and Vrej retained their one-third shares in the other's property. This left the Artarmon Road property owned by Vrej as to two-thirds and Vasken as to one-third; the Wyalong Street property was owned by Vasken as to two-thirds and Vrej as to one-third.
At some time after their marriage, Vanoush and Vrej, together with Vasken, borrowed $18,000 to finance the purchase of a coffee shop business. The business operated profitably until a shopping centre opened nearby. Vanoush and Vrej later sold the business. They then purchased a service station business and operated it together with Ara. It is not clear whether this is a complete catalogue of Vrej's and Vanoush's work history. Vrej and Vasken were said to have had closely intertwined business interests, but there was nothing in the evidence about what this involved apart from the properties they owned together and Vasken's involvement in the coffee shop.
In 1994 Vanoush went on the Centrelink disability pension. She also received an award of compensation of $26,000 for a workplace injury at about this time. Vrej went on the age pension two years later, in 1996. Vanoush went on the age pension in 2011.
In 1998 Vrej was diagnosed with cancer of the nasal cavity. As a result of chemotherapy, his balance and mobility were progressively impaired, he lost hearing and was unable to work by 2002 (if not before). Vanoush, Ara and Taline each assisted with his care and transport to medical appointments. Vrej later suffered several strokes.
Ara lives with Noushig and their children in a house on Kens Road, Frenchs Forest. It seems that they moved to the house in the late 1990s (presumably after their wedding). About the same time Taline bought a unit in Mowbray Road, Chatswood, and it appears she lived there until moving into rented accommodation with Vanoush in 2005 or 2008 (see [99] below).
In February 2002 the Artarmon Road property was sold to Ara and Taline for $700,000. In March Vrej and Vanoush purchased a new house at Altona Avenue, Forestville. The purchase was financed from the proceeds of the Artarmon Road property and approximately $500,000 in further finance (apparently an advance from Vasken). In December a further loan was taken out to repay Vasken and renovate the property to make it suitable for Vrej's ailing health.
In April 2003 Vrej transferred his one third share of the Wyalong Street property to Vasken's wife Eugenie for $273,400. The evidence did not identify what happened to the proceeds, nor was this explored in cross-examination.
In March 2008 Vrej and Vanoush sold the Altona Avenue property for $725,000. Distribution of the sale proceeds was an issue at the hearing; I deal with this further below.
Vanoush's and Vrej's living arrangements after about 2005 are somewhat unclear on the evidence. In her affidavit Vanoush said that she has lived in rented accommodation with Taline at Brown Street, Chatswood, since 2005. But in his affidavit Ara said that Vrej lived at Altona Avenue until its sale in 2008. In cross-examination, Vanoush accepted that Altona Avenue was Vrej's and her family home until it was sold in 2008. There is no evidence about where Vrej lived between when Vanoush moved in with Taline (in 2005 or 2008) and his death in February 2017.
Megerditchian family financial arrangements: Vanoush gave some evidence of a general nature about the family finances, and in particular about dealings between Vrej and Vasken. When questioned in cross-examination about her sources of financial support prior to 2011, Vanoush responded: A. Before then, of course that was my husband. We borrowed money on the house and then my husband support this way.
Vanoush said that as a result of Vrej's ill health, Vrej's and her financial position "suffered irreversibly" and as a result, Vrej and Vasken undertook a "financial restructuring" in 2002 and 2003 (this was when the Artarmon Road property was sold to Ara and Taline and Vrej's share of the Wyalong Street property was sold to Eugenie).
Vanoush's evidence was that she did not know the details of the dealings between Vrej and Vasken, but she continued: I do know that that brothers discussed and agreed on their financial positions by adjusting (plus or minus between themselves) the value of any assets and interrelated party loans maintained between them especially.
According to Vanoush, when Vrej died it proved impossible to unravel the history of his dealings with Vasken. Vasken has not been able to provide further detail as he suffers from dementia (presumably Eugenie was also unable to help).
Joint property ventures of Ara and Taline: The evidence shows that Ara and Taline, separately and together, have been involved in a number of property transactions, supported by mortgage finance, over the years. As already noted, they bought the Artarmon Road property from Vrej and Vasken in February 2002. Initially they seem to have rented the property out. In the early 2000s, together with Vrej and Vasken's sister Varsenig, they bought a commercial property at Lime Street, Sydney for $862,500. The property was sold for $980,000 in October 2005.
In or around 2011, Ara and Taline redeveloped the Artarmon Road property into a duplex with two separate residences. The property is now said to be worth approximately $4 million and carries a loan of $2.7 million. It generates approximately $1,500 in weekly rental income each for Ara and Taline.
Banking arrangements: In her oral evidence, Vanoush said that she and Vrej each maintained passbook accounts with the St George Bank. It appears that these accounts were used for pension receipts, and for payment of living expenses.
In evidence were documents produced by the National Australia Bank ("NAB") concerning a portfolio of loan facilities held by the members of Vanoush's family between December 2002 and November 2008. The facilities were jointly held in the names of Vrej, Vanoush, Ara, Noushig, and Taline. They operated as lines of credit, and were secured against the Altona Avenue property.
The first facilities recorded in the documents were two loan accounts, each with a limit of $290,000. The loan account statements were addressed to Taline's unit at Chatswood until June 2004, and thereafter to Ara and Noushig's home at Frenchs Forest. In late May 2005 the two accounts were rolled into a single loan account with a limit of $580,000. The statements for this account were likewise sent to Ara and Noushig.
The account statements contain a number of entries which appear to relate to property transactions (including the acquisition and sale of the Lime Street property, see [104] above). They also record deposits of rental income from the Artarmon Road property, which was owned by Ara and Taline at the time. Presumably Ara and Taline were responsible for operating the accounts and paying the interest.
Altona Avenue proceeds: The distribution of the proceeds of sale of the Altona Avenue property in 2008 attracted particular focus at the hearing. In her evidence Vanoush spoke of some of the proceeds being used for alterations to the house to accommodate Vrej's disabilities, the purchase of two cars, and two holidays for herself and Vrej. She also spoke of Vrej owing $350,000 to Vasken, but said she did not know the details.
The proposed settlement schedule for the sale of the Altona Avenue property is in evidence. It records that out of the proceeds of settlement payments were to be made of $590,000 to the NAB; and $57,800, representing the balance of the proceeds after payment of legal fees, council and water rates, to Ara and Taline.
The proposed payment of $590,000 to the NAB may be compared with the Megerditchian family loan facility limit of $580,000. Amounts were credited to the loan accounts at the time of the settlement but they do not reconcile to a figure of $590,000. Cross-examination of Ara and Taline on this issue was inconclusive. Both said they did not recall what had happened. Ara maintained that the credits could be transfers from other accounts. He alluded to a wider portfolio of accounts which he said was managed "as a whole".
Nor is it possible to identify in the NAB statements the $57,800 in settlement proceeds. On the face of it, Vrej and Vanoush, as owners of the property, would have been entitled to the proceeds after repaying the bank debt. But Ara and Taline accepted that the money was paid to them in accordance with the proposed settlement schedule. It was explained that $75,000 had been previously been made available to Vrej and Vanoush, which derived in some way from the Lime Street property, and the $57,800 was paid to Ara and Taline by way of recompense for this.
Vanoush accepted that the $57,800 was paid by way of bank cheque to her children, but she said it was then paid back by them to her and Vrej and deposited into her St George account (the statements for which were not in evidence). She maintained this assertion when pressed in cross-examination, but it was inconsistent with the evidence of both Ara and Taline. I accept the submission from counsel for Hampartzoum that Vanoush's evidence on this point was incorrect.
Ara's finances: Ara is involved in two business ventures which are conducted through discretionary family trusts. The trusts are known as the Megerditchian Family Trust and Megerditchian Services Trust.
The Megerditchian Family Trust owns a property in Rockhampton jointly with the Damcevski Property Trust. The Damcevski Property Trust is controlled by Bobi Damcevski, the solicitor who acted on the sale of the Altona Avenue property and represented Vanoush in the proceedings. Mr Damcevski gave evidence that the two trusts trade in partnership; he in fact identified the Damcevski Property Trust as trading in partnership "with Ara".
The Megerditchian Services Trust operates a mortgage brokerage business with Mr Damcevski's brother. The activities and finances of the Megerditchain Family Trust and the Megerditichain Services Trust operations were not otherwise detailed in the evidence.
Taline's finances: Taline appears to have funded her share of the Artarmon Road redevelopment at least in part by selling her unit in Mowbray Road, Chatswood. In 2014 a dispute arose with a builder and Taline sold another unit she owned, in Ellis St, Chatswood, to cover the costs of it. She had purchased the unit in 2007.
In December 2013 Taline purchased a one bedroom unit in Crows Nest. She said in evidence that she had intended to live in the unit, but in fact she decided to lease it and to continue to live with Vanoush. Taline said this was because of the financial stress which she had suffered as a result of the Artarmon Road building dispute and because of "the financial care I provided to my parents". The unit is now valued at $780,000 and carries a loan of $675,000.
The purchase of the unit at Crows Nest raises a number of unanswered questions. If Taline had moved to Crows Nest to live, as she intended, how was Vanoush to be accommodated? The precise role of financial pressures on Taline was also left unclear. Those financial pressures included the effect of the Artarmon Road building dispute. But it is unclear what Taline was referring to when she spoke of the additional effect of "financial care" she had provided to her parents. By this stage the Altona Avenue property had been sold, Taline had been living with Vanoush for several years, and Vrej was alive but where he was living is not revealed by the evidence. It is not obvious what "financial care" Taline would have been providing at the time.

Vanoush's circumstances

Vanoush is now 70 years old. She continues to live with Taline at the unit in Brown Street which they have shared since 2005 or 2008 (see [136] above). Taline earns $126,000 net per annum. Vanoush currently receives an average pension of $890 per fortnight.
Vanoush said that she would prefer to be able to live separately so as not to be a burden on Taline and it was clear from Taline's evidence that she would prefer that. But at the same time Taline said she would not terminate the sharing arrangement if that would leave Vanoush with nowhere to live.
In 2017 Ara lodged an application to undertake building work on his house at Frenchs Forest. In cross-examination, he refuted the suggestion that this was to provide accommodation for Vanoush (and in any event it appears that the application was not pursued). At the same time Ara accepted that he would house Vanoush, should it be necessary.
Vanoush continues to use an account with St George Bank for her pension receipts and savings. Her evidence was that her monthly living expenses exceed her income; that she receives financial assistance from her children, especially Taline; and that from time to time she dips into her savings to cover the shortfall. Vanoush said she resorts to her savings very reluctantly, having no means of replenishing them.
Vanoush's other assets consist of a car worth $7,000, $1,500 in cash and jewellery and personal effects estimated at $6,000. Her evidence was that her health is reasonably good. She is not undergoing any current medical treatment and she is not aware that of any particular medical treatment that she is likely to need in future.
Both Vanoush and Taline said in their affidavits that they had no interest in any trust. In oral evidence it was confirmed that neither of them has ever received any distributions from the trusts controlled by Ara.

Hampartzoum's family life and financial history

Hampartzoum gave evidence that he arrived in Australia in 1969. During his first two years in Australia, he worked for some time in a printing factory and then for CSR Ltd, a supplier of building materials. Hampartzoum's evidence was that after obtaining his certificate as an electrical fitter, he "gave up his career" to assist the deceased in his CBD workshop, and in the following year they began the Echo Diamonds business together with Archaluis.
After Echo Diamonds closed down, Hampartzoum worked for a year as a sales representative at a jewellery store and then a further year at a petrol station. Until suffering his brain haemorrhage he worked as a part-time warehouse assistant at Chatswood, earning an annual income of about $21,000. Marlene has worked as a child care educator in Lane Cove since about 1995.
Hampartzoum and Marlene own two investment properties, and a half share of another investment property, the other half of which is owned by Mary. The two properties owned by Hampartzoum and Marlene are a unit on Goulding Road, Ryde (bought in October 1998) and a unit on the Great Western Highway, Parramatta (bought in May 2001). The property owned with Mary is on Rita St, Merrylands and was acquired in 2003. All of the properties were "negatively geared" and carry bank finance.
In December 2017, Hampartzoum, Marlene, Souren and Mary began a tow-truck business. In her affidavit evidence, Mary said that Hampartzoum and Marlene contributed $60,000, Souren $17,000 and Mary $20,000. But in cross-examination, Hampartzoum accepted counsel's suggestion that he contributed the $60,000 as a gift to help Souren.
Souren and Mary have lived (and continue to live) rent-free at the Mowbray Road property. Some time after the deceased died in 2018, Mary and Souren contributed approximately $7,000 toward a kitchen renovation at the property.
Lottery prize: Marlene gave evidence in her affidavit that she and Hampartzoum purchased the Ryde property in 1998 after he won a $100,000 lottery prize. But in an affidavit in reply, Vanoush deposed to a conversation with Archaluis (of unspecified date) in which Archaluis said: We won $100,000 in Lotto but we did not want it to affect our pension so we gave the ticket to Hampartzoum so he could buy a property
Counsel for Vanoush raised this issue with Marlene in cross-examination. Marlene maintained that it was Hampartzoum and not Archaluis and the deceased who bought the lottery ticket. Given the lack of challenge to Marlene's credit, there is no reason not to accept her evidence on this point.

Hampartzoum's circumstances

In February 2019 Hampartzoum suffered a brain haemorrhage and was hospitalised for approximately six weeks. In September he was hospitalised for a further two weeks on account of an infection. In her updating affidavit of October 2019, Marlene said that following the brain haemorrhage Hampartzoum has required a degree of assistance at home and, although still able to undertake basic tasks independently, is unable to use a computer or manage finances.
In Marlene's view, Hampartzoum is unlikely to work again given his current cognitive capacity and memory, and may require professional in-home care in the future. Marlene continues to work in a full time capacity at Lane Cove (see [128] above) and currently earns an annual salary of $40,000.
In her affidavit of October 2019, Marlene gave evidence that debt carried by the Ryde property consists of $185,000 in bank debt and a special strata levy of $13,000. The debt on the Parramatta property is $114,000 and the debt on the Merrylands property is $281,000 (of which Mary is responsible for half). The Ryde property produces rental income for Hampartzoum and Marlene of $7,600; the Parramatta property, $9,741; and the Merrylands property, $2,300.
Hampartzoum and Marlene also own a share portfolio worth $95,000 (financed by a loan of $27,000); a bank account estimated to hold $6,000; and superannuation estimated at $11,000 and $132,000 respectively. Hampartzoum owns two cars, together worth approximately $20,000, and furniture worth $10,000. Hampartzoum and Marlene also maintain credit cards with $26,000 outstanding. They have borrowed $36,000 from Souren and Mary to pay for legal fees in these proceedings.

Valuation evidence

Evidence was presented by both sides as to the value of the Mowbray Road property and the three investment properties. In Vanoush's case the evidence came from Mr Glenn Adams, a registered valuer. His valuations (as at mid-April 2019) were: 1. Mowbray Road property: $1.9 million 2. Merrylands investment property: $780,000 3. Ryde investment property: $425,000 4. Parramatta investment property: $460,000
In Hampartzoum's case the evidence came in the form of market appraisals by local real estate agents. The appraisals (updated as at October 2019) were: 1. Mowbray Road property: $1.5 million 2. Merrylands investment property: $690,000 to $700,000 3. Ryde investment property: $370,000 to $380,000 4. Parramatta investment property: $450,000 to 460,000
It was agreed between counsel that neither Mr Adams nor the real estate agents would be required for cross-examination, and the parties would address the disparities in the evidence in final submissions. Counsel for Hampartzoum invited me to prefer the appraisals to Mr Adams' valuations, or perhaps to adjust Mr Adams' figures downwards in the light of the appraisals. But I do not think I should accept this invitation.
While the Practice Note allows evidence of value to be given by way of market appraisal, a sworn valuation where it exists is inherently better evidence of value than such an appraisal. In circumstances where Mr Adams' valuations were not challenged in cross-examination I am not prepared to depart from them. I have not overlooked the fact that the appraisals were undertaken closer to the hearing, but in the absence of evidence of any movement in the market (and that being put to Mr Adams) this does not make up for the inherent superiority of Mr Adams' evidence.
Based on Mr Adams' valuation figures and Marlene's figures for the debts carried by the investment properties, the equity in them can be calculated as follows: Property Value Debt Total Equity Hampartzoum's Equity Rita St, 750,000 (141,000) 609,000 152,250 Merrylands Goulding Rd, 420,000 (185,000) 235,000 117,500 Ryde Great Western Hwy, Parramatta 460,000 (114,000) 346,000 173,000 Total $2.8m ($440,000) $1.19m $442,750

But if the investment properties were sold, that would give rise to taxable capital gains. Assuming in each case that the consideration recorded on the transfer represents the cost base (the evidence was not sufficient to found a more accurate calculation), the taxable capital gains would be as follows: Property Acquisition Amount Total Taxable Capital Gain Hampartzoum's Taxable Capital Gain Rita Street, Merrylands 380,000 370,000 92,500 Goulding Road, Ryde 155,000 265,000 132,500 Great Western Highway, 183,000 277,000 138,500 Parramatta TOTAL 718,000 912,000 363,500

On the face of it, only half the gain would be taxable, in accordance with current capital gains tax concessions. The precise liability would, of course, depend on the other income Hampartzoum receives in the relevant financial year. But on any view the sale of the investment properties would result in a significant tax liability for Hampartzoum.

Non-disclosure

It is well established that, in some circumstances, where a plaintiff in a family provision application fails to make full and proper disclosure of his or her financial position, the Court will refuse the application. The principle was recently discussed by Ward CJ in Eq in Wright v Burg [2018] NSWSC 595.
Counsel for Hampartzoum relied on this principle. Counsel submitted that there had been a failure to provide full disclosure of the financial circumstances of both Vanoush and Taline. Counsel submitted in particular that there had been a failure to comply with the provisions of the Family Provision Practice Note (SC Eq 7).
As part of the submission, counsel argued that full and frank disclosure gives rise to a "jurisdictional issue", in the sense that such disclosure is a threshold condition which has to be satisfied before the Court can make a family provision order. As I understood it, counsel argued that if I was satisfied that there had been a failure to comply with the terms of the Practice Note, or I was otherwise satisfied that there had been a failure on Vanoush's part to make full disclosure, then I should (or at least could) dismiss her application without any further consideration.
In my opinion, this is an overstatement. The Act does not impose any such condition on the grant of relief. Nor do the provisions of the Rules (or the Practice Note). For the Court to fetter the exercise of its statutory power by imposing such an additional requirement would not be legitimate.
While, as I have stated, the requirement for disclosure is well established, I think it operates at an evidentiary level, rather than being a separate rule of law. There are two evidentiary principles which may be involved.
The first is the rule in Jones v Dunkel. The means of a plaintiff are a relevant factor in deciding whether the provision for that plaintiff is "adequate" for his or her "proper maintenance, education or advancement". If the plaintiff fails to lead full evidence of his or her financial position, the Court may infer that such evidence would not have assisted his or her case: Foye v Foye [2008] NSWSC 1305 at [14]-[15]. The same may apply to a defendant where the allegedly competing needs of another beneficiary are put forward as a defence to the plaintiff's claim.
Of course this only means that the Court may draw an adverse inference; it is not obliged to do so. But where a party's financial position is in issue it is usually a very important factor in the Court's decision and, in the ordinary case, non-disclosure would be a good reason to draw the adverse inference. Especially is this so, if it is proved at trial that the plaintiff's evidence on the question is actually false or incomplete.
In the case of a plaintiff there is another evidentiary principle at work. The onus lies on the plaintiff to prove his or her case. Usually the plaintiff cannot succeed in obtaining provision if he or she already has enough for his or her proper maintenance, education or advancement: Vigolo v Bostin (2005) 221 CLR 191 at 231 [123]-[124] per Callinan & Heydon JJ. If the plaintiff fails to lead sufficient evidence about his or her financial position, this may have the result that the onus of demonstrating that he or she lacks enough financial resources for his or her proper maintenance, education and advancement, has not been discharged: Collings v Vakas [2006] NSWSC 393 at [66]-[67]. In this event, the Court does not have the choice it has about whether to draw a Jones v Dunkel inference. The claim must fail if the plaintiff has not discharged his or her onus.
The Practice Note requires (cl 6(a)) that at the time of making the application the plaintiff file an affidavit in support of the application adapted from a prescribed form (annexure 1). Annexure 1 is a pro forma affidavit which contains a series of headings which correspond with the factors listed in the Succession Act, s 60(2)(a) to s 60(2)(o), as factors the Court may take into account.
For present purposes, there are two relevant parts of the pro forma affidavit. The first corresponds with s 60(2)(d): the financial resources (including earning capacity) and financial needs, both present and future, of the plaintiff 10. Annexed hereto and marked "###" is a summary of my assets and liabilities (including superannuation). 11. Annexed hereto and marked "###" is a summary of assets that I hold with another person. 12. My current gross monthly income is $###. My current net monthly income is $###. 13. Annexed hereto and marked "###" is a summary of my (or my family's) monthly expenditure. 14. I shall produce documents sought by the administrator. 15. I purchased or sold the following real estate in the last 3 years: 16. I purchased or sold the following shares in public companies in the last 3 years: 17. I made the following gifts of amounts of $1,000 or more in the last 3 years: 18. I sold the following property for $1,000 or more in the last 3 years: 19. I have the following interests in the following companies or trusts: Insert details 20. Annexed hereto and marked "###" is a diagram that shows my ownership and control of the companies and trusts referred to in the previous paragraph and their underlying assets. 21. Insert details of needs both present and likely future needs of the plaintiff.
The second relevant part corresponds with s 60(2)(e): If the plaintiff is cohabiting with another person-the financial circumstances of the other person 22. Insert details
Before considering the counsel's submission in detail, I make three preliminary observations. The first is that the Practice Note does not have the status of a statute or a rule which the Court is required to follow. It is only a guide to the exercise of the Court's case management powers.
The second observation is that the s 60(2) factors listed in the pro forma affidavit are only matters which the Court "may" take into account. Once the Vigolo v Bostin threshold is crossed, their relevance and weight will vary from case to case.
The third preliminary observation is that the pro forma affidavit is designed to be filed in support of the plaintiff's claim at the beginning of the proceedings. This is usually before the factual issues in the application have crystallised. Furthermore, some of the factors which the affidavit is required to address may not be within the personal knowledge of the plaintiff and, to that extent, it may not be possible to put the affidavit in admissible form. Documents may also be required to support some of the statements in the affidavit; the pro forma affidavit acknowledges this by containing an undertaking to produce documents sought by the administrator of the estate.
In my view an affidavit under the Practice Note may be compared with the affidavit required in support of an application to set aside a statutory demand (Corporations Act 2001 (Cth), s 459G(3)(a)). Such an affidavit is required to identify the grounds of the set-aside application, but need not necessarily be in admissible form: First Equilibrium Pty Ltd v Bluestone Property Services Pty Ltd [2013] FCAFC 108 at [21]. In the same way, the purpose of the affidavit prescribed by the Practice Note is to identify, in broad terms, the plaintiff's evidence concerning the factors enumerated in s 60(2) which may bear on the application. It will not necessarily be exhaustive, or all in admissible form, and it may be supplemented by further evidence as the case moves towards hearing.
Counsel for Hampartzoum made four specific complaints about non-disclosure. I will deal with them in turn.
The first complaint concerned the statement made in Vanoush's and Taline's affidavits that neither had any interest in any trust. Counsel pointed out that, as Ara's mother, Vanoush falls within the definition of "general beneficiaries" under the trust deed for the Megerditchian Family Trust (the Megerditchian Services Trust was identical in terms, but not addressed by counsel in any detail). Taline, along with Ara, Noushig and their children, is a "primary beneficiary". Vanoush's and Taline's statements that they had no interest in any trust were said to be false, and direct violations of the requirements of the Practice Note.
In response, counsel for Vanoush pointed out that Ara's trusts are discretionary trusts and the "beneficiaries" are merely objects of a discretionary power to appoint capital and income from the trust. As such, they have no vested entitlement to the property of the trust and only limited rights concerning its administration: see J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (8th edition, 2016, LexisNexis Butterworths) at [23-15].
Strictly speaking counsel's submission is correct, but I think the Practice Note should not be read too technically. An applicant who had received benefits from a discretionary family trust would need to disclose them. But neither Vanoush nor Taline has ever received any such benefits from Ara's trusts and there is no suggestion that any such benefit is in prospect. In fact, Vanoush said she was not even aware until the point was raised in these proceedings that she is one of the "general beneficiaries" under Ara's trusts. It would be absurd to say that her failure to mention this in her affidavit was a non-disclosure. In fact, the definition of "general beneficiaries" also includes Hampartzoum and his family. In my opinion there is nothing in this point.
The second complaint from counsel for Hampartzoum was the lack of evidence about the fate of the monies from the sale of the Altona Avenue property in 2008. But the Practice Note requires disclosure of the plaintiff's current financial position and certain transactions over the preceding three years, not the full historical position. As it happens, the sale of the property and the fate of the proceeds have emerged as being relevant, but that does not mean that failure to refer to them in Vanoush's affidavit in support of the application was a contravention of the Practice Note.
Counsel's third complaint was the failure to produce the statements for Vanoush's account with St George Bank. Counsel referred to Vanoush's evidence in her affidavit that she has to dip from time to time into the account to cover her expenses (see [106] above). Counsel submitted that the bank statements would shed light on the accuracy of that evidence. But in my view that is not enough to establish non-disclosure.
The obligation in the Practice Note is to disclose information in general terms, not to produce every single supporting or relevant document. It is for the defendant to decide, having regard to the disclosure made in the affidavit, what type of documentary corroboration will be sought. In the present case the bank statements could have been specifically sought by Hampartzoum's legal representatives but they were not. Again the allegation of non-disclosure goes nowhere.
Finally, counsel complained generally about the fact that Taline's affidavit was provided at a late stage of the proceedings and, it was suggested, somewhat reluctantly. I do not think this complaint was justified either. The Practice Note applies to the affidavit of the plaintiff. The plaintiff will not necessarily have direct knowledge of the detail of a cohabiting person's financial position. No doubt the Practice Note requires the plaintiff to make some enquiry and provide general disclosure based on that. But again I think it is up to the defendant, in the light of that disclosure, to decide whether to make an issue of the matter.
In the present case the point was taken and an affidavit was put on from Taline. I see no reason to draw an adverse inference from the fact that it was put on shortly before the final hearing. It may be that Hampartzoum's legal representatives did not themselves raise the issue or suggest an affidavit from Taline was necessary until a late stage of the proceedings.
For these reasons, I reject the contention that non-disclosure is a "jurisdictional issue" in an application such as this. I also reject the allegation of failure to comply with the requirements of the Practice Note. I will deal with wider questions of the adequacy of the evidence in due course.

Proper provision for maintenance, education and advancement

Counsel for Vanoush said that, on the evidence, she is a pauper. Counsel contended that, as Vanoush is unable to provide for herself from any earnings or savings of her own, it is the deceased's obligation (through his estate) to do so. Counsel submitted that the proper level of provision is a capital sum sufficient to allow Vanoush to purchase a home in the Willoughby area (where she has always lived), together with an additional fund to meet future contingencies.
Anticipating an argument that Vanoush's children should support her instead, counsel submitted: In terms of inter-generational responsibility to provide for a child (of any age) in need of financial assistance to enjoy a secure, even if modest, standard of living, it is not the social norm in N.S.W. in 2019 for children to support their parents financially when the parent's own parents are in a position to make testamentary provision for the parent: i.e. the primary responsibility lies on the parent's parents to make proper testamentary provision to provide proper maintenance and advancement in life for the parent, not on the parent's own children. (See the definition of "eligible person" in Succession Act section 57 - a child qualifies automatically, a parent is eligible only if falling under a generic category).
On the evidence, a two bedroom unit in the Willoughby area would cost between $725,000 and $1,070,000. Counsel submitted that $250,000 would be the proper amount for the additional capital sum which is sought for future contingencies. This would result in a provision of between $975,000 and $1,320,000. Counsel acknowledged, however, that the Court would be limited, in any provision it might make, to the property available to be designated as notional estate. As a result, for practical purposes, the upper limit of the provision which the Court could make would be the value of a half share in the Mowbray Road property, which on the evidence is worth $950,000. (In fact, this would be somewhat reduced by an allowance for the funeral expenses not covered by the actual assets of the estate: see [203] below; it might also be further reduced if costs were ordered to be paid out of the notional estate).
Counsel submitted that throughout his life the deceased did all he could to enrich Hampartzoum and to ignore or disown Vanoush. Counsel instanced the evidence of the deceased's conduct towards Vanoush, her children and grandchildren, and the transfer of a joint interest in the Mowbray Road property to Hampartzoum by way of gift. Counsel submitted: 53. In these circumstances the Deceased cannot be seen as a "capable testator" who has "duly considered the claims on the estate". On the contrary, the Deceased must be seen as a testator who, for reasons which now cannot be confidently determined, for the whole of his life had a disinclination to benefit the Plaintiff either emotionally or financially. 54. The Court cannot be deflected from fulfilling its statutory role under Section 59 of the Succession Act by the testamentary machinations (almost certainly malevolent testamentary machinations) of the Deceased.
Counsel argued that the Court should not be deflected from allocating a half share of the Mowbray Road property to Vanoush by any concern for the effect this might have on Hampartzoum. Counsel pointed out that Hampartzoum has already received a half share of the Mowbray Road property from the deceased, and holds shares in the three investment properties. Counsel also submitted that Marlene is "independently well placed financially in her own right". Counsel pointed out that neither Hampartzoum nor any members of his family had ever paid rent; counsel characterised this as another benefit conferred upon Hampartzoum by the deceased during his lifetime.
The thrust of counsel's submission was that, in the circumstances, the Court should aim towards an equal division of the deceased's estate between Hampartzoum and Vanoush. Indeed, as counsel would have it, the ultimate result of making provision for Vanoush in the manner sought would (because of the limit imposed by the notional estate being confined to a half share in the Mowbray Road property, and having regard to Hampartzoum's shares in the three investment properties and his expectation of support from Marlene) still leave the balance in Hampartzoum's favour.
I think there are a number of difficulties with counsel's submissions, both in the view they take of the applicable legal principles and in their characterisation of the facts. Four points in particular stand out.
First, I question the assumption implicit in counsel's submissions that "proper" provision for Vanoush requires the purchase for her of a house, together with a capital sum of $250,000. It is well established that an infant child prima facie has a claim to be maintained and supported, but an adult child capable of maintaining and supporting himself or herself usually does not: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 147.
In my view, the same principle applies to an adult child who was capable of maintaining himself or herself during his or her working life but has now reached retirement age. If an adult child had no prima facie entitlement to be provided with a house during his or her decades of financial independence, I do not think that such a prima facie entitlement can spring up just because, on retirement, he or she lacks ownership of a home.
This is not to say that an adult child may not be entitled to some capital amount or other asset upon which he or she may build (whether by discharging debts or acquiring assets) so as to be better able to provide for himself or herself in the future. Such a provision fits readily within the statutory concept of "advancement", and is not necessarily confined to childhood or early adult life: McCosker v McCosker (1957) 97 CLR 566 at 575. I deal with this possibility below, but I am concerned at the moment with a claim by an adult child to be housed and provided with a further large lump sum out of an estate consisting of an ordinary suburban family home.
Vanoush was financially independent of the deceased for almost 50 years. She made no significant contribution to the assets built up by the deceased and other members of his family. The fact that Vanoush does not own her own home was in no way the deceased's responsibility. In my view it is wrong to suggest that Vanoush now has, on her father's death, some sort of prima facie entitlement to have a home provided for her out of his estate simply because she was his daughter and she does not have a home of her own.
Secondly, there is the question of the capacity of Vanoush's children to support her, and her financial dealings with them more generally. I accept that for the purposes of the Act a parent has no categorical entitlement as an "eligible person" to make application for provision out of the estate of his or her child. But the question is not what entitlements Vanoush would have against the estates of her children if they were to predecease her. It is whether the provision made for Vanoush by the deceased was "proper" in the circumstances of the case.
The list of factors in s 60(2) only expressly mentions the "financial resources" of the claimant (paragraph (d)); the "financial circumstances" of another person with whom the claimant "is cohabiting" (paragraph (e): apparently this would include Taline in the present case); and whether anyone else "is liable" to support the claimant (paragraph (l)). But the Act allows the Court to decide which of the itemised list of factors to take into account and further provides for the Court to take account of any other matter which it considers relevant (sub-paragraph (p)). In my view, to adopt the approach that the resources available to the plaintiff's children are categorically irrelevant would be to impose a limitation which is not found in the text of the Act.
In this case I accept that Vanoush no longer has any interest in, or legal claim to, the former matrimonial home in Artarmon Road. Nor, on the evidence, does she retain any proceeds of the disposal of the former matrimonial home in Altona Avenue. But that does not mean that the past dealings with those properties are irrelevant.
As has been seen, the evidence about the financial arrangements surrounding the Artarmon Road and Altona Avenue properties is incomplete. But one thing which is clear is that at least until 2008 there was some sort of joint venture which involved at least Vrej, Vanoush, Ara and Taline. Whether Vanoush herself played any decision-making role is unnecessary to determine (although I am not satisfied she did not). The important point is that the sale of the Artarmon Road property, and the subsequent purchase and sale of the Altona Avenue property, did not just happen: they were part of a network of transactions involving Ara and Taline, and possibly other family members, and also involving other property ventures in which Ara and Taline, and possibly other family members, were interested.
It would have been obvious that on the sale of the Altona Avenue property, at the latest, Vanoush would need somewhere to live. Vanoush and her family cannot have had any expectation that this would be provided for her by her father.
There is a suggestion in the evidence that Vanoush and Taline began living together in 2005, even before the sale of the Altona Avenue property in 2008. Whether that is so or not, it still seems to have happened long before Vrej died. On any view, the decision for Taline and Vanoush to live together must have involved planning (including consideration of Vanoush's pension entitlements) and choices. Given that Ara acknowledged an obligation to house Vanoush if necessary, he may have been involved as well. The same comments apply to the decision for Taline not to live in the Crows Nest unit which she bought for that purpose in 2013.
All of this involves a degree of speculation, but the point is that the evidence did not explain it. It may be too much to expect Vanoush, Ara and Taline to provide a full account of the family finances from the late 1990s onwards; but it is not unreasonable to expect them to explain what the inter-family arrangements for Vrej's and Vanoush's accommodation were. Nor is it unreasonable, if the current arrangements under which Vanoush and Taline live together result entirely from financial misfortune, to expect that to be clearly explained in the evidence.
I am sure that if a property for Vanoush to live in could be made available for free, both Vanoush and Taline would prefer that to the current arrangements. But in the absence of clear evidence about how those arrangements arose, I cannot exclude the possibility that they simply represent the way in which Ara and Taline, both of whom recognise an obligation to house Vanoush, have chosen (or agreed with Vanoush) to discharge that obligation.
The third point concerns counsel's submissions about the deceased's "testamentary machinations" and supposed malevolence. These submissions are not supported by my findings. I have already noted that Vanoush's allegations of mistreatment by the deceased when she was a child were not pressed in final submissions. I have also concluded that the evidence does not establish that the rift between Vanoush and the deceased was solely the deceased's responsibility.
In my view, it is relevant that Vanoush's mother, Archaluis, also provided in her will, in the event that the deceased predeceased her, for Hampartzoum to receive the Mowbray Road property and for Vanoush to receive only a $10,000 legacy. This will was made in 1985, before the rift which arose in the late 1990s. It shows that the deceased's testamentary dispositions in favour of Hampartzoum were not just the result of some sort of purely personal animus towards Vanoush on the part of the deceased.
Finally, and fourthly, there is counsel's submission that, if the Court were disposed to award a half share of the Mowbray Road property to Vanoush, this would not be unfair to Hampartzoum, who could rely on his shares in the three investment properties and on support from Marlene. I think this is rather insouciant. In particular, it leaves out of account that Hampartzoum depends upon the income from the investment properties to cover living expenses, and that the sale of the properties would trigger a significant capital gains tax liability. It also leaves out of account the impact of the costs of these proceedings.
But there is a more important difficulty which faces the submission. It is clear that family life was important to the deceased. Hampartzoum, Marlene and their children provided that family life. They had the closest possible relationship with the deceased and with Archaluis. They cared for the deceased and Archaluis, and after Archaluis' death, for the deceased alone, for many years. As I have noted, the conclusion I have reached is that the evidence does not establish that the deceased was entirely responsible for the estrangement from Vanoush. But even if it did, the fact of the estrangement itself (irrespective of fault) would remain relevant. The evidence does not establish that Vanoush would have been willing, or able, to do what Hampartzoum and his family did for the deceased and Archaluis, even if there had been no falling-out.
It is quite clear that "proper" provision under s 59(1)(c) does not require equality between the testator's children. The deceased was entitled to make greater provision for the son who stayed close to his parents, than to the daughter who (for whatever reason) did not. Hampartzoum's many contributions to his parents' welfare are facts which the Court would not lightly cast aside, even if there were stronger evidence than there is that the deceased was to blame for the rift with Vanoush. In my view the Court would not be justified in rewriting the deceased's will in a way which would nullify, or jeopardise, the intention for Hampartzoum to have the Mowbray Road property as his home after his parents died.
For these reasons, I do not accept the submissions of counsel for Vanoush. I do not think that the deceased was under any obligation to provide provision for Vanoush to the extent of buying her a home and giving her an additional lump sum in the amount of $250,000.
But this is not the end of the question. I must still consider whether some lesser provision, in the form of a sum by way of advancement as discussed above, was proper.
In considering this question, I think there are three factors of significance. The first is that both Archaluis' will and the deceased's will provided for a legacy in favour of Vanoush. She was not excluded completely. That is consistent with the fact that, while the evidence did not establish affirmatively that the rift was entirely the deceased's responsibility, it did not affirmatively establish that it was entirely Vanoush's responsibility either.
The second relevant factor is that Vanoush never received her legacy from Archaluis. It is not clear on the evidence whether Archaluis' estate contained sufficient funds to meet the bequest. But on any view the deceased appears to have received, by survivorship or inheritance, all of Archaluis' assets on her death, and thereby to have benefited from the failure, or non-payment, of the gift to Vanoush.
The third factor is the change in value of the major family asset, namely the Mowbray Road property, over time. There was no evidence before me of its value of the property when Archaluis made her will in 1985, or when the deceased made his will in 2007. But I think I can take judicial notice of the fact that over the last couple of decades property prices have risen strongly. Even if the house had not been extended, it would now be worth much more than it was worth in 1985 (and probably considerably more than it was worth in 2007) and the relative value of the $10,000 legacy to Vanoush compared with the gift of the property to Hampartzoum will have declined accordingly.
Against this background, it seems to me that the legacy to Vanoush of $10,000, received in late 2019, while not nominal, was virtually so. It represents less than 2% of the value of the notional estate. The only persons having any identified call on the bounty of the deceased were Hampartzoum and Vanoush.
In a case such as this, I do not think the Court would be justified in concluding that provision is inadequate if the Court just considered it should have been higher by some marginal amount, such as $20,000 or $30,000. But I think that a legacy of $10,000 is sufficiently low that the Court can conclude that the exercise of judgment in the will has failed. In the circumstances, I consider that it did not represent a proper provision for Vanoush.

Provision which ought to be made

Doing the best I can, I consider that the proper provision in the present case is a legacy of $100,000. This is a substantial enough amount to make a real difference to Vanoush's life. It will enable her to acquire a modest share portfolio or some other investment which will generate some additional income. It could also be used as a fund to meet large and unexpected expenses. On the other hand, it is not too high so as to threaten the integrity of the testamentary dispositions in favour of Hampartzoum which I have found the deceased was entitled to make.

Designation of notional estate

Section 87 of the Succession Act provides: General matters that must be considered by Court The Court must not make a notional estate order unless it has considered the following: (a) the importance of not interfering with reasonable expectations in relation to property, (b) the substantial justice and merits involved in making or refusing to make the order, (c) any other matter it considers relevant in the circumstances.
Initially counsel for Vanoush sought to have the shares gifted to Mary (see [40] above) included in the notional estate, but this was not pressed. The only claim is thus to half of the Willoughby property. Counsel for Vanoush also accepted that the testator's funeral expenses, to the extent exceeding the monies left in his estate, should take priority over any provision for Vanoush.
Counsel for Hampartzoum pointed out that, on the evidence, he contributed financially to the acquisition and maintenance of the Willoughby property. Counsel also submitted that Hampartzoum would have expected, on his father's death, to receive the deceased's half share of the property. Counsel contended that in these circumstances, designation of the deceased's half share as notional estate would be impermissible because it would interfere with "reasonable expectations" protected by s 87.
Section 87 does not identify whose "reasonable expectations" are referred to. Clearly they would at least include Hampartzoum's. Counsel for Hampartzoum did not present their submission on any wider basis. Accordingly there is no need to enter into the debate about whether anyone else's reasonable expectations are relevant (see Phillips v James (2014) 85 NSWLR 619 at [125]).
In the present case, the fact that the Court may designate a half share of the notional estate reflects the fact that up until his death the testator could have partitioned the estate under the Conveyancing Act 1919 (NSW), s 66G, and then dealt with his half share of the proceeds. But had he done so, he would not necessarily have received a full half share of the value of the property, net of sale costs. Co-owners' entitlements on partition are subject to adjustment to reflect their contributions to the value of the property: Forgeard v Shanahan (1994) 35 NSWLR 206 at 223.
In principle, it seems to me that in a case of a joint tenancy, designation of a deceased's half share as notional estate should be subject to any adjustments which would have been made in favour of the surviving joint tenant, if there had been a partition when the deceased was alive. But there is no such issue here. The major renovation in 1992 took place long before a half share in the property was transferred to Hampartzoum in 2007. Only expenditure after that date would be relevant. The only expenditure on the property within the relevant period which is referred to in the evidence is the kitchen renovation in 2018 (see [131] above) and that was paid for by Souren and Mary. In any event, for the purposes of adjustment on partition, it would not have been the amount spent which was relevant, but the increase in value of the property: Forgeard v Shanahan at 224. There was no evidence to quantify any increased value of the property attributable to the kitchen renovation, and I proceed on the basis that it would be minimal in the scheme of things.
The question thus comes back to whether the designation of a sufficient proportion of the half share of the property as notional estate so as to meet the provision which I consider appropriate (and, if applicable, costs) would interfere with Hampartzoum's "reasonable expectations".
I accept that Hampartzoum would have expected, following the transfer of the half share of the Mowbray Road property to him in 2007, that in the usual course, the rest would pass to him on his father's death. But he must likewise have been aware that he had only received a transfer of half of the share of the property. He would have appreciated that his father had retained the other half share in his ownership and might change his testamentary intentions.
Although Hampartzoum had contributed financially to the property, the evidence does not establish that his contribution exceeded the value of the half share he received in 2007. As I have already stated, there is no evidence of any later contribution. Nor is there evidence that Hampartzoum incurred any expenditure or incurred any other detriment in reliance on the belief that he would ultimately receive the balance of the property by survivorship.
In my view, a significant factor is that the house at Willoughby also accommodates Souren and Mary. Modest rent payments from Souren and Mary would readily cover the cost of financing the provision I consider should be made in favour of Vanoush. Hampartzoum's "reasonable expectations" might extend to providing accommodation for himself and Marlene. In my view, they do not extend to continuing to provide his children rent-free accommodation in the same house.
For these reasons, I reject the submission from counsel for Hampartzoum that there is an obstacle to designating a half share of the Willoughby property to meet the provision which I consider is appropriate for Vanoush.

Conclusions and orders

I have concluded that: (1) the testator's will failed to make adequate provision for the maintenance, education and advancement of Vanoush; (2) prima facie, the amount of the provision which ought to have been made is, in my judgment, a legacy of $100,000; (3) this legacy, together with any costs which it may be appropriate to award, can be met by designating the half share in the Willoughby property as notional estate.
These conclusions are preliminary until I have considered any application for costs. I will now need to hear argument on that question. I will stand the proceedings over to allow the parties to present that argument.
The orders of the Court are:
Order that the proceedings be listed for further hearing on the questions of costs and quantum of provision at a time to be arranged with my Associate.

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: 27 December 2019

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