Megerditchian v Khatchadourian

Court of Appeal (NSW)|2020-07-28|Before: Macfarlan JA, Payne JA, Parker J

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellant, Vanoush Megerditchian, aged 71, successfully sought provision under the Succession Act 2006 (NSW) out of the estate of her late father, Souren Khatchadourian, who died in May 2019 at the age of 91. The primary judge found that proper provision did not require equality between the testator's children and that Mr Khatchadourian was entitled to make greater provision for his son who remained close to his parents over many decades than for his daughter who did not. The primary judge rejected the appellant's case that proper provision for the appellant required the purchase for her of a house, together with a capital sum of $250,000. The primary judge found that proper provision in the present case was a legacy of $100,000. On appeal, the appellant alleged that the award of $100,000 by the primary judge did not amount to adequate provision for her proper maintenance, education or advancement in life. The appellant submitted that the primary judge should have approached the case differently and that his Honour took into account irrelevant matters and failed to take into account relevant matters. The appellant submitted that the primary judge impermissibly had regard to the willingness of the appellant's children to assist her financially. The appellant submitted that the provision of $100,000 was manifestly inadequate. The Court held, dismissing the appeal: Per Payne JA (Macfarlan JA and Emmett AJA agreeing)

The question of whether "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" is the equivalent of a discretionary decision. Review in this Court of the decision of the primary judge is subject to the restraints identified in House v The King: [29]. House v The King (1936) 55 CLR 499; [1936] HCA 40; Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17, applied.
The evaluative judgment under s 59(2) of the Succession Act is fact-specific and the general words of the provision cannot be read down by applying constraints not found in the text of the legislation. It was for the primary judge to determine the weight to be given to the factors set out in s 60(2) of the Succession Act: [43]. Sgro v Thompson [2017] NSWCA 326, applied.
The appellant did not identify any relevant error in the primary judge's discretionary decision, any irrelevant matter taken into account by the primary judge, or any relevant matter not taken into account by the primary judge. No House v The King error was established: [44], [45], [46]. House v The King (1936) 55 CLR 499; [1936] HCA 40; Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17, applied.
The primary judge did not "pass responsibility" for providing for the appellant to the appellant's children. The Succession Act does not prescribe an order being made wherever a child has a demonstrated need for provision: [52].
The appellant had no entitlement to anything other than an amount which was adequate provision for the proper maintenance, education or advancement in life of the appellant, weighing up all of the factors in s 60(2) of the Succession Act. There was no House v The King error established in the primary judge deciding not to give the appellant the entire notional estate she had sought: [63]. House v The King (1936) 55 CLR 499; [1936] HCA 40, applied.

Judgment

MACFARLAN JA: I agree with Payne JA.
PAYNE JA: The appellant, Vanoush Megerditchian, successfully sought provision under the Succession Act 2006 (NSW) out of the estate of her late father, Souren Mihran Khatchik Khatchadourian, who died in May 2018 at the age of 91. This appeal concerns the alleged inadequacy of the provision awarded by the primary judge, Parker J: Megerditchian v Khatchadourian [2019] NSWSC 1870. Without intending any disrespect, I will refer to all relevant actors in this appeal by their given names.
Souren 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 (now aged 72), the respondent to the appeal. The younger is their daughter Vanoush (now aged 71), the appellant.
Souren's last will was made in 2007. Under that will, Souren left a legacy of $10,000 to Vanoush and the rest of his estate to Hampartzoum. Hampartzoum was appointed as executor.
At the time he made his will, Souren's major asset was the family home on Mowbray Road in Willoughby. The property was originally bought in 1970 in the names of Souren and Archaluis as joint tenants. Souren and Archaluis lived there, together with Hampartzoum, and later, Hampartzoum's family.
Archaluis died in 2006. On her death, her share of the Mowbray Road property passed to Souren by survivorship. Shortly after making his will in 2007, Souren transferred the property into the names of himself and Hampartzoum as joint tenants.
On Souren's death, his share of the property passed to Hampartzoum. Souren's estate consisted only of approximately $5,000 held in two bank accounts. This amount was insufficient to meet the funeral expenses which were paid by Hampartzoum. There were no funds to pay the $10,000 legacy to Vanoush under the will.
The proceedings were commenced in October 2018, within the statutory time period. Hampartzoum was named as the defendant. Given the lack of assets in the estate, Hampartzoum has never made a formal application for probate of Souren's will.
In February 2019, Hampartzoum suffered a brain haemorrhage. Subsequently, the Court made an order that Hampartzoum's son, Souren Khatchadourian, who I will refer to as Souren Jnr, 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 the primary judge, he continues to be affected by the haemorrhage. Souren Jnr continued as his tutor for the purpose of conducting the proceedings and representing the estate.
Vanoush is now 71 years old and a widow. She contended below and on the appeal that she is entitled to a provision of between $975,000 and $1,320,000 from Souren's estate. There was no dispute that the appellant was an "eligible person" for the purposes of the application: Succession Act s 59(1)(a). The primary judge determined that the provision made by Souren for Vanoush was not "adequate" for her "proper maintenance, education or advancement": s 59(1)(c). His Honour decided that the provision, in the circumstances, which "ought to be made" for the appellant was $100,000. The primary judge made an order designating a half share of the Mowbray Road property as notional estate under Part 3.3 of the Succession Act to enable that payment to be made. His Honour found that the value of that notional estate was $950,000, less funeral expenses (which his Honour did not quantify).
The background findings of fact made by the primary judge were as follows: 1. Souren was born in December 1926. He and Archaluis married in 1946 or 1947 in Cairo, Egypt, where they lived until migrating to Australia. Hampartzoum was born in May 1948. Vanoush was born in June 1949; 2. 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 was unnecessary to resolve; 3. The Mowbray Road property was bought in 1970. At that stage the house had two bedrooms. Archaluis and Souren slept in one bedroom, and Vanoush and her grandmother slept in the other. Hampartzoum slept in the sunroom. 4. in late 1970, or early 1971, Vanoush agreed to marry Vrej Megerditchian. Their engagement party was hosted by Souren 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; 5. Souren and Archaluis had been opposed to Vanoush marrying Vrej. An open rift later developed between Vanoush and the remaining members of Souren's family; 6. Souren 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, Souren, Archaluis and Hampartzoum opened a jewellery shop as partners. The business was called Echo Diamonds and the shop was located in Chatswood; 7. in about 1981, Hampartzoum married his wife, Marlene, whom he met while on holiday in Lebanon. Marlene migrated to Australia and moved into the Mowbray Road property with Hampartzoum and his parents; 8. Hampartzoum and Marlene have two children. Their son, Souren Jnr, was born in 1983 and their daughter, Mary, was born in 1984; 9. in about 1992, the house at Mowbray Road was renovated and extended, resulting in the construction of three additional bedrooms, a bathroom and a laundry. The cost was shared between Souren, Archaluis and Hampartzoum. Hampartzoum and Souren did some of the labour themselves; 10. in 1997, Souren, Archaluis and Hampartzoum shut down the Echo Diamonds business because the shop from which it operated was to be demolished. Souren (who was then about 70) and Archaluis retired. Hampartzoum found other work; 11. Souren Jnr turned 18 in 2001, and Mary turned 18 in 2002. Both of them continued to live at the Mowbray Road property with their parents and grandparents. They still live there today. Neither are married; 12. in 2005 or early 2006, Archaluis was diagnosed with a brain tumour. She was hospitalised for an operation, returned home, but then went into palliative care. She died in November 2006. During her illness, she was cared for by Souren, Hampartzoum, Marlene, Souren Jnr and Mary; 13. at the time of Archaluis' death, Souren was almost 80. In 2012, he had a fall, after which his mobility was limited. Hampartzoum, Marlene, Souren Jnr and Mary provided the additional care that was required. Souren died in May 2018; 14. 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; 15. Taline works as a communications director and also invests in property. She is not married and has no children; 16. Vrej died in February 2017. For the last 20 years of his life, he was in poor health; 17. since 2005 or 2008, Vanoush has lived with Taline.
The primary judge rejected the assertion at the heart of Vanoush's case that "proper" provision for Vanoush required the purchase for her of a house, together with a capital sum of $250,000. The primary judge accepted, however, that Vanoush may be entitled to a modest capital amount upon which she could build (whether by discharging debts or acquiring assets) so as to be better able to provide for herself in the future. Such a provision was within the statutory concept of "advancement" which was not necessarily confined to childhood or early adult life: McCosker v McCosker (1957) 97 CLR 566 at 575; [1957] HCA 82.
The primary judge found that: 1. Vanoush was financially independent of Souren for almost 50 years; 2. Vanoush made no significant contribution to the assets built up by Souren and other members of his family; 3. the fact that Vanoush did not own her own home was in no way Souren's responsibility; and 4. the question was not what entitlements Vanoush would have against the estates of her children if they were to predecease her, but whether the provision made for Vanoush by Souren was "proper" in the circumstances of the case, which included the evidence about Vanoush's children.
One aspect of the case, which was agitated again on the appeal, was Vanoush's assertion that the assets of her children were irrelevant to her claim against Souren's estate. The primary judge rejected this submission. His Honour addressed the list of factors in s 60(2) of the Succession Act, specifically by reference to the "financial resources" of the applicant (s 60(2)(d)); the "financial circumstances" of another person with whom the applicant "is cohabiting" which included Taline (s 60(2)(e)); and whether anyone else "is liable" to support the applicant (s 60(2)(l)). The primary judge concluded that to adopt the approach that the resources available to Vanoush's children were categorically irrelevant would be to impose a limitation which is not found in the text of the Act.
To understand the context of those findings a little detail needs to be sketched about the asset position over time of Vanoush, as found by the primary judge: 1. the first family home Vanoush lived in after she was married in 1971 in Artarmon Road, Willoughby, had been bought the previous November by Aharon (Vrej's father), Vrej and Vasken (Vrej's brother), 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. 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. 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. In 1994, Vanoush began to receive the Centrelink disability pension. She also received an award of compensation of $26,000 for a workplace injury at about this time. Vrej commenced receiving the age pension two years later, in 1996. Vanoush commenced receiving the age pension in 2011; 2. in February 2002, the Artarmon Road property was sold to Ara and Taline for $700,000. In March 2002, 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 2002, a further loan was taken out to repay Vasken and renovate Altona Avenue to make it suitable for Vrej's ailing health; 3. 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. In March 2008, Vrej and Vanoush sold the Altona Avenue property for $725,000. Vanoush has lived in rented accommodation with Taline at Brown Street, Chatswood, since that time; 4. the primary judge found 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 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; 5. in or around 2011, Ara and Taline redeveloped the Artarmon Road property into a duplex with two separate residences. The property is now worth approximately $4 million and carries a loan of $2.7 million. It generates approximately $1,500 in weekly rental income for Ara and Taline; 6. 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; 7. in December 2013, Taline purchased a one bedroom unit in Crows Nest. She intended to live in the unit, but decided to lease it and continue to live with Vanoush.
After setting out these findings of fact the primary judge drew the following conclusions. The primary judge accepted that Vanoush no longer had any interest in, or legal claim to, the former matrimonial home in Artarmon Road. Nor, on the evidence, did she retain any proceeds of the disposal of the former matrimonial home in Altona Avenue. But that did not mean that the past dealings with those properties were irrelevant. His Honour found that while the evidence about the financial arrangements surrounding the Artarmon Road and Altona Avenue properties was incomplete, 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 was unnecessary to determine, although his Honour was not satisfied she did not. The important point was 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.
The primary judge found that it was obvious to each of the participants that on the sale of the Altona Avenue property, at the latest, Vanoush would need somewhere to live. Vanoush and her family could not have had any expectation that this accommodation would be provided for her by her father. Vanoush and Taline began living together long before Vrej died. On any view, the decision for Taline and Vanoush to live together 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.
His Honour found that it was not unreasonable to expect Vanoush, Taline and Ara to explain what the inter-family arrangements for Vrej's and Vanoush's accommodation were. Nor was it unreasonable, if the current arrangements under which Vanoush and Taline live together resulted entirely from financial misfortune, to expect that to be clearly explained in the evidence.
The primary judge rejected Vanoush's submissions about Souren's "testamentary machinations" and supposed malevolence. Vanoush's allegations of mistreatment by Souren when she was a child were not pressed in final submissions.
Archaluis also provided in her will, in the event that Souren predeceased her, for Hampartzoum to receive the Mowbray Road property and for Vanoush to receive a $10,000 legacy. The primary judge found that this evidence demonstrated that Souren's testamentary dispositions in favour of Hampartzoum were not the result of personal animus towards Vanoush on the part of Souren.
The primary judge described Vanoush'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 investment properties and on support from Marlene as "rather insouciant". His Honour found 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.
The critical findings of the primary judge were that family life was important to Souren. Hampartzoum, Marlene and their children provided that family life. They had the closest possible relationship with Souren and with Archaluis. They cared for Souren and Archaluis, and after Archaluis' death, for Souren alone, for many years. The estrangement between Souren and Vanoush was also relevant. The primary judge found that the evidence did not establish that Vanoush would have been willing, or able, to do what Hampartzoum and his family did for Souren and Archaluis, even if there had been no falling-out.
The primary judge concluded that "proper" provision under s 59(1)(c) does not require equality between the testator's children. Souren 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. His Honour concluded: "[193] … 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. [194] 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."
Nonetheless the primary judge was persuaded that some provision should be made by way of advancement. Three matters of significance were identified: 1. both Archaluis' will and Souren's will provided for a legacy in favour of Vanoush. She was not excluded completely; 2. Vanoush never received her legacy from Archaluis; and 3. the change in value of the major family asset, the Mowbray Road property, was significant. The relative value of the $10,000 legacy to Vanoush compared with the gift of the property to Hampartzoum will have declined accordingly.
The primary judge found that a legacy of $10,000 was sufficiently low that the Court could conclude that the exercise of judgment in the will had failed. His Honour found that proper provision in the present case was a legacy of $100,000. That amount was not so high as to threaten the integrity of the testamentary dispositions in favour of Hampartzoum which the primary judge found Souren was entitled to make.

Consideration

Section 59 of the Succession Act provides: 59 When family provision order may be made (cf FPA 7-9) (1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that: (a) the person in whose favour the order is to be made is an eligible person, and … (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, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both. (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. …
As a daughter of the deceased, Vanoush was an "eligible person" (s 57(1)(c)). Section 60(1)(b) of the Succession Act provides that the court may have regard to matters set out in subs 60(2) for the purpose of determining whether to make a family provision order and the nature of any such order. Subsection 60(2) provides a list of numerous matters to which the Court may have regard without assigning any priority between them. They include the following: 60 Matters to be considered by Court (cf FPA 7-9) … (2) The following matters may be considered by the Court: (a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship, (b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate, (c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate, (e) if the applicant is cohabitating with another person - the financial circumstances of the other person, (f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated, (g) the age of the applicant when the application is being considered, (h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant, (i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate, (j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person, (k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so, (l) whether any other person is liable to support the applicant, (m) the character and conduct of the applicant before and after the date of the death of the deceased person, (n) the conduct of any other person before and after the date of the death of the deceased person, (o) any relevant Aboriginal or Torres Strait Islander customary law, (p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
The question of whether "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", within the meaning of s 59(1)(c) of the Succession Act, is the equivalent of a discretionary decision. Review in this Court of the decision of the primary judge is therefore subject to the restraints identified in House v The King (1936) 55 CLR 499; [1936] HCA 40 as restated in Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17.
In Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [74], Gummow and Hayne JJ cited the plurality in Singer v Berghouse (1994) 181 CLR 201 at 211; [1994] HCA 40 (quoting Gibbs J in Goodman v Windeyer (1980) 144 CLR 490 at 520; [1980] HCA 31), for the proposition that: "[74] … [T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the Court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
The appellant submitted that: "this is a case where the two-stage process for determining what is the appropriate order to be made on the application is the preferable approach (Poletti v Jones [2015] NSWCA 107 para 19 per Basten JA) - though the same result would follow from the 'one-stage' approach".
Whether a two-stage analysis is applicable to claims for family provision orders under Ch 3 of the Succession Act has been the subject of significant debate in this Court. The risk of error arises if a two-stage approach is adopted and it is assumed that the first stage requires an evaluation of whether the applicant has been left without adequate provision for his or her maintenance, education or advancement in life, thereby focusing primarily, or perhaps exclusively, on the applicant's financial needs. An applicant's financial needs and the financial needs of other persons with claims on a deceased's testamentary bounty are important considerations, but as Basten JA said in Chan v Chan [2016] NSWCA 222 at [22]: "[22] … [I]t is important not to elide the distinction between needs and adequate provision; the former is but one indicator of the latter. The adequacy of provision is not to be determined by a calculation of financial needs."
The question is whether adequate provision was made for the proper maintenance, education or advancement in life of an applicant. I agree with Basten JA in Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 that the structural changes between the Family Provision Act 1982 (NSW) and Ch 3 of the Succession Act mean that a two-stage approach is generally no longer appropriate. In Poletti v Jones [2015] NSWCA 107 Basten JA (with whom Emmett and Leeming JJA agreed) accepted that there may be circumstances in which that approach is preferable (at [19]). However, as Allsop P said in Andrew v Andrew (at [6]) this may be an analytical question of little consequence. I adhere to what I said in Sgro v Thompson [2017] NSWCA 326, agreeing with White JA that: "[6] What is 'proper' requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. I agree with White JA that while the Court's assessment of what is proper maintenance, education and advancement in life must be made at a time when the Court is considering the application, that does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate."
In Andrew v Andrew at [12] Allsop P stated: "[12] Accepted and acceptable social and community values permeate or underpin many, if not most, of the individual factors in s 60(2) and are embedded in the words of s 59, in particular 'proper' and 'ought'. That such values may be contestable from time to time in the assessment of an individual circumstance, or that they may change over time as society changes and grows can be readily accepted."
Allsop P acknowledged that orders made by reference to "perceived prevailing community standards of what is right and appropriate" referred to an imprecise, variable and contestable standard. If the deceased is capable of giving due consideration to the question of what provision was required for the applicant's proper maintenance and advancement in life and has done so, considerable weight should be given to the testator's testamentary wishes in recognition of the advantages that the testator has over the Court in knowing the details of the family's relationships: Slack v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [125]-[127]; Sgro v Thompson at [80]-[88].
As a general proposition, the fact of incomplete or unsatisfactory evidence may permit inferences unfavourable to the applicant for provision to be drawn. For instance, uncertainty left by imprecise or inaccurate evidence is not ordinarily to be resolved in favour of the person who was able to give the satisfactory evidence: Nicholls v Hall [2007] NSWCA 356 at [36] (Mason P, Hodgson and McColl JJA). If the absence of such evidence is a consequence of a deliberate withholding of evidence, the Court may be justified in proceeding on the basis that the evidence of the true position would have been unfavourable to that person's case: Re the Will of FB Gilbert (1946) 46 SR (NSW) 318 at 321-322, 324 (Jordan CJ); Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 at [100]-[104] (Meagher JA, Basten and Campbell JJA agreeing); Blendell v Blendell [2020] NSWCA 154 at [28].

Grounds 1 - 4

The appellant's grounds of appeal 1 to 4, whilst couched in the language of House v The King, really contain an appeal to the merits. The appellant seeks to have this Court re-exercise the broad evaluative discretion of the primary judge. Appeal grounds 1 to 4 may be summarised as follows: 1. Given the absence of any disqualifying conduct on the part of the appellant and the fact that any estrangement was not solely attributed to the appellant, the primary judge should have approached the case differently, by: 1. asking what were the respective needs of the eligible persons for proper maintenance, education, and advancement in life; 2. concluding that the respondent had no relevant need; 3. concluding that the appellant did have a relevant need; 4. asking whether the appellant's needs were adequately provided for by the will; 5. concluding that the appellant's needs were not adequately provided for by the will; 6. asking whether the estate was capable of providing adequately for the maintenance and advancement of the appellant; 7. concluding that the estate was capable of providing adequately for the maintenance and advancement of the appellant; and 8. making an order for the adequate provision for the maintenance and advancement for the appellant. 1. The primary judge's attention was distracted by concentration on incidental or irrelevant matters. 2. The primary judge took into account irrelevant matters, namely: 1. the primary judge incorrectly attributed to the appellant a submission that the court "should aim towards an equal division of the … estate" when the submission was that "something close to an equal division would be, fortuitously, the practical consequence"; 2. the primary judge incorrectly attributed to the appellant a submission that the appellant has "some sort of prima facie entitlement to have a home provided for her" when the critical question was "what is adequate provision for her proper maintenance or advancement in life?" and the facts were that the appellant has no home of her own, no prospect of having secure accommodation, and the estate can provide the appellant with modest secure accommodation; 3. the primary judge drew adverse inferences against the appellant from matters which were speculative regarding the purchase of the Artarmon Road property and the Altona Avenue property by Ara, Taline and other family members; 4. the primary judge assumed, without evidence or submissions, that if the respondent were obliged to sell any interest in his real property it would trigger significant capital gains tax liability. 1. The primary judge failed to take into account relevant matters, namely: 1. the primary judge failed to recognise that in family provision matters what the court regards as "adequate provision for proper maintenance or advancement in life" is not static over time and evolves to reflect changing community standards; 2. the primary judge implied that, as a matter of law, a working adult has no "prima facie entitlement" when there is no such legal principle.
At the outset it should be observed that grounds 1 to 4 fail to grapple with important matters addressed by the primary judge which are the subject of unchallenged findings: 1. the relationship between Vanoush and Souren which was found to involve an "estrangement" and a "breakdown". There had been no real contact between Vanoush and Souren for decades; 2. the relationship between Souren and Hampartzoum, which was found to be "the closest possible", involving care and attention over decades; 3. the fact that the notional estate available to meet any order for provision comprised a half interest in a residential home, to which Hampartzoum had made a substantial contribution. Hampartzoum and Marlene have lived there nearly all their entire adult lives. Their children have lived in the house their entire lives; and 4. the absence of any clear explanation of Vanoush's financial circumstances.
The second important observation about the appellant's case is that the submissions made on the appellant's behalf addressed alleged errors of principle in ways only tangentially related to particular grounds of appeal.
The first alleged error of principle was that the primary judge gave "incorrect significance" to the fact that Vanoush had not received financial support from Souren for many decades. Much of the appellant's written submissions addressed the primary judge's subsequent costs decision ([2020] NSWSC 112) and a solicitor's letter tendered for the purposes of that costs application. The appellant's attempt to use the costs reasoning as "thereby accepting" assertions made in a solicitor's letter are unpersuasive. The attempt to attribute the reasoning in a solicitor's letter tendered on a subsequent costs application to the primary judge in his principal decision should be rejected. The primary judge was entitled to take into account the fact that Vanoush had had little, if anything, to do with Souren over many decades and had not received any financial support from him during that period. No error of principle was demonstrated in taking those relevant matters into account.
The second alleged error of principle was that the primary judge took into account the expressed intentions of Ara and Taline to support Vanoush. There was no error in his Honour doing so. The extravagant language used by the appellant which asserted that the primary judge had impliedly concluded that Vanoush's "prima facie" entitlement was "obliterated" by the "gratuitous generosity of a grandchild" is a misstatement of the primary judge's careful findings. His Honour addressed the list of factors in s 60(2) of the Succession Act, specifically by reference to: "financial resources" of the applicant (s 60(2)(d)); the "financial circumstances" of another person with whom the applicant "is cohabiting" which included Taline (s 60(2)(e)); and whether anyone else "is liable" to support the applicant (s 60(2)(l)). The primary judge concluded that to adopt the appellant's approach - that the resources available to Vanoush's children were categorically irrelevant - would be to impose a limitation which is not found in the text of the Act. That conclusion did not, in the circumstances of this case, involve an error, let alone a House v The King error.
The third alleged error of principle was that the primary judge permitted Souren's testamentary intention to "override" Vanoush's claim for proper provision under s 59. The appellant submitted that it followed from the primary judge's finding that the $10,000 legacy was "virtually nominal", that Souren was not a capable testator who had duly considered the claims on his estate. Thus, it was submitted that respect for Souren's testamentary intentions "should not have been permitted by the judge to limit the order for further provision in favour" of Vanoush. The primary judge made no such error of principle. I do not accept the premise of the appellant's argument. The primary judge found that Vanoush was entitled to a modest capital amount as being within the statutory concept of "advancement". The $10,000 legacy in the will had, due to the passage of time, become "nominal" and was thus not adequate provision for her proper maintenance, education or advancement. This finding did not demonstrate that Souren was not a capable testator who had duly considered the claims on his estate. In determining adequate provision for the proper maintenance, education or advancement in life of the appellant, his Honour took into account all the relevant circumstances including the unchallenged matters of fact at [38] above and addressed the statutory test in the Succession Act. The primary judge did not permit Souren's testamentary intention to "override" Vanoush's claim for proper provision under s 59 of the Succession Act.
Turning to the actual grounds of appeal, ground 1 may be disposed of shortly. It is an unpromising start to an asserted House v The King error to commence with a complaint that the primary judge "should have approached the case differently". The rigid approach mandated in the appellant's ground 1 focuses, to the exclusion of virtually everything else, on a contest between the financial needs of Vanoush and Hampartzoum in the context of the value of the estate. The asserted approach is inconsistent with the terms of the Succession Act. The evaluative judgment required by s 59(1)(c) about whether "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" has regard to all relevant circumstances, not merely the parties' financial circumstances. While the court's assessment of what is proper maintenance, education or advancement in life must be made at a time when the court is considering the application, that does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate. It was for the primary judge to determine the weight to be given to the s 60(2) factors. The evaluative judgment made under s 59(2) is fact-specific and the general words of the provision cannot be read down by applying constraints that are not to be found in the text of the legislation: Sgro v Thompson at [67] per White JA with whom McColl JA and I agreed. Ground 1 should be dismissed.
Ground 2 does not allege any relevant error in the primary judge's discretionary decision. Review in this Court of the decision of the primary judge in this respect is subject to the restraints identified in House v The King as restated in Norbis v Norbis. Ground 2 should be dismissed.
Ground 3, which I have summarised above at [37], addresses allegedly irrelevant matters taken into account by the primary judge. None of the four tendentious and argumentative sub-grounds identify "irrelevant matters" within the meaning of House v The King: 1. ground 3(a) may properly be described as a quibble, rather than alleging House v The King error. The primary judge's summary of the appellant's case was not an error, let alone a House v The King error. To summarise the appellant's case in the way his Honour did was not to take into account an irrelevant consideration. The primary judge's determination, read in the context, that there was no "prima facie" entitlement to an unencumbered house was correct. It reflected the evaluative judgment required by the legislative scheme; 2. ground 3(b) is another quibble. His Honour did not err in his summary of the effect of the appellant's submissions, based as they were on the appellant's erroneous approach to the statutory task outlined in the appellant's ground 1. A summary by the Court of the "thrust" of the submissions made does not give rise to an irrelevant consideration. There was no misattribution of submissions on behalf of the appellant in terms of the quantum of provision to be made. It is clear, from the written and oral submissions, that the appellant was, and is, seeking provision involving unencumbered secure accommodation and a fund for vicissitudes or contingencies; 3. ground 3(c) is a complaint about fact finding. The subject matter was relevant. A description of the financial arrangements to which Vanoush was party as "some sort of joint venture" was correct. It could equally have been described on the evidence as an informal financial arrangement. His Honour's finding did not amount to taking into account an irrelevant consideration. The primary judge was entitled to draw inferences on matters where the appellant had an obligation of disclosure, including the appellant's living arrangements with her daughter, Taline. It was not an error, let alone a House v The King error, to make the observations his Honour did about the financial arrangements disclosed (and not disclosed) in the evidence, including what Vanoush had chosen to disclose about her financial circumstances; and 4. ground 3(d) involves no House v The King error. His Honour was remarking, correctly, about the likely capital gains taxation consequences for Hampartzoum of the orders sought by the appellant. Those consequences would inevitably have involved the sale of the investment properties in which Hampartzoum had shares. Those disposals would have given rise to capital gains tax liability. The appellant's explanation about the taxation treatment of the sale of the home Hampartzoum lived in (being his principal residence) is not to the point. The appellant's submission to the primary judge was that Hampartzoum should fund the remainder of his retirement from his shares in other investment properties. The primary judge described this submission as "rather insouciant". I agree. The primary judge found that Hampartzoum depends upon the income from the investment properties to cover his family living expenses. The sale of the properties, which would be a likely consequence of the orders sought by the appellant being made, would obviously have capital gains tax consequences. The trial judge did not err in so concluding.
Ground 4, which I have summarised above, addresses two allegedly relevant matters not taken into account by the primary judge. Neither criticism is fair to the primary judge's careful reasons. No House v The King error was established: 1. the primary judge's reasons do not reveal an adherence to static social and economic conditions (contrary to ground 4(a)). The Succession Act permitted his Honour to take into account the matters identified in s 60(2) of the Act and "any other matter the Court considers relevant"; and 2. the primary judge well understood that what constitutes "adequate provision" depends on the facts of the case (contrary to ground 4(b)). His Honour said so. There was no failure to take into account a relevant consideration.
Ground 4 should be dismissed.

Ground 5

Ground 5 of the appellant's notice of appeal stated: "5. In substance, the judge passed to Vanoush's children primary responsibility for providing for Vanoush for her remaining lifetime when the Succession Act clearly indicates that Parliament regards such primary responsibility as being that of Vanoush's parents, relevantly the Deceased."
The appellant submitted that to treat as relevant the resources available to the appellant's children "would be to impose a limitation which is not found in the Act". It was submitted that the primary judge impermissibly concluded that the appellant's need for proper provision under s 59 of the Succession Act was to be assessed having regard to the willingness of her children, Ara and Taline, to assist her financially.
The appellant submitted that it was an error of principle for the primary judge to exonerate the estate of a deceased parent from liability to an order under s 59 in favour of an adult child applicant otherwise left without proper provision by relying on the gratuitous support of the appellant by the appellant's children who could terminate their support at any time.
The primary judge did not "pass responsibility" for providing for the appellant to the appellant's children. The primary judge engaged in a considered analysis of the relevance of the financial circumstances of the appellant's children at [181]-[188] and took into account the non-disclosure of details of those financial circumstances where they were clearly intertwined with those of Vanoush. The unchallenged finding by the primary judge was that he could not accept Vanoush's evidence without independent support.
The Succession Act gives the Court an evaluative discretion where adequate provision for the proper maintenance, education or advancement in life of a child has not been made by the will of a deceased parent. This does not prescribe an order being made wherever a child has a demonstrated need for provision, much less dictate the amount of that order if made. That disposes of the proposition on which the appellant's contention rests.
Ground 5 should be dismissed.

Grounds 6 - 8

Grounds 6 to 8 of the appellant's notice of appeal provided: 1. the primary judge's exercise of jurisdiction under s 59 of the Succession Act miscarried; 2. the further provision of $100,000 was manifestly inadequate; and 3. extra income of between $2,000 and $5,000 per annum could not be regarded as "adequate provision" for a 70 year old woman living in Sydney.
The appellant submitted that the order for further provision in the sum of $100,000 was manifestly an unreasonable or unjust exercise of the court's jurisdiction. The appellant sought to demonstrate this by comparing the amount by way of provision with the cost of accommodation in the Lower North Shore area of Sydney. The appellant submitted that the proper provision for the maintenance or advancement in life of the appellant, with no home of her own, "virtually penniless and dependent upon a social welfare pension and the charity of her children", clearly called for secure modest accommodation and a realistic fund to meet future contingencies. The order of $100,000 was manifestly inadequate to answer those needs. Therefore, the appellant submitted that the decision was manifestly unreasonable or unjust.
The appellant submitted that the primary judge allowed Souren's testamentary entitlement to freedom of testamentary disposition to override the appellant's claim for proper provision under s 59. The primary judge said: "[193] 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."
Grounds 6 to 8 complain about the magnitude of the order for $100,000, labelling the evaluative outcome as a "miscarriage" and "inadequate" without pointing to any House v The King error.
There is no evidence about contingencies, or life expectancy, that his Honour failed to take into account. His Honour was entitled to take into account a wide range of non-financial matters, especially where the true facts were hard to ascertain.
The primary judge's application of the principles applicable to cases brought by adult children was consistent with authority, including Hughes v National Trustees, Executors and Agency Company of Australasia Limited (1979) 143 CLR 134 at 147; [1979] HCA 2. The primary judge accepted, using the terms "usually" and "prima facie", that the notion that an adult child does not normally have an entitlement to receive unencumbered accommodation is not applicable in every case.
This case was a long way away from a case involving an adult child with disability. Vanoush had been independent and living away from her parents for more than 50 years.
The primary judge considered, as he was entitled to, the relevance of the financial circumstances of Vanoush's children. His Honour found that, on the evidence available, he could not exclude the possibility that the appellant's children may have chosen (or agreed with the appellant) to take on responsibility to house the appellant. While that finding is relevant, it is only one of the matters that led his Honour to his ultimate determination.
Vanoush submitted at first instance (and submits now) that she is entitled to modest secure permanent accommodation, payment of significant present debts and a fund for contingencies. The primary judge was correct in rejecting this submission. On my understanding of community expectations, they do not include an expectation that a parent, in ordinary circumstances, should provide to an adult child (much less an adult child in her seventies) unencumbered accommodation in a suburb of that child's choosing. The asserted existence of such a community expectation was not established.
The case involves a modest estate and a strong competing claim. The appellant has no entitlement to anything other than an amount which is adequate and proper, weighing up all of the s 60(2) factors. There was no House v The King error established in his Honour deciding not to give Vanoush the entire notional estate as she had sought.
It is clear that the mere fact of estrangement between a parent and child does not, on its own, ordinarily result in the child not being able to satisfy the jurisdictional requirement for making a successful claim under the Succession Act. The converse does not follow. There is no prima facie entitlement to provision in circumstances where there is financial need on the part of an estranged adult child. All of the circumstances must be taken into account. It is for the primary judge to consider and evaluate those circumstances, as the primary judge did here.
Grounds 6 to 8 should be dismissed.

Conclusion and proposed orders

For the foregoing reasons I propose the following orders: 1. Appeal dismissed; 2. Appellant to pay the costs of the respondent.
EMMETT AJA: The question in this appeal is whether a family provision order made under the Succession Act 2006 (NSW) (the Succession Act) was adequate to provide for the proper maintenance, education and advancement in life of the appellant, Ms Vanoush Megerditchian (the Daughter). The order was made in respect of the estate of the Daughter's father, Mr Souren Khatchadourian (the Deceased), who died in May 2018 at the age of 91.
By his last will made in 2007, the Deceased gave a legacy of $10,000 to the Daughter and the rest of his estate to his only other child, the respondent, Hampartzoum Khatchadourian (the Son). The estate of the Deceased consisted of approximately $5,000, consisting of funds standing to the credit of two bank accounts. That was insufficient to meet the funeral expenses, which were apparently paid by the Son. There were no funds to pay the legacy to the Daughter.
The Daughter made an application under the Succession Act for a family provision order. On 26 March 2020, for reasons published on 20 December 2019 and 20 February 2020, a judge of the Equity Division (the primary judge) made orders under Ch 3 of the Succession Act designating the joint interest of the Deceased as joint tenant in a property situated in Willoughby (the Willoughby Property) as notional estate of the Deceased for the purposes of making a family provision order. The Son was the other joint tenant of the Willoughby property and, upon the death of the Deceased, succeeded to the interest of the Deceased as surviving joint tenant. The primary judge ordered that further provision be made for the Daughter in the sum of $100,000 from and out of the notional estate of the Deceased.
By notice of appeal filed on 16 March 2020, the Daughter appeals from the orders made by the primary judge. The notice of appeal raises grounds that may be summarised as follows: 1. given the absence of any disqualifying conduct on the part of the Daughter, the primary judge should have asked what were the respective needs of the eligible persons, being the Daughter and the Son, for proper maintenance, education and advancement in life; 2. the primary judge erred by concentrating on incidental or irrelevant matters; 3. the primary judge took into account irrelevant matters; 4. the primary judge failed to take into account relevant matters; 5. in substance, the primary judge passed to the Daughter's children primary responsibility for providing for her for her remaining lifetime; 6. the primary judge's exercise of discretion under s 59 of the Succession Act miscarried; and 7. further provision for the daughter in the sum of $100,000 was manifestly inadequate.
The essential question on appeal is whether the Daughter can demonstrate that there was an error of principle, a material error of fact, a failure to take some material consideration into account, or the converse, or the result is so unreasonable or plainly unjust as to bespeak error of some kind. I have had the advantage of reading in draft form the proposed reasons of Payne JA for dismissing the appeal with costs. I agree with his Honour, for the reasons given by him, that no appealable error on the part of the primary judge has been demonstrated.
In his reasons, the primary judge stated that, while it is well established that, prima facie, an infant child has a claim to be maintained and supported, an adult child capable of maintaining and supporting himself or herself usually does not. [1] Furthermore, his Honour considered that, if a parent owes no obligation to provide a home for a child whilst the parent is alive, that absence of obligation does not change merely because the parent dies. In the course of argument, when addressing that statement, counsel for the Daughter propounded the example of a New South Wales hypothetical resident equivalent of "Croesus". That allusion was presumably to the last King of Lydia, who ruled from 560 BC to 546 BC, when he was overthrown by Cyrus the Great, of Persia.
Croesus was anecdotally referred to by Herodotus as being very wealthy. Another more appropriate anecdote concerning Croesus in a legal context records the visit to him by Solon, the famed Athenian lawmaker, who, in the 6th Century BC, compiled a new code of laws to supersede the "draconian" laws of Draco. The Code of Solon was consulted by the law reform commission that produced Rome's famed Twelve Tables. [2] In AD 536 and AD 546, another great lawmaker, Justinian, enacted that a child was entitled to receive at least one third of what the child would receive on intestacy unless the child was expressly disinherited on one of 14 specific grounds. Allusion to Justinian's reforms might have been more relevant.

Endnotes

Citing Hughes v National Trustees, Executors and Agency Company of Australasia Limited (1979) 143 CLR 134 at 147 (Gibbs J); [1979] HCA 2.
The Decemviri consulari imperio legibus scribundis; see, for example, HF Jolowicz and Barry Nicholas, Historical Introduction to the Study of Roman Law (3rd ed, 1972, Cambridge University Press) at 13. 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: 25 September 2020

Family Provision Act 1982(NSW)

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