Milewski v Holben

PERSONAL RELATIONSHIPS 21The deceased was born in 1961. He was twice married; first to the plaintiff and, after a lapse of time, to the defendant. 22In formal terms, the first marriage (to the plaintiff) lasted from 29 December 1988 to 29 May 1995. 23The plaintiff is an American. At the time of their marriage, the deceased was approaching 28 years of age. Born in 1962, the plaintiff was aged 26 years. They were married in Toledo, Ohio, in the United States on 29 December 1988. 24They were divorced by an order of the Family Court of Australia that took effect on 29 May 1995. 25They met in Detroit, USA, in 1987. Their relationship commenced soon afterwards. The plaintiff visited the deceased in Sydney in October 1988. He proposed marriage to her in November. They were married in December. 26They were divorced upon the application of the deceased. In the application for divorce he filed in the Family Court in September 1994 (served on the plaintiff on 19 February 1995) he identified "February 1993" as the date of their separation. 27With reluctance, the plaintiff acquiesced in the divorce. She did not contest the deceased's nomination of a formal date of separation in the divorce proceedings but, in these proceedings, she did, not unreasonably, call it into question. Though they were for a time living apart, that was consistent with his peripatetic lifestyle, and she did not imagine that they had separated. Given her acquiescence in his application for a divorce the point was not worth pursuing at the time of the Family Court proceedings, and nothing much turns on it in these proceedings. 28The plaintiff says, and I accept, that the marriage came to an end because, with best intentions on both sides, she and the deceased could not settle down to a home base in the other's country. He could not settle down to a base in the US, and she could not settle down to life in Sydney. 29The deceased travelled a lot in a fairly single minded pursuit of business success. Nevertheless, he remained tied to his origins, and family, in Australia. She tried life in Sydney, but she desperately missed her extended family in the US. He still called Australia home. 30Despite his return to Australia, the parties' subsequent divorce and subsequent relationships on both sides, the plaintiff continued to hope (at times against hope) that they would get back together. 31She says, and I accept, that, from time to time, he made statements to her that encouraged her to believe that it was possible that they would re-unite. She held onto that hope well beyond the birth of the deceased's sons. Only with his marriage to the defendant did she begin, reluctantly, to allow her head to rule over her heart. 32Even so, from time to time he made statements to her, her father and her sister Rosanne to the effect that he would look after her. The fact that he never did never loomed large in her perceptions. 33He was a person who, although not ungenerous, appears to have been anxious to retain control of property. 34Hope, though she did, that a reunion with the deceased might eventuate, she was disciplined enough - mature enough - not to interfere with his relationship with the defendant. She and the defendant have never met. They may have spoken by telephone, by accident, as an incident of telephone contact between the plaintiff and the deceased; but, if so, it was nothing but an isolated experience. 35Following their divorce, the plaintiff left the deceased to pursue his business and personal affairs without distraction of her claims upon him. She made no application for a property settlement. She received no property settlement or other benefits from him. 36In formal terms the deceased's second marriage (to the defendant) dates from 30 October 2009. It was a second marriage for both parties. Neither had children from their first marriage. At the time of their marriage to each other, the deceased was about 48 years of age; the defendant (born in 1968) was aged about 41 years. Their first son had been born in February 1999, their second in April 2003. 37There is no basis upon which to doubt that the deceased loved, and deeply cared for, the defendant and their sons. 38The provision he made for them, in his marriage to the defendant and the trusts he established for their benefit is a testament to that fact. 39If the deceased failed to make adequate provision for his widow (according to any standards similar to that enunciated in Luciano v Rosenblum (1985) 2 NSWLR 65 at 69G-70A), that was a function of his pre-disposition to control property, to tie it up in trusts. His intention, made good by a Family Provision order in favour of the defendant, was to ensure that she, and their sons, would be secure in the family home and that they would have resources sufficient to enable them to live in the style to which they were accustomed and to cope with unforeseen contingencies. 40The deceased's deep and abiding affection for his second family is not necessarily to be seen as inconsistent with a strong, continuing affection for the plaintiff. 41The plaintiff and the deceased remained in contact, albeit irregularly, after their divorce. That contact diminished after the deceased commenced his relationship with the defendant. Nevertheless, in the course of his business travels he stayed with the plaintiff, and together they visited her family, in 2000, 2003 and 2006, at which times he referred to her by pet names long established. They last met personally in or about May 2008, when they shared a hotel room for three nights in Miami, Florida. 42The deceased spoke to the plaintiff by telephone, in 2009, to foreshadow his marriage to the defendant and, in January 2011, to tell her of his diagnosis with terminal cancer. 43On each occasion, or thereabouts, he gave her assurances that he would work out a way of making some financial provision for her. 44Her evidence of such assurances has been corroborated, in these proceedings, by evidence given by her father and her sister Rosanne. 45All three witnesses were cross-examined, via video link. All three presented as solid, sensible people, moderate and reasonable in the evidence they presented. 46I accept the substance of what they have deposed to about the nature of the relationship between the plaintiff and the deceased, and about the assurances he gave to her from time to time. 47The fact that the plaintiff gave the deceased time and space to work out his family, and financial, affairs without any disruptive fuss on her part is not, in my assessment, something that can be taken, upon due consideration, to count against her claim for Family Provision relief. 48The deceased appears to have been a man conscious of obligations of honour owed to each of those with whom he had shared his life. 49He was, also, evidently, a man pre-disposed to a strong desire to acquire, and control, property. The facts that he did not own his final, family home jointly with the defendant, and that he left it to a testamentary trust for the benefit of family, are consistent with this assessment. 50The fact, as I find, that the deceased more than once promised to confer financial benefits on the plaintiff, coupled with the fact that he appears not to have done so, is not to be taken as evidence of any form of insincerity on his part. More probably, in my assessment, the plaintiff was still part of his perception of "family" and the fact that he had not worked out a way of assisting her financially, without causing hurt to the defendant and his sons, was for him unfinished business.

THE PLAINTIFF'S APPLICATION FOR AN EXTENSION OF TIME: SUCCESSION ACT, S 58(2) 51The time constraint for which s 58(2) of the Succession Act provides upon the making of a Family Provision application is no mere formality. The plaintiff bears the onus of showing sufficient cause for an order extending the time to make an application: In Re Salmon, Deceased [1981] Ch 167 at 175B; Re Guskett [1947] VLR 212 at 214; Durham v Durham (2011) 80 NSWLR 335 at 344 [39]. 52The Court's discretion must be exercised judicially, but unconstrained by rigid formulae, taking into account factors that, conventionally, include: a consideration of the plaintiff's explanation for delay in the making of a claim for Family Provision relief; any prejudice to beneficiaries occasioned by the delay, other than disappointment occasioned by the making of an order for provision; and the strength of the plaintiff's case for such an order: Warren v McKnight (1996) 40 NSWLR 390 at 394D; Dare v Furness (1997) 44 NSWLR 493 at 500C; Thomas v Pickering [2001] NSWSC 572 at [84]-[90]; J K de Groot and B W Nickel, Family Provision in Australia (LexisNexis Butterworths, Australia, Fourth Edition, 2012) at paragraphs [5.8]-[5.14]. 53The plaintiff's delay is readily explained by the fact that she did not discover the possibility that she could apply for a Family Provision order until, in the course of the defendant's own application for Family Provision relief (filed shortly before expiry of the s 58(2) time limit), she was served with a formal notice of her entitlement to make an application. That fact, reinforced by residence in another jurisdiction and the difficulties attending cross-jurisdictional litigation, is a sufficient explanation for any delay. 54To this must be added the defendant's concession, properly made, that no material prejudice to the defendant can be identified as standing in the way of an order for extension of the time within which the plaintiff's application for a Family Provision order can be made. 55A need to have regard to the strength of the plaintiff's case for a grant of Family Provision relief focuses attention, particularly, on ss s 59(1)(b), 59(1)(c) and 59(2) of the Succession Act, read in the context of the matters identified for the Court's consideration by s 60 of the Act. 56Subject to a consideration of her case in those contexts, and bearing in mind the constraints of a designation of notional estate, an order under s 58(2) for an extension of time, as sought by the plaintiff, is appropriate and should be made.

FACTORS WARRANTING THE MAKING OF THE PLAINTIFF'S APPLICATION: SUCCESSION ACT, S 59(1)(b) 57I proceed on the basis that the plaintiff bears the onus of satisfying the Court that the condition on the making of a Family Provision order for which s 59(1)(b) of the Succession Act provides should be taken as having been met. 58Major factors standing in the plaintiff's way are the relatively short duration of her marriage to the deceased (approximately three years or so); the length of time between their divorce and his death; the decreasing frequency of their contact between the time of their divorce and his death, particularly after the commencement of his relationship with the defendant and their subsequent marriage; the lack of any regular contact between the plaintiff, the deceased and their respective extended families; and the absence of contact between the plaintiff and the deceased after his disclosure to her of his terminal illness. 59There is some force in the defendant's contention that each of the plaintiff and the deceased "moved on" with a separate life after their divorce. Prime evidence of that is found, on the deceased's part, in the birth of his sons and, perhaps more especially so, in his deliberate marriage to their mother, the defendant. 60On the plaintiff's side, the evidence on this front is at best equivocal. She appears to have taken longer to settle into a new pattern of life than did the deceased. She did, for some years, have a personal relationship with another man; but it appears to have settled in the territory of boyfriend-girlfriend rather than a domestic relationship comparable to marriage. Her friend died shortly before the deceased announced to her that he had been diagnosed with cancer. Grief struck her, then, from two directions. She is presently in another relationship, but not married. 61When married to the deceased she planned on having children. That plan came to nothing beyond, it seems, a hope that the two of them might yet get together again. 62Weighing in the balance the ongoing nature of the relationship between the plaintiff and the deceased, and the promises of provision he made to her, it is not appropriate to discount the plaintiff's application for Family Provision relief by a finding that she and the deceased had each "moved on". She appears never entirely to have done so. He appears to have regarded her as a confidant, and provision for her welfare as unfinished business requiring attention. 63The defendant says, correctly, that the present proceedings cannot be approached as if, de facto, an application for an adjustment of property rights, or for maintenance, under the Family Law Act 1975 Cth. They must be determined within the framework of Chapter 3 of the Succession Act. 64Nevertheless, even on that footing, it is of significance to note that the deceased made no provision (by way of capital or income) for the plaintiff at, or following, the time of their divorce. Had they settled their affairs in the context of a Family Law settlement, it is not difficult to imagine that that fact, alone or in combination with other facts, would have been fatal to the prospects of the plaintiff's present application. 65As life unfolded in fact, there are, in my assessment, a number of factors upon the foundation of which the Court can, and should, hold that the making of the plaintiff's application for a Family Provision order is warranted. 66It is not necessary that those factors be ranked in order of significance and, in listing them, I do not intend to do so. 67First, in time at least, is the lack of any fault attaching to the determination, or the comparatively short length, of the marriage between the plaintiff and the deceased. 68Secondly, there is the absence of any Family Law settlement attending, or following, dissolution of that marriage, leaving the plaintiff to fend for herself and the deceased free to pursue his consistent, and determined, pursuit of wealth. 69Thirdly, there is the ongoing, close (albeit, in more than one sense, irregular) nature of the relationship between the plaintiff and the deceased following their divorce. 70Fourthly, there is a pattern of promises of future provision for the plaintiff voluntarily made by the deceased over the years that followed their divorce. 71Fifthly, there is the size of the deceased's resources at the time of his death, sufficient to provide for his widow and his children an upmarket family home by the seaside, a trust fund of $1 million for each son, and liquid assets for his widow in the order of $1.9 million. 72Sixthly, there is the ready availability of property (namely, a term deposit bank account for $1.6 million) for designation as notional estate of the deceased. 73Seventhly, an element of moderation has been brought to bear in the plaintiff's claim for Family Provision relief in so far as she seeks a legacy limited to an amount of about $230,000 plus costs. 74Eighthly, the personal circumstances of the plaintiff are such that, after a lifetime of full time employment in the work force of Detroit, she has a legitimate need for assistance. She owns a modest home, in need of repair and subject of a mortgage; modest superannuation entitlements held in prospect; and a lifestyle which, in an Australian context, would once have been comfortably characterised as "working class". Although she is presently in a relationship, there is no basis upon which she can reasonably be said to be able to look to her partner for substantial, future support. He has his own financial constraints arising, in part at least, from a prior relationship. 75Ninthly, I accept that a grant of relief of the order sought by the plaintiff would not substantially interfere with the reasonable expectations of the defendant or her sons if charged against the defendant's term deposit account. 76In recording this last observation I am mindful that there is little evidence about the future income stream available to the defendant beyond evidence that she expects to rely upon interest earned on her investments. 77There is no suggestion, however, that the boys' trust funds are not available for their maintenance. The family home is unencumbered. Even if the full amount sought by the plaintiff in these proceedings, and all costs, were to be paid out of the liquid funds available to the defendant, she would, personally, retain cash in excess of $1 million or thereabouts. 78Having regard to all these circumstances, I formally find, for the purpose of s 59(1)(b) of the Succession Act, that there are factors which warrant the making of the plaintiff's application for a Family Provision order.

ADEQUACY OF PROVISION FOR THE PLAINTIFF: SUCCESSION ACT,

S 59(1)(c) 79It is not inappropriate to record that the deceased made no material provision for the proper maintenance, education or advancement in life of the plaintiff. 80In large measure, he amply supported the plaintiff during their shared life; but, despite promises to do more, he made no provision for her after their divorce. He certainly made no provision for her in his will. 81The defendant would have the Court find that, viewed at the present time, as s 59(1)(c) of the Succession Act requires, the plaintiff was left with "adequate" provision because, the defendant submits, the plaintiff has no "moral claim", at all, upon the bounty of the deceased. 82I use the expression "moral claim" here as a shorthand means of referring to the statutory criteria we are all required primarily to address. 83The defendant's submission should not be accepted. On the contrary, I find that, as the deceased himself acknowledged in his recurrent promises to the plaintiff, she did have a reasonable expectation that some provision would be made for her by him. 84I accept that, but for the "factors warranting" I have identified, current community standards would dictate that the plaintiff's application for Family Provision relief be dismissed. However, the identified factors cannot be disregarded and, when account is taken of them, I am satisfied that, measured against community standards, the deceased left the plaintiff without "adequate" provision within the meaning of s 59(1)(c).

AN ORDER FOR PROVISION: SUCCESSION ACT, s 59(2) 85I am mindful that, in approaching the task set for the Court by s 59(2) of the Succession Act, particular regard must be had not only to the matters enumerated in s 60(2) of the Act, but also the criteria attending a designation of distributed estate property as notional estate. There is an interconnectedness between the statutory criteria material to a determination under s 59(2) and those referable to a designation of notional estate. 86I am, I believe, relieved of an obligation to articulate in detail reasons for designation of the defendant's term deposit account as notional estate in circumstances in which the defendant has conceded that that property is available for designation and, if the Court were to determine that an order for provision (or costs) should be made, an order for designation of that property would be appropriate. 87I record, nevertheless, that I am conscious that an exercise of the designation power of the Court does require the Court to be satisfied of the criteria governing the making of an order for designation of notional estate. I am, particularly, mindful of a need on the part of the Court (reflected in s 87 of the Succession Act) to have regard to the importance of not interfering with reasonable expectations in relation to property, and the substantial justice and merits involved in making, or refusing to make, an order for designation of notional estate. 88If and to the extent it may be necessary, by operation of s 90(2)(b) of the Act, to be satisfied that there are "special circumstances" that justify the making of a notional estate order I am so satisfied. Special circumstances of that character can be found in the "factors warranting" identified by reference to s 59(1)(b), with particular reference to the fact (as I find) that a modest order for provision can be made in favour of the plaintiff without substantial interference with the reasonable expectations or entitlements of the defendant and her sons. 89By s 59(2) of the Succession Act, the Court is required to consider whether (and, if so, what) Family Provision relief ought to be granted for the maintenance, education or advancement in life of the plaintiff, having regard to the facts now known to the Court. 90Upon a consideration of s 60(2) factors I notice, especially, the present age of the plaintiff and her comparatively limited financial circumstances. Although she presently has an ongoing personal relationship of a domestic nature, she does not have the security of either marriage or substantial financial resources. 91Her affidavit evidence includes a statement of "future financial needs" (characterised, not inappropriately, by Senior Counsel for the defendant as a "wish list") which, whatever its deficiencies may be, provides a convenient summary of the plaintiff's needs. 92That list includes a perceived need for better accommodation (in terms of both a new home, in a safer district, and furnishings); mortgage relief; funding of education expenses; a new car; costs associated with health care; income, and retirement income, supplements; and a contingency fund. 93The plaintiff does not ask (and, if she did ask, she would not be granted) a level of provision designed to satisfy each or all of these perceived needs. 94Her case has been moderated, limited to a claim for a legacy of $230,000 or thereabouts, as earlier mentioned. 95When pressed to assist the Court with quantification of an order for relief, should the Court determine to make such an order in favour of the plaintiff, Senior Counsel for the defendant urged the Court to grant no more than $40,000 to $50,000 by way of a legacy. That submission was, appropriately, made without prejudice to the defendant's primary contention that no relief at all should be granted under the Succession Act to the plaintiff. 96The conclusion to which I have come, upon an evaluation of all the matters to which I have referred in this judgment, is that an order for provision should be made in favour of the plaintiff (charged against the defendant's term deposit account as designated notional estate) in the sum of $200,000. 97That amount will provide, within reasonable limits, assistance the plaintiff seeks in order to advance her aspirations for better, more secure residential accommodation; educational opportunities; and a car. 98How she may choose to apply the provision made for her is, ultimately, for her to determine. However, in my assessment, and having regard to community standards, the deceased ought to have made provision for her of the nature, and order, of that here determined to be appropriate. He could have done so without injustice to either his widow or their children.

CONCLUSION 99Subject to hearing from counsel as to the form of relief, I propose to make orders to the following effect: 100[His Honour then read a form of draft orders, upon which he received submissions from counsel, and after which he made orders (set out hereunder) based on them.] 101For completeness, and in order to avoid any unnecessary confusion, I record that all dollar figures mentioned in these reasons for judgment are intended to refer to Australian (not United States) dollars.

ORDERS 102Having heard counsel, I make the following orders and notations in disposition of the proceedings: (1)ORDER that the time within which the plaintiff may make an application for a Family Provision order be extended up to and including the date of commencement of these proceedings. (2)ORDER that the plaintiff be granted leave to file an amended summons bearing the date 26 March 2014 and that any requirement for further service of that amended summons be dispensed with. (3)ORDER that the Bendigo Bank term deposit standing to the credit of the defendant (identified in paragraph 17 of her affidavit sworn 3 March 2014) be designated as notional estate of the deceased ("the notional estate") so far as may be necessary to satisfy: (a)the order for provision of a legacy in favour of the plaintiff in the sum of $200,000; and (b)orders for costs made in these proceedings. (4)ORDER that the plaintiff be granted a legacy of $200,000 out of the notional estate of the deceased. (5)ORDER that interest shall accrue on that legacy (at the rate for which s 84A of the Probate and Administration Act 1898 NSW provides) calculated from 1 May 2014 in the event, and to the extent, that the legacy is not earlier paid. (6)ORDER, subject to further order, that the plaintiff's costs of the proceedings be paid out of the notional estate of the deceased on the ordinary basis. (7)ORDER that the defendant's costs of the proceedings be paid out of the notional estate of the deceased on the indemnity basis. (8)ORDER that the obligations for payment of a legacy, and costs, for which these orders provide, be a charge on the notional estate of the deceased. (9)RESERVE for further consideration the question whether any part of the costs of the plaintiff should be assessed on the indemnity basis. (10)ORDER that, if an application is to be made by the plaintiff for an indemnity costs order, it is to be made by a notice of motion (returnable before Lindsay J, on a date to be appointed by that judge), filed with the Associate to Lindsay J no later than 17 April 2014. (11)RESERVE liberty to apply for orders, if any, necessary for working out of these orders. (12)ORDER that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined. (13)ORDER that these orders may be entered forthwith.

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: 03 April 2014