It is also my wish that our home at … Blacktown always remain in our family and if it must be sold that either one of you buy the others out so that our home always remains in our family."
54 The Calalla Beach home is an asset of the family trust which was purchased solely with the testator's funds. This is the evidence of his daughters which I accept and is more reliable than Rosa's speculations.
55 There is further evidence of the pact respecting property in a will that Rosa had made on 17 March, 2004. The final paragraph of this latter will reads:
"IN MAKING THE PROVISIONS OF THIS MY WILL I have given full consideration to the claims on me of my Husband Luigi BORAZIO, however, I have made no provision for him because we have retained separate assets during our lifetime and I have no expectation of receiving any benefit under the Will made by him."
56 Vittoria gave evidence, which I accept that, in 1992, the testator said to her:
"Rosa and I are going to live together. Since both of us own our homes and acquired them before we met, we had a discussion about which home we would live in. My home is larger and more comfortable and has easier access to the Blacktown shops so we chose to live in my home. We agreed to keep whatever assets we owned separate. Rosa agreed to this before moving in with me. We did this because when your mother and I settled our divorce, concessions were made by your mother to leave assets with me that would one day benefit you and your sisters, Rosa has agreed to this. If she did not agree I would not live with her."
57 Rosa says that she did make such an agreement, but she now realizes that she cannot live in a reasonable lifestyle without reliance on some of the testator's assets.
58 Rosa said in her affidavit of 6 June 2008:
"In answer to observations by all three deponents that the deceased insisted that his home should be bequeathed to his children I acknowledge that I did not contest those statements during his lifetime. I felt that there would be no point in arguing about his wish."
59 Thirdly, both plaintiffs have, in the past decade made large capital gifts.
60 Rosa has made large gifts to her children. She sold her house to her son it would seem for $340,000 though she says $250,000 and gave a substantial part of the price to her daughters. Most of the proceeds were spent as "gifts". The evidence suggests that she was only able to do this because of her agreement that she would live in the testator's house and that they would keep their assets separate.
61 Gina paid out $196,000 to a confidence man she met over the internet. The "relationship" with this man lasted between August 2006 and February 2008. Gina considers that this amount is irrecoverable as it would cost about $50,000 in legal costs to pursue it, which she does not have.
62 Angela, Vittoria and Luisa have all given evidence. None of them put forward any special needs.
63 The applications are very difficult to resolve. I will commence with Rosa's application as ordinarily a man should consider his widow's needs before anything else.
64 One always commences with reference to the decision of the High Court in
Singer v Berghouse (1994) 181 CLR 201 at 209-210 that resolution of these applications involves a two stage process, first, a consideration of whether the provision made for the applicant was inadequate for her proper maintenance etc, the second, if the first is answered affirmatively, what provision should have been so made by the testator.
65 If there were anything that could be called "an ordinary case" one would say, with authority, that in this 21st century, in an ordinary case, it is insufficient for a man to leave his widow with a life estate only in the matrimonial home. At the very least he must make provision for the executors to sell the home and, as the widow ages, provide suitable substitute accommodation.
66 However, the present is far from the ordinary case. The case against the testator considering that a capital order for the widow would not be proper provision is strong.
67 First, the widow only has a short life expectancy. Any capital gift would in the absence of some undertaking by the widow or the involvement of some mortgage arrangement most probably work to the benefit Rosa's children.
68 This would be a problem even in the ordinary case. However, in the present case, the testator would have realised that to so provide would be to act contrary to the agreement he made with Marlene (an agreement for value to the testator) and also contrary to the prenuptial agreement with Rosa which she has already implemented to the benefit of herself and her children.
69 If one were just being generous with another's money, it would have been nice to give the widow $100,000 so that she could buy another unit. However, I have no power to so act on that basis.
70 I endeavoured to put up two possible orders which would have provided Rosa with $100,000, give Gina somewhere of her own to live and keep the house in the family as the testator wished.
71 Obviously the daughters consider that keeping the house is not feasible. Gina does not wish to buy it and I infer the same is also the case with her sisters.
72 Further, without full investigation, I should not infer that a mortgage arrangement is viable. Assuming that a mortgage would be available, there is the question as to whether there would be sufficient funds to pay it out.
73 My rough calculation when making the suggestion was that $150,000 at 10% would mean $15,000 a year interest and 52 weeks at a rent of $350 a week would produce $17,500 a year, so that the scheme was possible.
74 The house would be sold at the appropriate time to repay the capital.
75 However, the fact that no party has explored the matter would make me dubious about it.
76 It is also significant, that despite my hints throughout the proceedings that a sticking point was the probable increased benefit that would flow to Rosa's children to the detriment of the testator's children, no proposal was ever put up by Rosa's counsel that Rosa would make a covenant or will to see that that did not occur.
77 I bear in the forefront of my mind that there was never any release of rights under s 31 of the Family Provision Act and that I must judge the question as to whether Rosa was left with adequate provision as at today's date and that what may have been in the prenuptial agreement and what monies Rosa has given away are not as important as her present state of financial affairs.
78 However, those matters have a fair amount of significance, as does the fact that her own children who have benefited so much from her over the past decade have not given evidence to say that they are unable or unwilling to assist their mother with at least a loan of $100,000 for a few years.
79 Although this is very much a borderline case, I consider that in the light of all I have said, I am unable to conclude that in all the circumstances the testator did not make adequate provision for Rosa.
80 This view, however, is predicated on the assumption that the will's provision for Rosa can be implemented.
81 I have a concern that the executors' costs are said to be $55,000 and that they might consider themselves justified in selling the house to discharge that debt. If they were to attempt to do that, then the provision in the will would be inadequate.
82 Accordingly, my view is that if I have an undertaking to the court by the executors or other secure promise that they will not seek to sell the house without Rosa's consent while Rosa is still alive then I should dismiss Rosa's application. However, in the circumstances, I would not make any order for costs against her.
83 If the executors are unwilling to satisfy me about not selling the house, then I would consider that Rosa has surmounted the first stage of the two stage test in Singer v Berghouse.
84 I would then need to consider what is the proper provision that the testator should have made for Rosa.
85 In my view, the provision should be for Rosa's proper accommodation.
86 This can be secured if Rosa were to have $100,000 towards buying the home that is referred to in her most recent affidavit.
87 This can be done by a legacy of $100,000. The downside here is that that sum would pass out of the estate forever and probably, eventually benefit Rosa's children.
88 I have considered whether it would be more appropriate to direct the estate to loan Rosa $100,00 interest free not to be repaid until her death. However, as the executors can see off Rosa by not demanding that the house be sold to pay their costs at a price of raising $55,000, I have decided against such a course.
89 Because the executors will need to consider whether or not they are willing to make the secured promise, I will not make a formal order today, but stand the matter over for short minutes to be brought in. I suggest 21 October 2008 at 9.30am, but , if some other day is more convenient to counsel, a substitute date can be arranged.
90 I should make it clear that, as far as I am concerned, there is no reason why the parties cannot agree between now and 21 October that the proper order is that Rosa vacate the house and be given an interest free loan as noted earlier.
91 I now turn to Gina's application.
92 May I first of all say that I am intrigued by the inter family reaction. Angela receives some money from the Commonwealth as Gina's carer and Gina clearly appreciates what Angela does for her. Vittoria has lent Gina substantial monies, unsecured with no great chance of immediate repayment. One would thus think that relationships were good. The three sisters have no apparent needs for money though extra money is always welcome. Yet the three sisters oppose Gina's application.
93 It may be that this is because Gina is seeking about half the residue.
94 On the basis that Rosa's claim stands dismissed, the state of play is that no cash will be available in the estate until Rosa dies or vacates the house.
95 I consider that Rosa's claim, as the claim of a widow is stronger than Gina's claim.
96 Thus, on this basis there is no ready cash available for Gina at this time. However, assuming current property prices hold, in say, three years' time, there will be $320,000 to distribute. That is $400,000 less $80,000 costs of probate, these proceedings and costs of sale.
97 Gina's share will be $80,000.
98 The first stage of Singer v Berghouse requires me to ask whether this is adequate provision for Gina?
99 This is complicated by the fact that, because of the prior right of the widow, there are no monies available for three years.
100 If Rosa, by the secondary order proposed or by settlement, vacates the house for $100,000 then the estate would seem to be (on the assumption that the property market does not collapse) worth about $220,000. That is $400,000 less $100,000 less $80,000 costs of probate, these proceedings and costs of sale.
101 One quarter share of $220,000 is $55,000.
102 Again, the first stage of Singer v Berghouse requires me to ask whether this is adequate provision for Gina?
103 This is an awkward question. Gina lost $196,000 by falling for the blandishments of a confidence man. Had she not done so, she would have had enough to have the $180,000 to buy a villa home.
104 I do not know of any precedent as to how one takes into consideration the fact that a plaintiff has lost a large sum of money through fraud, even if her own gullibility was a principal factor.
105 My view is that one does not treat the loss in the same way as a claimant under the Act who deliberately denudes her assets so as to seek more from the testator.
106 Another problem is that the evidence that Gina needs $180,000 is a little sparse. She has given details of a large number of properties of which she has become aware from estate agents' advertisements, but has not seen any which have an ensuite. Furthermore, the prices of the various houses Gina has listed vary in price by up to $100,000.
107 It would be easier for me if I could merely adjourn Gina's application until after the death of the widow so that we could then possibly have a more accurate idea of what monies were available and also have some more definite figures on the cost of substitute accommodation for Gina.
108 However I do not have that material.
109 I consider that the answer to the first stage question for Gina is that the testator did not make adequate provision for her.
110 I must then go to the second stage.
111 There are problems here because the testator's estate is not large enough to cater for everyone. I do not consider that the case of Gina is so strong that she should receive the bulk of what is left over after the widow's portion.
112 Doing the best I can, I believe that the proper order as a matter of principle is that the residue be split into five shares, Gina receive two shares and each of her sisters one share.
113 On my calculations, if there is $320,000 to be divided, Gina would receive $128,000 and each of her sisters $64,000. If there was $220,000, Gina would receive $88,000 and each of her sisters $44,000.
114 The factor I have not taken into account is the effect of the order for costs that McLaughlin AsJ made against Gina. I do not have sufficient material to set aside his Honour's order. The appropriate way to do this would be by way of appeal.
115 No material has been placed before me as to how much money is involved. Without facts, there is no way that I can do anything save take into account that Gina's resources will be less because of what she might have to pay under that order.
116 Gina is entitled to some costs. However, I have not received an estimate, so that I will have to wait until the short minute stage before considering whether her costs should be capped. Probably those costs should be set off against the order made by McLaughlin As J.
117 Accordingly I merely publish these reasons and stand both sets of proceedings over to 21 October 2008 before me at 9.30am for the consideration of short minutes.