Misek v McBride

Early life in the Stuart household

1. The deceased, Patricia, was born in September 1930. She married Donald Archibald Stuart in the early 1950's. They had two children, a son and a daughter. The plaintiff's father, Gregory Stuart was born in September 1954. The defendant, Cheryl Anne McBride was born in May 1957.
2. During Cheryl's early life, her father, Donald was the Stuart family's sole bread winner. Her mother, the deceased was responsible for domestic duties and child-rearing.
3. Donald would leave home early at around 7:00am every morning to attend work at the Commonwealth Bank, Royal Exchange Branch in the CBD. But he would relax at the local pub most Friday and Saturday evenings and Sunday mornings with friends, business associates and neighbours.
4. Because of Donald's work and recreational habits, Patricia was chiefly responsible for raising Gregory and Cheryl. Their mother shouldered many additional burdens to those usually associated with raising a family. Cheryl had childhood asthma. But even this was overshadowed by Gregory's behaviour.
5. As he matured Gregory developed increasingly debilitating physical and psychological problems. Cheryl's evidence, which the Court entirely accepts on this issue, was that Gregory was "shy and displayed behaviours showing an inability to make friends, [and] maintain relationships". She also said "he had an increased and extended tendency towards violence".
6. Kylie confirmed this judgment about her father: he was prone to aggressive outbursts. Only later did Cheryl fully appreciate that her brother had, from his teenage years, suffered from anorexia nervosa, depression, and an obsessive-compulsive personality disorder.
7. Many of the events of Cheryl's childhood orbited around the treatment of Gregory's illnesses. Patricia went to great lengths to take Gregory to visit a psychiatrist at North Sydney, even though their family home at the time was in Beverly Hills.
8. Gregory's growing illnesses brought the family closer together, and created a closer bond between Cheryl and her mother. Cheryl says, and I accept as entirely accurate: "Mum and I became even closer as we responded to the ebb and flow of Greg's episodes. I remember that on some nights we clung together as we listened to him ranting about a lack of love and purpose in his life. Greg's suffering from what I now know as anorexia was tragic, as I witnessed my 180cm, 16 year old, brother drop his weight to less than 50 kg. The quest for his survival and recovery became our family's focus. Mum would sometimes joke with me saying to the effect: 'You are my rock because you are like a cat - always landing on 4 paws - so different to your very needy brother'."
9. Cheryl and Kylie's accounts of Gregory's illnesses, although given from different perspectives, coincide in substance. Both accounts can and should be accepted.

Gregory's relationship with the plaintiff's mother, Margaret - the early 1970s to 1983

1. Around the time Cheryl commenced university, Gregory met his future wife, the plaintiff's mother, Margaret Thornton. But Gregory and Margaret's relationship was predictably tumultuous, given Gregory's illnesses.
2. In 1976 Gregory and Margaret had a fierce argument. Gregory was affected by this so greatly that he tried to commit suicide. Cheryl and her parents attended the hospital at this time to await Gregory's progress, and comfort Margaret.
3. Gregory ultimately married Margaret in January 1977. Kylie, their eldest child was born later that year. The couple had four children: Kylie, Michelle born in October 1978, Olivia born in August 1981, and James born in March 1983.
4. Margaret lost her job before Kylie's birth. The couple became wholly dependent on Gregory's income. They had significant financial difficulties. Donald and Patricia provided financial support to the couple by: providing money for deposits on three houses; providing personal guarantees for their mortgages; providing funds for renovations; taking out personal loans for the couple's cars; and buying them gifts and clothes.
5. Gregory and Margaret's marriage ended in 1983. Their divorce was acrimonious. It resulted in them dividing responsibility for their four children between them. Margaret and her new partner, Barry Downing took in Kylie and James. Gregory took in Michelle and Olivia.
6. Shortly prior to her brother's divorce, in May 1982, Cheryl married her first husband, Tom McBride. Cheryl says and I accept that she, along with Donald and Tom, tried to provide assistance to both Gregory and Margaret, following their divorce. Cheryl loaned her car to Margaret two days a week to allow her to shop and carry out other tasks. Cheryl assisted Margaret with purchasing household goods, clothing and groceries. With Tom's help, Cheryl even provided after school care for Kylie.

The movements of the Stuart grandchildren - 1983 to 1998

1. Following Gregory and Margaret's separation in 1983, Kylie and her brother, James moved in with their mother and their mother's new partner, Barry. But Kylie came into personal conflict with Barry. I accept that she was, as she said, "scared" of him, as he made what she describes as "inappropriate advances" towards her. So in 1984 she moved out to live with her father and her two sisters, Michelle and Olivia, in Cronulla.
2. Her new living arrangements proved no more stable. Although the girls were in Gregory's care, he would frequently leave them with the professional care workers, Mimi and Judy, at Miss Mimi's Care Centre in Cronulla ("Miss Mimi's"). Initially Gregory left the children in care at Miss Mimi's during the day. But later he would neglect to pick them up and they would end up staying overnight during the week, only returning to live with him on weekends. I accept Kylie's evidence that her father was an abusive alcoholic, with a tendency to be aggressive.
3. Gregory frequently missed childcare payments. Donald and Patricia often had to pay them instead. Mimi and Judy became concerned about the well-being of the three girls with Gregory. The girls were complaining that Gregory left them unsupervised. He ultimately agreed for the girls to return to their mother, who was by then living in Wagga Wagga.
4. So by agreement in 1988, Kylie and her sisters left their father's home to live with their mother. But this did not go well. After only three weeks in Margaret's care, Kylie and her sister Olivia so strongly clashed with their mother, that living under the one roof together became all but impossible. Margaret decided to relinquish Kyle and her sisters to the New South Wales Department of Community Services ("DOCS").
5. An order made under the Children (Care and Protection Act) 1987, s 72 in 1988 declared that Kylie and Olivia were in need of care because "there is a substantial and presently irretrievable breakdown in the relationship between the child and one or more of the child's parents". Margaret retained custody of Kylie's sister, Michelle and her brother, James. Kylie and Olivia lived in short term foster care for two weeks, until they were taken back into their father's custody once more.
6. But their return to their father was equally short-lived. In December 1988, Donald and Patricia received a call from Kylie and Olivia. They told their grandparents that their father had not been home for two nights and they were hungry in Gregory's apartment in Kings Cross. Cheryl and Donald drove straight there. They found Kylie and Olivia living alone, sustaining themselves on toast. Cheryl and Donald collected them and took them back to Donald and Patricia's home in Lugarno.
7. Gregory took immediate advantage of Cheryl and her parent's generosity. That night, he left the girls' possessions on the front verandah of the Lugarno home. It was later discovered that within a short time he moved to New York with his then girlfriend. He never returned. He died in New York in September 2007.
8. Kylie was 12. She and Olivia became wards of the State. Donald and Patricia became their nominated carers. Kylie and Olivia began living at their grandparents' home in Lugarno.
9. Cheryl says, and I accept, that her father had not wanted to take on the full-time care of the girls. Patricia wanted to make sure they were fully cared for. Cheryl and her husband offered to assist where possible. But a compromise was reached. They left the girls at Miss Mimi's during the week and they came to their grandparents' home at Lugarno on weekends.

Cheryl and her Mother - the early 1980s

1. From an early age, Cheryl aspired to a career in teaching. With Patricia's support, and successful studies she earned and accepted a Commonwealth Scholarship for senior high school and university. Patricia was very supportive of Cheryl's chosen career path.
2. But the early 1980s were a turbulent time for Cheryl. She had a very difficult first pregnancy and then a stillbirth. As Cheryl's health deteriorated, Patricia would regularly drive five and a half hours from their then home in Dubbo to Sydney to visit Cheryl. Following Cheryl's hospitalisation, Patricia would sit with her at the hospital and persuade her to eat, offering her home cooked treats. Following the stillbirth Patricia provided significant support to both Cheryl and her husband.
3. When Donald and Patricia were living in Dubbo, they would come to live with Cheryl and Tom in Sydney every few weeks. Cheryl enjoyed dining, sharing holidays, birthdays, and other celebrations with them both. They were a very close family and in my view remained so right through until Donald and Patricia's deaths.
4. In March 1984 Cheryl's second son Lachlan was born prematurely. The deceased assisted her closely with caring for him, and she claims, and I accept, that their mother-daughter bond was greatly strengthened from this experience.

Kylie's education, marriage and children - 1989 to 2006

1. From 1989 to 1991, Kylie attended her local Catholic high school. She boarded at Miss Mimi's during the week. Her grandparents made and paid for these arrangements. On weekends and during school holidays, Kylie and Olivia lived at Lugarno with their grandparents.
2. But in 1992, at 14 years of age, Kylie clashed with the staff at Miss Mimi's. As a result she was sent to boarding school, to Saint Scholastica's Catholic College in Glebe. She studied there for three of her high school years until 1994.
3. At about the same time that Kylie went to Saint Scholastica's Catholic College Donald and Patricia approached Austudy and the Department of Social Security for financial assistance. A document which was much debated in the evidence was produced by the Department in the course of that application. It does show, perhaps not surprisingly, that Donald and Patricia "now feel abandoned by all" as it says. They felt they really had no option but to take on a "pseudo parenting role". But the document shows, as might be expected, that they saw they were elderly and "cannot care for the two girls full time". They clearly needed financial assistance. Not too much more can be drawn from this document, in my view.
4. From 1995 to 1997, Kylie resided permanently with her grandparents and attended Cronulla High School. She completed her Higher School Certificate (HSC) from there in 1996. She had a brief falling out with her grandparents that year due to her poor HSC results. This led to her living at a friend's place for a month. But the family were soon reconciled and Kylie returned home to live with her grandparents.
5. Shortly after completing her HSC, Kylie became engaged to Matthew Misek in 1997 when she was 19. Kylie and Matthew were married in 1998. Kylie says, and I accept, that shortly prior to her wedding in 1998, she had the following conversation with her grandfather, Donald: "Grandfather: So how much is the wedding costing you? Are you and Matt going to be alright to pay for it? Kylie: Pa, we are fine. We have saved the $10,000 that we needed to pay for the wedding. Grandfather: Good on you two but I still would like to pay for half the cost of the wedding. Kylie: Thank you Pa. You have no idea how much that means to me but I can't accept it, it is too much. Grandfather: There is no question about it. I am proud of you for saving the money but I want to pay for half of the wedding regardless."
6. Kylie and Matthew married on 10 October 1998. They had already paid deposits for the wedding amounting to $5,000. I accept Kylie's evidence as to what happened at and after the wedding.
7. Here is her account. Donald contributed $4,000 to cover the balance of the cost of the wedding. Donald walked Kylie down the aisle. In the course of Donald's speech at the wedding reception he said "we took an undertaking to take care of Kylie and we thank her very much for rewarding us in our efforts". Kylie spoke thanking to Donald and Patricia. Cheryl also spoke, saying that "in a world of Utopia a child is brought up by their parents. But for Kylie her grandparents brought her up lovingly". Following the wedding Kylie told Patricia, "You know everything I said in my speech last night I meant. I love you both very much". Patricia cried and hugged her.
8. Kylie and Matthew honeymooned in Queensland. Upon their return, Donald gifted Kylie with a cheque for $1,000. He said to her, "I want you to have this. It's the remainder of the money that you didn't use for your wedding. I said I would pay for half of the wedding so it is only fair that you take it. But I only ask one thing, please don't tell Olivia that I've given you this money. I worry that she will go and get married for the sake of getting $5,000." Kylie gratefully received the money and used it towards the purchase of a fridge for their new home in Campbelltown.
9. After their marriage, Kylie and Matthew frequently spent weekends with Donald and Patricia. Matthew acted as a handyman helping Donald and Patricia. He built a pergola and paved the outdoor area to their home. Occasionally Donald would telephone Kylie early in the morning to ask for Matthew to attend their home to perform some domestic task, such as turning off the smoke alarm. Kylie says, and I accept, that Donald and Patricia would often say to her, "We're lucky to have Matthew around, he is very good to us".
10. Kylie's original ambition was to join the NSW Police. But her HSC results prevented her admission to the Police Academy. She undertook an office administration course instead. But that was not for her. She decided to apply for a traineeship though NSW Health to become an enrolled nurse. She was accepted. After study she graduated with a credit average. I accept Kylie's account that upon her graduation as an enrolled nurse the deceased said to her, "we are so proud of you Kylie. You have done so well and you can only go on to achieve bigger and better things from here on".
11. Kylie and Matthew now have three children: Jessica, born in July 1999; Hope, born in August 2003; and Harrison, born in June 2007. During Kylie's second pregnancy with Hope she suffered some medical difficulties. Donald was very supportive during this time, taking her to all her medical appointments.
12. Patricia and Donald encouraged Kylie to undertake further nursing studies. She completed a Bachelor in Nursing at the University of Technology, Sydney. I accept that when she first told Patricia she had been accepted into the course, Patricia said to her, "Kylie this is wonderful news. You know how much your education has always meant to Pa and I and we couldn't be happier for you. You know I'm always here to help you out with Jessica so there is nothing to worry about, you are going to do so well for yourself".
13. Kylie continued her university studies. Throughout Donald and Patricia supported her financially, until she earned a scholarship from St George Private Hospital in the final year of her degree. Her grandparents helped her in other ways. Patricia looked after Jessica most days during the university term, except when child care was available one day a week. This enabled Kylie to attend her lectures, complete assignments and sit for her university exams. This undoubtedly conferred a financial benefit on Kylie and Matthew, who would otherwise have had to incur far greater childcare costs.
14. The deceased had a close bond with Jessica, formed during this period of constant contact with her. Matthew would often see Patricia "comforting Jessica with cuddles, and tickles on the back of her hand and the side of her face for what seemed to be hours". Kylie said to him, "I love seeing grandma with Jess. She does the same things to Jess that she did to me when I was a child".

Gifts and financial support given to Kylie from her Grandparents

1. Kylie received general financial support from her grandparents for most of her life from 1988, when she returned to their care, and during the completion of her nursing studies. This financial support sprang from the loving relationship between the deceased and Kylie, which Cheryl does not dispute. Apart from the financial gifts itemised below, it may readily be implied from Donald and Patricia's day-to-day care for Kylie (and Michelle) that they made substantial provision for Kylie throughout her formative years after 1988, in the form of school fees, text books and clothing.
2. Aside from the money Kylie received to pay for her wedding, Kylie says, and I accept as accurate, that she received a number of monetary gifts from her grandparents. Kylie claims that in 2006, her grandfather gave her $25,000 towards the renovations of her house, and a further $25,000 in 2008, which she used in part to travel to New York to collect her father's ashes, following his death in 2007. She also says that her grandparents gave her money ranging from amounts of $2,000 to $20,000 on special occasions, including for her birthday and at Christmas.
3. Her grandparents also gave Kylie monetary gifts to support her and Matthew. Between 2004 and 2011 Kylie received further increments of moneys totalling approximately $140,000.
4. On one occasion Kylie and her husband had needed a car, her grandfather had said to her "How about I buy a Ute for Matt and you can pay me back whenever you can afford it". The utility had cost around $20,000. Kylie and Matthew paid Donald back in instalments of $500, whenever they were able. By 2004 they had paid back around $8,000.
5. Donald and Patricia showed their generosity at this moment. Kylie had the following conversation with Donald: "Grandfather: If you won the lotto what would you do? Kylie: I would finish off the renovations and extensions to our home! Grandfather: What if you won, say, 50 grand? Kylie: Well I haven't, so there's no need to worry about that! Grandfather: Well, you have kiddo. I am going to take $12,000 off from the Ute that you owe me so when you want come and get your cheque for $38,000. Your sister and cousin will get the same. I have given you each the equivalent of $50,000."
6. I accept that is what happened. Kylie received a benefit of $50,000 from her grandparents on this particular occasion.
7. The plaintiff was extensively cross-examined about the amount of money she received from the deceased and from Donald over the years. Based on that cross-examination and her affidavit of 29 June 2015, I accept the defendant's general calculations that between a total of about $242,800 and $250,800 was paid to her up until about the time of Donald's death. Added to that is the amount of $150,000 that the defendant paid to the plaintiff in March 2012, upon the distribution of Donald's estate.
8. A figure of roughly $400,000 is a reasonable working figure for funds supplied to the plaintiff. But it is a misleading figure in many ways. It was never given as a single lump sum. It dates back to Kylie's wedding in 1998, with Christmas and birthday gifts being calculated as far back as 1993. Most of the other gifts were ad hoc often in amounts of $2,000 or $3,000, and sometimes in larger sums. A number of expenses were items which were simply a part of Kylie's necessary education. Sometimes the gifts were given to be expended for particular personal purposes which did not allow for saving, such as to allow Kylie to go to New York after her father's death.
9. One can accept that the deceased and her husband Donald were very generous to the plaintiff. But the plaintiff's position is not to be assessed on the basis that she has received a single advance of up to $400,000 from the deceased.

Patricia's Will - May 2000

1. Patricia executed her last will on 30 May 2000. If Donald survived the testator, the will (clause 3) appointed him as executor and made him sole beneficiary. In the event that Donald pre-deceased the executor, as indeed happened, the will (clause 4) named Cheryl as Patricia's executor and sole beneficiary in the event that Cheryl survived Patricia. The will named Kylie, Michelle and Lachlan as grandchildren who would take from her estate should both Cheryl and Donald pre-decease the testator (clause 5).
2. But the will expressly declares why Kylie, Michelle and Lachlan do not benefit under the will if Cheryl survives Patricia. The testator says (clause 6) on this subject: "no provision has been made for these grandchildren if my said daughter Cheryl Patricia McBride survives me, because of the very substantial time, effort and money expended by my wife [sic] and me for the benefit of these grandchildren during our lifetime which necessitated sacrifices of considerable significance. I have also been mindful of the love and affection of my daughter with whom I have had a close and excellent relationship which has assisted to offset the disappointing behaviour of my son". The mistaken reference to "my wife" in this statement seems to have arisen from a transposition of a similar paragraph that would have been apt for Donald's will but which the draftsman did not edit upon its placement in Patricia's will.
3. This statement in Patricia's will is factually correct. Donald and Patricia did expend substantial time effort and money for the benefit of Kylie and her siblings, which was only achieved through Donald and Patricia's "considerable sacrifices".
4. But as will be seen, this statement was made 14 years before Patricia's death, at a time when the ledger of family giving and sacrifice was firmly in Patricia and Donald's favour. Although Kylie and her husband continued to receive financial assistance from Donald and Patricia in the ensuing 14 years. They also greatly assisted Donald and Patricia in their declining years, in a way that the statement in the will could not have perhaps been expected to anticipate.
5. The testator also explained (in clause 7) why she nominated only three of her known five grandchildren in the will. She explained why she omitted Olivia Stuart and James Stuart, the first because of the financial assistance already given to her and her poor behaviour and in the case of James Stuart, his lack of contact with his grandparents. The will expresses the testator's clear disappointment with her son Gregory and indirectly about her daughter-in-law Margaret (Gregory's wife).

The conversations founding the Secret Trust Claim - late 1999 to May 2000

1. Kylie's secret trust claim arises out of a conversation she says she had with Cheryl and her grandparents. Both the timing and the content of this conversation are contentious. Kylie says that it took place between late 1999 and about May 2000 - just before or at the time that Patricia made her last will. Cheryl wholly denies Kylie's account of this alleged conversation and says that it never took place.
2. Kylie's Account. Kylie's account of these events follows. She says that in late 1999 or early 2000 her grandmother telephoned her one day and explained to her that she had "organized Michelle to pick you up to meet Pa and I at Lugarno to talk", emphasizing to her that it was "important" that they speak together. Kylie says she enquired on the phone what the meeting was about but her grandmother simply said "We will talk about it when you get here".
3. According to Kylie, the following day Kylie's younger sister, Michelle, picked up Kylie and Jessica in a car. Kylie remembers that her daughter, Jessica, was about 6 months old at the time: that is how she places the events in late 1999 to early 2000. Kylie and Jessica were driven from their then apartment in Sutherland to Kylie's grandparents' home at Lugarno.
4. Kylie insists that both her grandparents, Donald and Patricia, together with Cheryl, Michelle and Jessica were all present on this occasion. She remembers they all had, what she described as, a "nice lunch". When they were about to leave the table she says that her grandparents said to her and to the others, "We have sorted out our wills but need you to understand very clearly what we have done and why we have done it". Kylie says that she took this to be a reference to wills that Patricia and Donald had just made, or perhaps were about to make. Patricia then said words to the effect, "When these wills are read I never want you girls to think we didn't include you or love you, we have written our wills like this so that Olivia and Greg will have a lesser chance of ever contesting the wills".
5. Gregory at that time was still alive and probably living in New York. The difficulties he had caused his parents by 2000 have already been recounted in these reasons. Kylie's younger sister, Olivia, had also occasioned much worry to her grandparents and had been left out of their wills as well. The reasons for that are stated in Patricia's will and are briefly recounted earlier in these reasons.
6. Donald and Patricia then each read their wills to Michelle, Cheryl, Kylie and Jessica. Donald said to both to Michelle and Kylie, "we have told Cheryl to give you 20 percent each". Kylie says that she saw Cheryl nodding her assent in response to this statement, and saying "Yes". Donald went on to say to them all "I want our estates to be divided, so that Kylie, Michelle and Lachlan each get 20 percent and Cheryl gets 40 percent".
7. Then according to Kylie, Patricia said to them all "Cheryl has helped us to make these wills, you know your aunt has a law degree and she is our daughter, we trust her to do what we want". Kylie then responded to Patricia "I just hate to think of the day you and Pa aren't here anymore". Patricia replied, "Oh well, I don't plan on dying anytime soon but when I do, I want you girls to enjoy what we have worked so hard for".
8. Kylie has other memories of this occasion. She remembers her grandfather making a comment about going to Europe. It is not in contest that at the time Cheryl and her then husband Tom, and Lachlan and Kylie's grandparents were all planning a trip to Europe together. Kylie recalls that her grandfather also said to her, somewhat jokingly, words to the effect, "If something does happen to us, you girls will be very rich".
9. Kylie's account of this conversation covers subsequent times. She says that the family occasionally revisited this conversation. Subsequently between 2000 and 2011 she says that "every so often" at family gatherings Donald's and Patricia's wills and the arrangements for Lachlan, Michelle and Kylie to receive 20 percent of each of her grandparents' estate were mentioned. She recalls Cheryl and both her grandparents making comments in her presence with respect to the wills, repeating to her the effect of what they had said in this initial 1999-2000 meeting.
10. Cheryl's account. The account that Cheryl gives of the circumstances surrounding the alleged secret trust contrasts profoundly with Kylie's account. For reasons that will be explained, the Court generally prefers Cheryl's account, which is set out immediately below.
11. The date of Patricia's will, 30 May 2000 was important to Cheryl: it is her birthday. But she says that in the year 2000, nothing special happened that she remembers at the time Patricia's will was made. But in September 2000 about the time of the Sydney Olympics, Patricia, Donald, Tom McBride, Tom's sister, Lachlan and Cheryl all travelled to Europe together for a period of about six weeks. Cheryl says that Patricia did say something to Cheryl about Patricia's and Donald's wills not long before they left on this overseas trip and not long after they had made their wills. Cheryl says that prior to the departure on the trip Patricia said to her of herself and Donald, "We've redone our wills in case of any accidents. Our good friends, Eric and Esme Holms witnessed them. We signed on your birthday". Cheryl says, and I accept that Patricia did not tell her the details of Donald's and her wills, other than to say "You'll become a wealthy old lady". Mr and Mrs Holms did witness both Donald and Patricia's May 2000 wills.
12. Cheryl does remember some connection between the wills and her birthday. Her recollection is rather that her mother disclosed to her that the wills had been made on her birthday. But Cheryl says there was no other connection between the wills and her birthday. And there was no conversation on her birthday or any other time about them in 2000 between Donald, Patricia, Kylie, Michelle and Cheryl about Cheryl being the executor holding Patricia's estate in trust in the future on the basis it will be divided as to 40% to Cheryl, 20% for Kylie, 20% for Michelle, and 20% for Lachlan.
13. Cheryl has a law degree. But she has never practised law and never taken out a practising certificate as a legal practitioner. She says, and I accept, that she did not assist her parents to draft their wills, nor did she advise in any way in relation to the drafting or execution of their wills. She says, and I accept, that she did not study the law of wills or succession at university, as it was only an elective subject. Will drafting is not within her claimed areas of legal competency.
14. Cheryl's account, which I accept, is that Donald and Patricia rarely discussed their financial position with her. I wholly accept Cheryl's description that her father, as a retired banker was conservative with money and gave her careful instructions about what she should, and should not, do with her inheritance from him.
15. But contrary to the idea that an instruction was given to Cheryl that she should hold money on behalf of Donald and Patricia's three grandchildren as to 20% each, Cheryl says that Donald had said to her something quite different in September 2011 before his death. I accept Cheryl's account that in September 2011 Donald had an important conversation with her, in which he contemplated what might happen after his death to his property. He said to her, "All that is mine is yours. Hang onto it for a while and then do what you see fit. Make decisions that are fair". She says, and I accept, that she remembers saying to Donald on this September 2011 occasion, "It would be appropriate to give some to Kylie, Michelle and Lachlan". To this I accept that Donald responded "Yes, but use what you need first and the kids can have what is left afterwards". Cheryl says that she asked her father, "Should I use mum's money if any of the grandkids need it?" And Donald replied "By all means, especially if it could advance their prospects".
16. This is a key conversation. In my view Cheryl's account of what Donald said to her in September 2011 contains an explanation of what in my view was ultimately a misunderstanding on Kylie's part about her grandparents' wishes but which has led to her becoming fixed upon an idea that a promise of a 20% portion of the estate was made to her. Both Donald's generous conduct during his lifetime and this September 2011 conversation with Cheryl reaffirm his and Patricia's generosity to their grandchildren. But his trust in his daughter Cheryl was paramount. It is not at all improbable in my view that at some stage in the latter part of his lifetime that Donald did communicate to Kylie something rather like what he communicated to Cheryl in September 2011 and that Kylie has misinterpreted this as a promise of 20% of the estate. The exact way that this might have occurred was not explored in the evidence and any further analysis would be speculative.
17. Cheryl says that Kylie's secret trust allegations were a surprise. Cheryl says that the first time she became aware of Kylie's contention that Kylie was entitled to 20% of Patricia's estate was when Cheryl was at the hospital on the night that her mother died. Cheryl recalls, and I accept as accurate, that Kylie said to her that night, "Even though grandma is dying, I'll continue to challenge your power of attorney and grandma's will. I'll be after a lot more than 20%". Cheryl further says that at this time she "did not understand [Kylie's] reference to 20%". She says, and I accept, that she only became more fully aware of Kylie's claim for 20% of Patricia's estate and the basis of it after receiving correspondence from Kylie's solicitors after Patricia's death.
18. Cheryl's version is preferred. Apart from the Court's general preference for Cheryl's credibility on this issue a number of matters incline the Court to prefer Cheryl's' version over Kylie's secret trust claim.
19. Kylie's account does not fit well with Donald and Patricia's personalities. I accept Cheryl's account that Donald in particular was financially careful and conservative, consistent with what one might expect of a career bank manager. And I infer Patricia would generally agree with Donald's views on financial matters. That approach to financial matters is hardly consistent with what must otherwise be inferred on the Court's findings to be the case: that Patricia and Donald obtained independent legal advice about their wills in 2000, executed powers of attorney a year or so afterwards, but then strangely, made an informal family dinner table arrangement superseding the detailed provisions in their wills.
20. That kind of informality hardly seems consistent with the picture of Donald and Patricia that Cheryl paints and which I accept. Part of this picture, which I also accept, is that Donald and Patricia were private people and barely discussed any of their financial affairs with their own daughter Cheryl. It seems hardly likely that they would have had such an open conversation as Kylie alleges about their estate with other family members. The conversation is also not consistent with kind of general discretion which I accept that Donald gave to Cheryl through his conversations with her, about what would happen to his estate after his death.
21. Moreover Kylie somewhat strangely says that neither she nor her grandparents had any embarrassment or reticence in discussing this issue of the division of their estates, not only in about May 2000 but on the occasions thereafter that Kylie says that it was brought up again. In my view it was not discussed either in May 2000 or on subsequent occasions.
22. The secret trust case is hardly consistent with clause 6 of Patricia's will. Patricia gives a particular explanation as to why her grandchildren Kylie, Michelle and Lachlan have been left out of her will. She then gives a more detailed explanation for making no provision in her will for Olivia or James. It is strange that all of these considered written reasons in the will would be set aside in a private side arrangement with Cheryl, so that the same grandchildren were indeed to get a guaranteed share of the estate. But that being said, the will is clear that neither Olivia nor James were to benefit under any circumstances.
23. Kylie's account of the conversation does not flow very well. How Cheryl came into the meeting and the conversation is not very clear. But Kylie's account of the May 2000 conversation has Cheryl at one stage "nodding in response [to what Patricia had said] and saying "yes". Moreover, there is inconsistency between Kylie's verified Statement of Claim, which has Patricia communicating the semi-secret trust to Cheryl, and Kylie's account that Donald told her and Michelle "We have told Cheryl to give you 20% each". Although this inconsistency is mitigated to a degree by Patricia's involvement in the conversation.
24. Kylie was not able to give a very compelling account of how the conversation arose and its overall conversational context. She was not able to add consistent detail to flesh out the circumstances of the day in a way that gives the Court great confidence in the accuracy of her recollection of these events.
25. On Kylie's version Cheryl took responsibility for drafting Donald and Patricia's wills. This is improbable at several levels. I accept Cheryl's denial of having will drafting capacity. But there is also no objective evidence to support Cheryl's involvement in either the drafting or execution of the two wills. There is no evidence for example that the wills were kept in her possession, as one might expect if she had drafted them. Rather, the evidence suggests that they were drafted by a friend Donald had made as a bank manager, a friend who may have been a solicitor.
26. What is the purpose of the alleged secret trust? On the plaintiff's version, the text of the conversation alleged offers a theory: to prevent James, Gregory and Olivia from mounting a challenge to the will. But Ms Burke's answer to that in my view is effective: that will makes it fairly obvious on its face that at least in some circumstances Kylie, Michelle and Lachlan would benefit from their grandparents' estate. In any event why James, Gregory and Olivia were excluded was made obvious on the face of the will anyway. There is not a powerful motivation on the part of either Donald or Patricia engaging in the conversation which Kylie alleges in late 1999 and up to May 2000.
27. Finally, on Kylie's version, the conversation in about May 2000 applied to both Donald's and Patricia's wills. But Cheryl did not act in the distribution of Donald's estate, consistent with the alleged secret trust. Rather, using her discretion at the time and consistent with the wish her father had expressed to her, she made voluntary distributions to Kylie, Michelle, and Lachlan from his estate. And she did so in a way which was improbably more generous to the three of them than any agreement that Kylie now alleges. Cheryl says that as the sole beneficiary of her father's estate she received $543,254.10 in cash after a payment of estate expenses, Telstra shares valued at $5,232 and Westpac shares valued at $43,742.40, making a total taken by her from his estate of $592,228.50. I accept her evidence that she distributed $150,000 to each of Kylie, Michelle and Lachlan from Donald's estate, which represented 25.32% of the estate to each of them. In the end she was only left with 24.01% of the estate: being cash of $93,254.20 and shares of $48,974.40, being a total of $142,228.60. At the time of these distributions Kylie did not choose to remind Cheryl of the May 2000 agreement. If Cheryl really was present at a meeting in May 2000 in which she bound herself to give away 60% of her parents' estates, it is difficult to understand why she gave away 75% of her father's estate. The better view is that no such agreement was made and Cheryl's evidence on the issue should be accepted.
28. The secret trust dispute also involved evidence from both Cheryl's former husband Mr Tom McBride and, Kylie's husband, Matthew. Mr McBride as a former spouse seemed a somewhat unlikely witness for Cheryl. But he impressed the Court as a witness with a better recollection than that of Matthew Misek on these issues.
29. I accept Mr McBride's evidence that neither Patricia nor Donald ever discussed in his presence their personal finances, wills or anything like the arrangement that Kylie alleges that she, her sister Michelle and Lachlan would receive 20 per cent of each of Donald and Patricia's estates. I accept Mr McBride's evidence that he only became aware of Kylie's allegations to this effect after Kylie commenced these proceedings.
30. There is a direct conflict between the evidence of Mr Tom McBride and Mr Matthew Misek. Matthew says that Tom McBride discussed with him directly the concept that Kylie was entitled to 20 per cent of her grandparents' estate. But Tom McBride denies this and his denial is convincing. I also accept that he rejected a proposal from Matthew that he, Tom McBride, should give evidence to support the plaintiff's case on the secret trust issue. I accept Tom McBride's evidence that he rejected this idea saying, "I wouldn't sign anything that is not true, as it would be perjury".

Patricia and Donald's health declines - 1999 to 2013

1. Kylie and Cheryl give slightly different accounts of Patricia's decline into dementia. Kylie's account, as was a feature of much of her evidence, contains an implicit criticism of Cheryl's care for her mother. More than once in these proceedings Kylie's evidence infers that she was a keener observer than Cheryl of Patricia's needs in her declining years and a more ready and empathetic responder to those needs.
2. But Kylie's outlook on these issues was overly simplistic. She was not prepared to give Cheryl much credit for the competing demands of Cheryl's responsible career position, demands that meant that it was not always possible for Cheryl to immediately and flexibly respond to Patricia's medical needs. Kylie's response to Cheryl's unavailability to attend on Patricia is to criticise Cheryl in her evidence rather than to empathise with her difficulty in making herself available for Patricia.
3. But Kylie did step into the breach: she did attend on Patricia, responding as was required. Cheryl in turn indirectly benefited from this. But Cheryl does readily acknowledge this benefit.
4. Kylie says that she noticed in 1999 that Patricia was "behaving differently to how she normally would". Patricia was beginning to frequently repeat herself. Kylie raised her concerns with Donald. He arranged for Patricia to visit their local GP, who referred her to a neurologist.
5. Kylie claims that in 1999 the deceased had been diagnosed with dementia. She was medicated with "Aricept", medication that would assist in slowing down her mental decline, and indeed did. In 2007 Patricia's condition worsened to the point that she was no longer capable of caring for herself or others.
6. Cheryl contests Kylie's timeline of Patricia's decline. She claims that Patricia was diagnosed with Alzheimer's disease in 2002. She says that following this the deceased was put on a clinical drug trial which allowed her to live without significant cognitive deterioration for about five years. Cheryl says that during this period she would dine with her parents at least once a week.
7. In 2005 Patricia and Donald left their Lugarno home to live in a villa a few streets away.
8. Patricia's medication ceased in 2007. She began to deteriorate more quickly. Cheryl claims that her father also began to struggle at this time, not wanting to leave Patricia alone. Cheryl visited her parents at least weekly, provided respite care for her father, allowing him to continue playing bowls and seeing his friends. Cheryl continued to provide care for her parents, as they became infirm. She says that when the deceased became incapable of performing basic personal and domestic tasks, she organised an ACAT assessment. As a result, assistance was provided for cooking, cleaning and showering.
9. Kylie also claims that she assisted her grandparents during this time. She says that from 2007 to 2009, she would assist her grandparents with routine tasks, including attending to their weekly shopping. She took Patricia out for lunch each week. She thought that this would assist with her mental health and provide her grandfather with some respite. Kylie would also bring her children over to visit Donald and Patricia some afternoons after school. Kylie's recollection, which I accept, is that despite the deceased's failing health, spending time with Kylie's children would put "a smile on her face".
10. Some good news buoyed the family along during this increasingly testing time. Donald and Patricia were very proud of Cheryl in 2007, when she received an Order of Australia, recognising her contribution to the community as an educator.
11. By 2008 it became evident that Donald's health was also deteriorating. Kylie recalls, and I accept, that she was at her grandparents' home when Donald was unable to get out of bed to attend his weekly physiotherapy appointment. He appeared extremely weak and lethargic. She subsequently contacted his GP, and took him to the Emergency Department at St George Hospital. Donald was diagnosed with myelofibrosis, a serious bone marrow disorder that affects the body's production of blood cells. By 2009, Donald had suffered a series of seizures, and was diagnosed with epilepsy. On 13 November 2008 Donald executed his last will, naming Cheryl as his executor and bequeathing his estate to her.
12. In 2009, Patricia suffered a bad fall at home. She dislocated and fractured her wrist. Kylie attended upon her grandparents at 10:00pm in the Emergency Department of St George Hospital. She says, and I accept, that she insisted upon Donald going home, and she sat in the Emergency Department until 4:00am. She says that Patricia had been very anxious and confused due to the pain she was suffering from the fractured wrist. But I accept Kylie's evidence that Patricia had appeared comforted by her presence, saying to her "I'm glad you're here Kylie".
13. Kylie then claims that she contacted Cheryl at 4:00am to ask if she could attend the hospital to relieve her, as Matthew had work at 6:00am the next day. However, Cheryl had responded with "I can't come Kylie, I just started a new position at Canley Vale School, I'm too busy for this". Kylie also claims that she was angered when Cheryl later told her that "the doctors advised that Mum requires surgery on her wrist. I did not agree to this surgery and signed her out of hospital". Kylie stated that the deceased had enjoyed crocheting, and she observed that following the injury to her wrist she was no longer able to return to this hobby.
14. In 2010, Cheryl claims that she consulted with her parents about moving them into an aged care facility. They agreed to move into an apartment in an Anglican Retirement Village, Goodhew Gardens at Taren Point. Cheryl, Kylie and Michelle and her husband Jole assisted in the move.
15. Cheryl visited them on weekends, and a couple of times a week during school holidays. (The plaintiff claims that this happened in September 2011). Cheryl's account is, and I fully accept, that on a number of occasions her father needed to get to hospital in an emergency. She would accompany him there and wait for many hours in the ward. She claims that he said to her "it is always you who gets called at the worst times".
16. Cheryl stated that as her father's health deteriorated, so did her mother's capacity. It was at this time that Cheryl made the difficult decision to transfer Patricia to a high-needs aged care support facility. In March 2011, Cheryl found a permanent placement at a high needs facility, just 100 metres away from where Donald was living.
17. Cheryl says, and I accept, that on the day of her mother's move, she had been dealing with the suspension from school of a disabled child, and as a result had been unable to assist with the move. As a result Kylie was the one who helped to move Patricia into the new facility. Cheryl agreed that Kylie and Michelle provided much needed support to Patricia and Donald, when she was at school that day.
18. Whilst Donald was in the aged care centre, Kylie claims that he contacted her saying, "I want to kill myself". Kylie claims she contacted Cheryl voicing her concerns about her grandfather's wellbeing, stating that she believed he was suicidal. But Kylie says she was met with the response from Cheryl, "I'm at work, I can't". Kylie claims she later contacted her grandfather's neurologist, who organised a bed for him at St George Hospital. Kylie informed Cheryl of this. Cheryl said she had organised a nurse to take Donald across. This angered Kylie as she believed that a family member should be with her grandfather.
19. Donald was moved from St George Hospital to live at Moran's Nursing Home in Sylvania. Cheryl claims, and I accept, that she continued to visit him there on a regular basis. Kylie too was a regular visitor.
20. On 9 December 2011 Donald underwent surgery to remove a number of skin cancer growths. The operation led to severe complications. Donald contracted an infection from the surgery. It overwhelmed him and he passed away on 14 December 2011.
21. Cheryl claims, and I accept, she took responsibility for Patricia's close ongoing care after Donald relocated to Sylvania. This care included the following: administering Patricia's funds to pay her bills; placing money against a credit with the nursing home; organising spectacles and clothing; arranging her trips to the doctor, dentist, hairdresser and manicurist. She also accompanied Patricia to a dermatologist, who diagnosed her with basal cell cancer in the nose. Patricia underwent a clinical trial for reduction of the tumour, which was successful.
22. In April 2014, Patricia broke her hip in a fall. Following surgery, she returned to the nursing home at Taren Point. But she deteriorated rapidly, and was soon unable to walk. By June of that year, she was extremely weak and was struggling to eat.
23. Patricia passed away on 10 June 2014. It was clear even at the trial that the events on the days just prior to, and on the day of, the deceased's death were a matter of significant disagreement between Kylie and Cheryl. But it is not necessary to resolve those disagreements in these reasons.

Cheryl's Power of Attorney, Property Purchases and Gifts

1. On 14 May 2001 each of Patricia and Donald each appointed Cheryl as their attorney under enduring powers of attorney executed under Conveyancing Act s 163B. After Donald's death, Patricia's dementia worsened. Cheryl took more control of Patricia's day to day financial affairs using Patricia's power of attorney to her.
2. But events in Cheryl's life commencing in 2010 caused her to use the power of attorney for more than Patricia's day-to-day expenditure. Cheryl purchased three properties using funds that were gifted to her by Donald during his lifetime or using the power of attorney.
3. The *2 Macquarie Street Apartment. In July 2010, Cheryl separated from her husband, Tom McBride. They ultimately divorced in January 2012. By mid-2011 Cheryl was anxious to find a home for herself. She did not want the pressure of finalising a property settlement with her ex-husband to inhibit her from immediately purchasing the property for herself that she needed. An accelerated matrimonial property settlement would have forced her and her ex-husband to sell their jointly owned family home at Minto to their mutual financial disadvantage.
4. Donald was aware of the financial pressure on Cheryl. She and Donald had looked together at various properties as potential homes for her. These included an apartment in Macquarie Street in Sydney City. I accept that she and her father had the following conversation in relation to this property: "Donald: If you can negotiate the asking price of $1,500,000 down to around $1,350,000 you should go for it. Donald: Sell as many of my shares and take as much cash as you need to buy the place. I'm not long for it and my whole estate will be yours shortly anyway. Cheryl: But I'll need a lot. Are you sure? Donald: Absolutely. I insist. You must have a home."
5. Cheryl purchased the Macquarie Street apartment for $1,360,000 in September 2011. The Commonwealth Bank of Australia (CBA) loaned part of the purchase price, secured by her first mortgage over the apartment. Cheryl funded the rest of the purchase moneys supplemented with funds from Donald: $405,000 from the sale of Cheryl's shares; $84,000 from her long service leave and superannuation; $120,000 from her savings; and $450,000 from the sale of Donald's shares. The purchase was completed by January 2012. Cheryl currently resides in this apartment with her husband, Derek.
6. The *3 Macquarie Street Investment Property. In March 2013, Cheryl purchased another unit on Macquarie Street as an investment for $1,055,000 ('the Investment Property'). This purchase was principally funded with a loan from the CBA. But Cheryl required more money to make up the balance of the purchase monies. She sold some of Patricia's shares for a total consideration of $275,167.97.
7. Cheryl made the following payments from the share sale proceeds from the deceased's bank accounts: three payments to herself of $50,000, giving her $150,000 to pay for stamp duty, legal fees and strata levy and rate adjustments on the purchase of the Investment Property; gifts of $30,000 each to Kylie, Michelle and Lachlan; and the transfer of the deceased's shares in Channel 10 for $30,497.69.
8. The Sanctuary Cove Property. In August 2013, Cheryl became interested in purchasing a luxury home at ***8 Marine Drive, Sanctuary Cove in Queensland. The owner had been in financial difficulty, and had reduced the sale price from over $5,000,000 down to $3,000,000. Cheryl secured a loan from the CBA in the sum of $1,700,000, and vendor finance in the sum of $600,000. But this was still short of the total purchase moneys of $3,000,000.
9. On 18 July 2013 Cheryl sold more of the deceased's shares for a total of $597,747.15. She deposited the proceeds into the deceased's bank account. Then Cheryl withdrew four amounts totalling $642,000 from the deceased's bank account to assist with her purchase of the Sanctuary Cove property. There is a discrepancy in the evidence as to whether these amounts may have totalled $644,000 but the discrepancy is not immaterial.
10. Cheryl documented the moneys withdrawn from her mother's account in the form of a handwritten acknowledgment. Cheryl's acknowledgement noted that she had invested $600,000 (as opposed to the actual amount of $642,000) of the deceased's funds into the purchase of the Sanctuary Cove property, and stated that "in the unlikely event that I predecease my mother, I instruct my executor, Lachlan Stuart McBride, that when my properties and possessions are liquidated, that the $600,000, plus 20 per cent of the capital gain on said property at Sanctuary Cove, is restored to my mother's holdings". As will be seen, Cheryl has always acknowledged that a sum, structured more or less this way, is owing by herself to the estate.
11. Kylie became aware of Cheryl's transactions using the power of attorney. In the absence of what Kylie thought was a satisfactory explanation from Cheryl, Kylie took legal action. On 20 May 2014, Kylie applied to the NSW Civil and Administrative Tribunal for a review of the deceased's enduring power of attorney under the Power of Attorney Act 2003. But when Patricia died in June of that year Kylie did not continue with the proceedings. But Kylie mounts a residual argument in these proceedings to a similar effect. Although these proceedings do not, after Patricia's death, involve a review of the enduring power of attorney.

The Deceased's Estate - Current Position

1. The parties helpfully agreed upon the current nature and value of the deceased's estate. This agreement was of course subject to Kylie's claim that the estate should be augmented by the assets which Cheryl acquired using the funds and power of attorney from the deceased. That issue is considered separately later in these reasons.
2. The agreed financial position of the estate set out in the table below includes money which Cheryl has agreed she owes to the estate and accounts for the disclosed litigation settlements that have taken place in respect of claims by the plaintiff's sisters, Michelle and Olivia. Once those claims are taken into account the net total estate available for distribution is $783,321.26. But this figure is net of the liabilities associated with both the plaintiff's estimated litigation costs and the defendant's estimated litigation costs of (and in the defendant's case up to) the hearing of these proceedings. The agreed figures are as follows: Assets 3,610 Shares- Commonwealth Bank @ $75.95 $274,179.50 Cheryl's Loan $644,00.00 Less repaid on account costs these proceedings (- $7,668.37) Plus 20% Capital Gain $75,769.17 Add back as agreed with Plaintiff's Lawyer: $287,000.00 Michelle's Settlement $33,000.00 Michelle's Costs $125,000.00 Olivia's Settlement inclusive of Costs TOTAL GROSS VALUE ESTATE Less Liabilities to Pay: $32,899.04
3. Estimated Capital Gains Tax on Sale Shares $120,000.00
4. Plaintiff's estimated costs $50,000.00 $1,431,280.30
5. Defendant's estimated costs to hearing $287,000.00 $202,899.04 Less Already Paid: $33,000.00 $445,000.00
6. Michelle's settlement $125,000.00
7. Michelle's costs
8. Olivia's settlement NET TOTAL ESTATE AVAILABLE FOR DISTRIBUTION $783,381.26

1. The plaintiff's costs figure of $120,000 should be added back to produce the gross asset figure for the estate. Slight revisions to these figures will be necessary on account of the defendant's costs for the hearing of these proceedings. But this represents the broad agreed picture.

The Secret Trust Claim

1. The parties did not disagree as to the principles applicable for making out a secret trust. In order to establish a secret trust a plaintiff must show three matters: (1) an intention on the part of the testator to subject the primary donee to an obligation in favour of the secondary donee; (2) the communication by the testator of that intention to the primary donee (the prospective trustee); and, (3) the acceptance by the primary donee of that obligation either expressly or by acquiescence.
2. These principles have been identified in many authorities. In Australia the law has been stated to this effect. The High Court said in the secret trust case, Voges v Monaghan & Anor (1954) 94 CLR 231, (per Dixon CJ) at 233, that the plaintiff must prove "satisfactorily that the trust was ascertained and what it was" and (per Webb J) at 239, the plaintiff must prove the necessary elements of the secret trust by "positive evidence".
3. The standard of proof required to make out a secret trust is demanding. The requirement was stated in McCormick v Grogan (1869) LR 4 HL 82, at 97 (per Lord Westbury), as "the clearest and most indisputable evidence" and "you must show distinctly that [the primary donee] knew that the testator …was beguiled and deceived by [the primary donee's] conduct". In Ottaway v Norman [1972] Ch 698, at 711 Brightman J interpreted Lord Westbury's statement as meaning that if a will contains a gift in absolute terms that "clear evidence is needed before the Court will assume that the testator did not mean what he said" and the standard of proof "is analogous to that "which the court requires before it will rectify a written instrument, for there again a party is saying that neither meant what they have written". As the deceased cannot give evidence in response to claims that he or she said things to create a constructive trust, a plaintiff must establish each of the required elements upon "clear and convincing proof": In re Snowden [1979] Ch 528, at 536 per Megarry VC.
4. But the secret trust claim cannot succeed. None of the private conversations to which Kylie deposes have been found by the Court to have taken place. The foundation of the claim is absent and it need not be considered any further.

The Power of Attorney Claim

1. The plaintiff alleges that the defendant used Patricia's money to purchase the Sanctuary Cove property for $2.4 million. The plaintiff says that $642,000 of the deceased's money was used by the plaintiff for this purpose. The deceased was still alive at the time that the Sanctuary Cove property was purchased but had well advanced dementia. In substance Kylie contends that Cheryl on behalf of the deceased loaned the money to herself.
2. Cheryl concedes that the sum of $644,000 was borrowed from the deceased in order to assist the financing of the Sanctuary Cove property. She further concedes that this sum is owed back to the estate and is prepared to acknowledge the benefit back to the estate will should have an additional 20% (or approximately $76,000) added to that sum to account for the interest and other capital benefits that Cheryl has derived from the loan (see the estate figures elsewhere in these reasons).
3. The plaintiff says that the estate has an interest in 26.75% of the Sanctuary Cove property as a result of this advance. The plaintiff says that Cheryl must have misused the power of attorney in applying the deceased's money in the way that she did to assist her own purchase of the Sanctuary Cove property and that in those circumstances that the money should not be described as a loan, but should be traced and the proportion of the purchase price accounted for by the said advance should now reflect the estate's current proportionate interest in the property. The Sanctuary Cove property has also been rented out and significant income has been received by the defendant over time. The plaintiff says the estate is also entitled to a proportion of this income, although this is not been quantified the proceedings.
4. The plaintiff's case is that the estate is entitled to a direct percentage entitlement to the current value of this Sanctuary Cove property, so that the estate, and in turn the plaintiff, for the purposes of these proceedings might have the benefit of all capital gain that has occurred with respect to that property. The plaintiff estimates that 26.75% of the Sanctuary Cove property is now worth some $936,000, which is over $200,000 more than Cheryl concedes would be owing to the estate on the loan $720,000 ($644,000 plus $76,000).
5. Cheryl's answer to this part of the plaintiff's case is persuasive. She says the power of attorney authorised to her to make the loan. The enduring power of attorney from Patricia to Cheryl in this case was executed in 2001 together with a power of attorney from Donald to Cheryl, before the commencement of the Powers of Attorney Act 2003 and pursuant to the then provisions of Conveyancing Act 1919 s 163B. Despite the repeal of s 163B with the enactment of the Powers of Attorney Act, s 163B continues to apply to this instrument; see Powers of Attorney Act, s 6(3) and Schedule 1.
6. Both Donald and Patricia's powers of attorney authorised Cheryl, in what is commonly known as a "benefit clause", to "execute an assurance or other document, or to do any other act, whereby a benefit is conferred on her". The Court of Appeal in this State in Taheri v Vitek (2014) 87 NSWLR 403 (Taheri) at [111] (per Leeming JA, Bathurst CJ and Emmett JA agreeing) has recently expressed the view that clauses, such as this benefit clause, mean what they say and permit an attorney to act otherwise than in the interests of the principal and therefore, for example, to make gifts of the principal's estate to the attorney herself.
7. Whether in light of Taheri, the circumstances in which such benefit clauses may be included in the Powers of attorney should be more closely regulated, is perhaps a matter for further attention by the legislature. But that being said, in my view Taheri must be followed and is a complete answer to this part of Kylie's case.
8. There are cases in which judges at first instance have found a breach of fiduciary duty by the donee of a power of attorney, notwithstanding the existence of a benefit clause: see for example Spina v Conran Associates Pty Ltd; Spina v M & V Endurance Pty Ltd [2008] NSWSC 326, Mary Alice Hughes by her Tutor NSW Trustee & Guardian v Hughes [2011] NSWSC 729 and Perochinsky v Kirschner [2013] NSWSC 400. Most of these precede Taheri. But despite Taheri, one can postulate circumstances in which a fiduciary may be found in breach of duty notwithstanding a benefit clause. Whether or not such a breach may be found in any individual case will often depend upon the breadth of the fiduciary duty compared to the scope of the power of attorney. If the scope of the power of attorney does not cover the area of the fiduciary duty, the benefit clause may perhaps have limited operation as a defence to the breach of fiduciary duty claim.
9. But this does not seem to me to be such a case. Here the defendant was encouraged by her father, Donald, in the years leading up to his death, to use his and Patricia's estates for her benefit. No clear case has been made that the scope of her applicable fiduciary duty is identifiably wider than the scope of operation of the power of attorney in her favour. There is no evidence of any prohibition by Patricia on Cheryl's use of the power of attorney otherwise than in accordance with its written terms.
10. In my view the result of this reasoning is that the size of the estate should be considered as commensurate with the terms of the concessions that Cheryl has made: that she owes the estate $644,000 and an additional sum of approximately $76,000. This is reflected in the summary of the estate's assets and liabilities in these reasons.

"Eligible Person" and "Factors Warranting" Succession Act 2006, ss 57 and 59

1. The applicable legal principles are not in contest. For an order for provision to be made under Succession Act, s 59 in favour of an applicant, the Court must be satisfied that the applicant is an "eligible person" within Succession Act, s 57. It is not in contest that the plaintiff is an "eligible person" as a grandchild of the deceased who lived in the household of which the deceased was a member: Succession Act, s 57(1) "eligible person" (c). Kylie made her application within time.
2. As the plaintiff qualifies for eligibility under s 57(e), she must show "factors warranting" the bringing of her application: Succession Act, s 59(1)(b). But the defendant conceded the existence of relevant factors warranting in this case. Indeed the existence of factors warranting was admitted in the Defence.
3. But the issue must be considered further. Cheryl argues that this admission should not be stretched too far. She says that although it is conceded that the deceased, Patricia, regarded Kylie as a natural object of testamentary disposition, she at no stage regarded her as an object of testamentary disposition analogous to a child.
4. This submission is persuasive. Many factors point to Donald and Patricia treating Kylie differently from Cheryl in their testamentary considerations. They can be treated together on this issue as they made their respective wills at the same time, with each exhibiting a similar structure, thereby indicating a similar intent. First, the reservation in Patricia's will (clause 6) is the starting point. This clearly shows at least the primacy (Cheryl would argue the exclusivity) of Cheryl's position among the natural objects of their testamentary affections.
5. Secondly, Patricia's decision to appoint Cheryl as her attorney and not any other member of the family is a decisive indicator of her special place in her parents' trust and affection.
6. Thirdly, Donald and Patricia were generous with Kylie in the last ten years of their lives but they were even more generous with Cheryl.
7. And finally, even though the Court had rejected Kylie's version of the alleged secret trust agreement, even on Kylie's own understanding of those contentious events, she was not being treated equally with Cheryl: the percentage of the estate that Cheryl was said to hold on secret trust for Kylie (20%) was considerably less than the proportion that would be left for Cheryl.
8. Cheryl's concession on this issue is appropriate, proportionate and measured in the face of difficult case made against her. Parts of Kylie's evidence are openly critical of Cheryl's performance in her role as Patricia's only daughter. Kylie's perspective is that Cheryl could have done a better job at times. Kylie's evidence to this effect proceeds from a limited and unsympathetic understanding of the demands on Cheryl.
9. In my view Kylie should not be treated as the equivalent of a daughter among the objects of Patricia's testamentary intentions. This is not one of those cases where the relative conduct of the daughter and the grandchildren allows the Court to treat proper provision for the grandchildren as equivalent to the child. And these reasons will approach the question of what is adequate provision in this way.

Adequate Provision

1. Finally the issue is whether an order for provision should be made in the plaintiff's favour. The defendant submits that no order for provision is required.
2. The test of whether an order for provision should be made out of an estate in any case is set out in Succession Act, s 59(1)(c):- "(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: … (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."
3. There are many judicial statements summarising the operation of this legislation, which is often said to include a two-step process. For example in Singer v Berghouse (No. 2) (1994) 181 CLR 201 at 209, the High Court of Australia said of the test under the previous legislation:- "The first question is, was the provision (if any) made for the applicant "inadequate for [his or her] proper maintenance, education and advancement in life"? The difference between "adequate" and "proper" and the interrelationship which exists between "adequate provision" and "proper maintenance" etc. were explained in Bosch v Perpetual Trustee Co8. The determination of the first stage in the two stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder9, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
4. Whether the two-step test operates with the same full vigour in the current legislation has been recently discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. But such considerations are not an issue in this case, which is a clear one on the question of whether or not adequate provision has been made for the plaintiff once she has been shown to be an eligible person.
5. Other authorities explain in greater detail the meaning of the words in the legislation "adequate", "proper", and "advancement in life". Some of these authorities have been conveniently collected in the decision of Hallen AsJ (as his Honour then was) in Drury v Smith [2012] NSWSC 1067 at [153], [154], [155], [158] and [160], which relevantly provides:- "[153] Master Macready (as his Honour then was) in Stiles v Joseph (NSWSC, 16 December 1996, unreported) said, at 14-16: "Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541) In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274... In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said: 'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.' The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that: 'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'" [154] In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J at [114] noted: "In the context of the Act the expression "advancement in life" is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase "advancement in life" has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the "maintenance and support" of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support." [155] In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said: "The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)." … [158] Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word 'proper', that: "It means "proper" in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent." … [160] In Vigolo v Bostin [2005] 221 CLR 191, at 228, Callinan and Heydon JJ said: "[T]he use of the word "proper" ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future.""
6. The application of these principles involves examination of the plaintiff's and the defendant's financial position on the available evidence and of a number of specific issues.

The Plaintiff's and the Defendant's respective personal and financial positions

1. Ms Misek's and her husband's financial needs are closely linked to the state of their current domestic residence and to a medical condition that she has recently developed.
2. The Plaintiff's need for household renovations. Kylie Misek and her husband Matthew have three children. At the time of hearing Jessica was aged 16, Hope aged 12 and Harrison aged 9. With children of this age their South Caringbah household is busy. I accept Kylie's evidence that to make their home more liveable for the family considerable work needs to be done to the structure of their house which is now some 50 years old and is run down and needs renovation. After Kylie and Matthew purchased the South Caringbah house they had architectural drawings prepared for extensions and renovations. They obtained Council approval for these. But she says, and I accept, that they have been unable to afford to undertake the renovations.
3. A number of changes to the house are needed in the near term. There is an urgent need to renovate the bathroom and to extend so that each child can have a bedroom of their own, together with a larger living room to accommodate their family of five. At the time of the hearing repairs were needed. The shower and bathroom had started to leak water below into their garage, so the family all needed to use the bath to avoid this. But for the reasons that are explained below Ms Misek has recently undergone surgery, so using a bath has not been a practicable option for her. Makeshift arrangements to accommodate her situation have not been particularly successful.
4. Kylie says, and I accept, it is depressing to live in a house where "every corner I turn there is another problem that needs to be fixed". Given the ages of the children, doing something to sort out these problems with the household is obviously urgent, and made all the more urgent because current services in the house are breaking down. And the family budget (examined below) shows, there are insufficient spare funds available in the household to attend to necessary repairs, as and when they are needed. Ms Misek says that her husband Matthew is quite handy, but that many of the renovation jobs require specialist contractors and materials that I accept the family cannot readily afford.
5. Ms Misek says that the approved renovations will cost no less than $180,000 (her estimate) plus the cost of materials, appliances and fittings, even if her husband Matthew does much of the labour to assist the builder. Ms Misek has also provided a general estimate from an independent builder for the renovations. It is not a full quotation. It too is only an estimate and seems to be done on the basis that all the work would be completed by the builder's own employees. Given Matthew Misek's time commitments to his own employer, this may be the way that that any building works will have to be executed. But the estimate is $690,000 plus GST of $69,000, making a total of $759,000. I find that these renovations and extensions are necessary. The probabilities are that the Misek family will try to undertake them economically as possible.
6. Kylie Misek's nursing specialty is in midwifery. As she explains, and I accept, midwifery is a very physical job, each shift requiring the nurse to be standing, consulting with patients, walking between patient rooms, seeing patients, carrying babies, assisting with births and holding babies and teaching mothers how to care for their newborns.
7. The Plaintiff's medical condition. So far Ms Misek has been able to perform her nursing duties satisfactorily, progress in her career and maintain stable earnings in employment.
8. But in early 2016 Kylie faced a major medical challenge. She began to experience bladder problems. The correct diagnosis for this condition could not be reached rapidly, despite some weeks of medical investigations, whilst she was off work. She was finally diagnosed as being a probable case of Fowler's Syndrome, a neurological condition found only in women, which has the effect of interfering with the normal operation of the bladder. For reasons of her privacy it is not necessary for these reasons to publish any information about the range of symptoms Fowler's Syndrome has for the plaintiff. But the Court entirely accepts her evidence as to the effects of the Syndrome upon her on a day-to-day basis, evidence which is set out under the heading "My Health" in her affidavit of 8 August 2016.
9. In June 2016 the plaintiff underwent surgery to install the device that will assist her to overcome the effects of Fowler's Syndrome. Whilst the device appeared to be satisfactory in its therapeutic effect, the implantation of the device was not fully successful, with painful side effects, and required further surgery.
10. The implanted device does have some discomforting side effects which have tended to interfere with Ms Misek's sleep, but she is of the view that this device is far more satisfactory than the other alternatives that are available for overcoming the effects of Fowler's Syndrome. I accept her evidence that she has found getting through the challenges of dealing with this condition, her surgery, and her attempts to return to work since to be quite distressing and painful.
11. The medical advice to the plaintiff, which she has followed, is that the implantation of the device requires careful management, including restricting the extremes of her physical movement, to ensure that the implant does not become dislodged. This has had a substantial effect not only on her personal activity around the house but also it has restricted her in her duties as a midwife. At the time of the hearing she was unsure as to whether or not she might have to re-train in another field of nursing, which was less physically demanding. Managing the risk associated with the implant shifting or malfunctioning due to movement was, I accept, still a work in progress at the time of the hearing.
12. The implant restricts the plaintiff in several ways. She experiences a range of symptoms from it: sitting for long periods is uncomfortable; greater pain and discomfort are felt in cold weather; undertaking vigorous exercise is difficult; the implant causes inconvenience when she is driving; and there is a requirement to regularly adjust the device to avoid unpleasant side effects and sensations from it.
13. The medical investigations, surgical procedures and hospitalisation and after care have all been expensive for Ms Misek. As the explanation of her and her husband's financial position below shows, the family has substantial debt at present. Some of this debt has been incurred to meet Ms Misek's medical expenses. The cost of the initial surgery was $23,741, although this was mainly paid by her health fund. The family maintains health insurance. But Ms Misek has had to pay $3,200 by way of gap payments and insurance excess for several services she needs not covered by her health fund. The plaintiff is genuinely concerned that the family may not be able to maintain their health insurance because of their increasing levels of debt. Ms Misek lost about 6 - 7 weeks of wages due to her medical appointments, medical investigations, surgery and convalescence, which she calculates out as a loss to her of about $9,039 gross or $6,958.41 net. Some of these lost wages were able to be met out of accumulated sick leave and long service leave. But the balance of the losses have not been recouped and account in part for the high and increasing levels of debt in the Misek household.
14. I accept that the plaintiff faces medical and financial uncertainty arising out of her condition. She will continue to manage a range of medical difficulties. She says, and I accept, that these have had an adverse effect on the quality of her relationships with her husband Matthew and within the family.
15. The Plaintiff's assets and liabilities. The plaintiff and her husband Matthew, have estimated their assets and liabilities and income and expenditure for the purposes of these proceedings. I accept their estimates as set out in the plaintiff's affidavit of 8 August 2016.
16. Kylie and Matthew have both real estate and personal assets. The family home at South Caringbah was recently valued at about $1,200,000. Although an appraisal commissioned by the defendant, Cheryl, puts the value of the family home at closer to $1,400,000. I accept that a range of $1,200,000 - $1,400,000 for its value is appropriate for the purposes of these proceedings. The plaintiff and her husband have a first mortgage over the home. At the time of the hearing the amount outstanding on that mortgage was $576,731.73. Thus their net equity in the South Caringbah property is in the range of just under $625,000 to just under $825,000.
17. They have other assets. At the time of hearing they had total cash bank balances of $4,500. They had two motor vehicles, clothing, jewellery, antiques and other household contents and moveables totalling approximately $53,000. And they had investments in shares in Ramsay Healthcare Limited to the value of $1,000. Kylie and Matthew's combined superannuation, which is not currently accessible by them, given their ages and continuing employment, is $135,388.80.
18. This leaves Kylie and Matthew at the time of hearing with total gross assets, including their home, in the range $1,336,388.80 - $1,536,388.80.
19. Their principal liability is the mortgage over their home of $576,731.73. They have other lesser liabilities: credit card balances with St George bank of $17,288.47 and with HSBC of $7,324. They have other personal liabilities to St George Bank of $49,731.39. This brings their total secured and unsecured liabilities to $651,075.59.
20. Thus, when their real and personal estate is considered together, and assuming their real estate is valued at the lower bound of the range the Court has found, their total net worth is $742,813.31 (being total gross assets of $1,393,888.80 less total liabilities of $651,075.59). If the higher bound of the range is accepted for their home, this rises to a total net worth of $942,813.31. They also have some costs liabilities related to these proceedings, which have been left out of this account but which are dealt with above in calculating the net value of the estate.
21. The Plaintiff's and her husband's household income and expenses. Since December 2015 Matthew Misek has earned on average gross wages of $10,998.39 per month, depending upon the hours he works. Matthew currently pays about $2,166.66 per month in PAYG payments, leaving a net income of $8,831.73. This amount of tax per month is somewhat less than the rate mandated for monthly earnings such as his of nearly $11,000. The reason for this reduction is that Matthew has applied for and reached a temporary arrangement with the ATO for relief from some of his tax liabilities to the ATO, so he can reduce an already accumulated tax liability.
22. Matthew has managed to secure this tax-deferral arrangement whilst he is reducing an existing tax debt to the ATO of $16,674.16. Kylie and Matthew initially negotiated a more onerous debt reduction schedule at the rate of $2,000 per fortnight. But on this repayment schedule to the ATO they found themselves in a very tight financial position. At this rate of repayment they were unable to afford basic necessities, so much of their income was committed to their back tax liabilities. So Matthew successfully renegotiated the instalments for the reduction of their existing tax debt down to $500.00 per fortnight, until the tax debt is fully repaid. Once this target is achieved, Matthew will have to pay back the existing shortfall in his PAYG obligations, which is now accumulating fortnightly into a separate debt. This is clearly a long term project for the couple.
23. Matthew's liability to the ATO attracts substantial interest and penalties for non-payment or default on the primary ATO debt. Satisfying these liabilities to the ATO, so Kylie and Matthew can return their household budget to less stringent monthly budgeting, is one of Kylie's primary areas of need for provision out of the deceased's estate.
24. The plaintiff's earning capacity as a midwife has suffered in recent times. Due to her current medical condition the plaintiff has not been able to work on a full-time continuous basis as a midwife. Before the interruptions to her earnings, the plaintiff earned $6,026 per month gross before tax for an average working cycle of 14 shifts per month. She paid tax of $1,397.16 per month on this gross income, leaving her with monthly net income of $4,628.84, or $1,157.24 per week. The plaintiff had six weeks off in June-July 2016 for her surgery and recovery so her income has been markedly reduced over that period (she is only paid when she works, as her entitlement to 10 sick days per year has been exhausted by her need for medical investigations and procedures). Assuming that the plaintiff's medical position stabilises it is anticipated that she will be able to return to earnings of the order mentioned earlier in this paragraph.
25. Thus their joint household net income per month was Kylie's $4,628.84 and Mathew's $8,831.73, making a total of $13,460.57.
26. The plaintiff and her husband have also identified their average household expenditure, to contrast it with their level of household income. They assess their current monthly household expenses at $18,991.07. Although that figure contains a degree of double counting of Matthew's tax of $2,166.60 per month and Kylie's monthly tax of $1,397.16 per month, which have already been deducted for the purpose of calculating net monthly income. Deducting the total amount of this double-counted tax (of $3,553.82) from the estimated outgoings (of $18,991.07), their total average monthly expenditure is $15,437.25.
27. This monthly expenditure is made up of a number of significant components. The smaller components need not be detailed. Their monthly mortgage outgoings on their home are $3,291. Their monthly interest payment on their loan from St George Bank of $49,731.39 is the sum of $1,016.45 per month. Their credit card liabilities to St George and HSBC require monthly payments of $939.38. Apart from those figures the most significant other monthly outgoings are $1,950 for food and $2,053 per month for childcare, school fees and other pocket money and dance classes for the children.
28. It can be seen from these figures that they are currently running a monthly household financial deficit of $1,976.68, being the difference between their joint household monthly income of $13,460.57 and their monthly household expenditure of $15,437.25.
29. These figures show that Kylie and Matthew are currently struggling financially and are not able to meet all their monthly expenditure out of their monthly income. Just how they will eventually balance their household budget is not presently clear. I accept Kylie's evidence about her medical condition; and this places at considerable risk her earning capacity in the at-times physically demanding job of a midwife. Nor is there any obvious upside to Matthew's present earnings. Further household further economies therefore seem to be the only practical solution to reaching budgetary balance.
30. But there are even limits to this. I accept that theirs is already a reasonably lean monthly household budget. They have tried further financial stringency for the purposes of paying off Matthew's ATO debt in the past but have not been able to maintain that regimen. This household budget for a family in these circumstances with three children living in suburban Sydney is not obviously extravagant.
31. There were challenges to the plaintiff's and her husband's account of their income. Kylie was thoroughly cross-examined to suggest that the $150,000 which Kylie received from Donald's estate (given in three tranches). Cheryl says that of the $150,000 received, whilst $116,000 may have been paid off Kylie and Matthew's mortgage but an amount of $64,000 was drawn down again. The defendant's overall submission was that the plaintiff had not exercised any budgetary restraint and had misused the surplus sale proceeds of almost $193,000 from the Engadine property.
32. But the claim of lack of budgetary restraint is not made out in my view. Any redraws that occurred did not seem to have been applied to frivolous discretionary spending. An amount of $10,800 was used to discharge a credit card bill of the plaintiff and her husband. An amount of $9,245.54 was paid to the ATO and discharge of existing tax debts. An amount of $19,663.06 was paid to a sander to discharge a car loan and $38,340.32 was paid to solicitors to fund these proceedings.
33. But the allegation of lack of budgetary restraint is difficult to maintain in face of the need for renovations to the plaintiff's home and the well-established risk to the plaintiff's future career of her current medical challenges. Generally the schedules of expenses which the schedules of bank records, receipts which the plaintiff supplied by way of an aide memoir support that she was not lacking in budgetary restraint. Nor is it possible to deny the range of genuine expenditure including school fees and outgoings on three teenage children which the plaintiff now faces.
34. Cross-examination of Matthew Misek suggested that his current gross earnings may be higher than indicated in his affidavit evidence and of the order of approximately $13,000 gross per month. If this were a continuing feature of his earnings it may reduce the family's ongoing monthly deficit to almost the breakeven point, when his after-tax position is considered. But the Court is not prepared to infer that Matthew's earnings would continue at this level for the foreseeable future. So the budgeting which is set out in his affidavit has been used for calculations in these proceedings. And even if Matthew's earnings were to continue at the higher rate, on the family's current debt levels that would still not allow the household any room to save for renovations.
35. The Defendant's financial position. The defendant, Cheryl McBride, is married to Mr Derek Glinka. She continues to work as the school principal at the Smithfield Public School. She has not identified any particular medical or other immediate personal need for financial support. But it can be anticipated that as she ages, she will have greater medical needs and will incur increased medical and pharmaceutical expenses.
36. During 2016 and shortly before the hearing, Cheryl was involved in a number of property transactions, which account for the final structure of her assets and liabilities that are set out below. It is not necessary to detail the financial structure of each of these transactions, as the overall effect of the combined transactions on her asset and liability position is sufficiently set out in the tables below. But it is nevertheless useful to supplement the earlier narrative in these reasons of her property acquisitions with her father's encouragement, with the more recent additions to her property portfolio.
37. As with reference to Kylie's property, all reference in these reasons to Cheryl's real estate deletes any identification of the exact address of individual properties.
38. Cheryl sold the property that she lived in at *2 Macquarie Street, Sydney on 31 May 2016. Since then she and her husband, have been living at *3 Macquarie Street, Sydney. Prior to the sale of her former home at *2 Macquarie Street, Sydney Cheryl had rented out *3 Macquarie Street as an investment property.
39. The sale of *2 Macquarie Street Sydney was unexpected. Cheryl decided to purchase an investment property in Yanderra Close, Hope Island in Queensland with some of the proceeds of sale of *2 Macquarie Street, Sydney. She exchanged contracts for the Hope Island property in February 2016 and completed the purchase in July 2016. The financial outcome of this and subsequent transactions are recorded in Cheryl's statement of assets and liabilities in the table below.
40. In the next 2016 transaction Cheryl and her husband purchased as joint tenants the property at ***0 Marine Drive, North Sanctuary Cove in February 2016 and completed the purchase in June 2016. They paid the purchase price for this property with a combination of loans from the Commonwealth Bank of Australia, part of the sale proceeds of *2 Macquarie Street, Sydney and savings that Mr Glinka had accumulated, together with the sale of some of Cheryl's shares.
41. Cheryl's third 2016 property purchase related to her commuting arrangements to her workplace. Commuting each day to work to Smithfield in the western suburbs from her address in Macquarie Street, Sydney, is a distance of a little over 32 kilometres. I accept that Cheryl found she was becoming increasingly tired of the long commuting times in this journey, so she decided to purchase a new home closer to her workplace. For that purpose she exchanged contracts to acquire a property at Hannover Street, Cecil Hills in July 2016. At the time of the hearing the purchase of this property had not been completed. The purchase was anticipated to be completed in October 2016.
42. As a result Cheryl provided a statement of assets and liabilities showing the position pre-completion of the purchase and post-completion of the purchase. The statement of assets and liabilities below incorporates the post completion information, as it represents a more accurate long term view of the defendant's overall financial position.
43. Cheryl has substantial assets and high levels of debt. The table below of her combined assets and liabilities shows that her debts represent approximately 43 per cent of her gross assets. These debt levels represent a significant risk for her ongoing future financial equilibrium especially if interest rates were to rise significantly in Australia in the near term.
44. But the range of investment properties that Cheryl owns (and some of them with her husband) gives her considerable financial flexibility. For example once she retires from work she would be in a position either to sell or to rent out the Cecil Hills property. Whilst it may suit her tax position to negatively gear properties whilst she is working full time, she can be anticipated to receive a reasonable financial return in her retirement from selling some of her property portfolio.
45. The first part of this table represents Cheryl's assets, some of which are jointly owned with her husband. Cheryl McBride - Assets & Liabilities Asset Interest Estimated Value Macquarie Street, Sydney 100% $1,350,000.00 ***8 Marine Drive, North Sanctuary Cove 100% $3,500,000.00 The Parkway, Sanctuary Cove Purchased 11/2015 5% (with husband Derek Glinka) $62,500.00 $1,250,000.00 Yanderra Close, Hope Island 100% $1,350,000.00 Purchased June 2016 ***0 Marine Drive, North Sanctuary Cove Purchased June 2016 50% (with husband Derek Glinka) $537,500.00 $1,075,000.00 Hannover Street, Cecil Hills Purchased July 2016 to be settled 26/10/2016 100% $1,301,100.00 $1,301,000.00 Shares $82,265.00 Superannuation $250,000.00 Bank Accounts/Offset Accounts $569,362.00 TOTAL ASSETS $9,002,727.00

1. In the second part of the table Cheryl's assets are matched with the liabilities secures over and associated with each asset, where applicable. Loans & Mortgages Macquarie Street, Sydney $756,640.00 ***8 Marine Drive, North Sanctuary Cove $1,720,000.00 Redraw on ***8 Marine Drive, North $597,348.00 The Parkway, Sanctuary Cove $50,200.00 (Total loan $1,004,138.00 - 5%) Yanderra Close, Hope Island $1,084,511.00 ***0 Marine Drive, North Sanctuary Cove $404,254.00 (Total loan $808,508.00 - 50%) Hannover Street, Cecil Hills $500,000.00 Credit card $6,532.00 TOTAL LIABILITIES $5,119,485.00 NET ASSETS as at 15/8/2016 $3,883,242.00

1. Cheryl's income is commensurate with the responsibilities she holds as a school principal. Her income is $141,500 per annum and in the course of her employment she receives superannuation of $70,000 per annum. It is not in contest that she is able to provide for her future from her current earnings. At the time of hearing she was 59 years of age. She had a sufficiently flexible working capacity that although she had eased back from work some years earlier, she had nevertheless elected to return to full-time work. She presented as a highly capable and motivated professional woman, who subject to her continuing good health, could be anticipated to undertake remunerative employment in the education sector for as long as she possibly could, and probably for some years to come.
2. Cheryl and her husband's household expenditure levels are unclear on the evidence, in contrast to the position of Kylie and Matthew. But Cheryl does not have dependent children and it may be inferred is readily able to service all her mortgages from a combination of rental income and her employment income. One indirect indication of this is that she has sufficient financial self-confidence to be able to purchase the Cecil Hills property not only as a longer term investment but in the short term for what could be classified as a lifestyle choice, to ease her weekday commuting burden from Macquarie Street to work to Smithfield.
3. Cheryl's evidence does not disclose her husband's income or financial position. But nothing whatsoever is advanced to suggest or allow the Court to infer that he might possibly be a burden on her disclosed financial resources. On the contrary he seems to have been able to take some financial responsibility for the acquisition of a number of the properties that she holds jointly with him
4. But however Cheryl's financial position is to be analysed, her financial needs are less immediately pressing than those of her niece, Kylie.

What provision, if any, should be made out of the estate for the plaintiff?

1. I conclude from the above examination of the circumstances that adequate provision has not been made under the will of the deceased for the plaintiff's maintenance, education and advancement in life. The next question is what provision should be made.
2. Much of the threshold debate between the parties at the trial concerned whether or not Kylie should be seen by the court is in the position of the child of the deceased as distinct from a grandchild. For the reasons already given in my view this is a case where the relationship between the deceased and Kylie remained more akin to that of grandchild and grandparent, although there was a high degree of parent-like intervention in the lives of Kylie and her siblings by the deceased and her husband Donald.
3. Interestingly, when the whole history of this family is examined, including the records that show that in 1991 the deceased and her husband did not then want to take over the full role of parents of Kylie and her siblings, it may be inferred that a strong reason for this is that they did not perhaps want to accept that, despite his obvious failings, that Gregory should then be treated as having permanently failed as a parent. Apart from the difficulties of caring for teenagers at their age at the time, Patricia and Donald kept to their role as grandparents, I infer in part so that they could at least keep open the possibility that one day Gregory might resume parenting responsibilities.
4. The Court's earlier examination of Kylie and Matthew's financial position and monthly household budget suggests a number of ways that Kylie's proper maintenance and advancement in life should now be considered. If Kylie and Matthew's monthly household budget were to be turned around from its present deficit of just under $2,000 to even a modest monthly credit; that would allow them to reduce the financial pressures now bearing down on them on a monthly basis and allow them to start to save for their future and give them borrowing capacity to undertake the renovations to their house.
5. The elimination of the first mortgage over their home of $576,731.73 would reduce their monthly outgoings by $3,291, immediately putting them in monthly surplus of $1,314.32. Even this might be thought to be a budget outcome allowing little room for any accidental misfortune on their part. To provide further proof against budgetary vicissitudes, the plaintiff contends for greater provision of the estate. The payment off of their $49,731.39 St George bank loan would reduce their monthly expenditure by a further $1,016.45, giving them a monthly household budget surplus of $2,330.77. This would increase to a monthly surplus of $3,270.15 if the St George and HSBC credit cards were also paid off. The plaintiff also seeks funds to enable her to complete the renovations to the South Caringbah property.
6. In my view Kylie and Matthew's current financial position would justify the payment off of some of their existing liabilities. They still have ahead of them considerable expenditure in improving their current house and the uncertainty associated with Kylie's future medical situation. Those matters together with the probable increase in expenditure on the children as they go through their teenage years means that it is not unreasonable to say the appropriate measure of what is proper for their maintenance and advancement in life is the elimination of some of these liabilities. That must be balanced against the small size of the estate but taking into account what benefits that Cheryl has already received from Patricia's estate.
7. The defendant submitted that if provision were to be made out of the estate it should be no more than something of the order of $220,000. The plaintiff submitted that an award of $750,000 was appropriate.
8. In my view in the circumstances provision should be made out of the deceased's estate for Kylie in an amount which is almost sufficient to pay off the major one of these three major liabilities: the first mortgage of $576,731.73. The St George bank loan is a further $49,731.39; and the two credit cards make a further combined liability of $24,552.47. Combined these liabilities are $651,015.59. The Court proposes to award the plaintiff the sum of $460,000.
9. This award will not be sufficient to cover the renovations that Kylie Misek and her husband are planning to their South Caringbah home. Nevertheless with prudent future planning, further debt reduction, saving and then borrowing for those renovations, the provision of $460,000 should allow, such a goal to be within reach for them.

Conclusions and Orders

1. The Court has found that adequate provision has not been made under the will of the deceased for the plaintiff's maintenance, education and advancement in life and that the Court should order that a legacy be paid to her out of the estate of the deceased in the sum of $460,000. The Court is not satisfied that conversations took place as the plaintiff alleges between herself and the deceased and her late grandfather so as to constitute a secret trust in her favour over the benefits that Cheryl received under the deceased's will. And the plaintiff has failed to establish that the defendant holds any part of the Sanctuary Cove property on trust for the estate.
2. As the plaintiff has been successful in her family provision claim, ordinarily an order would be made that her costs be paid out of the estate on the ordinary basis. But the matter is complicated by the other claims upon which she has failed. And one or other party may seek a special costs order. The Court will give the parties a short opportunity to see if they can agree on appropriate costs orders. If the parties cannot agree, then they can file submissions in relation to costs.
3. Therefore the Court will make orders and directions as follows: 1. Order that there be provided to the plaintiff out of the estate of the late Patricia Ila Stuart a legacy in the sum of $460,000. 2. Order that these proceeding be adjourned for hearing before me at 9.30am on Friday 28 April 2017 for the making of final costs orders and if necessary for any argument in relation to costs and the making of any other consequential orders. 3. In the event that the parties are unable to agree upon orders for costs in the proceedings then they are directed to exchange and provide to my Associate by 4.00pm on 26 April 2017 their written submissions as to costs.

Amendments 19 April 2017 - citations corrected- typos 19 June 2017 - [106] correct spelling of Lugarno. [122] delete second reference to "in these reasons" in last line. [212] first linem change "he" to "she". [222] add to last line "was appropriate". 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: 19 June 2017