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[2010] NSWSC 69
plaintiff. The judge indicated a $60,000 legacy for the plaintiff, with her costs capped at $60,000, funded first from the legacies to her sons and any shortfall from the defendants’ savings; the defendants’...
The deceased's will left the residue of her estate equally to her two daughters, but her interest in a jointly owned property passed to the defendants by survivorship. The court considered the plaintiff's financial position, the assistance she had received during her mother's lifetime, her horse-racing expenditure, and the defendants' circumstances. It found that the plaintiff needed some further provision, but not a large amount. The judge treated the deceased's failure to sever the joint tenancy as a prescribed transaction because she was ill with the condition that caused her death and there was no rational prospect of her surviving the co-tenants. The judge proposed a $60,000 legacy, capped the plaintiff's costs at $60,000, and directed the parties to prepare short minutes.
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In Moon v Abrahams [2010] NSWSC 69, Diana Moon applied for family provision from the estate of her mother, Gwenda Cawsey. The application was brought under s 7 of the Family Provision Act 1982 (NSW), as then applicable. The judgment records that Cawsey died on 12 October 2006 and that the proceedings began with a summons filed on 11 April 2008 [1].
Cawsey had two daughters, Moon and Sharyn Abrahams. Her 2006 will made specific gifts, then divided the residue equally between them [13]-[14]. But the will did not control the destination of Cawsey's interest in the Perthville property. Cawsey, Abrahams and Abrahams' husband, Robert, had purchased that property as joint tenants in 2000. Cawsey contributed approximately half of its purchase price [9]. As a joint tenant, her interest passed by survivorship when she died, rather than under the will. After her death, Abrahams transferred the property into the defendants' joint names. They later sold it and used the proceeds towards superannuation, a vehicle, home improvements and other purposes [20]-[21].
Moon amended her summons at the hearing to seek declarations concerning the property as notional estate. Although the amended summons also sought trust relief, no submissions were made on that claim. Instead, Moon relied on the court's power to designate jointly owned property as notional estate [2]-[3].
The estate's listed assets totalled $124,719.84 before costs and expenses [15]. The judgment estimated that the deceased's half interest in the Perthville property's net sale value would have been approximately $232,500 had she severed the joint tenancy before death [23]. Those figures framed an important practical feature of the case: the amount Moon could receive from the actual estate was limited, while the defendants had received a much larger benefit through survivorship.
The judge considered the circumstances of both households. Moon was 60, unemployed, and married. Her husband worked as a casual landscape gardener, had serious knee problems and was approaching the end of his working life [26], [36]. Their stated assets totalled approximately $558,517, including the Portland property [35]. The defendants' listed assets totalled approximately $792,968, and both received pensions [39]-[40]. The judge also considered Moon's prior financial assistance from her mother, including a $50,000 payment in 1987, which the judge treated as a gift in the absence of contrary evidence [27], [50(c)].
Moon argued that the will and the survivorship outcome left her inadequately provided for. The judge accepted that she lacked a fund for contingencies, but viewed the claim in light of her household assets, her earlier assistance, her spending and her long involvement in harness-horse racing. The court found that racing had consumed substantial capital and income over many years [70], but concluded that Moon had nevertheless been left without adequate and proper provision [75].
The judge considered a $60,000 legacy appropriate, with Moon's costs capped at $60,000. The burden was to fall first on the legacies for her sons, with any shortfall paid from the defendants' savings. The judge said that the defendants' savings or property could be designated as notional estate, and imposed no condition on Moon's use of the legacy [86]. The parties were directed to bring in short minutes, including provision for the defendants' indemnity costs to be paid from the estate [87].
The judge framed the family provision question by reference to Singer v Berghouse [25]. The cited approach asks first whether the provision made was inadequate for the applicant's proper maintenance, education and advancement in life. It calls for an assessment of the applicant's financial circumstances, the size and nature of the estate, the relationship between applicant and deceased, and the claims of others. If the first question is answered in the applicant's favour, the court then considers what order should be made.
A central point in the judgment is that unequal treatment between siblings did not automatically establish inadequate provision. The judge recognised that Moon felt a strong sense of injustice about her mother's decision to leave the Perthville property interest to Abrahams through the joint tenancy. But the judge said that Cawsey was entitled to choose what to do with her property [65]. The relevant question remained whether Moon had been left without adequate and proper provision, not whether the daughters had received equal shares overall [67].
The judge examined the reasons Cawsey had given for not severing the joint tenancy. They included her belief that she had struggled to receive her share of the proceeds from the Chambers Flat properties, that she had paid for the jointly owned horses without receiving prize money, and that Moon had not repaid the $50,000 advanced in 1987 [48]. The judge found no evidence that Cawsey had needed to fight to receive the Chambers Flat proceeds, accepted Moon's evidence that her mother had paid only two initial stud fees for the horses, and treated the 1987 payment as a gift [50]. These findings weakened some of Cawsey's stated reasons, but they did not displace the judge's recognition that the deceased had been entitled to make her own property arrangements.
On need, the judge distinguished between Moon's wish to fund her horse-racing interests and her needs for maintenance or contingencies. The proposed expenditure on fencing and a driveway was unclear or had already been completed, and the judge considered that a recently purchased second car did not need replacement [61]-[63]. Moon had previously held a $50,000 deposit for contingencies, but spent it on improvements associated with her hobby [64]. The court accepted that horse racing had produced substantial losses over many years [70]. This history counted against the scale of further provision sought.
However, the court did not treat the possibility that an award might be spent unwisely as an automatic bar. At [72], the judge discussed Howarth v Reed, including its reference to Bondy v Vavros, in considering the difference between an applicant's entitlement to an order and the form that the order should take. In the present case, the judge ultimately imposed no condition on the use of the legacy [86]. The important result was a small award rather than the refusal of any provision.
The notional-estate issue turned on the failure to sever the joint tenancy. The judge set out the statutory route at [77]: an omission to sever could be a prescribed transaction if full valuable consideration in money or money's worth was not given for that omission. The judgment discussed Wade v Harding at [78], then described Needham J's reasoning in Cameron v Hills at [79]. It also noted that the Court of Appeal had followed that approach in Cetojevic v Cetojevic [80]. The judge concluded that the deceased was ill with the condition that led to her death and that there was no rational prospect of her surviving the co-tenants. On that basis, the omission was a prescribed transaction for which no valuable consideration had been given [81].
That finding did not mean the defendants' property should simply be taken without further consideration. Section 27, reproduced at [82], required attention to reasonable expectations, substantial justice and merits, as well as factors about the property and its value. The defendants expected to receive the property by survivorship, and before proceedings began they had sold it and rearranged their financial affairs [83]. The judge also took account of their circumstances and the costs already incurred. The conclusion was a restrained award and a capped costs order [84]-[86].
The judgment applied the Family Provision Act 1982 (NSW), not a statement of current succession legislation. It should therefore be read as an account of how Macready AsJ applied that Act in 2010, rather than as confirmation of the statute currently governing a later dispute.
Within that statutory framework, the judgment brings together two inquiries. First, the court assesses whether the testamentary provision was inadequate for the applicant's proper maintenance, education and advancement, using the factors described in Singer v Berghouse [25]. Second, if a provision is inadequate, the court determines the appropriate order. The judge's reasoning emphasises that perceived unfairness from unequal testamentary treatment is not a substitute for assessing adequacy [65]-[67].
The judgment also illustrates the difference between a will and survivorship. Cawsey's will divided the residue equally, but her joint-tenancy interest in Perthville did not pass under that division. The court treated the failure to sever as a possible prescribed transaction and assessed valuable consideration by reference to the deceased's position immediately before death [77]-[81].
For the notional-estate decision, the judge applied the balancing considerations in s 27. The defendants' expectations mattered, but they were considered alongside substantial justice, the parties' financial positions and the limited estate after costs [82]-[85]. The judgment thus does not treat the ability to designate notional estate as an automatic direction to award the applicant the value of the property. The actual order remained limited.
The judgment records that Cetojevic v Cetojevic had followed the approach in Cameron v Hills [80]. It does not set out any later statutory changes or later judicial treatment of Moon v Abrahams. No conclusion about the present state of the law or subsequent precedential status can be drawn from this judgment alone.
At [25], the judgment quotes the two-stage approach from Singer v Berghouse. In plain English, the court first asks whether the applicant received enough for proper maintenance and advancement, taking account of all relevant circumstances. If the answer is no, the court then decides what provision should be made. The judgment also notes that a finding of inadequate provision does not necessarily require an order in every case.
At [65], the judge says that Cawsey was entitled to decide what she wanted to do with her property. This recognises testamentary freedom, but does not end the inquiry. The court still had to assess whether the provision for Moon was adequate under the family provision legislation.
At [67], the judge identifies the starting point as whether Moon had been left without adequate and proper provision. The focus is not simply on comparing the daughters' inheritances. It is on provision in the context of Moon's needs and the competing circumstances.
At [75], the judge concludes that Moon had been left without adequate provision, while stressing that an appropriate provision would be small. This expresses the balance reached after weighing her lack of contingency savings against her assets, earlier assistance and spending history.
At [81], the judge explains why the joint-tenancy omission was treated as a prescribed transaction: Cawsey was ill with the condition that led to her death, so the judge concluded that there was no rational prospect of her surviving the co-tenants and no valuable consideration for not severing. The reasoning depends on the evidence about the deceased's illness and the statutory provisions discussed in the judgment.
At [86], the judge states the proposed practical result: a $60,000 legacy, with Moon's costs capped at $60,000. The order was not an equalisation of the daughters' overall benefits. It was a limited response to the finding that Moon needed further provision.
The judgment is relevant to fact patterns involving an eligible family member who claims that a will did not make adequate provision, particularly where the applicant argues that a large disparity between beneficiaries shows unfairness. The case illustrates that the court examines the applicant's actual circumstances and the whole history of assistance, rather than treating equal treatment between siblings as the governing test [25], [65]-[69].
It is also relevant where property passes by survivorship under a joint tenancy and is not dealt with by the will. The judgment considers whether a deceased person's failure to sever a joint tenancy can amount to a prescribed transaction, and whether the absence of a rational prospect of surviving the co-tenant means no valuable consideration was given [77]-[81]. The analysis is fact-sensitive: the deceased's illness and its relationship to the cause of death were material.
The case may be useful where notional-estate relief would affect beneficiaries who had reasonable expectations of receiving property and have since rearranged their affairs. Section 27 required the judge to weigh those expectations against substantial justice and the merits [82]-[85]. The judgment demonstrates that finding a prescribed transaction and deciding the extent of an order are distinct parts of the analysis.
Finally, the decision speaks to claims where the applicant's financial need is affected by voluntary spending or a costly hobby. Moon's horse-racing losses were relevant to whether she needed further provision and how much, but did not automatically defeat her claim [70]-[75]. The facts and the judge's assessment of this applicant's circumstances remain important.
The judgment itself does not identify later courts' treatment of Moon v Abrahams. It provides no post-2010 cases applying, distinguishing, approving or disapproving its reasoning. It would therefore be unsupported to claim, from this source alone, that the decision has been followed or remains authoritative on any particular issue.
The authorities discussed within Moon v Abrahams provide a limited account of the reasoning available to Macready AsJ in 2010. The judge applied the two-stage approach attributed to Singer v Berghouse [25]. He referred to Carey v Robson in discussing disproportionate testamentary treatment [66], and discussed Howarth v Reed and Bondy v Vavros in relation to whether concerns about an applicant's spending should affect entitlement or the form of an order [72].
On joint tenancy, the judge considered Wade v Harding [78], described the different approach in Cameron v Hills [79], and stated that the Court of Appeal had followed the latter approach in Cetojevic v Cetojevic [80]. Those are relationships between authorities as described in this judgment. They do not establish how later courts treated Moon v Abrahams itself.
The judgment records that the parties were to bring in short minutes [86]-[87]. It does not set out the final entered orders, the eventual calculation of the costs, or the precise property ultimately designated as notional estate. The proposed outcome is clear, but the document does not provide those later procedural details.
The decision also does not provide a general formula for determining when illness removes any rational prospect of surviving a joint tenant. At [81], the judge states an approach he would normally take in cases involving injury, a medical problem or a sequence of events leading to death, then applies it to Cawsey's illness. The judgment does not explore every possible factual variation, such as uncertainty about prognosis or a longer interval between illness and death.
There are also limits to what can be inferred from the family provision findings. The judgment reports the parties' assets and expenses and makes findings about Moon's need, but it does not establish a universal threshold for a contingency fund or for how spending on a hobby affects an application. The conclusion that some provision was appropriate, but small, arose from this particular evidence.
Finally, the decision does not address the current statutory framework or developments after 2010. Any present-day assessment of the governing legislation, or of the later authority of the reasoning, requires sources beyond this judgment.
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DECISION : Paragraph 86 Parties to bring in short minutes.
CATCHWORDS : Family Provision application by adult daughter left with only small provsion as majority of deceased's estate passed to another daughter by survivorship. Minor further provision and plaintiff's costs capped.
PARTIES : Diana Jean Moon v Sharyn Maria Abrahams and Anor
COUNSEL : JS Drummond for plaintiff P Blackburn-Hart SC for defendant
SOLICITORS : GJ Harris & Co for plaintiff IE Duffield for defendant
2303/2008 Diana Jean Moon v Sharyn Maria Abrahams and Robert Bruce Abrahams JUDGMENT 1 His Honour: This is the hearing of proceedings commenced by summons filed 11 April 2008 in which the plaintiff sought an order pursuant to s 7 of the Family Provision Act 1982 ("the Act") that provision be made for the plaintiff's maintenance and advancement in life out of the estate or notional estate, of Gwenda Jean Cawsey, who died on 12 October 2006. 2 An amended summons was filed at the hearing on 27 October 2009 which sought further relief by way of declarations that the deceased's interest in the proceeds of sale of property in Gestingthorpe Road, Perthville and the lands contained in folio identifier 31/DP87529 ("the Perthville Property") forms the deceased's notional estate pursuant to s 22 and s 23 of the Act and that the first and second defendants hold on trust for the deceased's estate, the deceased's interest in the proceeds of sale of the Perthville property. 3 On 26 October 2009 his Honour Justice White referred the whole of the proceedings to an Associate Judge for hearing. In the hearing no submissions were made in respect of the trust claim and the plaintiff relied instead upon the Court's power to designate jointly owned property as notional estate. Family History
4 The deceased had two daughters. The plaintiff, Mrs Diana Moon, is the deceased's eldest child. She was born in June 1949 and is now aged 60. She married Bryan Moon in September 1972. 5 The first defendant, Mrs Sharyn Abrahams is the deceased's second child. She was born in July 1954 and is now aged 55. The first defendant married the second defendant, Mr Robert Abrahams in January 1975. 6 In early 1996 the deceased separated from her husband, Donald Cawsey, and went to live with the plaintiff and her husband at Castlereagh until late 1997 when the deceased moved to a house she had inherited from her mother in Victoria Street, Berry. 7 The deceased, together with the plaintiff and the plaintiff's husband, purchased as joint tenants two neighbouring properties in Chambers Flat, Queensland ("the Chambers Flat properties") in 1997. It appears the deceased paid one half of the $205,000 purchase price. 8 In 1998 the deceased gave $5,000 to both of her daughters. 9 The deceased sold her home in Berry on 20 April 2000 and on 27 April 2000, the defendants and the deceased jointly purchased the Perthville property for $242,000. It appears the deceased lived with the defendants from that time onwards. The deceased contributed approximately half the purchase price. A deposit of $12,100 appears to have come out of the defendant's savings account on 17 March 2000. Taking into account rate adjustments, legal costs and disbursements, a total of $250,270.43 was paid for the Perthville property. On the available evidence before me the deceased contributed approximately one half of the purchase price. Given the deceased's instructions to her solicitor to write to Centrelink and inform them that she and the defendants had each paid half of the purchase price, I will accept this evidence. The certificate of title to the Perthville property showed the defendants and the deceased as joint tenants in the first schedule. 10 On 24 June 2000 the deceased executed a will. In that will the deceased devised her "half share" in each of the Chambers Flat and Perthville properties to the plaintiff and the first defendant respectively. 11 The Chambers Flat properties were sold in May 2001 for a total of $180,000. The settlement statement from John S. Gibson, Solicitor and Attorney, dated 10 May 2001 indicates that the proceeds of the sale were divided equally with the deceased receiving one half share of the net proceeds of the sale and the plaintiff and her husband receiving the other half. The last will of the deceased 12 The deceased executed her last will and testament on 25 July 2006 while in hospital. On 22 October 2009 probate to the deceased's will was granted to the first defendant who was one of the appointed executors. The plaintiff who was also appointed executrix in the will renounced probate to bring the present proceedings. 13 The deceased left two legacies of $20,000 to the plaintiff's sons, Craig and Mark Moon. Clause seven of the will, releases the deceased's brother, John Boxsell, from a debt he owed to the deceased of $40,000 or thereabouts. That debt was, in any event, statute barred. The deceased gave her interest or share in a standard bred horse partnership she held with the plaintiff, to the plaintiff and the plaintiff's husband. The deceased also gave her interest or share in a standard bred horse partnership she held with the defendants to the defendants. 14 Clauses eight and nine of the will then stated: " 8 I GIVE DEVISE AND BEQUEATH all the rest and residue of my Estate of whatsoever kind and wheresoever situate not hereby otherwise disposed of to my trustees UPON TRUST to pay thereout all of my just debts, funeral and testamentary expenses and TO HOLD the balance of my Estate then remaining as follows:- (a) AS TO fifty percent (50%) to my daughter the said DIANA JEAN MOON; (b) AS TO the remaining fifty percent (50%) to my daughter the said SHARYN MARIA ABRAHAMS . 9. I DECLARE that it is my wish that my daughters the said DIANA JEAN MOON and the said SHARYN MARIA ABRAHAMS divide equally between them all of the items of jewellery owned by me." The estate of the deceased 15 The deceased had no debts at the date of her death. The present property in the deceased's estate is as follows: (i) Cash $122,126.34 (ii) Toyota Corolla Sedan unregistered $ 1,000.00 (iii) Shares $ 1,593.60 (iv) Personal effects no commercial value TOTAL $124,719.84
(a) The deceased's interest in the Perthville property, owned in joint tenancy with the defendants.
(b) Standard bred horses registered in joint names with the plaintiff and the plaintiff's husband had an estimated value of $7,800 at the time of death. The plaintiff has now sold all these horses for what appears to be nominal abattoir value. 17 The defendant retained the horses she jointly owned with the deceased. However the horses have all been retired and have only a nominal value. 18 The plaintiff's son, Mr Mark Moon, held a cash sum of $14,091.55 for the deceased. Mr Moon withdrew this amount on 3 November 2006 and given the evidence, which I accept, of a gift to him of this cash by the deceased he would be entitled to retain that sum. None of the other assets of the estate had been distributed at the time of hearing on 27 October 2009. The deceased also gave a total of $3,500 to Mark Moon in 2006. 19 Since her death, the deceased's estate has borne the cost of $7,328.30 for funeral expenses. A figure of $1,861.00 remains to be paid for costs and disbursements following the grant of probate and administration. There are also the costs of these proceedings. 20 Following the deceased's death, the first defendant transferred the Perthville property into the joint names of the defendants. On 14 August 2007 the defendants took out a mortgage against the Perthville property with Macquarie Mortgages in the sum of $250,000. They drew down $185,000 from that facility and paid $150,000 into superannuation and $35,000 into a portfolio account with St George Bank. 21 On January 31 2008 the defendants sold the Perthville property for $465,000 on 31 January 2008 and received $256,467.20 after discharging the mortgage and paying other related sale fees. The money was used towards improvements and repairs to the defendant's present home in Nowra, for the purchase of a motor vehicle and horse float. The balance was transferred to a savings account held with IMB. 22 The will had the effect of giving the plaintiff approximately $42,359 worth of assets. This figure excludes any interest in standard bred horses and includes a half interest in the cash left in the estate after payment of legacies, a half interest in the motor vehicle and the shares. The plaintiff expects to receive partial repayments of loans totalling $55,000 she made to her sons Mark and Craig. These repayments are expected to total $40,000 and would be paid when Mark and Craig receive their legacies. Therefore before incurring legal costs, the plaintiff could have expected to receive $82,359. 23 Before legal costs, the defendants would have also received approximately $42,359 from the deceased's personal property as listed above. The deceased's half interest in the net sale price of the Perthville property was approximately $ 232,500 had the deceased severed the joint tenancy of the Perthville property prior to her death. 24 However, the theoretical position is no longer relevant as the defendants have incurred legal and probate costs of $87,181. That was on a two-day estimate but the case went for three days. Depending on whether there might be an order for recovery against the plaintiff there is the prospect of insufficient funds being available to pay the legacies. If the plaintiff succeeds and obtains an order for costs her estimated costs for a two-day hearing were $80,886. In that event there would be no actuate estate. Eligibility 25 The plaintiff is an eligible person. In applications under the Act the High Court in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 has set out the two-stage approach that a court must take. At page 209 the following was said: "The first question is, was the provision (if any) made for the applicant adequate'' and adequate provision'' and ``proper maintenance'' etc were explained in Bosch v Perpetual Trustee Co Ltd [1938] AC at 476. 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 Leeder (1951) 82 CLR 645, 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."
The situation in life of the plaintiff 26 As previously mentioned, the plaintiff is 60 years of age. She is married with two sons, Craig born in August 1973 and Mark, born in October 1976. Her sons are not dependent upon her. 27 In about 1987, the deceased advanced either by way of gift or loan an amount of $50,000 to the plaintiff to enable her and her husband to discharge a mortgage over a property they owned and lived in at Castlereagh. 28 In 1994 the plaintiff's husband received a redundancy payment of $120,000. 29 In early 1996, the deceased separated from her husband and came to live with the plaintiff for about two years at Castlereagh.
30 In 2003, the plaintiff and her husband sold their property at Castlereagh, receiving approximately $705,000 after paying out the mortgage and selling expenses. They then purchased a small farm at Delaney's Creek for $499,000, which left the couple with a difference of about $192,000 after costs. Improvements totalling $86,000 were made to the Delaney's Creek property, which would have left the plaintiff and her husband with just over $100,000. 31 The Delaney's Creek property was sold in 2007 for $700,000. The plaintiff and her husband received a net figure of $685,000. 32 The plaintiff and her husband then purchased a block of land consisting of five acres at Portland NSW for $415,000. The plaintiff appears to have spent approximately $120,000 on improvements to the Portland property. 33 Under cross examination the plaintiff has conceded that the remaining money that was available to her from the sale of Delaney's Creek property appears to have also been spent on home improvements, on a car, $55,000 went towards a loan for her sons and the rest on personal expenses. The plaintiff claims that the property is now valued at approximately $470,000, although there does not appear to be any evidence to support this valuation. 34 The plaintiff has received a number of windfalls over time in the form of prize money from racing her standard bred horses however these wins have been cancelled out by substantial losses incurred in pursuing the sport. 35 The plaintiff and her husband have the following assets:
(a) The Portland property $470,000 (b) Superannuation (Bryan Moon) $ 34,000 (c) Motor vehicles $ 24,000 (d) Tractor $ 3,000 (e) Horse float and horse racing equipment $ 25,000 (f) ANZ accounts xx816 and xx324 $ 2,517 TOTAL $558,517 36 The plaintiff is unemployed. Her husband is employed as a casual landscape gardener earning $700 net per week if he works for six days of the week. He does not receive holiday or long service pay. Mr Moon is almost 60 and suffers from a degenerative condition in both knees. His right knee requires a total replacement. Since his work is physically demanding his prognosis for continuing employment is not good. 37 The plaintiff claims she has not received adequate provision from the deceased's estate, particularly when consideration is made of her age, limited working life and comparatively minor savings. The plaintiff argues that one half of the net distributable estate, including the notional estate would place her in approximately the same position as the defendants and provide her and her husband with approximately $230,000 in cash and superannuation. 38 The plaintiff has also indicated she would like to make some further expenditures to further her horse racing interest. This includes purchasing a new car to transport the horses and the construction of some sheds, fencing and a driveway. The situation in life of the first defendant 39 The first defendant receives a carer's pension of $506 per fortnight and the second defendant receives a disability support pension of $506 per fortnight. The second defendant, the first defendant's husband, suffers from a number of disabilities including rheumatoid arthritis, a swan neck, restricted movements to his wrists, elbows, feet, shoulders and cervical spine, osteoarthritis, cerebral circulation thrombosis and chronic back pain. Their expenses, including food amount to $595.00. The defendants also spend a large amount on training and racing standard bred horses. 40 The first and second defendants' financial position is as follows:
(a) Property at Nowra $510,000 (b) Cash $115,405 (c) Superannuation $131,503 (d) Motor vehicles $ 15,500 (e) Horse equipment $ 14,000 (h) Advances to estate for costs $ 6,560 TOTAL $ 792,968 41 The plaintiff disputes the defendant's valuation of her motor vehicles and horses and equipment and in cross-examination there was some speculation that the Toyota Prado should be valued at $20,000. I will accept the defendant's figure of $15,500 for vehicles. 42 The first defendant and her husband have a liability to St George Bank of $7,000. They have dealt with the proceeds of the sale of the Perthville property through payments into their superannuation fund, the purchase of a car, horse float and home improvements.
Consideration 43 The deceased's joint tenancy with the plaintiff was severed when the Chambers Flat properties were sold in May 2001 and the plaintiff submits that the sale of these properties meant that deceased's intention for her daughters to benefit equally was no longer refected in the terms of her then will, made in April 2000. The 2000 will reflected a clear intention to benefit each daughter equally. 44 The plaintiff argues that the deceased did not fully appreciate the affect of her final will and did not understand that her interest as a joint tenant in the Perthville property passed by survivorship and could not be devised. Nor did she understand that the defendants would receive a disproportionate benefit as joint tenants of the Perthville property with the deceased. 45 The deceased was advised by Mr Harris, a solicitor, when making her final will and it is the plaintiff's case that Mr Harris did not explain to the deceased the overall effect the terms of her new will would have. 46 Mr Harris was cross-examined by Mr Drummond, counsel for the plaintiff, regarding his meeting with the deceased in hospital. It was on this occasion that the deceased instructed Mr Harris as to the provisions of her final will: "[MR DRUMMOND] Q. Did you give consideration to providing advice to her, if the will was drafted in the form it was, of the potential benefits to Sharyn as compared to the potential benefits to the plaintiff? [MR HARRIS] A. That is right, I did. There was reference to that and that is when the deceased said to me that "I have been very good to Diana and her husband and I have provided for them over the years more than I have Sharyn" and she highlighted to me some incidents which seemed to justify why she wanted to leave the ownership of the property as it was.
Q. There were two matters? A. Three matters according to my notes.
Q. The first matter was the issue of paying for the horses jointly owned with the plaintiff and the husband? A. Yes.
Q. The second was the question of advance or loan made to the plaintiff by the deceased? A. That is right.
Q. The third one was? A. Chambers Flat in Queensland and some difficulty that the deceased believed she encountered in receiving the due proceeds of that property.
Q. Those were the three reasons she expressed? A. The three major reasons.
Q. Taking those on board, did you give her any advice to that effect. I assume you made some assumption of what Perthville was worth? A. No.
Q. Did you not suggest if you left your interest in personal benefit to one daughter will be far far greater than to the other daughter?
OBJECTION TO LINE OF QUESTIONS; ALLOWED Q. Did you at any time provide advice to the deceased identifying to her what the effect of the introduction would be regarding the potential disparity in the provisions between her daughters? A. Yes.
Q. You did? A. And that is why I explained to her and I wanted her to be aware of the fact she could sever the joint tenancy if she wished and thereby leave in the will or make separate provision in the will as to how that property was to be left.
Q. In view of her instructions about the severing of the joint tenancy did you give her any advice about providing some other provision for her other daughter? A. Not when the deceased gave to me her reasons in not wanting to change the joint tenancy.
Q. So the answer to my question is no? A. No." 47 I accept Mr Harris' evidence that the deceased did not intend to sever the joint tenancy and that she understood the effect this would have on her will. The next question is the reasons given by the deceased for this decision. 48 The reasons given by the deceased to support the provisions in her final will were:
(a) That the deceased had to "fight" to receive her one half interest in the proceeds of the Chambers Flat properties;
(b) That the deceased had paid "all the expenses" in relation to the maintenance, training and raising of the standard bred horses she jointly owned with the plaintiff and the plaintiff's husband but she had not received any prize money; and
(c) That the deceased had made a loan of $50,000 to the plaintiff and her husband of which had remained substantially unpaid. 49 The plaintiff has stated that her relationship with the deceased continued to be loving and caring until her death and there is no proper foundation to support any of above reasons. She suggests that that these issues have become inflated and distorted with time and there is no basis to deny the deceased's moral obligation to her. 50 With regard to the deceased's specific justifications for the provisions of the final will the evidence shows that:
(a) There is no evidence to support the claim that the deceased had to "fight" to receive her interest in the Chambers Flat properties. Documentary evidence, including the prompt payment of the proceeds of the sale supports a contrary conclusion. If there had been a dispute it would have been evidenced in correspondence to Mr Gibson, the solicitor handling the sale.
(b) The only payments the deceased made towards the cost of maintaining the jointly owned horses were two initial service fees. I accept the plaintiff's evidence on this aspect.
(c) The deceased did provide $50,000 to discharge a mortgage in 1987 and in the absence of any contrary evidence this amount should be taken to have been a gift. 51 The plaintiff gave evidence that the deceased paid no expenses while residing with her at the Castlereagh property and the defendants have provided no documentary evidence to support a contrary claim. In contrast while the deceased lived with the defendants she contributed to improvements on the property and paid one half of all expenses. So far as the improvements are concerned, the deceased's records show payments in the relevant period from April to August 2000 of $43,060.35. The defendants' records show that from September 2000 to January 2003 there were withdrawals from Mr Abrahams' superannuation of $42,775. The defendants' evidence was that their contributions to improvements came from the superannuation. 52 Evidence was given as to the nature of the improvements carried out. Although evidence of the actual payment for the work was not available, given the extent of the works, I am satisfied that the defendants made a substantial contribution to the cost of improvements. As I have indicated, the deceased's contribution was $43,060.35. 53 The plaintiff, along with the deceased and the first defendant, raised and raced standard bred horses. The plaintiff has given evidence that she has been involved in the sport since she was 16 years old. In the last 12 months the plaintiff has earned prize money of $33,000 and she has three horses that have not yet been raced. 54 The plaintiff's horses have had a number of small wins ranging from $200 to $8,000. There were a number of wins attributed to a horse called "Our Benefit" which the plaintiff sold in 2006 totalling $67,944. Another horse called "Benefactor" won $55,000. The plaintiff was entitled to a quarter share of the prize and has given evidence that the money went back into maintaining the horses. No documentary evidence concerning these activities was produced. 55 The plaintiff and the deceased owned horses together from 1993. During that time a horse called "Left Alone" earned prize money in the order of $61,963, a horse called "Ticket to Rome" earned prize money of $16,289, and a horse called "Art in Motion" earned $15,950. The plaintiff stated following under cross examination by Mr Blackburn-Hart, counsel for the defendants:
"Q. Did you keep a record of all of your winnings? A. Not really.
Q. You did not record them in a cash book? A. No.
Q. You did not record them in a ledger of any kind? A. No.
Q. When the winnings came in was it your practice to pay them into your joint account of yourself and your husband? A. Yes.
Q. Was it your practice to pay out the expenses in relation to the horses over the period of time you owned horses with your mother at least from the same account? A. Yes.
Q. Over what period of time do you say you owned horses with your mother? A. We had horses dating back from about 1993.
Q. You are aware, aren't you, that witnesses in this case have reported conversations with your mother in which she is reported to have said she paid a substantial amount of money for costs of maintaining the horses in which she had an interest? A. That is not true.
Q. You are aware those statements have been made? A. I am aware.
Q. You are aware she said to your uncle Mr John Boxall, she has reported to have said to him "I have shares in horses with them", you and your husband, "which we have raced. I have never received any prize money but I paid the bills" ? A. Not true.
Q. Do you doubt your mother may have said that to Mr Boxall? A. To be honest I don't know any more.
Q. You are saying your mother did not pay for any of the maintenance costs associated with the horses jointly owned with you and your husband? A. No.
Q. You are aware that she is reported by Mr Harris as having said to him "for years I paid for the horses I owned with Diana and Brian but I never received any prize money." You are aware that Mr Harris has said that in his affidavit? A. Yes.
Q. Do you doubt your mother has said that to Mr Harris? A. Yes.
Q. You doubt that, do you? A. Yes.
Q. You question whether Mr Harris has reported that correctly, do you? A. She could not have said it because it is not true.
Q. What I am asking you is whether you have any doubts whether she said it to Mr Harris? A. As I said I don't know whether she would or would not.
Q. You are saying on your oath she did not pay for any costs on those horses? A. Early in the piece she paid for a couple of service fees, but when she started to get prize money she said until we get a really good one you keep the prize money.
Q. What do you regard as a really good win? A. About $10,000.
Q. Over the years some of those horses have earned considerably more than that? A. I am talking about $10,000 in one hit.
Q. You are aware your mother spoke to Mr Chisholm on this aspect as well? A. Yes.
Q. Which has been set out by Mr Chisholm in his affidavit? A. Yes.
Q. She is reported to have said to him "even though I paid for almost all of the costs associated with races, horses and breeding them I did not receive any prize money" You know Mr Chisholm has reported that conversation in his affidavit? A. Yes, I am aware.
Q. Do you doubt Mr Chisholm when he says that was said to him? A. As I said I don't know what my mother has said and what she did not say.
Q. But you say to his Honour she did not pay to you or your husband any moneys towards the maintaining of the jointly owned horses?" A. No. 56 Although there is no documentary evidence I will accept the plaintiff's evidence that apart from two stud fees her mother did not pay for any of the expenses associated with the horses. 57 The plaintiff has admitted that the horses are expensive to maintain and over a 30 year period she has lost a substantial amount of money. She is not sure whether or not she will give up her interest when her current horses have finished racing. 58 The defendant suggests that the $50,000 was a gift and argues that even if the $50,000 was a loan, it is statute barred. Nonetheless, $50,000 in 1987 would have conferred a substantial benefit on the plaintiff. 59 The first defendant submits that in the circumstances the plaintiff has been given proper provision under the will. She received $50,000 in 1987. She is entitled to one half of the residue and the two legacies to her sons are to go to her as loan repayments which will increase her assets. 60 It is necessary to see how the plaintiff says that she has been left without adequate and proper provision for her maintenance, education and advancement in life. 61 The plaintiff sets out her requirements in paragraphs 47, 48, 49 and 50 of her affidavit dated 27 June 2008. Shortly put they are as follows:
(a) That she needs $15,000 to $20,000 to complete some fencing and the driveway and constructing some sheds. (b) That she needs to replace the 19 year old Toyota Land Cruiser and a Hyundai Getz motor vehicle which was new in 2007 and which is now valued at $16,000. (c) A fund to cover the contingencies in life. 62 On the first matter the plaintiff's needs are not clear and it is apparent that in cross-examination that the driveway has been completed. She now suggests that she needs to erect a roof over a yard which would assist when looking after the horses. The extent of this roof is not evident nor is it costed. 63 So far as the cars are concerned, it is probably fair that the Toyota Land Cruiser should be replaced. She has probably had sufficient funds over the period to date to enable her to do this and, indeed, she would have had sufficient funds from the estate to enable this to happen. Clearly the second car which was purchased new in September 2007, after the date of death, does not need to be replaced. 64 When the plaintiff first swore her affidavit as to need she had a deposit of $50,000 available to her to meet these contingencies. She has now used this fund towards improvements to accommodate her hobby presumably on the basis that she did not feel the need to retain a sum for contingencies. One view of the circumstance is that if she were given a sum for contingencies she would be unlikely to save it and she would most likely use it for her hobby. 65 In this case it is plain that the plaintiff feels a great sense of injustice that the deceased left her half share of the property to her sister, Sharyn Abrahams. She continually badgered her mother about it before she died. The deceased intended to do this for three reasons that now do not all appear to be valid. The deceased was entitled to act in this way as it was her choice to do what she wanted with her property. 66 When considering this aspect it is useful to remember what Mr Justice Palmer said in Carey v Robson [2009] NSWSC 1142 at paragraphs 57 and 58 where he said the following: [57] The strongest ground for relief urged by Rosemary and Marion, though put somewhat obliquely, is that the provision made for them by the testator is vastly disproportionate to the provision made for Alan. One can understand the sense of grievance which one child may have at being treated by a parent differently from another child. Some may be tempted to think that great disproportionality of testamentary treatment in itself indicates some essential error in the testamentary process which requires amelioration under the Family Provision Act so as to achieve approximate equality between a testator's children. [58] That is not, of course, a position from which one can begin in this, or in any other case under the family provision legislation. It is useful to remind oneself of the parable of the labourers in the vineyard. Those who worked the whole day complained, not because their agreed wage was inadequate, but because those who worked only part of the day received the same wage and were therefore treated more generously. The moral of the parable is: what is fair and adequate to start with does not become unfair and inadequate just because someone else has been treated differently.
67 The starting point in the Court's consideration is the question of whether the plaintiff has been left without adequate and proper provision for her maintenance, education and advancement in life. This case involves an analysis of the situation of both the plaintiff and the first defendant and the provision made for the two daughters during the lifetime of the deceased. It must be seen in the context of the size of the actual notional estate. 68 It should not be forgotten that the plaintiff was greatly assisted by the $50,000 gift from the deceased in 1987. The benefit to the defendants of the deceased not severing her joint tenancy resulted in a gift to them of $232,500 at the date of death This would equate to $132,500 if paid in 1987. Alternatively, if one regarded the cash contributions of $168,195 to the purchase as passing on death this would equate to $95,871. Both figures are substantially greater than the gift of $50,000 to the plaintiff in 1987. It should also not be forgotten that the plaintiff stood to obtain a share of residue and by her own action of lending her children some funds she may also receive from the estate the legacies of $40,000. When considering the question of whether she has been left without appropriate provision at the time of the hearing one can have regard to what would have been the situation in the estate if this litigation had not commenced. 69 I have set out above the financial situation of the plaintiff and her husband and the first defendant and her husband. The situation in life between the two is not dissimilar except that the plaintiff's cash reserves are less than those of the defendants mainly because she has spent them in pursuit of her racing interests since the proceedings started. Both couples are at the end of their working lives and the defendants have been on a pension for many years. The difference in the values of their respective properties is immaterial. If the only need was for the plaintiff to replace her car she would have received sufficient funds from the estate to accommodate this need and the proceedings should be dismissed. There is, however, her claimed need for a sum for contingencies and this matter requires further consideration. 70 A careful analysis of the facts in the defendant's submissions on this aspect demonstrates that the plaintiff and her husband have for many years been involved in horse racing which has resulted in them losing substantial sums of capital and income. I accept that this is the case. The defendants' submissions on what should flow from this were as follows: "34. This is not a case which is equivalent to one where a plaintiff has a gambling or drug habit, as a result of which, the plaintiff might have needs which a testator should have provided for. The "needs" asserted by the plaintiff, have arisen because of her "hobby". The inevitable implication is that the unexplained missing sums were applied towards the plaintiff's hobby. Addressing the question of whether or not she has been left without adequate provision requires an examination of her chosen lifestyle. If the Court accepts her evidence that the costs of maintaining, training and racing horses exceeded the prize money and if the Court has regard to the level of expenditure on improvements to the various properties of the plaintiff devoted to these activities, it is quite apparent that this "hobby" has consumed a major proportion of the assets and income of the plaintiff and her husband for many years and will continue to do so. The Court should not accept any assurance or statement by the plaintiff that she intends to "finish up" within two years or any period. It is "in her blood". She was unable to assure the Court that she would " finish up" her hobby of owning, breeding and racing horses. Her current lifestyle and the desire to retain and continue this hobby in her present circumstances and in the future inevitably impacts on whether she has been left without adequate provision. 35. It is submitted that this type of expenditure is entirely voluntary. It is properly regarded in her circumstances as a luxury which she is free to indulge in but the Court should not assist her by giving her more. She has already spent her Esanda deposit of $50,000.00 she was keeping as "part of a fund to meet our future needs" in further "improvements" for the hobby, not on living expenses. ….. 40. If the plaintiff were to simply cease her "hobby" with harness horses, her argument for further provision would disappear. She admits she has been hoping for "30 odd years" she will not continue to lose money on it. Why should her luxury be funded by the defendants?"
71 As I have said earlier the plaintiff's reason for bringing the proceedings was her perceived injustice about her mother's decision not to sever the joint tenancy. Her actions do not support the view that she also brought the proceedings to obtain a fund for contingencies. However, those are matters on which the Court must make take an objective position. If the plaintiff has been left without such provision then, subject to matters to which I will deal with later, the Court should consider the question of whether she has a need for a fund for contingencies. 72 The concern that the plaintiff may not apply any provision for its proper purpose has been referred to by Powell J in Howarth v Reed Supreme Court of New South Wales 2 March 1991, 15 April 1991 (unreported). His Honour refers to the possibility of a provision not being applied by the person for the purposes intended by the court. At pages 43 and 44 his Honour went on to say: "While, as will be apparent from what I have earlier written, I am deeply concerned at what I regard as the totally unrealistic approach to the management of their affairs adopted by Mr. and Mrs. Howarth, which approach, if persisted in, will almost inevitably lead to the benefit of any Order which might be made in Mrs. Howarth's favour being dissipated in short order, it seems to me that, while that is a matter which may bear on the form of Order to be made, it is not a matter which ought, without more, to be regarded as disqualifying Mrs. Howarth from receiving the benefit of any Order to which she might otherwise be entitled. Nor is this a novel view, for a similar approach is reflected in the following passage in the Judgment of Young J in Bondy v. Vavros (29 August 1988 (unreported)): "I should interpose at this point that in one sense it does not matter if I form the view that a plaintiff is a spendthrift. If a person is entitled to an order, what they do with the money that they receive is their business and it is none of my affair if I very much fear that the money may be wasted on wine, women and song in a short period of time. I have deliberately used that expression to make it clear that I am not referring at the moment to the facts of this particular case. On the other hand, when one is considering what a wise and just testator would have done, if one can see that a plaintiff is a spendthrift and the testator has arranged his will in such a way as to limit the funds flowing to the plaintiff, then one may very well come to the conclusion that the plaintiff has failed to establish that there has been any breach of moral duty." The question, then, is what is the form of order which ought now to be made?" 73 In contrast to her sister the plaintiff as a result of her own actions has no fund for contingencies. The defendants have savings and superannuation which represent the benefit which the plaintiff received from the deceased's failure to sever the joint tenancy. 74 However, this does not mean the defendants' savings should be taken away. In some ways the defendants are worse off then the plaintiff and her husband. The defendants have not worked since 1997 and are dependant on the pension to meet their needs. The other matter which impacts on the defendant's situation is the question of any costs which may be made in favour of the plaintiff as this will mean that there is no actual estate. 75 In these circumstances, although what might be an appropriate provision will be small, I think that the plaintiff has been left without adequate and proper provision. 76 Under s 23 of the Act I can designate the defendants' property as notional estate if there has been a prescribed transaction which took place on the death of the deceased. 77 The relevant prescribed transaction which is alleged under s 23(b)(iii) of the Act is the failure of the deceased to sever the joint tenancy. By the combined effect of s 22(1)(a)(i), (4)(b) and (5) there will be a prescribed transaction if the deceased omits to sever the joint tenancy immediately before death and full valuable consideration in money or money's worth is not given for the omission of the deceased to do that act (s 22(1)(b)).
78 In Wade v Harding (1987) 11 NSWLR 551 Justice Young, as he then was, concluded on the facts of that case "what was forgone in not severing the joint tenancy was received by continuing to be a joint tenant." This conclusion appears to be because he formed the view that immediately before death the deceased had an equal chance with the joint tenant of benefiting by the jus accrescendi.
79 In Cameron v Hills Supreme Court of New South Wales, Needham J, 26 October 1989, unreported described that approach in these terms: "With great respect to his Honour, I find it difficult to see how a joint tenant, about to die immediately, can be said to have an equal chance of surviving the other joint tenant. The Court must look at the position the moment before death. Whatever may have been the facts in that case justifying the conclusion, there are no such facts in this case. Immediately before the death of this deceased there was no rational prospect of his surviving the defendant. Accordingly, in my opinion, no valuable consideration in money or money's worth was given for the omission of the deceased to sever the joint tenancy."
80 Needham J's approach has now been followed in the court of appeal; see Cetojevic & Anor. v. Cetojevic [2007] NSWCA 33
81 Provided that a deceased has suffered some injury, had a medical problem or set in train some sequence of events as a result of which death ensues then, like his Honour Needham J, I would normally conclude that there was no rational prospect of the deceased surviving his co-tenant. In the present case the deceased was ill and suffering from the condition which led to her death. In these circumstances I would conclude that no valuable consideration was given and thus there is a prescribed transaction.
82 Section 27 of the Family Provision Act is in the following terms: "(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the order; and (c) any other matter which it considers relevant in the circumstances. (2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to: (a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person; (b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration; (c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be; (d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and (e) any other matter which it considers relevant in the circumstances."
83 It is clear that the defendants expected to receive the deceased's share of the jointly owned property on her death. Before the proceedings were commenced on 11 April 2008 they put in train the sale and rearrangement of their superannuation. Any adjustment will impact on these arrangements and will interfere with their naturally held expectations. 84 The defendants' position in life means that the substantial justice and merits require that any impact on them will be minimal. The defendants' costs will mean that the actual estate will be in the order of $25,000 to $30,000 after payment of costs. This would leave little for any award to the plaintiff and for her costs. 85 In these circumstances any amount should be small and the plaintiff's costs should be capped. In this case the estate and notional estate is well under the $500,000 figure referred to in Practice Note No SC Eq 7. Apart from the size of the estate the plaintiff's approach to the litigation has been motivated in the way I have described. The case was fought hard and extended over three days when there was only a small amount in issue. 86 In my view an order for a legacy to the plaintiff of $60,000 with her costs capped at $60,000 would be appropriate. The burden should fall on the two legacies for the plaintiff's sons and any shortfall should be paid out of the defendants' savings. The defendants' savings or their property can be designated as notional estate. In terms of the order for a legacy in favour of the plaintiff I will not impose any condition on its use. 87 The parties can bring in short minutes to include the defendants' costs on an indemnity basis which are to be paid out of the estate of the deceased. **********
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Moon
Abrahams
The judge indicated a $60,000 legacy for the plaintiff, with her costs capped at $60,000, funded first from the legacies to her sons and any shortfall from the defendants’ savings; the defendants’ savings or property could be designated as notional estate. The parties were to bring in short minutes, including the defendants’ indemnity costs payable from the estate.
inadequate for [his or her] proper maintenance, education and advancement in life''? The difference between proper'' and the interrelationship which exists between