Moussa v Moussa

PARTIES : Therese Mary Moussa and Samuel Latif Moussa by their next friend Anita Devi Gounder - Plaintiffs Deborah Veronica Moussa - Defendant

COUNSEL : Mr J.R. Wilson SC - Plaintiffs Mr L.J. Ellison SC - Defendant

SOLICITORS : The Hargreaves Practice - Plaintiffs MacLarens - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5147/04 THERESE MARY MOUSSA AND SAMUEL LATIF MOUSSA BY THEIR NEXT FRIEND ANITA DEVI GOUNDER v DEBORAH VERONICA MOUSSA

1 The plaintiffs, Therese Mary Moussa ("Therese") and Samuel Latif Moussa ("Samuel"), are children of the late Ghassan Moussa ("the deceased") and his first wife Anita Devi Gounder ("Ms Gounder"). The deceased and Ms Gounder were married in 1987. The marriage was dissolved in 1997. Therese (born 1988) and Samuel (born 1990) are the only children of that marriage.

2 The deceased married his second wife, Deborah Veronica Moussa ("Mrs Moussa"), in April 2003. She had previously been married to Errol Diaz with whom she had two children, Keira and McKayla, who are now aged 15 and 12 respectively. The deceased and Mrs Moussa had one child of their own, a daughter Tanaiya who is now aged three, having been born in February 2003.

3 The deceased died suddenly and unexpectedly on 23 August 2003 at the age of 37 years. Although there is evidence of his having spoken to family members about a will, no will has been proved and a grant of letters of administration in respect of the deceased's intestate estate was made to Mrs Moussa on 3 March 2004.

4 Therese and Samuel, by their tutor (Ms Gounder), apply for an order that provision be made out of the deceased's estate for their maintenance, education and advancement in life pursuant to s.7 of the Family Provision Act 1982.

5 The estate of the deceased consisted of a house property at Blacktown owned by him alone, a Toyota motor vehicle and an interest in a proprietary company which provided painting services (this was effectively an incorporated partnership of the deceased and another painter). The values of these assets were estimated for probate purposes at $420,000, $6,000 and $17,500 respectively. There was a bank loan of $140,000 secured on the house. Otherwise, there were funeral and headstone expenses of $9,600.

6 Pursuant to s.61D of the Wills Probate and Administration Act 1898, Mrs Moussa required that the Blacktown house he held on trust for her alone. It is accepted that she thereby became absolutely entitled to the house (or, more precisely, the deceased's equity of redemption in it, so that she took subject to the mortgage in favour of the bank) and thereby lost any further claim upon the estate (s.61B(13)); also that the balance of the estate was held for Therese, Samuel and Tanaiya in equal shares (ss.61B(3) and 61C).

7 The assets to which the three children thus became entitled are effectively non-existent. Mrs Moussa, as administrator, sold the car for $5,000 and received about $2,500 in respect of the shareholding which is now regarded as of no value in consequence of the company's deregistration and the lack of funds to pursue any claim there might be to resurrect it and seek to realise value. The $7,500 to which I have just referred is less than the $9,600 expenses for funeral and headstone.

8 The deceased's death did, however, cause a benefit of approximately $131,000 to be paid from the National Mutual Retirement Fund. The trustee of that fund paid $15,000 to Ms Gounder in trust for Therese, $20,000 to Ms Gounder in trust for Samuel and $96,034.43 to Mrs Moussa "who is also responsible for the upbringing of Tanaiya".

9 The deceased and Ms Gounder had been divorced for some six years at the time of the deceased's death. Orders with respect to property and the children (Therese and Samuel) were made under the Family Law Act. There was effectively an equal split of property. Under the original orders of 1997, the children were to live with the parents for alternating periods of four days and there was no provision for their maintenance, the implicit assumption apparently being that each parent would attend to the children's needs while they were with that parent, so that there would be effectively an equal split of financial responsibility. This was made explicit in orders of March 2002 to the effect that each parent should support the children and pay their living expenses while the children were actually in the parent's care (with the children spending more than 40% of nights of each year in each parent's care) and that each parent would pay one-half of school fees.

10 Therese and Samuel spent significant time with the deceased and Mrs Moussa even before the deceased's second marriage. According to Mrs Moussa, Therese and Samuel became close to her older children, Keira and McKayla. She was upset when Therese and Samuel no longer formed part of her family unit after starting to live full time with Ms Gounder following the deceased's death.

11 Therese is in Year 12 at Cerdon College, Merrylands. She is preparing for her Higher School Certificate examinations. She has a particular interest in and aptitude for visual arts. She will major in art and textile for the HSC. She has already been awarded two scholarships by art colleges for short term courses in the current year. She wishes to go on to tertiary studies at the Whitehouse Institute, a private design college in Sydney. On the basis of information received from the college, Ms Gounder estimates that the course fees will be approximately $20,000 for the Bachelor of Interior Design course in which Therese is interested. Ms Gounder does not know whether scholarships are available for this course. Therese has done some casual work on Saturdays on the checkout at Woolworths and later at a chemist's shop. She has kept the money from this for her own purposes. She is not working at the moment because of HSC commitments.

12 Samuel is in Year 10 at St Paul's College, Graystanes. He plays basketball for the school and is doing well academically. He is interested in computers and has expressed a wish to study computer science after he finishes school. He had a casual job for about six months at one stage stacking shelves at Harvey Norman.

13 Ms Gounder is single and in employment. She is currently supporting Therese and Samuel. At the time of swearing her first affidavit in January 2005, she was a sales manager in receipt of an annual salary of $60,000 (gross) plus a car allowance of $14,000 (gross), superannuation and commission of about $20,000. In the year to 30 June 2004, she had a taxable income of almost $59,000. Since January this year, Ms Gounder has been employed as sales manager by Sandisk. According to her affidavit of 21 April 2006, she receives a salary of $75,000 (gross) per annum and a car allowance of $10,000 plus a commission if she meets targets. Her pay slip for the period of some two and a half months to 31 March 2006 shows year to date figures of $17,403.85 for salary, $2,499.99 for car allowance, $1,350 for "health life plan" and $3,125 for commission, with a negative of $781.25 for some form of salary sacrifice. The total gross for "year to date" is shown as $23,597.59 from which $7,466.00 tax has been withheld to produce "net pay" of $16,131.59. On a monthly basis, the constants shown by the pay slips in evidence seem to be gross salary of $6,250.00, car allowance of $833.33 and "health life plan" of $450. In the one month in which these constants, together with a salary sacrifice deduction of $312.50, appeared, tax withheld was $2,171.00 and the net for the month was $5,049.83. On this basis, it can be seen that the annual after-tax income, ignoring performance based commissions, is of the order of $60,000. She also receives family allowance at the rate of about $700 per year. Her employer contributes to a superannuation fund for her at the rate of almost $500 per fortnight.

14 Ms Gounder's latest affidavit lists assets and liabilities as follows: Assets : House at Graystanes $ 560,000 . 00 (est) Investment unit in Queensland 270,000 . 00 (est) Bank accounts 10 . 00 Liabilities: Graystanes mortgage 380,000 . 00 Queensland mortgage 190,000 . 00 Credit card balances 33,841 . 00

15 The Graystanes mortgage entails payments of $2,200 per month. Ms Gounder also pays $771.64 per month for a leased motor vehicle. The Queensland unit is an investment property situated between Brisbane and the Gold Coast. It is tenanted. The mortgage payments on it exceed the rent by $300 per month. Ms Gounder's other monthly expenses are HCF ($140), rates ($170), electricity ($100) and food and incidentals ($650). Total monthly outgoings are thus of the order of $4,400 compared with a net income of about $5,000, disregarding sales commissions.

16 Ms Gounder's Queensland unit is currently on the market. She has received (and may accept) an offer of $265,000. It may be inferred that there is some $70,000 available from this source, subject to any impact of capital gains tax.

17 Mrs Moussa's assets consist of the Blacktown property that formed part of the deceased's estate (said to have now a somewhat reduced value of about $350,000), furniture and contents to which she ascribes a value of $10,000 and a motor vehicle she estimates to be worth $6,000. There is a mortgage debt of some $135,000 on the house plus credit card debts of some $5,000.

18 Mrs Moussa's fortnightly income consists of family benefit of $435, Centrelink pension of $476 and child support of $120 from Mr Diaz - a total of about $1,150. She lists in her affidavit fortnightly expenses of about $1,140 including $508 mortgage payment. She has had difficulty paying school fees at Cerdon College for Keira and McKayla and was granted a waiver of one term's fees. She is unlikely to receive this again.

19 Mrs Moussa's bank statements for the period 1 February 2005 to 31 January 2006 were tendered in the plaintiff's case. They show cash withdrawals of $7,840 at the Blacktown Workers Club and the Merrylands RSL during the one year period. Mrs Moussa accepted that all this money was lost in poker machines. She admits to a gambling problem. The bank statements also show receipts totalling $26,840 from a person described by Mrs Moussa as her godparent's son. She explained that this friend had helped her out financially and that the receipts were gifts. The friend stopped providing support towards the end of 2005. She has also had financial help from her parents and her brother.

20 Mrs Moussa spent the $96,000 from the National Mutual Retirement Fund on outstanding debts (including arrears on the home loan, a car loan and loans from family members), credit card bills, dental bills, solicitors' bills, furniture, home repairs and a holiday at Hawks Nest, as well as everyday living. In cross-examination, she was asked for details of amounts spent of the various items. She could not account for the whole. She accepted that some of it would have been used for gambling but could not say how much.

21 Mrs Moussa is unemployed. She has not worked on a regular basis since 1986 or 1987, although she has had casual clerical jobs occasionally. Her last regular work was for Centrelink looking after old people. The daughter Tanaiya goes to pre-school two days a week. Her responsibilities to Tanaiya leave Mrs Moussa in a position where she cannot contemplate full time work. She is also suffering from a depressive illness.

22 The first question to be addressed in relation to Therese and Samuel is whether they have been left without adequate provision for their proper maintenance, education and advancement in life. If that question is answered in the affirmative, the court must decide what provision should be made for them out of the estate. This is the approach specified by the High Court in Singer v Berghouse (1994) 181 CLR 201.

23 The inquiry must, in the present case, be made against the background of the reality that the Blacktown house is the sole asset. There is, as I have said, evidence of the deceased having spoken to family members about a will. Those family members report him as having said that his house was for his children Therese and Samuel. It is clear, however, that any such statements were made before the deceased's marriage to Mrs Moussa, which marriage would have revoked any existing will and, in all probability, changed his testamentary intentions.

24 It was submitted by Mr J.R. Wilson SC on behalf of Therese and Samuel that their expectations should be approached on the basis of what they would have received from the estate according to an unmodified operation of s.61B of the Wills Probate and Administration Act as it stood at the date of the deceased's death. On that basis, each of Therese and Samuel (as well as Tanaiya) would have received about $36,000. Mr L.J. Ellison SC, who appeared for Mrs Moussa, did not question this calculation but submitted that the underlying premise is unsound. There is, he says, no basis for having regard to any unmodified operation of s.61B: the reality is that s.61D creates entitlements that encroach upon what would otherwise eventuate under s.61B, that those entitlements were taken up by Mrs Moussa and that they cannot be ignored.

25 Mr Ellison further submitted, citing Luciano v Rosenblum (1985) 2 NSWLR 65, that Mrs Moussa, the widow, would be in a stronger position than Therese and Samuel, were all three of them plaintiffs. That proposition is, however, questionable in light of the decision of the Court of Appeal in Bladwell v Davis [2004] NSWCA 170, where it was emphasised that the task of the court is to apply the statute to the facts without preconceptions as to the relative importance or merit of different relationships.

26 My assessment of the present case is that the deceased and Ms Gounder had accepted a position under which each was to bear one half of the cost of raising Therese and Samuel until they achieved adulthood at age 18; that property relationships between the deceased and Ms Gounder were at an end; that the deceased had embarked on his second marriage and the creation of his new family by way of a "new start" in the expectation that there would be no formal financial commitment to his former family except as I have already stated; but that he continued to recognise the children of his first marriage as deserving of his affection and support.

27 In these circumstances, it is reasonable to think that the deceased would have wished Therese and Samuel to benefit from his estate equally with Tanaiya - but in a context where his principal concern was for the welfare of the woman he had chosen to marry only some few months before his unexpected death, with whom he had a very young child (and with whom, I should add, he had had a romantic association for about four years before his marriage to Ms Gounder).

28 In determining, at the first stage of the Singer v Berghouse inquiry, whether the provision actually made for Therese and Samuel is inadequate, the court must, of course, have regard to the circumstances in which they are situated. They live with their mother who provides well for them. She has an after-tax income of some $60,000 per annum, disregarding such bonuses as she is able to earn. She has a fund of some $70,000 available to her (subject to capital gains tax) from the sale of the Queensland unit. Sums of $15,000 and $20,000 respectively were allocated to Therese and Samuel out of the National Mutual Retirement Fund and paid to their mother for their benefit. The sum allocated to Therese was spent on $10,000 of orthodontic treatment and, as to the balance, on her education and pursuits related to her interest in art. The $20,000 allocated to Samuel was spent, as to some $5,000, on things such as school fees and dental work. The balance of $15,000 was borrowed by Ms Gounder.

29 Ms Gounder is aged 40. On the face of things, she is quite able to support the two children through to the end of school and some subsequent course at a tertiary institution. It may therefore be doubted whether Therese and Samuel have been left without adequate provision. But even if that is the case, I am not satisfied that any provision should be made for them out of the deceased's estate.

30 The estate consists solely of the house. It is the home of the widow, Mrs Moussa, and her three children who were supported by the deceased at his death, including his own child born only a few months before he died. Those three children must look to Mrs Moussa for their support. She has only a modest income and is in no position to work. She has a depressive illness and a gambling problem. On balance, I consider that the house should be left where the laws of intestate succession have put it, that is, in the ownership of Mrs Moussa. That imperative, it seems to me, sees some measure of certainty and security achieved for Mrs Moussa and her three children. To require the house to be sold in order to provide funds to Therese and Samuel would be to make inappropriate inroads upon other areas for which the deceased should have made provision and in relation to which the provision that has eventuated is, in any event, also probably inadequate.

31 This is one of those cases in which the value and form of the estate do not allow all competing interests to be accommodated. For the reasons I have stated, the estate should be left to lie where it has fallen. That, in my view, is the just outcome in the particular circumstances.

32 The summons is accordingly dismissed. I shall hear the parties on costs.

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