Novak & ors v Public Trustee

1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 1 October 1998 the Plaintiffs, Dorothy Sophia Novak, Kathy Krystina Novak and Monika Margaret Novak claim an order that provision be made for the maintenance, education and advancement in life of each of the Plaintiffs out of the estate of the late Henry Drawert (to whom I shall refer as "the Deceased"). 3 At the time when the proceedings were instituted each of the first two Plaintiffs, Dorothy and Kathy, was under the age of eighteen years and brought the proceedings by her tutor, Jackie Sledge. Each of those Plaintiffs has now attained her majority. 4 Each of the first two Plaintiffs asserts that she is the daughter of the Deceased, by Barbara Novak. The Third Plaintiff, Monika, is a stepdaughter of the Deceased, being the daughter of Barbara Novak by an earlier relationship. 5 The Deceased (who had been born in Poland) died on 21 April 1997, aged seventy-two. He left a will dated 18 November 1981, probate whereof was on 10 March 1998 granted to the Public Trustee, the executor named in such will (who is the Defendant to the present proceedings). 6 I note that, somewhat curiously, in the will the Deceased is called Kenryk Drawert. However, the grant of probate, whilst acknowledging the foregoing fact, is made in respect to the estate of Henryk Drawert. 7 By that will the Deceased gave a legacy of $5,000 to Monika, and a legacy of $10,000 to each of Dorothy and Kathy. He gave his real property situate at and known as 64 Wharf Road, Gladesville to Barbara Novak (described in the will as his "de facto wife") . The Deceased gave the residue of his estate equally among seven named siblings, nieces and nephews. 8 The assets disclosed in the inventory of property consist essentially of the house property at 64 Wharf Road, Gladesville (to which a value of $430,000 was ascribed), and a house property situate at and known as 50 Prince Edward Street, Hunters Hill (to which a value of $390,000 was ascribed). 9 By the will the Deceased expressed a request, but without creating a binding trust in that regard, that Barbara Novak retain the property situate at and known as 64 Wharf Road, Gladesville "as a family home until my youngest surviving child attains the age of eighteen (18) years". 10 Dorothy was born on 9 February 1982, and is presently aged nineteen. She completed her Higher School Certificate at the end of 1999. Although desirous of pursuing a course in physiotherapy, her HSC results were not sufficient for this purpose. She has expressed a desire to sit again for the HSC in order to pursue her ambition to become a physiotherapist. Dorothy does not have any income. She resides with her mother and her sisters, and is totally dependent upon them. Her only asset is a motor car (a 1990 Dihatsu Charade, which was a gift from her mother and her sisters in early 2000 - I gather for her eighteenth birthday - costing $3,000). Otherwise, she has no assets and no liabilities. She is presently doing volunteer work with disabled children, and is also looking for employment. 11 Kathy was born on 17 November 1980 and is presently aged twenty. She is single. She completed her HSC at the end of 1998. She then attended the Charles Sturt University at Goulburn (stated to be also known as the Police Academy), in order to train to become a police officer. However, she gave up that course in 2000, and is now employed as a gaming representative in a club in Sydney. She earns $400 a week. As a result of her previous studies Kathy owes about $2,000 in HECS fees, which amount she is paying off slowly from her earnings. Kathy hopes to return to university in the near future to undertake further studies. 12 Kathy resides with her mother and her sister Dorothy. She has no assets and, apart from the debt to HECS, she has no liabilities. 13 After the institution of the present proceedings the solicitor for the Plaintiffs in September 1999 obtained a copy of Kathy's birth certificate. That document shows the father of Kathy to be Stan Novak (described as pensioner, aged sixty-five years). I assume that gentleman to be identical to Stanislaw Novak, the father of Monika and the husband of Barbara Novak - from whom Barbara had been separated since at least 1974 or 1975, when, accompanied by Monika, she went to live with the Deceased. 14 In her affidavit of 8 October 1999 Kathy refers to that birth certificate. She states that she has lived her entire life with the persons she regarded as her parents, being Barbara Novak and the Deceased. She met Stan Novak only once, when she was about four years old. She did not regard him as her father, and no one ever said or suggested that he was. Kathy's mother had told her that she had been married to Stan Novak some time before she met the Deceased. The Deceased treated Kathy as his daughter in every sense. She always called him "Tata" (which is Polish for "Dad"). He called her "Kasia" (which is Polish for "Kathy") and he consistently referred to her as "my daughter" when speaking to others. Kathy was aware that her parents were never married. 15 It is implied in that affidavit that until she saw the birth certificate Kathy never doubted that the Deceased was her father. 16 The Deceased himself in his will recognised Kathy as his daughter. Clause 5 of the will provides, relevantly, I GIVE AND BEQUEATH:- .... (b) the sum of Ten thousand dollars ($10,000) to each of them respectively my daughter KEATHY[ sic ] NOVAK and any other child or children born to me and my defacto wife BARBARA NOVAK as survive me and attain or have attained the age of eighteen (18) years absolutely. 17 By that provision of the will the Deceased firstly describes Kathy as "my daughter" and then proceeds to refer to "any other child or children born to me and my defacto wife BARBARA NOVAK". The use of the word "other" would be inappropriate unless Kathy were in fact, firstly the Deceased's daughter, and also a child born to him and his de facto wife Barbara Novak. Further, Kathy, and any other child or children born to the Deceased and Barbara Novak are treated in the will as being in a category separate from that of Monika, in respect of whom provision is made in Clause 5 (a) and the gift to whom is only one half of that to Kathy and any other children born to the Deceased and Barbara Novak. 18 In addition to the foregoing recognition by the Deceased in his will of Kathy as his daughter, it should also be observed that the death certificate of the Deceased records Kathy as one of his children (whilst, of course, it makes no reference to his step-daughter Monika). 19 The references to Kathy in the letters from the Deceased to his Polish kinsfolk (especially that of 25 January 1985) (Exhibit 1) also support the conclusion that the Deceased himself regarded Kathy as his own daughter and not as merely his step-daughter. 20 Barbara Novak, the mother of Kathy (who is shown as the informant on both the birth certificate of Kathy and the death certificate of the Deceased) is the person with the best knowledge of the identity of Kathy's father - the Deceased or Stan Novak. She could easily have resolved any uncertainty on this point. It is curious that she has chosen not to do so. 21 Nevertheless, I am satisfied from the wording of the Deceased's will, from the references to Kathy in his letters, from the terms of the death certificate (in respect of which Kathy's mother was the informant), and from the foregoing evidence of Kathy herself, that the Deceased was Kathy's father. 22 But even if (contrary to the conclusion which I have just expressed) she were not his daughter, but his step-daughter, Kathy's standing and entitlement in the proceedings would be no different from that of his step-daughter Monika. 23 Monika was born in Poland on 21 November 1971. She is presently aged twenty-nine. Her father was Stanislaw Novak, the husband of Barbara Novak, who died in Sydney on 13 August 1996. (Although separated for well over twenty years Barbara and Stanislaw appear never to have been divorced.) From about 1974 or 1975 Monika lived as part of the family unit with her mother and the Deceased and, after their respective births, each of her half-sisters Dorothy and Kathy. According to Monika, she and her half-sisters have always regarded each other as full sisters, and their mother and the Deceased always treated the three girls equally and as if they were each the daughters of both Barbara and the Deceased. Monika called the Deceased "Dad" until she reached the age of eleven, and thereafter, with his permission, she called him "Henry". 24 Monika has always lived at home with her mother and her sisters. She is unmarried. She has had no contact whatsoever with her natural father. 25 Monika attended Canterbury Girls High School, completing her HSC in 1989. She has been in employment since that time. 26 Until she commenced work Monika was supported financially and in every other way by her mother and the Deceased. When she started employment Monika offered to pay board of $50 a week, but the Deceased rejected that offer, saying that there was no need for it. After she commenced work Monika no longer received any pocket money from the Deceased, but if she ever needed anything and requested money from him he always gave it to her. 27 Monika does not have any tertiary qualifications. She is currently employed as a client relationship manager trainee, earning about $45,000 a year net. Her only asset is a Holden Barina motor vehicle (to which she attributes a present estimated value of about $6,000). 28 Monika still lives at home with her mother and her sisters. Although she does not pay any regular amount for board, she pays all household bills and purchases all groceries (she estimates this expenditure as totalling on average $1,500 a month). 29 Monika has liabilities in respect of a credit card and personal loans, totalling about $9,000. 30 It is Monika's desire to further her education by attending university, which she considers would assist her in her career. 31 Each of Dorothy and Kathy as a daughter of the Deceased is an eligible person within paragraph (b) of the definition of that phrase contained in Section 6(1) of the Family Provision Act. Accordingly, each of those Plaintiffs has the standing to bring the present proceedings. 32 Monika, who is a stepdaughter of the Deceased and was treated by him as if she were his own daughter, was a member of the same household as the Deceased from the time when she was aged three until the death of the Deceased when she was aged twenty-six, that is, for a period of twenty-three years. Throughout that period she was totally dependent upon the Deceased and her mother, and was treated no differently in the family unit from her two half-sisters. Monika is thus an eligible person within paragraph (d) of the definition of that phrase. As such she also has the standing to bring the present proceedings. However, since she is an eligible person only within paragraph (d) of the definition, the provisions of section 9 (1) of the Act are called into operation. I shall shortly refer to those provisions. 33 Apart from the three Plaintiffs the only other eligible person in relation to the Deceased is their mother Barbara Novak, who, as the de facto spouse of the Deceased, is also an eligible person within paragraph (a) of the definition. None of the other beneficiaries named in the will of the Deceased, being the various siblings, nieces and nephews of the Deceased, is an eligible person in relation to the Deceased. 34 In approaching the claim of each of the Plaintiffs, the Court must consider the competing claims of the other named beneficiaries upon the testamentary bounty of the Deceased. It is not necessary for those beneficiaries to prove anything. It is for each of the Plaintiffs to establish her entitlement to receive a greater benefit from the estate of the Deceased than is provided for her by the will. The claims of the other named beneficiaries, who it must be recognised are the chosen objects of the testamentary beneficence of the Deceased, may have the effect of reducing, or even extinguishing, any order for provision an entitlement to which one or more the Plaintiffs may otherwise have established. 35 I have already referred to the fact that the inventory of property discloses that the two substantial assets in the estate of the Deceased were the house property situate at and known as 64 Wharf Road, Gladesville (which was the family home of the Deceased, Barbara Novak and the three Plaintiffs), and another house property at 50 Prince Edward Street, Hunters Hill. In addition, the Deceased and Barbara Novak were the registered proprietors as joint tenants of another house property, situate at and known as 52 Wharf Road, Gladesville. That property was the subject of a deed of trust dated 27 December 1990, by which the Deceased and Barbara Novak declared that that property would be held by them on trust for the Deceased alone. The deed witnessed that the totality of the purchase price was being provided by the Deceased personally. 36 Upon the death of the Deceased the legal title in that house property at 52 Wharf Road passed by survivorship to Barbara Novak alone. 37 In the affidavit of Trevor Wayne Booth (the Branch Manager of the Chatswood Branch of the Defendant's office) sworn 20 January 1999, filed on the behalf of the Defendant, it was stated that the Public Trustee believes that the property 52 Wharf Road, Gladesville may also be an estate asset. 38 However, by contract dated 13 November 1998 Barbara Novak had already sold that property for $620,000. It would appear that that sale was effected without the knowledge of the Public Trustee. His letter dated 2 September 1999, addressed to the solicitors for Barbara Novak, wherein the Public Trustee stated that the proceeds of sale were considered estate assets and were required to be paid forthwith to the Public Trustee, was disregarded. 39 In consequence, the Public Trustee instituted proceedings 1695 of 2000, by summons filed on 10 March 2000, naming Barbara Novak as Defendant. By that summons the Public Trustee sought a declaration that the property situate at and known as 52 Wharf Road, Gladesville was part of the estate of the Deceased and available for distribution; an order that Barbara Novak pay to the Public Trustee the proceeds of sale of that property; an order that Barbara Novak be restrained from using any moneys acquired by her arising out of the sale of that property; an order that Barbara Novak transfer to the Public Trustee any property acquired by her arising out of the sale of the property at 52 Wharf Road, Gladesville; an order that the interest of Barbara Novak in the property situate at and known as 64 Wharf Road Gladesville be impounded by way of indemnity to the Public Trustee to replace the sum of $620,000 acquired by Barbara Novak in consequence of the sale by her of the property at 52 Wharf Road, Gladesville. 40 With the foregoing amount of $620,000 being the proceeds of sale of 52 Wharf Road, Gladesville, Barbara Novak in about September 1999 (perhaps a little earlier) purchased a house property situate at and known as 93 Charles Street, Putney, in which she and the three Plaintiffs now reside. 41 With the exception of an appearance (in a somewhat curious form), Barbara Novak has not filed any material in proceedings 1695 of 2000. 42 Although that appearance is headed "Public Trustee Plaintiff, Barbara Novak Defendant" and bears the number 1695 of 2000, it contains the statement "Harry Norman Freedman of Milne Berry Burger Solicitors of 40 Wentworth Avenue, Sydney appears". 43 On 8 December 2000, being the date of the hearing of the present proceedings, orders were by consent made in proceedings 1695 of 2000. Those orders included a declaration that Barbara Novak is indebted to the estate of the Deceased in the sum of $620,000 as at 13 November 1998, being the net proceeds of sale of the property situate at and known as 52 Wharf Road, Gladesville, and an order that Barbara Novak, pending further order, not dispose of or further encumber the interest she holds in the property situate at and known as 93 Charles Street, Putney. 44 It follows from the foregoing disposition of proceedings 1695 of 2000, that the Court in the instant proceedings must regard the assets of the estate of the Deceased as consisting not only the two pieces of real estate respectively situate at and known as 64 Wharf Road, Gladesville and 50 Prince Edward Street, Hunters Hill (or the proceeds of sale of that latter property, which appears now to have been sold), but also the indebtedness of Barbara Novak to the estate in the sum of $620,000. 45 Thus the present assets in the estate consist of the house property at 64 Wharf Road, Gladesville ($650,000), the amount of $391,333 (being the balance held in trust by the Defendant and representing essentially the net proceeds of sale of the property at 50 Prince Edward Street, Hunters Hill), and the indebtedness to the estate owed by Barbara Novak in respect of the proceeds of sale of 52 Wharf Road, Gladesville ($620,000), those assets totalling $1,661,333. 46 The only liabilities of the estate are the Defendant's commission (in an amount of about $24,000), together with the costs of the Defendant and, in the event that they be successful, the costs of one or more of the Plaintiffs in the present proceedings. 47 I have already referred to the provisions of section 9 (1) of the Family Provision Act. Since Monika is an eligible person only within paragraph (d) of the definition of that phrase contained in section 6 (1) of the Act she must establish that there are factors which warrant the making by her of the present application. In my consideration, there are such factors, being, essentially, the facts that Monika was, from the age of about three, treated by the Deceased as if she were his natural daughter, and that no differentiation was made by the Deceased between Monika and the two other daughters born to him of Barbara Novak. I am satisfied that those facts constitute factors which warrant the making by Monika of the present application. 48 I have already observed that the only other eligible person in relation to the Deceased is Barbara Novak, the mother of the three Plaintiffs, who was the de facto spouse of the Deceased. Under the terms of the will of the Deceased she receives the house property at 64 Wharf Road, Gladesville absolutely. 49 No affidavit evidence by or on behalf of Barbara Novak has been filed in the present proceedings (or, as I have already observed, in proceedings 1695 of 2000). 50 The Court is entitled to proceed, therefore, upon the basis that Barbara (who has of course been served with a Notice of Claim) is satisfied with the benefit given to her by the will of the Deceased (being the house property at 64 Wharf Road, Gladesville.) It must be appreciated however, that she has chosen no longer to reside in that house property, but to remove her residence to a new establishment, being the property purchased by her at 93 Charles Street, Putney, in which Barbara now resides with each of the Plaintiffs. 51 I have had the benefit of receiving an outline of issues and an outline of submissions from Counsel for the Plaintiffs. Those documents will be retained in the Court file. 52 It will be appreciated that the will of the Deceased was made just one year after the birth of Kathy, and before the birth of Dorothy. 53 It is quite apparent that the extremely small legacies given to each of the Plaintiffs by the will ($5,000 to Monika and $10,000 to each of Kathy and Dorothy) are totally inadequate, and that an order for provision for her maintenance, education and advancement in life should be made in favour of each of the Plaintiffs. 54 It has been submitted on behalf of the Plaintiffs that it is appropriate that the residuary estate of the Deceased be divided among the Plaintiffs. That residuary estate will, in the light of the orders which have been made in proceedings 1695 of 2000, comprise the amount of $391,333 held by the Defendant in trust (representing the proceeds of sale of 53 Prince Edward Street, Hunters Hill, together with the debt of $620,000 owing by Barbara to the Estate, that is, a total of $1,011,333. From that amount must be deducted the Defendant's commission of about $24,000, together with the costs of the Defendant and of the Plaintiffs of the present proceedings. 55 Thus it would appear likely that the residuary estate available for distribution will be in an amount of at least $950,000. 56 Each of the Plaintiffs has expressed a desire to proceed with tertiary education, and has expressed a desire to obtain the security of a residence. 57 I am satisfied that it is proper that each of the Plaintiffs should receive a benefit which will give to her a start in life, and will enable her to acquire tertiary qualifications, if she so desires. (In this latter regard I would observe that none of the Plaintiffs has placed before the Court any evidence concerning the monetary cost of obtaining those qualifications, or, indeed, any evidence concerning the precise nature of the qualifications which she wishes to obtain, or the courses which she wishes to pursue at a tertiary institution of her choice). I do not, however, consider that the three adult children of the Deceased (I regard Monika as being equivalent to a child of the Deceased), each of whom is capable of gainful employment, is entitled to receive out of the estate an amount to enable her to purchase a residence. It is, however, appropriate that each of the Plaintiffs receive an amount which will enable her to go some way towards the acquisition of a residence, by providing a significant deposit for that purpose. (I would also here observe that none of the Plaintiffs has placed before the Court any information concerning the nature of the residence which she is desirous of acquiring, or the cost of such a residence.) 58 Further, in regard to the acquisition of a residence by each of the Plaintiffs, it should be observed that each of the those Plaintiffs, although expressing a desire to obtain future security by the acquisition of a residence, appears to be happy and content to remain in occupation with her mother and her sisters in the house property at Putney. 59 None of the residuary beneficiaries of the Deceased has chosen to place before the Court any information concerning his or her financial or material circumstances, although two of those beneficiaries have sworn affidavits which have been filed on behalf of the Defendant, setting forth what might be described as the personal relationship between the deponent and the Deceased. Accordingly, it is not necessary that, on account of the financial and material circumstances of the residuary beneficiaries (or any of them), the Court should reduce, or extinguish, any order for provision an entitlement to which one or more of the Plaintiffs may otherwise establish. 60 I have reached the conclusion that, in lieu of the provision made for her by the will of the Deceased, each Plaintiff should receive out of the estate of the Deceased a legacy in the sum of $200,000. The practical effect of that order upon the testamentary provisions contained in the will will be that Barbara will retain the gift to her of the house property at 64 Wharf Road, Gladesville; most of the indebtedness of Barbara to the estate will be consumed in the payment of the three legacies to the Plaintiffs, and most of the balance held by the Public Trustee on trust will be available to be distributed among the residuary beneficiaries named in the will. 61 Accordingly, I make the following orders:

(1) I order that, in lieu of the benefit given to each Plaintiff respectively by the will of the late Henryk Drawert ("the Deceased"), each Plaintiff receive a legacy in the sum of $200,000, each such legacy to be borne by that part of the estate of the Deceased as consists of the indebtedness to the estate by Barbara Novak in the sum of $620,000, and each such legacy not to bear interest if paid within sixty days of the date of this order, and if not so paid to bear interest at Supreme Court rates.

(2) I order that the costs of each Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. 62 The exhibits may be returned.

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