Paul Sikorski v Richard John Michalowski and Anor

Supreme Court of NSW|2007-02-20|Before: Mr P, McLaughlin J

CITATION : Paul Sikorski v Richard John Michalowski and Anor [2007] NSWSC 666

CATCHWORDS : Succession. Family Provision. Estate entirely distributed before commencement of proceedings. Claim by adult son. Financial and material circumstances of Plaintiff. Whether there has been conduct disentitling. Plaintiff is the only eligble person. Whether Plaintiff has been left without adequate provision for his proper maintenance. Competing claim of First Defendant, who is sole object of testamentary beneficence of the Deceased. Proceedings out of time. Notional estate

Easterbrook v Young (1977) 136 CLR 308 Singer v Berghouse (1994) 181 CLR 201 CASES CITED : Vigolo v Bostin (2005) 221 CLR 191 Cetojevic v Cetojevic [2006] NSWSC 431 Spencer v Blyth [2006] NSWCA 181

Paul Sikorski (Plaintiff) PARTIES : Richard John Michalowski (First Defendant) Maria Delores Michalowski (Second Defendant)

COUNSEL : Mr P. O'Loughlin (Plaintiff) Mr F. Donohoe (Defendants)

SOLICITORS : Hancock Alldis & Roskov (Plaintiff) Atkins Jones (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2382 of 2005 PAUL SIKORSKI v RICHARD JOHN MICHALOWSKI and ANOR JUDGMENT 1 HIS HONOUR: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 13 April 2005 Paul Sikorski claims substantively an order for provision for his maintenance and advancement in life out of the estate of his late father, Joseph Sikorski (to whom I shall refer as "the Deceased"). 3 The Deceased died on 3 March 2003. He left a will dated 10 October 1996, probate whereof was on 8 May 2003 granted to Richard John Michalowski and Maria Delores Michalowski, the executors named in such will (who are the Defendants to the present proceedings). I would here observe that the given name of the Deceased is shown in the probate as "Jozef"; however, in the summons in the instant proceedings it is shown as "Joseph". 4 By that will the Deceased gave the entirety of his estate to Richard John Michalowski, the First Defendant. 5 The inventory of property discloses that the only asset in the estate of the Deceased was a house property situate at and known as 28 Storey Street Fairy Meadow, to which an estimated value of $330,000 was attributed. That house property was, however, sold in May 2003 for $348,500, the net proceeds of sale whereof, being in an amount of $332,569, were received by the First Defendant in late June 2005. 6 In calculating the value of an estate available for distribution, the costs of the respective parties are normally taken into account, since the costs of an applicant, if successful, will usually be payable out of the estate, whilst the costs of an executor, irrespective of the outcome of the proceedings, will also be payable out of the estate. The situation in the instant case is, however, somewhat different. Since the estate of the Deceased has been fully distributed, any order for provision which may ultimately be made in favour of the Plaintiff, must be paid (if it is to be paid at all) out of notional estate of the Deceased. It is estimated on behalf of the Plaintiff that his costs of the proceedings will total about $29,000 (inclusive of GST) whilst it is estimated on behalf of the Defendants that their costs will total about $36,000 (inclusive of GST). 7 The Plaintiff was born on 10 July 1958 and is presently aged 48. He was the only child of his parents. (The fact that he had been adopted by them as an infant does not affect his status as their child.) The Plaintiff lived at home with his parents at Fairy Meadow until 1976. On 9 October of that year he married his present wife, Susan Jennifer (née Glover). Of that marriage were born two children, Daniel Jason Josef (who was born on 1 April 1977, and is presently aged 30), and Keggan Travell Honan (who was born on 28 May 1992, and is presently aged 15). 8 The Plaintiff's mother, Mrs Janina Sikorski, died in August 1977. After the Plaintiff left home and married he visited his parents (and, after his mother's death, the Deceased) regularly, at least three times a week, until 1988, when he, his wife and their child moved to Queensland. According to the Plaintiff, he had a very good relationship with each of his parents, and his father also developed a close relationship with the Plaintiff's elder son Daniel. 9 It was the evidence of the Plaintiff that after his removal to Queensland he had less contact with the Deceased, but telephoned him once a week. He also travelled from Queensland to visit the Deceased at Fairy Meadow about once a year. 10 In 1992 the Plaintiff was informed that his father had shortly before been bashed and stabbed, and had been admitted to the Wollongong Hospital. The Plaintiff, his wife and their children immediately travelled from Queensland to Fairy Meadow, where, for the next nine months, after the Deceased's discharge from hospital, they resided with him in the Storey Street residence. 11 According to the Plaintiff, the Deceased for many years, and certainly by 1992, had been an alcoholic. The First Defendant did not admit that fact, but I am satisfied from the evidence (especially that of the Deceased's next door neighbour, Barry Armstrong) that the Deceased was, in fact, an alcoholic. That condition of the Deceased placed a strain on his relationship with the Plaintiff and the Plaintiff's family whilst they were residing with the Deceased. Indeed, the Plaintiff's wife found it necessary to receive instructions from Alcoholics Anonymous, in order to learn how to cope with living with an alcoholic. By mid-1993 the Plaintiff, on account of the drinking habits of the Deceased, left the Storey Street property with his wife and children, and returned to Queensland. They there resided in rented accommodation until about September 2001, when they purchased a house property at 52 Leray Road, Elimbah, in which they have resided since that time. 12 In about 1993 (I gather, after the departure of the Plaintiff and his family) the Deceased, who had been a linesman by occupation, retired from employment. From that time the Deceased's consumption of alcohol increased. 13 It was the evidence of the Plaintiff that for the first six months after his return to Queensland in 1993 he telephoned the Deceased regularly, at least once a week. However, on each of those occasions the Deceased, as soon as he became aware of the identity of his caller, terminated the telephone call. The Plaintiff continued to send Christmas cards and letters (including photographs of his two children) to the Deceased until about 2000. However, he received no response from the Deceased, and he ultimately ceased sending letters or making telephone calls to his father. 14 As I have already recorded, the Deceased died on 3 March 2003. However, the Plaintiff was unaware of that fact at the time and for two years thereafter. As a result of a telephone call which he made to his father's residence in mid-March 2005 the Plaintiff then called the Deceased's next door neighbour, Barry Armstrong, by whom he was informed that the Deceased had died two years previously. 15 The Plaintiff then sought legal advice, and ultimately became aware of the testamentary dispositions of the Deceased. 16 At the end of June 2005 the Plaintiff was retrenched from his employment as a commercial fisherman. He has not been in employment since that time. The Plaintiff said that he presently receives a parenting allowance from Centrelink, which averages about $138 a week. The Plaintiff's wife, who receives a disability pension of about $200 a week is in casual employment as a cleaner, receiving net weekly earnings in an average amount of about $248. In addition, his wife receives about $90 a week by way of a parenting allowance. According to the Plaintiff, the combined income of the Plaintiff and his wife is about $676 a week. However, the statement from Centrelink which is annexure A to the Plaintiff's affidavit of 24 December 2006 reveals the Plaintiff's parenting allowance to be about $90 a week, identical to that of his wife. If that be so, then the combined income of the Plaintiff and his wife would be only about $628 a week, that being less than the combined total of about $676 a week referred to in paragraph 4 of the Plaintiff's foregoing affidavit. The Plaintiff's elder son is no longer dependent upon the Plaintiff. However, his younger son lives at home and is totally dependent upon him. 17 The Plaintiff and his wife pay fortnightly mortgage instalments of $510 in respect to their residence (upon which an amount of about $140,000 is presently outstanding). The Plaintiff and his wife have no savings and no superannuation entitlements. Amongst their liabilities is a Mastercard indebtedness in an amount of about $11,600, which they repay at the rate of $50 a week. It was the evidence of the Plaintiff that the total income of himself and his wife was just sufficient to cover the mortgage payments, household expenses and other outgoings. 18 The Plaintiff suffers from various health problems, including sleep apnoea and chronic insomnia. It was the Plaintiff's evidence that as a result of these conditions he suffers from fatigue, which affects his ability to work, and that that was one of the reasons why he was retrenched. The Plaintiff also said that he will in the future require surgery upon his eyes, the condition of which has deteriorated in consequence of diabetes. 19 The Plaintiff asserted various needs, including the acquisition of a new motor vehicle and various household appliances, as well as improvements to and refurbishment work upon his residence. He estimated those items of expenditure, together with the outstanding amount of the mortgage loan on his residence ($140,000), to total $253,500. 20 It will be appreciated that the claim of the Plaintiff must be approached in the light of the competing claim of the First Defendant who is the chosen object of the testamentary beneficence of the Deceased. 21 The First Defendant was born on 14 April 1960, and is presently aged 47. His father died in 1976, and his mother, Adela Michalowski had known the Deceased for many years. The First Defendant met the Deceased when he was eighteen years of age. At that time the Deceased was living alone, his wife having died a couple of years earlier. The Deceased regularly visited the residence of the First Defendant and his mother, staying overnight every weekend. It was the evidence of the First Defendant that he had a very good relationship with the Deceased, who he said fulfilled the role of father figure to him. They indulged in social occasions and recreations together. 22 The First Defendant married Maria Delores Michalowski, the Second Defendant, on 6 March 1987. They have three sons (Matthew, aged 19, and twins Joshua and Nathan, aged 17). It was the evidence of the First Defendant that his three sons got on very well with the Deceased. 23 According to the First Defendant he had met the Plaintiff on only one occasion (that being at a Christmas dinner at the residence of the Deceased) before the Plaintiff and his family came down to Fairy Meadow at the time of the assault upon the Deceased in 1992. He said that the Deceased was in the Wollongong Hospital for ten days, having been admitted on the Friday night and that the Plaintiff arrived at the hospital, two days later, on the Sunday. 24 It was the evidence of the First Defendant that throughout the period whilst the Plaintiff and his family were residing with the Deceased (a period which the First Defendant ultimately agreed was about nine months), the Deceased continued making weekend visits to the First Defendant's mother and that during those visits the Deceased was critical of the presence of the Plaintiff and his family in the Fairy Meadow residence. The First Defendant did not visit the Deceased at his residence throughout that period. According to the First Defendant, the Deceased, after the departure of the Plaintiff and his family, said that he, the Deceased, had requested the Plaintiff to leave. 25 The First Defendant said that in about 1993 the Deceased retired from work, and that having always been a regular drinker, his consumption of alcohol increased after retirement. 26 The First Defendant's mother died in 1996. The First Defendant said that the Deceased's health deteriorated at that time, and that the First Defendant was in the practice of regularly visiting the Deceased, looking after him, preparing his meals, attending to his shopping and washing his clothes. He said that he visited the Deceased after work two or three times a week, and that occasionally on weekends he would take his children to visit the Deceased. 27 After the death of the Deceased, the First Defendant gave to the police (who were attempting to locate the Deceased's next of kin) the Plaintiff's last contact telephone number, which the First Defendant believed to be a Queensland telephone number. He informed the police that as far as he knew the Plaintiff was dead. The First Defendant himself made no attempt to ascertain whether or not the Plaintiff was alive and made no inquiries as to the Plaintiff's whereabouts. The information which the First Defendant gave to the police, that the Plaintiff was dead, was based on what the First Defendant said had been told to him by the Deceased. It was the First Defendant's evidence that the Deceased had at some stage, after the return of the Plaintiff and his family to Queensland, told the First Defendant that the Plaintiff had committed suicide. The First Defendant made no attempt to satisfy himself of the accuracy of that statement, or to elicit from the Deceased any details or amplification concerning the alleged demise of the Plaintiff. 28 The First Defendant said in his primary affidavit that if he had known that the Plaintiff was alive he would have tried to contact him, and would have made to him some allowance from the estate before distribution. 29 The First Defendant in that primary affidavit set forth his assets and liabilities, as follows: Assets House property at 1 Malcolm Avenue, Cringila $160,000 Toyota Sportivo 2003 motor vehicle $49,000 Mitsubishi utility dual-cab 1998 $8,000 Toyota Camry sedan 1993 $3,000

Liabilities Westpac BC mortgage $98,000 Visa credit card $3,000 30 In that same affidavit the First Defendant said that he no longer retains any of the proceeds of sale of the Deceased's residence, and that he disbursed those proceeds as follows:

Purchase of a new car (Toyota Camry Sportivo) $49,000 Purchase of dual-cab utility truck $12,000 Payment of debts to his sisters $40,000 Payment of credit card debt $30,000 Loans to family members $18,000 Holidays with his family $12,000 Purchase of camera and video camera $2,000 Purchase of new lounge suite, refrigerator, washing machine, freezer and television $9,500 School fees per annum (ongoing for his twin sons) $8,000 Interest in racehorse $4,000 Ongoing liability of trainer's fees $100 per month $1,200 31 The First Defendant said that other miscellaneous expenses had also been incurred. 32 As will later emerge in this judgment, the foregoing details of how the net proceeds of sale of the Fairy Meadow property were expended by the First Defendant, were far from accurate. 33 The First Defendant is employed as an industrial fibreglasser, receiving a net weekly wage of $560. He is in good health. 34 I have already recorded that the First Defendant made no attempt whatsoever to ascertain whether the only kinsman of the Deceased, the Plaintiff, was dead or alive, and, if alive, his whereabouts. Despite the First Defendant's denial of any recollection in this regard, the diary entry of the solicitor whom he consulted on the very day following the death of the Deceased, contained the following record, "advising Richard that the son will most probably contest the will". 35 The sale of the Fairy Meadow house property took place quite swiftly after the grant of probate on 8 May 2003. Contracts were exchanged on 14 May 2003 and settlement took place on 18 June 2003, just five weeks later (the property having been transmitted into the names of the Defendants on 30 May 2003). Also on 30 May 2003 a notice of intended distribution was published by the Defendants. 36 Of the amount of $332,569 received by the First Defendant, about $16,000 went in administrative expenses relating to the estate. The various payments listed in the First Defendant's affidavit (which I have already set forth herein), leaving aside continuing school fees and continuing expenses for a racehorse, totalled about $184,000. According to the First Defendant the balance of the $332,000 (being about $148,000) was transferred into a cash management account. The First Defendant also paid school fees totalling about $16,000 (for two years at $8,000 a year), and racehorse expenses totalling about $2,400, ($1,200 a year for two years). He terminated his interest in the race horse in about 2006. 37 From the sum which the Second Defendant transferred into the cash management account, he paid his Visa card each month. The First Defendant, however, made no attempt in his affidavit evidence, or, indeed, in any evidence proffered by him to the Court, to explain what happened to the balance of the foregoing sum (in an amount of about $120,000). He offered as an explanation for this omission that it would have cost him $400-$500 to obtain that information, and that he did not have such sum of money available. 38 The First Defendant chose not to retain the Visa card statements, which might have assisted the Court in learning how he expended that balance, stating that he had got rid of them "probably two years ago". 39 Under cross-examination it also emerged that, as well as paying $40,000 in respect to an alleged indebtedness of $20,000 owing by him to each of his two sisters, he had paid an amount of $13,000 to his brother in law, Joe Blasi, as well as lending money to a friend, Horrie Quintal, in an amount of $2000, and also giving an amount of $3000 to his wife's mother Victoria Guzman. No attempt was made by the First Defendant to offer any evidence in support of those various alleged payments.. 40 The First Defendant was cross-examined to the effect that by the time he ultimately heard from the Plaintiff in about March 2005, there was no money left in the estate, a proposition with which he agreed. He also agreed with the proposition that he was unable, in any precise detail, to explain how much of the money had been spent. 41 It emerged, however, that the First Defendant did not spend any money on effecting improvements to his house, on reducing his mortgage, or on acquiring any investment property. He spent the money on loans or gifts holidays, consumer goods, and motor vehicles. He summarised the objects of such expenditure by the phrase "on good times". 42 Since the death of the Deceased the First Defendant has increased the indebtedness on his residence by about $70,000, from $98,000 to $168,000. 43 That residence, according to his affidavit evidence, was valued at $170,000. It emerged that, at the time when he put that valuation in his affidavit evidence, he knew that there was a valuation in existence which disclosed the value of that property to be about $220,000.

44 The attitude of the Defendants towards the proceeds of sale of the Deceased's house property could be summarised in the response given by the Second Defendant under cross-examination to the suggestion that it might have been prudent to invest the money in property. She said, "No. I just lived for the day, and I didn't think about the future. We just spent the money." When asked whether she thought that she should, for example, have reduced the mortgage on the property, her response was, "We just lived for the day." 45 It is difficult to resist the conclusion that the Defendants, in particular, the First Defendant as sole beneficiary, deliberately disbursed the proceeds of sale of the Fairy Meadow property, so that there would be no assets available to meet any claim for provision which the Plaintiff might ultimately succeed in establishing. But, in any event, there still appears to be a considerable part of those proceeds of sale which remain unaccounted for. 46 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 47 I have had the benefit of receiving a chronology and a written outline of submissions from Counsel for the respective parties. Those documents will be retained in the Court file. 48 The Plaintiff as a son 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. As such, he has the standing to bring the present proceedings. 49 It should be emphasised that the Plaintiff is the only eligible person in relation to the Deceased. The First Defendant, the sole object of the testamentary beneficence of the Deceased, is not an eligible person in relation to the Deceased. 50 At the outset, two problems confront the Plaintiff. First, his claim is out of time, the limitation period of eighteen months from the death of the Deceased having expired on 3 September 2004, and the proceedings having been instituted on 12 April 2005, some seven months later. Second, the estate has been entirely distributed, and the Plaintiff, if otherwise entitled to an order for provision, must have resort to the concept of notional estate, and to the provisions of Part 2 Division 2 of the Family Provision Act, in particular section 24. That section provides, On an application in relation to a deceased person, if the Court:

(a) is satisfied that an order for provision ought to be made on the application, and (b) finds that, as a result of a distribution from the estate of the deceased person, property became held by a person (whether or not as trustee) or subject to a trust, the Court may, subject to sections 27 and 28, make an order designating as notional estate of the deceased person such property as it may specify, being property which is held by, or on trust for, the person or the object of the trust, whether or not that property is the property distributed. 51 At the outset, therefore, it is necessary for the Plaintiff to establish that he is entitled to an order to provision for his maintenance and advancement in life out of the estate of the Deceased. He must then overcome the problem that the proceedings were not instituted within the prescribed period of eighteen months from the death of the Deceased. 52 If that latter problem be overcome, then it will be necessary for the Plaintiff to seek that an order be made designating as notional estate of the Deceased property held by the First Defendant. The exercise of the Court's discretion to make such an order designating property as notional estate is, however, subject to sections 27 and 28 of the Act. Section 27 (1) precludes the Court from making such an order unless it has considered certain matters, being: (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. 53 Section 27 (2) requires the Court, in determining what property should be designated as notional estate of a Deceased person, to have regard to certain further matters, then set forth. 54 Section 28 of the Act deals with the powers and restrictions of the Court in designating property as notional estate, and, relevantly to the circumstances of the instant case, provides that the Court shall not make an order designating property as notional estate of the deceased person unless it is satisfied: (a) that the estate of the deceased person is insufficient to allow the making of provision that, in its opinion, should be made (b) that, by reason of the existence of other eligible persons or the existence of special circumstances, provision should not be made wholly out of the estate. 55 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208 -210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his proper maintenance. 56 Although by no means affluent, the Plaintiff and his wife are presently able to meet, but only just, their weekly outgoings. 57 The asserted needs of the Plaintiff set forth in paragraph 30 of his affidavit of 21 July 2005 might, to an extent, be characterised as a wish list, especially in respect to the acquisition of a replacement motor vehicle for $25,000, the repayment of a mortgage loan of $140,000, and the payment of twenty years of private health insurance at $2500 a year ($50,000). 58 The acquisition of, or payment for, such items as the foregoing can in no way be regarded as constituting needs of the Plaintiff for which the Deceased had any responsibility to make provision. 59 Despite the submissions of the Defendant to the contrary, it would appear that the various health problems suffered by the Plaintiff have been recognised by the appropriate social security authorities as justifying various allowances and pensions which he and his wife receive. 60 The entitlement of the Plaintiff to receive an order for provision out of the estate of the Deceased must be considered in the light of the submission on behalf of the Defendants that the Plaintiff has been guilty of what used formerly to be referred to as "conduct disentitling". That is, that the conduct of the Plaintiff towards the Deceased was such that, even if he might otherwise be regarded as entitled to an order for provision, that entitlement should be defeated as a result of the Plaintiff's own relationship with the Deceased. 61 The Defendants submitted that the Plaintiff had been guilty of conduct disentitling in that from the time when the Plaintiff and his family returned to Queensland after spending nine months looking after the Deceased in the Fairy Meadow residence there was a lack of any effective contact between the Plaintiff and the Deceased. I have already recorded that it was the Plaintiff's evidence that for a period of about six months he regularly attempted to telephone the Deceased, who as soon as the latter became aware of the identity of the caller, would terminate the connection; further, that for some years, until about 2000, he sent to the Deceased cards at Christmas and letters (including photographs), but those written communications were never acknowledged by the Deceased. 62 In this regard, the Deceased's alcoholism is of relevance, since that condition probably explains his refusal to respond to the Plaintiff's attempts to communicate with him. 63 I would here interpolate that the Deceased's alcoholic condition might also explain why he chose to make to the First Defendant the false assertion that the Plaintiff had committed suicide. However, the Deceased's alcoholism certainly does not explain why the First Defendant was so ready to accept on its face this statement made by an alcoholic concerning a very serious matter - the death of the Deceased's only child - without seeking any further details or information in that regard: for example, when and where the alleged suicide took place, or the circumstances and means by which the Deceased allegedly became aware of that asserted fact. Certainly, after the Deceased's death it suited First Defendant to believe that the Deceased's statement to this effect was true. 64 I do not consider that the lack of any effective contact between the Plaintiff and the Deceased after mid-1993 until the death of the Deceased constituted conduct on the part of the Plaintiff which would disentitle him to the benefit of any order for provision, an entitlement to which he might otherwise have established. Indeed, to the extent that that lack of contact may be regarded as relevant, the evidence suggests that it was the choice of the Deceased (certainly not that of the Plaintiff) that there should be no contact between himself and the Plaintiff. The false assertion by the Deceased to the First Defendant that the Plaintiff had committed suicide is consistent with a desire on the part of the Deceased not to have any contact with the Plaintiff, and would constitute, and was probably intended to constitute, a justification in the eyes of those to whom he made that false statement of the Deceased's failure allow the Plaintiff to maintain contact with him. 65 As I have already observed, the entitlement of the Plaintiff to an order for provision must be approached in the light of any competing claims upon the testamentary bounty of the Deceased. In the circumstances of the instant case the only such competing claim is that of the First Defendant, who was the sole object of the testamentary beneficence of the Deceased. 66 As has already been emphasised, however, the First Defendant is not an eligible person in relation to the Deceased. Further, he is not in any way related by blood or marriage to the Deceased. Although during the lifetime of the First Defendant's mother it was the practice of the Deceased to spend weekends at her residence, and thus to have become acquainted with the First Defendant, nevertheless, it cannot be said that the Deceased and the First Defendant became part of a single family unit. At its highest the relationship between them was put by the First Defendant as follows: he had a very good relationship with the Deceased; they were close friends; whilst the First Defendant was growing up the Deceased fulfilled the role of a father figure; subsequently, especially after the departure of the Plaintiff and his family in mid-1993, the First Defendant very largely accepted responsibility for keeping an eye on the Deceased, and attending to his physical and practical needs during his declining years. 67 The competing claim of the First Defendant cannot enhance the entitlement of the Plaintiff to an order for provision out of the estate of the Deceased. That competing claim can have the effect only of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise have established. 68 The First Defendant has, to a considerable extent, dissipated the benefits which he received from the estate of the Deceased. He agreed in his evidence that, had he been aware of the existence of the Plaintiff at the time of the death of the Deceased, the First Defendant would have allowed to the Plaintiff a considerable benefit from the estate, probably one half of the estate. 69 I have already commented on the asserted needs of the Plaintiff claimed in his primary affidavit, and have expressed the view that those asserted needs largely consist of a wish list, for the satisfaction whereof the Deceased had no responsibility. Although not entitled to receive amounts of the nature set forth in his primary affidavit, the Plaintiff is, however, entitled to receive an amount which will enhance the modest lifestyle of himself and his family, and which will provide a fund to meet any unexpected contingencies. I consider that for those purposes an amount of $100,000 would be appropriate. 70 Although I was not favourably impressed by the conduct of the First Defendant in disbursing the benefits which he received from the estate in such a manner that now there are few tangible assets which will ultimately be available to be the subject of any order for the designation of property as notional estate of the Deceased, nevertheless, I would not be prepared to make an order for provision in favour of the Plaintiff which would have the effect of depriving the First Defendant of most or all of his entitlement under the will of the Deceased. The amount of $100,000 to which I consider the Plaintiff has otherwise established an entitlement is considerably less than one half of the net value of the estate. 71 I am not persuaded that the competing claim of the First Defendant has the effect of reducing, let alone extinguishing, an order for provision for the Plaintiff in the foregoing amount of $100,000. Also, in considering the competing claim of the First Defendant, it should not be overlooked that the First Defendant himself regarded his financial situation after the death of the Deceased to be such as would appropriately allow him to increase the mortgage upon his residence from $98,000 to $168,000. 72 I shall, therefore, proceed upon the basis that the Plaintiff has established an entitlement to receive from the estate a legacy in the sum of $100,000. 73 Since the estate has been totally distributed, the practical position is that a legacy in the foregoing amount cannot be paid out of the assets of the estate, and can be received by the Plaintiff only if he is able to satisfy the Court that the statutory provisions relating to the designation of property as notional estate can appropriately be here attracted. 74 I have already observed that the proceedings were not instituted within the prescribed period of eighteen months after the death of the Deceased (section 16(1)(b)). However, the Court has discretion to extend that prescribed period (section 16(2)), but is precluded from doing so "unless sufficient cause is shown for the application not having been made within that period" (section 16(3)). 75 In Cetojevic v Cetojevic [2006] NSWSC 431, Campbell J (as he then was) said, at [48], The factors one looks to in deciding whether to extend the time for bringing an application under the Family Provision Act 1982 are: first, the sufficiency of explanation of delay in making the claim; second, whether there has been any prejudice to beneficiaries; third, whether there has been any unconscionable conduct by any relevant parties; and fourth, the strength of the applicant's case: Warren v McKnight (1996) 40 NSWLR 390 at 394; Dare v Furness (1997) 44 NSWLR 493 at 500. 76 In the instant case, the explanation offered by the Plaintiff for his delay in making the claim is the fact that he was unaware of the death of the Deceased until after the expiry of the prescribed period, and that, having become aware on 15 March 2005 of the death of his father, the Plaintiff instituted the present proceedings shortly thereafter, on 12 April 2005. 77 As to any prejudice to beneficiaries, I have already expressed the view that that it is difficult to resist the conclusion that the First Defendant deliberately disbursed the benefits which he received from the estate of the Deceased as swiftly as possible, and disbursed them not on any assets of substance (such as acquisition of an investment property or reduction of the mortgage upon his residence) but on consumables, holidays, motor vehicles, loans - in the words of the First Defendant, "on good times", and in the words of his wife (and co-executor), they "just spent the money" and "just lived for the day". I am not persuaded that there has been any relevant prejudice to the First Defendant as a result of the delay in instituting the proceedings. 78 As to unconscionable conduct by any of the parties, there has been no unconscionable conduct on the part of the Plaintiff. If there has been any unconscionable conduct at all, it has been on the part of the First Defendant (or on the part of both Defendants), who, as I have already concluded, sought deliberately to disburse the estate in such a fashion that there would remain in his hands few tangible assets which might be the subject of an order for designation of property as notional estate of the Deceased. Further, the estate was distributed very swiftly after the death of the Deceased. Further, the First Defendant (and also the Second Defendant) made no attempt whatsoever to ascertain whether the Plaintiff was alive, or, if so, his whereabouts. The Defendants abdicated their responsibility of attempting to contact the only relative of the Deceased, adopting the approach that any responsibility in that regard would be that of the police. Further, that attitude was adopted by the Defendants, despite the information given to at least the First Defendant by his solicitor that the Plaintiff, if alive, would "most probably contest the will". 79 The strength of the Plaintiff's case has already been the subject of my foregoing view, that the Plaintiff has established an entitlement to an order for provision in the sum of $100,000. 80 I shall now proceed to a consideration of whether property held by the First Defendant as a result of the distribution to him of the estate of the Deceased should, to the extent of $100,000, be designated notional estate. 81 I am satisfied that an order for provision ought be made on the application of the Plaintiff in relation to the Deceased. I find that, as a result of a distribution from the estate of the Deceased, property became held by the First Defendant (section 24, paragraphs (a) and (b)). 82 The Court is precluded from making an order designating property as notional estate of the Deceased unless it has considered, among other matters, the importance of not interfering with reasonable expectations in relation to property. In the instant case, it was the evidence of the First Defendant that had the Plaintiff contacted him before the distribution of the estate the First Defendant would probably have reached some accommodation with the Plaintiff, by which the Plaintiff would receive one half of his father's estate. The amount of $100,000 to which I am satisfied the Plaintiff has established an entitlement is considerably less than that one half. I have already expressed my views concerning the conduct of the Defendants in effecting a distribution so soon after the death of the Deceased and the grant of probate, and the conduct of the First Defendant in disbursing the amount which he received upon assets of a consumable and transitory nature. In my view the reasonable expectations of the Defendants in relation to property would have been that if the Plaintiff came to light the Defendants would have received no more than one half of the assets of the estate. 83 Further, I consider that the substantial justice and merits involved in making or refusing to make an order designating property as notional estate of the Deceased are such that I should make that order. 84 It was recognised on behalf of the Plaintiff that in order to succeed in establishing the entitlement of the Plaintiff to an order designating property as notional estate of the Deceased, special circumstances must be shown. It was submitted on behalf of the Plaintiff that the following matters constituted such special circumstances: the early distribution of the estate; the dissipation by the First Defendant of the proceeds of sale of the Fairy Meadow property; the fact that the First Defendant chose to make no enquiries as to whether the Plaintiff was dead or alive, or, if alive, as to the whereabouts of the Plaintiff. 85 I am in agreement that the foregoing matters constitute special circumstances which would have the effect of removing the preclusion contained within section 28 (1) of the Act. 86 I have considered the various matters referred to in section 28 of the Act, which impact upon the making of an order designating property as notional estate of the Deceased, and I am satisfied, in the circumstances of the instant case, that it is appropriate that an order for such designation be made, to the intent that the Plaintiff receive from the property so designated a legacy in the sum of $100,000. 87 My present view is that the house property of the Defendants should be designated as notional estate of the Deceased to the extent of $100,000. However, it may be that First Defendant would prefer that some other property held by him should be so designated. Accordingly, I propose to stand the matter over for the bringing of short minutes, to give effect to my conclusions herein, and also to give to the Defendants an opportunity to consider whether any property other than the house property of the First Defendant should be so designated.

88 There remain to be considered the costs of the present proceedings. 89 The present proceedings have taken the form of adversarial proceedings between the Plaintiff and the First Defendant. Indeed, it should be observed that it was the submission of the Counsel for the Defendants that the proceedings had been improperly constituted, by the joinder of the Second Defendant in circumstances where, as here, the estate had been fully distributed, and the Second Defendant, in her capacity as co-executor of the will of the Deceased, had completed her executorial duties. In this regard the Defendants relied upon what was said by Handley JA in the Court of Appeal in Spencer v Blyth [2006] NSWCA 181, 6 July 2006. His Honour, at paragraph [10], referred to the fact that the summons in that case had joined the executors as the sole defendants although they had fully distributed the estate, and did not join all the beneficiaries who had received that distribution, and continued, They had no assets in their hands from which to indemnify themselves against any costs they would incur if they took any part in the proceedings and they ran the risk that there might be no notional estate from which their costs could be paid and that they might be unable to recover them from the Plaintiff. 90 In the instant case, however, the First Defendant is an essential party to the proceedings, since he holds various assets which represent the proceeds of sale of the Fairy Meadow property. (In this regard, see Easterbrook v Young (1977) 136 CLR 308, where the High Court of Australia (constituted by Barwick CJ, and Mason and Murphy JJ) considered, at 314-317, the significance of the change in the capacity in which a personal representative holds assets which he has received on the grant of probate: in the instant case, the change in the capacity of the First Defendant from being a co-executor to being the sole beneficiary.) It may well be that the joinder of the Second Defendant as a party to the present proceedings was unnecessary. However, from a practical point of view, and especially regarding the costs of the proceedings, it does not appear that any additional costs have been incurred as a result of such joinder. Both Defendants had the same legal representation. The Second Defendant, according to her own evidence, appears to have benefited equally with the First Defendant from the distribution to him of the estate. 91 Since the entirety of the estate was distributed to the First Defendant, there in no purpose in making any order (of a nature which in other circumstances might be made) that the Defendants, or either of them, should have their costs out of the notional estate of the Deceased. 92 I am of the view that the appropriate costs order, in the instant case is that First Defendant should pay the costs of the Plaintiff, and that there should be no other order in respect to the costs of the proceedings. However, I have not heard any submission as to costs, and if any party is desirous of seeking some other costs order an opportunity will be given to that party to do so. 93 Accordingly, I stand the matter over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes of order to reflect my foregoing conclusions, and, if desired, for argument as to costs. **********

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Judgment (14 paragraphs)

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Cases Cited (7)

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