Rakovich v Marszalek - [2020] NSWSC 589 - NSWSC 2020 case summary — Zoe

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Rakovich v Marszalek

[2020] NSWSC 589

Supreme Court of NSW|2020-02-27|Before: Hallen J

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Source facts

Court

Supreme Court of NSW

Decision date

2020-02-27

Before

Hallen J

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

Succession Act 2006 (NSW), ss 3, 57, 58, 59, 60, 61, 63, 65, 84, 91, 99, 129, Ch 3 Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 31.62, 42.1 Cases Cited: Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 Armagas Ltd v Mundogas S.A. [1985] 1 Lloyds Rep 1 ("The Ocean Frost") Ashton v Pratt (No 2) [2012] NSWSC 3 Askew v Askew [2015] NSWSC 192 Bkassini v Sarkis [2017] NSWSC 1487 Boettcher v Driscoll (2014) 119 SASR 523; [2014] SASC 86 Borebor v Keane (2013) 11 ASTLR 96; [2013] VSC 35 Bouttell v Rapisarda [2014] NSWSC 1192 Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 Bowyer v Wood (2007) 99 SASR 190; [2007] SASC 327 Burke v Burke (No 2) (2015) 13 ASTLR 313; [2015] NSWCA 195 Calderbank v Calderbank [1976] Fam 93 Chan v Chan (2016) 15 ASTLR 317; [2016] NSWCA 222 Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 Commonwealth of Australia v Gretton [2008] NSWCA 117 de Angelis v de Angelis [2003] VSC 432 Devereaux-Warnes v Hall (No 3) (2007) 35 WAR 127; [2007] WASCA 235 Diver v Neal (2009) 2 ASTLR 89; [2009] NSWCA 54 Estate of the late Violet Eugenie Harrigan - Cowmey v Whibley [2012] NSWSC 291 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 Foley v Ellis [2008] NSWCA 288 Golosky v Golosky (Court of Appeal (NSW), Kirby P, 5 October 1993, unrep) Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31 Gorton v Parks (1989) 17 NSWLR 1 Grey v Harrison [1997] 2 VR 359 Hunter v Hunter (1987) 8 NSWLR 573 Ilott v The Blue Cross [2018] AC 545; [2017] UKSC 17 In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 Johnson v MNG Investments Pty Ltd t/as Australian Temporary Fencing [2011] ACTSC 150 Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (in liq) (2011) 197 FCR 113; [2011] FCAFC 136 Koellner v Spicer [2019] NSWSC 1571 Kossert v Margaret Gerda Ruggi as Executor of the Will of Peter Korps (No 2) [2012] WASC 191 Leichhardt Municipal Council v Green [2004] NSWCA 341 Lodin v Lodin (2017) 16 ASTLR 576; [2017] NSWCA 327 McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82 McKenzie v Topp [2004] VSC 90 Mekhail v Hana; Mekail v Hana [2019] NSWCA 197 Nicholas v Nicholas [2013] NSWSC 697 Noon v Bondi Beach Astra Retirement Village Pty Ltd (No 2) [2010] NSWCA 285 Page v Page (2017) 16 ASTLR 331; [2017] NSWCA 141 Page v Page (No 2) [2016] NSWSC 1323 Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19 R (on the application of M) v Slough Borough Council [2008] 1 WLR 1808; [2008] UKHL 52 Re Coventry, deceased [1980] Ch 461 Re Estate of Bridges (1975) 12 SASR 1 Re Wren, deceased [1970] VR 449 Richardson v Armistead [2000] VSC 551 Sam Wardy v Gordon Salier; William Wardy v Gordon Salier; Hassiba Wardy v Estate of late Edmond Wadih Wardy, developer and Ch 3 of the Succession Act 2006 [2014] NSWSC 473 Sgro v Thompson [2017] NSWCA 326 Sherborne Estate (No 2): Vanvalen v Neaves; Gilroy v Neaves (2005) 65 NSWLR 268; [2005] NSWSC 1003 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 Spata v Tumino (2018) 95 NSWLR 706; [2018] NSWCA 17 Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 Sung v Malaxos [2015] NSWSC 186 Thomas v Times Book Co Ltd [1966] 1 WLR 911 Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 Verzar v Verzar [2012] NSWSC 1380 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep) Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liq) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 Webb v Ryan [2012] VSC 377 White v Barron (1980) 144 CLR 431; [1980] HCA 14 Wilcox v Wilcox [2012] NSWSC 1138 Yee v Yee [2017] NSWCA 305 Ying v Song [2011] NSWSC 618 Zahra v Francica [2009] NSWSC 1206 Texts Cited: G E Dal Pont, Law of Costs (4th ed, 2018, LexisNexis) Rosalind Atherton, "The Concept of Moral Duty in the Law of Family Provision - A Gloss or Critical Understanding?" (1999) 5(1) Australian Journal of Legal History 5 Uniform Succession Laws: Intestacy, (April 2007); [2007] NSWLRC 116 Category: Principal judgment Parties: George Rakovich (Plaintiff) Helga Marszalek (First Defendant) Ingeborg Kreitz (Second Defendant) Petra Krogemann (Third Defendant) Michael Kobras (Fourth Defendant) Representation: Counsel: S Chapple with H Morrison (Plaintiff) C Mantziaris (Defendants)

[3]

Introduction

HIS HONOUR: Horst Marszalek (the deceased) died on 8 February 2018 aged 79 years. He was born in Germany but had lived in Australia since 1960. He died intestate, domiciled, and leaving real and personal property, in New South Wales. This case concerns the distribution of his intestate estate.
At the time of his death, the deceased was living with the Plaintiff, George Rakovich, his close friend for over 30 years. By Summons filed on 6 February 2019, and amended by an amended Summons filed on 26 March 2019, he seeks a family provision order under Chapter 3 of the Succession Act 2006 (NSW) (the Act). A family provision order is one for the maintenance, education, or advancement in life, of an eligible person. The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 (NSW) (the former Act), which was repealed, effective from 1 March 2009.
Without intending to convey undue familiarity or disrespect, and for clarity and convenience, I shall refer, hereafter, to the parties, and family members, after introduction, by the name used by the family members.
The deceased was never married and he had no children. His father died in 1979 and his mother died in 1999. His closest surviving relatives were his brother, Reiner Marszalek, who survived him, but who died on 23 August 2018, and the two children of his deceased sister, Irmgard Ada Kreitz, who had died on 21 April 2015. Those children are Ingeborg Irmtraut Kreitz and Petra Sonja Krogemann. They are named as the second and the third Defendants, respectively, in the Amended Summons.
Helga Marszalek, who is named as the first Defendant in the Amended Summons, is the widow of Reiner. Helga died on 26 August 2019, after the commencement of these proceedings. She was the sole beneficiary of Reiner's estate, all of which, other than his interest in the deceased's estate, was situated in Germany: Tcpt, 27 February 2020, p 2(35) - p 3(04).
Subject to any family provision order made in favour of George, the estate of the deceased falls to be distributed, pursuant to s 129(3) of the Act, to his sister's children, Ingeborg and Petra, as to 25% each; and as to 50% to the estate of the deceased's brother, Reiner.
Helga's estate comprised, in part, the estate of Reiner, which includes a half share of the deceased's estate. The beneficiaries of her estate were their two children, Ralf Marszalek and Frank Marszalek. The administration of Helga's estate, under German law, has been finalised with the result that, subject to any order of this Court, the one-half share of the deceased's estate will be divided between Ralf and Frank equally.

[4]

Procedural Matter

The nieces and nephews of the deceased all live in Germany. Even though two of them are the remaining Defendants, and all would be persons whose interests would be affected by the making of a family provision order, none attended the hearing (even though each had made an affidavit read in the proceedings). They retained an Australian lawyer, Mr Michael Kobras, of Schweizer Kobras, Lawyers and Notaries, as their legal representative and appointed him to seek a grant of administration of the deceased's estate on their behalf.
Mr Kobras affirmed a number of affidavits that were read in the proceedings.
The successive deaths of Reiner and Helga have complicated the grant of letters of administration in the deceased's estate in New South Wales. Indeed, it has been suggested that it may be necessary to first obtain the German equivalent of a grant of administration of Reiner's estate as a precondition to the grant of administration of the deceased's estate.
On 4 April 2019, Mr Kobras made an application, to this Court, to be appointed the administrator of the deceased's estate. As at the date of the hearing, administration had not been granted to him. However, according to JusticeLink, it appears that, as at the date of these reasons, a grant of administration has been made to Mr Kobras.
Mr Kobras also lodged a Notice of Intended Application for Letters of Administration with the Will annexed in respect of the estate of Reiner and also in respect of the estate of Helga. At the date of hearing, he was awaiting original documents to enable each application to be filed with the Court. However, at the date of writing these reasons, it appears (on JusticeLink) that grants of administration have been made to Mr Kobras in respect of both estates.
The parties agreed that, for the purposes of the current proceedings for a family provision order, an order under s 91 of the Act should be made in favour of Mr Kobras. He consented to being appointed.
Relevantly, s 91 of the Act applies if an application is made by a person for a family provision order, or notional estate order, in respect of the estate of a deceased person, in relation to which administration has not been granted. It empowers the Court, if it is satisfied that it is proper to do so, to grant administration in respect of the estate of the deceased person to any person the Court considers appropriate for the purposes only of permitting the application concerned to be dealt with, whether or not the deceased person left property in New South Wales.
I am of the view, since administration in respect of the deceased's estate has not been granted, that Mr Kobras is an appropriate person to whom a grant of administration in respect of the estate of the deceased should be made for the purposes only of permitting George's application to be dealt with. Mr Kobras represents all of the beneficiaries entitled under the rules of intestacy, or otherwise entitled to a share of the deceased's estate. They will, of course, bear the burden of any provision made in favour of George.
At the commencement of the hearing, with the concurrence of the legal representatives of each of the parties, the Court made the following orders: "1. Orders, pursuant to s 91 Succession Act 2006 (NSW), that administration in respect of the estate and notional estate of Horst Marszalek (the deceased) be granted to Michael Kobras for the purposes only of permitting the Plaintiff's application for a family provision order to be dealt with. 2. Orders that compliance with the Court Rules in relation to Order 1 above be dispensed with. 3. Orders, pursuant to Uniform Civil Procedure Rules 2005 (NSW), rule 7.10(2)(b), that the [sic] Michael Kobras be appointed to represent the deceased's estate and notional estate for the purposes of these proceedings. 4. Orders that any order entered or made in the proceedings binds the deceased person's estate to the same extent as the estate would have been bound had a personal representative of the deceased person to whom administration had been granted been a party to the proceedings."
Subsequently, on the second day of the hearing, an order was intended to be made, with the consent of the parties, and of Mr Kobras, that he be joined as the fourth Defendant in the proceedings to conduct the proceedings on behalf of the named Defendants. The order was not made but the matter proceeded on the basis that it had been. It is unnecessary to file a further amended Summons. I shall include orders to give effect to what the parties and the Court intended.
At the hearing, Dr S Chapple, with Mr H Morrison (on the first day), of counsel, appeared for George. Dr C Mantziaris of counsel appeared for the Defendants and for Mr Kobras. The matter was listed for two days and it was completed within that time. Only George and his son, Ben Rakovich, were cross-examined. The affidavit of another witness, Mr Samuel Geammal, a neighbour of the deceased, who had met the deceased in 1975, and who corroborated some of George's evidence, whose affidavit was read, was not cross-examined by counsel for the Defendants.
Mr Kobras sought to read a translated affidavit made by Helga and also one made by each of the four beneficiaries. In accordance with Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 31.62(1), the affidavits of the beneficiaries (other than Helga), included a certification by an accredited NAATI (National Accreditation Authority for Translators and Interpreters) certified translator, in the German and English languages. An affidavit affirmed 19 July 2019, of Max Doerfler, the translator, was also read.
As there was no objection to Helga's evidence, and as Mr Doerfler had referred to her affidavit in an affidavit that was also read, I permitted her affidavit to be read even though there did not appear to be a certification by an accredited NAATI certified translator in accordance with that rule.
None of the Defendants were cross-examined.

[5]

Some formal matters not in dispute

The proceedings were commenced within the time prescribed by the Act (not later than 12 months after the date of the death of the deceased): s 58(2) of the Act.
Section 57(1) of the Act provides that "eligible persons" may apply to the Court for a family provision order. The language of the relevant section is expressive of the person's status, as well as his, or her, relationship to the deceased. The categories of eligibility upon which George relied were s 57(1)(e), and s 57(1)(f), of the Act, namely, (e) that he was a person who was, at any particular time, wholly or partly dependent on the deceased, and who was, at that particular time, or at any other time, a member of the household of which the deceased person was a member, or (f) that he was a person with whom the deceased was living in a close personal relationship at the time of the deceased's death. It was accepted by the Defendants, and on the evidence, correctly, that George is an eligible person within s 57(1)(e) of the Act.
There is a reference to the deceased having had a de facto partner, Heidi Christmann, some years before his death. She had a son, Alexander Illes, who, it was suggested, may also be an eligible person. It was not submitted that either had lived with the deceased. There was no evidence of the precise nature, or duration, of the relationship between either and the deceased, although there is some evidence that a relationship of friendship between Ms Christmann and the deceased continued after the end of the de facto relationship.
Mr Kobras believes that neither wishes to make a claim for a family provision order. At the hearing, without objection, the Court was informed that there had been some correspondence, addressed to Mr Kobras, which founded that belief. On the second day of the hearing, counsel for the Defendants filed in Court, without objection, an affidavit of his instructing solicitor, Ms F Henderson sworn 2 March 2020, which affidavit had annexed to it a Consent of Mr Kobras to being joined as the fourth Defendant in the proceedings as well as a copy of correspondence passing between the Defendants' solicitors and Mr D Gray of Small & Gray Lawyers, the solicitor who acted for Ms Christmann.
I am satisfied that Ms Christmann was given notice of the proceedings and has not made a claim for a family provision order out of the estate of the deceased.
I am not satisfied, on the evidence, that her child, Alex, is an eligible person.
None of the deceased's nieces, or nephews, was said to be an eligible person. Indeed, it was acknowledged that each of them lived in Germany, whilst the deceased lived in Australia, and that each only had limited telephone, or letter, contact with the deceased. None of them had ever met the deceased in person.
The Act specifically provides that the interests of a beneficiary cannot be disregarded, even though each has not made a claim: s 61(1). Each is entitled to rely upon the operation of the intestacy rules and her, or his, competing claim, respectively, as an object of the deceased's bounty under those rules.
There is no definition of "beneficiary" in the Act. However, in Estate of the late Violet Eugenie Harrigan - Cowmey v Whibley [2012] NSWSC 291, Ward J (as her Honour then was) wrote, at [46]: "... the interests to which one must have regard (when determining what provision ought be made for a claimant who has satisfied the first stage of the Singer v Berghouse test) would include not only named beneficiaries and those persons with a competing claim on the testator's bounty (the former class of persons not necessarily also being within the latter) but also those who may otherwise be beneficially entitled to a share of the deceased estate (say, through a share of the intestate estate of a since deceased named beneficiary) and who therefore may be affected by the burden of such an order. I see no basis to conclude that the Court could not properly take into account, in determining what is the provision for the applicant for a family provision order, the effect of that order on persons beneficially entitled to a share of the estate though not named in the will."
As I wrote in Nicholas v Nicholas [2013] NSWSC 697 at [50]-[52]: "There is one further consideration that satisfies me that the conclusion is correct. Section 61(1) of the Act provides that in determining an application for a family provision order, the Court 'may disregard the interests of any other person by, or in respect of whom, an application for a family provision order may be made (other than a beneficiary of the deceased person's estate) but who has not made an application'. Importantly, the section does not refer to 'a beneficiary named in the Will of the deceased', or to 'a beneficiary entitled on intestacy'. The language of qualification is simply 'a beneficiary of the deceased person's estate'. The same terminology is used in s 60(2)(b), (d), and (f) of the Act. If the legislature had intended the term 'beneficiary' to have the limited application contended for by the Plaintiff, it would have been relatively easy for it to define the term with that limited application, for example, by referring to a 'beneficiary named in the will of the deceased', or by referring to 'a beneficiary entitled on intestacy'. In my view, the phrase 'a beneficiary of the deceased person's estate' refers to any person who receives, or is entitled to receive, or who stands to receive, a benefit from the deceased's [sic] person's estate. Whether he, or she, receives the benefit directly, or through the conduit of a deceased beneficiary, does not matter."
I shall refer to the situation in life of each of the nieces and nephews, as beneficiaries, later in these reasons.
As the deceased died without a Will, the operation of the intestacy rules applies. It was accepted that, thereunder, George does not receive any share of the deceased's estate.
Section 59 of the Act, relevantly, provides that in the case of a person who is an eligible person by reason only of paragraph (e) or (f) of the definition of "eligible person" in s 57, the eligible person will have to establish that having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application, and that at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made, relevantly, by the operation of the intestacy rules in relation to the estate of the deceased person. It will be necessary to return to this topic later in these reasons.
There was no dispute, in my view correctly, that George had established factors warranting the making of his application. I shall return to this topic later.
If eligibility and factors warranting the making of the application, are established, the Court considers, relevantly, whether, at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the operation of the intestacy rules. It is only if so satisfied, that the Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made: s 59(2) of the Act. By the end of the evidence, it seemed to be accepted, again, in my view, correctly, that provision ought to be made for George.
A family provision order may be made in relation to property that is not part of the deceased's estate, but is designated as "notional estate" of the deceased by an order under Pt 3.3 of the Act: s 63(5). "Notional estate" of a deceased person is defined in s 3(1) of the Act to mean property designated by a notional estate order as notional estate of the deceased person. "Notional estate order" means an order made by the Court under Ch 3 of the Act, designating property specified in the order as notional estate of a deceased person. A person's rights are extinguished to the extent that they are affected by a notional estate order: s 84 of the Act. Neither party suggested that there was any property that could be designated as notional estate of the deceased.
Mr Kobras stated that if he obtained the grant of administration of the deceased's estate, he would not seek any commission, or percentage, for his pains and trouble as is just and reasonable, out of the estate of the deceased pursuant to s 86 of the Probate and Administration Act 1898 (NSW).

[7]

Some background facts

It is next convenient to set out some background facts that are not in dispute. To the extent that any of them are identified as being in dispute, the facts stated should be regarded as the findings of the Court.
The deceased was born in June 1938 and he died in February 2018 aged almost 80 years. He was the son of Anna Meta Marszalek and Erich Alfred Marszalek, both of whom predeceased him. His sister, Irmgard, was born in November 1935 and his brother, Reiner, was born in October 1940.
The deceased immigrated to Australia in about 1960 and remained living in Australia thereafter. He did not ever return to Germany, even for a holiday, to visit his family.
Mr Kobras gave evidence that the deceased was not in any de facto relationship at the date of his death.
As stated, the deceased died intestate. No testamentary instruments have been discovered, although George gave some evidence about what the deceased had said about his testamentary intentions, to which I shall refer.
George was born in August 1959 and is currently 60 years old. He completed his School Certificate in New Zealand in about 1976. Since 1982, he had worked in various blue collar jobs in the building and construction industry. He completed a Building Diploma in 2009, which enabled him to work, sporadically, depending upon industry momentum, as a Site Supervisor/Manager. He had not worked after September 2019 and averred that he is now unable to work due to his medical condition, to which condition I shall also refer later in these reasons.
George has never been married, although he was in a long time de facto relationship with Ms Carole Millar. Their relationship ended in about 1993. There were two children of this relationship: Ben, who was born in November 1987, and Jamie, who was born in May 1986. George currently stays with Jamie and her family.
George lived for periods of time with the deceased. In about 2010, George moved to Adelaide for what proved to be a relatively brief period. Following his return, in late 2011, he lived with the deceased from the beginning of 2012 until the deceased's death in February 2018. He paid the deceased $100, in cash, "each week to assist with expenses".
George continued to live alone in the deceased's property after the deceased's death, until 10 November 2019. He did not pay any rent, or occupation fee, to the estate, for his continued occupation of the Petersham property. He gave evidence, about which he was not cross-examined, that whilst living at the deceased's property, at Petersham, after the deceased's death, he had maintained the home and carried out any maintenance and repairs that had been required. He also paid the water rates.
Helga was born in November 1944. She and Reiner married in 1961. They visited the deceased in Australia in 1990, in 1993, and for the last time, in 1996. They met George on the first visit to Australia. They also are said to have corresponded with the deceased, by telephone, and by letter, about once a month and on special occasions.
Frank was born in March 1962 and Ralf was born in August 1970. They are the only children of Reiner and Helga. Neither ever met the deceased, although each says that he spoke to the deceased on the telephone.
Petra was born in December 1960 and Ingeborg was born in September 1964. They are the only children of Irmgard. Neither ever met the deceased, although Petra gave evidence of keeping in contact with him "through our mother".
The deceased sent Petra and her husband a wedding card and gift of DM300. The card stated: "Dear Petra and Hartmut, I have a very bad conscience because I forgot your wedding. I hope that you will forgive me. Unfortunately, it is little to [sic] far and expensive for me to come to your wedding. But we will meet one day. I wish you the best of health and much happiness for the future. Your Uncle Horst Please send me a photo of the wedding. Thank you"
The evidence does not reveal whether the "photo of the wedding" was sent to the deceased.
In some of the medical records relating to the deceased tendered (Ex P2), there is a reference to the deceased's brother and sister in Germany. The admission notes of 27 May 2005, recorded "Has brother + sister in Germany - not spoken to them since Christmas". A similar note appears in the Case History Notes of the same day. I shall refer to other references in the medical records later in these reasons.
I am satisfied that whilst there may have been some telephone contact between the deceased and each of his siblings, it was not extensive. There is no reason to disbelieve the evidence of each of the beneficiaries in relation to her, or him, having had telephone communication with the deceased. However, none stated how regularly the telephone contact occurred. I am unable to speculate about this matter as no telephone records were in evidence.

[10]

The Costs of the Proceedings

Section 99(1) of the Act provides that the Court may order that the costs of proceedings under Ch 3, in relation to the estate or notional estate of a deceased person (including costs in connection with mediation), be paid out of the estate, or notional estate, or both, in such manner as the Court thinks fit. The section confers a discretion in respect of costs that is no more confined than the general costs discretion.
Usually, in calculating the value of the deceased's estate available from which a family provision order may be made, the costs of the proceedings should be considered with circumspection. Unless the overall justice of the case requires some different order to be made, the applicant for a family provision order, if successful, normally would be entitled to an order that her, or his, costs and disbursements, calculated on the ordinary basis, should be paid out of the estate of the deceased; while the defendant, as the person representing the estate of the deceased, irrespective of the outcome of the family provision proceedings, normally will be entitled to an order that her, or his, costs, calculated on the indemnity basis, should be paid out of the estate. The size of the deceased's estate, and the conduct of a party, may justify a departure from what is said to be the usual rule.
As Basten JA (Simpson and Payne JJA agreeing) put it in Chan v Chan (2016) 15 ASTLR 317 at 330 [54]; [2016] NSWCA 222 at [54]: "In considering an amount by way of provision, it is appropriate also to have regard to the diminution of the estate on account of legal costs."
George's costs, calculated on the ordinary basis were, initially, estimated to be $48,862, inclusive of GST, and on the basis of a two day hearing. On the second day of the hearing, counsel informed the Court, without objection, that George's costs, calculated on the ordinary basis, had increased to $54,700.
The Defendants' costs calculated on the indemnity basis, initially, were estimated to be $110,321, on the basis of a two day hearing. (Without objection, the Court was informed that there was no GST payable on those costs.) On the second day of the hearing, the Court was informed, without objection, that their costs calculated on the indemnity basis, had increased to $141,728. There may be some additional costs of administration, but these have not been estimated.
It follows that if the usual orders for costs were made, and these estimates prove accurate, the value of the net distributable estate, after deducting the costs of the proceedings referred to, will be about $1,412,606. It remains an estate of reasonable value.
On 28 February 2020, between the first and second day of the hearing, I raised with counsel for both parties the possibility that if George were successful, the Court could make an order that he receive a lump sum, calculated as a percentage of the net proceeds of sale of the Petersham property, or the net value of the estate. In this way, both parties would benefit if the Petersham property were sold for a price greater than had been estimated, and each would be detrimentally affected if it sold for less than the estimate. There would also, then, be certainty of price, costs, and expenses, upon which calculations could be made.
McDougall J in Bouttell v Rapisarda [2014] NSWSC 1192 at [96], has raised the concern that "to make provision by way of a share, the value of which can only be ascertained until after realisation of all the estate's assets, runs the very real risk of under-providing (or over-providing) for [the applicant's] needs".
Whilst this is undoubtedly true, it seems to me that, in some cases, to make a lump sum order will not be the most appropriate way of determining what is "proper" in all the circumstances of the case. One example is where the principal asset of the estate is real estate, the value of which is only estimated, and which, ultimately, may prove wildly inaccurate. It cannot be forgotten that the actual value of the estate is a relevant consideration in determining the adequacy and propriety of the provision.
Furthermore, the Act, in s 65(2), specifies the ways in which provision may be made, and includes, "in any other manner the Court thinks fit", thereby leaving unconstrained the Court's power as to the nature of the order for provision that may be made.
I have made similar orders for provision on this basis in many cases, the most recent of which is Koellner v Spicer [2019] NSWSC 1571. Rein J has also made a similar order in Askew v Askew [2015] NSWSC 192.
As stated, the estate essentially consists of the Petersham property which must be sold and some cash. The estimates of the liabilities, and the costs of the proceedings, to be deducted, have been identified (although they may change), and there may be further liabilities, reasonably incurred, which are not yet known.
I am satisfied that the percentage method of determining the lump sum provision to be made in favour of George, is an appropriate way to proceed. That the parties agreed to this method of determining the quantum of the provision made for George is also important.
At the commencement of the hearing, counsel stated that the Court could not deal with how the burden of costs should be borne as part of these reasons as there may be documents that are relevant to how the burden of costs should be borne. I have referred to what followed the completion of the evidence and submissions.

[11]

Credit Issues

As earlier stated, only George and his son, Ben, were cross-examined. However, it was George who gave the most evidence about his relationship with the deceased and about a number of important events in their lives.
Credit findings assume a greater significance in a case such as this one. Because of the position of the parties and the witnesses, the Court is required to determine on the balance of probabilities, taking into account s 140(2) of the Evidence Act 1995 (NSW), which version is the more likely and plausible.
The principal evidence about the nature of the relationship between George and the deceased came from George himself. In some important respects, his evidence was corroborated by other evidence. On the question of whether I accept his evidence, I remember that in Thomas v Times Book Co Ltd [1966] 1 WLR 911, Plowman J (as his Lordship then was), at 916, stated: "... not only in this case is the onus of proof on the defendants, but I am enjoined by authority to approach their story with suspicion having regard to the fact that the other actor in this story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place."
(The Defendants in that case were in the position of George in this case, bearing the onus of proof.)
In Richardson v Armistead [2000] VSC 551, Hansen J (as his Honour then was), at [36], stated that: "In such circumstances the self-interest of a claimant to give evidence favourable to his or her case is obvious ... in such a case much caution is exercised before the evidence of the claimant is accepted."
Also, I remember what Bryson AJ said in Zahra v Francica [2009] NSWSC 1206 at [1]: "In these proceedings the plaintiff makes claims against the deceased's estate and the facts that he alleges depend for proof very largely upon his own evidence. In approaching his evidence and making findings on a matter he alleges, I bear in mind the need for careful scrutiny to which evidence in such a case should be subjected. This need is well established and was stated clearly by Isaacs J in Plunkett v Bull (1915) 19 CLR 544. Two more modern statements appear in the judgment of McLelland CJ in Eq in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACSR 785 at 789 in a passage which was cited with approval in the judgment of Sheller JA in Eggins v Robinson [2000] NSWCA 61 at [26]: '... in a claim based on communications with a deceased person the Court will treat uncorroborated evidence of such communications with considerable caution, and will regard as of particular significance any failure of the claimant to bring forward corroborative evidence which was, or ought to have been, available.'"
Whelan J (as his Honour then was) in Webb v Ryan [2012] VSC 377 at [22], referred to the difficulties in assessing evidence in such circumstances, stating: "An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to the conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In the light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined."
Also see, Ashton v Pratt (No 2) [2012] NSWSC 3 at [18] (Brereton J, as his Honour then was).
I also remember what was said by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liq) (No 2) (2011) 297 ALR 56 at 69 [48]; [2011] FCA 1123 at [48]: "When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2)."
The credibility of a witness and her, or his, veracity may also be tested by reference to the objective facts proved independently of the evidence given, in particular by reference to the documents in the case, by paying particular regard to her, or his, motives, and to the overall probabilities: Armagas Ltd v Mundogas S.A. [1985] 1 Lloyds Rep 1 at 57 (Robert Goff LJ) ("The Ocean Frost"). Also see, In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 at [7] (Black J).
Having observed George in the witness box over several hours, having seen the cards sent to him by the deceased which he had retained for many years, having seen the medical records, some of which specifically refer to George as a good friend of the deceased, having read the evidence of Mr Geammal, a neighbour, who had met the deceased in 1975, who was not cross-examined, who corroborated some of George's evidence, and taking into account the concessions, properly made, on behalf of the Defendants, by counsel, I am satisfied that I should accept George's evidence about the nature, duration and quality of his relationship with the deceased.
Overall, I found George to be careful and measured witness whose evidence I accept and one who, during his reasonably lengthy cross-examination, did not seek to avoid difficult questions. That conclusion also applies to accepting George's evidence about his conversations with the deceased. I am satisfied that he was an honest and straightforward witness who displayed close, paternal feelings for the deceased. In addition, I think that he was entirely genuine in expressing his friendship with, and a deep sense of grief at the loss of, the deceased.
Neither Mr Kobras, nor any of the beneficiaries, were cross-examined. None really had the same direct knowledge of events, or of the relationship that existed between George and the deceased.

[12]

The relationship of the deceased and George

George first met the deceased in about 1984 or 1985 when they worked together. Their friendship developed outside the work environment and they saw each other regularly, celebrating special occasions such as birthdays, Christmas Day, and New Year's Eve together. From about 1985 or 1986, George would visit the deceased at least once a week, usually on a Wednesday.
George did not have a father figure in his life, and he said that the deceased filled that role, providing emotional support and advice in relation to work, personal, relationships, and family. The topics of their conversations included George's relationship breakdown with Ms Millar, in about 1993, his relationship with their children, and many personal, and other, topics.
George's children would come over to the deceased's home and they played with the deceased's dog, interacted with his birds and watched his tropical fish. From about 1993, George, the deceased and the children, would go together to such places as Botany Bay and La Perouse. The deceased was George's sole confidant, and the only person to whom he felt comfortable turning for help.
Ben gave evidence in cross-examination that the last time he had seen the deceased, was on the day of the deceased's death: Tcpt, 27 February 2020, p 88(36-37). This corroborates the strength of the familial type relationship that existed between George, his family and the deceased.
At the time of George's relationship breakdown with Ms Millar, it was the deceased who invited George to stay with him, which he did for a period of about three months. Then, George purchased his own home in Croydon Park, following which the visits continued, either at the home of the deceased or at George's home.
George borrowed $5,000 from the deceased when he purchased the Croydon Park property, to assist in the payment of stamp duty. On other occasions, the deceased would lend him money. George gave evidence of loans of $4,000 in May 2015, $4,000 in July 2015, $6,000 in October 2015, $15,000 in November 2015 and $5,000 in November 2016. In 2015, the deceased lent George $35,000 to enable him to continue legal proceedings brought against his sister. All of these loans were repaid.
George moved to Adelaide to be closer to his sisters and his mother in about 2010. Whilst there, he remained in close contact with the deceased, returning every two months or so to see the deceased. They would speak, by telephone, several times a week. They even discussed the possibility of the deceased moving to Adelaide.
George returned to Sydney at the end of 2011. He had little money and no assets because he had spent his savings renovating a home with his sister (about which there was subsequent litigation). It was then that the deceased invited George to move into his home at Petersham and live with him. He suggested that George move back into his "old room and [look] after me".
George moved into the deceased's home in about April 2012 and remained living there until after the deceased's death some years later.
The deceased retired in 1988. As he aged, the deceased began to rely, increasingly, on George, for assistance, including for shopping and in performing maintenance tasks around his home. By way of example, George says that he demolished an existing fence for the deceased and replaced it with a colorbond fence. He also replaced the deceased's back fence, replacing it with a timber one. As another example, George would service the deceased's motor vehicle and his motor home. He also identifies other maintenance and repair work he did for the deceased, which it is not necessary to repeat.
George accompanied the deceased to medical appointments, cooked for him, performed home maintenance, and took care of everyday administrative tasks. The deceased provided George with accommodation, occasionally made dinner, or assisted with his laundry.
With no close family members nearby, the relationship between George and the deceased became one of close companionship and, it appears, mutual dependence.
The evidence also reveals that the deceased suffered from depression. He attempted suicide in about 1992 and again in 2005. In 1992, it was George who found the deceased. In 2005, it was George who contacted the Police to enable them to find the deceased. George, on each occasion, then supported the deceased through his recovery, moved into his home to care, and to provide support, for him. He took over the household duties until the deceased had recovered. It was also George who spoke with doctors and nursing staff whilst the deceased was in hospital.
In February 2018, when George became concerned about the deceased's mental and physical health, he made an appointment for the deceased to see a doctor, and, subsequently, arranged for the deceased to be admitted to hospital. He remained by the deceased's bedside.
As the deceased's condition declined rapidly, he called for George. When given an opportunity to say a final goodbye to the deceased, George's words, genuinely expressed in my view, encapsulated the nature and quality of their relationship: "You are the best friend I ever had. I love you. My children loved you. Buddy loved you. It was an absolute pleasure and privilege having you in my life and I am going to miss you so much."
Medical records (Ex P2) include a reference to an appointment of the deceased in February 2018, and to George, who was present at the doctor's surgery with the deceased. He was described as "a good friend who lives with Horst (describes Horst being like a step father)": Ex P2/Tab 1/24. The same record refers to the deceased and notes that he could "only go home if George stays with him until review tomorrow because of risk of self harm" (Ex P2/Tab 1/24) and on the next day, refers to the deceased being "[h]ere with George": Ex P2/Tab 1/25.
There are further references in the medical records that indicate that George accompanied the deceased on hospital visits as early as May 2005: Ex P2/Tab 2/63. In September 2014, there is a reference (near the date 8 September 2014), to "[l]ives in Petersham in a house [with] friend": Ex P2/Tab 2/39.
A letter dated 28 October 2014, to the deceased's doctor, Dr Ghosh, refers to the deceased living "independently with a friend in Petersham": Ex P2/Tab 2/99. The friend is described as the deceased's next-of-kin in the Progress Notes on 8 February 2018, and described as "appropriately grieving" on that date: Ex P2/Tab 2/111, 116. (It was not suggested by counsel for the Defendants that the friend could be someone other than George.)
In an undated document created around this time (Ex P2/Tab 2/88) the admission document signed by the deceased lists George as the "contact person".
I have earlier referred to George having produced some cards which were sent to him by the deceased. In one, the deceased referred to George as "Stepson George" and identified himself as "Stepfather Horst". In a Christmas card, the deceased referred to George as "my Dear Friend stepson and [illegible]".
George was cross-examined about evidence that he gave regarding discussions, in 2016, with the deceased about them demolishing the Petersham property and building a duplex in which they could live in one part, and George's children could live in the other part, with each contributing something towards the demolition and rebuilding costs. There were copy documents, annexed to George's first affidavit regarding such a venture. It was put to George that he "had formulated a plan for financing the redevelopment which was based on your children moving into half the property and taking out a loan …": Tcpt, 27 February 2020, p 79(18-25).
I have no hesitation in accepting George's evidence that the suggestion to demolish the Petersham property and build a duplex, came from the deceased rather than from him. I also have no hesitation in accepting George's evidence that he did not "formulate such a plan", but that it was the deceased who had suggested it.
George was also cross-examined about other conversations that he had with the deceased about moving from Sydney. Of course, none of the discussions about moving came to fruition as George realised not only that he did not have sufficient funds to contribute to any such move, but also that (Tcpt, 27 February 2020, p 73(12-16)): "Horst was set in his ways. He loved his little bunker. I think deep down inside, he would have liked to have moved near a beach or gone to the countryside, but set in his ways, he'd been in Petersham for so long. At his age, it's very hard for someone like that to make that move …"
George gave evidence about his wish to live near the water: Affidavit, George Rakovich, 5 March 2019 at par 28; Tcpt, 27 February 2020, p 75(40-46), 77(17-19). In re-examination, counsel referred to that evidence and asked: "Q. Can I ask you this, what reasons did you have for staying in Petersham? A. Reasons because I, I had a love for Horst. I cared for Horst. He's - he - when I broke up with my partner, my children's mother, all the friends just went, chu-chu(as said), disappeared. The only person in my life that stuck by me that never let me down, that's true to his word and sincere, was Horst. I thought - and I didn't even have my father to do that, and the bond that Horst and I created, I realise now evermore so, 35 years of close knit friendship became he'd say 'Hey son', I'd say 'Yeah okay dad', you know. It just developed to the point that he was like my father. It had gone from friendship to, to - and when he passed away it was just like, 'Oh my God, now what'. The person I relied upon the most has gone": Tcpt, 27 February 2020, p 84(14-24).
George was also cross-examined about a plan he had to purchase a house together with his son Ben: Tcpt, 27 February 2020, p 79(48) - 81(17). It was put to George that the plan was that he and Ben would live in the house together. In response, George asked: "Who's going to look after Horst?": Tcpt, 27 February 2020, p 80(43-50).
It was George who organised the deceased's funeral.
Very fairly, if I may say, and consistent with the evidence, counsel for the Defendants submitted: "On the basis of the available evidence, there can be no dispute between the parties about the following propositions - (a) That the Deceased and the Plaintiff had known each other for many years, and that they were friends. (b) That there was no intimate or sexual relationship between the Deceased and the Plaintiff. (c) That the Plaintiff shared the Petersham house with the Deceased since 2012. The Plaintiff provided the Deceased with $100 pw for shared living expenses. (d) The Plaintiff performed odd jobs for the Plaintiff and the Defendant; they shared some of the cooking and assisted each other with some jobs around the house. (e) That the Plaintiff worked a full time job most of the time, and this took him outside the house on working days. (f) That at specific moments of personal crisis in each other's lives, they provided support to one another."
Despite the above, counsel for the Defendants submitted that an issue in the proceedings remained the nature of the relationship between the Plaintiff and the deceased.
As earlier mentioned, George also relied upon the evidence of Samuel Geammal, a neighbour of the deceased, who had met him in 1975. They became friends over the many years that they lived next door to each other. They would see each other nearly every day.
Mr Geammal recollects first meeting George in about the early to mid-1990s. He remembers meeting George's children when they were young. He says that "George and the deceased were very good friends and from my observations, had a very close, caring and committed relationship". On occasions, he would hear their conversations. He gives examples of George suggesting that the deceased not drink alcohol as he had just come out of hospital and alcohol was not good for his health; he says he heard George encouraging the deceased to stop smoking.
He also gives evidence of overhearing a conversation about demolishing the deceased's house and building two new houses. Importantly, Mr Geammal gave the following evidence of a conversation with the deceased at par 12 of his affidavit sworn 1 August 2019: "12. I can recall a conversation that I had with the deceased many years ago in or about the 1990s. The deceased was sitting in his garage having a beer. I said to him, 'What are you going to do with this house when you die? Are you going to give it to your family?' The deceased said to me, 'My family gets nothing. I don't want to give nothing to my family.' The deceased then pointed to George with his thumb … George did not see the deceased make this gesture."
Mr Geammal recollects that George moved into the Petersham property in about 2012. He saw George doing work on the Petersham property, including replacing the roof, fixing the fences, mowing the lawns, weeding the garden and generally performing other maintenance work. He also saw George working on the deceased's car and caravan.
I found this powerful evidence corroborating George's version of events and conversations that he had with the deceased. It is hard not to conclude that their relationship was close and loving, and was more akin to a son and father than just friends.

[13]

Testamentary intentions of the deceased

In his first affidavit affirmed 5 March 2019, George gave the following evidence at par 74: "In about 2012, when I returned to live with Horst from Adelaide, I can recall a conversation with Horst and he said to me, 'Look mate it is all going to work out. You are going to be okay. Half to you and half to my brother but if my brother dies I [sic] you can have it all.'"
In February 2018, the deceased said to George, "I want to do a will to make sure you are covered. If anything happens to me I want to know that I don't forget you. That you have a home, a roof over your head": Affidavit, George Rakovich, 5 March 2019 at par 45.
George was cross-examined about his knowledge of the deceased's family in Germany. I set out the cross-examination at Tcpt, 27 February 2020, p 81(25) - p 82(15): "Q … You're aware that Horst had relatives in Germany were you not? A. I knew of his brother because in 2016 I think it was I got him a mobile phone with an Aldi package so that he could ring Germany for 100 minutes for free. He never had contact with his sister, there was a big fallout many many years earlier, something to do with her getting-- Q. All right, you've answered the question. You were aware that those relatives could potentially inherit the Petersham house if Horst died, were you aware of that as a possibility? A. It's not even a thought. Q. You never had that thought? A. Horst said to me many many years earlier, 'When I die, I want half to go to my brother and half to you'. And in fact it was about a year and a half approximately before Horst passed away. He got off the phone talking to his brother and he said to me, 'My brother is very ill, I don't think he will last too much longer'. Q. But you were not aware, were you, that Horst had followed up on what you say was his intention with respect to the house in the form of a document or a will that he'd shown you? A. No, I never saw a will, there's never been a will that I know of. Q. So it was always a possibility I suggest to you that someone else other than you would end up with the house if Horst died? A. Never even thought of it like that. All I could think of was the last time that Horst had had a medical at the doctor's, I came home, I came in and I said 'How was your doctor's appointment', he goes 'Everything is all good', so it's just we're living, I'm trying to get my life back on track. He's living in his existing home. The thought of somebody in Germany - it just wasn't a thought, we were just living together. Q. You say that it was clear in your mind that Horst was going to give you the house if his brother died before him, is that what you're saying? A. His words were 'If I die half to my brother, half to you. But if my brother's dead and I die you can have the lot'. Q. You operated on that basis? A. Well it's a comforting thought in the back of your mind when you're struggling in life."
It seems to me that the purchase of a mobile telephone for the deceased, to enable the deceased to keep in contact with members of his family in Germany, demonstrates that George was acting in the deceased's interest rather than in his own. It also does not support any suggestion of George being motivated by a desire to keep the deceased insulated from his family.
Indeed, there is no suggestion, in the evidence, that George, at any time, sought to advance his own interests and encourage the deceased to make a Will that reflected what had been said, or in any other way. That George's evidence about the deceased's testamentary intentions included a reference to the deceased's brother as a beneficiary as to one half supports the conclusion.
If further support were needed, Mr Geammal's evidence about a conversation he had with the deceased has been referred to: see [121] above.
There is no reason not to believe the evidence given on this topic. Not only could it not be seriously challenged, it is plausible, and, in light of the people in the deceased's life, unsurprising. It is also a key aspect of George's case.

[14]

George's situation in life

George set out his financial resources in his first affidavit. The resources included two table top utility trucks (about $19,000), another car ($3,000), tools of trade ($15,000), savings ($165,000), superannuation (less than $5,000).
At the time of his first affidavit (affirmed 5 March 2019), he had not lodged his income tax return for the financial year ending 30 June 2018. He stated that his taxable income for the financial year ending 30 June 2017 was $52,855. He estimated that his monthly expenditure totalled $3,865 (including dental expenses of $1,800 per month averaged over the last two years).
The Defendants tendered a copy of George's income tax returns for the year ending 30 June 2017 and the year ending 30 June 2018: Ex D3. His taxable income for the latter financial year was $65,234.
At the time of the hearing, George was not earning any income. He stated that he had not worked since about September 2019 as shortly before his employment ended he suffered "immense lower back and leg pain which made it near impossible for me to continue with my work".
At the date of the hearing, George was living with his daughter, her husband and their three children, in a three bedroom villa. It is clear from his evidence that this is unlikely to be a permanent arrangement.
George currently suffers from asthma, bronchitis, tinnitus, anxiety, stress and back and leg pain. He has been diagnosed with lumbar spondylosis, piriformis syndrome, five bulging discs and pars defect in his spine. He says that he is in constant pain. He has limited mobility which he manages by stretching each morning, and otherwise when he can, by using heat packs and by exercising. When he feels pain coming on, he lies flat on his back on the floor to help reduce the pain. He says that, with his current medical issues, he would not be able to return to his work as a Site Supervisor.
Counsel for George submitted that George's financial circumstances are unlikely to improve and he is at an age and stage in life where it is unlikely that he will be able to change careers, notwithstanding his current health limitations. Whilst I accept that this seems to be so, I do not think it can be said that he has no working capacity, although, one might think that at his age, with his medical condition, obtaining employment in his field of expertise would be somewhat difficult.
As significantly, the cash sum of $165,000 that George had in March 2019 has now been dissipated. He had placed virtually all of the cash into a bank account in Ben's name. Ben gave evidence, about which he was not really cross-examined, that, without his father's knowledge, or consent, he had spent all of George's money on drugs and gambling. Ben has promised to repay the amount taken, but whether that promise will be realised is far from certain.
Currently, all George has, by way of savings, is $3,679. He also has his two motor vehicles (with a total value of about $17,000), tools ($15,000), and superannuation (about $5,000). His financial circumstances are parlous. He has virtually no savings, no income, and his current living circumstances are temporary.
George was subjected to strenuous cross-examination, particularly concerning his financial circumstances. He was challenged, particularly, on his failure to disclose details of a company of which he was the sole director and shareholder. The company, Decisive Constructions Pty Limited, was first registered in August 2016. It is an Australian proprietary company registered by shares, with one $1.00 ordinary class share. It was the service company through which George carried on his business.
It is true that George did not include details about this company in his affidavits. However, I do not accept the criticism of him made by counsel regarding his financial affairs. In this regard, I note that on the evening of 24 February 2020, that is two working days prior to the commencement of the hearing, the Defendants' solicitors served a notice to produce (Ex D1) on George, which required production of five categories of documents, all of which required the production of documents from 2012 through to 2019 or to date.
It is clear that George made every effort to produce such documents that he had available to answer the notice to produce. He produced a copy of his taxation returns for two years, as well as the tax returns of the company. He even attended on a bank at which he had conducted banking to obtain details of the accounts that he had once conducted but no longer did: Ex P4.
At Tcpt, 27 February 2020, p 56(40) - p 57(01), Dr Mantziaris put to George the following propositions regarding his income: "Q. I suggest to you that your taxable income in the financial year ended 2017 was in excess of $52,855 which is the amount that you stated in your affidavit of 5 March 2019? A. I can, I can only go on whatever my accountant's provided, like - and if, if that's what provided I've just got in here that's to my team, 'Here you go, that's what I've been told I've earned' or whatever. I, I have no capacity to, to have any impact on it. Q. I suggest to you that your taxable income in the financial year end of 2018 was also in excess of $52,000. Do you agree or disagree? A. My response is the same. Whatever I got from the accountant to give to my team to demonstrate, that, that's it."
Dr Mantziaris also addressed the point in his oral submissions, at Tcpt, 2 March 2020, p 118(31-39): "Just to get a handle on that, if I could take your Honour to a very rough calculation at para 12(d) of the document I just handed up? The plaintiff gave evidence that after 2014, he got quite a lot of work, the earnings were $75 an hour. The work was fairly steady, although there were periods of time when he didn't work at all. But when the work was on, it was quite intense. On a very conservative calculation, 35 weeks of that work, which is quite conservative, taking his lowest figure 60 hours a week at $75 per hour you get to $157,000 per annum in that period between 2014 until when he stopped working in September 2019."
Dr Mantziaris later returned to this submission, although the ensuing discussion had a greater focus on the nature of George's drawings from the company's accounts: Tcpt, 2 March 2020, p 124(20) - p 125(39).
I am satisfied that George has done his best to disclose his financial resources and that he does not have any additional resources that he did not disclose.

[15]

The situation in life of each of the beneficiaries

Ingeborg Kreitz is entitled to one-quarter of the deceased's estate on intestacy. As stated, she and the deceased never met each other in person. Her evidence is that her mother remained in contact with the deceased. She states that, as a child, she wrote letters to the deceased, but does not provide any evidence of contact with the deceased later in life. Her evidence is limited to the statement at par 7 of her affidavit sworn 5 July 2019, that "… my mother loved her brother and our family kept in regular contact with him by telephone and by letter up until her death on 21 April 2015".
She has provided an affidavit, sworn 5 July 2019, updating her financial circumstances, which reveals that her main form of income comes from operating a small snack stand business. She provides that the business generates approximately $5,673 in profit each year. Although she annexed to her affidavit a copy of tax returns for that business, it is unclear from her evidence whether she takes any wages or drawings from the business over and above the profit earned. She supplements her income with approximately $3,582 per annum from working for a welfare society. Ingeborg deposes that her annual expenditure is approximately $23,499.
Her assets are limited to savings ($5,674) and a motor vehicle ($9,726). She does not have any liabilities.
Petra Krogemann is also a niece of the deceased. She, too, is entitled to one-quarter of the deceased's estate on intestacy. She and the deceased never met each other in person. She had some contact with the deceased. I have referred to the wedding card sent in 1984 when she married. She telephoned the deceased, in 2015, to inform him of her mother's death.
Petra does not have any income independent from her husband. However, she does receive a small expense allowance for voluntary work that she performs (approximately $167 per month). Her husband receives approximately $54,095 per annum from his employment as a timber merchant. His continued employment is, however, in some doubt given his age and ongoing medical issues. Their annual expenditure is approximately $38,294.
Petra and her husband have assets consisting of their house ($114,752), savings ($68,864), a car ($8,198) and household furniture ($8,198). They do not have any liabilities.
Frank is a nephew of the deceased and is entitled to one-quarter of the deceased's estate on intestacy (arising from his position as a beneficiary of his mother's estate, who was, in turn, a beneficiary of her husband's estate). Like Ingeborg and Petra, Frank never met the deceased in person. He states that he spoke with him on the telephone.
Frank is in receipt of disability pension of approximately €10,011 per annum. His annual expenditure is approximately $15,594. Frank has no assets apart from a motor vehicle which, he asserts, has no resale value.
Ralf, like Frank, is a nephew of the deceased and is entitled to one-quarter of the deceased's estate on intestacy. As with the other beneficiaries, Ralf never met the deceased but did, on occasion, speak to him on the telephone.
Ralf is employed as a school caretaker and receives annually $61,681 in gross income. His annual expenditure amounts to about $18,762.
Ralf has limited assets of a motor vehicle ($1,610), a motorbike ($2,416) and savings ($6,991). He has a credit card liability of $2,426.
The financial resources and needs of each of the beneficiaries are somewhat varied. Although none can be said to be in a particularly strong financial position, equally, none appear to be in any significantly worse financial position than is George.

[16]

The Submissions

Counsel for George submitted in writing: "Having regard to those matters, the moral duty of the deceased (which the deceased in fact recognised) to make substantial provision for George was a strong one. The evidence of the deceased's testamentary intentions is that he wished for George to have secure accommodation. Given the nature and quality of their relationship, the absence of competing claimants with compelling (or any) moral claims for provision, and in circumstances where George was dependent upon the deceased for accommodation, this is a case where the appropriate order for provision is consistent with the deceased's expressions of testamentary intent. The plaintiff seeks provision from the deceased's estate sufficient to acquire a modest 1-bedroom unit in the areas of Petersham or Croydon Park."
At the commencement of the hearing, the parties agreed (Ex P3) that: "1. The median price for a 2 bedroom unit in Croydon Park is $559K. 1 bedroom units are available from $390K. 2. The median price for a 2 bedroom unit in Petersham is $830K. The median price for a 1 bedroom unit in Petersham is $640K. 1 bedroom units are available from $475k and studios from $339K."
Counsel for George also submitted, at the commencement of the hearing, that adequate provision for the proper maintenance and advancement in life of George would be in the form of a lump sum of $500,000.
During his oral submissions, counsel for George revised that figure upwards to $640,000. He submitted by way of explanation: "As the evidence has unfolded, it seems to me that the more appropriate and the proper provision would in fact be a provision to enable the plaintiff to obtain a one bedroom apartment at Petersham. The median price for a one bedroom property at Petersham it's agreed is $640,000. I say that for this reason. Much was made in cross-examination of the plaintiff attending the White Cockatoo Hotel. The White Cockatoo Hotel is located in Petersham. When asked why he attends the White Cockatoo Hotel the plaintiff replied 'All my friends are there.' … … the focus point of the plaintiff's life is very much around Petersham where his friends are, where his mates are, and so that grounds my submission that contrary to what I said at the beginning, something in the order of 600, 640 might be more appropriate": Tcpt, 2 March 2020, p 111(10-37).
Counsel for the Defendants submitted in his written opening: "The Court should not make any order for provision; and if the Court is so minded, the award should be of a very modest character."
As stated above, by the time of counsel for the Defendant's oral closing submissions, he had accepted that some provision ought to be made for George. As to the quantum of that provision, he submitted: "MANTZIARIS: … The defendants put that the plaintiff should be placed at an equal level with [the beneficiaries] at 20%": Tcpt, 2 March 2020, p 120(41-43).
Counsel's final submission was, therefore, that the estate should be divided equally between George and the four beneficiaries entitled on intestacy.
I should mention that in his written submissions, counsel for the Defendants submitted that the Court should take into consideration an occupation fee of $800 per week for the period 7 February 2018 (presumably he meant to submit 8 February 2018, the date of the deceased's death) to 10 November 2019.
In his written closing submissions, counsel for the Defendants reduced the figure to $450 per week. On his submission, the lower figure made allowances for the "basic nature of the accommodation" and for "the fact that the Estate benefited from the occupation of the house by the plaintiff (ie the property was not abandoned)". The total was the amount that, he submitted, should be deducted from the 20% of the deceased's estate he said was adequate and proper provision in all the circumstances.
On the second day of the hearing counsel for the Defendants tendered, without objection, a document headed "Agreed facts re: Rental Property market in Petersham": Ex D9. This document revealed that: "1. The median rental price for a two bedroom house in Petersham is $680 per week. 2. The median rental price for a one bedroom unit in Petersham is $400 per week. One bedroom units are available from $350 per week. The median rental price for a two bedroom unit in Petersham is $520 per week."
I accepted the tender even though it is clear from Ex D9 that the rental price in each case relates to the current position not the position as it was during the period between February 2018 and November 2019.
Counsel for the Defendants also stated, without objection, that the first demand made for rent, or an occupation fee, was not made until 24 May 2019 and that it was made by Mr Kobras who, then, was not a party to the proceedings.
There were a number of problems accepting the submission, not the least of which were that no Cross-Claim had been filed, or served, in which an occupation fee had been sought; there was no legal personal representative of the estate of the deceased who could have sought to rent the deceased's property; and there was simply no evidence of the amount of any rent, or occupation fee, that could have been obtained in the period during which George was in occupation after the death of the deceased.
However, as expressed to counsel, and not disputed by counsel for George, the fact of George's occupation for that period, after the death of the deceased, effectively rent, and occupation fee, free, is a matter the Court considers relevant, at the time the application is being considered, even though the value of that occupation could not be determined on the evidence.
Thus, even though I do not propose to deduct an amount for an occupation fee for George's continued occupation of the deceased's home from the time of his death until he vacated, I have considered the fact of George's occupation of the Petersham property during that period.

[17]

The Statutory Scheme

I shall next discuss the statutory scheme and what I have previously described as general principles. I have discussed these matters in many cases. In view of the fact that ultimately, in this case, the real issue was the quantum of provision to be made, it is not necessary to restate the principles to which I have referred many times, other than in respect of the real issue in these proceedings. Naturally, I have borne those principles in mind.
In this case, the deceased did not leave a Will, with the result that the pre-ordained scheme for distribution of the deceased's estate is not according to the wishes of the deceased, as expressed in any Will, but according to the regime established by statute.
It was written in New South Wales Law Reform Commission, Uniform Succession Laws: Intestacy, (April 2007); [2007] NSWLRC 116 at pars 1.23 and 1.25: "The rules of distribution on intestacy are, at the most general level, the community's view of what should be done with the estate of a person who has died intestate. The parliaments of the various Australian jurisdictions, as representatives of their communities, have established and amended the rules from time to time. One of the purposes of this Report is to determine the extent to which any proposed scheme of distribution meets the collective requirements of the Australian community. … One of the more widely acknowledged aims of intestacy rules is to produce the same result as would have been achieved had the intestate had the foresight, the opportunity, the inclination or the ability to produce a will." (footnotes omitted)
In Re Wren, deceased [1970] VR 449, Smith J, at 451, concluded that the limitations on a court's ability to interfere with dispositions where there was inadequate provision made for an applicant, applied to both testate and intestate estates. His Honour wrote: "The justification for the limitation [on interference] would appear to be as strong in the case of intestacy as in the case where there is a will; for the deceased may have known how his estate would devolve upon intestacy and chosen to die intestate; and even if he did not, nevertheless the mode of devolution upon intestacy is that which is regarded by the legislature as being, in the generality of cases, the fairest and most reasonable." (citations omitted)
In Re Coventry, deceased [1980] Ch 461, Oliver J (as his Lordship then was) considered at 474: "Subject to the court's powers under the Act and to fiscal demands, an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases or, if he chooses to do so, to leave that disposition to be regulated by the laws of intestate succession."
In Re Estate of Bridges (1975) 12 SASR 1, Bray CJ (Jacobs J agreeing) noted at 5-6: "In the case of an intestacy, as much as in the case of a will, it seems to me that Parliament has indicated its intention that the scheme of things set up by a testator in his will, or by the law of the State in the event of intestacy, shall be interfered with so far as is necessary to make adequate provision for the proper maintenance, education and advancement of the claimants specified in the Act, but no further. It is true that when the persons entitled on intestacy are the surviving spouse and legitimate children of the deceased as opposed to collateral relations the speculation that the deceased may have intended to die intestate may have more cogency, but nevertheless I repeat that I think the correct approach is as I have said. I think that Parliament no more intended to grant an unlimited liberty to recast dispositions resulting from the law of intestacy on moral grounds than it did to give a similar liberty to recast dispositions made by will."
In Kossert v Margaret Gerda Ruggi as Executor of the Will of Peter Korps (No 2) [2012] WASC 191, Kenneth Martin J, at [38], after referring to the passage in Re Estate of Bridges, noted: "So, in going about the task of resolving this Inheritance Act application ... I must respect the effect of the intestacy laws of the day in terms of the result they would deliver ..."
Also see Steinmetz v Shannon (2019) 99 NSWLR 687 at 700 [59]; [2019] NSWCA 114 at [59] (White JA).
As stated earlier, s 59(1) of the Act confers jurisdiction on the Court to make a family provision order in relation to the estate of a deceased person if, relevantly, the court is satisfied as to three matters, namely that: 1. the applicant, the person in whose favour the order may be made, is an eligible person; 2. if he, or she, is an eligible person by reason only of s 57(1)(e), or s 57(1)(f) of the Act, having regard to all the circumstances of the case (whether past or present), there are factors which warrant the making of the application; and 3. at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the operation of the intestacy rules in relation to the estate of the deceased.
I shall deal with these matters next.

[18]

Eligibility

In relation to George, it was accepted that he was an eligible person within the meaning of that term in s 57(1)(e) of the Act. The Act does not specify a particular length of time during which the applicant must have been a member of the household of which the deceased was a member. However, for some period, the applicant and the deceased must have been members of the same household.
The Act contains no definition of the words "dependent on". In general, the word "dependent" connotes a person who relies upon support of another, financial and/or emotional. Dependency is not limited only to the class of persons actually in receipt of financial assistance from the deceased. The authorities reveal that the words are wide enough to cover any person who would naturally rely upon, or look to, the deceased, rather than to others, for anything necessary, or desirable, for her, or his, maintenance and support.
In Tobin v Ezekiel (2012) 83 NSWLR 757 at 786-787 [109]-[110]; [2012] NSWCA 285, Meagher JA (Basten and Campbell JJA agreeing) wrote at [109], that dependency "in this context means actual reliance on someone else for the total or partial satisfaction of some need. It is not limited to purely financial or material matters …", and at [110], that it "may exist irrespective of whether the dependent person is financially or physically able to support himself or herself …".
As has been repeated in Spata v Tumino (2018) 95 NSWLR 706 at 719-720 [68]; [2018] NSWCA 17 at [68] (Payne JA, Macfarlan JA and Sackville AJA agreeing): "It has long been held that the word 'dependent' is an ordinary English word and the question of whether a person is wholly or partly dependent on another is a question of fact: Page v Page [2017] NSWCA 141 at [7], per Sackville AJA (with whom Leeming JA agreed on this point). Although Sackville AJA noted that the construction of s 57(1) was not in issue in that case, he cited Petrohilos v Hunter (1991) 25 NSWLR 343 at 346 (per Hope JA with whom Clarke and Sheller JJA agreed) and Aafjes v Kearney (1976) 180 CLR 199; [1976] HCA 5 at 204 (per Barwick CJ) and 210 (Mason J, Stephen J agreeing), as authority for the proposition. To these cases may be added the decision of Meagher JA (with whom Basten and Campbell JJA agreed) in Tobin v Ezekiel at [109]-[111] …"
In Mekhail v Hana; Mekail v Hana [2019] NSWCA 197 at [180], Leeming JA (Basten JA and Emmett AJA agreeing) wrote that "[d]ependency is not to be given any restrictive meaning"; also see, Spata v Tumino at [70]-[84] (Payne JA).
As well as it having been conceded, I am satisfied that George is an eligible person under s 57(1)(e) of the Act. Clearly they were members of the same household, and whilst George's dependency upon the deceased was partial, it was significant. Clearly, he was partly dependent (at the very least for accommodation) upon the deceased, in the six years or so that they lived together. They were emotionally co-dependent for many years longer than that.
(In these circumstances, it is unnecessary to discuss eligibility under s 57(1)(f) of the Act.)

[19]

Factors warranting the making of the application

Again, there was no dispute that George had established factors warranting the making of his application.
In requiring a person who falls within, relevantly, s 57(1)(e) to satisfy the Court that there are such factors, the Act distinguishes between two classes of eligible person. As was written by McColl JA (Gleeson and Simpson JJA agreeing) in Yee v Yee [2017] NSWCA 305 at [111]-[112]: "Within the first category (s 57(1)(a) - (c)) are persons generally 'regarded as natural objects of testamentary recognition', such as lawful and de facto spouses and children. This class is so regarded because it consists of those to whom it has been said a testator owes a moral duty of support. Those falling within the second category (s 57(1)(d) - (f)) are not generally regarded as natural objects of testamentary recognition by a deceased. Rather, they are 'potentially appropriate objects of testamentary recognition, depending upon their circumstances'. In order to qualify as such objects in fact, they must establish there are factors warranting their application. That is a jurisdictional question." (footnotes omitted)
The Act does not specify the "factors which warrant the making of the application". As Pembroke J noted, in Wilcox v Wilcox [2012] NSWSC 1138 at [16], "[n]o legislative assistance is given as to the intended scope or meaning of this enigmatic requirement".
In Lodin v Lodin (2017) 16 ASTLR 576 at 603-604 [126]-[129]; [2017] NSWCA 327, Sackville AJA (Basten and White JJA agreeing), at [126]-[129], (although in the context of a claim by a former spouse) set out a number of propositions which I paraphrase: 1. Care must be taken not to impose rigid constraints on the circumstances that might constitute factors which warrant the deceased making an application for family provision from the estate. 2. The factors must demonstrate that the deceased had a social, domestic or moral obligation to make testamentary provision for the applicant. 3. The position is unlikely to be different even if the estate is relatively large. Something more is ordinarily needed for the claimant to show that he or she was a natural object of testamentary recognition. 4. What more a claimant must show cannot be defined with precision since all the circumstances have to be taken into account. Some cases may be comparatively straightforward. 5. A significant matter is likely to be the nature of the relationship between the claimant and the deceased. In particular, it may be very important to determine whether there were (or are) features of that relationship that can be said to create a moral obligation on the deceased to make testamentary provision for the claimant.
However, as stated in Spata v Tumino, by Payne JA, at [72], "[a] finding of being 'wholly or partly dependent' does not itself give rise to a statutory obligation to make provision from the deceased person's estate for the proper maintenance, education or advancement in life of the dependent; it is merely the first step".
Sackville AJA, in Spata v Tumino at [139], also affirmed that: "A claimant who establishes that he or she is an eligible person by reason of dependency on the deceased (and membership of the same household) may or may not be a person to whom the deceased owed an obligation to make provision by way of testamentary disposition. The concept of dependency in s 57(1)(e)(i) of the Succession Act is not to be limited by incorporating criteria that are only to be considered once the claimant establishes that he or she is entitled to apply for a family provision order."
Finally, in Page v Page (2017) 16 ASTLR 331 at 340 [38]; [2017] NSWCA 141, Leeming JA noted, at [38], that: "An order for provision may only be made if (a) as a former member of the same household, the appellant establishes that he was 'at any particular time, wholly or partly dependent upon the deceased' and (b) that 'having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application': s 57(1)(e)(i) and s 59(1)(b). These are both 'jurisdictional' questions, in the sense that the application must be dismissed unless both questions are answered favourably to the claimant. However, they are different from one another. They are also different from the further question which arises under s 59(1)(c), which must also be answered favourably before an order for family provision is made." (emphasis in original)
It is quite clear that George was someone whom the deceased regarded as a natural object of his testamentary bounty. Amongst other things: 1. they had a close relationship of friendship between about 1986 and 2018, that is over 30 years; indeed, for much of the time that they knew each other, the deceased was a mentor to George; 2. the deceased referred to George as his "step-son", in writing, on a number of occasions; he appears to have assumed and accepted paternal responsibility for George; 3. the deceased played a significant role in George's life as a paternal figure, particularly in circumstances where George had no relationship with his own father; 4. on each of the occasions that the deceased attempted suicide, it was George who looked after him and continued to do so. He provided emotional, as well as physical, support. There is no suggestion that any of the deceased's siblings, or the current beneficiaries on intestacy, provided such support; 5. in about 2016, the deceased suggested to George that they construct a duplex home, with George and the deceased living in one part of the duplex (which the deceased would give to George when he died), and George's children living in the other; 6. at different times, the deceased referred to his testamentary intentions and, on each occasion, George was to be an object of his testamentary bounty; 7. the deceased repeated to his neighbour, Mr Geammal, that on his death, if his brother did not survive him, he wished George to receive his whole estate; and 8. the deceased did not have any other apparently close relationships, with the exception of Ms Christmann.

[20]

Adequacy of Provision

Relevantly, other than by reference to the operation of the rules of intestacy, s 59(1)(c) of the Act leaves undefined the norm by which the Court must determine whether the provision, if any, is inadequate for an applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the Court to the provision made for the applicant on intestacy, on the one hand, and to the requirement for maintenance or advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance or advancement in life of the applicant.
The question whether the deceased has made adequate provision for an applicant is a question of objective fact, the determination of which involves an evaluative judgment: Singer v Berghouse (1994) 181 CLR 201 at 210-211 (Mason CJ, Deane and McHugh JJ); [1994] HCA 40; White v Barron (1980) 144 CLR 431 at 434-435 (Barwick CJ, albeit in dissent in the result), 443 (Mason J); [1980] HCA 14.
"Provision" is not defined by the Act, but it was noted in Diver v Neal (2009) 2 ASTLR 89 at 97 [34]; [2009] NSWCA 54 at [34] (Basten JA, Allsop P and Ipp JA agreeing), that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
The word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, described by Rosalind Atherton in "The Concept of Moral Duty in the Law of Family Provision - A Gloss or Critical Understanding?" (1999) 5(1) Australian Journal of Legal History 5 at 10, as reached upon "a purely economic and objective basis", whereas "proper" prescribes the standard of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) (2007) 35 WAR 127 at 145 [72], [77]; [2007] WASCA 235 at [72], [77] (Buss JA, Pullin JA agreeing), which seems to invite more subjective criteria.
In Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19, Dixon CJ (McTiernan J agreeing) at 19, pointed out that the words "adequate" and "proper" are always relative and that what the testator regarded as "superior claims or preferable dispositions" is a relevant consideration: "The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning."
In Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31, Gibbs J (as his Honour then was) (Stephen and Mason JJ agreeing) wrote, at 502: "… the words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards ..."
In Vigolo v Bostin (2005) 221 CLR 191 at 228 [114]; [2005] HCA 11 at [114], Callinan and Heydon JJ wrote: "… the use of the word 'proper' … implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all of the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here … The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
White J (as his Honour then was), in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253 at 283-284 [123]; [2013] NSWSC 522, wrote, at [123]: "The question of what level of maintenance or advancement in life is 'proper' depends on all of the circumstances of the case including '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' (Singer v Berghouse (1994) 181 CLR 201 at 210)."
In Ilott v The Blue Cross [2018] AC 545 at 564-565 [14]-[15]; [2017] UKSC 17, a claim by an estranged adult daughter under the Inheritance (Provision for Family and Dependants) Act 1975 (UK) c 63, Lord Hughes JSC (Lord Neuberger PSC, Baroness Hale DPSC, Lord Kerr, Lord Clarke, Lord Wilson and Lord Sumption JJSC agreeing), in defining "maintenance", wrote, at [14]-[15]: "The concept of maintenance is no doubt broad, but the distinction made by the differing paragraphs of section 1(2) shows that it cannot extend to any or everything which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living … The summary of Browne-Wilkinson J in In re Dennis, deceased [1981] 2 All ER 140, 145-146 is helpful and has often been cited with approval: '… in my judgment the word "maintenance" connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of a lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure. Nor am I suggesting that there may not be cases in which payment of existing debts may not be appropriate as a maintenance payment; for example, to pay the debts of an applicant in order to enable him to continue to carry on a profit-making business or profession may well be for his maintenance.' … The level at which maintenance may be provided for is clearly flexible and falls to be assessed on the facts of each case. It is not limited to subsistence level. Nor, although maintenance is by definition the provision of income rather than capital, need it necessarily be provided for by way of periodical payments, for example under a trust … As Browne-Wilkinson J envisaged (obiter) in In re Dennis (above) there is no reason why the provision of housing should not be maintenance in some cases; families have for generations provided for the maintenance of relatives, and indeed for others such as former employees, by housing them …"
Whether the disposition of the deceased's estate is not such as to make adequate provision for the proper maintenance, education or advancement in life of the applicant will always, as a practical matter, involve an evaluation of the provision, if any, made for the applicant on the one hand, and the applicant's "needs" that cannot be met from her, or his, own resources on the other: Hunter v Hunter (1987) 8 NSWLR 573 at 575 (Kirby P, Hope JA agreeing). This statement is not intended to suggest that an applicant's "needs", when compared with the provision made for him or her, out of the estate, should be the dominant consideration. The existence, or absence, of "needs" which an applicant cannot meet from his, or her, own resources will always be highly relevant, and quite often decisive, as the statutory formulation, and therefore, the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for her or his proper maintenance, education and advancement in life: Singer v Berghouse at 227 (Gaudron J, albeit her Honour was in dissent in the result); Bkassini v Sarkis [2017] NSWSC 1487 at [296]-[297] (Robb J).
In Devereaux-Warnes v Hall (No 3), at [81]-[84], Buss JA (as his Honour then was) wrote: "The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources: see Singer (at 227) per Gaudron J. 'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc: see Gorton v Parks (1989) 17 NSWLR 1 at 10-11 per Bryson J. The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs' that cannot be met from his or her own resources on the other: see Hunter (at 575) per Kirby P. Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc: see Singer (at 227) per Gaudron J. Compare Gorton (at 6-11) per Bryson J; Collicoat v McMillan [1999] 3 VR 803 at [38], [47] per Ormiston J."
However, as will be read, s 60 of the Act invites the Court to have regard to various matters, including, but not limited to, financial need: s 60(2)(d). If the Court does so, as will also be read, one of the purposes for which that is done is for determining "the nature of any [family provision] order": s 60(1)(b) of the Act.
No doubt, this has prompted White J to write, in Sam Wardy v Gordon Salier; William Wardy v Gordon Salier; Hassiba Wardy v Estate of late Edmond Wadih Wardy, developer and Ch 3 of the Succession Act 2006 [2014] NSWSC 473 at [147], that "the need a claimant must demonstrate is a need for 'proper' maintenance, education and advancement in life", but that does not mean that "adequate provision for proper maintenance and advancement in life implies no more than provision for the necessities of life, irrespective of the size of the estate and the effect, if any, of an order for provision on others". Respectfully, I agree.
Of course, "need" is a relative concept: de Angelis v de Angelis [2003] VSC 432 at [45] (Dodds-Streeton J). It is different from "want" and does not simply mean "demand" or "desire". The latent difference between the words was stated by Lord Neuberger (the former President of the Supreme Court of the United Kingdom), in the House of Lords decision, R (on the application of M) v Slough Borough Council [2008] 1 WLR 1808 at 1825 [54]; [2008] UKHL 52 at [54]: "'Need' is a more flexible word than it might first appear. 'In need of' plainly means more than merely 'want', but it falls far short of 'cannot survive without'."
In Boettcher v Driscoll (2014) 119 SASR 523 at 530 [41]; [2014] SASC 86 at [41], David J added: "'Need' is not so synonymous with 'want' such that the two are interchangeable."
However, no narrow view of what is encompassed by the concept of "need" is to be adopted. In Gorton v Parks (1989) 17 NSWLR 1, Bryson J (as his Honour then was) commented, at 8, that "[i]t does not seem possible to give a complete or exhaustive statement of the concept".
As Callinan and Heydon JJ emphasised in Vigolo v Bostin at [122], the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies. The whole of the context must be examined.
If the Court is satisfied that, at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the operation of the rules of intestacy, it determines whether to make an order for provision and what provision ought to be made.
Section 60 of the Act provides: (1) The Court may have regard to the matters set out in subsection (2) for the purpose of determining: (a) whether the person in whose favour the order is sought to be made (the applicant) is an eligible person, and (b) whether to make a family provision order and the nature of any such order. (2) The following matters may be considered by the Court: (a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship, (b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate, (c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate, (e) if the applicant is cohabiting with another person - the financial circumstances of the other person, (f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated, (g) the age of the applicant when the application is being considered, (h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant, (i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate, (j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person, (k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so, (l) whether any other person is liable to support the applicant, (m) the character and conduct of the applicant before and after the date of the death of the deceased person, (n) the conduct of any other person before and after the date of the death of the deceased person, (o) any relevant Aboriginal or Torres Strait Islander customary law, (p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
It can be seen that s 60(2) enumerates 15 specific matters, described by Basten JA in Andrew v Andrew (2012) 81 NSWLR 656 at 665 [37]; [2012] NSWCA 308 at [37], as a "multifactorial list", and by Lindsay J in Verzar v Verzar [2012] NSWSC 1380 at [123], as "a valuable prompt" to which the Court may have regard, together with "any other matter the court considers relevant", for the purpose of determining whether the applicant is an "eligible person", whether a family provision order should be made, and if so, the nature of any such order.
In Chapple v Wilcox (2014) 87 NSWLR 646 at 649 [7]; [2014] NSWCA 392 at [7], Basten JA wrote: "Section 60 of the Succession Act spells out the matters which the court may have regard to in determining whether the claimant 'is an eligible person' and whether to make a family provision order: s 60(1). Most of the factors listed in s 60(2) will be irrelevant in relation to whether the applicant is an eligible person, a matter largely dependent upon the language of s 57. The matters set out must be available considerations in relation to both limbs of s 59(1) dealing with a family provision order, namely par (b) and par (c). Section 60 provides no assistance in relation to the different considerations which may arise in respect of each paragraph of s 59(1). The factors are also relevant to the determination of the 'nature of any such order', which presumably includes the discretionary element to be found in s 59(2): s 60(1)(b)."
The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The Act does not provide guidance as to the relative weighting of each factor. The weight of each of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed are, necessarily, of decisive significance, and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender. The sub-section makes clear, since other matters may be taken into account, that the jurisdiction is not exclusively needs-based.
Furthermore, the section also does not say how the matters listed are to be used to determine the matters identified in s 60(1). Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the Court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical.
A reference to some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary, whilst others do not. Importantly, also, many of the matters in sub-section (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
Dixon CJ, in Pontifical Society for the Propagation of the Faith v Scales at 19, commented upon the consideration that was to be given to the deceased's wishes: "The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs, but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court."

[21]

Some Additional Principles

Accepting that no two cases will be exactly alike, because each case necessarily turns on its own unique combination of facts, there are some general principles that may be stated. Whilst most of these principles were stated in the context of the former Act, they are equally apt in a claim brought pursuant to the Act. Other judges, and I, have repeated them in many cases under the Act.
The Court's discretion in making an order is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation: Pontifical Society for the Propagation of the Faith v Scales at 19 (Dixon CJ); McKenzie v Topp [2004] VSC 90 at [63] (Nettle J).
Bryson J noted in Gorton v Parks, at 6, that it is not appropriate to endeavour to achieve "an overall fair" division of the deceased's estate. It is not part of the Court's function to achieve some kind of equity between the various claimants.
As Pembroke J repeated in Sung v Malaxos [2015] NSWSC 186 at [5]: "Fairness and equality are not touchstones for relief under the Succession Act."
Of course, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep) at 30-31; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 at [269]-[274] (Ward J).
In all cases under the Act, what is adequate and proper provision is necessarily fact specific: Sgro v Thompson [2017] NSWCA 326 at [67] (White JA, McColl and Payne JA agreeing).
The size of the estate is a consideration in determining an application for provision. However, its size does not justify the Court re-writing the deceased's Will in accordance with its own ideas of justice and fairness: Bowyer v Wood (2007) 99 SASR 190 at 202-203 [41]; [2007] SASC 327 at [41] (Debelle J, Nyland and Anderson JJ agreeing); Borebor v Keane (2013) 11 ASTLR 96 at 110 [67]; [2013] VSC 35 at [67] (Hargrave J). In the same way, the size of the estate will not justify the Court substituting its own ideas of justice and fairness thereby usurping the operation of the rules of intestacy.
The role of the Court is not "to address wounded feelings or salve the pain of disappointed expectations" that the applicant might feel: Heyward v Fisher (Court of Appeal (NSW), Kirby P, 26 April 1985, unrep) at 7.
In Foley v Ellis [2008] NSWCA 288 at [88], Sackville AJA (Beazley and Basten JJA agreeing), noted that Singer v Berghouse: "… strongly suggests that the Court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased's bounty. These claimants include other beneficiaries entitled to a share of the deceased's estate, whether or not they themselves have made a claim under the Family Provision Act."

[22]

Qualifications on "Principles"

As long ago as 1980, in White v Barron, at 440, Stephen J wrote: "[T]his jurisdiction is pre-eminently one in which the trial judge's exercise of discretion should not be unduly confined by judge-made rules of purportedly general application."
As I have stated in many cases (see, for example, Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [117]), I do not intend what I have described as "principles" or "general principles" to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction should be unduly confined, or the discretion should be constrained, by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered. I do not intend what is provided as a guide to be turned into a tyrant.
It is necessary for the Court, in each case, after having had regard to the matters that the Act permits it to consider, to determine what is adequate and proper in all the circumstances of the particular case. In addition, in each case, a close consideration of the facts is necessary in order to determine whether the basis for a family provision order has been established. Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. Every case is different and must be decided on its own facts and it is in the detail that the answer to the proper application of the Act is to be discovered: Golosky v Golosky (Court of Appeal (NSW), Kirby P, 5 October 1993, unrep) at 16.
The importance of the qualifications to which I have referred have been stressed in Chapple v Wilcox, by Basten JA, at [18]-[20], and by Barrett JA, at [66]-[67]; in Burke v Burke (No 2) (2015) 13 ASTLR 313 at 329 [84]-[85]; [2015] NSWCA 195 at [84]-[85] (Ward JA, Meagher and Emmett JJA agreeing); in Yee v Yee at [172] (McColl JA, Gleeson and Simpson JJA agreeing); and recently, by White JA, in Steinmetz v Shannon, at [37]. The qualifications must be remembered.

[23]

Determination

As stated, there is no dispute that George is an eligible person. He commenced the proceedings within time. There is also no dispute that there are factors which warrant the making of his application.
Then, the first question for determination is whether, at the time the Court is considering the application, adequate provision for the proper maintenance or advancement in life of George has not been made by the rules of intestacy. In this regard, advancement in life may be seen as provision that will improve, and enhance, the material situation of George.
What is written below should be read as a continuation of what has been written above. In addition, I have regarded the factual matters referred to earlier, so far as they are relevant, to the circumstances set out below.
The deceased was single with no natural children. The beneficiaries are persons with whom he had a blood relationship but with whom he did not have any close relationship. None was an eligible person within the meaning of that term in the Act.
On the other hand, whilst the deceased and George had no blood relationship, by referring to George as his "step-son", the deceased appears to have regarded their relationship as akin to such a relationship.
The deceased provided George with advice, accommodation and, at times, money by way of loan. He was a surrogate father, or as he described himself, a "stepfather". These matters, amongst others, confirm George's evidence about the depth of their relationship. Over the more than 30 year relationship, they developed an affectionate, emotional, and an enduring, relationship, which only came to an end with the death of the deceased. They lived together for the last six years of the deceased's life, which also demonstrates a permanency and continuity of their friendship. It is true, however, that the deceased had no legal, or financial, obligation to George.
There was evidence that the deceased wanted to provide, on his death, for George, either partly (if his brother survived) or wholly (if his brother did not). There is no evidence at all that he wished to provide for any of the beneficiaries who are entitled by the operation of the rules of intestacy.
The fact that George does not receive any provision under the rules of intestacy does not, automatically, mean that he will have satisfied what has been said to be the jurisdictional threshold. A person may fail to satisfy the description of being "left without adequate provision" even though no, or little, provision is made for them in the deceased's Will or under the rules of intestacy.
Yet, for the last few months, George has been unable to work. His nest egg has been entirely, and wrongfully, dissipated by his son, and he now finds himself in very modest circumstances, with very little to fall back on as he ages.
The Court is required to make, and I have made, an assessment of the financial position of George, the size and nature of the deceased's estate, the relationship between George and the deceased, and the competing moral, and financial, claims of the beneficiaries, as well as the financial resources or needs of all of them: see, for example, McCosker v McCosker (1957) 97 CLR 566 at 571-572 (Dixon CJ and Williams J); [1957] HCA 82; Singer v Berghouse at 209-210 (Mason CJ, Deane and McHugh JJ); Vigolo v Bostin at [16] (Gleeson CJ), [75] (Gummow and Hayne JJ), and [112] (Callinan and Heydon JJ); and Tobin v Ezekiel at [70] (Meagher JA).
Having considered the matters I am required to consider, George has satisfied me that he has been left without adequate provision for his proper maintenance or advancement in life. The test established by s 59 of the Act has regard not only to what is "adequate" by reference to the applicant's needs, but also to what is "proper" in all the circumstances of the case.
I am also satisfied that an order for provision for him should be made. George is not in a strong financial position and he does have a need for a fund to provide him with secure accommodation and to protect him against the ordinary exigencies of life. He continues to experience some medical issues which, whilst not extinguishing his earning capacity completely, have significantly diminished his employment prospects.
The next question is what provision "ought to be made for … his, maintenance … or advancement in life", having regard to the facts known to the Court at the date of hearing. This involves "an instinctive synthesis that takes into account all the relevant factors and gives them due weight": Grey v Harrison [1997] 2 VR 359 at 367 (Callaway JA, Tadgell and Charles JJA agreeing). It is not a scientific, or arithmetic, or exact, exercise and it is often difficult to articulate the factors which contribute to that "instinctive synthesis". Indeed, it is often not susceptible of complete exposition and minds may differ as to the provision which ought to be made. However, similar considerations as are set out above often arise.
Having considered all of the matters I am required to consider, and remembering that what is "proper" requires an evaluative judgment that has regard to all relevant circumstances, not merely financial circumstances, I am satisfied that a lump sum should be provided for George out of the deceased's estate and that it should be calculated as a percentage of the net value of the estate.
I am of the view that George should receive a lump sum that equates to 45 per cent of the net value of the estate. Assuming an estimated value of $1,412,606, that equates to about $635,000. This will enable him to purchase accommodation in which to live, and depending upon how much he spends, may also provide a modest amount for exigencies of life. Proper provision means not only provision from the estate that alleviates poverty, but also takes into account the vicissitudes of life.
I have previously stated that I am satisfied that the deceased considered George's future and was concerned about the security of his accommodation.
There will then be 55 per cent of the net value of the estate to be divided between the nephews and nieces of the deceased, with each receiving 13.75 per cent, or, on present estimates, about $194,000. That will provide each with a reasonable capital sum for exigencies of life.

[24]

The Costs of the Proceedings

Counsel for George tendered two documents which contained what might be described as "Calderbank offers".
The Civil Procedure Act 2005 (NSW), s 98(1), provides that subject to the rules of Court, and that, or any other, Act, costs are in the discretion of the Court. The subsection gives the Court full power to determine by whom, to whom, and to what extent, costs are to be paid. The discretion is broad but not unconfined. It is a judicial discretion to be exercised on a principled basis.
UCPR, r 42.1, provides that costs should follow the event, unless it appears to the court that some other order should be made as to the whole, or any part, of the costs. The rule provides that the discretion to award costs will ordinarily require an order that the successful party's costs will be paid by the unsuccessful party.
The term "Calderbank offer" comes from the decision of the English Court of Appeal in Calderbank v Calderbank [1976] Fam 93. In that case, Cairns LJ (Scarman LJ and Sir Gordon Willmer agreeing) discussed various types of proceedings where offers of settlement (otherwise privileged) were admissible on the issue of costs: at 105-106. The long-standing practice emerging from that decision has led to correspondence expressed to be 'without prejudice except as to costs' being admissible on the issue of costs: G E Dal Pont, Law of Costs (4th ed, 2018, LexisNexis) at 423.
In Leichhardt Municipal Council v Green [2004] NSWCA 341, Santow JA (Bryson and Stein JJA agreeing) wrote at [14]: "... the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants."
I also note the comment made by Harper M in Johnson v MNG Investments Pty Ltd t/as Australian Temporary Fencing [2011] ACTSC 150 at [15], with which I respectfully agree, that: "Part of the rationale for the Calderbank principle is that, where there is a failure to accept a reasonable offer, the offeror will have incurred further expense, sometimes representing the costs and disbursements of many days of hearing, and would be only partially indemnified by an order for costs on a party-and-party basis. The offeror can be seen as having taken the only course available to it (or him or her) to avoid that exposure."
A Calderbank offer differs from an offer of compromise made pursuant to UCPR, r 20.26 (sometimes termed a "formal offer" or a "rules offer"). The costs consequences that flow from an offer of compromise are set out in UCPR, rr 42.13-42.17. Whereas, as Ward J (as her Honour then was) wrote in Ying v Song [2011] NSWSC 618 at [26]: "The position in relation to offers expressed to be without prejudice except as to costs (and relied upon as being in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586) differs in that the party seeking to rely on the offer must establish both that it represents a genuine compromise of the dispute and that it was unreasonable for the offeree to reject it. It is recognised that the making of a Calderbank offer is one of the circumstances in which the court may exercise its discretion under Rule 42.1 to make some order other than that costs should follow the event but that it does not automatically follow that simply because the offer was more favourable than the judgment then an indemnity costs order will be made."
Thus, a Calderbank offer will not justify an indemnity costs order unless the offer was a genuine offer and its rejection was unreasonable: Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 at [7] (Ipp JA, Mason P and McColl JA agreeing).
The reasonableness of a decision not to accept a settlement offer is not to be determined with hindsight. The strength, or otherwise, of the claim should be considered prospectively as at the time of the offer: Noon v Bondi Beach Astra Retirement Village Pty Ltd (No 2) [2010] NSWCA 285 at [11] (The Court).
The onus is on the party making a Calderbank offer to satisfy the court that it should exercise the costs discretion in that party's favour: Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [20] (The Court); Commonwealth of Australia v Gretton [2008] NSWCA 117 at [46] (Beazley JA, Mason P agreeing).
I also remember that in Sherborne Estate (No 2): Vanvalen v Neaves; Gilroy v Neaves (2005) 65 NSWLR 268 at 278 [56]-[57]; [2005] NSWSC 1003, Palmer J wrote, at [56]-[57]: "A claim under the FPA is not quantifiable by the parties' legal advisers prior to judgment with anything like the prescience possible in a claim for a liquidated sum such as a contract debt, or even in a claim for unliquidated damages for personal injury or for future economic loss. There are statutory and judicial guidelines for the range of damages appropriate for various types of personal injury; expert accountants attempt to quantify damages for future economic loss by reference to historical financial information. However, in a claim under the FPA the Court has to quantify what provision 'ought to be made' for the applicant out of the deceased's estate 'having regard to the circumstances at the time the order is made': s.7. Inevitably, that question involves a large element of subjective assessment by the Judge. Inevitably, on any particular set of facts, there would be a variety of answers given by different Judges. The decided cases offer broad parameters as to what provision 'ought to be made' in certain kinds of circumstances but there is no formula and there is no yardstick on which the degrees of measurement are not etched by the Judge's own experience of life."
As was noted (albeit in another context), in Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (in liq) (2011) 197 FCR 113 at 116-117 [9]; [2011] FCAFC 136 at [9] (Greenwood and Rares JJ): "The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party. As to the importance the community attaches to legal costs incurred of and incidental to the resolution of controversies before courts, see Clark v Commissioner of Taxation [2010] FCA 415 at [90]; Uniline Australia Ltd v S Briggs Pty Ltd (No. 2) [2009] FCA 920; (2009) 82 IPR 56 at [38]; and, Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [130] to [132]."
I refer to what I wrote in Page v Page (No 2) [2016] NSWSC 1323 at [54]-[57]: "In relation to a claim for a family provision order in which a Calderbank offer has been served, I dealt with the principles in Walsh v Walsh (No 2) [2013] NSWSC 1281, so far as they relate to reliance upon a Calderbank offer, at [39]-[56]. I shall not repeat all of what I wrote there. Essentially, a Calderbank offer does not attract the same cost consequences as a formal offer of compromise made under the UCPR. Its presence does not yield any presumption of a costs order outside the normal rules. In an appropriate case, the existence of a Calderbank offer may influence, but not govern, the exercise of discretion supporting a different order as to costs. It enables the Court to consider whether it should exercise its discretion to make a costs order other than as provided by the UCPR rule 42.1 and rule 42.2. Nor does the making of a more favourable Calderbank offer appear to be determinative of what kind of (more favourable) costs order (or order other than the usual) should be made: In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932 at [54] (Ward J, as her Honour then was). Even where it is held that a Calderbank offer should have been accepted, and the offeree achieves a result as, or less, favourable than the offer at the trial, there is no automatic consequence. What must be considered is the reasonableness of the offeree's rejection or non-acceptance of that offer, a matter to be determined having regard to the circumstances at the time that the offer fell to be considered. The question is whether, in all the circumstances, the failure to accept the offer warrants departure from the ordinary rule as to costs. In Evans v Braddock (No 2) [2015] NSWSC 518, I added, at [50]: 'To these principles, I should add that service of a Calderbank offer serves a number of purposes, including to promote settlement and also to give the offeror cost protection in the event of an unreasonable refusal by the offeree. Furthermore, "to some extent any offer of compromise or Calderbank offer is necessarily a tactical weapon. At the heart of a Calderbank offer are two factors - settlement of the case and protection on costs if the offer is ultimately regarded as reasonable. Characterisation as a tactical weapon does not necessarily defeat the efficacy or the genuineness of the offer": Zealley v Liquorland (Australia) Pty Ltd & Anor (Costs Ruling) [2015] VSC 133, per J Forrest J, at [18] and [24].'"
Counsel for George tendered what became Ex PC1 which were two pieces of correspondence sent by the solicitors for George to the solicitors for the Defendants. The first, dated 23 May 2019, made an offer to settle the proceedings for a sum of $421,000 inclusive of costs. The second, dated 16 September 2019, made an offer to settle the proceedings for a lesser sum of $350,000 inclusive of costs.
On present estimates, the amount of provision that I have determined to be adequate and proper in the circumstances (45% of the net value of the estate) is approximately $635,000. In those circumstances, the Defendants have achieved a result less favourable than that which would have been received had either of the offers made been accepted.
However, in accordance with the principles above, that does no more than render the two offers relevant to the exercise of the Court's discretion as to the costs of the proceedings. The onus lies on George to establish both that the offers were, or either of them was, genuine, and that the rejection of each, respectively, was unreasonable in the circumstances.
I am satisfied that each offer was a genuine offer intended to bring the proceedings to an end. There is no simply reason to doubt the genuineness of the offers. However, I am not satisfied that it was unreasonable for the Defendants to have rejected each of the offers as at the date it was made.
First, in considering the stage of the proceedings at which each offer was received and whether the Defendants were conversant with the issues in the case, I note that each of the offers was made before much of the evidence had been filed. In particular, each was made before evidence was filed in relation to the dissipation of George's savings by his son. The loss of some $160,000 has had a material impact on George's financial provision and, consequently, upon what has been determined to be adequate and proper provision in all the circumstances.
Secondly, neither of the offers made any mention of George vacating the Petersham property. That was a matter that would have been highly relevant to the Defendants' consideration of each of the offers. Again, the fact that, at the time of the hearing, George had vacated the Petersham property and that he lacked secure accommodation, was a matter of relevance to the result of the proceedings.
In my view each offer was in clear terms and even though the quantum of the costs incurred by George at the time the offer was made is not known, each offer could not have been regarded as an unreasonable offer. George's prospects of success, even then were reasonable, in all the circumstances of the case.
There is no basis, on the evidence, to find that each offer was made purely to justify an indemnity costs application.
However, as counsel for the Defendants submitted, the Defendants were entitled to test the evidence of George, and of any other witness, including Mr Geammal (which, ultimately, they did not do as Mr Geammal was not cross-examined). I must consider the position as at the time each offer was made and when each was open for acceptance.
In all the circumstances I was not satisfied that the Defendants' rejection of either of the two offers was unreasonable. I considered, instead, that the appropriate exercise of discretion was to make the usual costs orders.
The Court: 1. Orders that Michael Kobras be joined as the fourth Defendant to the proceedings. 2. Orders that the requirement to file an amended Summons be dispensed with. 3. Having found that the Plaintiff is an eligible person, that the proceedings were commenced within time, and that the provision made for him pursuant to the operation of the rules of intestacy is inadequate for his proper maintenance or advancement in life, orders that he receive, by way of provision, out of the estate of the deceased, a lump sum equating to 45 per cent of the net estate of the deceased. 4. Orders that no interest is to be paid on the lump sum, if it is paid within 7 days of the completion of the sale of the Petersham property; otherwise, interest calculated at the rate prescribed by s 84A(3) of the Probate and Administration Act 1898 (NSW), on unpaid legacies, is to be paid from that date until the date of payment of the lump sum. 5. Orders that the provision made for the Plaintiff should be borne by the residuary estate to the intent that each of the nieces and nephews of the deceased shall bear an equal share thereof. 6. Orders that the Plaintiff's costs, calculated, on the ordinary basis, of the proceedings, be paid out of the estate of the deceased. 7. Orders that the Defendants' costs, calculated on the indemnity basis, of the proceedings, be paid, or retained, as the case may be, out of the estate of the deceased. 8. Orders that the Exhibits be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (r 31.16A and r 33.10) and Practice Note No SC Gen 18.

Rakovich v Marszalek

At a glance

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Judgment (25 paragraphs)

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