Rootes v Slatcher and McLaughlin as Executors of the Estate of the late Derek George Slatcher

The provision sought

1. In opening written submissions, Ms Tibbey, who appeared for the Siblings, said that the Siblings "seek a notional estate order designating a half share of the property as notional estate, to be sold and the net proceeds of sale divided between the four siblings".
2. However, in oral submissions Ms Tibbey submitted that, by reason of the appreciation in value of her interest in the Property, Faith had somehow received provision from the Deceased's estate during the Deceased's lifetime and, as a consequence, the notional estate should be divided equally between the Siblings. I do not accept that submission. On any view of the facts, Faith purchased her interest in the Property, such that any appreciation in the value of that interest is attributable to that purchase and not to any provision from the Deceased.

The Deceased

1. The Deceased was a highly educated and sophisticated man. He had an honours degree in economics and postgraduate qualifications.
2. Although he was 90 when he died, and was by then physically frail, he suffered no cognitive impairment prior to his death. As recently as 19 November 2019, his general practitioner certified in writing that the Deceased was "mentally competent to manage his own affairs". No suggestion to the contrary was made on behalf of the Siblings, nor was it suggested that the Deceased's mental acuity deteriorated after 19 November 2019.

Was adequate provision not made for the Siblings?

1. During cross-examination, each of the Siblings stated that they thought that they were "entitled" to an inheritance from the Deceased. But adult children have no prima facie entitlement to an inheritance. And the law imposes no obligation on a parent to treat their children equally. The Court's jurisdiction under the Act is not enlivened by any precept of fairness. That is, looking at this case, an order for provision is not to be made merely because I might form the view that the Deceased's decision as to the disposition of the estate was unfair to the Siblings. Nor is the fact that the Siblings have shown love and affection for the Deceased itself a reason to make an order for provision; still less to assuage their hurt feelings at the decision the Deceased has made concerning disposition of his estate.
2. The only question for me is whether the Siblings have shown that inadequate provision has been made for their "proper maintenance, education or advancement in life". [1] The only order that can be made is one necessary to deal with that demonstrated inadequacy.
3. That involves an evaluative consideration of all the circumstances, including the applicant's financial position, the size and nature of the deceased's estate and the totality of the relationship between the applicant and the deceased [2] and the other matters set out in s 60 of the Act. [3] The Court must be guided by its perception of "prevailing community standards of what is right and appropriate". [4]
4. There is no suggestion of any estrangement between the Siblings and the Deceased. Each had a close and loving relationship with him. There is no suggestion of any behaviour of the Siblings so far as concerns the Deceased that could be the subject of any criticism, save for one incident in 2019 involving Emma, the details of which I find unnecessary to recount. Each of the Siblings contributed to the Deceased's care from time to time.
5. The Deceased lived with Faith, and her daughter, Bethany Downing, from the time of the purchase of the Property in 2009 until he died. The primary burden of caring for the Deceased thus fell to Faith and Bethany. The Siblings offer criticisms of some aspects of that care and of the access that Faith and Bethany permitted the Siblings to have with the Deceased in his latter years; including Faith's decision to install cameras at the front door and internally in the Property. Those matters were put to Faith and Bethany in cross-examination. The suggestions were firmly rejected. There may be some truth in some of them, but the fact remains that for the last 12 years of his life, the Deceased was primarily cared for by Faith and Bethany.
6. Much of the cross-examination of Faith and Bethany was devoted to enquiry as to the use made by them of monies withdrawn from the Deceased's bank accounts during the period from 2009 to 2021. Each of Faith and Bethany gave responses to those questions rejecting the impropriety that was implicit in the questions. There is no evidence to contradict those responses, and I accept them. To the extent that analysis of the bank statements revealed spending that may have directly or indirectly benefited Faith or Bethany, that is consistent with the Deceased sharing a household with them and reflects the close relationship, marked by interdependence, between the Deceased and Faith.
7. It was not in terms suggested to either Faith or Bethany that they had acted improperly nor, in the case of Faith, in breach of her obligations arising from an Appointment of Enduring Guardian or Enduring Power of Attorney that the Deceased executed on 7 February 2020, [5] although this was the implication of the questions asked in cross-examination. The distinct impression I gained from the cross-examination was that it was being used somehow to ventilate and vindicate intra-family resentments arising from the decision that the Deceased made to enter into a joint tenancy with Faith in relation to the Property.
8. I turn to the circumstances of each of the Siblings. This summary is taken in large part from the submissions of Ms Muscat, who appeared for Faith. There was no dispute about these matters.

Sarah's claim

1. Sarah is now aged 58.
2. Sarah is married to Tim, who is aged 61. They do not have any dependent children.
3. Sarah and Tim each have some identified health issues, although the evidence in relation to those is expressed in general terms.
4. Sarah and Tim each work full-time. They each intend to work until they turn 67. Their combined annual gross income was in the order of $238,000 in the financial year ending 30 June 2021. Sarah estimated that her and Tim's annual expenditure is in the order of $113,000, considerably less than their combined income.
5. Each of Sarah and Tim is accumulating superannuation, although Sarah's is relatively modest and is in the order of $51,000, and Tim's more modest still.
6. Sarah and Tim own their home. Sarah estimates its value is $1.2 million. The property is encumbered by a mortgage in the order of $670,000.
7. Sarah and Tim own a number of vehicles and some listed shares with a combined value of approximately $60,000.
8. Sarah's only identified financial need is referable to repayment of the mortgage.

Jeremy's claim

1. Jeremy is 59.
2. He is married to Sue who is 75. They are both in good health.
3. Jeremy works as a nurse. He has a net monthly income of around $6,600.
4. Sue is retired and no longer earns an income. Jeremy's and Sue's expenses are estimated to be in the order of $5,600 per month.
5. Jeremy has a superannuation entitlement in the order of $424,000 as at 31 December 2021.
6. Jeremy and Sue own their home. Jeremy estimates that the home is valued at $560,000. There is a mortgage of about $278,500.
7. Jeremy and Sue own three vehicles with a combined value in the order of $61,000.
8. Like Sarah, Jeremy's only identified financial need relates to repayment of the mortgage.

Emma's claim

1. Emma is 52.
2. Like Sarah, Emma has some health concerns, which have been described in the evidence in a general way.
3. Emma is married to Garry who is 51. They have three children; a son aged nearly 21 and twin daughters aged 17.
4. Emma and Garry are both working. Their combined gross income is about $200,000 per year. Their annual expenditure is disclosed as about $124,000 per year.
5. Emma and Garry own a home said to be worth around $1 million. They also own a number of vehicles.
6. Emma and Garry have significant superannuation entitlement. As at 30 June 2021, Emma had accumulated superannuation in the order of $759,000 and Garry in the order of $451,000, a combined total of more than $1.2 million. That is likely to have increased since then.
7. Emma and Garry have debts in the vicinity of $649,000, primarily a mortgage debt secured over their home.
8. Emma characterises her needs by reference to repayment of that debt and some expenses in relation to the children.

Generally

1. Thus, each of the Siblings is an independent adult in full employment. Each is married and, with their spouse, a homeowner. Each of those homes is encumbered by a mortgage to approximately half the value of the homes. But each of the Siblings has above average earning capacity and has income exceeding outgoings. Jeremy and Emma have significant superannuation entitlements.
2. Each asserts a "need" to pay down some of their mortgage debt (Emma also points to some expenses relating to dependent children) but none asserts an inability presently to service and ultimately to retire such debt. None asserts that any possible provision from the notional estate of the Deceased could retire their debt completely.

Conclusion

1. In effect, each of the Siblings has received no provision from the Deceased's estate.
2. Nonetheless, in the circumstances I have outlined, I am not persuaded that adequate provision has not been made. The jurisdiction under the Act should be seen as a needs-based jurisdiction, as s 59 of the Act directs attention to any inadequacy of provision for, relevantly in this case, the proper maintenance and advancement in life of the applicants for provision. Although each of the Siblings would obviously benefit from receiving a provision which would enable them to pay down their mortgage debts, I am not persuaded that it follows from the Deceased's failure to structure his testamentary affairs that he has thereby made inadequate provision.
3. Further, as emerges from the matters I set out below concerning the Deceased's acquisition of the Property as joint tenant with Faith, and his later consideration, following the Siblings' reaction to revelation of the joint tenancy, to the possibility of its severance, the Deceased gave due and careful consideration to the Siblings' claim on his estate, and chose to maintain the joint tenancy; fully aware of its consequences. The making of the provision sought by the Siblings would subvert the Deceased's expressed wishes about that matter.
4. It is, in any event, relevant to consider Faith's competing claim. Faith does not have to justify her position. The Deceased decided to enter into a joint tenancy with Faith in respect of the Property. But I consider that Faith does have a strong competing claim. She had a close and loving relationship with the Deceased. She provided considerable care and support to him, especially since 2009. The Property is her home. It may be that, as a five-bedroom property, it is more than she needs. But it has been her home for almost 14 years. It is true that Faith has a significant income from the Department of Communities and Justice and stands to receive a substantial superannuation payout on her retirement. However, she also has significant debts, and no savings. Unlike the Siblings, she is unpartnered.
5. Whether or not, as Ms Tibbey submitted, Faith's "apparent inability to save" is something that "lies at her own feet", the fact remains that were I to order provision for the Siblings as they contend, it could only come from the notional estate, and it seems inevitable that Faith would have to sell the Property. It was put to Faith in cross-examination that she has sufficient income to borrow funds necessary to make the provision sought. However, Faith rejected that proposition and there is no evidence to prove otherwise.
6. For those reasons my conclusion is that the Siblings' claims fail at the threshold. They have not shown that the provision made for them is not adequate.
7. However, as considerable attention was given at the hearing to the question to whether, assuming the Siblings have established inadequate provision, a notional estate order should be made, l will now turn to that question.

The acquisition of the Property

1. As the only notional estate could be the Deceased's former interest as a joint tenant in the Property, I will recount the circumstances in which that interest was created, and the events that occurred once Sarah, Jeremy and Emma became aware of its implications so far as they were concerned.
2. The Deceased and Faith purchased the Property for $529,000 and became registered proprietors of the Property as joint tenants following registration of the transfer dated 15 December 2009.
3. As I have said, the Deceased paid half of the purchase price from the proceeds of a property in Bathurst that he then owned as joint tenant with his late wife. Those proceeds were in the order of $320,000 and it seems clear the Deceased could not have afforded to purchase the Property alone. The Deceased was then on a single pension and was struggling financially.
4. Faith funded her interest in the Property with borrowings secured by a mortgage from ING Bank (Australia) Limited, in the names of both joint tenants. Faith and the Deceased agreed that Faith would make all payments under the mortgage, which she did. Faith has also paid all utilities, expenses, and home insurance on the Property, as well as some $19,000 on repairs to the Property.
5. The original mortgage was for $300,000. The amount now owing is in the vicinity of $241,000. There is also a second mortgage under which some $54,000 is owing.
6. As I have said, from the time of purchase of the Property until his death, the Deceased occupied the Property with Faith and Bethany.
7. Neither the Siblings nor Faith adduced evidence of a formal valuation of the Property. The Siblings rely on five "drive by" assessments by local real estate agents who opine the property would sell for something between $1.1 and $1.2 million. Faith relies on a "walk through" appraisal by another real estate agent who opines the Property is worth $950,000 and who notes that "the premises is only in fair condition and considerable expense is required to bring it up to a reasonably acceptable standard". Assuming the true value is somewhere between these figures, and that were the Property to be sold, the net proceeds, after payment of agent's commission and legal costs, were in the order of $1 million, the value of the notional estate is in the order of $500,000.

The creation of the joint tenancy

1. Faith gave evidence that in December 2009, she attended with the Deceased on a solicitor at Wollongong Conveyancing Services, Mr Stephen Dawson, to give Mr Dawson instructions concerning the purchase by the Deceased and Faith of the Property.
2. Faith gave this evidence as to what happened on that occasion: "[Mr Dawson] asked us how we were purchasing it, and I'm not sure which one of us said it first and the other one confirmed it: 'We're purchasing as joint tenants.' … He asked us if my mum's name was going to be on the property and we - Dad said no, he didn't want Mum's name on the property; he wanted it to be just us two, because my mum was in a nursing [home [6] ] in end stage dementia. So he then said, 'Do you understand what a joint tenancy is?' … … He specifically directed it at Dad, I think because Dad was the older person; I'm not sure. And Dad said, 'Yes. I've' - he - 'I've purchased numerous properties. I know exactly what it means.' … I think Mr Dawson said that, 'It would revert directly to your daughter in that case', and my dad said, 'Yes, I understand that.' He then said to my dad … 'I want you to go and get financial advice prior to the purchase and prior to me proceeding with this. I want you to go and get independent advice', and I said, 'I don't have a problem with that' … He was a bit irritated by it, my father. Dad said to me afterwards, 'Does he think I don't know what I'm doing?' and - but I said, 'Just go, Dad. Just go and get the advice.' So Dad went to … Terry Cross Financial Services … So he went and got advice, independent advice, and then he came back and - yeah, we went ahead with it as a joint tenancy."
3. I see no reason why I should not accept this evidence. It is consistent with evidence that the Deceased had hitherto owned properties as joint tenant with his late wife. It shows that he intended to create a joint tenancy with Faith, and understood that, if he died first, his interest in the Property would pass by survivorship to Faith.
4. This is confirmed by evidence that Jeremy gave of a conversation with the Deceased a short time later in which the Deceased said that the reason he had decided to buy the Property together with Faith was that "Faith has nothing in her name" and that "they were going to buy a property together" and that "he was concerned about her future".
5. Jeremy said that he said to the Deceased: "It will be better if you bought on your own. Faith is fine. She is earning a good wage and she will recover financially from the marital breakdown."
6. In cross-examination, Jeremy said: "My concern was that he was concerned for her financial welfare, and I put it to him that she would be fine. She is permanently employed and she's on a good wage and she will be able to get a property herself further down the track … without sharing with him … I felt that he would be fine on a property on his own, a small property of his own, yeah. Because at that time, he could manage okay. He was fine in 2010."
7. Nonetheless, the Deceased adhered to the joint tenancy.
8. The Siblings make no application to impugn this transaction. They make no suggestion of undue influence or any other matter that might cast doubt on the legal effect of the creation of the joint tenancy.
9. There was a dispute in the evidence as to when the Siblings became aware of the joint tenancy.
10. I do not find it necessary to come to a final conclusion about this as it is clear that, by 2019, when relations between Faith and the Siblings were becoming strained, Jeremy came to know of the joint tenancy.
11. That is because he took it upon himself, without consultation with the Deceased, to contact the Deceased's solicitor as he "wanted direction on where we stood".
12. Jeremy said that this followed an occasion when "Faith was not happy for us to go into the house" and when Faith had said: "If you go in there, the police will be called. Even after our father's death, you won't be able to come in. I'll go through the house and I will leave outside all the furniture and effects that have to be shared between you all."
13. Jeremy said that after he spoke to the solicitor, he had a conversation with the Deceased as follows: "[Jeremy]: I've spoken to lawyers about the property situation because of Faith's reluctance to let us into the house. When you have passed on, this property will all go to Faith, excluding me and my sisters. [The Deceased]: No, that couldn't be right. [Jeremy]: Well it is right, because the house is owned by you and Faith as joint tenants, not tenants in common. It will pass automatically to Faith, not to all of us. I've spoken to the solicitor and that is what he has told me. [The Deceased]: No, that wouldn't be right, I've got to go now."
14. It cannot be known why the Deceased responded to Jeremy's statement by saying it "couldn't be right" that the Property "will all go to Faith" after he had "passed on", although the Deceased's reported statement that "I've got to go now" might suggest he was seeking to avoid a confrontation with his son.
15. The Deceased was clearly irritated that Jeremy had made contact with his solicitor. Thus, Jeremy said that a short time later the Deceased telephoned him and they had this conversation: "[The Deceased]: You shouldn't have rung the lawyer, causing all that trouble. [Jeremy]: No, we needed to know where we stood Dad. [The Deceased]: I'll get that fixed so you won't have to worry about it. I'll talk to Faith and it will be fixed."
16. Jeremy said that on another occasion the Deceased rang him and said, "Faith has said everything's sorted".
17. At about the same time, Sarah said that the Deceased said to her: "Don't worry about the house, Faith has promised she will share the estate out properly when I die. Faith will do the right thing. She will make sure you all get your share. Don't worry about it. She's promised me."
18. The Deceased's reported statements that Faith had said "it will be fixed" or "sorted" and that she would "do the right thing" is consistent with Faith's evidence of her intentions at that time.
19. Thus, Faith gave evidence that she told Emma that she and the Deceased had purchased the Property as joint tenants. Faith said that Emma asked "what does that mean" and Faith replied, "it means that it won't be part of the estate when Dad dies, it will automatically revert to my name".
20. Faith said that the following conversation ensued: "[Emma]: When Dad goes, you know, we'll decide what happens with the house. [Faith]: Well actually, I will decide because it's a joint tenancy and it will revert to mine alone. [Emma]: Well, you would need to pay us out some money. [Faith]: I understand that, but I would need at least six months to organise my finances. [Emma]: Oh, yeah, I could give you six months."
21. Similarly, Faith said, she thought in about 2017, that she told Jeremy that she and the Deceased had purchased the Property as joint tenants and that she told Jeremy: "… when anything happens to Dad, it will revert to my name and then we can talk about what happens after that."
22. Further, in November 2019, shortly after Jeremy had been told that the Deceased and Faith held the Property as joint tenants, Emma and Faith had this SMS exchange: "[Emma]: You have stolen our inheritances - omg where is your integrity - you had me fooled - I never thought you would be like that." [Faith]: Actually I haven't at any time done that nor do I intend to. [Emma]: Legally you have and you know it - I feel sick about it. [Emma]: I trusted you. [Faith]: If you had listened since day dot the legal aspects were explained to you ... It's all about Dad to me. Now leave me alone. I would never take what isn't mine. I will go to a solicitor and get a legal agreement drawn up and you can have copies. Then you can have the money after his death and stop harassing Dad. You are making his life a misery arguing over money and he is not even dead. You will always be welcome to see him but don't expect me to forget what you have done to him. I would always have paid you, ask anyone, I have discussed the payout for years even my financial planner can tell you my future plan has all been premised around that extra debt. Thanks for the trust don't judge others by yourselves." (Emphasis added.)
23. At around that time, Faith made the following Facebook post: "I have been accused of some very nasty things on Facebook today. Let's make it clear I have never had any intention of taking anything from anyone and if they had bothered to listen they have had this explained again and again and again. I would and will always equally share my father's estate despite the absolute vicious and vindictive nature of the posts today. I have always had and will have integrity. I don't want what isn't mine and I have never wanted arguments over money it just is not worth it and at the moment all it is doing is hurting Dad terribly. Hey guys, he is still alive you know and mentally competent, well aware of what you are doing. I will be glad to give you the money I would really like to shove it down your nasty throats but will refrain. When you have it you will not be one bit happier because money does not create happiness particularly for those so obsessed with it. Next time someone is explaining how something is going to work try listening." (Emphasis added.)
24. The passages I have emphasised show, as Faith accepted in her evidence, that at this stage, she was intending to make some informal provision for the Siblings after the Deceased's death. As I discuss below, for reasons Faith explained, she changed her mind about this.
25. On 20 December 2019, Faith and the Deceased met at the Property with another solicitor, Mr James Isabella, from the firm Williamson Isabella Lawyers in Dapto.
26. That meeting was evidently prompted by the following conversation between Faith and the Deceased. Faith placed this conversation as having occurred in February 2020, but its contents suggest that it occurred prior to 20 December 2019.
27. The conversation was as follows: "[Faith]: If you want your children and grandchildren back around, you could split our joint tenancy. [The Deceased]: That would not be fair. You have more than repaid my contribution to the house through your financial support and the physical care you and Bethany have provided me. This home is mine, yours and Bethany's. [Faith]: Do you want to see a solicitor to discuss it, or change the title? If you want, I can have one come to the house? [The Deceased]: No, I do not want to change the title. However, I do want a new power of attorney and medical guardianship done up. I am worried about your siblings stepping in and overruling me about what I want."
28. This appears to be inconsistent with a statement that Sarah attributed to the Deceased at around this time that "I'm going to go to the solicitor and change the joint tenancy". Again, it cannot be known why the Deceased may have said this to Sarah.
29. It appears from a manuscript file note produced by Mr Isabella on subpoena, and from a more complete note Mr Isabella made at a later meeting on 7 February 2020 and to which I will return, that on 20 December 2019 the Deceased gave Mr Isabella instructions for a new will pursuant to which Faith would ultimately receive a 70% interest in the Property and have an option to purchase the remaining 30%.
30. It also appears from Mr Isabella's manuscript notes that the Deceased instructed Mr Isabella to prepare a revocation of an existing Power of Attorney in favour of the Siblings and Faith and to prepare a "New P/A".
31. Faith and the Deceased had a further meeting with Mr Isabella on 7 February 2020.
32. On that occasion, the Deceased executed the revocation of the earlier Power of Attorney and the Enduring Power of Attorney in favour of Faith and, as her substitute, Bethany, foreshadowed at the 20 December 2019 meeting. The Deceased also executed an Appointment of Enduring Guardian in favour of Faith. Those documents had been prepared by Mr Isabella, evidently from instructions received at the meeting on 20 December 2019.
33. On 7 February 2020, there was also discussion about the draft will that Mr Isabella had prepared arising from his meeting with the Deceased and Faith on 20 December 2019.
34. Faith gave this evidence about what occurred at the meeting: "I said to the solicitor that I was concerned because of the family dispute and the fact that my father was having no contact with my siblings. I said, you know, 'It's upsetting for him. They want him to sever the tenancy. I'm happy for that to happen if that's what it takes to end the family dispute and for him to have that contact that he wanted.' He discussed it with my Dad. He said, you know, 'Is this what you want?' and my Dad said, 'I'm worried about Faith', and I said to him, 'Don't worry about me, Dad. I'm worried about you. I'm worried about the fact that they're not contacting you, how much it's upsetting you'. And then he talked - the solicitor said, you know, 'It's a joint tenancy so that means that it would revert to Faith automatically upon your death. That's why, if you wanted to leave it to anyone else you would have to sever the tenancy', so he made that very clear to Dad. I said, 'I'm fine if that's what you want to do, Dad'. Dad said, 'I'm worried about you.' I said, 'Well, you could leave me a bit more of your half if we sever it, if that's what you want to do, Dad'. I said - he goes, 'I want it to be' - you know, 'I want it to be fair', and I said, 'Okay. How about 20% to me and 10% each to them, so that would give an overall - I would end up with 70% of the property and they would end up with 30% of the property", and my dad just clammed up. He literally clammed up about that time and he just didn't want to discuss it. He didn't want to speak about it. And the solicitor said, 'Well, we'll leave it at that", because Dad wouldn't talk. He didn't want to talk about it. And then we discussed it further when we got home."
35. Mr Isabella made an extensive note of the 7 February 2020 meeting as follows: "I attended Mr Slatcher when he called in to sign his Will, Power of Attorney and Deed of Guardianship. He read through the Power of Attorney and Deed of Guardianship and confirmed that he was happy with those documents. I asked him if he knew what a Power of Attorney was and he was able to explain that it was a document that gave someone power to make financial decisions on his behalf. I then asked him about a Deed of Guardianship he said someone can look after me and make my medical decisions if I am not able to. I then asked him who he wanted as his attorney and guardian and he said 'Faith' and if she could not do it who would it be? He said 'Bethany'. I was satisfied that he understood what the documents were and they were then signed. As far as the Will was concerned he was able to read it but he seemed a bit vague. In view of the change in the Will from his previous Will and the fact that the Will as it stood could not operate for the gift to Faith to take effect until such time as he transferred part of his share in the property (after the joint tenancy was severed) there was not much point signing this Will and I indicated that I would prefer that he got a Doctor's Certificate confirming that he was capable of fully understanding what the Will was all about and he saw an independent Lawyer. I suggested he see Adrian Daly … to give instructions to Mr Daly who would then confirm them with me. As it presently stands, the property is held as 'joint tenants' with Faith and he understands that upon his death it will go to Faith. Faith was also present for some time when I initially saw Mr Slatcher, however she then left the room, and he was able to explain to me that she had paid a lot of money towards the property, rates etc and as such he felt that she should have a share of his share in the jointly held property which is the principle place of residence for both Mr Slatcher and Faith. Faith is also caring for him. I confirmed with Faith that her father has to be quite clear that he wants to sever the 'joint tenancy' to give her a share of his share in the property so that Faith would have 70% and he would have 30% and then that 30% is subject to an option to purchase by Faith as set out in the Will which he did not sign today. Once he has seen Mr Daly and instructions are confirmed independently, we will proceed to sever the 'joint tenancy' and effect the transfer. In the meantime, the present Will is to stand. It was also explained to Faith about 'notional estate' and she understood this concept although as we discussed she could argue that it could be said that she received part of her father's share in the property now while he is still alive for no consideration in view of the things she had done for her father, e.g. looking after him and all the moneys she has expended on the property over the years."
36. Mr Isabella's note is likely to be a more accurate summary of what occurred at this meeting than Faith's recollection given in evidence. However, Faith's recollection of the meeting, and her conversation with the Deceased as set out at [95] above, suggest that she was encouraging the Deceased to consider severing the joint tenancy. As I discuss below, ultimately, the Deceased decided not to follow this course.
37. I draw these conclusions from Mr Isabella's file note: 1. Mr Isabella was satisfied that the Deceased understood the effect of the proposed Appointment of Enduring Guardian and Enduring Power of Attorney and that it was in order for the Deceased to execute the documents (a matter about which there is no dispute in the proceedings); 2. there was discussion about the draft will that Mr Isabella had prepared following the 20 December 2019 conference; 3. although that draft will is not in evidence, it evidently proceeded on the basis that the joint tenancy in the Property be severed with the result that Faith acquire a 70% interest in the Property and have an option to purchase for value the balance of 30%; such that the 30% would either remain as the estate or, if Faith exercised the option such exercise would generate funds equal to that 30% which funds would become part of the estate; 4. Mr Isabella advised that, in order to give effect to the proposed will, it would be necessary for the Deceased to sever the joint tenancy in the Property; 5. Mr Isabella advised that the Deceased should get independent advice from the solicitor Mr Adrian Daly about that matter; 6. but that Mr Isabella advised that if nothing further was done, the Property would remain held as a joint tenancy so that, as the Deceased understood, "it will go to Faith" and the current will would stand.
38. Faith's evidence suggests that she may have made an alternative suggestion that the joint tenancy be severed so that, on the Deceased's death, she acquire a further 20% interest in the Property to make a total interest of 70%, and that each of Sarah, Jeremy and Emma acquire a 10% interest. On the other hand, it may be that Faith has misremembered the detail of the conversation and that all that was discussed was the proposed new will. It is not possible to be certain about this as Faith was not asked any questions about what appears to have been the contents of the proposed new will.
39. In any event, the matter went no further. The Deceased did not execute the proposed new will, nor take any step to sever the joint tenancy in the Property.
40. The evidence suggests that this was because the Deceased made a conscious decision not to take either of these steps. That is evident from the conversation the Deceased had with Faith prior to the 7 February 2020 meeting with Mr Isabella which I have set out at [95] above.
41. It is also evident from the statements made by the Deceased to Faith following the meeting.
42. Faith said that the Deceased later said to her "I am worried about that option". Faith said she understood that the Deceased was referring to the "option" as severing the joint tenancy and making provision for the Deceased's interests in the property to be divided between siblings on the 10:10:10:20 basis that Faith may have suggested. Faith said that the Deceased said: "I don't want to do it in an even split". Although the transcript records that Faith here deposed that the Deceased said he did not want an "even split", it is likely that he said he did not want the "uneven" split that Faith was suggesting for his consideration.
43. Faith also said that the Deceased then said, concerning the Power of Attorney, that "I feel a lot safer now".
44. Faith also gave this evidence: "Over the days following seeing the solicitor, on several occasions, I asked Dad why he did not want to talk further about severing the joint tenancy. On one of those occasions, he said 'I don't want to sever the tenancy. To give them [the Siblings] those shares in the property was not my suggestion. I do not want to give them any share at all. They [the Siblings] want money more than me."
45. It was in these circumstances that Faith reconsidered whether she should reach some accommodation with the Siblings about passing on to them some benefit following the death of the Deceased. In answer to a question from me as to "what changed", Faith gave this evidence: "What's changed is, I didn't want to argue about money. I didn't want to have a family mass row. I wasn't concerned about what was fair to me, I was only concerned about not having a family argument, but it's happened anyway, and Dad was the one that changed me. Dad turned around and said, 'You're being grossly unfair to yourself. You've done all of this for me, and you're going to give away your home, you're going to lose your home, and they all have their own homes.' And he was right."
46. Ms Tibbey asked Faith no questions arising from that evidence. I see no reason not to accept it. The words Faith attributed to the Deceased are consistent with the established facts that both Faith and Mr Isabella raised the possibility of the Deceased severing the joint tenancy in relation to the Property and that, despite this, the Deceased did not and, I would infer, decided not to do so.
47. Faith also deposed that: "Dad often also expressed concern that my siblings would make life difficult for me when he died. A few weeks before he died, there was an occasion where Dad was sitting in his chair and I was next to him sitting on his walker when he grabbed my hand and said to me, 'It's your home, yours and Bethany's, and I want you to have your home'."
48. Emma said that she had this conversation with her father "fairly close in time" to his death: "[Emma]: You know she's stolen our inheritance. [The Deceased]: No, she won't do that, she'll make sure everyone will get their fair share. It's all in the will. [Emma]: It doesn't matter what's in the will, it's in joint tenancy. [The Deceased]: No, she won't do that."
49. Once again, it cannot be known why the Deceased would have said this to Emma. It is obviously inconsistent with what he said to Faith. It may be that, faced with Emma's assertion about Faith stealing the Siblings' inheritance, the Deceased was seeking to deflect matters and appease Emma.

Notional estate

1. As I have concluded that the Siblings have not established that adequate provision was not made for them by the Deceased, the question of whether I should make a notional estate order does not arise.
2. However, had I been satisfied that adequate provision had not been made by the Deceased for the Siblings, I would not have been persuaded to make a notional estate order.
3. The Court approaches applications for a notional estate order with circumspection.
4. That reflects the provisions of s 87 of the Act: "87 General matters that must be considered by Court The Court must not make a notional estate order unless it has considered the following - (a) the importance of not interfering with reasonable expectations in relation to property, (b) the substantial justice and merits involved in making or refusing to make the order, (c) any other matter it considers relevant in the circumstances."
5. That section operates as a constraint on the making of a notional estate order.
6. Section 87(a) provides that the Court must not make a notional estate order unless it has considered "the importance of not interfering with reasonable expectations in relation to property".
7. As has often been observed, the section does not specify whose "reasonable expectations" are to be considered.
8. Untutored by authority, I would find it hard to see how the provision in s 87 could be seen as being directed to the "reasonable expectations" of an applicant for provision. That is because the legislative exhortation in s 87 only arises for consideration once the Court has concluded that adequate provision has not been made for the applicant for provision; in which case it is hard to see how any "reasonable expectations" of the applicant could continue to be relevant. Nor can I see how the "reasonable expectations" of the testator could be relevant.
9. This is the view expressed by Basten JA (as his Honour then was) in Phillips v James [7] as follows: "While it remains true that the section … is silent as to whose 'reasonable expectations' must be considered, the requirement is a constraint on the making of a notional estate order. It is not sensibly construed as referring to the reasonable expectations of the applicant who wants a share of, but does not own, the property. Nor does it sensibly refer to the expectations of the deceased person, because the court must already have determined that an adjustment in the distribution effected by the will was appropriate: s 89(2). Since a notional estate order will only be made in relation to property which never was, or no longer is, part of the estate, it is unlikely to refer to the expectations of any person other than the person who is the present holder of an interest in the property." [8]
10. In Phillips v James, Beazley P (as her Excellency then was, and with whom Meagher JA agreed) cited with approval [9] the judgment of Ward J (as the President then was) in John v John [10] in which her Honour cited with approval [11] an earlier decision of McLaughlin M in Petschelt v Petschelt [12] expressing a wider view. [13]
11. Were it necessary for me to express a view about this matter, I would, for the reasons set out at [124] above, favour the view expressed by Basten JA.
12. It is not, however, necessary for me to express a concluded view about this because I find it clear that Faith has, in the circumstances I have outlined, a reasonable expectation of maintaining her interest as the surviving joint tenant of the Property and that this, alone, is a decisive reason not to make a notional estate order.
13. Further, the circumstances I have set out show that the substantial justice and merits of the case compel the conclusion that Faith should retain her interest in the Property.
14. As I have said, Faith has lived in the Property since 2009. She there cared for the Deceased. She has made the Property her home, a fact that the Deceased, for understandable reasons, considered to be of great importance. [14]
15. That this was the Deceased's view is confirmed by Bethany's evidence that the Deceased said to her, on a number of occasions, "this is your home, I hope you will be able to raise your own family here one day too" and of the Deceased making general comments referring to the Property as "our house" and "our home".
16. The fact that Faith made what might be described as representations to the Siblings as to making some compensatory provision from her own resources is, I accept, a matter that could be taken into account in assessing the substantial justice and merits involved in the making or refusing of a notional estate order. But Faith has given an explanation for her change of heart about that matter that I see as being reasonable. Further, the Siblings have not asserted any detrimental reliance on anything that Faith said in that regard. In any event, such weight as should be given to Faith having made those statements is outweighed by the other matters to which I have referred and by the fact that the making of a notional estate order of the kind sought by the Siblings would subvert the Deceased's express wishes as to how he wished his estate to be dealt with.
17. For completeness, I record that had I been persuaded to make an order for provision in favour of the Siblings, it would only come from the notional estate that, as I have said, was in the order of $500,000. In that event, it is likely that the Siblings' costs, and certainly that Faith's costs, would first be paid from the notional estate, leaving some $300,000 to be divided equally between the Deceased's four children: $75,000 each. That is what was at stake here.

Conclusion

1. For these reasons I propose to dismiss the plaintiffs' claims.
2. I will now hear submissions as to costs.

Endnotes

1. Section 59(1)(c) of the Act.
2. Sgro v Thompson [2017] NSWCA 326 at [86] (White JA, McColl and Payne JJA agreeing), cited with approval in Tarbes v Taleb [2023] NSWSC 565 at [211] (Meek J).
3. See especially s 60(2)(d): "the financial resources (including earning capacity) and financial needs, both present and future, of the applicant … or of any beneficiary of the deceased person's estate".
4. Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [16] (Allsop P, as his Honour then was).
5. To which I return at [98]ff below.
6. The transcript reads "room", but this is clearly an error.
7. (2014) 85 NSWLR 619; [2014] NSWCA 4.
8. At [125].
9. At [105].
10. [2010] NSWSC 937.
11. At [118].
12. [2002] NSWSC 706.
13. At [68].
14. See [113] above. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 July 2023