Russell v Quinton

Supreme Court of NSW|2000-03-08|Before: Bergin J, Young J, Bryson J, Mr P

CITATION : Russell v Quinton [2000] NSWSC 322 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2487/99 HEARING DATE(S) : 6, 7, and 8 March 2000 JUDGMENT DATE : 17 April 2000

PARTIES : Kaye Lorraine Russell (Plaintiff/Cross defendant) Luke William Quinton (Defendant/Cross claimant) JUDGMENT OF : Bergin J

COUNSEL : P Hallen SC (Plaintiff) D Studdy (Defendant) SOLICITORS : Conway MacCallum (Plaintiff) Lane & Lane (Defendant) CATCHWORDS : Application for approval of release pursuant to s.31 Family Provision Act 1982 - Whether prudent, fair and reasonable in all the circumstances in which independent legal advice given - Application for provision pursuant to s.7 Family Provision Act 1982 - De facto relationship for 21 years in which plaintiff in full time employment and with separate financial affairs. LEGISLATION CITED : Family Provision Act 1982. Luciana v Rosenblum (1985) 2 NSWLR 65 at 69; Singer v Berghouse (1994) 181 CLR 201 at 208-209; CASES CITED : White v Barron (1980) 144 CLR 431; Golosky v Golosky (unreported Court of Appeal 5.10.93); Anasson & ors v Phillips (unreported Supreme Court of NSW 4.5.1988 Young J). DECISION : Application for approval of release rejected. Cross claim dismissed. Order for further provision.

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2487/99 - KAYE LORRAINE RUSSELL v LUKE WILLIAM QUINTON

1 This is an application by the plaintiff, Kaye Lorraine Russell, for an order pursuant to s 7 of the Family Provision Act 1982 (the Act), that provision be made for her maintenance and advancement in life out of the estate or notional estate, or both, of William Edward Quinton, late of 9/48A Queenscliff Road, Queenscliff in the State of New South Wales, (the deceased) in addition to the provisions made for her in the last will and testament of the deceased dated 27 April 1994. 2 By Cross Claim the defendant Luke William Quinton, the executor of the deceased's estate and son of the deceased, seeks an order pursuant to s 31 of the Act that the Court approve the plaintiff's release of her right to bring this action given in a Deed dated 10 October 1984 (the Cohabitation Deed). 3 The deceased was born on 1 April 1934 and died on 18 July 1998. Probate of the deceased's will was granted on 16 February 1999 and the plaintiff commenced the proceedings on 26 May 1999. 4 The matter was expedited by Bryson J on 24 September 1999 and heard by me on 6, 7 and 8 March 2000 when I reserved my judgment. Mr P. Hallen SC appeared for the plaintiff/cross defendant and Mr Studdy, of counsel, appeared for the defendant/cross claimant. 5 The deceased made the following provision for the plaintiff in his will made on 27 April 1994; 4. I GIVE my home unit premises situate at and known as 9/48A Queenscliff Road, Queenscliff to my Executor TO PERMIT my de facto spouse KAY LORRAINE RUSSELL to reside therein for a period of 12 months from the date of my death or for such lesser period of time as she wishes PROVIDED THAT she pays the rates and taxes levied on the home unit and keeps it in repair to my Executor's satisfaction AND when my said de facto spouse ceases to live in the said home unit it shall form part of the residue of my estate. 5. I GIVE: (a) To the said KAY LORRAINE RUSSELL the sum of $200,000. 6 Apart from three other gifts to relatives and a close friend totalling $20,000 the residue of the estate was given to the defendant. At the date of the hearing the total value of the residue of the estate, comprising three parcels of real estate, moneys from two bank accounts and rental from two of the properties was approximately $2.1 million.

The plaintiff and the deceased 7 The existence of a de facto relationship between the plaintiff and the deceased was in issue until the afternoon of the first day of the hearing when the defendant made the concession that the plaintiff and the deceased were living in a de facto relationship from 1977 to the date of the deceased's death. 8 In 1976 the plaintiff, then aged 30 years, was introduced to the deceased, then aged 40 years. Their relationship developed and in 1977 they commenced living together in the deceased's home at 32 Fitzroy Avenue, Birchgrove (the Birchgrove property). The deceased had been previously married and was by then divorced. The defendant in these proceedings is the only son of that previous marriage. 9 In 1977 the plaintiff was employed as a barmaid at the Evening Star Hotel. It is not clear what the defendant's occupation was at that time. The plaintiff claimed that the deceased "kept his occupation, his place of work and his earnings completely secret from me". The defendant said that his father had a private investigator's business but no detail as to the time during which he operated such a business or its location was provided. At some stage the deceased apparently owned a taxi plate which was subsequently sold. 10 During the late 1970s the plaintiff and the deceased went on a number of holidays together and on one occasion took the defendant on a skiing holiday to Thredbo for about one week. In 1979 the plaintiff, the deceased and the defendant travelled to Bali and Singapore for a holiday. 11 In about 1980 the deceased subdivided the Birchgrove property and sold one of the resulting blocks. He then purchased a unit at 2/2 Eastbourne Avenue, Clovelly (the Clovelly property). The plaintiff and the deceased moved into the Clovelly property and they lived together in that property until 1988. The deceased also purchased a unit 9/48A Queenscliff Road, Queenscliff (the Queenscliff property) which was tenanted until 1989. 12 In 1984 the plaintiff purchased a unit at 10/89 Mount Street, Coogee (the Coogee property) as an investment and leased it until its sale. 13 Although there was no evidence of the detail of the deceased's occupation there was evidence that he retired in 1988. It was during this year that the plaintiff and the deceased enjoyed a holiday in Fiji. 14 It was also in 1988 that the deceased and the plaintiff moved to the Pasadena Motel at Church Point where the plaintiff managed the motel and restaurant. The plaintiff had expected to be in that employment for approximately 6 months but her contract was extended. The deceased lived with the plaintiff at the Pasadena for about 9 months. However he found the noise associated with the hotel and restaurant environs burdensome and decided to move into the Queenscliff property which by that stage was vacant. 15 The plaintiff continued to work at the Pasadena for a further 9 months and during that period stayed with the deceased at Queenscliff on Tuesday nights and the deceased stayed with the plaintiff at the Pasadena on the weekends. In May 1989 the plaintiff and the deceased travelled to Singapore, Hong Kong and Bali for a holiday. 16 In 1990 at the expiration of the contract at the Pasadena, the plaintiff moved into the Queenscliff property with the deceased. They lived together in that property until 1996. Also in 1990 the plaintiff obtained employment as the Manager of "Havana Joes", an hotel/restaurant at St Leonards where she apparently worked until 1995. In 1991 the plaintiff and the deceased enjoyed another overseas holiday, this time to Hawaii. 17 The plaintiff sold the Coogee property in 1992 and shortly thereafter purchased a unit at 5/38 Centennial Avenue, Lane Cove (the Lane Cove property). This property was leased until 1996. 18 In addition to the employment already referred to the plaintiff worked as a tote operator at Randwick Racecourse during the period 1986 to 1989 and 1991 to 1995. 19 In 1995 the plaintiff, in partnership with one other person not named in the proceedings, purchased and managed a restaurant known as "Rusty's" in Surry Hills. In early 1996 the plaintiff and her business partner successfully tendered for the restaurant known as "The Middle of Nowhere Restaurant" at Marsfield (the restaurant) which she currently owns and manages. Soon after the opening of the restaurant the plaintiff and her business partner parted on the basis that the plaintiff took over the restaurant and the partner took over Rusty's. 20 In early 1996 the plaintiff moved into the Lane Cove property as the tenants had vacated and she "didn't want to leave the unit vacant". The deceased continued living at the Queenscliff property. 21 In September 1997 the plaintiff sold the Lane Cove property and purchased a unit at 22/57 Culloden Road, Marsfield (the Marsfield property) into which she then moved. The deceased remained living at the Queenscliff property. Another reason the plaintiff moved to Lane Cove and then to Marsfield was to be closer to her place of employment as she was working very long hours both at Rusty's and at the restaurant. 22 During the period 1996 to 1998 the deceased would stay two or three nights a week at Lane Cove and later at Marsfield with the plaintiff. They spent the weekends together either at Queenscliff or at Lane Cove or Marsfield. They each had keys to the both premises. 23 On 3 June 1998 the plaintiff purchased a property at 60 McLeans Point Road, Sanctuary Point (the Sanctuary Point property) on the South Coast of New South Wales. In the few weeks prior to his death on 18 July 1998 the deceased and the plaintiff stayed from Saturday to Wednesday each week at the Sanctuary Point property. 24 The plaintiff described the deceased as being from "the old school" in that he believed that housework was a "woman's job". The plaintiff "did all the domestic chores including the cooking, cleaning, ironing and washing". The deceased attended to any household repairs or maintenance of the properties in which they lived from time to time. 25 At all times the plaintiff and the deceased kept separate bank accounts. They kept their "financial affairs" completely separate from each other and did not borrow money from each other. The deceased paid all the rates and insurance with respect to the properties he owned and the plaintiff paid all the expenses in relation to the properties she owned. 26 The plaintiff purchased all the food and groceries and the deceased paid the electricity, water and gas accounts. The plaintiff usually paid the telephone account. 27 The deceased and the plaintiff shared the costs of their holidays both within Australia and overseas during the years 1977 to 1993. Any holidays they took in the period 1993 to the date of the deceased's death were paid for by the deceased. At the time of his death the deceased had booked and paid for a holiday to Port Douglas for himself and the plaintiff the cost of which was refunded to the plaintiff after the deceased's death. 28 Although the plaintiff and the deceased kept their financial affairs and banking arrangements separate each was involved in some way in the others search for, purchase and maintenance of their respective properties. The plaintiff helped the deceased manage his properties at Birchgrove, Clovelly and Queenscliff. 29 Whenever anything at one of the properties required maintenance the plaintiff assisted the deceased in organising what needed to be done. This included ringing tradesmen to obtain quotes, negotiating prices and contacting real estate agents to make arrangements for access to the properties. When tenants moved out of the properties the plaintiff accompanied the deceased to inspect the properties and would arrange for the maintenance required to be done. 30 Other aspects of the assistance provided by the plaintiff included arranging for the replacement of cracked windows in the lounge room of the Queenscliff property, shower screen and new tracks for the bathroom screen. The plaintiff also liaised with a neighbour to obtain compensation for water damage to the ceiling and hallway of the home unit and organised insurance claims and liaised with the insurance company. 31 Notwithstanding the separateness of their financial affairs the relationship between the plaintiff and the deceased was obviously close and emotionally supportive. In the early years of the relationship they had tried unsuccessfully to have children. Also in the early years of the relationship the defendant would stay with the plaintiff and the deceased on alternate weekends and later lived with them at Clovelly for approximately 6 months whilst he attended a nearby Technical College. 32 From time to time the deceased assisted the plaintiff at the restaurant by helping to prepare the premises for opening; making coffees when the restaurant was busy, waiting on tables, hosing down balconies, cleaning the bar, organising the cool room and unpacking the deliveries. Even when he was not helping in this way the deceased would attend the restaurant and eat lunch and/or dinner with the plaintiff. 33 The deceased informed the plaintiff that he was of the view that the restaurant took up too much of her time preventing her from travelling with him. The plaintiff's response was "just give me a few years in the restaurant to make some money and then we'll go. We'll rent out all of the properties and go together". 34 The plaintiff and the deceased also discussed retirement plans. In 1997 they discussed moving to Queensland together and perhaps managing a block of home units. At another time there was discussion about the sale of the restaurant during which the deceased provided a list of names of relevant brokers the plaintiff could approach for assistance. They also had discussions about the possibility of retiring and using the Sanctuary Point property as a base for taking trips around the south coast. 35 Since the deceased's death the plaintiff has continued to operate the restaurant and still owns the Marsfield property and the Sanctuary Point property.

The Cohabitation Deed 36 The relevant terms of the Cohabitation Deed are as follows: 6(a) EACH of the parties hereby releases and forever quits claim to the other party and the whole of his or her estate and notional estate from and against all rights, if any, by or on behalf of that party to make any application or claim under or pursuant to the Family Provision Act, 1982 of the State of New South Wales and any act of the State of New South Wales or elsewhere replacing or amending the same or making like or similar provisions or giving like or similar rights to those under that Act AND HEREBY INDEMNIFIES and covenants forever to keep indemnified the other party and his or her estate and notional estate from and against all such applications and claims. (b) EACH of the parties covenant to join in and support any request or application of the other (whether made in the lifetime or after the death of either or both of the parties) to the Supreme Court of New South Wales for the approval of that Court under Section 31 of the said Family Provision Act to the releases herein contained or for any similar or like approval or sanction under any other applicable Act. (c) THE effect and operation of the agreement evidenced by this Deed (including the release contained in this Clause except to the extent that the same are rendered ineffective by the said Family Provision Act) are in no way subject to or dependent upon any approval or sanction as referred to in sub-clause (c) to the intent that such agreement and all of its provisions (including such releases except as aforesaid) become fully operative and binding upon the parties and their heirs, executors, administrators and assigns upon the execution hereof and quite independently of whether or not: (i) any application for approval or sanction of the said releases is ever made under Section 31 of the said Family Provision Act or any other Act, and (ii) any such approval or sanction is ever granted or given. 37 In signing the Cohabitation Deed the plaintiff and the deceased purported to give up their respective rights to make any claims on each other's estates under the Act (cl. 6(a)). They each covenanted to join in any application for approval of the releases in the Deed (cl. 6(b)) and they each purported to make the terms of the agreement binding on each other irrespective of any application for or granting of approval (cl. (c)).

Circumstances of the execution of the Cohabitation Deed 38 In October 1984 the deceased and the plaintiff had a conversation in which the deceased informed the plaintiff that his parents had provided the deeds to their home so that he could borrow some money. He informed the plaintiff that his parents were worried that they might lose their home if he and the plaintiff broke up. He said "I want you to sign an agreement to keep our assets separate". 39 As a result of that conversation the plaintiff went with the deceased to the offices of Neil David Milne, the deceased's solicitor. Mr Milne informed the plaintiff that he could not advise her in respect of the Deed and referred her to another solicitor, John Francis Newnham. 40 The plaintiff attended Mr Newnham's office alone and during the course of the discussion with Mr Newnham it is beyond doubt that he advised her that it was not prudent for her to sign the Deed. The plaintiff's evidence was that a conversation to the following effect took place:

Mr Newnham: Well the De Facto law has just come inwhich allows you to make a claim on his property. He's doing this to stop you. I really can't advise you to sign this agreement. It is not in your best interest. You should think about the type of man who would ask you to sign such an agreement. You want someone who will look after you better than this.

The plaintiff: If I don't sign it, I'll never hear the end of it. Bill is so obsessed with money. It will be world war three in my house and it will be worse for our relationship.

Mr Newnham: It doesn't say much for his character.What have you got out of the 8 years you have been with him? What do you have?

Mr Newnham: That's all you've got out of 8 years oflooking after him.

Mr Newnham: This is not in your best interests. I am advising you not to sign it. I wouldn't sign it if I were you. I just wouldn't sign it.

The plaintiff: It doesn't matter what you say. I have to sign it to keep the peace. My relationship will go down the spout if I don't sign.

Mr Newnham: I can see that you are going to sign the agreement despite what I say. It doesn't matter anyway because in 5 years it will be null and void, it won't mean anything.

41 The plaintiff also gave evidence that she was aware that the Cohabitation Deed contained the clause stating that she would not make a claim against the deceased's estate after his death. She said she signed the agreement as it seemed fair to her that neither she nor the deceased could claim against the other with respect to the properties they had bought with their own money. She also gave evidence that she agreed to it because she believed at the time that she would be able to support herself and that if she and deceased were together for a long time the deceased would adequately provide for her in his will. 42 Mr Newnham said that he did not have an independent recollection of his conference with the plaintiff and relied heavily on his notes made at the time to recollect the advice given to her. Those notes record; Kaye Russell - Interviewed 10/10/84 Advised her re the De Facto Relationship Act to be introduced Advised: 1. Not to Sign. 2. No recognition of her effort since 1977 in other properties, ie. Birchgrove & Clovelly. 3. Told her this may preclude her from bringing application for maintenance and property. 4. Told her no advantage to her in signing(sic) the agreement. 5. Told her not prudent to sign 6. Told her provisions of agreement were in my opinion not fair and reasonable. She however, wished to sign and did so. 43 The certificate to the Deed signed by Mr Newnham on 10 October 1984 certifies that:- (a) I have advised the abovenamed KAY LORRANE RUSSELL in respect of the above cohabitation agreement and I witnessed her execution of the said agreement. (b) Prior to the execution of the agreement by the said KAY LORRAINE RUSSELL, I advised her independently of the other party of the agreement as to the following matters:- (i) The effect of the agreement on the rights of the partners referred to therein to apply to an order under Part III of the De Facto Relationships Bill 1983 in the event of that Bill being enacted. (ii) Whether or not at that time it was to the advantage financially or otherwise of that partner to enter into the agreement. (iii) Whether or not at that time it was prudent for that partner to enter into the agreement. (iv) Whether or not at that time and in the light of such circumstances as were at that time reasonably foreseeable, the provisions of the agreement were fair and reasonable. 44 Mr Newnham gave evidence that he believed that he would have gone through the agreement clause by clause with the plaintiff and that he would have explained to her the terms and effect of the agreement before she signed it. Although Mr Newnham said that he would have explained Clause 6 of the Deed to the plaintiff he did not have any recollection of what he explained. From looking at his notes he said that "any focus was on the de facto aspects of the agreement". 45 Mr Newnham forwarded his account in the amount of $50 to Mr Milne for "our costs of and incidental to interview with Mrs Kaye Russell in relation to the Deed, advising her under the De Facto Relationships Bill,1983, in excess of (1/2) hour" 46 Mr Newnham was not asked any questions about the portion of the conversation in which the plaintiff claimed that he had advised her that the agreement would be "null and void in 5 years time and won't mean anything". 47 The plaintiff submitted that the focus of Mr Newnham's advice was really upon the De Facto Relationships Bill and that this much was clear not only from Mr Newnham's oral evidence but from the terms of his account forwarded to Mr Milne. 48 The plaintiff gave evidence that she probably "flipped through" the Deed and "didn't give much seriousness to it at all because I thought we had been together for many years. I never thought I'd have a problem like this". 49 The defendant submitted that despite the plaintiff's attempts to suggest that she did not really understand the Cohabitation Deed the following portion of her evidence was to the contrary: Q That was the reason why you said in your affidavit of 24 June 1999 when referring to the cohabitation agreement executed in 1984 that you signed the agreement as "it seemed fair to me that neither of us could claim against the other with respect to the properties we had each bought with our own money". That is a correct statement isn't it? A Yes. Q You understood in 1984 when you executed the cohabitation agreement that you were agreeing to not make any claim on any real estate property of Mr Quinton to which you had made no financial contribution? A Yes I signed that. Q That is what I mean when I was referring to the Family Provision Bill of 1983. You said you do not recall now any discussion about it but you accept that you would have read those words prior to signing the agreement? A. Probably. Q. You understood when you executed the cohabitation agreement that you were agreeing not to make any claim on the assets of Mr Quinton. A. Yes. Q And that agreement that you would not make any claim on his estate, or his financial affairs either during or after he died is based upon the statement in your affidavit that it seems fair to you that neither would make a claim on the other's estate if they hadn't contributed to those particular assets, is that correct? A. That's correct. Q. The statement in par 11 of your affidavit sworn on 24 June 1999: 'I signed the agreement as it seemed fair to me that neither of us could claim against the other with the respect to the properties we had each bought with our own money' is a true statement isn't it? A Yes. Q When you swore this affidavit on 24 June the sentence I've just read to you from par 11 of your affidavit was correct? A. That's correct. Q And that statement that I read to you a few minutes ago was true and correct when you signed the cohabitation agreement in 1984? A. Yes. Q And its something that you still believe to be true and correct isn't it? A. Yes yes. Q. After you executed it, you signed the cohabitation agreement in 1984 you continued, as you said before, as I understand it, to keep your financial affairs separate from Mr Quinton and he did the same? A. Yes. Q. In other words, nothing changed after the execution of the cohabitation agreement? A. No. 50 This evidence establishes that the plaintiff thought it was fair that neither she nor the deceased could make a claim on the other's assets if they had not "contributed" to those assets. It seems that the plaintiff equated contribution to the provision of money to purchase the asset. But the Court must look at the matter in more detail, taking into account the whole of the circumstances of the case.

Application for Approval of the Release 51 The cross claim seeks approval of the releases in the Cohabitation Deed pursuant to s 31 of the Act. Notwithstanding the terms of clause 6(c) of the Cohabitation Deed the releases of the plaintiffs rights to make an application for provision under the Act have no effect unless it is approved by the Court (s31(2)). 52 An application can be made and approval can be granted before or after the death of the person with respect to whom the approval relates (s31(4)). In considering this application the Court must have regard to the whole of the circumstances of the case including whether: (a) it is or was, at the time the Cohabitation Deed was signed, to the advantage, financially or otherwise, of the plaintiff; (b) it is or was, at that time, prudent for the plaintiffto make the release; (c) the provisions of the Cohabitation Deed are or were, at that time, fair and reasonable; and (d) the plaintiff had taken independent advice in relation to the release and, if so, had given due consideration to that advice. (s31(5)) 53 A relevant matter to which the court would give consideration is whether the release was obtained by undue influence (s31(8)). 54 The plaintiff submitted that the circumstances of this case would persuade the Court that the deceased and the plaintiff had abandoned the agreements in the Deed. Those circumstances included the failure to make any earlier application for approval of the releases; the continuation of the de facto relationship for a further fourteen years with changed circumstances which were not acknowledged in the deed; the lack of any further mention of the Deed by the deceased or the plaintiff to each other; and the recognition by the deceased that he should make provision for the plaintiff by the terms of his will. 55 Although I am not satisfied that these circumstances establish that the parties "abandoned" the agreements within the Deed I am satisfied that they are important matters to take into account in my consideration of whether the releases should be approved. 56 A further circumstance touching upon the deceased's provision for the plaintiff in his will, which the plaintiff characterises as the deceased's recognition of his obligation to do so, is a conversation which occurred between the plaintiff and the deceased in 1994. 57 In that conversation the deceased said "I've made my will. I've left $200,000 for you and the rest is going to Luke". The plaintiff said to the deceased' "$200,000! You must be joking!". The deceased responded "That's a lot of money. You will be all right with that" to which the plaintiff responded "Bill that's not enough". 58 Although the plaintiff did not know the exact value of the assets and investments of the deceased, she had assumed at the time of that conversation that they must have been in the region of about $2 million. The plaintiff did not raise this matter with the deceased again as she thought they would be together for many more years and that the deceased would provide for her needs. 59 The plaintiff submitted that the Deed is unjust within the meaning of the Contracts Review Act 1980. The further circumstances relied upon in support of this claim include a claimed material inequality in bargaining power between the deceased and the plaintiff; the rapidity of the execution of the Deed with no real opportunity being afforded to the plaintiff to negotiate or reject any of the terms of the Deed; and the fact that the breadth of the releases were not reasonably necessary to protect the legitimate interests of the deceased in the context of his relationship with the plaintiff. The circumstances relied upon in the plaintiff's earlier submissions were relied upon in support of this claim. 60 There was one matter that I regarded as quite significant which was not relied upon by the plaintiff and which I raised with both counsel during the course of submissions. It was the evidence of the plaintiff in relation to the "null and void in 5 years" advice from Mr Newnham. I suggested to counsel that, in the light of there being no cross examination of Mr Newnham about it and no real challenge to the plaintiff, the defendant's application was fatally flawed. 61 The plaintiff was cross examined about the content of the advice given to her by Mr Newnham. Her evidence was as follows: Q. Did you have a discussion with Mr Newnham about the effect of this agreement? A. I can't remember what he said. I know that he did say that in five years it wouldn't mean anything. I know he said that - I have bought Clovelly, I must have bought Clovelly because he explained to me - I didn't know this - but he explained to me that the de facto law had just come in, I didn't know, and that is what he was explaining to me, that's why Bill obviously wanted me to do this and I had bought Coogee and I said, what, living together, I had bought Coogee, and he said "What $12,000 is that all?" and that's all I can remember. I mean, I don't know what else was said. Q. You have just referred to I think in the last or second last answer to the De Facto Relationships Bill or law that was about to come in and do you also recall having discussions Mr Newnham about the Family Provision Bill or Family Provision Act. A. No. I've never heard of that before. Q. You read the agreement to yourself before you signed it? A. Well I probably did because he probably made me read it. Q. Mr Newnham? A. Yes. Q. Being a diligent solicitor? A. He probably said "read it" yes. 62 At the end of the plaintiff's evidence, it was the fact that her evidence that Mr Newnham had told her that the agreement would be null and void in five years time and would not mean anything, had not been challenged. 63 Mr Hallen SC submitted that the plaintiff could not rely on such evidence in support of the proposition, as I had put it, that it was a "fatal flaw" for the defendant in the cross claim for approval of the release. He submitted that it was but one factor that I would take into account with all the other factors. 64 Mr Studdy submitted that because the plaintiff did not rely upon Mr Newnham's "null and void in 5 years" advice as being such a fatal flaw I would exercise some caution in reaching such a conclusion.

Findings on s31 Application for approval 65 I find this last matter very persuasive against the granting of approval. If a person has been told by a legal practitioner that a Deed will be null and void and meaningless in 5 years time, before agreeing to sign it, I am unable to understand why that is not the end of any application for approval 12 years after the expiration of the five year period. 66 Whilst it may seem surprising, to say the least, that a solicitor would have said such a thing, the fact is that the plaintiff's evidence that it was said was unchallenged. On this evidence alone I would not grant approval of the release. However, I will deal with the matters raised in the detailed submissions that have been made by the parties in respect of the matters referred to in the Act to which the Court must have regard in such an application. Was the release to the plaintiff's advantage? 67 Although there is no evidence of the deceased's specific financial situation at the time the Deed was signed, other than the fact he was the registered proprietor of certain parcels of land, the irresistible inference is that he was better off financially than the plaintiff. 68 The only advantage to the plaintiff in signing the Deed was the continuation of her relationship with the deceased in an atmosphere of relative calm. It is clear that if the plaintiff refused to sign the Deed the relationship would certainly have been stormy and may well have terminated. This conclusion is reached having regard to the fact that the deceased was "obsessed with money" and was "secretive" and the plaintiff's expectation that the home environment would be like "world war three" if she did not sign the Deed. 69 Any financial advantage that may have accrued to the plaintiff by the non payment of any rent to the deceased was in my view neutralised by reason of her obvious contribution as homemaker, including providing assistance to the deceased in relation to his other properties. I am of the view that there was no financial advantage to the plaintiff in signing the Deed.

Was it prudent? 70 A prudent person is one who acts with care and thought for the future in particular exercising care and good judgment in relation to one's own interests. 71 The deceased informed the plaintiff that the purpose of the Deed was to give comfort to his parents that their home would not be at risk if he and the plaintiff ended their relationship. The Deed purported to achieve much more than exclusion of the deceased's parents home from a claim by the plaintiff. 72 By 1984 the plaintiff had already made a contribution as homemaker over the preceding seven years and had worked full time to support herself. She was giving up rights in circumstances where it seems that to have maintained such rights would not have put the deceased's parents' home at risk. 73 She was advised that it was not prudent for her to sign the Deed. However the plaintiff believed that it was fair, in particular, because she wanted to continue in her relationship with the deceased. It was only in that regard that she was looking after her future interests. However the balance of her interests were in my view overlooked, or lost focus of, in the pursuit of the desire to remain in the relationship with the deceased. I am of the view that the signing of this Deed lacked good judgment and was not prudent.

Fair and Reasonable 74 Prima facie the Cohabitation Deed presents as fair and reasonable. Here were two parties who wished to enter a Deed to reflect what each of them thought at the time was fair. Each wanted to exclude the other from making a claim on their respective assets. Each had taken legal advice and accepted that the Deed should be signed. 75 But on investigation it is clear that the plaintiff was complying with a request to placate third parties (the deceased's parents) rather than signing a Deed to govern what she really wanted. The giving away of her rights in the circumstances of the relationship that had developed with the deceased in my view was not fair and reasonable.

Independent Advice 76 There is no doubt that the plaintiff received independent advice. However I am of the view that by reason of the fear of the termination of the relationship, or the stormy course of any remaining relationship, combined with the deceased's suggested purpose of the deed and the expectation that the deceased would ultimately provide for her if they remained together, the plaintiff did not give due consideration to the advice she received. 77 In all these circumstances I am of the view that it is not necessary to deal with the plaintiff's further submissions in relation to undue influence and the Contracts Review Act 1980. 78 Having regard to all the circumstances of the case, the application for approval of the release pursuant to s31 of the Family Provision Act 1982 is rejected and the cross claim will be dismissed.

The Plaintiff's Claim for Provision 79 The plaintiff claims an entitlement to a sum that will allow her to discharge her liabilities and ensure she has income sufficient to permit her to live in the style to which she is accustomed and a sum to provide her with a fund to enable her to meet any unforseen contingencies: Luciana v Rosenblum (1985) 2 NSWLR 65 at 69. 80 For the purposes of assessing the plaintiff's claim the Court is required to determine whether the plaintiff has been left without adequate provision for her proper maintenance, education and advancement in life and if so the Court is to decide what provision for the plaintiff ought to be made out of the deceased's estate: Singer v Berghouse (1994) 181 CLR 201 at 208-209. 81 However it is important that one does not approach this task on the basis of some inflexible rule that every spouse or widow is entitled, as of right and in every case, to look to the testator to provide accommodation for life: Golosky v Golosky, NSW Court of Appeal unreported 5.10.93 per Kirby P at p.10. 82 Mr Milne gave evidence that the deceased had instructed him that any property that he left when he died was to go to his son Luke. However on 15 April 1994 the deceased went to see Mr Milne and instructed him that he had a "big bust up" with the plaintiff and needed to make a new will. 83 The contemporaneous note of instructions made by Mr Milne records "cash bequest $200,000 notwithstanding release contained in cohabitation". The figures $85,000, $100,000 and $150,000 were also in the file note but were crossed out leaving the $200,000 as the final amount. 84 Mr Milne said the series of crossed out figures were the amounts given to him by the plaintiff during the conference. The figure of $200,000 was the final instruction for the will which the deceased telephoned through to Mr Milne's personal assistant later the same afternoon. 85 There is no issue that the plaintiff is an eligible person under s 6(1)(a)(ii) of the Act. The real issue in this case is whether any provision ought to be made in favour of the plaintiff out of the estate or notional estate of the deceased. 86 In Golosky v Golosky Kirby P noted at p 10 that "it has been said that in the absence of special circumstances it will normally be the duty of the testator to ensure that a spouse is provided with a place to live appropriate to that which he or she has become accustomed". 87 The defendant submitted that there are very special circumstances in this case that will persuade the Court that the plaintiff has not been left without adequate provision for her proper maintenance, education and advancement in life. Those special circumstances are as follows: · The plaintiff and the deceased had completely separate financial affairs and bank accounts for the 21 years of their relationship. · The plaintiff made no financial contribution to the acquisition, maintenance and ` retention of the deceased's properties. The same is true of the deceased in respect of the various properties purchased and sold by the plaintiff. · The plaintiff and the deceased did not lend each other any money. · The plaintiff and the deceased paid for their own living and other expenses including holidays except for the last five years of their relationship. · The deceased did not disclose his earnings to the plaintiff nor did he inform the plaintiff of the nature of his employment or the whereabouts of his place of work. · The plaintiff purchased and sold a number of properties in the knowledge that she had executed the cohabitation deed providing that she would make no claim pursuant to the Act. · The plaintiff purchased the Marsfield and the Sanctuary Point properties and mortgaged them in the knowledge that she would have to service them without any assistance from the deceased. The same is true with respect to the Coogee and Lane Cove properties. · Neither the deceased nor the plaintiff ever contributed to the payment of the loans on any of their respective properties. · The plaintiff did not receive any part of the rent enjoyed by the deceased from the Birchgrove and Clovelly properties nor did the deceased apparently enjoy any of the rental received by the plaintiff from the Coogee or Lane Cove properties nor the income from the restaurant. · The plaintiff conducted her life on a very independent basis working throughout the 21 year period including owning and operating two restaurant businesses. · The plaintiff lived in a separate house on the other side of Sydney from the deceased for the last two and half years of the deceased's life. · The plaintiff is in receipt of an income of approximately $45,500 from her restaurant which is very similar to the income she enjoyed from the restaurant during the last two years of the deceased's life. 88 The relationship the plaintiff enjoyed with the deceased provided the opportunity for her to maintain a lifestyle that was independent of the deceased. Her ownership of the restaurants and her part time work at the racetrack appeared to be pursuits which she enjoyed although in some respects they were "exhausting". 89 There have been cases in which the court has observed that spouses have not had "sufficient time" to make a substantial contribution to the life of the testator as a homemaker: Golosky v Golosky per Kirby P at p7. However it must be recognised that time is not the only factor which facilitates the making of a contribution as a homemaker. Where a person prefers a relationship with a spouse who has an independent spirit, which enjoys the enhanced freedom of vocational pursuit, the flexibility of the concept of homemaker will, in my view, accommodate and recognise the contribution although the time spent with the particular spouse may be less than if the independent spirit is given wings. 90 This was a "special" relationship in which the deceased and the plaintiff each enjoyed their own pursuits and generally kept their financial affairs separate. However I have no doubt that by reason of the matters referred to earlier in this judgment the plaintiff did make an important contribution as homemaker to the life of the testator. 91 It is clear on the evidence that in 1994 the deceased decided to make provision for the plaintiff. The figure that he settled upon after a number of attempts was $200,000. According to Mr Milne's evidence this conclusion was reached in circumstances where the deceased and the plaintiff had suffered "a big bust up". Although this may have been the deceased's perception of the relationship at the time, the evidence does not demonstrate any interruption to the relationship. 92 The deceased and the plaintiff had only one conversation about the provision he had made for her in his will. But that conversation has significance in assessing the deceased's intentions in respect of the provision for the plaintiff. He said "That's a lot of money. You will be alright with that". 93 Evidence from Mr Rex Walker, a friend of the deceased for forty five years, gives a further indication of the deceased's intention to make proper provision for the plaintiff. In a conversation relating to the making of his will the deceased informed Mr Walker that the plaintiff "will be well looked after" and that the balance of his estate would go to the defendant. 94 Irrespective of whether $200,000 is proper provision for the plaintiff, it is clear from the evidence that the deceased was concerned that the plaintiff should be "alright" and "be well looked after". 95 The deceased intended "the bulk" of his estate to go to his only son, the defendant. He made that intention clear to the plaintiff and to a number of his friends including Mr Rex Walker and Mr Max Connolly and also to his solicitor, Mr Milne.

The defendant 96 If, as here, there is a large estate, competition between claimant and beneficiary may be reduced: Anasson & Ors v Phillips Young J, Supreme Court of NSW, unreported, 4 May1988 at p 20. However the nature and relative strengths of the competing claims of the plaintiff and the defendant need to be considered. 97 The defendant is thirty three years of age and described his occupation as investigator/safety officer. After attending Barrenjoey High School between 1977 and 1982 he left school at the age of sixteen years after completing Year 10. He is a qualified carpenter and worked as such for three years between 1984 and 1986. 98 In about 1986 the defendant completed a security officer's course and became a licensed security officer. He has worked in the area of private and corporate security and has continued in that work to the present time. 99 In 1987 and 1988 the defendant trained as a stuntman and in 1989 he commenced working as such on a freelance casual basis. He continues this work. 100 In 1995 the defendant became a licensed private investigator after working as a sub-agent for a firm for a period of twelve months. He regards himself as particularly skilled in the area of surveillance and close personal protection and such is the predominant work that he does as a private investigator. 101 In 1996 the defendant undertook a one year undergraduate course at the University of New South Wales in Exercise, Physiology and Pharmacology. This enabled him to conduct exercise courses for the general public and corporate clients and to provide training schedules for private individuals. 102 In 1996 the defendant established "Quintons Problems Solving Solutions Pty Ltd" a company which conducts his film and security and private investigation work. He conducts one bank account with the ANZ Bank. 103 In his affidavit of 13 January 2000 the defendant claimed that for the past five years he had earned "roughly $20,000 gross per annum". He said that the assets he possessed at the time of the affidavit included the properties left to him by the deceased under his will together with a Mitsubishi 4WD van which is valued at approximately $12,000 and a Nissan Exa motor vehicle left to him by the deceased. 104 Also in his 13 January 2000 affidavit the defendant set out some detail of his monthly outgoings. In addition to the affidavit of 13 January to which I have referred, the defendant swore an affidavit of 18 June 1999 as administrator of the estate of the deceased. In that affidavit he set out the real estate, bank accounts and liabilities of the estate claiming that the nett distributable estate as at that date was $1,750,352. 105 A further affidavit by the defendant as administrator of the estate was sworn on 11 February 2000 in which the value of the net distributable estate had increased to $1,975,000. 106 Notwithstanding the detail into which the defendant went about his assets, outgoings and liabilities, no mention was made of the rental income from the Birchgrove and Clovelly properties. As to such failure the defendant claimed he was not aware that he had to detail it separately and thought it was sufficient to provide a copy of bank statements to his solicitor. 107 In the result the Court was left with the task of having to analyse some bank statements and real estate agent's statements to ascertain the amount of rental that had been received in respect of the estate properties. The bank statements of the defendant's ANZ bank account in Manly that were supplied covered only seven months of the period since the death of the deceased. However it is clear that the rental has been received by the defendant and such amounts are intermingled with the defendant's income and other payments into his bank account. 108 The rental received during the period 1 July 1998 to 30 June 1999 for the Birchgrove property was $32,837. The rental received during the period 1 July 1999 to the end of April 2000 will be $33,020 making a total for the Birchgrove property of $65,857. 109 Rental during the period July 1998 to the end of February 2000 for the Clovelly property totals $33,575 making a total rental income during the period of $99,432. With the additional rental anticipated for the Clovelly property for March and April 2000 it is safe to conclude that the rental income for the period for both properties is approximately $100,000. 110 The defendant's monthly expenses were detailed as follows: mobile phone $200 - $300 ($250); home telephone $150; electricity $150; gas $50; water $50; food $300; petrol $200 - $250 ($225) and entertainment $400. These monthly expenses of $1,575 amount to annual expenses of $18,900. Other annual expenses are $2,400 per year to the Manly Credit Union; $1,000 per year for portfolio pictures for the defendant's film industry work and $500 per year for union fees. Annual expenses total approximately $22,800. 111 Additionally, the defendant stated that since October 1999 a flatmate contributed $130 per week for rent and paid half of some of the outgoings associated with running the household which would probably reduce the defendant's annual expenses by approximately $10,000 to a total of $12,800 per annum. 112 The defendant's claimed gross income of $20,000 together with $50,000 per annum rental certainly leaves the defendant with a surplus of income over expenditure. 113 His assets of $1,975,000 over liabilities which amount to a number of outstanding debts relating to arrears of rental and mobile phone accounts leaves the defendant with a net asset value well in excess of $1.9 million.

Financial position of the plaintiff 114 The plaintiff owns the Marsfield property and the Sanctuary Point property. They are valued at approximately $88,000 and $290,000 respectively and the combined mortgages to the St George Bank of $196,729 leaves the plaintiff with equity of approximately $181,271. 115 The value of the plaintiff's furniture, household effects and personal property and cash in the bank amount to $63,853. The approximate value of the plaintiff's motor vehicle is $23,400. 116 Although the plaintiff had much higher expectations, the expert evidence valued The Middle of Nowhere Restaurant at $34,000 at sale on a going concern basis. The plaintiff is also entitled to the balance of the legacy left to her by the deceased which still remains unpaid. This amount with interest is approximately $105,000. 117 The restaurant bank account with the St George bank at the time of the hearing was approximately $19,000 overdrawn. The plaintiff's other liabilities include a $2,205 debt to Walker Wayland, credit card debts totalling approximately $3410 and estimated legal and other fees associated with the proceedings of approximately $42,000. 118 Total assets ($407,524) over liabilities ($66,615) leaves the plaintiff with a net asset value of $340,909. If the costs associated with these proceedings ($44,205) are removed the net asset value is $385,114. 119 The plaintiff's primary source of income is from the restaurant and an analysis of the plaintiff's income tax returns performed by Mr Greenwood, Chartered Accountant with Walker Wayland, indicates that in the last 12 months the plaintiff received an income of approximately $45,000. In addition to this income the plaintiff now receives approximately $9,300 from two boarders who live at the Marsfield property making a total annual income of $54,300. 120 After some additional evidence from the plaintiff's personal accountant and adjustments to the schedule of expenditure (tr 85) it is apparent that the plaintiff's annual expenditure is approximately $56,786. The expenditure was not challenged as being excessive or inappropriate. 121 On the figures provided in the schedule (ex KLR P) as adjusted (tr 85) income is therefore at least $2,400 less than expenditure. I say at least because the schedule did not include any amount for tax. 122 The plaintiff said that she only ever intended to work in the restaurant for two to three years. The plaintiff gave evidence that the amount of physical work that she performs at the restaurant and the hours that she spends at the restaurant are exhausting. She would like to sell the restaurant and partially retire as she had planned to do when the deceased was alive. 123 The plaintiff would like to work two days a week, Wednesdays and Saturdays, at the Randwick Racecourse as a tote operator. Such employment has been recently offered to her and the plaintiff understands that she would earn $90 per day after tax. 124 The plaintiff said that if she enjoyed working as a tote operator again she would probably continue to do so "until I'm about 60 - 65 years old". Her estimate was that she would work about 100 days per year and after holidays are taken into account she would earn about $9000 after tax. 125 The plaintiff on the one hand wants the benefit of a finding that, notwithstanding her continued full time employment, a significant contribution was made as homemaker to the life of the deceased. On the other hand the plaintiff wants the benefit of a finding that the deceased should have provided for her so that she could cease the work that provided the independence that seemed to be the very essence of the relationship. 126 Although the plaintiff did not give detailed evidence as to why, at age fifty three, she wanted to "partially retire" her Counsel submitted that at that age it was understandable. On the other hand the defendant submitted that fifty three years of age is relatively young to be partially retiring. It may be that the exhausting nature of the work at the restaurant has played some part in the plaintiff's desire to partially retire but I agree with the defendant's submission and regard it as reasonable to fix a later age for the purpose of making an assessment of the plaintiff's needs in this case. I am of the view that a reasonable age for this purpose is 55 years. 127 The plaintiff gave evidence that she would like to continue to take small trips of between three to seven days about three or four times a year as she and the deceased used to do. On these holidays the plaintiff and the deceased usually stayed at five star hotels and dined at "nice restaurants for lunch and dinner every day". 128 The approximate total cost of the trips including air fares was estimated by the plaintiff to be about $2000 - $4000. The plaintiff also gave evidence that she would like to travel overseas with either her mother or a friend. 129 The plaintiff is presently in good health and has HCF Private Heath Fund membership and is currently paying premiums under the Fit and Well Plan. The plaintiff would like to upgrade and pay premiums under the Value Cover Hospital Plan and the Multicover Extra Plan when she reaches the age of sixty. The cost of those premiums is currently $1073.80. 130 The plaintiff gave evidence that if she retired to her property at Sanctuary Point she would still like to keep the Marsfield property so that she would have a place to stay in Sydney when working at the Randwick Racecourse or visiting her mother and friends on trips to Sydney. 131 The plaintiff concluded that she would like to have enough money to discharge all of her liabilities, travel as much as she did when the deceased was alive and be free of financial worries for the rest of her life.

Was Provision Adequate? 132 Even if the plaintiff utilised the whole of the $200,000 to pay off as much of the mortgages or overdraft as possible, she would still be left with significant financial anxieties having regard to the conservative valuation of the restaurant and the commercial risks involved with it. Such risks are highlighted in paragraph 7 of Mr Greenwood's report. 133 With the mortgages and the overdraft paid off and on the assumption that the plaintiff continued to operate the restaurant, it is not at all certain that the plaintiff would not have to draw on her capital to survive financially. If the restaurant is sold and a net amount of approximately $34,000 is obtained, the plaintiff would then only have about $50,000 cash when such amount is combined with the her only savings in the St George Bank personal account. 134 Wilson J's dictum in White v Barron (1980) 144 CLR 431 at 457 provides helpful guidance in this case. His Honour, having referred to the relevance of the consideration of all the circumstances, including the size of the estate and the style of life to which the applicant had become accustomed, said: I do not think a wise and just testator would think it right for his widow to be required to draw on her own capital assets in satisfaction of her need of proper maintenance, especially when he had the means to protect her from the risk of financial anxiety in the future by a provision which enabled her to conserve her own capital. 135 The twelve month entitlement for the plaintiff to live in the Queenscliff property was in my view of no value to the plaintiff as she was then living in the Marsfield property and would have incurred further liabilities of rates and insurances should such option have been taken up. 136 I am satisfied that although the deceased intended to provide properly for the plaintiff so that she would be "alright", the provision he did make is inadequate for the proper maintenance, education and advancement in life of the plaintiff. 137 I am of the view that the change of employment status to part time is not unreasonable, but as I have said above I regard the reasonable time for that to occur for the purposes of this assessment as at 55 years of age. I think it is reasonable to expect that the plaintiff would be able to secure work that would bring her more than $9,000 per annum. I am of the view, for the purpose of this assessment, taking into account the two year period and all the circumstances of the case, that a reasonable figure is $25,000. 138 If the plaintiff only uses the Marsfield property part time I am of the view that it is reasonable to expect some income from that property by way of board or rent. I assess that figure at $10,000 per year having regard to the arrangements with the present boarders. 139 On the assumption that the restaurant is sold the plaintiff will probably be provided with a fund of approximately $50,000 ($34,000 on sale plus personal savings) and an annual income of $35,000. If the plaintiff uses the $105,000 owing from the estate and the fund of $50,000 to pay off the mortgage she will still have a debt of $41,729 ($42,000) on the mortgage and the overdraft debt of $19,000 such debts totalling $61,000. I am of the view that such debt should be paid off to allow the plaintiff some material and emotional security of accommodation and ability to pursue her employment and leisure activities in a manner to which she was accustomed. 140 I regard it as reasonable for the plaintiff to travel as much as she did when the deceased was alive and I would allow her $3,000 per annum for 12 years totalling $36,000. 141 In addition the plaintiff will need sufficient income to meet the outgoings relating to the properties and the costs of the running and maintaining of her motor vehicle and the general expenses of living. I am of the view that the plaintiff should be provided with a fund to be invested to give her capacity to supplement the income of $35,000 per annum to which I have referred earlier to meet these outgoing of costs and expenses. I am of the view that such a fund would also provide against contingencies. In my view the appropriate amount of such fund is $225,000. 142 The total amount additional to the legacy of $200,000 that I regard as adequate for the plaintiff's proper maintenance, education and advancement in life is $322,000. This additional provision still enables the deceased's intention that his son have the "bulk" of his estate to be realised. 143 Accordingly in lieu of the provision made for the plaintiff by the deceased there will be provision for $522,000 out of the estate of the deceased.

Notional Estate 144 The deceased's estate has already been distributed and the three properties have been transferred to the defendant. Submissions have been made by the plaintiff that the Court should make an order pursuant to s27 of the Act specifying property held by the defendant as notional. There is no other actual estate from which the balance of the legacy and the amount by way of further provision can be met. 145 Additionally the plaintiff seeks an order pursuant to s15 of the Act for the appointment of a trustee and the plaintiff has already provided the relevant consent in that regard of Mr Hugh Charles Thomas of BKR Walker Wayland. The history of the matter including the defendant's failure to pay the plaintiff the balance of the legacy within a reasonable time and the failure to properly disclose the rental income persuades me that it would be appropriate to make such an order. 146 I will allow the parties a short time to consider my findings for the purpose of reaching a possible agreement as to the implementation of any orders to facilitate the payment of the additional $322,000 and the legacy plus interest of $105,000 totalling $427,000. ********************

Last Modified: 09/25/2000 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.

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Judgment (28 paragraphs)

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Cases Cited (3)