Simons v Permanent Trustee Co Ltd: Estate D. Hakim

Supreme Court of NSW|2005-03-18|Before: Palmer J

CITATION : Simons v Permanent Trustee Co Ltd: Estate D. Hakim [2005] NSWSC 223

DECISION : Further provision out of the estate ordered for the daughter; claims of grandchildren dismissed.

CATCHWORDS : FAMILY PROVISION ACT - EXTENSION OF TIME - Whether sufficient cause for delay shown. - ELIGIBLE PERSON - Whether grandchildren wholly or partially dependent upon testator - what is "dependence" - whether emotional, not financial, dependence is sufficient for purposes of s.6(1)(d). - ADEQUATE PROVISION - Large estate - claim by daughter - all other beneficiaries well provided for - whether adequate provision made for daughter - extent of daughter's needs.

Family Provision Act 1982 (NSW) - s.6, s.7, s.16 LEGISLATION CITED : Wills Probate and Administration 1898 (NSW) - s.93

Anasson v Phillips (unrep) NSWSC 4 March 1988 - Fulop, Re (1987) 8 NSWLR 679 - Leahey & Trescowthick [1999] VSC 409 - MacEwan Shaw v Shaw [2003] VSC 318 - O'Dea v O'Dea [2005] NSWSC 46 CASES CITED : - Pearson v Jones [2000] NSWSC 799 - Petrohilos v Hunter (1991) 25 NSWLR 343 - Sayer v Sayer [1999] NSWCA 340 - Tsivinsky v Tsivinsky (unrep) NSWCA, 5 December 1991 - Warren v McKnight (1996) 40 NSWLR 390

Mariane Hakim Simons - First-named Plaintiff David Joshua Edgeworth Simons - Second-named Plaintiff - Ceased to be a party: 13.12.04 James Lloyd Simons - Third-named Plaintiff Mijanou Celina Ariane Zigane - Fourth-named Plaintiff PARTIES : Giselle Marise Phillipa Simons - Fifth-named Plaintiff Permanent Trustee Company Limited - First-named Defendant Claude Hakim - Second-named Defendant Muriel Betty Ginges - Third-named Defendant

R.F. Margo SC, S.L. Bell - Plaintiffs COUNSEL : M. Cashion Sc, T.M. Thawley - Defendants

McCabe Terrill - Plaintiffs SOLICITORS : Kemp Strang - Defendants

1 This is an application under s.7 of the Family Provision Act 1982 (NSW) for provision out of the estate of the late David Hakim. The Plaintiffs are a daughter of the deceased, Mariane Hakim Simons, and three of her children, James Lloyd Simons, Mijanou Zigane, and Giselle Marise Simons. For the sake of convenient reference and without intending any disrespect, I will refer to the Plaintiffs as Mariane, James, Mijanou and Giselle. 2 The deceased died on 6 April 2001 leaving a will dated 27 July 1998. Probate of the will was granted on 30 September 2002 to the Defendants, namely, Permanent Trustee Company Limited ("Permanent"), Claude Hakim and Muriel Ginges. Claude Hakim is the widow of the deceased and Muriel Ginges is his daughter. Again, without intending any disrespect, I will refer to the personal Defendants as Claude and Muriel.

3 The Plaintiffs' application under the Act was commenced by the filing of a Summons on 27 February 2003. The prescribed period for the making of the application provided by s.16(1), namely, eighteen months from the death of the deceased, had expired on 6 October 2002. The Court cannot make an order under s.7 of the Act in this case unless the Court grants an extension of the prescribed period: s.16(2). The Court cannot extend the prescribed period in respect of the application unless either the Defendants have consented to the application being made out of time or else "sufficient cause is shown for the application not having been made" within the prescribed period: s.16(3). The Plaintiffs' Summons seeks an extension of time under s.16(2). 4 The Defendants say that they have not consented to the application being brought out of time. The Plaintiffs say that the Defendants are estopped from denying that they have given such consent because Permanent wrote to the Plaintiffs' solicitors on 28 November 2002 giving notices under s.93 of the Wills Probate and Administration Act 1898 (NSW) requiring the Plaintiffs to take proceedings to enforce a claim under s.7 of the Act which they had previously foreshadowed. 5 I do not accept that the giving of these notices gave rise to any estoppel against the Defendants. First, the notices were given after the prescribed period had expired. Second, there is no evidence that the Plaintiffs relied on the notices in any way relevant to their conduct of the present proceedings. Third, the notices are not an unequivocal representation that the Defendants had consented or would consent to the Plaintiffs' application being brought out of time: all the notices do is to require the Plaintiffs to commence proceedings so that their claims might then be dealt with according to law. That might have involved the Plaintiffs' claims being dismissed because an extension of time was refused. 6 The Plaintiffs say that they have demonstrated "sufficient cause" for not having made their application within time, for the purposes of s.16(3)(b). The Plaintiffs rely on the evidence of Mr Terence McCabe, a partner of the firm of solicitors acting for the Plaintiffs. 7 Mr McCabe says that Mr John Garrett, formerly a partner of the firm, had the conduct of this matter until he left the firm on 27 December 2002. It seems that Mr McCabe has no knowledge of this matter except from what now appears in Mr Garrett's file. 8 Mr McCabe says that in about mid-2002 Mr Garrett notified the firm that he had received a claim from the Australian Taxation Office. Mr McCabe does not know very much about the nature of that claim save that it ultimately resulted in Mr Garrett surrendering his practising certificate after some compromise had been reached with the ATO and the Law Society. Mr McCabe says that between mid-2002 and December 2002 when Mr Garrett left the firm, Mr Garrett gave the impression that his work was being handled competently. However, Mr McCabe subsequently discovered that this was not the case in a number of Mr Garrett's files. Mr McCabe does not know where Mr Garrett can be contacted. 9 Evidence has also been given by Mr Andrew Lacey, a solicitor assisting Mr Garrett at the relevant time, and by Mr S. Bell of Counsel, who had been briefed by Mr Garrett to prepare and conduct these proceedings. Their evidence, which was not challenged, makes it clear that the Plaintiffs were at all times most anxious to proceed with their claims against the deceased's estate, and that Mr Bell had warned Mr Garrett in September 2002 that the prescribed period under s.16 of the Act was about to expire and that a Summons commencing the proceedings should be filed. 10 It is clear that despite a number of warnings from Mr Bell, Mr Garrett allowed the prescribed period under s.16 to elapse without taking action. It may well have been the case that during this period Mr Garrett was preoccupied with the claim against him by the ATO and its consequences to his professional career. 11 The Defendants and, presumably, the beneficiaries under the deceased's will, were not unaware that the Plaintiffs intended making a claim under s.7 of the Act against the deceased's estate, well prior to the expiry of the prescribed period, as is shown by correspondence in Mr Garrett's file. 12 On 19 June 2002, within the prescribed period, Permanent, as one of the executors named in the deceased's will, wrote to Mr Garrett referring to a meeting the previous day in which Mr Garrett had advised that the Plaintiffs intended to make an application under the Act for provision out of the deceased's estate. Permanent advised that it intended to seek a grant of probate with either itself alone or jointly with "another suitable person" . It is apparent from the letter that Permanent opposed the grant of probate to Claude and Muriel and that that opposition was supported by the Plaintiffs. 13 On 29 July 2002, Mr Garrett wrote to Permanent seeking information as to the progress of Permanent's application for probate. He confirmed his instructions from the Plaintiffs to make application under the Act. 14 On 18 September 2002, still within the prescribed period, Mr Garrett wrote to Permanent, again confirming that the Plaintiffs intended to make claims against the estate and requesting confirmation within seven days that Permanent had lodged an application for probate. On 23 September, Permanent wrote to Mr Garrett advising that an application for probate was to be lodged very shortly on behalf of all named executors. Permanent noted that the Plaintiffs intended claiming against the estate and undertook to notify Mr Garrett when the application for probate was made and when it was granted. 15 There is no evidence before the Court that Permanent notified Mr Garrett when the application for probate was lodged. As I have recorded, probate was granted on 30 September 2002, which was still just within the prescribed period. However, as far as the evidence reveals, Permanent did not advise Mr Garrett that probate had been granted until it wrote a letter to that effect dated 7 October 2002, a day after the prescribed period had expired. According to a date stamp on the copy of the letter in Mr Garrett's file, the letter was apparently not received until 9 October 2002. 16 Mr Garrett may have believed that he could not commence proceedings under the Act until probate had been granted. However, there were a number of steps available to preserve the Plaintiffs' position if it appeared that probate would not be granted until after the prescribed period under s.16 had expired. One such step was an application to extend time made within the prescribed period under s.16(4). 17 It may be that if Permanent had notified Mr Garrett promptly on 30 September 2001 that probate had been granted, as it had undertaken to do, Mr Garrett would have moved quickly to commence proceedings before the expiration of the prescribed period. However, Permanent waited six days before advising Mr Garret that probate had been granted, by which time the prescribed period had already elapsed. I do not think that Permanent is entirely free from any responsibility for the failure on the Plaintiffs' part to make their application under the Act within the prescribed time. 18 In Warren v McKnight (1996) 40 NSWLR 390, at 394, Hodgson J (as his Honour then was) referred to four factors relevant to the exercise of the Court's discretion to extend time under s.16(3)(b) for an application under the Act, namely:

the sufficiency of the explanation of delay in making the claim;

whether there would be any prejudice to beneficiaries if the period were extended;

whether there has been any unconscionable conduct by the plaintiff;

the strength of the plaintiff's case. 19 I find that the failure on the part of the Plaintiffs to bring their application within the prescribed period is due entirely to the failure on the part of their solicitor to take the appropriate steps within time. No fault is to be attributed to the Plaintiffs themselves. The delay in actually commencing the proceedings after expiry of the prescribed period was not inordinate, as Mr Cashion SC, who appears with Mr Thawley for the Defendants, fairly and properly conceded. I am satisfied that the Plaintiffs' delay in bringing their claim has been sufficiently explained. 20 Mr Cashion makes no submission that the beneficiaries of the deceased's estate would suffer prejudice if an extension of time under s.16(2) were to be granted. The Defendants were well aware of the Plaintiffs' intention to bring a claim under the Act before the prescribed period expired. The estate has not yet been fully administered and no substantial distribution has yet been made to beneficiaries. 21 The Defendants have not suggested that the Plaintiffs have been guilty of any unconscionable conduct relevant to the question of extension of the prescribed period. 22 As will emerge shortly, the strength of Mariane's case for further provision out of the deceased's estate is sufficient to justify an extension of the period within which her claim may be brought. However, for reasons which I will explain in a moment, James, Mijanou and Giselle do not qualify as eligible persons under s.6(1)(d) of the Act, so that their claims must inevitably fail. I would not extend the prescribed period to enable James, Mijanou and Giselle to bring their claims under the Act. 23 I will make an order under s.16(2) of the Act extending the period within which Mariane may bring a claim under s.7 of the Act up to and including 27 February 2003.

Whether James, Mijanou and Giselle are eligible persons

24 There is no issue that Mariane, as a child of the deceased, is an eligible person within the meaning of s.6(1)(b) of the Act. Mr Margo SC, who appears with Mr Bell for the Plaintiffs, submits, and Mr Cashion denies, that James, Mijanou and Giselle, as grandchildren of the deceased, were wholly or partly dependent on him so as to qualify as eligible persons within s.6(1)(d). 25 The authorities make it clear that a grandchild is not normally regarded as a natural object of a testator's testamentary recognition and that additional factors need to be shown to bring a grandchild into the category of persons for whom the testator ought to have made provision. These additional factors usually show that the testator had come to assume, for some significant time in the grandchild's life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild's support and welfare, or else that the testator has undertaken a continuing and substantial responsibility to support the plaintiff financially: see e.g. Tsivinsky v Tsivinsky (unrep) NSWCA 5 December 1991 per Kirby P; Sayer v Sayer [1999] NSWCA 340; MacEwan Shaw v Shaw [2003] VSC 318; O'Dea v O'Dea [2005] NSWSC 46. 26 The authorities are equally clear that the grandchild's dependence, whether whole or partial, on the grandparent must be direct and immediate; it is not sufficient that the grandchild's dependence is the indirect result of the testator providing support and maintenance for his or her own adult child and thereby incidentally benefiting the testator's grandchildren who are directly dependent on that child: see e.g. Petrohilos v Hunter (1991) 25 NSWLR 343, at 346; Re Fulop (1987) 8 NSWLR 679, at 682; Pearson v Jones [2000] NSWSC 799; MacEwan Shaw v Shaw (supra). 27 Further, the fact that the testator occasionally, or even frequently, made gifts to or for the benefit of the grandchild does not in itself make the grandchild wholly or partially dependent on the testator for the purposes of s.6(1)(d). To qualify the grandchild as a dependant, the gifts or benefits provided by the testator must be of such regularity and significance that one can say that the testator had clearly assumed a continuing and substantial responsibility for the grandchild's support and welfare: see e.g. Leahey & Trescowthick [1999] VSC 409; MacEwan Shaw v Shaw (supra); Pearson v Jones (supra). 28 Mr Margo says that there are additional factors bringing James, Mijanou and Giselle into the category of persons partially dependent on the deceased. He says that:

when Mariane and her husband separated in 1982 the deceased voluntarily stepped in to become, and remained until his death, in effect a substitute father to Mariane's children;

the family unit constituted by the grandchildren and Mariane was, and remains, a particularly vulnerable one, as was recognised by the deceased in his lifetime;

the grandchildren remained dependent upon the deceased up until the time of his death;

the deceased's estate is a very large one and it can afford to make whatever provision for the grandchildren the Court may determine ought to be made. 29 I am unable to accept that the deceased became, in effect, a substitute father to James, Mijanou and Giselle, or that he had any relationship with them that fell outside what one would call the normal relationship of grandparent and grandchild. 30 After Mariane separated from her husband in 1982, she and her children stayed with the deceased and Claude for about two weeks. For a number of months thereafter they lived, rent-free, in a flat in Bondi owned jointly by the deceased and Claude. Then they moved into a two-bedroom unit, 9/591 Old South Head Road, Rose Bay ("Unit 9"). The unit is in a block of ten units then owned in equal shares by the deceased, his sister, Florette, and his brother, Maurice. Mariane, Mijanou and Giselle continue to live in Unit 9 while James now occupies a small caretaker's flat in the building. Mariane and her children have never paid rent for Unit 9 or the caretaker's flat but this support has not been provided by the deceased alone - his brother and sister, as co-owners of the property, have been co-benefactors with the deceased. 31 Between 1982 and 1987, the deceased gave Mariane a cash allowance of $400 per month which was used for general household expenses such as food, clothing and medical care both for her and the children. From 1987 to 1992, the allowance was increased to $500 per month. 32 The deceased explained his assistance to Mariane, saying: "If I do not help her she will be out on the street because [her husband] is not supporting her" . This explanation indicates that it was the deceased's intention primarily to assist Mariane and thereby, indirectly, the children for whom Mariane was the primary carer. 33 The assistance provided by the deceased directly to James may be summarised thus:

the deceased took James and his cousin, Philip, with him and Claude on holidays twice, to The Entrance and Surfers Paradise, and the deceased paid for the holidays;

when James, at the age of sixteen, was charged with a serious driving offence the deceased accompanied him and Mariane to Court during the four or five days of the hearing;

in about 1993 the deceased offered to pay to send James to Israel for a year, but James declined the offer;

in the same year the deceased gave James a car which had been left behind by a tenant of one of the deceased's properties who owed the deceased rent - it may be assumed that the car was not of great value;

in 1995 the deceased lent James $7,000 to buy a motorcycle and James repaid the loan over a short period of time;

the deceased helped pay for the joint Bar Mitzvah of James and his elder brother, David, and the deceased paid for their suits;

the deceased gave James small gifts of money on his birthday;

the deceased offered to assist in setting James up in business after he left school but James declined the offers. 34 The evidence of Mariane and her children makes it clear that they did not feel welcomed by Claude in the deceased's home and they did not spend a great deal of time there. Visits were generally confined to birthday and religious holidays. 35 Having regard to this evidence, I conclude that the relationship between James and the deceased, although affectionate, was not one in which the deceased assumed more than the normal role of a grandparent. 36 The assistance provided directly to Mijanou by the deceased may be summarised thus:

Mijanou, like James, benefited from the assistance with accommodation and household expenses provided by the deceased to Mariane;

during her school years, the deceased assisted in buying school clothing and books for Mijanou but the frequency and amount of this assistance is not specified;

while she was at school, the deceased gave Mijanou a camera and some lenses and the use of a storeroom to use as a darkroom;

the deceased provided a computer for all of the children to use in their studies;

the deceased gave Mijanou $3,000 to enable her to complete a film project for her studies;

the deceased gave Mijanou small gifts of money for her birthday, bought her make-up for special occasions, and gave her other small gifts to celebrate her successful achievements. 37 As in the case of James, I conclude that the relationship between Mijanou and the deceased, although affectionate, was not one in which the deceased assumed more than the normal role of a grandparent. 38 The assistance provided directly to Giselle by the deceased may be summarised thus:

Giselle, like James and Mijanou, benefited from the assistance with accommodation and household expenses provided by the deceased to Mariane;

the deceased gave Giselle small gifts of money and other presents for her birthday and to celebrate successful achievements at school and university;

the deceased bought Giselle dresses to attend the weddings of Mariane's step-sisters;

the deceased provided a computer for all the children to use in their studies;

the deceased from time to time assisted Mariane with the cost of Giselle's school fees, clothing and books. 39 As in the case of James and Mijanou, I conclude that the relationship between Giselle and the deceased, although affectionate, was not one in which the deceased assumed more than the normal role of a grandparent. 40 Mr Margo has urged most eloquently that James, Mijanou and Giselle were dependent upon the deceased emotionally, to a degree beyond that of the normal grandchild/grandparent relationship, because they regarded him as a substitute for a father who, he says, had abandoned them in their early years. Emotional dependence, Mr Margo says, even if unattended by financial dependence, qualifies as dependence for the purposes of s.6(1)(d) of the Act. 41 The first observation I would make is that the evidence does not show that the deceased himself assumed the responsibility of giving James, Mijanou and Giselle more emotional support than any normal and loving grandfather would give. Second, I do not think that there is any authority which directly supports the proposition that if James, Mijanou and Giselle felt that they needed the deceased to be more of a father than a grandfather, this unrequited need qualifies them as dependent on him within the meaning and for the purposes of s.6(1)(d). 42 Dependence for the purposes of s.6(1)(d), so far as the cases have discussed, is seen as the giving of financial or other material assistance by the deceased over a significant period of time in order to meet a need of the eligible person, with the result that the recipient has come ordinarily to rely upon that assistance. In very many cases where a grandchild is held to be dependent on a testator grandparent, the giving of financial or other material assistance by the testator for the child's maintenance and welfare is accompanied by the giving of natural love and affection, so that the child is dependent on the testator for both financial and emotional support. In some cases, the giving of financial support by the testator grandparent may be unaccompanied by love and affection but the child is still dependent upon the giving by the testator and is therefore an eligible person. 43 However, the fact that the grandchild has a need, even an abnormally high need, for emotional support from a grandparent testator is not, on its own, sufficient to make a child dependent on the testator for the purposes of s.6(1)(d). The dependency which s.6(1)(d), and the Act generally, addresses is financial dependency. The Act is concerned only with the provision out of the estate of the deceased for the financial needs of those who had a claim on the testator's testamentary recognition. It is not the policy of the Act to console with legacies those who, while in no financial need, feel that the testator did not love them enough or feel that they should have a monetary solace for the loss of a loving relationship. 44 For these reasons I hold that James, Mijanou and Giselle have not established any dependency on the deceased within the meaning and for the purposes of s.6(1)(d) of the Act. It follows that their claims against the estate cannot succeed. 45 I should add that, had James, Mijanou and Giselle qualified as eligible persons within s.6(1)(d), I would not have regarded their applications as warranted within the meaning and for the purposes of s.9(1) of the Act. My reasons, briefly, are as follows:

their degree of direct financial dependence on the deceased, if it had qualified them as eligible persons, nevertheless was extremely slight;

each of them is young, healthy, in full time employment and has no pressing financial need: James is presently earning a gross income of $48,000 per annum and has no major liabilities; Mijanou is presently earning a gross income of $50,000 per annum and has liabilities of $13,000 which are not pressing; Giselle is presently earning a gross income of $48,000 per annum and has liabilities of $15,000 which are the result of voluntarily incurred expenses on her credit cards. 46 Mr Margo urges that a report of Dr Diamond, a psychiatrist, shows that James, Mijanou and Giselle are vulnerable in that they still live with their mother and are emotionally dependent upon her. I do not accept Dr Diamond's report as having any weight in this regard. He acknowledged that he did not interview James, Mijanou and Giselle and he candidly expresses reservations as to his opinions as to their psychological state. Further, whatever emotional dependence the children may have on their mother has not prevented them from engaging in full time employment. 47 In my opinion, the fact that the estate is a large one does not in itself warrant the making of applications by James, Mijanou and Giselle. It is clear that the deceased had the financial capacity to be more generous to his grandchildren than he was. But, as far as the purposes of the Act are concerned, capacity to be generous does not translate into obligation to be generous.

48 The deceased was born in Cairo in 1919, or possibly 1914. He was married twice. He married his first wife, Sarah, in about 1943 and had two children by that marriage, Victoria, born in 1944, and Mariane, born on 2 October 1948. 49 The deceased and his first wife separated in about 1956 and the deceased came to Australia in the following year. Some time prior to 1963 he was divorced and in February 1963 he married Claude. There are three children of this marriage, Muriel, born in December 1963, Nicole, born in December 1965 and Philip, born in November 1972. 50 The deceased became a very successful businessman in Australia. He left an estate which, including notional estate, is agreed by the parties as having a nett value of not less than $14,000,000. It may be that the estate is worth more but the parties have wisely agreed that the minimum value of the estate is a sufficient basis for the determination of the issues in these proceedings, thus avoiding a much more detailed, time-consuming and expensive investigation into all of the dealings of the deceased, Claude, and the other members of his family. 51 The personal and financial circumstances of Mariane have been set out in a number of detailed affidavits. Mariane was cross examined very briefly and none of the assertions which she makes in her affidavits are challenged. The following is a summary of the significant facts and circumstances. 52 Mariane was born in 1948 in Cairo, where her parents were living. She lived there with her parents and her elder sister, Victoria, until the outbreak of the Suez War in 1956. In that year, at the age of seven, Mariane was sent on her own to Paris where she lived with her maternal grandmother and her aunt and uncle for about six months. During 1956, her parents separated. 53 In about 1957, the deceased and Victoria came to Paris but Mariane's mother remained in Egypt. Mariane and Victoria were placed in an orphanage for a short time because the deceased was unable to look them. I accept that this was a very difficult, disturbing time for Mariane and that it has had effects on her personality as an adult. 54 Mariane came to Australia with Victoria in 1957. She attended Kambala High School, leaving in 1964 when she was sixteen. She studied for a diploma in early child education and worked from time to time in the area of child care. 55 In 1968, when she was about twenty, Mariane married Anthony Simons. The deceased paid for her engagement and wedding and also paid the rent during the couple's first year of marriage. 56 There were four children of Mariane's marriage to Anthony Simons: David, born on 24 October 1969, James, born on 16 August 1971, Mijanou, born on 23 October 1973, and Giselle, born on 16 January 1979. 57 In about 1982, Mariane and her husband separated. They subsequently divorced. Mariane's husband became bankrupt on his own petition and provided no financial support to Mariane or their children. Mariane received no property settlement as a result of the breakdown of her marriage. 58 After Mariane's separation, the deceased paid her a monthly allowance of $400 to assist with the living expenses of herself and her children. In 1987 the allowance was increased to $500 per month and the deceased to continue to pay this for another five years. 59 After the family home in which Mariane lived was lost, Mariane and her children stayed with the deceased and Claude for about two weeks. Thereafter they lived in a flat in a property at Bondi jointly owned by the deceased and Claude. After about five months, Mariane and the children moved into Unit 9. 60 As I have earlier recorded, Mariane continues to live in Unit 9 with Mijanou and Giselle, and James lives in a small flat in the basement. Mariane has never paid rent for her occupation of Unit 9 or for James' use of the flat. 61 In 1987 the deceased and Mariane purchased, as joint tenants, a property at 77 Brook Street, Coogee, for $125,000. $80,000 was borrowed from the Advance Bank and the deceased contributed most of the balance of the purchase price, stamp duty and costs of the purchase. Mariane paid the deposit of $12,500. The agreed value of the Brook Street property is now $1,037,500. 62 The Brook Street property was let and the rent was applied to the mortgage loan repayments supplemented, when necessary by payments from the deceased. The mortgage was discharged in about 1992 and from that time onwards all the rent received from the Brook Street property has been paid to Mariane. The monthly payments of $500 which had been made by the deceased to Mariane ceased at this time and the rental from the Brook Street property has been Mariane's primary source of income from that time to the present. 63 Between 1997 and 1999, the deceased funded the cost of a new bathroom and kitchen in Unit 9. 64 Under the will of the deceased, Mariane is given a legacy of $50,000 and the deceased's one-third interest in Unit 9. As a consequence of the death of the deceased, Mariane is now the sole surviving joint tenant of the Brook Street property. The nett rent which she receives from the property is between $22,000 and $24,000 per year. 65 Mariane has, for many years, been an artist. However, as is so commonly the case with artists, she makes very little, if anything, from her art. Her only income, besides the rental received from the Brook Street property, is board of $50 per week paid to her by each of James, Mijanou and Giselle. 66 Unit 9 is very run-down and in need of substantial repairs and maintenance. Further, Mariane's tenure of the unit, rent-free, is not secure. Although she is now entitled, under the deceased's will, to a tenancy in common as to a one-third share in the unit, that interest does not ensure that she will be able to remain in the unit rent-free indefinitely. One of the other co-tenants has died and it must be assumed that the other, the deceased's sister, is elderly. The executors of the co-tenants would doubtless require, sooner or later, that the unit either be sold to enable distribution of the co-tenants' estates, or else be rented out at a market rental. 67 If Mariane were required to vacate Unit 9, she would have nowhere to live other than the Brook Street property. She would then lose the rental from that property, which is her major source of income. 68 Further, the Brook Street property is run-down and in need of extensive repairs. A building report, which is not challenged, shows that necessary maintenance and repair to the Brook Street property would cost approximately $188,500. 69 Mariane's annual income is approximately $30,000, being almost $22,000 received from rental of the Brook Street property and almost $8,000 received as board from James, Mijanou and Giselle. Mariane's living expenses are, in round terms, $31,000 per year. Those expenses are not challenged by the Defendants as unreasonable. Indeed, as Mr Margo submits, it is clear that Mariane has for many years found it a severe struggle to survive financially. She has had to live frugally and to deny herself many ordinary pleasures of life which others would take for granted. At the age of 56 and without qualifications except in art, Mariane would find it exceedingly difficult to find remunerative employment which would materially ease her financial hardship. Further, in order to provide for the legal costs of these proceedings she has been compelled to borrow $50,000 on the security of a mortgage over the Brook Street property.

70 I am relieved of the necessity to make findings as to the extent of the deceased's estate and as to the extent of the claims of others upon it by reason of the agreements and concessions of the parties. As I have noted, the parties agree that the nett value of the estate, including notional estate, is not less than $14M. The Defendants have conceded that the estate is sufficient to enable further provision to be made for Mariane without detracting from the legitimate claims of other beneficiaries of the deceased. At the time this concession was made, it was well understood that Mariane was claiming further provision in an amount in the vicinity of $1.5M.

71 The Defendants submit that Mariane's claim against the estate fails at the first stage of consideration because she has not been left by the deceased with inadequate provision for her proper maintenance and advancement in life. The Defendants say that the deceased has made adequate provision for Mariane by providing for her the Brook Street property, of which is now sole owner, a one-third interest in Unit 9 and a $50,000 legacy. 72 I find that Mariane has been left without adequate provision for her maintenance and advancement in life. In doing so, I take into account that the deceased's estate is large and is able to provide comfortably for Claude and all of the deceased's children so that the obligation of the deceased to have regard to the needs of Mariane was of a relatively high order: see Anasson v Phillips (unrep) NSWSC 4 March 1988, per Young J (as his Honour then was). 73 In concluding that Mariane has been left without adequate provision I have taken into account the following circumstances:

her income is barely sufficient to meet her living expenses;

she is compelled to live a very frugal life and to deny herself art materials which she needs as an artist;

her present accommodation in Unit 9 is very cramped and badly in need of renovation;

she has no security of continued rent-free tenure of Unit 9;

if she were compelled in the Brook Street property, she would lose the only income which she presently has and would have to spend in repairs and maintenance far more than she is presently able to afford;

her prospects of any improvement in her financial position are remote, bearing in mind her age and condition in life;

she requires continuing counselling to assist her with a number of emotional difficulties.

74 The Defendants submit that Mariane should not be regarded as destitute: she owns outright the Brook Street property which is worth more than $1M and she has a $50,000 legacy as well as a one-third interest in Unit 9. If any further provision is to be made for Mariane, the Defendants say, it should be a very modest one. 75 I do not accept this submission. Bearing in mind the size of the deceased's estate and the circumstances of the other beneficiaries I find that the following needs of Mariane are reasonable and should be provided for out of the estate. 76 Mariane needs secure accommodation to a reasonable standard of living. She would prefer to move to the Brook Street property as that would allow James, Mijanou and Giselle to continue living with her. The cost of carrying out the necessary renovations and repairs to the Brook Street property is approximately $188,500. 77 Mariane would need to rent alternative accommodation for about a year while the necessary renovations to the Brook Street property are carried. Rent for such accommodation is estimated at $10,000. She would also be deprived of the income from the Brook Street property from the time the renovations commence. She estimates her living expenses for that year, other than rental, at about $60,000. The Defendants do not criticise the amounts for rental and living expenses as unreasonable, and I accept them. 78 Mariane is also liable to pay interest on the mortgage of the Brooks Street property in an amount of $9,450 per annum. 79 The total of Mariane's immediate needs as set out in paragraphs 76, 77 and 78 is, in round figures, $280,000. I accept that figure as reasonable. 80 As to Mariane's need for provision in the future, a calculation has been done to show what capital sum she would need to provide an income equal to approximately $57,000 per annum for the remainder of her life. The calculation has been based upon estimated life expectancy according to actuarial tables and the long term Commonwealth bond rate of 5.38% discounted for CPI of 2.4%. The calculation shows the nett present value of such capital sum at $1,092,000 in round figures. 81 Mr Margo says that if one is to provide separately for Mariane's immediate needs in the total sum of $280,000 referred to above, that sum includes provision for living expenses, rent and interest during the first year of this actuarially based calculation, so that $79,500 in round figures should be deducted from the sum of $1,092,000, leaving a total capital sum required of $1,012,500. 82 The Defendants have adduced no evidence challenging these calculations, nor has any criticism been made of them in the Defendants' submissions. I accept the calculations as reasonable. 83 Mr Margo submits that Mariane has a need for expert investment advice as to how to manage any lump sum provision which is made for her out of the deceased's estate. A total of $75,000 is claimed as the reasonable cost of such services over Mariane's lifetime. 84 I do not consider the claim for $75,000 to be a reasonable one. The investment of such sum as is provided to Mariane out of the estate should not be complex or difficult. Mariane's eldest son, is a solicitor. Her other children are well educated and have some experience of life. I think that, to the extent that Mariane requires any advice or assistance in making investment decisions, she will be able to obtain that advice and assistance from her children. 85 A calculation has been done showing that Mariane will need to furnish her accommodation at least twice more in her lifetime. The total cost is estimated at $25,000, in round figures. No criticism of this calculation has been made by the Defendants and I accept it. 86 Mr Margo submits that additional provision should be made out of the estate as a buffer for the vicissitudes of life, such as medical expenses as Mariane grows older, and for small luxuries such as occasional overseas trips to visit relatives. A figure of 10% of the capital sum is suggested. Again, no critical analysis of this figure has been made by the Defendants and I accept it as entirely reasonable. 87 In summary, I find that Mariane has established that, in addition to the provision presently made for her in the deceased's will, provision ought to have been made as follows: For immediate needs of renovating the Brook Street property and living expenses 280,000 To provide for future income 1,037,500 $1,317,500 To provide for vicissitudes of life (10% of capital sum) 131,750 $ 1,449,250

88 I would, therefore, order further provision for Mariane out of the deceased's estate in an amount of $1,450,000.

89 The parties have requested that I publish my reasons without making final orders so that they may consult and agree as to the most acceptable and convenient means of arranging out of the deceased's estate such provision as may be ordered. I accede to that request.

I find that James, Mijanou and Giselle do not qualify as "eligible persons" within the meaning of s.6(1)(d) of the Act.

I would decline to extend under s.16(2) of the Act the prescribed period within which James, Mijanou and Giselle may make an application under the Act.

I find that Mariane has established a sufficient cause for failing to make her application under the Act within the prescribed time.

Pursuant to s.16(2), I extend the time for the making of Mariane's application under the Act up to and including 27 February 2003.

I find that, in addition to the provision presently made for her in the will of the deceased, further provision should be made for Mariane in the sum of $1,450,000. 91 As requested, I will stand the proceedings over for a short time to enable the parties to bring in agreed Short Minutes reflecting these reasons. I will then hear argument as to costs, if any. 92 I indicate, without deciding, that my present view is that although the claims of James, Mijanou and Giselle have failed, it was not unreasonable for them to bring those claims against the estate so that their costs should be allowed out of the estate. 93 The costs of Mariane should also be allowed out of the estate. 94 I note that while the costs of this litigation have been high, measured by the standards applicable to the average type of case under the Act, the unusually extensive financial investigations which have been necessary on both sides in order to ascertain the value of the deceased's estate go a long way to explaining the costs which have been incurred. 95 Finally, I feel it would be remiss of me not to express my thanks to Counsel and solicitors on both sides for the exemplary way in which this case has been conducted. A case listed for six days has been concluded within two days, largely as a result of concessions fairly and sensibly made by Counsel on both sides about matters ultimately not really in dispute or not of critical importance. Further, the preparation and submissions have been of the highest order and have enabled me to deliver judgment promptly. For that assistance I express the Court's gratitude. - oOo -

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.

Family Provision Act 1982(NSW)

Wills Probate and Administration Act 1898(NSW)

At a glance

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Judgment (60 paragraphs)

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Legislation Cited (2)

Cases Cited (8)