Sloboda v Crawford

The structure of these reasons

1. Because of the view I have come to about Andrew's claim under the Act, it is strictly not necessary for me to determine what might be called the trust aspect in this case. If Michael's claim that Number 74 was never part of May's estate is correct, then Andrew's claim must fail because there is nothing from which an order for provision can be made. If Number 74 is part of her estate then I have determined this is not an appropriate case for a family provision order in any event. Therefore, after considering the facts, I will first deal with Andrew's family provision claim. I will then express some brief conclusions about the trust issues.

The facts

1. The background facts were all undisputed.
2. May was born on 4 September 1928. She met and married Marion Joseph Sloboda in the United Kingdom.
3. There were four children of the marriage: John, Andrew (born 1953), Michael (born 1955), and Linda.
4. In 1970, May, Marion, Andrew, Michael and Linda immigrated to Australia. By this time, John was married and living in Scotland.
5. After living in a migrant hostel, the family eventually moved into a housing commission residence in Macquarie Fields.
6. It was common ground that Marion and May spent their working lives in relatively low income employment. Marion worked (at least for some time) in a job moving bales of wool. May was employed in a furniture factory as a process worker.
7. In 1976, Andrew left home.
8. In 1979, Michael was seriously injured in a motor vehicle accident.
9. In 1985, Michael received a substantial compensation payment arising from his accident. He used that money to buy two houses in the suburb of St Andrew's: Number 74 and another property to which I shall refer as Number 31. The purchase price of Number 74 was $55,000.
10. Around this time, John had made unsuccessful efforts to emigrate to Australia. The family came to understand that John's prospects of a successful application would be enhanced if he owned property in Australia. There was no dispute that Number 74, though purchased by Michael, was put into John's name for the purpose of assisting John's prospects of being allowed to come to Australia. John's next application was successful and for about two and a half years John and his family lived in Number 74 before returning to Scotland. After that (in the late 1980s or early 1990s), May and Marion moved into Number 74 on the basis, the Court is satisfied, that Michael told them that they were free to live there for life.
11. For the period between around 1985 and when they moved into Number 74, May and Marion had lived with Michael in Number 31.
12. Michael divorced his first wife in 1986.
13. Marion retired in about 1989.
14. On the basis of four payslips for between November 1990 and February 1991 (addressed to her at Number 31), May's net weekly income was approximately $270 or a net annual income of approximately $14,000.
15. In around 1991 (Michael says 1990, but I note that the payslips for February 1991 are still addressed to May at Number 31), Michael sold Number 31 and moved to Queensland.
16. Also in around 1991, May retired. Although it was a little unclear in the evidence when exactly May and Marion moved into Number 74, it could not have been later than at some point in 1991.
17. There was in evidence a letter dated 9 December 1997 from Centrelink to May addressed to her at Number 74. This informed her that her age pension would be $285.70 per week. The same document noted that she was receiving rent assistance of $35.30 and that her annual income was $155 from financial investments of approximately $5,000 and a UK pension yielding approximately $8,800 per annum.
18. In about 1999, Michael returned to New South Wales and moved into Number 74 with his parents.
19. Also in 1999, Marion became terminally ill. John returned to Australia to visit his father and during the course of that visit John executed a power of attorney in favour of Michael on 7 July 1999.
20. Marion died on 26 July 1999.
21. In 2001, Andrew married his second wife, Maureen.
22. In mid-2005, John transferred Number 74 to May. The transfer was executed for John by Michael pursuant to the power of attorney referred to in paragraph [27] above. The transfer in evidence is undated, however, it bears an Office of State Revenue stamp saying, "Vendor duty endorsed" and another stamp indicating that the transfer was exempt from duty by reference to "80(1)". I have arrived at the date of mid-2005 because vendor duty was abolished in New South Wales on 2 August 2005. The parties accepted that the reference to "80(1)" was a reference to s 80(1) of the Duties Act 1997 (NSW) (the "Duties Act") which was an exemption from duty afforded to first home buyers.
23. On 20 October 2005, May executed the Will in the presence of Mr Banfield, solicitor, and a legal secretary. Mr Banfield is now dead. The Will appointed Michael as executor and gave him the entirety of May's estate. If he did not survive her then the Will appointed as executors and gave the entirety of her estate to Andrew and Linda in equal shares. At the same May executed a general power of attorney and form of appointment of enduring guardian in favour of Michael. The alternative enduring guardians were listed as Andrew and Linda.
24. Around this time, but before the execution of the transfer referred to in paragraph [30] above (matters which I infer from the content of the document), I am satisfied that Maureen at least wrote, and probably sent, this document to May and Michael ("Maureen's letter"): "Hello May & Michael, I've enclosed the Solicitors document of attorney for Michael and also the Transfer of Property for you to send John. I have tried not to make this too professionally done but as it is a legal document it has to be (even at its least), slightly legal in the terms to make it legal. It has to be signed in the presence of an independent witness this can be anyone but it would be better if it was a solicitor or a justice of the peace: but then you may not want to suggest this to John as if he takes it to a solicitor they may advise him differently to what you're requesting and that in itself could be a problem. So, if I may suggest if you (May), could write include a wee hand written note something simple and straight forward to John and "act" none-the-wiser it may work out fine? Something along the lines that Michael is moving up to his house m Queensland to live in the New Year to be closer to his friends George and Annie. You have decided (peace of mind and all that); you want the houses in you're [sic] name and all the bills transferred over. Anyway, we'll see how this goes, if it requires anything more than this then we will cross that bridge when we come to it. I'd better go so I can get this in the post to-day - the quicker its sent to you the quicker it can be sent to John. If Michael wants to change anything (I'll kick his teeth in), no seriously try not to change any of it has been set out as needed and deliberately hinting that there maybe an outstanding mortgage (John won't want to be hit with a bill). Cheerio for now....see you soon (Signed) Maureen, Andrew & Josh xx"
25. Maureen's letter was typewritten, but the signature is handwritten. As the letter also refers to Josh, I note that Josh was born in 2001.
26. From around 2005, Andrew and Maureen lived with May in Number 74.
27. In 2008, Andrew and Maureen separated.
28. In 2011, Andrew became May's carer and received a carer's pension.
29. May died at the age of 87 on 2 December 2015.
30. On 5 August 2016, probate for the Will was granted to Michael. Matters had clearly become tense between Michael (who was living in a remodelled garage at Number 74) and Andrew.
31. On 16 November 2016, Michael left this handwritten note on the door of Number 74: "Dear Andrew 16-11-2016 Moving out notice I regret having to write this letter. However, as you have told me you will move out when Maureen (your wife) has had a house inspection, I am giving you formal notice that you have to move out of my house no later than 1st of December 2016. When you moved in to look after our mother you agreed to move out after she died which was December 2nd 2015 then you said Oct 20 2016 I want my house back so my family can move it to look after me. If you do not leave before said dated I will have to take further action to get you to leave. Yours sincerely (Signed) M. Crawford"
32. Shortly thereafter Andrew left Number 74.
33. On 22 November 2016, Andrew filed his summons in these proceedings for family provision.
34. Since Andrew left Number 74, Michael has been living there with his estranged spouse and their child.
35. On 14 June 2017, Michael filed his cross-claim asserting that Number 74 was beneficially his and had never formed any part of May's estate.
36. At the date of hearing, Andrew was aged 64 and Michael was 62.

Other undisputed facts

1. A number of other background matters were not in dispute.
2. Andrew's claim has been brought in time and he is an eligible person. Ignoring what might be termed peripheral allegations of a kind which are common in this type of litigation, it is clear that both Michael and Andrew enjoyed good relationships with May. Both cared for her in health and, in her later years, in sickness. Insofar as this type of language remains relevant to applications under the Act, I have no doubt that they both have a moral claim to her bounty. Both are in straitened financial circumstances.
3. Andrew is 64 years old and has minimal assets and savings. He is unemployed and on a Newstart pension. He has had to move in with his 33-year-old daughter, his 12-year-old granddaughter and his daughter's boyfriend and the boyfriend's sister. Andrew contributes $100 a week to rent and makes other contributions to the household. He has a credit card debt of $11,000, no assets to speak of and his only income is the Newstart allowance. While he is not unhappy living with his daughter, he understandably wants his own space. He makes a claim on the estate of $100,000 based on purchasing a motorhome or caravan, valued between $50,000 and $60,000, which he would park in a permanent caravan park. He then would have to have funds to meet the rent in such a park of between $150 and $200 per week.
4. Michael's only source of income is also a Newstart allowance of $280 per week. He has applied for a disability pension owing to various physical and psychological difficulties from which he suffers. Ignoring Number 74, he has minimal assets consisting of $9,000 in a bank account, a Toyota motor vehicle with an estimated value of $11,000 and household contents with an estimated value of $12,000. His liabilities consist of credit card debts of $300 and his liability for the costs of the proceedings. He is separated from his wife, Elizabeth, but they continue to reside in Number 74 with their nine-year-old daughter. Michael's wife works as an aged care nurse and has an income of $1,121 per week.
5. The sole asset of May's estate is Number 74, which has an estimated value of $580,000. Assuming it were to be sold and allowing for the defendant's costs of the proceedings it was agreed that this left an estimated distributable estate of $488,544.70. Assuming Andrew is successful, the estate would be reduced by approximately a further $63,500 in relation to Michael's costs and disbursements on the ordinary basis.

The central factual question

1. Against the background of so many uncontroversial matters, in my view the case turns on the answer to this question: did Marion and May repay Michael what Michael had paid for Number 74? There was no dispute that, whether by an express or resulting trust, Number 74 was beneficially Michael's while it was held by John. Whether that position changed when or after Number 74 was transferred by John to May largely turned on whether Marion and May had paid Michael for the cost of Number 74.
2. A positive answer to this question was the basis of Andrew's contention that Number 74 was legally and beneficially May's and therefore part of her estate. There was no dispute that Andrew bore the onus of satisfying the Court to the level of actual persuasion on the balance of probabilities that such a repayment had, in fact, occurred. For the reasons which follow, I am unable to reach such a state of actual persuasion.
3. No one was able to provide any documentary evidence that shed light on this question one way or the other. Andrew accepted in cross-examination that his case on this point depended entirely on what he said he had been told by May.
4. Andrew's evidence may be summarised by what appears in his affidavit of 16 November 2016: "18. In 2005 Maureen sent a letter to John asking him to sign an agreement to release ownership of the St Andrews property from him to Mum. As far as I know this was done and the St Andrews property was transferred to Mum. 19. My mother had many conversations with me before and after she was diagnosed with Dementia. She would say words to the effect "Your father and I paid for this house. I want you to continue to live here after I'm gone. I can't stand the thought of Beth returning to live here". Beth was Michael's wife. I had been living at the family home for years and contributing towards all household expenses, running costs, maintenance and improvements. I had nowhere else to go and it was my pleasure to care for my mother."
5. Maureen's affidavit evidence was: "10. In April 2005, we visited May for Easter and my 40th birthday. We told May our plans to relocate to Sydney. She was very happy, as was all the family. During this visit, I had a conversation with Michael, the Defendant in these proceedings, where he said to me words to the effect "Can you write a letter to John and see if he will agree to relinquish his rights in mum's property so that it can be returned to her?". Michael was referring to his brother, John, who lives in Scotland. I was surprised at this request as Michael had for many years boasted that the house belonged to him. 11. I said to Michael words to the effect "I want May to be part of this discussion". Both Michael and I went into the house where May was sitting. We had a frank conversation where Michael said to May and myself "When John was immigrating to Australia, he had no way of showing a capacity for employment or ownership of a house. I had some finances at the time to allow my brother, John to purchase a property so his family could migrate to Australia. The house was purchased in 1986. John migrated to Australia with his wife and 2 children but shortly separated and they moved out of the property and John returned to Scotland". 12. May said words to the effect "Joe and I moved into the property after John moved out and we took over the full running costs. We secured a bank loan and paid Michael back all the money that he had contributed. The house became ours well before Joe died in 1999". 13. May went on to say "As you know, Joe was Polish and his heritage is relevant to his personality and character. He grew up in Poland and was in the Polish Army in a time of great unrest. He was steadfast, resolute and a proud man and both of us had a very strong work ethic. We would go without until we could afford what we wanted". I asked May "Why didn't the ownership of the home transfer from John to you and Joe while Joe was still alive?" May said words to the effect "I'm unsure but maybe we didn't bother because everybody knew the house was ours". 14. Michael confirmed what May had disclosed and said words to the effect "The house is mum and dad's and they paid me back. The house belongs to mum and it is long overdue that she should get the house back, which is why I want you to write to John to get him to sign it over back to mum". 15. Having been party to the above conversations, I felt satisfied I had the factual circumstances correct. I agreed to assist but I did say "I want John to be informed prior to the letter being sent". The following day John was telephoned. I spoke to him first, then May and finally Michael confirmed the conversations we had had the previous day. 16. I then wrote a letter stating Mr John Crawford relinquish the ownership to his mother, May Sloboda. I posted the letter to John in Scotland, which he signed, had witnessed and returned back to his mother in Australia."
6. Michael denied this version of events and said that the transfer from John to May was the product of two things: first, a fear on the part of May that if Michael ever sold Number 74 she would have to go into a retirement village; and, second, that if Michael ever went through another divorce, Number 74 might be lost in any property settlement. Michael's affidavit response included: 8. As to paragraphs 10 to 15: … (b) I deny the contents of the conversations referred to. I did not say the words attributed to me. I deny that my mother said to me the words attributed to her. (c) I purchased the property at XXX Drive, St Andrews (the "Property") in John's name so that he could migrate to Australia. (d) After my brother John moved out of the Property I moved my mother and father out of [Number 31], St Andrews (that I also owned) into the Property. This was in about 1990. (e) My father had retired from his occupation as a cleaner in 1989 and was not able to work because of an injury he suffered during the course of his employment. My mother was also not in employment. The only income they had at that time was the Aged Pension. (f) I am not aware of my parents obtaining a bank loan. My parents did not pay me any money for the Property. Based on what I heard and saw, they were not in a financial position to be able to borrow money. There has never been a mortgage registered on the title of the Property. (g) I deny that there was ever any conversation with my mother or my father about them paying me money for the Property. (h) When I arranged for my mother and father to move into the Property I said to them: Me: "You can live here for the rest of their lives." (i) There was no agreement for my parents to pay me any money for their occupation of the Property."
7. Linda's evidence given in Michael's case did not directly address the question of the alleged payments from Marion and May to Michael. Her affidavit evidence of 9 June 2017 was: "26. I cannot now recall the exact words spoken between Michael and my mother but I recall that in about 2005 Michael arranged for the Property to be transferred from John's name to our mother's name. … 27. I remember this being topic of conversation with all of us at that time. 28. Michael arranged for the house to be transferred into my mother's name and I recall he said to her that she "could live there for the rest of her life". 29. My mother made a new Will and I was informed by my mother, as was my brother Andrew. She said to me, words to the effect: "the house will be left to Michael." 30. I agreed to this because I knew that Michael had paid for the house in the first place. When my mother died, Michael, Andrew and myself all went to the Solicitor's office for the reading of the Will. The Solicitor said to us: "Do any of you disagree with the contents of the Will?" Andrew and I both said: "No, the house has always been Michaels.""
8. Linda's oral evidence was to the effect that, "We all knew Michael owned the house" and that the arrangement had been that Michael had bought Number 74 (which was first in John's name, then in May's name) on the basis that May could live there for the whole of her life.
9. Unsurprisingly, John was unable to cast any light on the question of the alleged payments. His affidavit evidence of 2 October 2017 was: "10. It was during this visit that I signed a Power of Attorney appointing my brother Michael as my Attorney. 11. In or about October 2006 I received a telephone call from my mother and she said to me, words to the effect: "Would you be happy for the house to "be transferred into my name?" I said, words to the effect: "I would be more than happy to transfer it to you." 12. Following that telephone call I had some further telephone conversations with Michael to arrange the transfer and for him to sign the documents for me as my Attorney. 13. Although the Transfer document was signed by Michael, I do have some recollection of some papers being sent to Scotland for me to sign but I do not recall what they were. I do not recall having any conversations in relation to the transfer of the property other than with my mother and Michael. 14. Even though the property was in my name, it was Michael who paid for it and it was always my belief and understanding that it was Michael's house."
10. I approach this question on the basis that Andrew must satisfy the Court on the balance of probabilities, but to the level of actual persuasion and bearing in mind the importance or seriousness of the question in the context of this case. I respectfully adopt what was said by Emmett J (as his Honour then was) in the matter of Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123, (2011) 297 ALR 56: "48. Under s 140(2) of the Evidence Act 1995 (Cth) (the Evidence Act), the Court must, in deciding whether it is satisfied that a case has been proved to the requisite standard, take into account: • the nature of the cause of action or defence; • the nature of the subject matter of the proceeding; and • the gravity of the matters alleged. When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2)."
11. Mr L Ellison of Senior Counsel, who appeared for Andrew, submitted that I should give considerable weight to Maureen's evidence as the closest to a disinterested witness in this case. I do not accept that submission for two reasons.
12. First, the fact that Andrew and Maureen are divorced does not in and of itself support the conclusion that she is, to any extent, disinterested. Her own affidavit evidence was that, "Although Andrew and myself no longer live together as husband and wife, we have remained close friends as we have a son together." Without intending any criticism, my firm impression was that Maureen was very much "in Michael's camp."
13. Second, I found her denial in relation to Maureen's letter (see paragraph [32] above) to be completely unconvincing. The copy tendered into evidence bore what she admitted was her own handwriting saying, "Maureen, Andrew and Josh xx." It was an original document. Confronted with the document, she forcefully asserted several times that she had never seen its contents before. Other than her denials, there is nothing to suggest that Maureen's letter is not genuine. I find that it is genuine. It is unnecessary for me to determine whether her assertions were the product of a bad memory or a desire to deceive the Court. Whatever the reason, her response completely undermined any confidence I may have had in her as a reliable witness.
14. Weighing Andrew's evidence on this point against the following matters, I am unable to reach a state of actual persuasion on the balance of probabilities that Marion and May paid Andrew for Number 74. It is the accumulated weight of the following matters that has led me to this position.
15. First, Mr J Armfield of Counsel, who appeared for Michael, submitted that what was known about Marion and May's financial position made it highly unlikely that they could ever have repaid Michael, even over a period of time, what he had paid for Number 74. Looking at the limited evidence about their financial circumstances (see paragraphs [22] and [25] above), that submission must be accorded some weight. However, what I find particularly persuasive, and which enables me to accept Mr Armfield's submission, is the overall history of Marion and May in relation to accommodation. The evidence is that they were frugal people who lived on relatively low incomes. Before they moved into Number 31 and then Number 74, it was accepted that they had lived their entire lives in Australia (other than for a few months at the outset) in Housing Commission accommodation.
16. There is no suggestion they ever attempted to buy their own home and I infer from that and the evidence, such as it is, that they would never have been able to have afforded to do so. In particular, I am satisfied that it is highly unlikely that they could have ever obtained a loan. This casts serious doubt on Maureen's evidence that May told her and Andrew that they (May and Marion) had taken out a loan to pay Michael out, particularly when the chronology suggests that this would have happened when both Marion and May were retired and living on pension income. No mortgage or caveat has ever been registered over Number 74. It is this last mentioned factor of retirement that I also take into account. It seems to me highly unlikely that they would have been able to have a loan or to have afforded to have paid Michael out once they were in retirement. Finally, given that their financial resources were obviously always somewhat limited, why would they have imposed on themselves the burden of paying Michael out when, as I accept, he had never asked for repayment and had told them they could stay in Number 74 for life? He reiterated this offer to May after Marion's death.
17. Second, the third paragraph of Maureen's letter paints a completely different picture of why Number 74 was being transferred to May. If, in fact, May and Marion had paid Michael what he had paid for Number 74, that would have been a simple and straightforward explanation.
18. Third, there was uncontested evidence that Michael had made improvements to Number 74 over the years to a value of approximately $36,000. Even accepting that he was living there, making such improvements seems an entirely incongruous course of action if one understood that the property was not his because he was being paid for it by May and Marion.
19. Fourth, Michael's explanation for why the transfer occurred (see paragraph [55] above), strikes me as inherently probable, especially when there was already history in the family of Number 74 being put in particular people's names for particular purposes. Quite apart from assuring her own peace of mind, putting Number 74 in May's name to avoid adverse consequences if Michael went through another divorce, seems to me to be entirely plausible.
20. For these reasons I am not satisfied that Michael was paid by Marion and May for Number 74. Furthermore, for the same reasons, I accept Michael's evidence that he was in fact not paid by them and that the arrangement between him and Marion was for the legal ownership of Number 74 ultimately to reflect his beneficial ownership through the mechanism of the Will.

The Act

1. Part 3.2 of the Act deals with family provision orders. Division 1 of that part identifies in s 57 who are "eligible persons who may apply to the Court for a family provision order in respect of the estate of a deceased person." Section 58(2) requires an application for a family provision order to be "made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown."
2. Division 2 of Part 3.2 of the Act deals with determination of application for family provision orders. For the purposes of these proceedings, the relevant provisions are: "59 WHEN FAMILY PROVISION ORDER MAY BE MADE (1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that: (a) the person in whose favour the order is to be made is an eligible person, and (b) in the case of a person who is an eligible person by reason only of paragraph (d), (e) or (f) of the definition of "eligible person" in section 57 - having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application, and (c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both. (2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made. (3) The Court may make a family provision order in favour of an eligible person in whose favour a family provision order has previously been made in relation to the same estate only if: (a) the Court is satisfied that there has been a substantial detrimental change in the eligible person's circumstances since a family provision order was last made in favour of the person, or (b) at the time that a family provision order was last made in favour of the eligible person: (i) the evidence about the nature and extent of the deceased person's estate (including any property that was, or could have been, designated as notional estate of the deceased person) did not reveal the existence of certain property ("the undisclosed property" ), and (ii) the Court would have considered the deceased person's estate (including any property that was, or could have been, designated as notional estate of the deceased person) to be substantially greater in value if the evidence had revealed the existence of the undisclosed property, and (iii) the Court would not have made the previous family provision order if the evidence had revealed the existence of the undisclosed property. (4) The Court may make a family provision order in favour of an eligible person whose application for a family provision order in relation to the same estate was previously refused only if, at the time of refusal, there existed all the circumstances regarding undisclosed property described in subsection (3) (b). 60 MATTERS TO BE CONSIDERED BY COURT (1) The Court may have regard to the matters set out in subsection (2) for the purpose of determining: (a) whether the person in whose favour the order is sought to be made (the "applicant" ) is an eligible person, and (b) whether to make a family provision order and the nature of any such order. (2) The following matters may be considered by the Court: (a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship, (b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate, (c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered, (d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate, (e) if the applicant is cohabiting with another person--the financial circumstances of the other person, (f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated, (g) the age of the applicant when the application is being considered, (h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant, (i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate, (j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person, (k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so, (l) whether any other person is liable to support the applicant, (m) the character and conduct of the applicant before and after the date of the death of the deceased person, (n) the conduct of any other person before and after the date of the death of the deceased person, (o) any relevant Aboriginal or Torres Strait Islander customary law, (p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."
3. In West v Mann [2013] NSWSC 1852 at [9] to [11], I explain the reasons for the approach I adopt to applications under the Act. That is how I will proceed in this case.
4. By reference to the language of the Act the questions and issues which the Court must take into account are: 1. Is the person who has applied to the Court for a "family provision order" (as defined in s 3 of the Act) an eligible person under s 57 of the Act? In accordance with s 60(1)(a), the Court may (not must) have regard to the matters set out in s 60(2) in determining whether that person is an eligible person. It is not readily apparent how many of those matters could be relevant to the issue of eligible person, but nothing turns on that observation. 2. If the answer to question (1) is "yes", has the application been filed in the Court's Registry not later than 12 months after the deceased's death (ss 58(2) and (3))? 3. If the answer to question (2) is "no", has the eligible person who has brought the application shown sufficient cause for the Court to order otherwise to extend the date for the filing of the application in the Court's Registry (ss 58(2) and (3))? 4. If the answer to question (2) is "yes" or the Court has otherwise ordered under s 58(2), is the Court satisfied that the person in whose favour the order is to be made (the "applicant") is an eligible person (s 59(1)(a))? In reaching the requisite state of satisfaction the Court may (not must) have regard to the matters set out in s 60(2). As a theoretical matter this question admits of the possibility that "the person in whose favour the order is to be made" is not the person who has brought the application (in which case, the latter must also be an eligible person). 5. If the answer to question (4) is "yes", what provision has been made for the proper maintenance, education or advancement in life of the applicant by the deceased's will or by the operation of the intestacy laws (the "Provision")? 6. Is the Court satisfied, at the time when the Court is considering the application, that the Provision is not adequate for the proper maintenance, education or advancement in life of the applicant? 7. If the answer to question (6) is "yes" (i.e. the Court is satisfied the Provision is not adequate for the specified purpose) then the Court's discretion conferred by the chapeau to s 59(1) to make a family provision order in favour of the applicant (the "Discretion") is enlivened. 8. Once the Discretion is enlivened then, noting s 59(2), what provision, if any, does the Court think ought to be made for the proper maintenance, education or advancement in life of the applicant, having regard to the facts known to the Court at the time the order is made (the "Proposed Provision")? This is an evaluative judgment which arises from the word "ought" and requires examination of the applicant's needs. In making this judgment the Court may (not must) have regard to the matters set out in s 60(2) ("the nature of any such order": s 60(1)(b)). 9. Having answered question (8), should the Court exercise the Discretion to make an order for the "Proposed Provision"? In deciding whether to exercise the Discretion to make such an order, the Court may (not must) have regard to the matters set out in s 60(2) ("whether to make a family provision order": s 60(1)(b)). 10. Section 60(2) provides a helpful checklist but it is no more than that. The Court is not obliged to take those matters into account. The extent to which it does (if at all) will depend upon the facts of each particular case. 11. Section 60(2)(p) confirms the breadth of matters the Court can take into account. Once enlivened, the Discretion is expressly fettered only by the requirement in s 59(2) that if an order is made, it must be such order "as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made". The Discretion is otherwise unconfined, which means that in answering question (8) the Court is otherwise constrained only by the need to act judicially, that is to say "not arbitrarily, capriciously or so as to frustrate the legislative intent": Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ. The Court must act rationally and exercise the Discretion for the purpose for which it was conferred.

Uncontroversial matters

1. Because Andrew is May's son, he is an eligible person under s 57 of the Act. The summons was filed less than 12 months after May's death. It follows that the questions set out in sub-paragraphs (1), (2) and (4) of paragraph [73] above are all answered, "Yes."
2. The provision referred to in the question posed in subparagraph [5] of paragraph [73] above is nil.

Has adequate provision not been made for Andrew?

1. It is next necessary to consider what is sometimes referred to as the jurisdictional question. This is set out in subparagraph [73(6)] above, namely whether the Court is satisfied, at the time when the Court is considering the application, that the provision for Andrew is not adequate for his proper maintenance, education or advancement in life. If that question is answered, "Yes," then the Court's discretion to make a family provision order in favour of Andrew is enlivened.
2. In Verzar v Verzar [2014] NSWCA 45, Meagher JA, with whom Macfarlan and Barrett JJA agreed, summarised the legal principles governing this stage of the inquiry: "39. The primary judge concluded that Stephen's will did not make adequate provision for the respondent's proper maintenance, education and advancement in life. Whether such provision has been made requires an assessment of the applicant's financial position, the size and nature of the deceased's estate, the relationships between the applicant and the deceased and other persons who have legitimate claims upon his or her bounty and the circumstances and needs of those other persons: see Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 75 at [70] and McCosker v McCosker [1957] HCA 82; 97 CLR 566 at 571-572; Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 210; and Vigolo v Bostin [2005] HCA 11; 221 CLR 191 at [16], [75], [112]. Such an assessment is necessary because of the inter-relation between "adequate provision" and "proper maintenance". Whilst the inquiry as to what is "adequate" directs particular attention to the needs of the applicant, what is "proper" requires regard to all the circumstances of the case, and in particular the size and nature of the estate and the needs of the other beneficiaries or potential beneficiaries. As was observed by Sackville AJA in Foley v Ellis [2008] NSWCA 288 at [88], a court cannot consider the propriety and adequacy or inadequacy of any testamentary provision for an applicant in isolation from the resources and needs of the other claimants on the deceased's bounty."
3. In addition to the passage from Verzar quoted in the preceding paragraph above, I also respectfully adopt what Hallen J said in Camernik v Reholc [2012] NSWSC 1537 both as to the general approach to be adopted to applications for family provision and general observation concerning claims by adults and children: "154. Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education or advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, Young J, 17 May 1996, unreported); Vigolo v Bostin at 199 and 204; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59. 155. An important consideration is whether, in all the circumstances, the community expectation would be for greater benefaction to have been made for the proper or adequate provision of the person seeking provision. Gleeson CJ observed in Vigolo v Bostin, at 199, that the justification for interference with freedom of testation is to be found in the failure of a deceased to meet the obligations, which the community would expect in terms of maintenance, for those persons within the class of eligible persons. The process requires the court to "connect the general but value-laden language of the statute to the community standards". 156. As Allsop P said in Andrew v Andrew, at [16]: "If I may respectfully paraphrase Sheller JA [in Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24 at 46F-47B], the Court in assessing the matter at s 59(1) and the order that should be made under s 59(1) and (2), should be guided and assisted by considering what provision, in accordance with prevailing community standards of what is right and appropriate, ought to be made. This, Sheller JA said ... involved speaking for the feeling and judgment of fair and reasonable members of the community. It is to be emphasised that s 59(1)(c) and s 59(2) refer to the time when the Court is considering [an application for a family provision order] and the facts then known to the Court. The evaluative assessment is to be undertaken assuming full knowledge and appreciation of all the circumstances of the case. This ... makes the notion of compliance by the testator with a moral duty (on what he or she knew) apt to distract from the statutory task of the Court." 157. In all cases under the Act, what is adequate and proper provision is necessarily fact specific. An inflexible approach cannot be taken in assessing the questions to be answered. 158 The Act is not a "Destitute Persons Act", and it is not necessary, therefore, that the applicant should be destitute to succeed in obtaining an order: In re Allardice, Allardice v Allardice (1909) 29 NZLR 959 at 966. 159. In relation to a claim by an adult child, the following principles are useful to remember: (a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. (b) It is impossible to describe in terms of universal application, the obligation, responsibility, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801. (c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death if he or she is able to do so. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia. (d) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VicRp 58; [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons to whom the applicant, however reasonably, wishes to support, where there is no obligation to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86]. (e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2), at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45. (f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17]. (g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149."
4. Applying the principles just set out, the Court is satisfied that the provision is not adequate for Andrew's proper maintenance, education or advancement in life. The question posed in subparagraph [73(6)] above is answered, "Yes." The reason for this is that, as I have said, Andrew does have a moral claim on May's testamentary bounty, not least as an adult child who had been a dutiful son and who has no real reserves for the future. That claim is obviously not met by his exclusion from the Will.

What provision ought to be made for Andrew

1. The various considerations under s 60 of the Act are well-known. I accept Mr Armfield's observation that, had the estate been larger, Andrew would have had a good case for additional provision. However, in the exercise of the Court's discretion, the Court declines to order further provision for Andrew for these reasons: 1. The small size of May's estate. 2. The fact that Michael had paid for Number 74 and had never been paid for it by anyone. 3. There is no suggestion that in permitting the transfer to May, Michael ever intended to abandon his status as the "true" owner of Number 74. 4. Any order would dispossess Michael from his home, to which he has also made additional improvements. I do not accept Mr Ellison SC's submission that this could be cured by a reverse mortgage. This still, in effect, requires Michael to part with what was his and fetters his ability to deal with it.
2. For these reasons, the Court declines to exercise its discretion to make a family provision order in favour of Andrew and answers the question posed in subparagraph [73(8)] above, "No."

The trust issues

1. By his cross-claim, Michael sought this declaration: "1. A declaration that the property situated and known as 74 XXX, St Andrews NSW 2556, folio identifier XXX, (the Property) is held by the Cross-Claimant as the executor of the late May Sloboda on trust for the benefit of the Cross-Claimant absolutely."
2. In addition to denying that Michael was entitled to such a declaration, the Court gave leave to Andrew to amend his defence to the cross-claim to plead these special defences: "12. In the facts and circumstances which have happened, the cross-claimant having delayed the bringing of the cross-claim until after the death of the deceased and the death of the deceased's husband in 1999, delay and prejudice to the cross-defendant is such that the cross-claimant should be denied the relief he seeks. Particulars (a) The deceased died on 2 December 2015; (b) The deceased's husband died 26 July 1999; (c) The property was transferred to the deceased in October 2005; (d) All documents except for the transfer to the deceased cannot be located; (e) The deceased and her husband's financial records no longer exist; and (f) Any solicitor involved in the transfer and the creation of the deceased's will has died. 13. Further, the cross-claimant having represented, or participated in the deceased's representation of herself as a First Home Owner (and thereby obtaining certain financial benefits under the Duties Act 1997, i.e. the reduction or elimination of ad valorem duty which might otherwise be payable on the subject transfer) rather than the deceased holding the subject realty on trust for the cross-claimant (as is alleged in the cross-claim), the cross-claimant is estopped or prevented or otherwise denied from claiming the nature of the ownership of the realty is other than claimed to be at the time of transfer ABXXX and at the time of death of the deceased; that is, the Deceased was the legal and beneficial owner of the subject realty. 14. Further, the effect of the participation of the cross-claimant, as pleaded in 13, in the transfer of the realty to the deceased is such he comes to court not having clean hands and as such is not entitled to the relief he claims."
3. I will briefly express my conclusions on the questions raised by the cross-claim, notwithstanding that as I explained in paragraph [8] above, it is strictly not necessary for me to do so.
4. My conclusions are: 1. By reason of the factual findings I have made above, I am satisfied that the benefit of Number 74 has, at all times, been Michael's. In those circumstances, and absent any disentitling factors, Michael would be entitled to the declaration that he seeks in the cross-claim. 2. I do not consider there has been any disentitling or disqualifying delay in Michael's asserting his interest. This is because no occasion has arisen where he has been required to or ought to have done so until Andrew brought these proceedings. Nor is there any evidence that Michael's lawyers sought to obtain evidence which is no longer available due to the passage of time. 3. It is clear that a trustee would not have been eligible for the duty exemption under the First Home Buyer's Scheme (see s 73(1) of the Duties Act). However, the evidence does not permit the conclusion that is what was done, given that we have no evidence of what passed before Mr Banfield. Even if it was, the transfer would have been subject to only nominal duty if it had been characterised as the transfer from one trustee to another (see s 54 of the Duties Act). I accept Mr Armfield's submission that, applying Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, there is no conduct proven in this case that would disentitle Michael from the declaration he seeks. 4. Even if the transfer to May was done with some intention to defraud the revenue (and the evidence does not permit and I make no such finding), there is no evidence that Michael was a knowing participant. Therefore, the defences of lack of clean hands, estoppel or similar must fail.
5. I will give the parties an opportunity to address on the form of orders required to give effect to these reasons.

Postscript

1. Mr Armfield persuaded me that there is utility in the Court making the declaration sought by Michael, in particular to facilitate transferring the registered title to Number 74 to Michael. Mr Ellison SC does not oppose this.
2. The orders of the Court are as follows: 1. The summons is dismissed. 2. The Court declares that the property situated and known as 74 XXX, St Andrews, NSW, 2566 Folio Identifier XXXX is held by the said Michael Crawford as the executor of the estate of the late May Sloboda on trust for the benefit of the said Michael Crawford absolutely. 3. The plaintiff is to pay the defendant/cross-claimant's costs of the summons and the cross-claim. 4. The exhibits are to be returned to the parties to be held by them in accordance with the applicable practice note.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 April 2018