[1976] HCA 5
Amaca Pty Ltd v Novek, [2009] NSWCA 50
Andrew v Andrew (2012) 81 NSWLR 656
[2011] HCA 18
Ball v Newey (1988) 13 NSWLR 489
Barnes v Barnes (2003) 214 CLR 169
[2003] HCA 9
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424
[2001] FCA 1833
Chapple v Wilcox (2014) 87 NSWLR 646
Source
Original judgment source is linked above.
Catchwords
[1976] HCA 5
Amaca Pty Ltd v Novek, [2009] NSWCA 50
Andrew v Andrew (2012) 81 NSWLR 656[2011] HCA 18
Ball v Newey (1988) 13 NSWLR 489
Barnes v Barnes (2003) 214 CLR 169[2003] HCA 9
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424[2001] FCA 1833
Chapple v Wilcox (2014) 87 NSWLR 646[2011] NSWCCA 63
Gett v Tabet [2009] NSWCA 76254 ALR 504
House v King (1936) 55 CLR 499[1936] HCA 40
Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177[1973] HCA 8
Kuru v State of New South Wales (2008) 236 CLR 1[1986] HCA 17
Sassoon v Rose [2013] NSWCA 220
Page v Page [2017] NSWCA 14
Palffy v Rogan (2013) 85 NSWLR 253[2013] NSWSC 522
Petrohilos v Hunter (1991) 25 NSWLR 343
Re Fulop deceasedFulop v Public Trustee (1987) 8 NSWLR 679
Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459[2017] NSWCA 38
Shaw v Lambert 9 October 1987, unreported
Singer v Berghouse (1994) 181 CLR 201[1994] HCA 40
Spata v TuminoEstate of Gina Spata [2017] NSWSC 111
Tabet v Gett (2010) 240 CLR 537
[2010] HCA 12
Tobin v Ezekiel (2012) 83 NSWLR 757
[2012] NSWCA 285
Vigolo v Bostin (2005) 221 CLR 191
[2005] HCA 11
Warren v Coombes (1979) 142 CLR 531
Judgment (31 paragraphs)
[1]
ee [2017] NSWCA 305
Texts Cited: New South Wales Law Reform Commission, Report on the Testator's Family Maintenance and Guardianship of Infants Act 1916 (Report 28, 1977)
New South Wales Law Reform Commission, Uniform Succession Law: Family Provision (Report 110, May 2005)
Queensland Law Reform Commission, Report to the Standing Committee of Attorneys General on Family Provision (Paper 28, December 1997)
Category: Principal judgment
Parties: Giovanni Spata (Appellant)
Solicitors:
Hunter Lawyers (Appellant)
George Khoury & Co (Respondents)
File Number(s): 2017/86435
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Equity - Family Provision List
Citation: [2017] NSWSC 111
Date of Decision: 24 February 2017
Before: Brereton J
File Number(s): 2015/087274
[4]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[5]
headnote
[This headnote is not to be read as part of the judgment]
A dispute arose concerning the estate of the late Gina Spata. The appellant is the deceased's adult stepson and the respondents are the deceased's nephew and niece. Probate of the deceased's will was granted to the respondents, to whom the deceased left her whole estate in equal shares as tenants in common.
The appellant filed a summons seeking an order that he was eligible for provision under the Succession Act 2006 (NSW) in respect of the deceased's estate. The primary judge rejected the appellant's claim on the basis that "dependency" on the deceased had not been established. The primary judge found that if "dependency" had been established, there were circumstances warranting the appellant's claim and that inadequate provision for his proper maintenance and advancement had been made. An award of $300,000 from the deceased's estate would have been made.
The issues on appeal were:
(i) whether the scope and meaning of the term "wholly or partially dependent" used by the primary judge was narrower than that provided by s 57(1)(e) of the Succession Act; and
(ii) whether on the facts of this case the appellant was "wholly or partly dependent" on the testator.
The respondents cross-appealed. The issues there were:
(iii) whether the primary judge erred in finding that there were factors which warranted the making of the appellant's claim; and
(iv) whether the primary judge erred in finding that had the appellant been an eligible person he should have received provision from the deceased's estate, or alternatively if he did receive provision, an amount of $300,000 was an inappropriate sum.
The Court, (Macfarlan and Payne JJA, Sackville AJA) dismissing the appeal and the cross-appeal, held:
In relation to issue (i), per Payne JA at [53]-[72], Macfarlan JA agreeing at [1], Sackville AJA agreeing at [132], [135]-[139]:
The word "dependent" is an ordinary English word and the question of whether a person is wholly or partly dependent on another is a question of fact. The correct approach to construction of a provision such as s 57(1)(e) of the Succession Act is that the court should be astute not to place a restricted construction upon the terms of such a law.
The primary judge erred by regarding the issue of the appellant's dependency on the deceased as determined by the fact that the deceased was not a co-owner of the property in which she and the appellant lived for a period. It was necessary to have regard to the whole of the relationship between the appellant and the deceased.
Succession Act 2006 (NSW) s 57(1)(e); Page v Page [2017] NSWCA 141; Petrohilos v Hunter (1991) 25 NSWLR 343; Aafjes v Kearney (1976) 180 CLR 199; Tobin v Ezekiel; Ball v Newey (1988) 13 NSWLR 489 applied.
Clinch v Swift 13 October 1988, unreported; Shaw v Lambert 9 October 1987, unreported not followed.
In relation to issue (ii), per Sackville AJA at [143]-[152], (Macfarlan JA agreeing at [1], Payne JA agreeing at [73]-[88]):
The appellant did not discharge the burden of establishing that he was wholly or partly dependent on the deceased for the provision of accommodation. The appellant did not adduce credible evidence demonstrating that the deceased encouraged the appellant to remain at the property or actively supported or participated in a decision to enable him to stay at the property for a prolonged period. Accordingly, the primary judge did not err in ordering the summons be dismissed.
In relation to issue (iii), per Payne JA at [94]-[104], (Macfarlan JA agreeing at [1], Sackville AJA agreeing at [153]):
The primary judge was correct in the contingent finding that there were circumstances warranting the making of the claim and that all of the relevant circumstances, including representations made by the testator that she would make provision in her will for the appellant, created a moral obligation on the part of the testator to make provision for the appellant in her will.
Succession Act 2006 (NSW) s 59(1)(b); McKenzie v Topp [2004] VSC 90; Lodin v Lodin [2017] NSWCA 327; Chapple v Wilcox (2014) 87 NSWLR 646 applied.
In relation to issue (iv), per Payne JA at [110]-[128], (Macfarlan JA agreeing at [1], Sackville AJA agreeing at [153]):
The primary judge was correct in the contingent finding that adequate provision for the proper maintenance, education or advancement in life of the appellant had not been made from the deceased's estate. The competing claims of the respondents were not such as to require the appellant's claim to be disregarded or discounted. The primary judge made a broad evaluative judgment in determining the amount of adequate provision. While reasonable minds may differ about the amount of provision, the respondents did not demonstrate that the primary judge erred in arriving at the figure of $300,000.
Succession Act 2006 (NSW) s 59(1)(c); Aubrey v Kain [2014] NSWSC 15; Vigolo v Bostin (2005) 221 CLR 191; Singer v Berghouse (1994) 181 CLR 201; Andrew v Andrew (2012) 81 NSWLR 656; Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253 considered.
[6]
Judgment
MACFARLAN JA: I agree with the judgment of Payne JA and also with that of Sackville AJA.
PAYNE JA: This is an appeal from a decision rejecting the appellant's eligibility for provision out of the estate of the late Gina Spata under the Succession Act 2006 (NSW): Spata v Tumino; Estate of Gina Spata [2017] NSWSC 111. Gina Spata died on 29 March 2014, aged 77. She was predeceased by her husband, Rosario (Ross) Spata, who died on 7 February 2010.
The appellant, Giovanni (John) Spata, is the deceased's stepson. The respondents, Franco Tumino and Enza Liberatore, are the deceased's nephew and niece. Without intending any disrespect, I will refer to the deceased as Gina, her late husband as Ross, the appellant as John and the respondents as Franco and Enza respectively.
On 17 June 2014, probate of Gina's will was granted to Franco and Enza, to whom she left her whole estate in equal shares as tenants in common.
On 23 March 2015, John filed a summons seeking an order under the Succession Act in respect of Gina's estate. The primary judge rejected the appellant's claim on the basis that John had not established that he was a person who was, at any particular time, wholly or partly dependent on the deceased, as required by s 57(1)(e) of the Succession Act. John was not eligible under s 57(1)(e) of the Succession Act as "dependency", either wholly or partially, upon Gina had not been established. The primary judge found that if he were wrong about "dependency", there were circumstances warranting the making of the claim by John and that inadequate provision for his proper maintenance and advancement had been made. Had John been eligible, the primary judge would have awarded him $300,000 from Gina's estate.
John appeals against the primary judge's decision. Franco and Enza cross-appeal against the contingent findings of circumstances warranting the making of the claim, the finding of inadequate provision and the quantum of the award.
[7]
Relevant facts
The facts found by the primary judge were not controversial on the appeal. Gina was born on 1 January 1937. Ross, the father of John, was born on 21 September 1926.
In about 1953, Ross married Nancy Barone. They had three children together: Salvatore (Sam) born in 1954; John born on 11 September 1955, and Roberto (Robert) born in 1957. Nancy died in 1973.
From at least the 1960s, Ross and his family occupied 306 West Botany Street Rockdale. By 1973 Ross had purchased the adjoining property at 304 West Botany Street Rockdale, and in the mid-1970s he purchased 24 Platts Avenue Belmore.
In June 1979, John married Valerie. Following their marriage John continued to reside in 306 West Botany Street with Valerie. They lived at 306 West Botany Street until the mid-1980s, when they moved to rented premises and subsequently purchased their own property.
On 8 March 1980, Gina and Ross were married. At that time, Gina owned a 5/6th interest in 2/59 Tebbutt Street Leichhardt, as tenant-in-common with her sister Giovanna Tumino, who owned the remaining 1/6th.
Following their marriage, Ross and Gina initially resided in 306 West Botany Street, together with John and Valerie. In about October 1980, Ross and Gina moved (with Robert) to Gina's flat in 2/59 Tebbutt Street Leichhardt, leaving John and Valerie occupying 306 West Botany Street. In December 1980, Robert married Marie and moved out of 2/59 Tebbutt Street.
In about 1982, Ross, who was employed by Schweppes at Alexandria as a fitter, retired as a result of a work injury. He received a compensation payment of approximately $40,000 which he used to purchase a motor vehicle and to fund his retirement.
In November 1982, Ross purchased Gina's sister's 1/6th interest in 2/59 Tebbutt Street.
Gina retired in 1988. Prior to that she was in full-time employment with AWA at Strathfield. At that time, Ross and Gina moved from Tebbutt Street to 24 Platts Avenue Belmore, which had been renovated over the preceding eight years. John and his brothers significantly contributed to the acquisition, conservation and improvement of Platts Avenue.
In 1989 or 1990, Ross transferred ownership of 306 West Botany Street to Robert.
John and Valerie separated in September 1995 and their marriage was dissolved in 2000. The primary judge found that John resided with Ross and Gina, at 24 Platts Avenue, for "a few years" after his separation. As will become apparent, the primary judge accepted evidence from Sam that John was invited to live at 24 Platts Avenue after his separation from Valerie by both Ross and Gina.
[8]
Primary judgment
The question of whether John was an "eligible person" pursuant to s 57(1)(e) of the Succession Act turns on whether John was "wholly or partly dependent" on Gina at any time.
John advanced two grounds for dependence upon Gina before the primary judge:
1. dependence upon Gina for accommodation; and
2. dependence upon Gina for the provision of domestic services and the supply of food whilst he resided with her in the same household.
The primary judge rejected both aspects of the claim of dependence. The primary judge found that John was a member of the household at 306 West Botany Street in 1980 (for a few months) and at 24 Platts Avenue from 1995 (for a few years), whilst Gina was a member of that household.
The primary judge, however, rejected the appellant's claim on the basis that eligibility under s 57(1)(e) of the Succession Act was not made out. His Honour held that "dependency", either wholly or partially, upon the deceased could not be established.
With respect to accommodation, the primary judge found that it could not be said that John was dependent upon Gina, as distinct from Ross, for accommodation. Ross was the registered proprietor of both 306 West Botany Street in 1980 and 24 Platts Avenue at all relevant times. The primary judge found that, in truth, Gina and John were both dependent upon Ross for accommodation.
With respect to the provision of domestic services, the primary judge found that John was not dependent on Gina for domestic services during either period they resided in the same household. The primary judge described the evidence of dependence given by John on these issues as relating to trivial assistance. In relation to the provision of food, the primary judge was not satisfied that Gina provided John's food and household supplies during the second period.
The primary judge was satisfied that had dependency been established, there were sufficient factors warranting the making of an application under s 59 of the Succession Act. The primary judge found that John, if eligible, would only have been so under category (e) of the definition in s 57(1), but that there were factors which gave John the status of a person who would generally be regarded as a natural object of testamentary recognition by the deceased: Re Fulop deceased; Fulop v Public Trustee (1987) 8 NSWLR 679 at 681E (per McLelland J); Churton v Christian (1988) 13 NSWLR 241 at 242G (per Hope JA), 244F (per Mahoney JA), 252A-E (per Priestley JA).
[9]
Notice of appeal
The appellant's notice of appeal dated 22 May 2017 raised the following issues:
1. whether the primary judge erred in finding that the appellant was not "wholly or partially dependent" upon the deceased and thus not an eligible person pursuant to s 57(1)(e) of the Succession Act (grounds 1 and 2); and
2. whether the primary judge erred in ordering the summons be dismissed rather than making an order that the appellant receive provision from the deceased's estate in the sum of $300,000 as adequate provision (ground 3).
[10]
Notice of cross-appeal
The notice of cross-appeal raised the following grounds:
1. the primary judge erred in finding that there were factors which warranted the making of the appellant's claim (ground 1);
2. the primary judge erred in finding the deed of family arrangement did not extinguish any obligation which the deceased may have owed to the appellant (ground 2);
3. the primary judge erred in holding the competing claims of the respondents were not such as to require the appellant's claim to be disregarded or discounted (ground 3);
4. the primary judge erred in finding that had the appellant been an eligible person he should have received provision from the deceased's estate, or alternatively if he did receive provision, an amount of $300,000 was an inappropriate sum (ground 4); and
5. the primary judge erred in finding that the deceased was impressed with a moral obligation to make provision for the appellant and his brothers (ground 5).
Because the respondent chose to proceed by cross-appeal it is necessary to address that topic even in the event that the appeal fails.
[11]
Appellant's submissions
The primary judge described the legal test for "dependency" at [59]-[67] of the judgment in a way which was not criticised by the appellant. The subject of attack was the reliance by the primary judge in applying that test upon two decisions of Young J in Clinch v Swift 13 October 1988, unreported and Shaw v Lambert 9 October 1987, unreported.
The appellant submitted that the finding of dependency by the primary judge was in error in that either:
1. the scope and meaning of the term "wholly or partially dependent" used by the primary judge was narrower than that provided in the statutory context of s 57(1)(e); or
2. the primary judge took into account irrelevant factors, or failed to take into account relevant factors, in the application of the dependency test.
The appellant submitted that the dependency test was not limited merely to a consideration of legal ownership and that the primary judge erred in treating as determinative the legal ownership of the relevant properties by Ross. The appellant submitted that the primary judge failed to apply authority to the effect that a context specific assessment of the relationship between the relevant parties is necessary in order to determine whether dependency should be found.
The appellant submitted that an assessment of the actual relationship between the parties was not given weight by the primary judge. That relationship was illuminated by the joint invitation made by Gina and Ross for John to live with them at 24 Platts Avenue, which was acted upon. The appellant, while accepting that the evidence of dependency before the primary judge was narrow, submitted that the invitation by Gina (which was acted upon) was direct, public and made in the presence of Ross.
The appellant submitted that Gina was in a position of critical importance when it came to determining who might live in the matrimonial home because:
1. she was Ross' wife and it should be inferred that the views of a spouse are material to if not determinative of the question as to who might reside in the matrimonial home - irrespective of ownership; and
2. in considering the consequences of a significant disagreement, Gina ultimately had the ability to bring the relationship to an end.
The appellant placed considerable reliance on the decision in Ball v Newey (1988) 13 NSWLR 489 which considered the eligibility requirements under the former s 57. The appellant also relied upon the decision in Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285, in particular the remarks made by Meagher JA at [109]-[111] with respect to the dependency test:
"[109] It is also necessary to say something about the primary judge's treatment of Albert's dependency on his parents for accommodation. Dependency in this context means actual reliance on someone else for the total or partial satisfaction of some need. It is not limited to purely financial or material matters: Petrohilos v Hunter (1991) 25 NSWLR 343 at 346-347. Nor is it restricted to requirements of basic necessity and the standard or measure of satisfaction of any need is not to be determined by reference to any minimum or subsistence standard. In each case, the measure is the standard set by the parties: Ball v Newey (1988) 13 NSWLR 489 at 492.
[110] Dependency may exist irrespective of whether the dependent person is financially or physically able to support himself or herself: Ball v Newey at 492. However, the reasons for and circumstances of the dependency are relevant when considering what claims the dependent has on the bounty of the testator. Whilst Albert lived with his parents so as to give rise to an expectation that they may make some provision in their wills for his accommodation, he was not financially dependent on them for accommodation. Nor was he physically or emotionally incapable of living apart from his parents or on his own and away from the Beach Road property.
[111] The primary judge did not err in regarding Albert as being dependent on Lily and Abraham for accommodation…"
[12]
Respondents' submissions
The respondents submitted that no dependency upon Gina for accommodation could arise in circumstances where Gina was not the registered proprietor of either 306 Botany Street or 24 Platts Avenue. This is because the right to permit or prevent John to reside in each property was solely exercisable by Ross and not by Gina.
The respondents submitted that the fact that Gina may have expressly or impliedly acquiesced in Ross permitting John to reside at the property cannot be elevated into John being dependent upon Gina for accommodation.
The respondents submitted that the concept of dependency consistent in the Succession Act "may not permit the widest reading which the fair meaning of the language will allow. This is because a wide reading of the legislation may impose a burden on others by restricting their testamentary freedom." The respondents submitted that in Page v Page [2017] NSWCA 14, this Court rejected a submission that a younger sibling was partly dependent on an elder sibling who, at the request of their mother, ensured the home was secure and supervised his younger sibling. It was submitted that the present was an analogous case.
Finally, the respondents submitted that to construe the concept of "dependency" in the way contended for by the appellant would lead to absurd results and impose an unreasonable restriction on testamentary freedom.
[13]
The test to be applied on this appeal
In Page v Page Leeming JA (with whom Basten JA agreed on this point) held that in determining the question of "dependency" in s 57(1)(e) of the Succession Act, it was likely that the power of this Court to intervene was not limited by the considerations identified in relation to discretionary decisions by House v King (1936) 55 CLR 499; [1936] HCA 40, as explained in Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 (at 518 and 520 per Mason and Deane JJ) when addressing a broad evaluative decision. Rather, it was likely that the issue of dependency is determined by an appellate court determining for itself the "facts as well as the law" in accordance with Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 at 552 (per Gibbs ACJ and Jacobs and Murphy JJ).
The reasoning of Leeming JA about the role of this Court when addressing the question of dependency under s 57(1)(e) of the Succession Act is contained at [35]-[41]. His Honour concluded that the principles in House v The King are likely inapplicable to review of a finding of partial dependency within the meaning of that section and that nothing in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 requires a different conclusion. I regard Leeming JA's analysis on this question as compelling. Nothing in the subsequent decision of this Court in Yee v Yee [2017] NSWCA 305 affects Leeming JA's conclusion as the question of dependency was not in issue in Yee: see [94]-[96] and [108].
The appellant submitted that the absence of dispute about the relevant facts in this case means that there is no practical difference in the outcome here regardless of which test is applied. That may be so, however, I will proceed on the basis that the issue of dependency is determined by this Court determining for itself the facts as well as the law in accordance with Warren v Coombes.
[14]
The construction of s 57(1)(e) of the Succession Act
Section 57 of the Succession Act sets out those who are "eligible" to apply for a family provision order. In the present case, John submitted that he was an eligible person falling within s 57(1)(e):
"57 Eligible persons (cf FPA 6 (1), definition of "eligible person")
(1) The following are eligible persons who may apply to the Court for a family provision order in respect of the estate of a deceased person:
…
(e) a person:
(i) who was, at any particular time, wholly or partly dependent on the deceased person, and
(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member,
…."
Section 59 of the Succession Act provides the power of the Court to make a family provision order:
"59 When family provision order may be made (cf FPA 7-9)
(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.
Note. Property that may be the subject of a family provision order is set out in Division 3. This Part applies to property, including property that is designated as notional estate (see section 73). Part 3.3 sets out property that may be designated as part of the notional estate of a deceased person for the purpose of making a family provision order.
(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)…."
[15]
Grounds 1 and 2 of the cross-appeal - factors warranting the making of an application
[16]
Respondents' submissions on the cross-appeal
The respondents submitted that the primary judge erred in finding that there were factors which warranted the making of John's application.
The respondents submitted that John was not a natural object of testamentary recognition by Gina. First, John had already received substantial provision from Ross' estate, namely $200,000. Secondly, John and Gina did not enjoy a relationship akin to parent and child. Thirdly, there was no provision in the Deed of Family Arrangement recognising any obligation to make provision. The Deed evinced an intention, the respondents submitted, to bring about a "clean break between them". Finally, the representations made by Ross that the properties were for his sons were presumably known to the parties at the time the Deed was entered into. In those circumstances, it was submitted that the representations did not give rise to a continuing obligation upon Gina to leave an interest in her estate to John. If there had been any intention to make provision for John, one would have expected a term to that effect to be included in the Deed.
[17]
Appellant's submissions on the cross-appeal
The appellant submitted that the "factors warranting" findings made by the primary judge were correct. The appellant submitted that the respondents' primary contention that the Deed evinced an intention on the part of the parties to it to bring about a clean break between them was considered and rejected by the primary judge.
The appellant submitted that the lack of a release in respect of the deceased's estate was relied upon by the primary judge to support an inference that the parties had not intended to sever the deceased's moral obligation. Such an inference was open on the evidence.
[18]
Consideration of factors warranting the making of a claim
The weight of authority in this Court is that a determination that there are factors warranting the making of a claim within the meaning of s 59(1)(b) of the Succession Act is the equivalent of a discretionary decision and review in this Court is subject to the restraints identified in House v The King and restated in Norbis v Norbis: Sassoon v Rose [2013] NSWCA 220 at [12] (per Meagher JA); Lodin at [130]-[132] (per Sackville AJA); Yee v Yee [2017] NSWCA 305 at [108]-[109] (per McColl JA). The parties on this appeal did not submit that any different approach should be adopted.
In Lodin, Sackville AJA gave close consideration to the requirement to demonstrate factors warranting the making of a claim in s 59(1)(b) of the Act. His Honour said at [106]-[107];
"[106] In Re Fulop, McLelland J construed s 9(1) of the FP Act, the forerunner to s 59(1)(b) of the Succession Act. His Honour stated the following propositions:
(i) The question posed by s 9(1) of the FP Act cannot be resolved until all admissible evidence relevant to the issue of whether there are factors warranting the application has been tendered. Despite s 9(1) using language that apparently contemplates determining the question as a preliminary issue, ordinarily it is impracticable to isolate the evidence bearing on that issue from other evidence in the case.
(ii) Section 9(1) is premised on a distinction between "factors which warrant the making of the application" and the circumstances which justify the making of the family provision order. Otherwise the subsection would be pointless. This means that in a particular case an applicant might establish that there are factors warranting the application, yet the court might decline to make a family provision order in the applicant's favour.
(iii) The legislation also requires a distinction to be drawn between "eligible applicants" who do not have to satisfy s 9(1) (a spouse, de facto partner or child of the deceased) and those who do (such as a former spouse or grandchild). The difference is that the former are generally regarded as natural objects of testamentary recognition by a deceased, while the latter are not generally so regarded. Accordingly, the "factors" referred to in s 9(1) of the FP Act are those that give an eligible person in the second category "the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased".
[107] These propositions have been accepted in subsequent cases arising under the FP Act, including cases in which a former spouse of the deceased claimed a family provision order. They have also been accepted as applicable to a claim by a former spouse under the Succession Act. Thus in Sassoon v Rose, Meagher JA said that the trial Judge in that case correctly identified the principles stated in Re Fulop as the basis for determining whether there were factors warranting the making of the application."
[19]
Grounds 3 - 5 of the cross appeal - an order for provision should not have been made and, if made, should have been in a lesser amount
[20]
Respondents' submissions
The respondents submitted that further consideration should have been given by the primary judge to the competing claims of Franco and Enza who had a very close relationship with Gina and who were her closest blood relations. Gina had no children of her own and was unmarried for many years. The evidence demonstrated that the respondents were regarded by Gina as if they were her own children.
The respondents contended that if the Court was of the view that an order for provision should be made in favour of John, the sum of $300,000, in the context of an estate of this size, is excessive and well beyond the range of a proper exercise of discretion. The respondents relied upon the decision of Aubrey v Kain [2014] NSWSC 15 at [190] as establishing "guidelines" about community expectations in relation to adult children. It was submitted that the amount of provision here ordered exceeded those "guidelines".
[21]
Appellant's submissions
The appellant submitted that no complaint is made as to the findings of the Court below regarding the assets of the respondents. The appellant further submitted that no complaint is made with respect to the finding that Franco had "since 2013…received a benefaction of $300,000" from the deceased, which significantly exceeded the provision made for John.
With respect to the moral claim owed by Gina to John, the appellant submitted that the primary judge carefully considered that claim and his reasoning was entirely orthodox.
The claim arose from John's legitimate expectation of inheritance from his father, which in turn arose from his contributions to the properties comprising his estate, and his father's representations that John was to inherit, as acknowledged by Gina. Further, Gina made later representations that she would honour Ross' wishes in this regard.
[22]
Consideration of grounds 3 - 5 of the cross-appeal
There is no doubt that the question of whether "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" within the meaning of s 59(1)(c) of the Succession Act is the equivalent of a discretionary decision and review in this Court of the decision of the primary judge is subject to the restraints identified in House v The King as restated in Norbis v Norbis.
Whether a two-stage analysis is applicable to claims for family provision orders under Ch 3 of the Succession Act has been the subject of significant debate in this Court, but was not addressed by the parties here. It is undesirable to address that question in the absence of any submission that the outcome of the debate could make a difference in this case.
In Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [74] Gummow and Hayne JJ cited the plurality in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, for the proposition that:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the Court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
What is "proper" requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. The Court's assessment of what is proper maintenance, education and advancement in life must be made at the time when the Court is considering the application. This does not, however, mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.
In Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [12] Allsop P stated:
"Accepted and acceptable social and community values permeate or underpin many, if not most, of the individual factors in s 60(2) and are embedded in the words of s 59, in particular 'proper' and 'ought'. That such values may be contestable from time to time in the assessment of an individual circumstance, or that they may change over time as society changes and grows can be readily accepted."
Allsop P acknowledged that orders made by reference to "perceived prevailing community standards of what is right and appropriate" referred to an imprecise, variable and contestable standard. See also White J in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [125]-[127].
[23]
Conclusion and orders
For the foregoing reasons I would dismiss the appeal and the cross-appeal. Whilst the cross-appeal was essentially defensive, considerable time was taken in addressing the issues raised in the written and oral submissions of the parties. That should be reflected in an adjustment in the award of costs. I propose the following orders:
1. appeal dismissed;
2. cross-appeal dismissed;
3. order that the appellant pay 70% of the costs of the respondents of the appeal and the cross-appeal.
SACKVILLE AJA: I have had the advantage of reading Payne JA's judgment in draft. I am grateful for his Honour's account of the facts and of the issues arising on the appeal and cross-appeal.
As Payne JA explains, the critical issue on the appeal is whether the primary Judge erred in finding that the appellant (John [1] ) had not established that he was a person:
"who was, at any particular time, wholly or partly dependent on the deceased person",
within the meaning of s 57(1)(e)(i) of the Succession Act 2006 (NSW) (Succession Act).
I agree with Payne JA's reasoning on this issue. In particular, I agree that what his Honour describes as the "traditional test" for determining whether a claimant was "wholly or partly dependent on the deceased person" should be applied in preference to the more limited construction supported by the respondents. [2]
I also agree with Payne JA that the primary Judge's finding that John was not wholly or partly dependent on Gina for accommodation was affected by an error. The primary Judge found that John had lived in the same house as his father (Ross) and his stepmother (Gina) "for a period of at least a couple of years following his [John's] separation from Valerie [John's wife] in 1995". [3] His Honour considered that although John was living in the same household as Ross and Gina, he could not be said to be wholly or partly dependent on Gina for his accommodation since Ross was the sole registered proprietor of the house. [4] The error in this approach is that the primary Judge did not take into account all of the relevant circumstances to determine whether, as a matter of fact, John was dependent upon Gina for the provision of accommodation during the whole or at least a substantial part of the period during which he lived at the house. [5]
Notwithstanding this error, in my respectful opinion this Court should not interfere with the primary Judge's ultimate finding on the question of dependency. The facts found by his Honour and the evidence as a whole do not in my view justify a finding that John was wholly or partly dependent on Gina for the provision of accommodation.
[24]
The issue of construction
Payne JA has referred to the authorities which have consistently applied the "traditional" test for determining whether a claimant was wholly or partly dependent on the deceased person. I do not repeat his Honour's analysis.
The respondents relied on observations of Basten JA in Page v Page [6] for the proposition that s 57(1)(e)(i) of the Succession Act, when read in context, posits a more limited test of dependency than the traditional test. Basten JA said that the form of dependency contemplated by s 57(1)(e)(i) is that: [7]
"which gives rise to a statutory obligation to make provision from the deceased person's estate for the proper maintenance, education or advancement in life of the dependant".
Apart from the matters identified by Payne JA, there is a textual difficulty with the more limited construction of s 57(1)(e)(i) of the Succession Act advanced on behalf of the respondents. Section 57(1) specifies six categories of "eligible persons" who may apply to the Court for a family provision order. A claimant who relies on s 57(1)(e) to be an eligible person must satisfy two criteria. He or she must be a person:
"(i) who was, at any particular time, wholly or partly dependent on the deceased person, and
(ii) who … was, at that particular time or at any other time, a member of the household of which the deceased person was a member".
A finding that a claimant was wholly or partly dependent on the deceased person does not establish that the claimant is entitled to a family provision order. Even if the claimant satisfies both requirements in s 57(1)(e) of the Succession Act, he or she must also establish that:
there are circumstances warranting the making of the application (s 59(1)(b)); and
the deceased person has not made adequate provision for the proper maintenance, education or advancement in life of the claimant (s 59(1)(c)).
In short, as Payne JA points out, a finding of dependency is merely the first step in determining whether the circumstances give rise to a statutory obligation in the deceased person to make provisions out of his or her estate for the proper maintenance, education or advancement in life of the claimant. To construe s 57(1)(e)(i) as limited only to dependency of a kind that gives rise to a statutory obligation to make provision for the claimant tends to conflate the two quite distinct preconditions for the making of a family provision order. A claimant who establishes that he or she is an eligible person by reason of dependency on the deceased (and membership of the same household) may or may not be a person to whom the deceased owed an obligation to make provision by way of testamentary disposition. The concept of dependency in s 57(1)(e)(i) of the Succession Act is not to be limited by incorporating criteria that are only to be considered once the claimant establishes that he or she is entitled to apply for a family provision order.
[25]
Appellate review
In Page v Page [8] two members of this Court (Leeming JA, with whom Basten JA agreed) expressed the view that review by this Court of a finding of dependency or non-dependency is not confined by the principles governing discretionary decisions stated in House v The King. [9] As the third member of the Court, I did not find it necessary to express an opinion on the question. [10] However, I agree with Payne JA that the reasoning of Leeming JA is persuasive and that appellate review of a finding of dependency is not confined by the principles stated in House v King.
But the fact that appellate review is to be conducted in accordance with the principles stated in Warren v Coombes [11] does not obviate the need for an appellant to demonstrate error in the finding made by the primary Judge. [12] What is necessary to establish error depends on the nature of the findings or conclusions reached by the primary Judge. [13] As Allsop P observed in DAO v The Queen: [14]
"The degree of intensity of review on appeal of any particular question depends upon a number of things - the terms of the statutory provision providing for appellate review, the nature of the question under review, the need to discern error, the respective advantages and disadvantages of the court below and the appeal court and, implicitly, a degree of legal policy (though the last matter is rarely explicated). I strongly agree with the Chief Justice that labels are apt to mislead in this context, most particularly the word "discretion" and the phrase 'House v The King review' as an alternative to 'Warren v Coombes review' as the exhaustive universe of alternatives (which they are not)."
Where a finding depends on weighing a range of factors on which reasonable minds might differ, it is not necessarily enough to demonstrate error on the part of the trier of fact for the appellate court to prefer a different outcome. [15] While a finding of dependency perhaps does not involve a range of legitimate choices as wide as some other evaluative factual issues, it does require a number of considerations to be taken into account and, to this extent, involves a value judgment. Depending on the circumstances, a finding of dependency (or non-dependency) may be finely balanced and may not admit of a single correct answer.
[26]
Error has been shown
There is no occasion in this case to consider further the precise scope of appellate review since, as I have noted, the primary Judge's finding was affected by an error of principle. His Honour regarded the issue of John's dependency on Gina for accommodation as foreclosed by the fact that Ross was the sole registered proprietor of the property at Platts Avenue, Belmore (Belmore Property) in which John lived for at least two years after his separation from Valerie. The established principles explained by Payne JA require the question of dependency to be determined as a matter of fact by reference to the whole of the relationship between the claimant and the deceased person. [16] Thus it is necessary to consider whether John relied on Gina for the total or partial satisfaction of his need for accommodation. [17] The fact that Gina was not a co-owner of the house is only one factor to be considered in determining whether John has established that he was wholly or partly dependent on Gina for accommodation. It is not decisive.
[27]
The evidence
Mr Loofs SC, who appeared with Mr Brown for John, submitted that John's dependency on Gina was established by the finding that Ross and Gina extended a joint invitation to John to live with them following his separation from Valerie. That finding rested on the primary Judge's acceptance of evidence given by Sam (John's older brother) of a conversation that occurred in 1996. [18] Sam's evidence was as follows:
"In around 1996, John moved into the Belmore property. I was present for a conversation between John, [Gina] and [Ross] at Belmore at that time, in which we exchanged words to the following effect:
John 'I've split up with Valerie. I am devastated.'
[Gina] 'Don't worry, you can come and stay here.'
[Ross] 'Yes, come and stay here.'
At the meeting I noticed that John was crying and very emotional about his marriage breakup."
The primary Judge also appears to have accepted Sam's evidence that on subsequent visits to the Belmore Property he observed that John occupied the second bedroom and that Gina prepared and served John's meals and washed his clothes.
Mr Loofs did not identify any other evidence which supported John's case on dependency, other than Gina's affidavit evidence in earlier proceedings that she and Ross generally had a happy marriage until Ross' death in 2010. Mr Loofs submitted that the subsistence of a generally happy marriage between Gina and John during that relevant period supported the inference that Gina was instrumental in permitting John to live at the Belmore Property and that John was therefore partly dependent on Gina for the provision of accommodation.
The Court's attention was not drawn to any evidence that explained the circumstances in which John was permitted to live in the Belmore Property, not merely for a short period following the breakdown of his marriage but for a period of at least two years. While the evidence shows that Gina participated in the decision to permit John to stay at the Belmore Property in the immediate aftermath of his separation from Valerie, the evidence does not address who made the decision to allow John to remain in occupation for a prolonged period. It is not clear, for example, whether Gina encouraged John to remain in the Belmore Property or whether she merely acquiesced in a decision made by Ross. It is also not clear whether Ross' ownership of the Belmore Property was or was not a significant factor in the decision (if there was one) to allow John to continue in occupation of the Belmore Property. There are a number of possibilities that seem not to have been explored in the evidence.
[28]
Other issues
If I had reached a different conclusion on the question of dependency, I would have agreed with Payne JA that the primary Judge was justified in finding that there were factors warranting the making of John's application. With some hesitation I would also have agreed that no error was shown in the primary Judge's contingent assessment that provision should be made from Gina's estate in favour of John in the sum of $300,000.
[29]
Orders
I agree with the orders proposed by Payne JA.
[30]
Endnotes
Like Payne JA, for convenience I shall refer to the parties and family members by their first names. No disrespect is intended.
See at [68**]-[72**] above.
Spata v Tumino; Estate of Gina Spata [2017] NSWSC 111 (Primary Judgment) at [58].
Primary Judgment at [69].
See at [143**]-[151**] below.
[2017] NSWCA 141.
Page v Page [2017] NSWCA 141 at [8].
[2017] NSWCA 141 at [21], [39]-[41].
(1936) 55 CLR 499; [1936] HCA 40.
[2017] NSWCA 141 at [92].
(1979) 142 CLR 531 at 552.
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [21], [25]-[28] (Allsop J, Drummond and Mansfield JJ agreeing).
Branir at [24]; Costa v Public Trustee [2008] NSWCA 223 at [14]-[19] (Hodgson JA); Gett v Tabet [2009] NSWCA 76; 254 ALR 504 at [10]-[20] per curiam, aff'd Tabet v Gett (2010) 240 CLR 537; [2010] HCA 12.
(2011) 81 NSWLR 568; [2011] NSWCCA 63 at [88]. The reference to the Chief Justice is to the observations of Spigelman CJ at [51]-[52].
Sanderson as Liquidator of Sakr Nominees Pty Ltd (in liq) v Sakr (2017) 93 NSWLR 459; [2017] NSWCA 38 at [50] (Bathurst CJ; Beazley P, Gleeson JA, Barrett and Beach AJJA agreeing); DAO v The Queen at [90] (Allsop P).
Ball v Newey (1988) 13 NSWLR 489 at 491 (Samuels JA; Hope and Mahoney JJA agreeing).
Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 at [109] (Meagher JA; Basten and Campbell JJA agreeing).
Primary Judgment at [54].
Primary Judgment at [72].
Primary Judgment at [71]
Primary Judgment at [77].
Primary Judgment at [79].
McKenzie v Baddeley [1991] NSWCA 197 (Priestley JA; Hope AJA agreeing).
[31]
Amendments
15 February 2018 - Typographical errors in headnote, [53], [55], [68] and [89] amended.
01 March 2018 - Typographical error on coversheet amended.
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Decision last updated: 01 March 2018
Sometime in or after 1996, John met Emi Iwata, and by 1999 he was living with her at a house in Kogarah. Their son Rosario (junior) was born on 18 March 2001. John moved with Emi and Rosario (junior) to Japan in 2003 and resided there with her family until April 2011, when they returned to Australia.
Ross died on 7 February 2010, aged 83. His estate comprised 24 Platts Avenue (then worth $600,000), 304 West Botany Street (then worth $600,000), a 1/6th interest in 2/59 Tebbutt Street Leichhardt (then worth $70,833), moneys on deposit ($86,862) and shares ($5,994). By his last will, made on 16 June 2005, probate of which was granted on 12 May 2010 to Sam and Robert, he left his household chattels to Gina, and gave her a right of residence as long as she wished to reside in his principal place of residence (Platts Avenue) provided that she paid the rates and outgoings, and he stipulated that the property was not to be sold until she remarried, entered into a de facto relationship, ceased to live there permanently, or failed to comply with the conditions of the right of residence. Upon sale, the proceeds were to form part of the residue, which after payment of debts, funeral and testamentary expenses were to be divided equally between those of his children who survived him and attained the age of 18 years.
Gina brought an application under the Succession Act in respect of Ross' estate. Although the evidence given on that application featured to a limited extent before the primary judge in the present case, the detail of that evidence did not figure prominently in the submissions of either party in this Court. On 28 November 2011, Hallen AsJ gave judgment on Gina's application and made orders that:
"1. In lieu of the provision made for her in clause 4 of Ross's will, Gina receive:
1. a lump sum legacy of $143,000;
2. Ross's interest in 2/59 Tebbutt St (and all income derived from it since his death), subject to a charge over the whole of that property in favour of Rosario's executors securing payment to them of 61.5% of the value of the property, to be paid to the executors (upon trust for the brothers in equal shares) on the earlier of sale of the property or the death of Gina; and
3. 24 Platts Ave absolutely;
4. The executors were to carry out certain repairs and renovations to [24 Platts Ave]; and
2. Gina's costs on the ordinary basis and the executors' costs on the indemnity basis be paid out of the estate."
Ross' executors filed a notice of intention to appeal. Negotiations ensued between the executors of Ross' estate and Gina in respect of the implementation and variation of Hallen AsJ's orders.
On 23 February 2012, Hunter Lawyers (solicitors acting for the executors) wrote to Coorey & Fitzgerald (solicitors acting for Gina), asserting that John was destitute and was occupying 304 West Botany Street with the executors' permission with his wife and 10 year old son, but would have to be ejected if Hallen AsJ's orders of 28 November 2011 were implemented in order to fund the lump sum legacy. It was stated that Sam had contacted Gina with a view to finalising the matter and resolving the situation and proposing that the estate transfer 24 Platts Avenue, and its 1/6th interest in 2/59 Tebbutt Street, to Gina, that the rest and residue (including 304 West Botany Street) go to the brothers and that each party bear their own costs.
On 27 February 2012, Gina gave written instructions to her lawyers that she had had a private discussion with Sam and had decided to consent to setting aside the orders of 28 November 2011 and replacing them with arrangements under which: (1) the executors would not appeal; (2) she would receive clear title to Ross 1/6th interest in 2/59 Tebbutt Street and the whole of 24 Platts Avenue; (3) she would bear her own costs; (4) she would not receive the legacy of $143,000; and (5) the rest of the estate would go to the brothers. She acknowledged that she had been advised that this would leave her about $40,000 worse off than she would be under the orders of 28 November 2011, but still wished to proceed.
A Deed of Family Arrangement was executed on 30 March 2012. It provided for the orders which had been made in the proceedings to be vacated and in their place, for Gina to receive, in lieu of the benefits provided by Ross' will, (a) his interest in 2/59 Tebbutt Street (and all income derived from it since his death), and (b) 24 Platts Avenue absolutely. The deed included a release of all claims - including of rights to make any further Succession Act application - against Ross' estate, but did not include any release in respect of possible claims on Gina's estate. In essence, by the settlement Gina relinquished the lump sum legacy and her entitlement to costs of the proceedings, in return for the sons relinquishing the charge over 2/59 Tebbutt Street.
As a result, the estate retained 304 West Botany Street, which was later sold for $670,000. In early 2012, John and each of his brothers received a distribution of about $200,000 each from their father's estate.
On 1 August 2012, Gina sold 2/59 Tebbutt Street for $450,000. On 17 August 2012, Gina sold 24 Platts Avenue for $690,000 and purchased a unit at 3/70 Norton Street Ashfield for $625,000.
The primary judge found that Gina's estate, after deducting costs, exceeded $800,000. This amount included a term deposit of $300,000 held by Gina and Franco jointly which passed by survivorship to Franco. His Honour found that Franco had not contributed to this fund and that the entire fund had been beneficially owned by Gina.
The parties informed the Court that the appellant's ordinary costs of the trial and the appeal were $55,000 including GST and the respondents' indemnity costs were $33,000 including GST.
The primary judge identified three matters relevant to this determination. In relation to the first, the characteristics of the relationship that qualified John, if at all, as an eligible person, the primary judge concluded that this was a factor tending against a finding of circumstances warranting the making of a claim. The periods of common membership of the same household by John and Gina were short, and the nature, extent and duration of the dependency alleged were slight. There was no dependency as at the deceased's death, or for many years before that date. Any general community expectation that a testator would provide for those who are dependent on him or her did not apply where the dependency had long since ended. The primary judge also rejected a submission that the relationship between Gina and John was analogous to that of a parent and child.
In relation to the second matter, John's expectations of inheritance from his father Ross, and from Gina, the primary judge concluded that this was a factor tending in favour of a finding of circumstances warranting a claim. The primary judge found that:
1. John had strong legitimate claims on Ross' testamentary bounty arising from his contribution to the acquisition, conservation and improvement of his estate (principally by assisting in the renovation and maintenance of the properties);
2. during his lifetime, Ross on a number of occasions made statements in the presence of Gina to the effect that the properties were for the boys and that each was to have a house, and that Gina acknowledged and agreed to this; and
3. Gina herself made representations both before and after the entry into the deed of family arrangement to John and to Sam to the effect that she would honour Ross's wishes and make provision for them in her will.
In relation to the third matter, the significance of the earlier proceedings concerning Ross' estate and the subsequent settlement of those proceedings, the primary judge concluded that this was a factor tending in favour of a finding of circumstances warranting a claim. The representations made by Gina, including those made after the settlement of the proceedings, to the effect that she would make provision for the boys from her estate, gave rise to a moral obligation incurred by Gina which was not extinguished by the deed of family arrangement.
The primary judge concluded that assuming John to be eligible, Gina's will failed to make adequate provision for John's proper maintenance and advancement. His Honour concluded that having regard to the competing claims of Enza and Franco, John would have been entitled to $300,000 from Gina's estate:
"[102] The competing claims of the defendants are not such as to require John's claim to be disregarded or discounted. Enza and her husband have net assets of in excess of $2.8 million. Franco and his wife have net assets in excess of $800,000, and Franco has already received the benefit of the $300,000 which was held in the joint names of Gina and him."
Membership of a common household is a necessary but not a sufficient condition of eligibility under s 57(1)(e). That requirement is not controversial on the appeal. The critical requirement is that the claimant must also have been at some time wholly or partly dependent on the deceased.
In Lodin v Lodin [2017] NSWCA 327, Sackville AJA at [69]-[84] traced the history of Chapter 3 of the Succession Act and noted a number of curious features. The legislative history provides some assistance in understanding the relevant features of the Succession Act and, in this case, the relationship between the key provisions governing a Succession Act claim by an adult stepchild.
The first legislation in New South Wales to provide for family provision claims was introduced over 100 years ago in the Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW). The legislation permitted the Court to make an order for the provision of the widow, husband or children of a deceased person out of that person's estate.
In 1977, shortly after the enactment of the Family Law Act 1975 (Cth), the New South Wales Law Reform Commission (NSWLRC) reviewed the law relating to family provision in New South Wales. The NSWLRC recommended that the class of persons eligible to apply for provision be enlarged. As the NSWLRC said in its Report on the Testator's Family Maintenance and Guardianship of Infants Act 1916 (Report 28, 1977) at [1.7]:
"at present, where a person leaves a will, eligible persons are the widow, widower and the children of the deceased person and, where a person does not leave a will, eligible persons are the widow, children and some grand children of the deceased person. We recommend, whether the person concerned does, or does not, leave a will, that a person should be an eligible person if he or she is -
(a) the widower or widow of the deceased person;
(b) a child of the deceased person; or
(c) a person -
(i) who was, at any time, wholly or partly dependent upon the deceased person;
(ii) who was, at any time, a member of a household of which the deceased person was a member; and
(iii) who was a person whom the deceased person ought not, in the opinion of the Court, to have left without adequate provision for his proper maintenance, education or advancement in life."
In its report the NSWLRC gave close consideration to the position of adult stepchildren. The NSWLRC said at [2.6.25]:
"It is argued, in relation to stepchildren, that an adult child whose parent remarries may never live in the household of his stepparent. And yet, if the parent leaves everything to the stepparent and, in turn, the stepparent leaves everything to a stranger, the stepchild is without rights under the Act. As we see it, in this particular case, any injustice is the result, not of section 6, but of the child's failure to exercise his right to apply for an order out of his parents estate. There may, of course, be cases where this simple answer is inapt; cases where section 6 may operate too restrictively in its application to stepchildren. Nonetheless we are reluctant to propose the encroachment on testamentary freedom which would result from equating, in all cases, stepchildren with children. The relationship of a parent and a child is always a special relationship. The relationship of a stepparent and stepchild may develop into a special relationship but it will not always do so. If it does do so, the conditions of section 6 may sometimes disadvantage stepchildren. But, in our view, these cases will be far fewer than the cases where the relationship of stepparent and stepchild does not develop into a special relationship of the kind which the new Act seeks to protect."
As Sackville AJA explained in Lodin, the Family Provision Act as enacted followed some but not all of the NSWLRC's recommendations. In relation to stepchildren, s 9(1) of the Family Provision Act, the precursor to s 59(1)(b) of the Succession Act, adopted the criterion of eligibility recommended by the Commission.
In 1991, the Standing Committee of Attorneys-General approved the development of uniform succession laws in Australia. The Queensland Law Reform Commission (QLRC) was asked to coordinate the project and in 1997 reported to the Standing Committee. Except for people with "automatic" eligibility (being children and spouses of the deceased at the time of his or her death) the QLRC favoured an approach where eligibility to apply for family provision orders (other than by spouses and children) turned "not on membership of some arbitrary class of persons" but on the establishment of a "special responsibility" on the part of the deceased person towards the applicant. New South Wales Law Reform Commission, Uniform Succession Law: Family Provision (Report 110, May 2005)
The NSWLRC report Uniform Succession Law: Family Provision (Report 110, May 2005) about uniform succession laws essentially adopted the approach proposed in the model provisions whereby a person could apply for a family provision order if the deceased person had a "special responsibility" to the person to provide maintenance, education or advancement in life. The draft legislation specified 14 matters that could be considered by the court in determining whether the deceased person had a responsibility of the relevant kind to the claimant. The same matters could be considered in determining whether to make a family provision order and, if so, the nature of any order made.
The Succession Act as originally enacted in New South Wales did not deal with family provision orders. The provisions now in Chapter 3 of the Succession Act were introduced by the Succession Amendment (Family Provision) Act 2008 (NSW). This legislation did not follow the model bill proposed by the QLRC and the NSWLRC in relation to a family provision claim made by a person other than a spouse, a person with whom the deceased was living in a domestic relationship and a child of the deceased. The second reading speech explained why:
"… The model bill did not adopt the eligibility requirements for an application for family provision that are currently in place in the New South Wales Family Provision Act. Currently the Family Provision Act provides that the following people are automatically entitled to apply for provision: the spouse of the deceased, a person with whom the deceased was living in a domestic relationship and the adult or non-adult child of the deceased. Former spouses of the deceased and other dependents, including grandchildren, are also entitled to apply, but the Act requires the court to determine whether there are factors which warrant the making of the application before going on to consider an application.
The model bill restricts the list of those who are automatically entitled to make an application for provision to spouses, de facto partners and non-adult children of the deceased. It then contains a catch-all category of claimant permitting anyone "to whom the deceased person owed a responsibility to provide maintenance, education or advancement in life" to apply to the court for a family provision order. Such a change may lead to a flood of new claims being made on estates from people who are not currently entitled to apply in New South Wales. Adult children would be forced to demonstrate the requirement of the deceased's responsibility to them. This may lead to more lengthy and expensive litigation, as adult children seek to prove they meet this requirement.
The bill before the House therefore does not adopt the model bill eligibility provisions. It retains the approach in the current Act with one modification: the current Act provides that those who were living in a "domestic relationship" with the deceased are automatically entitled to eligibility. The model bill's restriction of this entitlement to de facto partners is sensible and thus the new bill replaces "domestic relationship" with "de facto relationship" and creates a new category of applicant - a person in a "close personal relationship" with the deceased.…"
It is against this background that the construction of s 57(1)(e) of the Succession Act must be addressed.
It has long been held that the word "dependent" is an ordinary English word and the question of whether a person is wholly or partly dependent on another is a question of fact: Page v Page [2017] NSWCA 141 at [7], per Sackville AJA (with whom Leeming JA agreed on this point). Although Sackville AJA noted that the construction of s 57(1) was not in issue in that case, he cited Petrohilos v Hunter (1991) 25 NSWLR 343 at 346 (per Hope JA with whom Clarke and Sheller JJA agreed) and Aafjes v Kearney (1976) 180 CLR 199; [1976] HCA 5 at 204 (per Barwick CJ) and 210 (Mason J, Stephen J agreeing), as authority for the proposition. To these cases may be added the decision of Meagher JA (with whom Basten and Campbell JJA agreed) in Tobin v Ezekiel at [109]-[111] and that of Samuels JA (with whom Hope JA and Mahoney JA agreed) in Ball v Newey (1988) 13 NSWLR 489 at 491 who said:
"'Dependent', in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed. In determining whether that relationship exists, it is relevant to bear in mind what was said by Sankey LJ in Lee v Munro (1928) 98 LJ KB 49 at 53…, that in "deciding whether or not there is dependency the factors to be considered are past events and future possibilities". While it is true here we are concerned with financial dependence and not emotional dependence, the whole relationship between the appellant and the deceased must be examined in the light of that statement in order to exclude situations which might present the simulacrum but not the substance of dependency".
As Basten JA explained in Page v Page, in some cases in which it has been said that whether a person is wholly or partly dependent on the testator is a question of fact, such as Petrohilos v Hunter, the Court went on to explain that the phrase "wholly or partly dependent on the deceased person" must be understood within its relevant statutory context. As a matter of language, dependency between two people could arise simply by engaging in some co-operative activity which can be said to give rise to mutual dependency. Basten JA's conclusion, that the statutory context requires a more limited construction of the term dependency, being limited to a relationship which of itself gives rise to a statutory obligation to make provision from the deceased person's estate for the proper maintenance, education or advancement in life of the dependent, was relied upon by the respondents in this case.
In the present case, the same answer to the question of whether John was "wholly or partly dependent" upon Gina will be reached regardless of whether the traditional test applied by Sackville AJA and Leeming JA in Page v Page or the narrower test favoured by Basten JA in the same case is adopted. Nevertheless, as the respondents have relied upon a more restrictive interpretation of "wholly or partly dependent", I will address the question of construction first.
There is a long history of decisions in this Court which have concluded that the word "dependent" is an ordinary English word and the question of whether a person is wholly or partly dependent on another is a question of fact. I would be hesitant to depart from that settled construction unless persuaded it was clearly wrong. Further, any restrictive reading of "dependent" would be contrary to established principles of statutory construction of remedial or beneficial provisions. Three members of the High Court in Barnes v Barnes (2003) 214 CLR 169; [2003] HCA 9 at [44] (per Gummow and Hayne JJ) and [124] (per Kirby J) held that the correct approach to construction of a provision such as s 57(1)(e) of the Succession Act is that the court should be astute not to place a restricted construction upon the terms of such a law. The construction advanced by the respondents in the present case would be inconsistent with the ordinary natural meaning of the words in the section.
Further, the text of the section and the context in which it was enacted does not provide support for any narrower reading. A finding of being "wholly or partly dependent" does not itself give rise to a statutory obligation to make provision from the deceased person's estate for the proper maintenance, education or advancement in life of the dependent; it is merely the first step. The recommendation by the QLRC and the NSWLRC that as a criterion of eligibility claimants such as adult step-children be forced to demonstrate the deceased's "special responsibility" to them was specifically rejected by the Parliament in the introduction of Chapter 3 of the Succession Act. The legislature provided that the dependence may arise "at any particular time" and what must be shown is that the applicant was "wholly or partly" dependent upon the testator. Both of these matters are an indication of an expansive, rather than a restrictive, scope of the statutory pre-condition of dependence. Construction of the term "wholly or partly dependent" in the way this Court has long construed that term does not lead to "absurd" results as contended for by the respondents. For the foregoing reasons, I reject the respondents suggested construction of "dependent".
The controversial question on this appeal was the primary judge's analysis of "who provides the accommodation to whom". His Honour cited two decisions of Young J which were important in determining the question of dependency.
In Clinch v Swift, the deceased's son and daughter-in-law lived with her. Young J found the daughter-in-law was not dependent on her mother-in-law for accommodation. His Honour said:
"It seems to me that one must distinguish between the case of a daughter-in-law who lives with her husband in her mother-in-law's home and one who does not live with her husband, but may dwell in her mother-in-law's home. In the case of the first person the court musk ask itself whether the free accommodation flows to the lady because she is married to her husband or because of her relationship with her mother-in-law. It seems to me that generally speaking if a lady lives with her husband and they have their own family and they pay their own way, then the mere fact that the lady lives in her husband's mother's home without payment does not of itself indicate a dependency."
In Shaw v Lambert, Young J concluded that where accommodation had not been provided "directly" to the claimant, mere residence in the deceased's house may not amount to dependency on the deceased. Accordingly, the deceased's granddaughter, who lived with her mother in the deceased's house, was not, even partially, dependent on her grandfather (who owned the house she lived in) for accommodation:
"In the case where a daughter comes into her father's house to look after him and, with his concurrence, brings her children with her, and it seems to me that whilst the children are dependent upon the mother and the mother may be dependent upon the father unless there are some other facts there is insufficient to show that the grandchildren are directly dependent upon their grandfather. In the instant case there are no further facts and accordingly I do not find that the grandchildren were dependent upon the testator."
Whilst as the respondents submitted the outcome in each case may have been correct on the facts, the reasoning in the passages in each case cited above involves a gloss on the statutory language. This is seen most clearly in his Honour's identification of a requirement in Shaw v Lambert for "direct" dependence. The fact that in that case the grandchild was dependent upon her mother does not, of itself, preclude a finding that the grandchild was also dependent upon her grandfather for accommodation.
The question posed in Clinch v Swift also seems to me not to be correct. There is no requirement in the statute to determine whether or not free accommodation "flows" to a person because of her marriage to her husband rather than her relationship with her mother-in-law who owns the house where she lives. To ask that question seems to me impermissibly to import an additional causation requirement into the statutory question of dependency. It is also inconsistent with the statutory language of "wholly or partly dependent".
The reasoning identified above drawn from Clinch v Swift and Shaw v Lambert relied upon by the primary judge is also inconsistent with authorities in this Court. Dependence has long been understood as being determined on the basis of the actual fact of dependence. That is, has reliance on another to fulfil a need been shown?: Ball v Newey (1988) 13 NSWLR 489 at 492 per Samuels JA. In Ball v Newey, Samuels JA said (at 491):
"'Dependent', in the ordinary sense of the word, means the condition of depending on something or on someone for what is needed."
In Amaca Pty Ltd v Novek [2009] NSWCA 50 at [45], this Court endorsed the earlier statement about "dependency" in Middleton v Kiama District Hospital [1970] 3 NSWR 136 at 138:
"Dependency is, moreover, a complex question of fact, which may involve the consideration of many elements, including both past events and future probabilities. It is not necessarily correlative with a legal duty to maintain. A person may in fact be dependent upon another who is under no legal duty to maintain him; and may be so dependent even though there is also in existence one who has legal duty to maintain, eg a husband his wife. On the other hand there may be no dependency in fact upon a person who is under a legal duty to maintain. The existence of the legal duty is, however, one of the many elements to be taken into account in deciding upon a question of dependency in fact. Dependency and actual support are not necessarily correlative. There may be dependency although for the time being there is no actual support. And it seems to us to be possible to figure cases in which there may have been a provision of support, or of some measure of support, at least for a short time or for some special purpose, which did not amount to dependency. The definition of "dependants" does not merely refer to one who was in fact supported by the deceased worker at the time of his death; a "dependant" is a member of the workers' family who was "wholly or partly dependent for support upon the worker at the time of his death". Dependency refers to a state or condition of being dependent, to having been in this relationship to the deceased. As to all the above matters see Hodges v Scotts' Provision (Wholesale) Pty Ltd [1963] WCR 161 and cases there cited."
In Ball v Newey, the deceased and the claimant had been cohabiting when they decided to purchase a house in which to live together, and which neither of them separately would have been able to buy, so they pooled their incomes, bought the house, made mortgage repayments out of the joint fund and lived in it together. Samuels JA, with whom Hope JA agreed, said (at 492):
"Counsel then suggested, as I understood him, that these circumstances produced no dependency because each of them was separately financially capable of acquiring somewhere to live, so that their decision to live together and finance their purchase jointly was, in some sense, an indulgence which the law should not countenance. I see no substance in this argument. I assume that dependency involves the total or partial satisfaction of need. But the need is not restricted to the requirements of basic necessity or sustenance: cf, in a different context certainly, the meaning of 'needs' in the Liquor Act 1912 as 'reasonable demands or expectations': Toohey v Taylor [1983] 1 NSWLR 743 at 749. Whether dependency, total or partial, exists is a question of fact: Aafjes v Kearney (1976) 50 ALJR 454; 8 ALR 455. It is not to be determined upon theoretical considerations. It is 'the actual fact of dependence or reliance on the earnings of another for support that is the test'".
The remarks of Gibbs J about dependence drawn from a workers compensation case, Kauri Timber Co (Tas) Pty Ltd v Reeman (1973) 128 CLR 177; [1973] HCA 8 at 189, are also relevant. There his Honour said that "the standard of support is set by the parties themselves" (at 190).
It was common ground on this appeal that reliance on the deceased for accommodation may amount to dependence, but the mere fact of lodging in another's property without paying rent does not necessarily amount to dependence: Tobin v Ezekiel per Meagher JA at [109]-[111].
The crux of the decision of the primary judge on dependency was that as John was the sole registered proprietor of 306 West Botany Street and 24 Platts Avenue, it could not be said that John was dependent upon Gina, as distinct from Ross, for accommodation. Rather, in truth, Gina and John were both dependent upon Ross for accommodation. That conclusion was apparently based on the requirement in Shaw v Lambert for "direct" dependence, concentrating on the immediate legal rights of the parties to the marriage rather than addressing the factual question of who, in a practical sense, determined who lived in the matrimonial home.
I respectfully disagree with the primary judge's conclusion about dependency. Legal title to property is a relevant factor to be considered when addressing the question of dependency upon another for accommodation but is not, of itself, determinative of the question. Dependency, in a case such as the present, requires an answer the factual question of who, in a practical sense, determined who lived in the matrimonial home. Even if House v The King is the relevant test to be applied to the question of dependency, the error of construction by the primary judge is sufficient to enliven this Court's jurisdiction to intervene.
It is thus necessary to consider whether the evidence entitles this Court to conclude that John was partly dependent upon Gina during either of the relevant periods. The only dependency relied upon by the appellant in this appeal was partial dependency for accommodation. In relation to the first period at 306 West Botany Street in 1980, the evidence does not permit a finding that John was partly dependent upon Gina.
In relation to the second period, there was evidence that Gina invited John to stay at Platts Avenue following the breakdown of John's marriage to Valerie. The primary judge accepted evidence given by the appellant's brother Sam that it was Gina who said to John, in Ross' presence the following:
"John: 'I've split up with Valerie. I'm devastated'.
Gina: 'Don't worry, you can come and stay here'.
Ross: 'Yes, come and stay here.'"
Following that initial invitation, however, there was no evidence of the role Gina played, if any, in the decision to allow John to reside at Platts Avenue for "a couple of years". In the absence of any such evidence, I would not conclude that John was partially dependent upon Gina for accommodation.
I agree with the reasons of Sackville AJA on this issue. It follows that I agree that the appeal from the decision of the primary judge should be dismissed.
Although the appeal must be dismissed, it is desirable in this case also to address the cross-appeal briefly: Kuru v State of New South Wales ((2008) 236 CLR 1; [2008] HCA 26 at [12]; Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd ((Receivers and Managers Appointed) ((2011) 244 CLR 1; [2011] HCA 18 at [56].
The breadth of the evaluative judgement required by s 59(1)(b) of the Succession Act and the statutory direction to take into account all the circumstances of the case creates the possibility that judicial minds might differ in a particular case as to whether a claimant has established that there are factors warranting the making of an application.
Consistently with the decision in Re Fulop, the starting point for applying s 59(1)(b) of the Succession Act is that an eligible person such as an adult stepchild of the deceased is not normally regarded as a natural object of testamentary recognition by the deceased. In order to satisfy s 59(1)(b), John must therefore establish that there are circumstances that justify regarding him as a natural object of testamentary recognition by Gina. Those circumstances must go beyond the bare fact of the familial relationship. The factors relied on must be such as to demonstrate a social, domestic or moral obligation on the testator to make some provision for the claimant: Lodin at [114] (per Sackville AJA); Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 at [13]-[15] (per Basten JA).
The primary judge rejected the submission made by the appellant that the relationship between Gina and John was analogous to one between parent and child. His Honour accepted, however, that the evidence disclosed an expectation created by Gina of an inheritance being granted to John. In particular, the primary judge accepted the evidence of Sam's daughter Alyssa of two conversations in which Gina said that she wanted to "look after you boys… Just like Ross would have liked it" and again in 2014 a few weeks before her death that "I will look after you and the boys is that is what Ross would have wanted…". The primary judge found that Alyssa accepted in cross examination that Gina mentioned her testamentary intentions only in the second conversation. That conversation occurred after the Deed of Family Arrangement was executed in March 2012. No challenge to the acceptance of this evidence by the primary judge was made by the respondents.
The primary judge concluded that John and his brothers had strong legitimate claims on Ross' testamentary bounty arising from their contributions to the acquisition, conservation and improvement of his estate. Those contributions were not quantified in the evidence, but the primary judge accepted that contributions were made by the sons to the acquisition, renovation and maintenance of the properties owned by Ross. His Honour also found that during his lifetime Ross on a number of occasions made statements in the presence of Gina to the effect that the properties he owned were for the boys and that Gina acknowledged and agreed with this. As already indicated, the primary judge found that Gina herself, subsequent to entry into the Deed of Family Arrangement, made representations to John and Sam to the effect that she would honour Ross' wishes and make provision for them in her will.
I accept, as the respondents submitted, that the representations made prior to Ross' death were no doubt known to the parties at the time of making the Deed of Family Arrangement. It does not follow, however, that those representations can therefore be put to one side. This is because of the evidence of representations made by Gina subsequent to Ross' death and the entry into the Deed of Family Arrangement. Those later representations, taken together with all that had passed before that time, provided ample support for the primary judge's conclusion that there were factors warranting the making of an application.
The relevance of the earlier proceedings and their settlement in the Deed of Family Arrangement was identified by the primary judge. His Honour quoted pertinent passages from the decision of Nettle J, when his Honour was a judge of the Supreme Court of Victoria, in McKenzie v Topp [2004] VSC 90 at [56] - [60]. The primary judge found that 24 Platts Avenue was undoubtedly one of Ross' three properties the brothers had significantly contributed to the acquisition, conservation improvement thereof. Gina had received Platts Avenue in priority to John and his brothers pursuant to the orders of Hallen AsJ and, ultimately, the Deed of Family Arrangement. The primary judge found that the proceeds of sale of Platts Avenue were reflected in Gina's estate.
But for Gina's representations, I would have concluded that the tenuous and distant (in time) nature of John's dependency (assuming that it had been established) on Gina would have led to a conclusion that there were no circumstances warranting the making of John's claim. I agree with the primary judge, however, that all of the relevant circumstances, including Gina's representations, created a moral obligation on the part of Gina to make provision for John in her will. In the circumstances, the primary judge was correct to conclude that there were circumstances warranting the making of the claim on Gina's estate by John.
I do not accept the respondents' submission that the Deed of Family Arrangement evinced an intention to effect a final severance between the parties. That conclusion is inconsistent with the representations made by Gina I have recorded above. I also agree with the primary judge that the absence of any release of rights in respect of Gina's estate in the Deed of Family Arrangement tells against the respondents' submission.
Accordingly, I would dismiss the notice of cross-appeal so far as it asserts that the primary judge erred in concluding that there were circumstances warranting making the claim as required by s 59(1)(b) of the Succession Act.
This is a difficult question in this case for three reasons. Generally, in applying what I understand to be prevailing community standards of what is right and appropriate, interfering in a testamentary decision freely made by a competent testator on the application of an adult stepchild would be something I would be most reluctant to do. The following matters, however, lead me to conclude that this is a case where the primary judge was correct, on the contingent basis he was addressing the issue, to do so:
1. A significant part of Gina's estate was represented by the proceeds of sale of Platts Avenue. John and his brothers had made substantial contributions towards the acquisition, renovation and maintenance of the property;
2. Representations made by Ross in Gina's presence when he was alive and by Gina herself after Ross passed away expressly acknowledged the claims of John and his brothers to the proceeds of sale of the properties, including Platts Avenue, upon her death; and
3. Gina's will was made before she became entitled to Platts Avenue following her successful Succession Act claim. Leaving her estate to Franco and Enza was entirely consistent with the representations she had earlier joined in that the properties owned by Ross would pass to his sons on his death. The circumstances confronting the primary judge were quite different to those existing at the time Gina's will was made.
I have set out the relevant facts at some length above in dealing with the "circumstances warranting" aspect of the claim. While the conclusion that there are circumstances warranting the claim raises a different issue to whether adequate provision has been made within the meaning of s 59(1)(c), I agree with the primary judge that Gina's receipt of 24 Platts Avenue in priority to the claims of Ross' sons, including John, was impressed with a moral obligation to make provision for the brothers from any residue that might ultimately not be required for her maintenance and advancement. Ross' other sons, Sam and Robert, did not advance any claim and their interests may for present purposes be disregarded.
I agree with the primary judge that Gina's undoubted freedom of testamentary disposition was affected by the circumstance that she made her will many years before her death and, most relevantly, before Ross' death and her receipt of provision out of Ross' estate.
When Gina's will was made, the moral obligation which arose from receipt of provision out of Ross' estate in priority to the claims of the sons did not exist. The provision Gina received from Ross' estate in the form of Platts Avenue wrought a significant change in her circumstances which, as the primary judge found, Gina herself acknowledged in making the representations I have described above. No error has been shown in the primary judge's conclusion that those proceeds of sale Gina received were impressed with the moral obligation to make adequate provision for John from any part of that amount left outstanding at her death. No error was shown in the primary judge's conclusion that Gina failed to make adequate provision for John's proper maintenance and advancement.
The primary judge concluded that John's circumstances are modest and that he and his wife's net asset position is less than $100,000. No challenge was made by the respondents to this finding. The primary judge found that the estate left by Gina after providing for costs, but adding back $300,000 which Franco had already received, exceeded $800,000 of which well in excess of half represented the proceeds of sale of 24 Platts Avenue. While John received approximately $200,000 from Ross' estate, he would have received substantially more were it not for the provision obtained by Gina.
I was initially attracted to the submission that the primary judge had given inadequate consideration to the competing claims of Franco. The evidence was that Franco was unemployed at the time of the trial, suffered from heart problems and was in a degree of financial difficulty. The primary judge found, however, that Franco and his wife had net assets in excess of $800,000 and made a finding, which was not challenged on this appeal, that Franco has already received the benefit of $300,000 from Gina's estate. Enza and her husband had net assets in excess of $2.8 million and no error has been shown in the primary judge's conclusion that their competing claim should be put to one side.
I have ultimately concluded that no error has been shown in the primary judge's conclusion that the competing claims of Enza and Franco were not such as to require John's claim to be disregarded or discounted.
As to the amount of provision identified by the primary judge, $300,000, the submission by the respondents that it was excessive was principally based on an assertion that the size of Gina's estate was $515,000, rather than over $800,000 as the primary judge found. The provision identified by the primary judge was approximately 37 per cent of Gina's estate not 58 per cent as the respondents submitted.
There is nothing contained in the general statement of principles relied upon by the respondents drawn from Aubrey v Kain which assists in the determination of this question. There Hallen J was at pains to point out that he was not seeking to identify rules of law or otherwise to confine the jurisdiction granted by the Succession Act. His Honour's observations concerning community expectations about the provision of housing to adult children, relied upon by the respondents here, were expressly prefaced by a qualification with which I agree (at [190]):
"It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child."
Whilst it is no doubt possible to arrive at a different figure as representing adequate provision than that identified by the primary judge, I see no error of the kind described in House v The King in his Honour's broad evaluative judgment. His Honour found that John's net asset position is less than $100,000. At current rates of repayment John will be 90 years old before the mortgage loan on the family home is repaid. The combined after tax earnings of John and his wife are barely adequate to cover their expenses:
"In short, not far from retirement, John is left with a modest house, heavily encumbered, which will have to be paid off over his retirement."
The primary judge found that Gina's estate exceeded $800,000 and that well over half of that amount represented the proceeds of sale of 24 Platts Avenue. Contrary to the respondents' submission, the primary judge did not conclude that Gina's estate should be responsible for providing an unencumbered home for John and his family. The amount of $300,000 was found by the primary judge to be sufficient to discharge a mortgage over the family home to the ANZ bank, but not to repay funds advanced by John's wife's family to acquire the home.
In the circumstances of this case, while reasonable minds may differ about the amount of the provision identified by the primary judge's broad evaluative decision, no error has been shown in the amount of provision identified by his Honour which should be made in favour of John from Gina's estate of $300,000.
Accordingly, I reject grounds 3 - 5 of the cross-appeal.
The paucity of evidence addressing Gina's role in the provision of accommodation to John after his separation from Valerie perhaps reflects the way in which John's case on dependency was presented at trial. John's principal contention appears to have been that dependency was established by reason of domestic services provided by Gina during the period he lived at the Belmore Property. The primary Judge rejected this contention on the ground that, although Gina prepared food for John, there was no evidence that Gina provided food or household supplies for John out of her own resources. [19] His Honour also found that while Gina may have provided comfort and solace to John when he was distressed following the breakdown of his marriage, her compassion did not create a dependency. [20] These findings are not challenged on the appeal.
It was part of John's case at trial that he treated Gina as his mother and she treated him as her son. The primary Judge rejected John's evidence to this effect, which his Honour described as "radically different from what emerges from his affidavit in the earlier proceedings". [21] Accordingly, his Honour did "not accept that the relationship between Gina and John was analogous to a parent-child relationship". [22]
In determining whether the evidence is sufficient to establish dependency in the relevant sense, it is necessary to bear in mind that John need only show that he was "partly dependent" on Gina for the provision of accommodation during the period of at least two years that he lived at the Belmore Property. The word "partly" does not necessarily mean "substantially", but conveys a sense of "more than minimally" or perhaps "significantly". [23]
The primary Judge found that Gina and Ross jointly invited John to stay with them following his separation. In view of this finding I accept that it would not take a great deal of additional evidence to establish that Gina actively encouraged John to continue living at the Belmore Property beyond the period immediately following the separation. I would also accept that if the evidence showed that John and Gina had a close and loving relationship, an inference could be drawn that, irrespective of the state of title to the Belmore Property, Gina played a significant part in the decision to encourage or at least to permit John to live at the Belmore Property well beyond the period immediately following the breakdown of his marriage. This would be sufficient to establish that John was partly dependent upon Gina for the provision of accommodation during this period.
The difficulty confronting John is that the primary Judge did not accept John's evidence as to the nature of his relationship with Gina. It is one thing for Gina to have encouraged John to "stay" temporarily at the Belmore Property while John was in an understandable state of distress by reason of the breakdown of his marriage. It is quite another for Gina to have encouraged or even willingly accepted that John should remain in the Belmore Property for a period of at least two years. Sam's evidence addresses the first situation, but not the second.
As I have explained, the evidence is silent as to the circumstances in which John continued to live at the Belmore Property. If anything, the primary Judge's rejection of John's claim that he had a close and loving relationship with Gina suggests that the decision may have been made by Ross and that Gina merely acquiesced in the situation. In my view, it was necessary for John to adduce at least some credible evidence demonstrating that Gina encouraged John to remain at the Belmore Property or at least actively supported or participated in a decision to enable him to stay for a prolonged period. In the absence of any such evidence, I do not consider that he discharged the burden of establishing that he was wholly or partly dependent on Gina for the provision of accommodation. Thus I would uphold the primary Judge's finding, albeit for different reasons.
Spata v Tumino - [2018] NSWCA 17 - NSWCA 2017 case summary — Zoe