Stern v Sekers; Sekers v Sekers - [2010] NSWSC 59 - NSWSC 2009 case summary — Zoe

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Stern v Sekers; Sekers v Sekers

[2010] NSWSC 59

Supreme Court of NSW|2009-12-17|Before: Ward J

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Source facts

Court

Supreme Court of NSW

Decision date

2009-12-17

Before

Ward J

Source

Original judgment source is linked above.

Judgment (28 paragraphs)

[1]

For the reasons I have just indicated, I do not consider that the mere fact that a proceeding has been commenced entitles a former director to inspect all of the books of a company. 253 In Tan, Master Newnes, found that s 198F(1) does not mean that a director has company documents in his or her "power or possession of a company director" for the purposes of discovery (at [47]) saying: at [46] - [47]; I was not referred to any authority which supported the contention that s 198F gave a right of inspection in circumstances such as the present. Indeed, it seems that the effect of s198F has received very little judicial attention in that respect. [After noting the judgment in Hardcastle, Newnes M went on to say ... ]

[2]

The curious result referred to by Emmett J applies, in my view, with equal force to s 198F(1). It tends strongly to point to the conclusion that no such right was intended and when regard is also had to the Explanatory Memorandum is, I think, sufficiently clear that the purpose of s 198F was not to give access to directors or former directors for purposes unconnected with a liability or claim arising out of their capacity as a director. It was to overcome the limitation at common law that access must be for the purposes of the company, which, to adopt the example given in the Explanatory Memorandum, made it difficult for a director or former director who was sued by the company to get access to the company's records for the purpose of those proceedings. I do not, therefore, accept that s 198F has the effect contended for by counsel for the plaintiffs.

[3]

254 Some commentators have, suggested that, in the absence of an express limitation in the text of section 198F, there is no requirement that proceedings be related to the director's capacity as a director and that a director will have a right under 198F to have access to "the books of the company", for the purposes of a legal proceeding, regardless of whether the director is acting in the interests of the company or in his or her personal interests (at least where the legal proceeding involves a claim of breach of duty against the director) (see R P Austin, H A J Ford and I M Ramsay, Company Directors: Principles of Law and Corporate Governance, LexisNexis, Sydney, 2005, at [4.11]; R P Austin and I M Ramsay, Ford's Principles of Company Law, 13th ed, Butterworths, Sydney, at [10.410]; referring to the Explanatory Memorandum for the Corporate Law Economic Reform Program Bill 1999, at [6.107] - [6.110]). However, it is not suggested that the director would be in a position to compel access to the company's records for purposes wholly unconnected to the company or the director's position with the company (such as would be the case here if such an argument were available on the subpoena issue raised by the plaintiffs) and it would seem to me to be a surprising result if that were to be the case. 255 The statutory right of access extends to all documents, financial reports and records, and any other record of information providing it falls within the phrase "of the company"; s 9 of the Corporations Act. It seems difficult to believe that a provision designed to ameliorate the difficulty faced by a director at common law in obtaining access to documents necessary to defend himself or herself against an action for breach of duty by the company (because the information may be used only for the purposes of the company), could be relied upon by a director to obtain access to potentially highly confidential company documents solely for the purpose of producing those on discovery in proceedings unconnected with the company or the director's role or conduct as a director. 256 The evidence from Daniel was that he was not in possession of any documents relevant to the issues in the case or in answer to the notice to produce other than those which he had produced and that he had enquired of his co-director who did not consent when asked to produce any documents. It seems to me that in light of that evidence, the matter goes no further and it has not been established that Daniel was in default of his obligations in relation to the production of documents in the possession of third parties, whether on discovery or in answer to the notice to produce. 257 A different position would apply if it had been shown that Daniel had failed to produce documents held, say, by his accountant in relation to his financial position (since it might reasonably be assumed that Daniel would have had a presently enforceable right to call for those documents) but the complaint in this regard was, in essence, that the documents had been produced late. 258 Daniel's apparent non-compliance with a notice to produce credit card statements evidencing or in relation to the personal expenses to which he deposed seems to me again to be a different issue, particularly as I can only assume he had the benefit of legal advice in so doing (since his response to the notice was apparently under cover of a letter from his solicitors). It was difficult not to form the view that the level of cooperation in the production of relevant documents of that kind in these proceedings on the part of the executors left something to be desired. 259 That said, I do not consider that this takes the matter very far. The relevant point to note from the material which was produced and from the evidence that both David and Daniel gave is that they were well provided for by their parents, have or are in the process of obtaining qualifications which should enable them to establish successful careers, and are in a very comfortable position financially. While an order for provision out of their father's estate which deprives them of all or a significant portion of the Denning Street sale proceeds will obviously have a financial effect on them, it is not something which seems likely to lead them to financial penury or so adversely to affect their position or prospects in life as to cause me to limit what would otherwise be the proper provision for Carol by reference to their position. (Indeed, Dr Birch submitted early in the hearing, when it was suggested that an application would be made to join one or more of the Seker associated companies to the proceedings, that an order for provision could be met out of the estate funds distributed to and held by David and Daniel without the need to join any of the family companies.) 260 For completeness, I should also note that while I accept that the effect of what happened was that the properties left in trust for Eva's children or grandchildren were distributed free of any estate debts which might not have been the case had the debts been paid proportionately out of the respective beneficiaries' assets, it is difficult on the material before me to know how much of those consolidated debts were debts jointly owed by Suzanna and it may well be that, directly or indirectly, David and Daniel have also benefited, through their inheritance from their mother's estate, in the discharge of some of the debts attributed by them to the deceased's estate. 261 In terms of the competing claims to the estate, David and Daniel seem to have had a close relationship with their father - who, not surprisingly perhaps, appears to have had more day to day contact with them during their upbringing than with the children who remained living with his first wife when he left home. I accept that they contributed to his welfare over the last years of his life. I also note that they have accepted the obligation of funding the rates in respect of Carol's unit and have paid her a weekly stipend since their mother's death (in accordance with the direction made to that effect in their mother's will - Suzanna clearly recognised that Carol was in need of support insofar as she was concerned to make provision for the continuation of the weekly stipend for her stepdaughter after her death). David and Daniel have also had the benefit of considerable support from their parents during the course of their respective parents' lives (a private school education, comfortable home, assistance with tertiary education here or overseas, and, in David's case at least, the provision of not insignificant funds to acquire property overseas).

[4]

Equality of treatment 262 The tenor of the complaints made by Dorothy (in her correspondence with her father before he died) and by Ralph (both in his correspondence with Suzanna after his father's death and in these proceedings) was a sense of entitlement to an equal share of the estate simply because of their position as a child of the deceased (or a sense of injustice that they or their children had not been given the same opportunities or treated equally with the children of the deceased's second marriage). 263 So, for example, Ralph was of the opinion that his father had breached his contract (no such claim being pleaded however) and said that: "A wise and just testator would have treated me as an equal to my half-brothers. I can only assume that my father was unduly influenced against his first 3 children since we have been so loyal all our lives" (para 19, affidavit of 10 December 2009). He compared his position with that of David and Daniel, offering the opinion that they had at least $7.5 million from their mother's estate with which to make adequate and proper provision for their own offspring - para 23, affidavit 10 December 2009. Again, this seems to be more a complaint that his step-mother Suzanna did not treat him equally with her own sons, than as to the treatment by his father. 264 Tellingly, perhaps, Ralph, in a letter sent to his stepmother and stepbrothers after his father's death (in which he describes himself as a university dropout), set out what he considered to be the acceptable alternative means of 'compensation' (presumably by that meaning compensation for his father's breach of promise), those being either one-third of a half of the whole of the estate plus compensation (unquantified) for "deceit" and lost career and for 17 "lost years" or the value of what was promised and compensation for the "lie" and lost years and opportunities. 265 The first method of 'compensation' sought by Ralph indicates very clearly that his complaint is that he should have had an equal share of the estate as did David and Daniel (or, more precisely) that the estate should have been halved and the children of each marriage should have shared equally in that half. That wholly ignores the position of Suzanna and it ignores the fact that, of the 5 children, Ralph received a property which was substantially more valuable than any of the others did. True it is, that he received it under a testamentary trust created by the will. So too were the provisions made for David and Daniel, with whom he wants to be treated equally. 266 For the executors it is noted that even if the estate is valued at the $9 million figure placed on it by Mr Wilson, a one-third share of half of that amount would be $1.5 million, yet the property given to Ralph and his children was valued by Laing & Simmons at $2.5 -2.7 million - and even on Ralph's lower estimate of $2.2 million it exceeded what he saw as his 'share' of the estate. (Ralph's letter then went on to describe what he had considered he had done for his father over the years (in the job he referred to in his affidavit as often life threatening) including to offer shoddy and shabby units for rent, make bodgy repairs, bear false witness against tenants, commit perjury, assertions which do not reflect well on him insofar as he seems to have been prepared to engage in such conduct to preserve his expectations of an inheritance.) 267 In any event, equality of treatment with one's siblings or half-siblings is not the determining factor on an application such as the applications the plaintiffs now make. In Cooper v Dungan (1975) 9 ALR 93 a situation where the position as between siblings was being considered, Stephen J observed that "equality may be equity" but that "in this jurisdiction equality is not in itself an aim and to seek to attain it may well indicate that the discretion exercisable in this statutory jurisdiction has miscarried" (at 99). 268 It is neither the purpose of the Family Provision Act to ensure that there is an overall fair division of the estate; Gorton v Parks (1989) 17 NSWLR 1 at 6B, nor to deal with the "righting" of moral wrongs in the relationship between the deceased and the applicant: Robinson v Tame (unreported, NSWCA, 9 December 1994). What is relevant, when considering the second stage of the test, is the competing position of others with a claim on the deceased's testamentary bounty and it is only in that context that an assessment of the financial position of David and Daniel is relevant.

[5]

Community Expectations 269 It has been said more than once that the court should be careful not to interfere with freedom of testation except in circumstances where the legislation requires this to be done. In Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, Dixon CJ said (at 19): All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being deposited in the court. 270 The important matter (as observed by Young J in Walker v Walker, unreported, NSWSC, 17 May 1996) is whether in all the circumstances the community expectation of the testator or testatrix would be for greater benefaction to have been made for the proper or adequate provision for the person seeking provision. 271 As Gleeson CJ observed in Vigolo v Bostin, the justification for interference with freedom of testation is to be found in the failure of a testator to meet the obligations which the community would expect in terms of maintenance for those persons within the class of eligible persons (at [11]). It does not seem to me to be consistent with the policy identified as underlying this legislation, that the court should interfere with a testator's dispositions beyond that which was necessary. 272 Caution was expressed in Cropley v Cropley [2002] NSWSC 349, where Barrett J said (at [53]): It must also be borne in mind that, if the threshold is resolved in favour of intervention by the court, that intervention should only be to the minimum extent necessary to make adequate provision for the proper maintenance, education and advancement in life of an applicant. (Citing Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24; King v Foster (unreported, NSWCA, 7 December 1995).) (my emphasis) 273 I also note the caution expressed much earlier in Cooper v Dungan by Stephen J: It is notorious that in this particular jurisdiction courts must be vigilant in guarding against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant. 274 In Walker v Walker, in a comment repeated elsewhere (as in O'Loughlin v Low [2002] NSWSC 222, although there in the context of an application by a widow), Young J as his Honour then was said: … I reject the approach that all an applicant under this Act has to do is to prove that he or she is an eligible person and that he or she reasonably needs more financial assistance. The cases show that there must be a full investigation into all the facts of the matter to see whether the community would expect that a person in the plight of this testator ought to have made provision or further provision for the applicant… (my emphasis) 275 Adapting that test to the present circumstances, what is the provision that the community would think a person in the position of the deceased should have made for each of Ralph, Dorothy and Carol? I consider first the general principles relating to the position of adult children in the context of the claims by Ralph and Dorothy, since their position is markedly different from that of Carol. 276 In McGrath v Eves [2005] NSWSC 1006 at [67], Gzell J, when considering the position of claims by adult children for provision from their father's estate, said that: When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father though there noting also that there is no special principle or rule which precludes such a claim by an adult child from making (citing Bryson J in Gorton v Parks at 7 and White J in Barbara Mayfield v Suzy Carolyn Lloyd-Williams (at [109]-[110])). 277 Not surprisingly, reliance was placed by Mr Wilson on Barbara Mayfield v Suzy Carolyn Lloyd-Williams, where the decision by White J to make provision for the purchase of a house for the benefit of an adult child was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. On appeal, Bryson JA in Lloyd-Williams v Mayfield (at [32]), considered it altogether appropriate for the trial judge to have looked well beyond needs when interpreting and applying community standards to decide what provision the court ought to order. 278 White J had considered that a relevant factor in determining the appropriate provision for the maintenance of an applicant was that applicant's obligation to support others (such as a parent's obligation to support a dependent child) (at [86]). His Honour said that if the proper maintenance or advancement in life requires that provision be made, then the court could make such a provision even if it were not necessary in order to meet the applicant's needs in the sense of the applicant's necessities or requirements. His Honour noted that in Re Buckland deceased [1966] VR 404, Adams J had emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate (at [112]). 279 Various factors which featured in that case can be seen in the present case. The property designated as notional estate was large (as is the distributed estate available for designation in this case, even leaving aside the share portfolio) and the person with a competing interest was well provided for (as is the case with each of David and Daniel). 280 In Foley v Ellis, Sackville AJA (at [88]) noted that the language in Singer v Berghouse, "strongly suggests that the court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased's bounty. These claimants include other beneficiaries entitled to a share of the deceased's estate, whether or not they themselves have made a claim under the Family Provision Act." However, I do not understand the position to be that, when determining the proper provision for maintenance, an applicant's claim should be enhanced (beyond that which would otherwise be proper provision) by reference to the fact that though those with competing claims may be in a more comfortable position. The test ultimately remains that as to what is proper provision in all the circumstances.

[6]

Ralph 281 Turning first to the position of Ralph, it is relevant to note that, had Ralph been left the freehold title to the Francis Street property, in which he and his family had lived for some time, or even the present day value of a life interest in that property (as to which there was some argument but which presumably would have been a not insubstantial proportion of the property's current value given that Ralph is only 45), then it could hardly have been said that there had been inadequate provision for Ralph. 282 The Francis Street property represents a substantial proportion of the distributed estate. A gift of freehold title to the property (or a sum, out of the proceeds of sale of the property, equivalent to the present day value of a life interest in the property) would have given Ralph both security of accommodation (or a sufficient deposit to enable him to acquire suitable accommodation for his growing family) and the flexibility to use the equity in those premises (or any premises he might acquire with such a deposit) to fund any career development initiatives he might then choose to take or to effect any necessary repairs to those or alternative premises, and/or in due course to secure accommodation in an appropriate residential aged care facility. 283 Ralph's claim for provision seems in a large part based on his father's promise to give him Francis Street, which Ralph says was the reason Ralph left his employment at Lend Lease. Ralph's resignation from Lend Lease took effect from 30 June 1990. Before he resigned, he told his father what he was planning to do. In cross-examination he said that he was "reasonably happy" in that employment (T 22.10) and that he generally enjoyed work as an accounts clerk (T 23.31). In his affidavit of 13 March 2008, Ralph said that "due to" the promise he says his father made to him in relation to the Francis Street property he gave up his job at Lend Lease (para 26), a career which he believes could have been lucrative (para 27). 284 At paragraph 29 of that affidavit, he goes further and says that he gave up that career "so I could work for my father 7 days a week". However, when questioned on this in cross-examination he conceded that his father had not asked him to give up his job (rather, he told his father that he was going to do so) and that the promise (on which, according to his evidence, he has placed much store over the years) in relation to the Francis Street property was not in any way conditional on him commencing work as a property manager for his father. 285 Ralph says the role he performed for his father required him to be "on call" 24 hours a day in respect of the properties owned by the deceased. However, he conceded that the demands made on him in that role by his father were not onerous (T 23.23) and the suggestion in his affidavit that he worked 18 hours a day 7 days a week (in a job which was at times "life-threatening") is clearly an exaggeration. At most, he regarded himself as "on call" during that time. Ralph freely conceded in cross-examination that he had significant amounts of free time during the period in which he was employed by his father. 286 Ralph accepted that there was no suggestion by his father that he resign from his job at Lend Lease (T 25.37) and that he "absolutely" could have continued to work at Lend Lease (T 25.45). (In that regard, it is not clear to me that Ralph could not have continued to work at Lend Lease at the same time as he performed his property management services for his father - given that there seems likely to have been a reasonable ability for Ralph, absent emergencies, to attend to those property management services at a time convenient to himself and that he conceded he had significant free time during the working day even though he was "on call" to assist his father as his property manager.) 287 Whether or not Ralph was wholly satisfied with his career at Lend Lease (he describing his degree of satisfaction in somewhat lukewarm terms as being 'reasonably happy' there) and despite the career prospects he now says he would have had as an accounts clerk there, Ralph seems to have made the decision to leave in advance of his father giving him the Francis Street property and without there being any condition that he do so (T 25.41). It is difficult in those circumstances to conclude that Ralph had any serious career aspirations or ambitions in his role at Lend Lease. (And he disavowed any thought of going back to Lend Lease - T 28.46.) 288 Accepting that Ralph decided to leave Lend Lease because he thought that his father was going to transfer the title of the Francis Street property to him (rather than, as his father did, simply give him the rental income from the property), Ralph was nevertheless seemingly content thereafter to take on and continue the role of property management for his father in the knowledge that the Francis Street property remained in his father's hands, albeit pressing his father from time to time to transfer the property to him. 289 To that extent, while Ralph may be said at the outset to have put on hold any plans he had for a career in property development, at some point in the 16 or so years from the making of the promise to his father's death it must have become apparent to Ralph that there was no certainty as to when any transfer of the property would eventuate (particularly given his father's varying explanations or excuses for the delay). Ralph says that over the period from 1990 to his father's death his father was constantly promising that he would transfer the property to him (T 28.10). Even the least sceptical person must surely have entertained some doubts as to the prospect of a transfer in light of the 16 year delay. Nevertheless, Ralph took no steps in that period to explore the possibility of a career in property development otherwise than through his father's largesse or to gain any formal qualifications that might have assisted him to do so; nor has he done so since his father's death. 290 It seems to me that at best what Ralph had were ideas about doing what his father had done in building up a portfolio of property assets but that he was only interested in, or proposing to follow, such a course if his father provided him with the capital to do so (in the form of the transfer of the Francis Street property). It does not seem that Ralph had any concrete plans or goals in that regard (the most he could point to was having at some stage put forward a proposal for his father to acquire the next door property, which his father rejected) other than taking on the project of renovating Francis Street to incorporate a third unit (an enterprise in which his father did assist him by way of the provision of funds, thus, intentionally or otherwise, enabling his son during the deceased's lifetime to gain at least some experience in property development). 291 Ralph says in his affidavit that: If my father had not made his promise to me I would have continued working my way through the corporate path I had already commenced. As it now stands I am looking at starting from scratch. My father's promise allowed me to think and act like my financial future was bright and secure. I only accepted the relatively low remuneration and often life threatening work because of the promise of a measure of wealth in the future. If the inducement had been to be a caretaker for the rest of my life, I would have taken measures to ensure my ambitions were fulfilled instead of relying on my father to my detriment". 292 To similar effect, in paragraph 17 of his affidavit of 10 December 2009, after Ralph expressed the opinion that the estate was more than capable of honouring his father's promise (though it should be noted that that promise was for the Francis Street property to be Ralph's and Ralph does not in fact now press for the title to this property to be given to him absolutely), Ralph said that he is seeking "funds of equal value from the estate to redress his [father's] omission". He went on in paragraph 20 to complain that "If it were my father's intention for me to have nothing but a pension he should never have made his promises to me, as I worked for my father to my own personal detriment and ultimately to the detriment of my family" (the last comment being somewhat of an overstatement given that his family has security of accommodation and his children have been left the remainder interest in a substantial asset of the estate.) Ralph asserted that (but for the promise) "I would have continued with my own independent career [which at the time was as an accounts clerk]. My labours and loyalty were remunerated with minimum moneys for many years and ultimately, apparently, unappreciated and unrewarded". Ralph's bitterness at his current position seems evident in passages such as this in his sworn affidavits and his assertion that he had been exploited by his father. 293 Insofar as it was suggested that Ralph's claim should be elevated by reason of the fact that promises were made to him in relation to the transfer of the Francis Street property (Ralph giving evidence that his father had said to him during his life that "I am giving you this property now so you do not have cause to rejoice on my death" - T 25.20), Dr Birch submits that the promise to Ralph was substantially fulfilled in that from 1990 Ralph received all the financial benefits that flowed from the Francis Street property and had the ongoing financial benefit from that property by reason of the gift under the will. Dr Birch points to the acknowledgment by Ralph in the witness box that the deceased's statement was not made conditional on Ralph doing anything in return (T 25.40) and that Ralph had further accepted that he resigned from Lend Lease of his own volition (T 26. 10) (ie not in the expectation of what his father might do in relation to the property nor with a view necessarily to taking on the property management role for his father).

[8]

296 In his affidavit of 13 March 2008 Ralph described his father's conduct as having deprived him of the opportunity to achieve his ambitions in life and 'derailed' his progress towards the goals he had for success and wealth. He said that: "I have always held a strong ambition for success and wealth. I was independently working towards those goals when my father derailed it all with what should have been a short cut to those ambitions" (para 20). Most telling, it seems to me is the comment that what his father had offered him was "what should have been a short cut" to the achievement of his ambitions. What Ralph seems to have done, insofar as he says he put his ambitions on hold in reliance on his father's promise, was to opt for the easy option or short cut to wealth. That was, of course, a choice open to him to make but it does not mean that, having done so, he should now look to the estate to put him in the position he would have been in had he not done so. 297 On his own testimony, Ralph has spent the last 16 years of his father's life waiting to be provided with the capital to start a property development career (and, he seemed to accept, has spent the last three and a half years since his father's death 'sitting on his hands'). He has done nothing since his father's death to obtain any employment or any qualifications (other than reading advertisements for positions for which he has not once applied - T12.30-45 - and making what can only be described as desultory enquiries of a friend or by reference to one university website as to law courses). He is still waiting, it seems, to be provided with a kick start from his father's estate to pursue his goal of success and wealth. 298 In that context, Ralph's current desire to study law (formed during the course of his discussions with his legal advisers and having become aware of the legal profession during this case - T 14.11) was expressed with a degree of ambivalence and seems at best a fallback to his desired career as a property developer. Indeed, his evidence was that he thought the nomination of the University of New South Wales as a desired institution in which he might study law was put into his affidavit by error of his solicitor (T 16.16). While he professed an ambition to study law, he has made no enquiries about courses other than the law course at Bond University and at UNSW (T 16). He agreed he had made no serious enquiry as to how realistic such a goal might be (T 17.49) nor had he made any plan for what might happen if this application were to fail in this regard (T 18). It is difficult to see his desire for tertiary education in this area as more than an aspiration (as opposed to a serious aim). 299 It seems to me that this was a choice that Ralph made, not one forced upon him, and Ralph's real complaint now is that he did not receive the title to Francis Street, as his father promised, but simply a life interest in the income from that property (or 'pension' as he so dismissively described it). 300 I am left with the firm view that what Ralph wishes, in effect, is to have full title to the Francis Street property from which he could choose to commence a career as a property developer or retain his current lifestyle as the case may be. He made it very clear that he is not interested in acquiring any accounting qualifications or pursuing the career he abandoned in 1990. 301 Dr Birch submits that the lifestyle choice that Ralph has made (to have more leisure and to spend more time with his family rather than to make a substantial commitment to a career) does not give him 'needs' now to be met from the estate. He submits, and I agree, that the estate is not obliged now to provide for Ralph the wealth and success that could possibly have come to him had he chosen at an earlier time to pursue a career in law or business.

[9]

302 To all intents and purposes, the deceased intended, the Francis Street property to benefit Ralph and his family (and it is significant, I think, that the deceased made provision for each of his children, or in Dorothy's case her children, under a similar trust structure). The deceased's treatment of Ralph is not unique in that regard. It seems to me that Ralph is capable of making a decision (as he seems to have done in the past) as to the lifestyle he wishes to lead and, if he now chooses to activate his hitherto dormant ambitions, he is in a position to do so utilising his own resources and the substantial equity (or funds) that would have been available to him in those circumstances. This would also have left sufficient capital for his debts and the private school education of his sons to be met. 303 I therefore would not have considered any further provision necessary had the Francis Street property (or a substantial portion of its value) been left to Ralph outright. It was not. However, in the circumstances I consider that the community expectation would be that a man of his age, who is capable of taking up full-time paid employment in order to provide for his family and who has for lifestyle reasons apparently chosen to date not to do so, should not be provided for further than by way of providing flexibility of accommodation in his lifetime and a means, thereby, of meeting his debts and other expenses out of proceeds obtained from the sale of the substantial property which has been left to him and his family. 304 In circumstances where his children are young, in good health, unlikely to inherit for some time if Ralph lives to the normal life expectancy of someone his age, and can expect to be well provided for by their parents, I would have thought that the making of an order for provision to put Ralph in the position where he has the freehold title or at least the funds representing the present value of his life interest in the property (if not the freehold title to the property) would be the appropriate order for his proper provision. However, Ralph does not wish provision to be made to that effect. While maintaining that he has been left with inadequate provision, Ralph seems to have set his face against any order which would detract from a gift to his sons (which gift is itself unlikely to vest in possession for a considerable time). 305 It seems to me that it is not for Ralph to burden the estate with additional obligations simply because he fears that an order for provision of the kind which would otherwise be the appropriate order might disturb his family harmony. 306 The decisive factor in this regard is that I must balance Ralph's claim against all the competing claims. In circumstances where I consider that Ralph's claim for provision is far weaker than that of his sister Carol, for whom substantial provision needs to be made (and can only be made out of distributed estate thus affecting the provision made under the will for one or more of the remaining beneficiaries), and where Ralph's claimed needs seem to me to be little more than a wish list (and a wholly unrealistic wish list in my view insofar as he seeks to be provided with a substantial deposit for what would, in effect, be a second home for the family or, alternatively, a $500,000 capital sum for contingencies and to enable him to pursue a career which hitherto he has shown no apparent interest in pursuing), if Ralph seeks to maintain the provision made for his sons then I think he must do so at the expense of his 'wish list'.

[10]

307 In view of Ralph's adamant position that there be no interference with the bequest to his children, I consider that the proper provision for Ralph's maintenance, education and advancement in life should be that which provides him with the flexibility of accommodation that is currently lacking in the provision made for him under the will but, subject to the qualification I make below, nothing further. (In that regard, I note that it is by no means automatically the case that provision will be made to adult children as a nest egg or contingency to cover the vicissitudes of life. In Howe v Lowry [2009] NSWSC 451, for example, Macready AsJ held that (at [48]), given the adult daughter's health and situation in life, the claim for a $200,000 fund for contingencies was not appropriate.) 308 I have considered whether additional provision should be made for Ralph to enable him to meet his credit card debts. I note that he would readily be able to meet those debts out of the proceeds of sale of the Francis Street property if the testamentary trust were to be re-written to permit this (and this might well be in the interests of his minor children so that Ralph is able to clear his debts, which I understand have built up over some time, and commence afresh. However, it appears that Ralph would prefer not to make use of the capital tied up in the Francis Street property for that purpose. 309 In circumstances where Ralph has a reasonable income, has the ability to maintain that income and to add to that income if he chooses to take steps to obtain employment for which he is presently qualified (or further qualifications to enable him to obtain higher remunerated employment as he seems to wish to do) and has set his face against an order for provision which would give him the opportunity to sell the Francis Street property if necessary to clear his debts and start afresh, and particularly in light of the strength of the competing claim Carol has on the deceased's testamentary bounty (which will subsume most of the property to be designated as notional estate), I do not consider that the proper provision for Ralph requires a lump sum payment to enable him to clear his debts or for contingencies. 310 I therefore propose to make an order for provision in terms of what is generally known as a Crisp order (an order of the kind made by Holland J in Crisp v Burns Philip Trustee Company Ltd (unreported, NSWSC, 18 December 1979), which will have the effect of re-writing the testamentary trust in favour of Ralph and his children so as to permit Ralph to sell the Francis Street property for the purpose of acquiring other suitable accommodation for himself and his family and, in due course, aged care residential accommodation should he so require it but which will preserve the remainder interest in the Francis Street property or any substitute property for the benefit of his children. 311 I consider that it would be appropriate, as part of the Crisp order, to make provision for a sum to be set aside out of any sale of the Francis Street property for the purpose of providing a fund for the children's education. I will hear submissions as to whether and how any such provision should be made. Further, while I do not consider it appropriate to make provision for a 'nest egg' or contingency sum of the substantial amount claimed, I think it would be appropriate to allow out of any sale of Francis Street an amount to be applied to discharge the debts which have been incurred by Ralph for family expenses. Again, I will hear submissions as to this aspect of the orders. 312 The qualification I referred to above is that I consider it appropriate, to remove any uncertainty as to the status of the funds provided to Ralph for the renovation of the Francis Street property, to declare that as part of the provision for Ralph on this application any outstanding liability to the estate in relation to those funds be discharged.

[13]

315 Clause 3(4) of the will, after referring to the property which Dorothy and Michael had unsuccessfully managed for the deceased and denying any promise to give that property to his daughter or her children (as set out earlier) explained the reason for the fact that no provision was made for Dorothy: … I am leaving … Edward Street to my two grandsons and not to my daughter Dorothy Carroll because she expressly requested that I leave her nothing but that I leave her inheritance to her children. 316 This explanation is of interest. First, it follows immediately upon the denial by the deceased that he had made any "promise" to give the Coogee Bay Road property to Dorothy and/or her children. That denial has a defensive tone and appears to be the deceased's final response to the assertions Dorothy had made while he was alive to the effect that he had made just such a promise. Dorothy's evidence is that this is what was promised to her by her father in October 1989. The fact that the deceased felt the need to include such a denial in his will, even though the property had by then been sold and hence could no longer have been the subject of testamentary disposition, suggests that the issue still rankled with him and/or that he anticipated the possibility of a claim by Dorothy. 317 Secondly, and more significantly, to my mind it shows very clearly that what the deceased considered to be Dorothy's "inheritance" (and what he apparently considered would have been the appropriate legacy for her), was the Edward Street Unit 4 (whether outright or, which seems more likely given the manner in which his testamentary beneficence was displayed to his other children, by way of a trust for Dorothy and her children for life and on her death to her children). The stated reason for this bequest to Dorothy's children makes it clear that it is in substitution for any such bequest to Dorothy. 318 Paragraph 7 of Dorothy's affidavit sworn 11 April 2008 denies in absolute terms "ever saying to my father any words to the effect that he leave me nothing and to leave my inheritance to my children". However, it seems difficult to take that denial at face value in light of the correspondence passing between Dorothy and the deceased. 319 By a letter dated 10 June 2005 (which I acknowledge that Dorothy says she did not receive), the deceased wrote to Dorothy offering her a sum of money in lieu of any bequest under his will. The letter opened by referring to his asthma (a point of no relevance other than the fact that there is a letter in evidence from Dorothy to her father which appears to respond to this comment in a letter she says she did not receive). The deceased offered Dorothy $100,000 "if you could visit personally a solicitor and identify yourself and sign an undertaking that you are accepting this amount as your full and final inheritance from me and you shall not make any demands, requisition or claim against my will after receiving this amount". The letter concluded (sarcastically, it can only be said) with the words "you do not have to stress yourself, if you answer this letter in less than 8 months", which appears to be a thinly veiled complaint at the time taken by Dorothy to respond to earlier correspondence. 320 The letter from Dorothy to which I have referred above was undated and handwritten. Its subject matter bears a marked similarity to the matters raised in her father's letter and, despite Dorothy's denial, I would infer that it was a response to the deceased's letter of 10 June 2005. 321 In her letter, Dorothy referred (somewhat unsympathetically to her father's complaint as to his problems with asthma), thus seemingly responding to the text of the letter she denied having received; thanked her father for some cheques (apparently sent as birthday presents for her sons) "especially that they have been written correctly"; and stated that she did not have time or money for a solicitor ("all of my income goes very willingly for William and Edward's needs and wants"). Dorothy denied that this was in response to her father's invitation for her to see a solicitor in relation to the $100,000 offer. She says it was a response to a suggestion her father had made in a telephone conversation that she see a solicitor about a traffic matter that her husband had (T 67.23), although the first mention of this conversation was in the witness box. 322 Significantly, Dorothy's letter included the statement "For myself I won't be claiming anything but if William and Edward are cheated then I will fight." (my emphasis). In the witness box, Dorothy adamantly denied that this was a reference to an offer made in relation to her inheritance (or to her inheritance at all) (T 68.6), rather, she said this was a reference to a telephone conversation with her father in which she said they discussed her father's earlier promise that when the Coogee Bay Road property was sold that her boys would get the shares purchased with the sale proceeds of that property. Dorothy said that in that telephone conversation she asked her father to transfer the shares to her sons (the elder of whom was then 17) straight away (T 68/69). Despite having (according to her evidence in the witness box) asked her father to transfer the shares straight away the letter she sent to her father threatened to fight if they didn't receive their inheritance by the time her son turned 23 (T 70) - she accepted that she had given her father an ultimatum to have transferred the shares by that time (T 70.23). 323 Dorothy's letter concluded with the entreaty "Be nice, not offensive as your last letter is", which could easily be read as a reference to the sarcastic comment made by her father at the conclusion of his 10 June letter, but which Dorothy said was a reference to another letter. However, Dorothy says that she doesn't recall exactly what letter she had been upset about (T 71.2) (or what it was in whatever letter which had upset her, though she thought it probably was about the boys not being brought up in the Jewish faith). 324 Faced with her undated letter, which was annexed to the affidavit of David sworn in February 2009 and which seemed to call into doubt Dorothy's denial that she received her father's 10 June letter, Dorothy asserted in the witness box that her letter was in response to a telephone conversation she had had with her father about a different topic (T 69.5) and one to which reference had not been made in her affidavit. That rather strains credulity, particularly when the demand she says she made in that telephone call was that the deceased transfer to her then minor sons a substantial share portfolio representing the proceeds of sale of the Coogee Bay Road property, (a demand which itself was inconsistent with her June 2005 letter and which was predicated on a right to the proceeds of sale of that property which the deceased had for some time disputed). The suggestion that, in response to that demand, the deceased would have invited Dorothy to visit a solicitor to document anything of the kind discussed seems highly unlikely given the tenor of the deceased's denials of any obligation in that regard.

[15]

326 While the statement in Dorothy's letter that she would not be claiming anything for herself is not expressly a request that she not be left anything, I think it is fair to say that that is its import and that, in those circumstances, the deceased could well have understood her to be requesting that anything the deceased might leave to her should instead be left to her sons. However, I also think that any such 'request' must be taken in the context of the ongoing dispute with her father as to the entitlement she believed she had to the proceeds of sale of the Coogee Bay Road property. I doubt that the letter was seriously intended as an invitation to her father to disinherit her (as opposed to an attempt to influence her father to leave a more substantial inheritance for her and her sons) and the deceased's letter of 10 June 2005 (whether or not ever received by Dorothy) itself suggests that the deceased did not consider that Dorothy was actually intending to give up any claim to his estate. 327 It is not suggested on behalf of the executors that there was any binding disclaimer by Dorothy of any claim to her father's estate, though it is submitted by Dr Birch that the decision of the deceased to leave no provision for Dorothy in the will is explicable in circumstances where Dorothy herself appeared to adopt the position in correspondence with her father (in the context of Dorothy having for some time taken issue with the fact that her father had promised to leave her the Coogee Bay Road property or the proceeds of sale and having made repeated requests in relation to that issue) that she wanted nothing for herself and that her inheritance should be left to her children. In Retter v Permanent Trustee Co Limited: Re Estate of Rita Retter, (unreported, NSWSC 13 April 1994 at p 6), McLaughlin M (as the Associate Justice then was) observed that a statement of the deceased's reasons must be accorded respect, but must be weighted in light of the evidence of the case. 328 It seems to me clear from the will that the deceased had intended the Edward Street unit the subject of his bequest to Dorothy's sons to represent 'her' inheritance. In that regard, they were, perhaps accurately, described by Dr Birch as 'accidental beneficiaries'. Insofar as the position of Dorothy's children is concerned, not only would they not ordinarily be considered the natural objects of the deceased's testamentary beneficence, there is some doubt on the face of the will as to whether it was intended that they have more than a life estate and, but for Dorothy's rather petulant correspondence in June 2005, they may well not have shared in the estate at all. It seems to me likely, given the vehemence with which Dorothy staked her children's claim to 'their' inheritance that her children will be likely to inherit from her in due course any capital remaining from any provision now made for her. 329 Balancing the needs of their mother and the competing interests of the other beneficiaries (particularly Carol), it seems to me that the proper provision for Dorothy is to re-write the testamentary trust in respect of that property so as to provide for the sale of that property and direct that the proceeds be paid to Dorothy subject to a direction that she pay, out of the proceeds of sale, an amount payable to each of her children which can be used for their education and advancement in life (as the deceased had intended) or otherwise as they may wish in lieu of their entitlements under the will. I note that Mr Wilson submitted (while strongly pressing for Dorothy's principal claim in full) that at least $50,000 each might be an appropriate sum if I were to be of the view I have expressed above and I consider that to be appropriate. 330 I will hear submissions as to whether any form of Crisp order should be made in respect of the proceeds of sale of Unit 4 in the Edward Street property after deduction of the allowances for Dorothy's children and the clearance of Dorothy's debts. A provision of this kind, while it will not secure the purchase outright of a larger house in the price range indicated by Mr Wilson should provide a substantial deposit for perhaps a more modest home for Dorothy.

[16]

Carol 331 In relation to Carol, it was suggested that her position was not dissimilar from that of a wife left without means of support, insofar as she has no capacity to improve her current position, unlike her siblings and half-siblings, and thus her needs should be accorded primacy to theirs. In Bladwell v Davis [2004] NSWCA 170, addressing the position of elderly widows, for example, Ipp JA said (at [2]): …where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, would ordinarily result in the needs of the widow being given primacy. 332 Mr Simpson also placed emphasis on the fact that when considering claims under the Family Provision Act what one is concerned with is not simply what would be adequate provision but what is proper in all the circumstances and that, as recognised in Bosch v Perpetual Trustee Co [1938] AC 463 at 475, that which might be adequate is not necessarily proper. 333 Here, of those with competing claims to the estate (including her own siblings), both David and Daniel are in markedly superior financial positions and have the ability to establish successful careers and further to improve their position (factors relevant in Foley v Ellis). 334 In Caldwell v Ang (unreported, NSWSC, 11 April 1991), Young J referred to Mahoney JA's comment in Kearns v Ellis (unreported, NSWCA, 5 December 1984) that "the content of the moral obligation [which a deceased has] is [not] to be determined by opinion surveys or by the lowest common denominator of community feeling at the time". 335 I am of the view that the community expectation of the deceased, having a very large estate at his disposal and knowing that his daughter had suffered for many years from a serious psychiatric illness, would be that he would ensure that she was left well provided for and not left at risk of (now or in her old age) having to fend for herself or at the mercy of the kindness and charity of her family no matter how attentive and well-meaning they might be. 336 In that regard, I accept that Ralph has been attentive to and solicitous of his sister over the years (even though he may have overstated the level of his current contact with his sister, if the account given by her to her social worker is reliable), but he has his own family to attend to and is now at the stage of his life where he apparently wishes to pursue with some vigour a more high powered career. 337 I accept the evidence of Mr Kennedy-Gould, who I considered to be a thoughtful and objective witness, that, in light of the most recent admission of Carol to hospital, it is important for her to have the regimen of day-to-day contact with a companion carer in order to maintain routine and to monitor her condition and that in his experience an independent carer is preferable for a number of reasons including the stress which a condition of this chronicity places on the family (T 93.10). I accept that it is preferable that Carol be in a position to engage an independent person to carry out such a service rather than being dependent on friends and relatives to do so.

[18]

(i) Accommodation 339 The decision as to whether it is better for Carol to remain in the Edward Street unit (and have it renovated) or to acquire suitable alternative accommodation is one which has troubled me, as it seems that any relocation is likely to be stressful for Carol; and Mr Kennedy-Gould acknowledged this (T 85.26). I sensed from Mr Kennedy-Gould's quiet deliberation and tentative response when I posed this question to him, that he was similarly troubled and that there is no easy answer. Mr Kennedy-Gould's practice in such situations is to recommend that preference be given to the wishes of the patient. However, it did not seem to me that this was a result which he would endorse in this case without considerable reservation and he certainly did not suggest that to make provision in terms which required Carol to relocate would be harmful to Carol's long term health or unduly disruptive to Carol. Carol's legal representatives press for an order which would provide Carol with alternative accommodation, noting that Carol's stated preference was not given in absolute terms and that Carol will in any event have to relocate for some time if the Edward Street property is to be renovated. 340 I am of the view that the proper provision is for Carol to be provided with sufficient funds to acquire suitable accommodation in the Bondi area (with which she is familiar) and that I should allow a sum of $600,000 (plus stamp duty, legal costs, relocation expenses and the cost of furnishings, as estimated) for this purpose. (Had I been of the view that the proper provision was for a sum to allow Carol's unit to be renovated, then I would have allowed a contingency over and above the costs of the repairs estimated by Mr Reid (the builder called for the executors) since it seemed to me that his estimate (of necessity perhaps) did not have regard to Carol's particular needs but was, rather, an estimate of what it would cost to carry out works of the kind he identified as would be required to the unit and as to which 'no parameters' had been given to him.) 341 My reasons for reaching this conclusion are that it is clear that Carol will have to relocate for a period of time in either event (since there is evidence that it will be necessary for her to do so while any renovations are carried out to her Edward Street unit) and hence she will have the stress of relocation whatever my decision in this regard; that even if she does remain in Edward Street for the immediate future there is no certainty that this will remain suitable accommodation for her (although I accept that this could be dealt with by a Crisp order); that the condition of the current unit, though kept clean by Carol, is described as decrepit and of 'pensioner only' type accommodation (I observe that Carol's unit, from the photographs provided, is small and that the opinion expressed by Mr Reid, the builder who gave evidence as to the cost of renovations, was that this was an 'add-on'); that her current accommodation is not what, in the view of Mr Kennedy-Gould, would be described as dignified and safe accommodation that to which any person in her situation should have access (T 85.19) (I gather from Mr Kennedy-Gould's evidence that there is a concern that a unit such as this may be unlikely to attract neighbours of a type who would be able to assist Carol if she were to need); that Mr Kennedy-Gould said Carol "clearly didn't reject the idea of a move" and had expressed the idea that she would like somewhere with a garden (T 85.42); and, significantly, Carol's tutor, Mr McLoughlin, gave evidence by affidavit that he had inspected another flat with Carol and that Carol was relaxed and calm during the inspection and had indicated in discussion with him afterwards that she was not unreceptive to the idea of a move at least insofar as she had said that she liked the flat and the garden which they had inspected. 342 Although I accept that Carol's preference would be to remain where she is, in familiar surroundings, this is not a situation where there has been an adamant objection raised by Carol to a move, nor has Mr Kennedy-Gould cautioned strongly against it. Mr Simpson, no doubt on instructions from Carol's tutor, presses for provision in relation to the provision of a suitable home. I consider that that would be the proper provision for Carol in all the circumstances. I trust that, with the benefit of assistance from carers and her family, the stress of such a move can be minimised for Carol. 343 I accept Dr Birch's submission that the appropriate course is to make an order for the sale of the Edward Street unit and to roll the proceeds of sale into the purchase price of the new unit and, allowing for the purchase price to be in the order of $600,000 plus consequential costs and an allowance for furnishings as estimated, any shortfall between that amount and the sale proceeds of the unit should be supplemented by provision out of the designated estate. 344 I was helpfully provided by Mr Simpson with information as to the creation of special disability trusts (Exhibit P1/A), from which I understand that for the relevant concessions to be available it is necessary that the trust be established for the sole purpose of providing care and accommodation for a person with a severe disability. Carol has already been assessed and approved as a person entitled to be made the beneficiary of such a trust (Annexure C to the 8 December 2009 affidavit of Ms Suttor being a letter dated 27 November 2009 from Centrelink advising that Carol was granted special beneficiary eligibility status on 4 November 2009). I understand that, at present, assets of up to $500,000 plus the home in which the disabled person lives should be able to be held in the trust without affecting the support benefits available to that person. 345 I think it is appropriate to structure the provision for Carol in such a way as to preserve her benefits and will seek submissions from Counsel as to the way that can best be done. I note that the Public Trustee on 16 March 2009 indicated consent to appointment as trustee in relation to any provision which might be made in these proceedings for Carol. The relevant office is now that of the NSW Trustee and Guardian (as from 1 July 2009 the offices of the Public Trustee and the Protective Commissioner having merged.

[19]

(ii) Level of care 346 The three objectives of a companion carer seem to be for someone to minimise Carol's social isolation, to assist in organising activities for Carol, to observe Carol's condition and alert medical practitioners to any need for intervention. I consider that the appropriate provision is for the increased level of care recommended in Mr Kennedy-Gould's second report at least until such time as Carol is likely to be progress to some form of aged care accommodation, where such needs should to a large degree be met. (In that regard, I note that Mr Kennedy-Gould referred to some of the difficulties which people with conditions such as Carol's may have in retaining places in aged care accommodation - T 88.30.) 347 I have taken into account Dr Parmagiani's observations but it seems to me that, while making those observations, he did not expressly reject the proposition that a higher level of care would also be reasonable. Mr Parmagiani was asked to provide observations on Carol's condition including as to the nature duration and extent of further treatment. He had regard to, and commented on, Mr Kennedy-Gould's first recommendation as to the level of companion care per week. He had regard to, but did not comment on, Mr Kennedy-Gould's second recommendation of a higher level of companion care (made after there had been a further admission to hospital the need for which might perhaps have been avoided had there been a monitoring of Carol's condition of the kind possible with daily physical contact with Carol). 348 I consider that the reasoning underlying Mr Kennedy-Gould's changed recommendation was logical. Mr Kennedy-Gould said that he changed his recommendation because he felt that the level of contact with a companion carer needed to be consistently structured (T 92.28) and face to face rather than telephone contact to enable early intervention to prevent decompensation. He regarded Carol's circumstances in 2008 as indicating a very serious exacerbation of her condition. 349 I think that the community expectation would be that the deceased would err on the side of caution to make sure that there is sufficient care available throughout the whole of his daughter's life, when funds are available to meet this cost. 350 Accordingly, I think the cost of the companion carer should be calculated on the assumption of 14 hours per week, the case manager at one hour per week and the clinician as estimated. However, as discussed below, I think this should be for a set period up to such time as it would be reasonable to assume that Carol would be well settled into an aged care facility and thereafter to reduce the level of provision for companion care to 7 hours per week in order to provide ongoing social interaction for Carol.

[20]

(iii) Care after admission to an aged care facility 351 I note that the executors have submitted that once Carol is admitted to an aged care facility much of the need for a companion carer, case manager and independent clinician would not be necessary and that hence the single capital sum now required should be reduced to reflect that possibility. There is, however, uncertainty as to the age at which Carol might be admitted to aged care and whether she will have difficulty by reason of her condition in being admitted to, or being permitted to remain, in any particular aged care facilities. (It seems to me that there is also a risk that if Carol finds aged care accommodation difficult to obtain (or retain) as Mr Kennedy-Gould indicated might be the case at least in relation to government assisted accommodation, then there might be a period in which she might require considerably more in terms of one to one care as she ages than the hours presently suggested.) 352 In the circumstances, I think that any reduction for the possibility that the one-to-one care may be reduced after Carol is admitted to an aged care facility should be a conservative reduction. Carol is now 47. She may not wish, or be able, to enter aged care accommodation as soon as she turns 65 and might otherwise be eligible for such accommodation. She may have difficulty obtaining appropriate accommodation in light of her condition. In that regard I think a cautious approach would be to allow for the higher level of care for, say, 28 years (by which time Carol will be 75 and it seems likely, from the evidence given by Mr Kennedy-Gould, that she would be able to obtain suitable aged care accommodation even if her symptoms are by then more florid and less easy to manage) and that for the balance of her life expectancy the hourly level of care for which allowance is to be made should be reduced to 7 hours per week (thus permitting an hour per day of continued companion care contact). 353 I think the community expectation would be that the testator would be concerned to ensure that there was no lacuna in appropriate assistance for Carol as she ages, particularly as that is when her symptoms may be more difficult to manage as her tolerance to anti-psychotic drugs is lessened. 354 As for the terms of the trust in regard to the real estate to be acquired for Carol's occupation, I have in mind that any property acquired out of the funds so provided for that purpose should be held on trust for Carol for her life on terms that permit the trustee, if that be in the interests of Carol, to sell that property and acquire alternative accommodation for Carol, including aged-care accommodation or the like in due course.

[21]

(iv) Use of discount tables 355 As to the use of the 3% tables as opposed to the 5% tables, the adoption of the 3% table by Mr Simpson was based on the decision of Todorovic v Waller, a decision admittedly not in the Family Provision Act context where, as here, the court is looking at the proper provision which ought to have been made having regard to community expectations, not what would represent compensation for losses sustained as a result of negligence or the like. In choosing one set of tables over the other there is a balancing exercise to be undertaken. 356 Todorovic states that the 3% discount tables (rather than the 5% discount tables or some other prescribed discount) are to be applied when assessing the amount of damages to be awarded for loss of earning capacity and the future costs of goods and services which a plaintiff will need as a result of negligence; at 424 (per Gibbs CJ and Wilson J); 451 (per Mason J); 460 (per Aickin J); 480 (per Brennan J). 357 The 5% discount tables must now be applied to the assessment of damages for negligence claims to which the Civil Liability Act 2002 (NSW) applies (section 14 of that Act). Neither the Second Reading Speech nor the Explanatory Notes in relation to the Civil Liability Bill, expressly discuss the reasons for the choice of the 5% discount tables, and departure from the position in Todorovic. There is no express indication in the Explanatory Memorandum or Second Reading Speech (28 May 2002) of the relevant factors and reasons for the application of the 5% tables nor for the departure from the position in Todorovic (beyond the implicit assumption that the adoption of the 5% tables is consistent with the overall purpose of the Civil Liability Act of reducing the damages awarded for personal injury as a result of negligence). 358 The only real contingency in Carol's case is that she may live less than or more than her normal life expectancy (which is around 41 years). As I have said earlier, I consider that the community expectation would be to err on the side of a generous provision for someone in Carol's position. After the events in global financial markets over the past year, one cannot necessarily assume that if the fund is invested for the long term in a growth portfolio including investment in the leading companies that will produce any particular level of return. Dr Birch points to the more recent application of the 5% tables in the context of applications to which the Civil Liability Act applies and submits that if there is to be no discount for contingencies (as submitted by Mr Simpson) then the 5% tables should be adopted in the calculation of the lump sum for future care for Carol.

[23]

360 There seems little guidance in the authorities on this issue. Nor, so far as I can ascertain, does it seem that the amendment to the Civil Liability Act has had any real impact on the practice of the court in Family Provision Act applications. I note that in Fellows v Paterson [2002] NSWSC 190 (at [36] and [42]) (albeit only the day after the commencement of the Civil Liability Act, Macready M (as the Associate Justice then was) looked to Todorovic in determining that the proper approach would be to apply a 3% discount rate. 361 In Barbara Mayfield v Suzy Carolyn Lloyd-Williams, the parties had agreed that it was appropriate to use a 3% discount rate in order to provide a capital sum which would yield a certain amount per week after tax for a specified period. There was no suggestion, when the matter was determined on appeal by the Court of Appeal, that this was inappropriate. 362 In McGrath and Anor v Eves and Anor (at [50]), Gzell J applied the 3% tables, without discussion of alternative discount levels or factors to be considered. 363 In Caldwell v Ang, Young J (as his Honour then was) had regard to the 5% tables when considering the value of a remainderman's interest in property. There, again, the issue as to the appropriateness of the different tables was not argued before his Honour. 364 I have been unable to find authority which would be conclusive on the issue as to which of the tables is most appropriate in the present circumstances. I do note, however, that Todorovic was recently relied upon to apply the 3% tables in Bovaird v Frost [2009] NSWSC 337 by Brereton J in relation to a case concerning the assessment of damages for breach of a promise to fund the plaintiff's retirement accommodation and associated expenses for life. Brereton J acknowledged the prescribed 5% discount in the Civil Liability Act but stated that for damages claims to which that Act does not apply, it would be appropriate to apply the 3% discount tables (at [73]). Bovaird v Frost also involved an application under the FPA, and Brereton J indicated that such an application would have been successful, but for the finding that the plaintiff was entitled to damages under the contractual claim and as such would have adequate provision, although did not go on to indicate what level of discount would have been applied to the FPA claim if awarded (at [122]).

[24]

365 I am of the view that the community would expect a conservative approach to be taken in a case where the testator is looking at the proper provision for a severely disabled daughter. On balance I consider that it is appropriate for the 3% tables to be used on this application. 366 I consider that there should be no discount for contingencies. It is accepted by Dr Birch that there is no likelihood that Carol's condition will improve to the extent that ongoing care will not be required for the balance of her life. The contingency that Carol may not reach her normal life expectancy can be in part addressed by providing for the manner in which any fund remaining at the date of her death is distributed and is, in any event, reflected in the adoption of the life tables. 367 I consider that the fund held in trust for Carol, and any capital in any real estate then owned on trust for her, should on her death be distributed as between David, Daniel and Ralph (or in each case their respective children should any of them pre-decease Carol) such that Ralph receives that proportion of the fund which represents the proportion which the present day value of the Edward Street unit ($400,000) bears to the overall provision now to be made in favour of Carol out of the deceased's estate and that David and Daniel receive in equal shares that proportion of the fund which represents the proportion which the amount of the estate distributed to them and which is now declared to be notional estate contribution bears to the overall provision now to be made in favour of Carol out of the deceased's estate. I will hear any submissions from Counsel as to this proposed order to effect such a result, as it was not debated in those terms before me. (iv) Capitalization of pension supplement 368 As to the capitalization of Carol's $200 per week pension supplement, I think this falls within the proper provision to be made for Carol. I recognise that it may be unlikely that David and Daniel would both be unable to fund this in the future and that they have acknowledged an obligation to meet this amount but I consider that Carol should not be at risk of any subsequent failure or inability of her half-brothers to make this payment.

[25]

(iv) Contingency sum 369 As to the contingency sum claimed, I think this is reasonable and removes the risk of changes in the level of support from family members over the years. 370 I have not attempted to calculate the management fees which would be payable to the NSW Trustee and Guardian for a fund totalling the provision which I propose to order. I will ask that the parties liaise and prepare short minutes of order to reflect the above and to incorporate the management fees in such orders. I consider it appropriate for the NSW Trustee and Guardian to be appointed to manage the fund rather than the executors in order to remove any conflict of interest and to allow them to get on with their own lives without the responsibility of managing the funds for Carol's care. 371 After calculation of the quantum of the amount ordered to be provided for provision in accordance with the above (namely to provide for the acquisition of a house or unit to a value of $585,000, plus stamp duty and legal expenses estimated at $28,000; relocation expenses of $2,000, body corporate rates capitalised at $79,426; furnishings at $17,141; funds for medical care (costed for a companion carer (14 hours per week for 28 years and 7 hours per week for 13 years) capitalised by reference to the 3% tables, plus costs of a case manager one hour a week for 41 years similarly capitalised ($185,985) and costs of a clinician similarly capitalised at $14,258); costs of management by the NSW Trustee and Guardian; supplement to pension ($200 per week capitalised at $247,980): and a contingency sum of $125,000) there must be deducted the sum of $10,000 already made available for Carol's care by reason of the order for interim provision which I made at the conclusion of the hearing on 17 December 2009. Any funds remaining out of that $10,000 should be added to the fund to be held for Carol's benefit in accordance with this judgment. 372 As the provision for Carol includes a number of components, I invite Counsel to draw to my attention if I have omitted to address any particular item of care which should be addressed.

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374 In view of the findings I have made in relation to each of Ralph and Dorothy's applications for provision (in effect limiting the provision made for them to the re-writing of the testamentary trusts under the will), I consider that it is appropriate that the provision for Carol be met out of the sale proceeds of Unit 1 in the Edward Street property, together with such amount out of the distributed estate received by David and Daniel from the sale proceeds of the Denning Street property (to be designated as notional estate) as is necessary to meet the shortfall. 375 Finally, insofar as it was submitted by Dr Birch that any trusts for Carol should provide a remainder for the beneficiaries whose share of the estate was the source of the fund, to which Mr Simpson objected on the basis that any order for provision is made out of the deceased's notional estate as designated (not from the executors personally), I think that as the practical effect of the current position (albeit so reached in part because of the distribution of the estate before the expiry of the time for commencement of the present claims) is that David and Daniel will be compelled to fund a large part of the provision ordered to be made for Carol it is appropriate for such an order to be made (as contemplated above), though effectively preserving Ralph's remainder in what represents the proceeds of sale of the Edward Street unit currently occupied by Carol. 376 As to costs, while I consider that Dr Birch is correct in his submission that the Family Provision Act in its terms does not provide for the designation of notional estate purely for the payment of costs (as opposed to a designation for the purposes of an order for provision which may include provision to meet debts such as costs), the Family Provision Act does contemplate in section 33 that an order for costs may be made out of notional estate once designated. (I note that in Barbara Mayfield v Suzy Carolyn Lloyd-Williams, both at first instance and on appeal, costs were ordered to be paid out of the notional estate.) In the circumstances I think it appropriate that the order for provision for each of the plaintiffs should reflect the fact that if they are required to bear their own costs of these proceedings it will operate to reduce the provision which I consider ought to have been made for them. 377 I therefore am inclined to expand the provision for each of the plaintiffs to order as a separate sum by way of provision out of the designated notional estate, such amount as would cover so much of their liability to their legal representatives for costs on a party/party or other basis as I would have been prepared to make the subject of a costs order in the ordinary course. That can only be determined after I have heard submissions as to costs. I am minded to cap any such provision so that, together with the monetary provision ordered for Carol, the total does not exceed the proceeds of sale of the Denning Street property. I will hear submissions on this issue when I hear submissions in relation to costs generally. Conclusion 378 I find as a matter of fact that inadequate provision was made under the deceased's will for each of Ralph, Dorothy and Carol. 379 I consider that the distributed estate comprised of the proceeds of sale of the Denning Street property should be designated as notional estate to the extent necessary for the making of the provision for Carol (after the application towards that fund of the net proceeds of sale of the Edward Street unit in which she currently resides) and to enable the plaintiffs' costs (as may be ordered in due course) to be met. 380 I find that the proper provision to be made for Ralph is as set out in paragraphs 310-313 above. 381 I find that the proper provision to be made for Dorothy is as set out in paragraph 329 above. 382 I find that the proper provision to be made for Carol is as summarised in paragraph 371 and outlined in the preceding paragraphs of my conclusions in relation to Carol's claim. I note that this will take into account the sum of $10,000 already ordered by way of interim provision for Carol. 383 I will hear submissions from Counsel as to the appropriate form of orders to implement my findings and, in the case of Carol, as to how those orders should be framed in order to constitute the trust, or an appropriate part of the trust, for her benefit as a special disability trust under Part 3.18A of the Social Security Act 1991 (Cth). 384 I will also hear any submissions as to costs. I consider it appropriate that the order for provision for each of the plaintiffs should include any amount which I may order in their favour in relation to the costs of these proceedings.

Legislation Cited (5)

Workplace Relations Act 1996(Cth)

Corporations Act 2001(Cth)

Family Law Act 1975(Cth)

Social Security Act 1991(Cth)

Civil Liability Act 2002(NSW)

Cases Cited (46)

CITATION : Stern v Sekers; Sekers v Sekers [2010] NSWSC 59

Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 Bladwell v Davis [2004] NSWCA 170 Bosch v Perpetual Trustee Co [1938] AC 463 Bovaird v Frost [2009] NSWSC 337 Brookfield v Yevad Products Pty Limited [2004] FCA 1164 Button v Lynch [2002] NSWSC 1148 Caldwell v Ang (unreported, NSWSC, 11 April 1991) Cetojevic v Cetojevic [2006] NSWSC 431 Civil Liability Act 2002 (NSW) Collings v Vakas [2006] NSWSC 393 Crisp v Burns Philip Trustee Company Ltd (unreported, NSWSC, 18 December 1979), Cropley v Cropley [2002] NSWSC 349 Davies v Eli Lilly & Co [1987] 1 All ER 801 Diver v Neal [2009] NSWCA 54 Falkingham v Falkingham [2002] NSWSC 534 Fellows v Paterson [2002] NSWSC 190 Foley v Ellis [2008] NSWCA 288 Ford v Simes [2008] NSWSC 1120 Ford v Simes [2009] NSWCA 351 Gillett v Holt [1998] 3 All ER 917 Gorton v Parks (1989) 17 NSWLR 1 Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846 In Re Hattie [1943] SR (Qld) 1 Kalmar v Kalmar [2006] NSWSC 437 CASES CITED : Kavalee v Burbidge (1998) 43 NSWLR 422 Kearns v Ellis (unreported, NSWCA, 5 December 1984) Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 Lloyd-Williams v Mayfield [2005] NSWCA 189 Lonrho Limited v Shell Petroleum Co Limited [1980] 1 WLR 627 McGrath v Eves [2005] NSWSC 1006 Minister of Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 1994 Nicholls v Hall [2007] NSWCA 356 O'Loughlin v Low [2002] NSWSC 222 Palmdale Insurance Limited (in liq.) v L Grollo & Co Pty Limited [1987] VR 113 Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9 Pope and Ors v Christie Matter No 4918/94 [1998] NSWSC 118 Prince v Argue [2002] NSWSC 1217 Re Buckland deceased [1966] VR 404 Re Gilbert (1946) 46 SR (NSW) 318 Retter v Permanent Trustee Co Limited: Re Estate of Rita Retter, (unreported, NSWSC 13 April 1994) Robinson v Tame (unreported, NSWCA, 9 December 1994) Schaeffer v Schaeffer (1994) 36 NSWLR 315 Singer v Berghouse (No 2) (1994) 181 CLR 201 Tan & Ors v St George Bank Ltd & Ors [2005] WASC 143 Taylor v Santos Limited (1998) 71 SASR 434 Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 Vigolo v Bostin (2005) 221 CLR 191 Walker v Walker, unreported, NSWSC, 17 May 1996 Wheatley v Wheatley [2006] NSWCA 262

Reasons 72 The test required to be applied in Family Provision Act claims of the present kind is that outlined in Singer v Berghouse (No 2) (1994) 181 CLR 201, and approved in Vigolo v Bostin (2005) 221 CLR 191. It is a two stage test. 73 The first stage is a question of fact, namely whether the provision (if any) made for the applicant is inadequate for his or her proper maintenance, education and advancement in life. A factual finding of inadequacy of maintenance is necessary in order to enliven the statutory power to make an order for provision, as was recognised in Collings v Vakas [2006] NSWSC 393 at [66] per Campbell J. 74 An assessment of whether the provision made, if any, was "inadequate" involves an assessment as to what level of maintenance was appropriate having regard to the applicant's financial position; the size and nature of the estate; the relationship between the applicant and the deceased; and the relationship between the deceased and other persons who have legitimate (and in this sense competing) claims upon the deceased's bounty. The question as to the adequacy of provision falls to be decided having regard to facts as they exist at the time of the hearing, not at the time of the death (Nicholls v Hall [2007] NSWCA 356 at [40]). 75 The second stage of the Singer v Berghouse test, which involves the exercise of discretion, is to assess the proper level of maintenance and adequate provision which should be made. The factors to be taken into account in making such a determination are contributions to the property and welfare of the deceased; the character and conduct of the applicant in relation to the deceased; and the circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased). 76 With that in mind, I turn to the four issues I have enumerated for determination.

127 On the one occasion that Dorothy did return to Sydney after her move to Queensland, Dorothy contacted her father by telephone but did not visit him. Dorothy (seemingly being critical of this, although she accepted in cross-examination that this was not a cause for criticism) pointed out that her father had not attended her graduation ceremony (T 72.35) (though he was in his mid 80's). While the fact that Dorothy was unable to visit her father on that occasion may not be of much significance in the circumstances, the fact that she did not take any steps later to contact her father or anyone else in the family to ascertain her father's welfare (T 73.15) even though she considered that he had been incoherent and disoriented on the telephone (T 72.35) is of more significance. 128 Even more revealing, insofar as the relationship between them is concerned, was the attitude displayed by Dorothy in her communications with each of Ralph and Daniel just prior to her father's death - an attitude described by Dr Birch (in my view, with admirable understatement) as one of general indifference. 129 As noted above, the deceased died in May 2006. Shortly before his death, Ralph emailed Dorothy to inform her that her father was in hospital. Although Dorothy initially did not concede that she was informed at that stage of her father's imminent death, she ultimately accepted in the witness box in effect that the thrust of the message from Ralph was that their father's condition was terminal and that she appreciated that his condition was serious. Dorothy's response, by email to Ralph, was in fairly bland terms "That is sad indeed. I hope that all is well as can be. Let us know where so we can send a card directly to him … He missed William's 18th birthday." (My emphasis). No card was in fact sent by Dorothy, nor was any contact made with him. Dorothy sent an email to Daniel about three quarters of an hour after receipt of Ralph's email, expressing the hope (rather oddly in the circumstances) that all was well; passing on news of her sons; and giving Daniel her address, with not a word about their dying father. 130 The fact that, when contacted with news that her father was in the terminal stages of cancer, Dorothy's only response (other than to air an apparent complaint that her father had failed to contact her son the previous month for his birthday) was to ask Ralph where she could send a card (but made no further attempt to ascertain where her father was or to make contact with him) and then to write to Daniel speaking only about her own family and not mentioning the deceased's terminal condition, seems extraordinary. Thereafter, Dorothy did not make any further attempt to contact her father before he died (in the witness box she seemed to think it was sufficient that she had given Daniel her contact details in her email to him) and, when arrangements were made at Daniel's expense for her to attend her father's funeral, held in accordance with Jewish custom within a short time after his death, she complained that she had not been consulted first to arrange convenient flight times. 131 It therefore does not seem to me that Dorothy has demonstrated any particularly close relationship with her father for some years before his death. Rather, Dorothy seems to have had the view that she was entitled to a substantial inheritance from her father but was under no corresponding duty to consider him or his needs. However, and despite the deceased's complaints in his 1998 will, it does not appear that there was any outright estrangement or hostility between the two, as such (though it seems clear that communications between them caused offence from time to time on one or other side). 132 In Foley v Ellis [2008] NSWCA 288 at [101] the Court of Appeal noted: The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of the testator or testatrix to provide for the claimant. 133 While it was not suggested (and I do not consider) that Dorothy's conduct amounts to 'disentitling conduct' in the sense referred to by Jordan CJ in Re Gilbert (1946) 46 SR (NSW) 318 at 321, it was submitted by Dr Birch that this is a factor to be taken into account when considering the adequacy of the provision made for Dorothy. 134 In Ford v Simes [2008] NSWSC 1120, at first instance, Macready AsJ (at [89]) referred to what has been said in In Re Hattie [1943] SR (Qld) 1 at 26, namely that "a just father's moral duty is to assist the lame ducks amongst his offspring, provided they be not morally or otherwise undeserving" (my emphasis). I do not suggest by this that Dorothy (or Ralph for that matter) should be said to be lame ducks (indeed both seem to have provided for their families largely within their means and to be capable of continuing so to do). However, it is instructive that the courts have recognised that conduct of a morally undeserving nature is ordinarily required before a testator is regarded as absolved from what would otherwise be seen as his obligations to his offspring. 135 Reliance was placed by Dr Birch on what was said by Bergin CJ in Eq sitting in the Court of Appeal in Ford v Simes [2009] NSWCA 351 at [71], when considering the effect of estrangement and bad conduct by an applicant towards the deceased: … in my view it is very important for the maintenance of the integrity of the process in these types of applications that this Court acknowledge once again the entitlement of testators, in certain circumstances, to make no provision for children: Pontifical Society for the Propagation of the Faith & St Charles Seminary: Perth v Scales (1961) 107 CLR 9. This is particularly so in respect of children who treat their parents callously, by withholding without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility.

136 At [58], the Court of Appeal noted that "acrimony or estrangement does not necessarily destroy the bonds of parental ties" citing Diver v Neal [2009] NSWCA 54 at [27] and observing that it was the underlying reason for the acrimony or estrangement that was relevant to an application under the Family Provision Act (see also Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 at [104]). In Ford, Bergin CJ in Eq (at [59]-[62]) further noted that in Wheatley v Wheatley [2006] NSWCA 262 there had been some explanation for the acrimonious relationship between the testatrix and the claimant and observed that it was there material that the deceased was not entirely blameless in the breakdown of the relationship (at [62]). 137 Here, the question of any blame for the state of the relationship between Dorothy and the deceased is impossible to determine. The factors contributing to it, so far as they can be discerned from the evidence, seem to include Dorothy's reaction to comments or criticism made by her father as to her sons' schooling, the physical distance between them once Dorothy's family moved to Queensland, Dorothy's financial position which precluded her from travelling back to Sydney other than on one occasion, and perhaps any ongoing resentment by the deceased arising from the circumstances in which a garnishee was sought to be placed on Dorothy's 'wages' or the perceived mismanagement of the Coogee Bay Road property. 138 Most likely to have been the subsisting cause for dissension between father and daughter as at the time of his death, however, seems to have been the sale of the Coogee Bay Road property and the destination of the sale proceeds, to which Dorothy asserted she was entitled. She clearly felt strongly that this property had been promised to her and that the sale proceeds were her inheritance. Her father denied that this was the case. The tone of their correspondence in relation to this issue suggests that it was keenly felt on both sides. 139 There was, nevertheless, still some degree of communication between them in the years leading up to the deceased's death and the deceased himself appears to have recognised a duty to provide for Dorothy (hence his explanation in the will as to why he had not done so). In the present case, the conduct of Dorothy towards her father (while it smacks of disinterest) does not seem to me to go so far as to evidence callousness or hostility. Further, to the extent the contact between father and daughter was limited and somewhat perfunctory (as it seemed from the material before me to be), it may be fair to say that this was so on both sides of the relationship. 140 My conclusion therefore is that though there was not a very close relationship between the two for a number of years, the situation was not such as to absolve the deceased from any moral obligation to provide for his daughter on his death. 141 That said, when balancing Dorothy's needs against those of others with a claim on the deceased's testamentary bounty (in particular, Carol), for the purposes of assessing what would be the proper provision for Dorothy, the apparently distant relationship between Dorothy and her father is a factor to be taken into account.

171 Pursuant to s 24 of the Family Provision Act, if the court is satisfied that an order for provision ought to be made on an application for provision under the Family Provision Act and there has been a distribution of the estate within the relevant period then there is power (subject to ss 27 and 29) to make an order designating as notional estate of the deceased such property as the court may specify, whether or not that property was the subject of the distribution. Relevantly, again, the property which may be so designated is "property which is held by, or on trust for, the person …" (which must be a reference back to the person referred to at the beginning of the section in the phrase "as a result of distribution from the estate property became held by a person"). 172 Section 27(1)(a) of the Family Provision Act requires the court, before making an order in relation to notional estate, to consider (among other things) the importance of not interfering with reasonable expectations in relation to property. In this case, there was no suggestion that any steps have been taken by David or Daniel in relation to any distributed estate in the reasonable expectation that there would be no claim against the estate of their father. In relation to the jointly held assets, while the fact of a joint tenancy may found a reasonable expectation that the property so held would be enjoyed solely and absolutely by the survivor upon the death of the other joint tenant(s) (see Button v Lynch [2002] NSWSC 1148 at [90], per McLaughlin M, as the Associate Justice then was), here no such issue was raised. 173 I have grouped issues (ii) and (iii) together as the principal question in relation to each in this case is broadly the same. The relevant distinction between them on the facts of this case is that, as the deceased's interest in the jointly held shares passed by way of survivorship to his widow, that interest did not ever form part of his estate and thus does not form part of the distributed estate (and hence any designation of part or all of that interest as notional estate would be governed by s 23 of the Family Provision Act), whereas assets forming part of the deceased's estate (such as his share in Denning Real Estate or the Denning Street property) but which were distributed within the 18 months after his death form part of the distributed estate and any designation of those assets as notional estate comes within the power conferred by s 24 of the Family Provision Act. 174 As indicated at the outset, the power to designate property as notional estate under s 23 of the Family Provision Act or to designate property which has been distributed as notional estate under s 24 of the Family Provision Act is enlivened only if there has been either a prescribed transaction or a relevant distribution of the estate and the court is satisfied that an order should be made for provision. I am satisfied, in the case of each of the plaintiffs that there has been inadequate provision made under the will as a matter of fact and (as discussed later in these reasons) that an order for provision should be made for each of them.

175 The plaintiffs seek the designation as notional estate of the deceased's share in Denning Real Estate (valued by the executors at $20,000 but which, if the value of the Alexandria properties is taken into account, would seem to be worth a far greater amount, namely $682,500) and of the share portfolio held by Suzanna by way of the right of survivorship (valued by the executors as at 27 July 2009 at approximately $2,002,324 but which, if valued as at the date of the hearing by reference to the closing share prices for the relevant shares, would be worth an increased amount of somewhere in the order of $2.8 million as indicated in Mr Wilson's closing submissions). 176 As to the jointly held share portfolio, the failure of the deceased to sever the joint interest in those shares falls within the definition of a prescribed transaction by reason of the operation of section 22(1) of the Family Provision Act (which deems the entry into a prescribed transaction if sub-paragraph (a) is satisfied; and (b) if valuable consideration in money or in money's worth for the act or omission is not given) and subsection 22(4)(b) of the Family Provision Act (which provides, in effect, that a person is deemed to do or omit to do an act as a result of which property is held by another person or subject to a trust for the purposes of s 22(1)(a) if, holding an interest in property which would, on the person's death, become, by survivorship be held by another person (whether or not as a trustee) or subject to a trust and the power to exercise a power to prevent this happening that person does not exercise the power before he or she ceases (by reason of death or the occurrence of other event) to be so entitled). Thus, in Cetojevic v Cetojevic [2006] NSWSC 431 at [62], Campbell J held that a failure to sever a joint tenancy is an event which falls within s 22(4)(b). 177 The issue raised on the facts of this case is whether any designation as notional estate of property held by or distributed to Suzanna is available to be made following her death, ie once the initial "disponee" of that property is no longer alive. 178 In Prince v Argue [2002] NSWSC 1217, Macready AsJ heard proceedings involving claims on the estates of two deceased persons who had been husband and wife. The husband's interest in a jointly owned property had passed by right of survivorship to the wife and it was claimed that there was a prescribed transaction as a result of the failure of the husband to sever the joint tenancy. The "disponee" in relation to that transaction was the wife who had died prior to the commencement of the proceedings. 179 Macready AsJ dismissed the claim, holding that a designating order cannot be made under the Family Provision Act where the relevant property to be designated as notional estate is no longer held by or on trust by the disponee (as was there the case, as the disponee had died). I have been unable to find any authority which has doubted the correctness of that decision. (Although in Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419, an order was made designating property as notional estate notwithstanding the death of the relevant disponee, it seems that the court's attention was not drawn to the decision in Prince v Argue and the issue was not raised.) The NSW Law Reform Commission noted the import of Prince v Argue when recommending that the legislature enact a provision which, in effect, reverses that result, as it has done in s 82 of the Succession Act 2006 (see Report 110 (2005) - Uniform Succession Laws: Family Provision [paras 3.33 - 3.34]). 180 A liberal approach is to be taken to the question of construction of the Family Provision Act in determining whether a prescribed transaction has occurred (Schaeffer v Schaeffer (1994) 36 NSWLR 315; Kavalee v Burbidge (1998) 43 NSWLR 422) and there is no reason to think that a liberal approach should not equally be adopted in construing the provisions of the Family Provision Act relating to the designation of distributed estate as notional estate. (By way of example as to the approach taken in construing this legislation, Mr Simpson SC noted the broad construction attributed to the definition of 'property' in the Family Law Act 1975 (Cth) by the High Court in Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 at [89].) 181 In Minister of Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 1994 at 208, the majority of the High Court, when considering the expression 'business of an employer' in s 149(1)(d), which formed part of the succession provisions in the Workplace Relations Act 1996 (Cth), noted that the section must be read in a way that gives effect, so far as possible, to its legislative purpose but emphasised the need to consider the words of the section when seeking to discern the legislative purpose: It is only if some a priori assumption is made about the intended reach of the provision that considering its purpose casts light on the question [that being how far the extension of the operation of awards went beyond those party to the dispute in question]. To reason in that way begs the question. Rather, it is necessary to consider the words of the provision. It is there that the intended reach of the legislation is to be discerned. 182 In Kavalee v Burbidge, (at 443) Mason P (with whom Meagher JA agreed) noted that the legislative scheme underlying the notional estate provisions was beneficial to applicants and restrictive of the property rights of disponees, stating that: "Prescribed transaction" is defined in s.22. It is obvious that the legislature has cast the net very wide, in pursuit of its goal of providing adequate provision in favour of eligible persons. As beneficial legislation, a liberal approach to construction is called for, notwithstanding the obvious impact of a designating order upon existing property rights' 183 However, his Honour went on to say that: … the ability to choose a construction which promotes the purpose of extending the powers of the Court to the full range of benefits and advantages controlled by testators exists only 'in so far as any question of construction presents a choice' 184 Here, the issue as framed by Mr Simpson is whether "disponee", on its proper construction in s 23 (or "the person" in s 24) is limited to the first recipient of the property in question. It is said that if that is the case then David and Daniel, as beneficiaries of Suzanna's estate, take the interest formerly held by the deceased in the share portfolio shorn of the prospective liability that this may be designated (in whole or in part) as notional estate, such that her estate is enlarged for the benefit of her beneficiaries and the deceased's estate is diminished to the detriment of his beneficiaries. 185 It is further said for the plaintiffs, in advocating a construction contrary to that applied in Prince v Argue, that a construction limiting the application of the sections to the first recipient would have the result that in any Family Provision Act proceeding where a claim is made for property to be designated as notional estate there would be a risk until the date of judgment that an otherwise valid claim might fail (if the recipient of the property the subject of the prescribed transaction were to die before then). I accept that the uncertainty inherent in such a case would be undesirable. However, that of itself does not warrant the construction for which the plaintiffs contend.

(iv) What is the proper provision to be made for each of Ralph, Dorothy and Carol ? 198 Having found, as a matter of fact, that there was inadequate provision for each of the plaintiffs under the will, the second stage of the test in Singer v Berghouse requires the making of a holistic and multi-faceted judgment of an evaluative kind as to the proper provision to be made for them (Kalmar v Kalmar [2006] NSWSC 437 at [67] per White J; Foley v Ellis at [3] per Basten JA). Before considering the factors to which regard is to be had on the second stage of the test, I summarise the claims for provision that have been made by each of the plaintiffs. Claims made by the plaintiffs for provision

(a) acquisition of a house (between $550,000 and $650,000 but say $585,000) plus stamp duty and legal expenses of the sale (estimated at up to $28,000 in total); (b) relocation expenses ($2,000); (c) body corporate rates (capitalised at $79,426); (d) furnishings etc ($17,141); (e) funds for medical care - costs of companion carer 2 hours per day capitalised on the basis of a 41 year life expectancy ($716,315); costs of a case manager one hour per week similarly capitalised ($185,985), costs of a clinician again capitalised ($14,258), totalling $916,558); (f) costs of management by NSW Trustee and Guardian (charged as a percentage on the value of assets and gross income on a sliding scale); (g) supplement to pension ($200 capitalised per week - $247,980); and (h) contingency sum ($125,000). 212 In all, on my calculations it would seem that the claim is quantified at around $2 million, leaving aside the costs of management by the NSW Trustee and Guardian of any such fund. 213 In Foster v Lisle [2003] NSWSC 1243 (at [56]-[58]), Young J observed that it is no answer to a claim of this kind that the defendant is entitled to a pension, but that a wise and just testator would take into account such income received by the defendant. Mr Simpson submits that I should not take into account (by way of any reduction of the provision to be made for Carol) the impact of such provision on the benefits or social security entitlements which might otherwise be available to Carol. 214 The executors quite properly accept that there is a reasonable basis for a claim for further provision in favour of Carol. However, they raise issues as to the quantum of such provision in a number of respects. 215 First, they note that Mr Kennedy-Gould, the social worker who gave evidence in the proceedings, when asked by me what would be his recommendation as between the alternative options of moving to new premises and remaining in her existing premises to be renovated as necessary, leant towards Carol's preference which he said was not to move. 216 Evidence was adduced for the executors by a qualified builder as to the potential cost of renovation of Carol's unit. They made no submissions as to the claim for furnishings or any relocation expenses. 217 Secondly, they raise an issue as to the cost of a companion carer. Mr Kennedy-Gould, in his first report, recommended a carer for 8 hours per week (on the basis that contact could some days be made by telephone) but in his second report he increased this to 2 hours per day (14 hours per week). Dr Parmagiani, the consultant psychiatrist retained as a joint expert, expressed the view that the 8 hour per week recommendation was reasonable. He had both reports before him but had not been asked to express an opinion on that particular issue and it is not clear that he was expressing a view that 14 hours per week would not also be reasonable nor did he give any reason for preferring the lower level of care.

218 Thirdly, it was submitted that the terms of the trust in relation to any real estate in which Carol is housed should be altered so that it may be sold and the proceeds used to fund a bond for a nursing home and additional care. This, it was said, would have the result that the need for a single capital sum would be reduced in quantum. 219 Fourthly, insofar as the calculation of a single capital sum is concerned, the defendants submit that instead of using the 3% tables (on which Carol's calculations are based) the 5% tables should be used. It is said that this is appropriate in circumstances where the lump sum amount claimed for future care does not provide any reduction for future contingencies, which of itself greatly inflates the final present value lump sum figure. It is noted that in Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402, the High Court, in setting out the rule for the calculation of lump sum damages claims for loss of earning capacity in personal injury cases, made it clear that there must be a reduction for contingencies before the application of the 3% tables. Further, it is noted that the Civil Liability Act 2002 (NSW) now makes provision for the 5% tables in lump sum damages claims (s 14(2)(b)). It was submitted that if the fund were placed in the care of the Trustee and Guardian then this would produce the rates of return that would make the 5% tables the appropriate ones. (By way of example as to the difference between the two, on the executors' calculations if the lesser number of hours were adopted, and the 5% tables utilised, it is said that the cost of medical provision is achieved by a lump sum of $460,000; if 3% tables are used the lump sum on the reduced hours would be $630,000.) 220 Fifthly, it is said that there is no need for the capitalisation of the pension supplement (as the defendants both acknowledge an obligation to make such payments under the will and it is highly improbable that both would be rendered incapable of meeting that obligation in the future); nor is there any need for the contingency insofar as Carol has the acknowledged support of Ralph and the defendants and also any buffer in the capital produced if the terms of the trust in respect of Carol's unit are altered. 221 Finally, it is submitted that any trusts for Carol should provide a remainder for the beneficiaries from whose share of the estate the fund was sourced. In that regard it is suggested that consideration should be given as to whether contribution should also be sought from the property distributed to Ralph and his children. 222 In response to the above, Mr Simpson emphasised that what the Family Provision Act requires is an assessment of the "proper" provision for an applicant for whom inadequate provision was made (not an assessment of what might be the compensation to be awarded in a personal injury case). 223 With the various claims for provision in mind, I turn to the factors to be taken into account on the second stage of the Singer v Berghouse test: Contribution by the applicants to the property and welfare of the deceased

Competing claims of David and Daniel 238 Obviously, David and Daniel are the principal persons with competing claims on the deceased's testamentary bounty. (None of the grandchildren would ordinarily be seen to have a claim on the deceased's bounty.) Both are well educated (indeed Daniel's affidavit has stressed his capabilities) and both have substantial personal wealth, although the precise details of their respective financial positions were somewhat difficult to pin down and neither was able to express an opinion as to his present personal worth. (The fact that neither David nor Daniel had turned his mind to the quantum of his personal wealth is suggestive of a greater level of comfort in that regard than that enjoyed by at least Dorothy and Carol, and, to a lesser degree, Ralph.) 239 David is a practising lawyer living in Tel Aviv with his wife and two children. He has an apartment in Jerusalem (the existence of which was not disclosed until his final affidavit, sworn on 11 December 2009 after he arrived in Sydney for the commencement of the hearing) acquired with funds in the sum of US$270,000 provided by his father and mother. He has not only had the benefit of the distributions made from his father's estate but also a half share of his mother's not inconsiderable estate. He and his wife earn approximately $4,250 per month (which income is largely expended on family expenses) and have savings of $37,800. 240 Daniel, as at February 2009, was unemployed and concentrating on the completion of studies in an Executive Masters degree in Business Administration run through the Australian Graduate School of Management. He is a graduate of NIDA and has deposed to being the youngest person to be admitted to the Australian Graduate School of Management. Like David, he shared in the distribution of his mother's estate. He lives in the Oceanview Avenue property (valued at $2 million), which is held on trust for David and him jointly. (He expended a considerable sum to add an additional storey to that property some time ago.) Daniel is due to be married this year. His fiancé is a teacher (T 196.22). He has allocated $50,000 to the completion of his studies and $160,000 for his wedding. He also has surgery scheduled or proposed for this year. 241 There was evidence as to a contingent amount which might become payable by David and Daniel in respect of property damage to one of their father's properties for which an insurance claim might lie - the prospects of David/Daniel having to bear those costs personally seemed, however, to be low when there seemed to be no basis for a concern that insurance would be denied. 242 Daniel's business interests include a shareholding in a company incorporated in 2009 as a resource entity (Greenfields Energy Pty Limited). Little information was able to be gained about this company, as Daniel was surprisingly not in possession or control of much in the way of company documentation (notwithstanding that the company's registered office is Daniel's home) and said there were no minutes of any discussions of directors in relation to the company. It would seem, from Daniel's evidence, that although the company has already (albeit unsuccessfully) made application for government funds, it has no business plan. (I can only assume that the directors proposed to prepare a business plan in a hurry if their application for funding had been successful.) Daniel's evidence was that the company has no present business plans. 243 Although much of the assets of David and Daniel are said to be held on various trusts, these arrangements seem largely to have materialised without any formal documentation (other than the will itself in the case of the testamentary trusts) (and contrary, I must say, to what the financial statements produced in court would themselves seem to suggest - a matter I raised during the hearing but for which there was no explanation). For the brothers to know so little about how the trusts and their financial affairs are structured, seems to be rather surprising since David is a lawyer and Daniel claims to be one of the youngest graduates admitted to the AGSM to study business management. 244 There was criticism by the plaintiffs' respective Counsel of the incompleteness of financial information provided by each of David and Daniel in answer to notices to produce served on them or in compliance with their discovery obligations, particularly in the case of Daniel as to his compliance with the requirement to produce documents in relation to companies of which he is a director (such as Greenfields Energy and Denning Real Estate). 245 In that regard I am not satisfied that the criticism of the non-production of documents in the possession of third parties (such as any documents held by Greenfields, Denning Real Estate or the Sekers group companies) has been sustained. The weight of authority suggests that the obligation to give discovery does not extend to making requests of those entities even for documents which they would likely produce on request and that it extends only to documents which the discovering party has a presently enforceable legal right (or perhaps an actual and immediate ability) to obtain for inspection. 246 Therefore, in the case of documents in the possession of companies of which Daniel is a director but not in his own possession, the question would be whether he had a presently enforceable legal right to obtain those documents for inspection. 247 In Palmdale Insurance Limited (in liq.) v L Grollo & Co Pty Limited [1987] VR 113, Marks J (lighting something of a controversy) suggested that a party's discovery obligation extended to making requests for documents no longer in that party's possession and expressed the view that the full reach of the word 'power' in the expression 'possession, custody or power' had not been settled by what had been said by Lord Diplock in Lonrho Limited v Shell Petroleum Co Limited [1980] 1 WLR 627 at 636 (namely, that in the absence of a presently enforceable rights there was nothing in the court rules for discovery to compel a party to take steps that would enable that party to acquire such a right in the future). 248 Marks J noted that in Lonrho, his Lordship had expressly declined to consider more generally the law of discovery, confining his comments to the special facts of the case before him. Lord Diplock said at 636-637, "In particular, I say nothing about one man companies in which a natural person and/or his nominees are the sole shareholders and directors. It may be that, depending upon their own particular facts, different considerations may apply to these." (I note, in passing, that even if it were to be the case that different considerations should apply to one man companies that would not change the position viz-a-viz any obligation on Daniel to discover documents in the possession of Greenfields, in which Daniel is only one of three shareholders and directors, and it could not be said this was a one man company or that the remaining directors were his nominees.) 249 The issue has arisen not uncommonly in cases where it is suggested that a subsidiary company is obliged to give documents held by its parent company or vice versa. In Taylor v Santos Limited (1998) 71 SASR 434 at 437-8, Doyle CJ, with whom Prior J agreed, quoted the relevant passage from Lonrho and said that he did not agree that what Lord Diplock had said should be treated as stating exhaustively the content of the expression 'power' in the relevant court rule. His Honour said: In my opinion the court should be cautious in extending the concept of power beyond the concept of a presently enforceable legal right, even though it may be appropriate to do so. Reading r 58 as a whole, my view is that the obligation to discover a document is limited to a document that the person in question has the legal power or (I can think of no better expression) actual and immediate ability to inspect, even though the document is the property of or is held by another person. … in my opinion, the obligation to discover hinges upon having a right or actual and immediate ability to examine the document. A person does not have that right or actual immediate ability if the person is able to inspect the document only if a third person, who has control of the document, agrees to permit inspection, or agrees to refrain from so exercising that person's control as to prevent inspection…

The point I wish to emphasise is that to the extent that the concept of power extends beyond a presently enforceable legal right, it should be held to so extend only when the court can say that the person in question does have the actual immediate ability to inspect the document. Otherwise, I consider, the law would place an impossible obligation upon a party. I consider that the cautious extension which I contemplate was the sort of thing that Lord Diplock had in mind in the second of the excerpts from his speech. 250 I note that in Brookfield v Yevad Products Pty Limited [2004] FCA 1164, Lander J, dealing with an application to set aside a judgment on the ground, inter alia, that discovery had been fraudulently withheld, emphasised that the integrity of the discovery process must be maintained, referring at [367] to what was said by the Master of the Rolls in Davies v Eli Lilly & Co [1987] 1 All ER 801 at 804, namely that "litigation is not a war or even a game. It is designed to do real justice between the parties and, if the court does not have all the relevant information, it cannot achieve this object." Lander J considered it essential for the administration of justice that the parties' legal advisers properly instruct their clients as to their responsibilities in the discovery process, noting that in many ways the process was dependent upon the honesty of the parties and their legal advisers at [369]. 251 As a director of, say, Greenfields, would Daniel have had a presently enforceable right to call for and inspect the documents in question? He clearly has power under s 198F(1) of the Corporations Act 2001 (Cth) to seek access to the books of the company for the purpose of legal proceedings but it was submitted by Dr Birch that this power could be exercised only for legitimate company purposes (and that compliance with Daniel's personal discovery obligations in litigation to which he was a party as executor and in a capacity unconnected with the company's business or affairs was not such a purpose). 252 In Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846, per Emmett J (at [25]) (whose reasoning was applied by Newnes M in Tan & Ors v St George Bank Ltd & Ors [2005] WASC 143), applying Hardcastle to section 198F(1), (at [46] - [47]), observed that a possible limitation on s 198F(2) is that it may be confined to legal proceedings which arise in the director's capacity as director of the company. His Honour said: A second possible limitation on the operation of s 188F(2) [sic] is that the proceeding must be a proceeding to which the former director is a party or believes might be brought against him or her or which he or she proposes to bring in his or her capacity as a director of the company . It would be curious if a person who, fortuitously, happened to have been a director of a company in the past would be entitled to access to books of the company that might be material to proceedings brought by that former director or which might be brought against the former director in a capacity totally unconnected with the capacity of the former director as a director. I do not express any firm or final view on that question at this stage because it does not arise in the application before me. Section 1303 authorises intervention by the Court where a person in contravention of the law refuses to permit inspection. [original emphasis]

[2005] HCA 9

[1998] NSWSC 118

[2005] WASC 143

(1989) 17 NSWLR 1

(1998) 43 NSWLR 422

(2008) 238 CLR 366

(2005) 222 CLR 1994

(1961) 107 CLR 9

(1994) 36 NSWLR 315

(1994) 181 CLR 201

(1998) 71 SASR 434

(1981) 150 CLR 402