The Estate of Kati Tsilfidis; Stavrakakis v Tsilfidis

Solicitors: B Hayward & Co (Plaintiff) Saba El-Hanania Lawyers (Defendant) File Number(s): SC 2014/33859; 2014/289443

Introduction

1. These two proceedings were heard together.
2. The parties to both proceedings are the only children of the late Mrs Kati Tsilfidis ("the Deceased"), who died on 21 December 2013 at the age of 79 years.
3. The plaintiff in proceedings 2014/33859 (the "Probate Proceedings"), Mr Paul Tsilfidis, was born in 1963 and is now 52 years of age. The plaintiff in proceedings 2014/289443 (the "Family Provision Proceedings") is his elder sister, Mrs Sofia Stavrakakis, who was born in 1961 and is now aged 54 years. Both Mr Tsilfidis and Mrs Stravrakakis were born in Australia, of Greek parents.
4. At the time of her death, the Deceased's assets were the subject of a financial management order ("FMO") made by the Guardianship Tribunal on 14 September 2009. On that date, the Tribunal ordered that the Deceased's estate be subject to management under the provisions of the NSW Trustee and Guardian Act 2009 (NSW) and that management of the Deceased's estate be committed to the NSW Trustee and Guardian ("the Trustee").
5. In the Probate Proceedings, Mr Tsilfidis seeks probate of a will that the Deceased made on 16 November 2012 (the "2012 Will"). By the 2012 Will, the Deceased appointed Mr Tsilfidis as her executor and left her entire estate to him. It is common ground that if the 2012 Will is valid, it revoked an earlier will made by the Deceased on 15 April 1988 ("the 1988 Will").
6. By cross-claim in the Probate Proceedings, Mrs Stavrakakis seeks probate of the 1988 Will. By the 1988 Will, the Deceased appointed both Mr Tsilfidis and Mrs Stavrakakis as executors and left her estate to them in equal shares as tenants in common.
7. In the Probate Proceedings, Mrs Stavrakakis contends that the 2012 Will is invalid because the Deceased did not have the capacity to make the will, did not know and approve of the contents of the will, and made the will as a result of the undue influence of Mr Tsilfidis. Mrs Stavrakakis also contends that the 2012 Will is invalid by reason of what is said to be "suspicious circumstances" surrounding the making and execution of the will.
8. It is common ground that if probate is not granted in respect of the 2012 Will, it should be granted in respect of the 1988 Will.
9. If the 2012 Will is admitted to probate, Mrs Stavrakakis seeks, in the Family Provision Proceedings, an order for provision under s 59 of the Succession Act 2006 (NSW) ("the Act").
10. The evidence reveals that Mr Tsilfidis and Mrs Stavrakakis are, to say the least, estranged. Such is the level of conflict between Mr Tsilfidis and Mrs Stavrakakis that, whichever will is admitted to probate, letters of administration with the appropriate will annexed should be granted to the present administrator of the estate, Mr Jack Jacovou ("the Administrator"). I will refer to Mr Jacovou's appointment as Administrator below.

Representation

1. Mr Morrissey appeared with Ms Clarke for Mr Tsilfidis and Mr O'Loughlin appeared with Mr Pearson for Mrs Stavrakakis. I have been greatly assisted by the economical and competent manner in which counsel conducted the proceedings. I have also been greatly assisted by the written opening and closing submissions I received from counsel. Much of what follows is drawn, with gratitude, from those submissions.

The property of the Deceased

1. The estate consisted of three properties, including a property located at King Street, Newtown ("Newtown"), and two adjoining properties in Hurlstone Park which the parties referred to as "871" and "873".
2. The properties were purchased by the Deceased and her late husband (who died in 2003) from the proceeds of a clothing business they both ran.
3. The ground floor of each of 871 and 873 comprise retail premises that are leased to third parties. On the first floor of each property is residential accommodation.
4. Mr Tsilfidis has resided, rent free, in the accommodation on the first floor of 873 since 1997 or 1998. He lived there with the Deceased until she died.
5. Mrs Stavrakakis has resided, also rent free, in the residential accommodation on the first floor of 871 since around 1999, with her three adult children.
6. On 12 December 2013 (very shortly before the date of the Deceased's death) the Trustee exchanged contracts to sell Newtown to a third party, Promethean Investments Pty Ltd for $1,005,500. A dispute arose between Mr Tsilfidis and the Trustee about that contract. Ultimately, the purchaser commenced proceedings for specific performance and, on 29 July 2014, Sackar J ordered that the contract be specifically performed: Promethean Investments Pty Ltd v Tsilfidis [2014] NSWSC 1049. The Trustee filed a submitting appearance in those proceedings. Mr Tsilfidis appeared before Sackar J, in person, to oppose (unsuccessfully) the order for specific performance sought by the purchaser.
7. On 29 July 2014, Sackar J also ordered that letters of administration of the Deceased's estate be granted ad litem to the Administrator, limited for the purpose of him representing the Deceased's estate in the specific performance proceedings and specifically performing the contract of 12 December 2013 in accordance with his Honour's orders.
8. On 1 and 15 September 2014, Lindsay J made further orders extending the purpose for which the Administrator was granted letters of administration to enable him to manage the ground floor premises at 871 and 873, collect GST, lodge BAS returns and pay various expenses. Lindsay J also ordered that the Administrator pay from the proceeds of sale of Newtown certain sums to each of the parties. $170,000 has been paid to each of Mr Tsilfidis and Mrs Stavrakakis. Those payments may be relevant to the costs order I make in the proceedings.
9. Completion of the sale of Newtown took place on 5 September 2014.
10. The Administrator is currently holding some $500,000 in his trust account, being the net proceeds of Newtown, less the monies referred to at [19] and an amount paid by the Administrator to the Australian Taxation Office in satisfaction of a garnishee order, plus the rent received from 871 and 873.
11. The Administrator has obtained valuations of the two Hurlstone Park properties, which reveal that 871 and 873 are valued at $1,170,000 and $1,320,000 respectively.
12. The Administrator is collecting the rent from the two properties and depositing same into his trust account. The current monthly rent from 871 and 873 is in the order of $1,700 and $1,120 respectively.

The parties

1. Mrs Stavrakakis gave her evidence calmly and responsively. She answered questions in cross-examination directly and without hesitation.
2. In her affidavit evidence, Mrs Stavrakakis gave a very detailed account of conversations she has had with Mr Tsilfidis, and conversations she says she overheard (through the party wall between 871 and 873) between Mr Tsilfidis and the Deceased.
3. It is an agreed fact that Mrs Stavrakakis kept a diary of such events, and that the account given in her affidavit evidence was made "by reference to [those] contemporaneous notes". When told of this agreement, I informed counsel that I would infer, absent a submission to the contrary, that Mrs Stavrakakis's account of events in her affidavit was consistent with those contemporaneous notes. Mr Morrissey said he would make no such submission, and he did not.
4. Nonetheless, I have some reservations about Mrs Stavrakakis's evidence of what she said she heard through the party wall between 871 and 873. She agreed that the party wall is a double brick wall. Even if the conversations she says she heard were ones in which voices were raised, it seems improbable that she could have heard all such conversations in the detail she recorded. Her purported recollection, based on her notes (which Mr O'Loughlin did not tender) is very detailed indeed; perhaps too detailed to be entirely accurate. Her clear animosity towards Mr Tsilfidis (which, I should add, is reciprocated) also means that she is not a detached, objective witness. And she gave an account of a conversation that she says she heard between Mr Tsilfidis and the Deceased on the day the Deceased executed the 2012 Will, which is very hard to reconcile with the evidence given by the solicitor who prepared that will, Mr Peter Livers, of his dealings with the Deceased that day (see [107] below).
5. Mr Tsilfidis denied the accuracy of Mrs Stavrakakis's account of many of these conversations. However, in light of the view I have formed of the reliability of his evidence, I am able to place only limited weight on those denials.
6. I found Mr Tsilfidis to be a most unsatisfactory witness.
7. His evidence in cross-examination was very often unresponsive to the questions put to him. He did not hesitate to make speeches to advocate his cause, whether in the witness box or not. On occasion he interjected from the back of the Court, despite Mr Morrissey's best endeavours to control such behaviour.
8. On one occasion he gave evidence that he must have known could not be true. That evidence concerned an oral authority he claimed he had from the Trustee to lodge BAS returns on behalf on the Deceased's estate. That evidence is improbable in the extreme, and inconsistent with an email the Trustee sent the ATO denying that Mr Tsilfidis had any such authority.
9. Another example of the evidence given by Mr Tsilfidis which points to his unreliability as a witness concerned the Deceased's debts at the date of the hearing before the Guardianship Tribunal. The evidence before the Tribunal was that the rent generated by 871, 873 and Newtown was in the order of $5,800 per month, that it was being paid into Mr Tsilfidis's bank account and that, despite the income, the Deceased was substantially in debt. That evidence was a significant factor persuading the Tribunal to make the FMO.
10. In cross-examination, Mr Tsilfidis denied providing material to the Tribunal as to the level of the Deceased's debts. Mr Tsilfidis was then shown a document in his writing, which was handed up at the hearing before the Guardianship Tribunal on 14 September 2009. It showed that the Deceased owed a total of almost $51,000 including some $21,500 owing to Marrickville Council, some $15,000 owing to Westpac Bank and some $12,000 owning for land tax.
11. Overall, I found Mr Tsilfidis to be a most unreliable informant.

The other witnesses

1. Two of Mrs Stavrakakis's children, Dr John Stavrakakis and Ms Angela Stavrakakis, gave evidence of conversations they had with the Deceased and conversations that they heard Mr Tsilfidis have with the Deceased. I did not find that evidence cast significant light on the issues I must decide.
2. The other witnesses called were Mr Livers and a consultant neurologist, Dr Konstantinos Yiannikas. I deal with the evidence of those witnesses below.

Circumstances leading to the execution of the 2012 Will

1. Mrs Stavrakakis gave evidence that from 2007 the Deceased started behaving somewhat unusually. For example, Mrs Stavrakakis said that the Deceased told her that she believed singers on the radio were singing to her personally, and that persons on the radio or television could see her.
2. As I have mentioned, on 14 September 2009 the Guardianship Tribunal made the FMO and appointed the Trustee as the Deceased's financial manager. The Guardianship Tribunal found that the Deceased was incapable of managing her own affairs. Whilst the reasons of the Tribunal have not been admitted as evidence of the truth of its findings, s 25G of the Guardianship Act 1987 (NSW) provides that the Tribunal may only make an FMO if satisfied that: 1. the relevant person is not capable of managing their own affairs; 2. there is a need for another person to manage those affairs on the person's behalf; and 3. it is in the person's best interests that such an order be made.
3. The reasons given by the Tribunal show that it came to each of those conclusions.
4. In 2010, Mrs Stavrakakis became concerned about the Deceased's wellbeing and approached the Aged Care Assessment Team (ACAT) at Canterbury Hospital.
5. As a result, the Deceased was assessed by Dr Andreas Suryawan, the Geriatrics Registrar at Camperdown ACAT. Dr Suryawan visited the Deceased with an officer from ACAT and a Greek interpreter.
6. In his report to the Deceased's general practitioner, Dr Max Lee, Dr Suryawan said: "She was happy with the support provided by her children, especially by Paul. She denied having difficulty with her personal care, or having any falls in the past. She mentioned her disappointment that 'money' from her properties - which details she could not explain further - had been managed by 'the government'."
7. Nonetheless, Dr Suryawan concluded that: "On today's review, [the Deceased] had cognitive impairment, which may affect her testamentary capacity. She is at risk for exploitation. The duration of this condition was unclear, and this would need to be established by reviewing the client's old records."
8. Dr Suryawan's report is dated 8 July 2010. That was the last day that Mrs Stavrakakis saw her mother. Evidently, that was because of an apprehension the Deceased had, which may well have been placed in her mind by Mr Tsilfidis, that Mrs Stavrakakis had, by causing the FMO to be made and approaching ACAT, caused the Deceased (and Mr Tsilfidis) financial hardship and was trying to have her "put…in a psychiatric ward" (to use the language that Mrs Stravrakakis says she overheard Mr Tsilfidis use).
9. On 25 January 2011, the Deceased was assessed by Dr Rosemary Sheehy, a geriatrician endocrinologist from the Sydney Local Health Network.
10. Dr Sheehy wrote to Dr Lee: "Thank you very much for speaking to me today prior to the home visit for [the Deceased]. You confirmed that as her treating local doctor you have no concerns about her son's care. There has been no evidence of any physical or emotional injury or poor self care, anxiety or fear during any of the times that you have seen this lady… As I noted you did not support the Guardianship."
11. Dr Sheehy's report also indicated how unhappy the relationship between Mrs Stavrakakis and Mr Tsilfidis then was: "Before entering the house I was approached by [the Deceased's] daughter and grandson… She advised that she has taken out AVO's against her brother and she is no longer able to enter the property. Also present for today's interview were the ACAT team leader…a Greek interpreter and two police officers to simplify any issues around access."
12. Dr Sheehy concluded that the Deceased: "…does have short term memory problems but this does not necessarily impact on her ability to make reasoned decisions. With her son now on a methadone program and having treatment for hepatitis C with good control of disease reported by him, I think that the circumstances are very different now from those that must have prevailed several years ago. Unfortunately, this lady does not desire any renewal of family ties with her daughter. She is not unduly concerned about that."
13. Dr Sheehy's reference to Mr Tsilfidis being on a methadone program was a reference to an addiction that he has, or at least had, to heroin. I will return to this when considering Mrs Stavrakakis's claim for family provision.
14. Dr Sheehy concluded: "I have not found any evidence of depression. This lady is quite optimistic even though she has painful arthritis. She would prefer to remain in her home until she dies."
15. Dr Sheehy also recorded: "[The Deceased] lives in a comfortable unit above a retail shop. She owns the property and may still own the property next door where her daughter and her family live. [The Deceased] advised that she had given that property to her daughter".
16. That was not true. The Deceased had not given 871 to Mrs Stavrakakis. But, at least during her interview with Dr Sheehy, the Deceased evidently believed that she had.
17. As I have mentioned, the 2012 Will was prepared by Mr Livers.
18. The Deceased first consulted Mr Livers about making a will on 3 February 2012. Several years earlier, in about March 2010, the Deceased and Mr Tsilfidis consulted Mr Livers about the possibility of making an application to revoke the FMO. Ultimately, that application was not made until April 2013. It was not resolved when the Deceased died.
19. On 3 February 2012, the Deceased attended on Mr Livers accompanied by Mr Tsilfidis. According to a file note that Mr Livers made that day, the Deceased informed him that she "wants to make [a] will" and to leave "all to Paul Tsilfidis".
20. Mr Livers gave evidence that: "In view of the appointment of a financial manager, I requested that she deliver to me a medical report that she was capable of giving instructions to prepare a will."
21. Thereafter, the Deceased gave Mr Livers a brief note from Dr Lee which stated: "Mrs K Tsilfidis has been a patient of mine for many years. She came to see me and in my opinion, she is mostly stable and not delusional."
22. Mr Livers gave evidence that: "I told her this note was not satisfactory and then she asked me what she should do. I arranged for her to be assessed by a Greek speaking consultant neurologist, Dr Yiannikas, to assess her capacity to make a will. I arranged the appointment by letter dated 24 July 2012…".
23. Dr Yiannikas is a consultant neurologist and clinical professor of medicine at the University of Sydney.
24. Mr Livers's letter to Dr Yiannikas of 24 July 2012 was in the following terms: "…kindly provide your opinion as to the following: 1. Whether you believe our client is capable to manage her own financial affairs and manage her affairs such as banking money, withdrawing money, selling her home, managing and renting her properties? 2. Please comment on whether our client is able to appreciate the rentals which enter into her bank book from three properties and is able to pay her debts for the three properties including repayment of her mortgage repayment to Westpac Bank? 3. Is our client capable to pay her tax and understand BAS statements? 4. Is our client capable to pay council debts? 5. Is our client capable of ensuring that all rental payments are deposited into her account and not that of her son's bank account? 6. Do [you] believe our client is delusional? 7. Is she capable of giving instructions to a solicitor to prepare a will?"
25. On 26 July 2012, another general practitioner, Dr Costakis Papacosta, also wrote to Dr Yiannikas as follows: "Thank you for seeing Mrs Kati Tsilfidis, age 77 yrs, for review re ability for self determination. Family issues regarding estates and will, and needs clarification re mental state. Her usual GP is Dr Lee, but the family came to us for help regarding finding a Greek speaking specialist. I have asked the family to also get a referral with relevant past history from her treating GP Dr Lee."
26. Dr Yiannikas saw the Deceased on 23 August 2012. Mr Tsilfidis was also present.
27. In his report to Dr Papacosta of 3 September 2012, Dr Yiannikas said: "This woman undoubtedly has a mild dementia although she is quite well orientated. The suggestion of improvement in her recall with queing might argue in favour of a sub cortical mechanism such as vascular disease. … I recommended that we should investigate her further with a CT scan of her brain as well as EEG and a screen looking for secondary causes of dementia."
28. In his report to Mr Livers of 11 September 2012, Dr Yiannikas stated that "assessment of cognitive function revealed a Mini Mental State Score of 18/30" and that he thought the Deceased "had a mild to moderate dementia although she was quite well orientated". Dr Yiannikas concluded: "1. I do not feel that this patient is capable of managing her own financial affairs such as banking money, withdrawing money, selling her home and managing and renting her properties. 2. I did not feel that this patient is able to pay her debts on three properties including repayments of the mortgage repayment to Westpac bank. 3. The [sic] do not feel that this patient is able to pay her tax and understand BAS statements or pay her council debts. 4. I do not feel that she is capable of ensuring that all rental payments are deposited into her account rather than that of her son's. 5. I do not feel the patient is delusional and although she does have some cognitive problems I think she is capable of understanding general principles and who she wants to help her with managing her affairs and who she wants to live with. 6. I think she is capable of giving instructions to a solicitor to prepare a will."
29. In his affidavit in these proceedings, Dr Yiannikas said that at the time he saw the Deceased: "a. She was able to understand the nature and act of executing a will. b. She was able to understand the nature and extent of her property. c. She was able to recall the persons who may have claims to her estate. d. She was sufficiently orientated to weigh the relative claims of those persons. e. She did not have delusions or hallucinations."
30. Dr Yiannikas added: "11. I cannot recall specific conversation regarding her will. 12. She did not tell me anything specific about her property. However, I did feel that she was sufficiently orientated to recall the persons who may have claims to her property. 13. She did not tell me anything about her children that may have claims to her estate. 14. In my opinion, Mrs. Tsilfidis was not delusional and although she had cognitive problems they were not sufficient as to influence her to make a disposition in her will which she would not have made if she did not have those cognitive problems."
31. During cross-examination, Dr Yiannikas said he expressed the conclusion in pars 1 to 5 of his letter to Mr Livers of 11 September 2012 on the basis of the Deceased's "Mini Mental State Score of 18/30". Dr Yiannikas agreed that this was "not a particularly good score", and suggested "moderate involvement of cognitive function".
32. Dr Yiannikas said he had no recollection of discussing with the Deceased "her will", nor of any discussion about "wills in general".
33. Dr Yiannikas said: "But one can make a decision as to [whether] one has the capacity to understand the nature of executing a will on the basis of your perception of their cognitive function, their orientation, their capacity to function generally."
34. Mr O'Loughlin submitted that Mr Livers had failed to ask Dr Yiannikas the "precisely relevant question"; namely, whether the Deceased had the mental capacity to make a will.
35. However, Dr Yiannikas did express opinions relevant to that question. For example, Dr Yiannikas expressed the opinion that the Deceased "was able to understand the nature and extent of her property".
36. As I have set out above, in his affidavit, Dr Yiannikas said that the Deceased did not tell him anything "specific" about her property. In cross-examination, Dr Yiannikas explained that by this he meant the Deceased had not told him about the addresses or value of the properties. He must have known the Deceased owned three properties that were mortgaged to Westpac and from which the Deceased was receiving rent, as Mr Livers had stated this in his second question, which Dr Yiannikas answered.
37. Dr Yiannikas also expressed the opinion that the Deceased was able to recall the persons who may have claims on her estate and was sufficiently orientated to weigh the relative claims of those persons (see [65] above). Dr Yiannikas went on to say that the Deceased did not tell him "anything about her children that may have claims to her estate". During cross-examination, Dr Yiannikas said he knew that the Deceased had two children, one of whom was present during the interview and with whom the Deceased then lived. Dr Yiannikas said that the Deceased had said nothing to him about her children's relative means or conduct.
38. Finally, Dr Yiannikas opined that the Deceased had no "delusions or hallucinations". In cross-examination, he said: "I asked her if she had any hallucinations or I asked her son whether she'd been displaying paranoid behaviour where you - it's a standard question you ask and obviously if someone's demented and they're having delusional or paranoid behaviour they often tell you that [they] don't, that they're perfectly well. It's a standard thing, so you need a relative with them to explain to you whether their behaviour is irrational or not."
39. Dr Yiannikas agreed that he assumed that the answers that Mr Tsilfidis had given him in relation to such questions were correct.
40. Mr O'Loughlin submitted: "It is submitted that Professor Yiannikas went through a prescribed formula for expressing an opinion without properly investigating the basis for the opinion after a relatively short consultation. It is also submitted that Professor Yiannikas fails to expose his reasoning as to how he was able to conclude that [the Deceased] was capable of giving instructions to prepare a will."
41. There is some force in the submission that Dr Yiannikas did not expose his reasoning process as clearly as he might have.
42. However, Dr Yiannikas must have understood that one reason he was seeing the Deceased was because she was contemplating making a will, and obviously did understand that he was being asked to express a professional opinion relating to her mental state relevant to the making of a will. The fact that he did not suggest that he detected any significant lack of mental capacity, when that is the very subject of his specialist experience, is a factor I must take into account.
43. On 26 October 2012, the Deceased attended Mr Livers's office, together with Mr Tsilfidis.
44. In his affidavit, Mr Livers gave this evidence about that meeting: "11. … I spoke to [the Deceased and Mr Tsilfidis] in the reception area, and I invited [the Deceased] into my office alone and I took instructions from [the Deceased]. She was well dressed and appeared to me to be alert. 12. She told me that she wanted to make a will appointing [Mr Tsilfidis] as executor, and if [Mr Tsilfidis] were to die, his son Adam was to be executor. The whole of her estate was to go to [Mr Tsilfidis], and if he died before her, then to his children. I said: You are leaving out your daughter Sofia from the will and you should prepare a note about why you are doing that as the will could be challenged because of the appointment of the NSW Trustee and Guardian as financial manager. We then again discussed the possibility of making an application to revoke the appointment of the financial manager, because she had not received any payments from the NSW Trustee and Guardian. [The Deceased] said: I will leave that up to Paul [Mr Tsilfidis] and Adam [Mr Tsilfidis's son]. [The Deceased] then said: I want to include in the will the cemetery grave plots and I will give you the plot details when I come back to sign the will. I said: What is the name of the Prime Minister of Australia? [The Deceased] said: Julia Gillard. I said: Where do you live? [The Deceased] said: 873…Dulwich Hill. I said: Who do you live with? [The Deceased] said: My son Paul [Mr Tsilfidis]. I said: Who will be the executor? [The Deceased] said: My son Paul [Mr Tsilfidis]. I said: Do you trust him? [The Deceased] said: Yes. 13. Shortly after that I took her back to the reception area. I spoke to Paul and asked him to give me the grave plot details and to make another appointment for his mother to sign the will. 14. I briefly discussed the results of Dr. Yiannikas' report with her and then they left the office."
45. On 16 November 2012, again accompanied by Mr Tsilfidis, the Deceased returned to Mr Livers's office to execute the 2012 Will. Mr Tsilfidis's son's partner was also present.
46. In relation to that meeting, Mr Livers gave this evidence: "16. … They [Mr Tsilfidis and his son's partner] remained in the waiting room whilst I took her into my office by herself. She was well dressed and alert. 17. She repeated the instructions she had given me on 26 October 2012 to make the will appointing [Mr Tsilfidis] executor, but if he were to die, first, his son Adam. The whole of her estate was to go to [Mr Tsilfidis], but if he died first, then to [Mr Tsilfidis's] children. 18. She said she wanted grave 390J to go to [Mr Tsilfidis] at Rookwood, that grave 390 was for her, and grave 378 for her daughter [Mrs Stavrakakis]. 19. I said: This will likely be challenged by [Mrs Stavrakakis], so you should set out a handwritten statement in Greek which you should sign, explaining why you are not giving [Mrs Stavrakakis] anything except the grave site. [The Deceased] said: I have assisted [Mrs Stavrakakis's] children in the past… 20. I then read over to her every word of the document I prepared, translating it from English into Greek. 21. I said: Did you she [sic] understand it[?] [The Deceased] said: Yes. I was satisfied she understood the will. 22. I then called my secretary Maria Schiovo, into my office. I saw Kati sign the will. I saw Maria affix her signature to the will, after Kati signed it in her presence, and I signed it."
47. Mr Livers concluded his affidavit by stating: "24. I formed the view on the basis of what I had seen and heard, that she knew she was making a will, she knew what property she owned, and she knew the testamentary claims on her estate by both [Mr Tsilfidis] and [Mrs Stavrakakis], and that she knew what she wanted to do, and that she was acting freely of her own will."
48. Mr Livers agreed with Mr O'Loughlin's suggestion that, in relation to the Deceased's capacity to make a will, he had to a large extent delegated that determination to Dr Yiannikas. However, he asserted, and I accept, that he also made his own, independent judgment that the Deceased had testamentary capacity.
49. Mr Livers was aware of the potential significance of the Deceased's stated intention to leave all her estate to Mr Tsilfidis, and nothing to Mrs Stavrakakis. At each of the 26 October and 16 November 2012 meetings, Mr Livers told the Deceased that it was likely that Mrs Stavrakakis would "challenge" the 2012 Will. He did not draw to the Deceased's attention the distinction between a challenge to the Deceased's capacity to make a will on the one hand and a claim for family provision on the other; but I doubt the Deceased would have made much of that distinction.
50. Mr Livers did not ask the Deceased why she was leaving nothing to her daughter in the 2012 Will. What Mr Livers did suggest was that the Deceased "prepare a note" or "set out [in] a handwritten statement" the reasons for her decision. No such note or statement was in evidence.

The Deceased's capacity to make the 2012 Will

1. The principles relating to the validity or otherwise of a will are well known, and were set out by Powell J (as his Honour then was) in Re Eger; Heilprin v Eger (Supreme Court (NSW), 4 February 1985, unrep) as follows: "1. the onus of proving that an instrument is the Will of the alleged testator lies on the party propounding it; if that is not established, the Court is bound to pronounce against the instrument…; 2. this onus means the burden of establishing the issue; it continues during the whole case, and must be determined upon the balance of the whole evidence…; 3. the proponent's duty is, in the first place, discharged by establishing a prima facie case…; 4. a prima facie case is one which, having regard to the circumstances so far established by the proponent's testimony, satisfies the Court judicially that the Will propounded is the last Will of a free and capable testator; 5. unless suspicion attaches to the instrument propounded the testator's execution of it is sufficient evidence of his knowledge and approval…; 6. facts which might well cause suspicion to attach to an instrument include:- a. that the person who prepared, or procured the preparation of, the instrument receives a benefit under it…; b. that the testator was enfeebled, illiterate or blind when he executed the instrument…; c. where the testator executes the instrument as a marksman when he is not…; 7. where there is no question of fraud, the fact that a Will has been read over to or by a capable testator is, as a general rule, conclusive evidence that he knew and approved of its contents; 8. a duly executed Will, rational on its face, is presumed, in the absence of evidence to the contrary, to be that of a person of competent understanding…; sanity is to be presumed until the contrary is shown…; 9. facts which, if established, may well provide evidence to the contrary include:- a. the exclusion of persons naturally having a claim on the testator's bounty…; b. extreme age or sickness…or alcoholism…; 10. however, while extreme age…or grave illness…will call for vigilant scrutiny by the Court, neither (even though the testator may be in extremis…) is, of itself, conclusive evidence of incapacity; it will only be so if it also appears that age, or illness has so affected the testator's mental faculties as to make them unequal to the task of disposing of his property…". [Citations omitted]
2. The locus classicus for determining testamentary capacity is that of Cockburn CJ in Banks v Goodfellow (1870) LR5QB 549 at 565, summarised as follows: 1. the testator was aware and appreciated the significance of the act of law which he (or she) was about to embark on; 2. the testator was aware, at least in general terms, of the nature, extent and value of the estate over which he (or she) had a disposing power; 3. the testator was aware of those who might reasonably be thought to have a claim upon his (or her) testamentary bounty and the basis for, and nature of, the claims of such persons; and 4. the testator had the ability to evaluate, and discriminate between, the respective claims of those persons.
3. However, as Hallen AsJ (as his Honour then was) observed in Petrovski v Nasev; The Estate of Janakievska [2011] NSWSC 1275 (at [246]): "It is important to remember that Banks v Goodfellow does not require perfect mental balance and clarity in the deceased. As Cockburn CJ put it in that case, at 566, 'the mental power may be reduced below the ordinary standard' provided the deceased retains 'sufficient intelligence to understand and appreciate the testamentary act in its different bearings'."
4. His Honour also observed (at [252] and [253]): "A matter that is often forgotten by parties in probate cases is that what is being spoken of is capacity rather than the exercise of it. The question is whether the deceased had the capacity of sound judgment, not whether she, or he, in fact, made the judgment about her, or his, disposition of the estate by will soundly, and for reasons which might appear to the observer to be appropriate. As Ward J noted in King v Hudson [2009] NSWSC 1013, at [51]: 'Mr Willmott referred in this context to the three 'R's' adumbrated by Myers J (writing extra-judicially in the Australian Bar Gazette 1967 Vol 2 p 3), those being the need for the testator to have the capacity to remember, to reflect and to reason: He must be able to remember, so that he can call to mind the property at his disposal and those who may have claims upon him, to reflect so that he can consult within himself on the relative weight of their claims, and to reason so that he can judge, having regard to his assets, how far, if at all, he should give effect to them. Mr Willmott emphasised that his Honour went on to say: It is to be observed that it is not necessary for the testator to do any of those things. All that is required is that he should be able to do them and, if he can, his will will be valid no matter how unreasonable or capricious it may be. Testamentary dispositions are always relevant to the question of testamentary capacity, but I have never known a case in which they have done more than create suspicion on the one hand, or served to confirm capacity on the other'."
5. The 2012 Will was duly executed, and (as Mr O'Loughlin accepted) rational on its face. Thus it is presumed, in the absence of evidence to the contrary, to be "that of a person of competent understanding".
6. When she made the 2012 Will, the Deceased was elderly and suffering from mild dementia. However, she impressed Dr Yiannikas as being well oriented and Mr Livers as being alert.
7. By the 2012 Will, the Deceased excluded Mrs Stavrakakis, a person who would naturally have a claim on her bounty as a beneficiary.
8. But Mr Livers twice raised this matter with the Deceased, who gave a reason for excluding Mrs Stravrakakis; namely, that she had "assisted" Mrs Stavrakakis's children in the past. The only evidence before me of such assistance was a gift of $10,000 to Mrs Stavrakakis's daughter, Angela, shortly before her 21st birthday. That may not strike some minds as a sufficient reason to exclude Mrs Stavrakakis entirely as a beneficiary. However, the wisdom or fairness of the Deceased's decision is not a matter relevant to this aspect of the enquiry.
9. The Deceased was also able to nominate who should be executor and beneficiaries in the event that Mr Tsilfidis were to predecease her.
10. Mr Livers arranged to have the Deceased examined by Dr Yiannikas, who expressed the opinions I have set out above. Mr Livers also applied his mind to the question of the Deceased's capacity and concluded that she knew she was making a will, knew what property she had, knew the claims on her bounty and knew what she wanted to do.
11. In all of those circumstances, I am satisfied that the Deceased had testamentary capacity when she made the 2012 Will. There is objective, professional evidence pointing to that conclusion. And the Deceased had ample time to consider what she wanted to do with her will and reflect on whether to maintain her exclusion of Mrs Stavrakakis as a beneficiary. As Mr Livers pointed out in cross-examination, the Deceased attended on him on 3 occasions during 2012 over a period of 10 months, and on each of those occasions gave him clear and consistent instructions.

Suspicious circumstances?

1. Recently, White J in Estate of George Aeneas McDonald; Howard v The Sydney Children's Hospital Network (Randwick & Westmead) [2015] NSWSC 1610 said at [4]: "Where a capable testator makes a will that is duly executed and attested there is a presumption that the testator knows and approves of the contents of the will, but that presumption does not arise where the making of the will is attended by suspicious circumstances. In such a case…the onus remains upon the person propounding the will to prove not only its due execution but that [the testator] knew and approved of its contents."
2. Mr O'Loughlin pointed to a number of "suspicious" circumstances that, he submitted, rebutted any presumption that the Deceased knew and approved of the contents of the 2012 Will. I have considered the matters to which Mr O'Loughlin referred, but am comfortably satisfied, without resort to any presumption following from the due execution of the 2012 Will, that, in fact, the Deceased knew and approved of its contents.
3. As I have said, on three occasions she told Mr Livers, in clear terms, how she wished to make her will.
4. The 2012 Will is by no means complex, and the Deceased had the "opportunity in the preparation and execution of the [2012 Will] for reflection and independent advice" (per Meagher JA in Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 757 at [47]).
5. Mr Livers gave evidence that he read the 2012 Will out to the Deceased (said to be "the most satisfactory evidence" of actual knowledge of the contents of a will: Barry v Butlin (1838) 2 Moo PC 480; 12 ER 1089, cited with approval by Meagher JA in Tobin v Ezekiel at [47]), and translated it from English to Greek. Mr Livers was satisfied that the Deceased understood the 2012 Will.
6. I see no reason in this case to conclude that the Deceased did not know and approve of the contents of the 2012 Will. I am positively satisfied that she did.

Undue influence

1. In Petrovski v Nasev, Hallen AsJ said at [263]-[264]: "Undue influence in probate is to be distinguished from the equitable doctrine of undue influence. In order to render a will void, there must be influence which can justly be described by the court to have caused the execution of a testamentary document pretending to express the deceased's mind, but which really does not express her, or his, mind, but something else which she, or he, did not really mean: Boyse v Rossborough (1857) 6 HL Cas 2; 10 ER 1192, at page 1205; Craig v Lamoureux [1920] AC 349 at 357. In probate, 'persuasion, or influence, or importunity is not sufficient unless it amounts to coercion, that is, unless the testator is prevented by the persuasion, influence, or importunity from exercising free will'. (See: 'Wills and Intestacy in Australia and New Zealand', Hardingham, Neave and Ford (2nd Ed).)"
2. Mr O'Loughlin accepted that there was no direct evidence of a undue influence. However, he pointed to the following matters: 1. the Deceased was isolated from Mrs Stavrakakis after July 2010; 2. there was evidence to suggest that Mr Tsilfidis convinced the Deceased that the making of the FMO, and the financial deprivation he and the Deceased suffered as a result, was Mrs Stavrakakis's "fault"; 3. there was evidence to suggest that Mr Tsilfidis convinced the Deceased that Mrs Stavrakakis should be excluded from the estate and that Mr Tsilfidis "took the Deceased to Mr Livers, [and] supplied Mr Livers with the information about the estate having persuaded the Deceased to make a will excluding" Mrs Stavrakakis; and 4. Mr Tsilfidis agreed in cross-examination that the Deceased "never said no" to him.
3. Mr O'Loughlin also drew my attention to the evidence given by Mrs Stavrakakis of overhearing Mr Tsilfidis exhort the Deceased on a number of occasions (including 16 November 2012, the day the 2012 Will was executed) to exclude Mrs Stavrakakis from the 2012 Will.
4. That evidence, if true, suggests that Mr Tsilfidis did tell the Deceased, in strong terms, that she should exclude Mrs Stavrakakis from the 2012 Will. However, as I said at [27] above, it is hard to reconcile Mrs Stavrakakis's evidence of what she heard Mr Tsilfidis say to the Deceased on 16 November 2012 with Mr Livers's evidence of what occurred that day. According to Mrs Stavrakakis, Mr Tsilfidis told the Deceased to tell Mr Livers that Mrs Stavrakakis was to be excluded from the 2012 Will because Mrs Stavrakakis "took you to court" (presumably a reference to the Guardianship Tribunal) and "has done wrong". That is not what the Deceased told Mr Livers. Rather, she said she was excluding Mrs Stavrakakis because she had "assisted" Mrs Stavrakakis's children in the past.
5. As I have said, the Deceased told Mr Livers on three separate occasions during 2012 how she wanted the 2012 Will written. Although Mr Tsilfidis drove the Deceased to Mr Livers's office on each occasion, Mr Livers saw the Deceased alone on the two critical occasions; 26 October 2012, when she gave him formal instructions for the 2012 Will, and 16 November 2012, when she executed it.
6. I am not, in those circumstances, persuaded that the Deceased's 2012 Will was overborne by Mr Tsilfidis, such that she did something that she "did not really mean".

Conclusion

1. I am satisfied that the Deceased had testamentary capacity when she made the 2012 Will, that she knew and approved of its contents, and that it was not procured by reason of Mr Tsilfidis's undue influence.
2. Letters of administration with the 2012 Will annexed should be granted to the Administrator and the papers remitted to the Registrar to complete the grant.
3. In those circumstances, I turn to Mrs Stavrakakis's claim for provision under the Act.

Mrs Stavrakakis's claim for provision

1. Section 59 of the Act provides that the Court may make, on the application of an "eligible person" (there is no dispute that Mrs Stavrakakis is an "eligible person"), a family provision order in relation to the estate of a deceased person if the Court is satisfied that: "At the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person…".
2. The section provides that, if the Court is so satisfied, then: "The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made."
3. I consider that the test to be applied remains the two-stage test referred to in Singer v Berghouse (No 2) [1994] HCA 40; 181 CLR 201 at 208-209; namely, determining whether adequate provision has been made in the 2012 Will for Mrs Stavrakakis, and, if not, what provision should be made.
4. A different view as to the applicability of the two-stage test has been expressed by one member of the Court of Appeal (Basten JA in Andrew v Andrew [2012] NSWCA 308 at [29] and [41]). Differing views were expressed by other members of the Court in that case (see Allsop P at [6] and Barrett JA at [65], [79]-[81] and [94]).
5. In Nowak v Beska [2013] NSWSC 166 Hallen J said at [113]: "It seems to me that the two stage approach adopted in the myriad of cases determined under the former Act and under the Act, including Keep v Bourke [2012] NSWCA 64, enables me, despite what has been said by Basten JA [in Andrew v Andrew], and until uncertainty is resolved, to continue to follow that approach in determining cases under the Act. As Allsop P said [in Andrew v Andrew], 'it may be an analytical question of little consequence' [at [6]] since what has to be decided by the Court is whether to make a family provision order and the nature of any order."
6. His Honour expressed the same view more recently in Ciric v Ciric [2015] NSWSC 313 at [86], and observed that that view was unaffected by the more recent decisions of the Court of Appeal in Phillips v James [2014] NSWCA 4; 85 NSWLR 619, Verzar v Verzar [2014] NSWCA 45 and Salmon v Osmond [2015] NSWCA 42. I agree.
7. The first stage of the two-stage test involves a question of fact, namely whether the Deceased has made adequate provision for Mrs Stavrakakis's proper maintenance, education and advancement in life.
8. The aim of the first stage is to assess whether the Court can make an order for provision. As Hallen AsJ said in Lajcarova v Todorov [2011] NSWSC 522 at [79]: "Unless the court comes to the conclusion that inadequate provision has been made, it is not empowered to make an award. This is commonly referred to as 'the jurisdictional question'. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant." [Emphasis added]
9. The second stage, should it arise, involves an exercise of discretion. The Court must assess whether provision ought to be made in Mrs Stavrakakis's favour.
10. The object of the second stage is to assess whether the Court should make an order for provision. As Hallen AsJ said in Lajcarova v Todorov at [84]: - "At the second stage, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour." [Emphasis added]
11. Although Hallen AsJ was then considering a claim under the former Family Provision Act 1982 (NSW), I see no reason to adopt a different approach under the Act.
12. It is clear that the determination of the second stage involves similar considerations to that of the first stage: Singer v Berghouse (No 2) at 209-210.
13. What is involved is "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific" (Manuel v Lane [2013] NSWCA 61 at [9] per Emmett JA, with whom Meagher and Ward JJA agreed, speaking of the discretion to be exercised under s 20 the Property (Relationships) Act 1984 (NSW); which I see as involving, in this respect, the same notions as arise under the Act).
14. The guiding "principles" were summarised by Hallen AsJ in Gersbach v Blake [2011] NSWSC 368 at [94]-[96] as follows: 1. it is not appropriate to endeavour to achieve a "fair" disposition of the deceased's estate; 2. it is not part of the court's role to achieve some kind of equity between the various claimants; 3. the court's role is not to reward an applicant, nor to distribute the deceased's estate according to notions of fairness or equity; 4. rather, the court's role is of a specific type and goes no further than a making of "adequate" provision in all the circumstances for the "proper" maintenance, education and advancement in life of an applicant (see also Bryson J in Gorton v Parks (1989) 17 NSWLR 1 at 6); 5. the court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation (see also Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 at 19 per Dixon CJ and McKenzie v Topp [2004] VSC 90 at [63] per Nettle J); and 6. freedom of testamentary disposition remains a prominent feature of the Australian legal system; see also Lajcarova v Todorov at [91].
15. There can be no doubt that the 2012 Will does not make "adequate" provision for Mrs Stavrakakis's maintenance or advancement; it makes no provision for her at all.
16. Mr Morrissey submitted that "on one view" Mrs Stavrakakis "has already received adequate and proper provision".
17. Mr Morrissey relied upon a number of matters.
18. The first was that the Deceased, and her late husband, "significantly contributed" to the costs of a property that Mrs Stavrakakis and her former husband purchased in Canterbury.
19. Mrs Stavrakakis and her former husband purchased that property in 1982 for $73,000, using $15,000 savings and $15,000 that Mrs Stavrakakis said her father gave her. The balance was borrowed. That property was sold in 1991 for $190,000. Ultimately, Mrs Stavrakakis received something in the order $70,000 from the proceeds, which she lost as a result of a "short term relationship" she had with another person who "took that money from me and gambled it".
20. I do not see this factor as having great significance. The money was advanced almost a quarter of a century ago, and has since been lost.
21. Mr Morrissey also pointed to the fact that Mrs Stavrakakis and her three (now adult) children have had rent free accommodation at 871 for some 16 years.
22. Mrs Stavrakakis's three children do live with her at 871, and pay little or no board. Each has some capacity to pay board (especially her two sons, who are in full time employment). The capacity of those children to support Mrs Stavrakakis is a factor to be weighed in the balance.
23. Mr Morrissey also submitted that Mrs Stavrakakis was "employable" and pointed to experience she has had doing market research and in translation work.
24. However, the evidence shows that Mrs Stavrakakis has a series of medical problems, including a left knee and ankle problem, anxiety and depression. She does not sleep well. Her only income at the moment is Centrelink benefits. I accept Mr O'Loughlin's submission that Mrs Stavrakakis's skills are "well out of date", and it is most unlikely she will be able to return to the workforce.
25. Much the same can be said about Mr Tsilfidis. He has had, and may still have, a drug dependency, and is also in receipt of social security benefits.
26. Mr Tsilfidis was certainly the Deceased's primary carer after July 2010 (Mrs Stavrakakis did not see her mother after that) and appears also to have been the Deceased's primary carer for several years before that.
27. Just as Mrs Stavrakakis has had rent free accommodation in 871 for many years, Mr Tsilfidis has had rent free accommodation in 873 for a similar period.
28. Overall, my opinion is that Mr Morrissey's opening submission that Mrs Stavrakakis and Mr Tsilfidis "seem to be in roughly similar personal and financial circumstances" is a fair summary of the evidence.
29. Both are now in their middle age, in poor health and have very limited, if any, prospects of obtaining employment in the future. Both need security of accommodation, some source of income and some capital to deal with future contingencies.
30. For more than 15 years, 871 has been Mrs Stavrakakis's home and 873 has been Mr Tsilfidis's home. Although 873 has been valued at $150,000 more than 873, it yields slightly less rent from the retail premises at ground level.
31. There is a little under $500,000 held by the Administrator in his trust account. It may be that the costs of one or both parties will be paid from this fund; counsel have asked me to defer making any decision as to costs until publication of these reasons.
32. In all of those circumstances, the conclusion to which I have come is that the provision that should be made from the Deceased's estate for Mrs Stavrakakis is that the less valuable property and the one in which she is living, 871, be transferred to her. She should also be paid one half of the net funds in the Administrator's trust account.
33. That will leave Mr Tsilfidis with 873 and the remaining funds. It will leave both siblings with an income from the retail premises at 871 and 873, and a capital sum for the future.
34. To a very large extent, that will leave the chips to lie where they have, for all practical purposes, already fallen.
35. Conclusion
36. I invite the parties to confer and agree on the orders that should now be made to give effect to these reasons. I will hear submissions as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 November 2015