Tsakonas v Chrisedoulou

COUNSEL : Mrs L Snelling for plaintiffs Mr M Meek SC for defendant

SOLICITORS : Turner Freemand for plaintiffs Diamond Conway for defendant

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

288695/09 CHRISTINE TSAKONAS and ATHINA DELLIOS v PAUL CHRISODOULOU

JUDGMENT 1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Aspasia Chrisodoulou who died on 18 February 2000 aged 93 years. She was survived by her husband and her five children, two of whom are the plaintiffs, and one of whom is the defendant. The last will of the deceased 2 The last will of the deceased was made on 28 May 2005. In that will she made the following provisions:

(a) $5,000 to Antonia. (b) the household chattels to Socratis, her husband. (c) a form of right of residence / Crisp order in favour of Socratis in respect of the property at Eldridge Street, Cherrybrook. (d) on Socratis' death the Cherrybrook property is to be divided with 3/10ths share going to each of Athina and Christine and the 2/10ths share to go to each of Angela and Paul. (e) the rest and residue of the estate, including the deceased's interest in the Solander Centre as well as the proceeds of any bank account are given to Paul.

3 Probate was granted on 5 August 2008 to the defendant. Assets in the estate 4 The estate presently consists of the following:

1. The property at Eldridge Street, Cherrybrook $900,000. 2. 2/12ths share in the Solander Shopping Centre $500,000. 3. term deposit $72,776. 4. cheque account $6,395 5. moneys due from the Solander Shopping Centre being income for the past two years due to the deceased $58,099 6. moneys due from executor to the estate (being funds set aside to pay his daughters Amex bill) $11,000 Total $1,548,290

5 There are administration costs due in the estate of $5227.60; the defendants costs are estimated at $25,000 and the plaintiffs costs at $29,337. Family History 6 The family migrated to Australia from Greece, arriving in Sydney on 16 October 1954. They stayed in Brookvale for approximately three months and then settled in Kensington. 7 At that stage they had four children: Paul born in 1940, Athina born in 1943, Christine born in 1946 and Antonia born in 1951. Their fourth child Angela was born in 1956. 8 After arriving in the Australia, Paul commenced work in a biscuit / chocolate factory. His father found work in a glass factory and their earnings were used to support the family. Athina was kept at home from the age of 11 years to assist her parents. In 1958 she was found work in a coat-hanger factory for four years. 9 The Kensington property was rented by the family. Socratis and Paul continued to support the family and pay the rent. A year after moving into the Kensington property the house was put up for sale and they bought the house. Paul says that he and Socrates paid the mortgage payments. 10 When Paul was 21 years of age the Kensington property was sold and the proceeds of sale were used to purchase the shop in Sefton. The shop was bought in the names of the parents and Paul, who worked in the shop. They were equal partners. At this time Christine worked and was available to work in the shop during the busy periods. Christine married and left home when she was 21; and Athina married and left home when she was 19. 11 In 1972 the grocery shop was sold and each of the three partners receive $9,000. The deceased used the proceeds to buy the property in Winston Hills for $21,000. She used the $9,000 as a deposit and borrowed the balance. 12 Socratis commenced a partnership with Paul in a shop business at Winston Hills. They were equal partners but the land was owned by Socratis. They gave the profits of their partnership to the deceased to repay borrowings from the house at Winston Hills. Part of that repayment was moneys from Paul. Eventually they were all repaid. 13 In about 1980 the deceased sold the house at Winston Hills for approximately $90,000. She used the proceeds to purchase the property at Eldridge Street, Cherrybrook. She borrowed approximately $175,000 to build a new home. Paul assisted with this, coordinating subcontractors and managing the construction. The deceased husband contributed $80,000 to the building costs. The Solander Centre 14 In about 1975 Paul and his parents sought to purchase land at Kings Langley in order to build a supermarket. They could not borrow monies from financial institutions at that time. The evidence of Paul is that at a family conference his father requested him to sell his house and put some money into the centre. He stated that he could do that but as there was a recession he would have to take a loss in order to sell his house. He said, and I accept, that his father promised that if he sold the house that he and the deceased would leave their shares in the Solander Centre to Paul in their wills. 15 The land at Kings Langley cost $240,000. Paul and his father contributed $160,000 from the sale of the shop business at Winston Hills. $120,000 was contributed by the father and $40,000 by the defendant Paul. Paul sold his house at what he says was an undervalue of $20,000 and contributed $65,000 to the purchase price. The deceased contributed $10,000 and Angela contributed $5,000. Moneys were then able to be borrowed to construct the centre. 16 After that sale of the home Paul and his wife and children moved into one of the flats in the shopping centre where they operated three businesses, being a supermarket, a liquor store and a news agency and worked in them 12 hours a day. The children also worked there in the shops after school and Angela also worked in one of the shops full time and was made a partner in the development. 17 The Solander Centre was completed in approximately 1976 and is a two story brick and colorbond skillion roof building. On the ground floor there are several lock up shops having display areas, toilets and a loading dock. On the first floor there are six offices, an air-conditioned restaurant, shared toilets and two separate toilets. 18 The shareholding in the centre is as follows:

1. 3/12ths Paul 2. 3/12ths Barbara 3. 2/12ths the deceased 4. 2/12ths Socratis; and 5. 2/12ths Angela. 19 Paul currently services the Solander Centre with help from his son who earns $30,000 from this work. Paul does not charge any fees for management, preparation of leases, collection of rents and payments of outgoings. Eligibility 20 Both the plaintiffs are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:- "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

21 I turn to consider the circumstances of the plaintiffs and others having a claim on the deceased's bounty. These are, of course, the husband and her children. 22 I will first deal with the husband's situation in life. Until recently he was living in the Cherrybrook property. His health has deteriorated and he has moved into the Lady of Grace Nursing Home at Dural. It is a permanent assessment. He is now 92 years of age. 23 Since the deceased's death the defendant has cared for his father and has done the shopping. Angela has cooked and cleaned his house and has done the general other chores for him. Paul has been paying for the running of the house, giving his father $3,600 every month from his share of the earnings of the Solander Centre. That is used as to $600 to buy food and Angela is paid $1,000 a month and he saves the balance. 24 The deceased husband has a bank account with the National Australia Bank having slightly in excess of $100,000 in that. All that has changed now as he has now moved into the nursing home. 25 It is likely he will have to pay a bond and that this will be in the order of $150,000-$200,000 and the family has been told that he will have weekly fees in the order of $400-$500 because he does not have a pension as normally a pension is used to meet the nursing home requirements. It is uncertain whether this will continue after the bond is paid, but there is also evidence that some part of the bond will be returnable when he ceases to reside in the nursing home. 26 Apart from a gambling problem, which the deceased's husband had when he first came to Australia, the marriage seemed to be a long and happy one. 27 I turn to consider Paul's circumstances in life. Paul is aged 68 years, married to Barbara and they have two children. Paul has property in his own name as follows:

1. a house in Castle Hill $800,000. 2. his 3/12ths share in the Solander Centre $600,000 Total $1,400,000 28 His wife also owns a 3/12ths share in the Solander Centre valued at $600,000. 29 They have the following joint assets:

1. Account at the National Australia Bank $46,000 2. investment account at the National Australia Bank $30,000 3. IAG shares - approximately $4,000 4. a car - approximately $40,000 5. two old cars - approximately $5,000 6. furniture - approximately $10,000 Total $135,000 30 His current net income is approximately $37,707.50 and Barbara's net income is approximately $34,834. All of this income is obtained from the Solander Centre. They have no liabilities. 31 However, their life is not easy. Paul's wife Barbara is confined to a wheelchair and he is her carer. He does the household shopping, cooking, washing and cleaning. Paul's son has had an operation on his lymph glands and he recently finished a course of chemotherapy and lives at home. Paul cares for him as well. 32 Paul's daughter Joanna has recently separated from her husband and he has left her to go back to Canada. She lives with Paul and his wife, as do her two children aged twelve and eight years from an earlier relationship. He supports their family. He had a good relationship with his parents all of his life. 33 Antonia's circumstances. Antonia was injured in a car accident in 1974 and she is independently cared for and has no needs beyond what is provided for her at the moment. The Public Trustee holds investments of $1,925,980 on her behalf. 34 Angela Chrisodoulou's situation in life. Angela is 54 years of age and has a partner who owns a grocery store in the Solander Centre. She works one day a week. Apart from referring to her interest in the Solander Centre, she does not give any details of her assets or income. She has worked in shops since the age of 12 years. She had a good relationship with the deceased, seeing her on a frequent basis. 35 Athina's situation in life. Athina is age 66 years, married with no dependent children. Her husband is 73. They have a home worth $900,000 and a farm also worth $900,000. They have cash and investments and two cars valued at $18,554. They are retired and their income is the age pension of $12,428 per annum. Their expenses are estimated at $17,464 per annum. 36 The contributions she made to the estate are limited to the four years when she worked before marrying in 1961 aged 19 years. She has not been in employment since but has worked on their farm. She made no contribution to the Solander Centre. 37 She had a normal relationship with the deceased but that soured when there was a family argument in January 2005. The deceased and her husband told the two plaintiffs that they intended to leave their share in the Solander Centre to Paul because of the work he had put in and because he had sold his home during a recession to enable them to buy it. Both plaintiffs took great umbrage to this, even though they were to get a greater share of the house than the provision made in the will. 38 As a result of that dispute both plaintiffs substantially cut off their contact with the deceased, visiting only once or twice a year, which greatly upset the deceased. 39 It is also to be noted that she has her interest in the deceased's home and that interest at the present value is $270,000 and no doubt will increase over the next 3.96 years, which is the deceased husband present life expectancy. 40 The situation in life of Christine. Christine 62 years of each, married with no dependent children. They own their house worth $725,000 which is next door to the deceased's home. They have savings of $141,635 and a car purchased new in 2006 for $20,000 and another purchased in 2007. They live on their combined pension of $17,428 and their expenses are estimated at $14,400. There is some suggestion that their pension will decrease when John reaches the age of 65 years. 41 John recently sold a unit in Greece for a sum equal to $175,000 to $180,000. He claims he received nothing as he had to pay many fines arising from faults in the construction of the house dating back many years. He has retained another unit in the same building presumably worth the same. He does not let it and keeps it for the family to use when they visit Greece. 42 The evidence about the sale of the unit and receipt of the funds is self-contradictory and I am not satisfied that he has given a full explanation of this aspect of their financial situation. 43 Christine has not worked since she was 21 years. Her contributions before then were in the family shop. She did not contribute to the Solander Centre or the Cherrybrook property, other than by the work she did in the shop as a child. 44 I have already dealt with her relationship with the deceased and the breakdown, which is even harder to understand -- she lived next door to the deceased. She also has her interest under the will of the deceased.

Discussion 45 It is necessary to see how the plaintiffs say that they have been left without adequate and proper provision for their maintenance, education and advancement in life. 46 In submissions it was suggested that they did not have sufficient funds for their living expenses. It was also suggested in the affidavit evidence that they did not have sufficient superannuation. 47 The way in which this was said to occur was not elaborated on in submissions or evidence, and the claim was made that both plaintiffs should receive the deceased's share of the Solander Centre in addition to the benefits they already receive under the will. 48 This approach is simply asking for a lump sum without any justification. 49 I am reminded of what was said by Sheller JA in the Court of Appeal in Singer v Berghouse on 23 July 1992 where his Honour had this to say: "I must say that I find it extraordinary that the appellant presented scant or no evidence as to her present income and outgoings or as to her intentions or needs for the future or as to what lump-sum provision applying appropriate discount tables would be required to meet these claims or needs, if they existed. In my opinion, in the circumstances of this case, for the Court, in the absence of any such evidence, to make an order for the payment to the appellant of a lump sum is to do no more than act on speculation and, contrary to the prohibition contained in section 9 (2) of the Act, to alter the deceased's disposition of his property in the absence of proof that he has inadequately provided for the appellant." 50 If one looks at their income position it is, as I have set out above, for Athina:

1. pension $12,428 2. expenses $17,464 51 This leaves a shortfall of $5036 per annum.

For Christine: 1. pension $17,428 2. expenses $14,400 per annum. 52 This leaves a surplus at the moment. 53 So far as superannuation or a sum for contingencies is concerned Athina has a farm worth $900,000 to cover such matters. Christina has $140,000 in cash and a unit in Greece worth $175,000. 54 In addition, both ladies have their interest in the estate which they will receive at some stage over the next four years. This means that any need which either might have for income will only be for a few years and Christine will receive more than enough to provide for contingencies. 55 In effect what is happening in this case is that the plaintiffs are continuing to articulate the claims which they made to their parents five years ago that they should receive an equal share of the estate notwithstanding that they made no contribution to the Solander Centre. Their contributions as children before their marriage were minimal compared to the contributions of Paul and Angela. 56 In Taylor v Farrugia [2009] NSWSC 801 Brereton J summed up the position about claims by adult children in these terms: "57. These are claims by adult children. It is impossible in this area to describe in terms of universal application the moral obligation or community expectation of a parent in respect of an adult child. I think, however, it can be said that ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life -- such as a deposit on home, although it might well take a different form. The community does not expect a parent in ordinary circumstances to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in this particular case, the assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [ McGrath v Eves [2005] NSWSC 1006]. 58. Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such a spouse, who has a private obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute. It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent. 59. The Court's attitude to the eligibility for means tested pension benefits of eligible persons and beneficiaries varies, depending on the circumstances of the case. Ordinarily a testator makes a will and provides for those who have a claim on the testator without regard to the claimants eligibility for a pension. However, in a small estate where there are competing claims, a testator, and this Court on an application under the Act, may take into account the eligibility of a claimant for a pension as a means of deciding how such limited benefits as are available from the estate should be shared between claimants, and how those benefits might be structured. But this qualification to the principle that the burden of support should be borne in the first instance by an estate rather than by social security arises mainly, if not exclusively in smaller estates [ Parker v Public Trustee (19880 NSWSC, Young J, 31 May 1998; Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J, unreported; King v Foster (Court of Appeal, 7 December 1995, unreported); King v White [1992] 2 VR 417, 424; Shah v Perpetual Trustee Company [1981] 7 Fam LR 97 100; Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151; Chan v Tsue [2005] NSWSC 82]. 57 In this case it was not suggested that I should disregard the pension entitlements of the plaintiffs and their spouses and this accords with the view expressed in King v Foster (Court of Appeal, unreported 7 December 1995) where Sheller J referred with approval to the discussion by Bryson J in Whitmont Lloyd (unreported 31 July 1995) on the subject. At page 14 his Honour had the following to say: "The protection of public funds from claims by indigent persons is not a purpose of family provision legislation but they are incidentally protected by legislation, which was not connected solely for protection of private interests and serves public policy: see Dillon v Public Trustee of New Zealand [1941] AC at 303, 304 and observations, not uniform in their import, in judgments in Lieberman v Morris (1944) 69 CLR 69. In my opinion, the availability of age pensions and other social benefits is a circumstance which should be regarded, and particularly in smaller estates it may be appropriate to leave an applicant wholly or partly dependent on them or to mould the provision made so that their availability is preserved in whole or in part. The acceptance of benefits for which statute law provides is in every way legitimate, involves no social stigma and incurs no disapproval from the Court. It is not the Court's task to be vigilant to throw burdens off public funds and onto private estates. Still it is true that the legislation has a public policy purpose and it is not appropriate that where there is wealth in an estate it should be directed away from the less fortunate and successful of the eligible persons so as to enhance their claims to social benefits and maximise the resources of others; the Court should not disregard the interest of the public in public funds, which can receive incidental protection from the workings of this legislation. Where wealth is available it should be used to meet needs for maintenance, education and advancement of eligible persons. The significance of social benefits is related to the available resources. In my understanding this expresses the views on which this Court administers the legislation. See my observations in Wentworth v Wentworth (14 June 1991, unreported at 132) which appear not to have attracted criticism in the Court of Appeal (3 March 1992): 'The testator should not have disposed of all the family wealth in ways of his own choosing and left the family's economic casualty to relative penury or dependence on social agencies.' See too Parker v Public Trustee (young J, 31 May 1988) and Thom v Public Trustee (Master Mclaughlin, 2 april 1992), both noted in Leslie's Equity and Commercial Practice F30:1010." 58 His Honours comments are most apposite when considering the matter.

59 Here there has been no reference to how the receipt of funds might reflect on the eligibility for a pension and no evidence on this aspect was tendered. 60 I have also referred to the fact that Socratis has now left the house and has a permanent place in a nursing home. Under the terms of the will the proceeds from the sale of the house, which will have to happen now, can be used to fund the accommodation bond. The need for a large fund is no more. Given his life expectancy, his existing funds and liabilities for weekly payments a fund amounting to 4/10ths of the value of the house would be adequate. 61 As I indicated in argument the approach which the plaintiffs have to their entitlement has no place in our law. The Court can only make provision for a plaintiff when they have been left without adequate provision for their maintenance education and advancement in life. Here there is available evidence that the provision of the share of the home is an appropriate provision as it will fall into possession in a short time. 62 However, because of the present deficiency of income for Athina, and the doubts about Christina's husband's pension entitlements, they have been left without adequate provision at the moment. That can be cured by accelerating their entitlements so that they are now entitled to $270,000 each. I will not discount the sum as if the amount was paid in four years time the value of the property would most likely have increased. 63 The orders which I propose are:

1. In lieu of the provision in clause 5 in favour of the plaintiffs that each of the plaintiffs receives a legacy of $270,000.

2. The legacies in order 1 above are to be paid from the proceeds of sale of the deceased principal place of residence with the balance of such proceeds to be held upon the trust contained in clause 5 varied:

(a) to provide that the proceeds referred to in clause 5 (e) be held for Angela Chrisodoulou and Paul Chrisodoulou equally. (b) that the residence in Eldridge Street Cherrybrook be sold within six months of this order.

3. The plaintiffs' costs on an ordinary basis and the defendant's costs on an indemnity basis be paid or retained out of the estate of the deceased.

4. Interest payable if the legacy is not paid within six months of today's date on and from that date at the rate provided for under the Probate & Administration Act.

6. In the event that on or before six months from the date of these orders the legacies are able to be paid other than from a sale of the property, Order 2 is varied such that a sale of the house is not ordered but the trusts on which the property is held are to remain varied so that in lieu o the provisions in Clause 5 (e) of the will there is to be provided a 5/10th share to Angel Chrisodoulou and a 5/10th share to Paul Chrisodoulou.

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