William Bkassini v Sonya Sarkis

William Bkassini v Sonya Sarkis - [2017] NSWSC 1487 - NSWSC 2017 case summary — Zoe

[4]

The deceased's will and memorandum of wishes

By her will dated 21 April 2005, the deceased appointed Sonya to be her executor and trustee. She gave substantially all of her property to Sonya to hold on the trusts created by the will. She left nothing to William. Schedule 1 of the will contained the operative provisions of her testamentary trust. The primary powers of the trustee were set out in clauses 2.2(c) and 2.5(a).
Clause 2.2(c) stated: The Trustee may from time to time during the Year pay or apply the whole or part of the income to or for the benefit of any Income Beneficiary who is living or in existence at any time during the Year, in whatever shares and proportions that the Trustee in its absolute discretion determines…
Clause 2.5(a) stated: …the Trustee will hold the Trust Fund for such of the Capital Beneficiaries who are living or in existence (as the case may be) on the Vesting Date, and in such proportions as the Trustee in its absolute discretion determines on or before the Vesting Date.
The 'Vesting Date' was defined in clause 13.1 as including 'any date determined by the Trustee'. The 'Income Beneficiaries' were defined in the first schedule to include William and any child or remoter issue of the deceased. The 'Capital Beneficiaries' were defined in the second schedule as including any child or remoter issue of the deceased. William therefore was not a Capital Beneficiary.
These provisions make clear the broad nature of Sonya's power to administer the trust and distribute its income and capital. The deceased did not include in her will specific directions to her trustee. Instead, she executed on the same day a memorandum of wishes, which provided as follows: 1. This Memorandum is made with a view to indicating to my Executor of my estate the manner in which she should exercise her powers as trustee of the discretionary testamentary trust created under my Will. 2. During the lifetime of WILLIAM BKASSINI, I require my Executor to administer the trust primarily for the benefit of William so that in using her discretions she ensures that the income is used for his benefit and also within her discretion that the capital is used for his benefit but so that capital is not distributed to him absolutely but preserved for the benefit of my children. 3. Following the death of William I wish my Executor to: Pay the sum of $20,000 to my son SAM WILLIAM BKASSINI by way of acknowledgement that during my lifetime I provided financial assistance to my son ASSID BKASSINI and my daughter SONYA SARKIS and because I was not able to provide the same assistance to Sam. Divide the remainder of the fund into 3 equal shares and to hold each of those shares for the following persons respectively: (i) My son Assid Bkassini; (ii) My son Sam William Bkassini; and (iii) My daughter Sonya Sarkis. 4. I wish my Trustee, following the death of William Bkassini and the creation of the 3 individual family trusts, to consult with Assid and Sam as to whether they wish their one third share in the trust fund to be paid to them absolutely or to be dealt with in such other ways as they might agree with my trustee. 5. If Assid, Sam and Sonya wish to take their shares absolutely from the trust then the trust should be wound up and the trust fund distributed. 6. Once there has been a distribution to any of my children of their one third share in the trust fund, I would expect that my Trustee would not make any further distributions from the fund to that child or his children. 7. This Memorandum is signed in the knowledge that my Trustee will not be bound by the terms of this Memorandum but in expectation however that my Trustee will use her best endeavours to ensure that the terms of the Memorandum are implemented as nearly as may be possible and prudent in the light of circumstances generally pertaining at the time that she makes her decisions.
There is also evidence of the deceased's testamentary intent in a letter dated 15 March 2005 written by her solicitor, Mr Kirk McKenzie, to the deceased with which he enclosed a draft will, a draft power of attorney and a draft enduring guardianship form. Mr McKenzie confirmed some of the instructions that he had been given by the deceased, including "… I note your instructions that your husband is to have a right to continue living in your home until his death or until he leaves those premises".

[5]

The events leading to this application

Following the death of the deceased, William attended the offices of Mr McKenzie with Sonya. He said that he was not given a copy of the deceased's will and that he was under the impression that he was the principal beneficiary of her estate. This, he explained, was why he did not think it was necessary to make any enquiry about claiming further provision from the deceased's estate.
Sonya denied that the will was not explained to William, and called Mr McKenzie to give evidence in the proceedings. In an affidavit dated 8 April 2016, Mr McKenzie said that he did explain the operation of the deceased's will to William and, when William said that he thought he would get the deceased's shares in the two properties, told him that he may have rights under the Family Provision Act. Mr McKenzie added that he told William that, if he wished to challenge the will, he would have to obtain advice from another lawyer.
William responded to Mr McKenzie's affidavit in his affidavit dated 24 April 2017. He stated that he has no recollection of the conversation Mr McKenzie described and that, if Mr McKenzie did talk to him about the Family Provision Act, he did not understand.
In cross-examination, Mr McKenzie agreed that William was not his client for the purpose of the conference, but said that he explained the effect of the will to William because Sonya asked him to. During re-examination, Mr McKenzie confirmed the evidence given in his affidavit and said that William appeared annoyed when he learned of the effect of the deceased's will.
From the death of the deceased until May 2013, Sonya carried out her duties as trustee of the deceased's testamentary trust in accordance with the memorandum of wishes.
In May 2013, what William described as a 'falling out' occurred between himself and Sonya. Sonya said that she and William argued on 7 May 2013, when she discovered that William's fiancée, Ms Lijin Zhao, was living at No 95, when he had said that she was living with her family in Riverwood. William claimed that Sonya threw Ms Zhao out of No 95 and left her crying in the street. Sonya denied doing so but Ms Zhao gave evidence to the effect that Sonya had in fact acted in the manner described by William.
William said that he told Sonya that he was going to sell the properties, and that it was only then that he found out that she was trustee of the deceased's share, because she told him that he could not sell them without her permission.
Following this argument, Sonya stopped William receiving the rent from No 93. She also stopped his receipt of board from the lodger at No 95. William changed the locks on No 95 so that Sonya could no longer use her key to enter the house on that property.

[6]

The claims made by the parties

William commenced proceedings against Sonya by summons filed on 29 January 2015. He sought orders under s 66G of the Conveyancing Act 1919 (NSW) for the appointment of trustees for the sale of No 93 and No 95 and for related orders.
In response, Sonya sought judicial advice from the Supreme Court of New South Wales in her capacity as trustee. As part of the application for judicial advice, Sonya prepared a statement of facts in which she described sums exceeding $285,000 that she claimed that William owed to her and was obliged to repay.
Slattery J heard Sonya's application for judicial advice. Sonya appeared in her capacity as trustee and Sam appeared as a beneficiary of the trust. His Honour handed down judgment on 28 September 2015 (see Application by Sonya Sarkis [2015] NSWSC 1369). Slattery J made an order under s 63 of the Trustee Act 1925 (NSW) to the effect that Sonya was justified in bringing a cross claim against William in respect of the matters described at [67] of his reasons. That and the subsequent paragraph provided: [67] In my opinion the trustee is justified in bringing a Cross Claim against William. The nature of the Cross Claim has been sufficiently explained above under the heading "The Conveyancing Act, s 66G Claim and the Cross Claim". But the trustee would not be justified in including every one of her putative heads of claim in the Cross Claim, only the ones that appear to be reasonably maintainable, less the ones, such as (6) for which credit should be given. These would appear to be the following: (1) Trust's share of Number 93 rent; (2) William's 50 per cent share of outgoings; (3) reimbursement of William's re-draws; (4) William's retention of lodger fees; allowance for (6) the Trust's 50 per cent share of mortgage repayments on Number 93; (8) occupation fee for Number 95. Thus of the original posited Heads of Claim in my view the trustee is justified in allowing for claim (6) and bringing all but claims number (5) and (7). [68] But as the court's analysis above shows, even these claims are in total less valuable than the plaintiff first anticipated. Leaving aside the smaller claims, and rounding the larger claims to the nearest thousand, and applying the logic to the claims that the court has set out above, the net position would appear to be as follows: the Trust could claim from William $29,000 for claim (1); $21,000 for claim (2); $31,000 for claim (3); and $26,000 for claim (8), making a total of $107,000. But from that an allowance against the Trust of $35,000 would need to be made in respect of claim (6). Thus the net potential claim is about $72,000. This is not a particularly large sum in the context of a Supreme Court action for the appointment of trustees for sale to two parcels of valuable real estate.
His Honour also noted that at [89] that: The Court has now dealt with the matters for judicial advice. In doing so the Court has declined to give the trustee any advice about William's threatened Family Provision Act proceedings. Such proceedings are not on foot. Any such advice would be theoretical.
As the application was made by Sonya under s 63 of the Trustee Act, Slattery J did not give Sonya any authorisation to cross claim against William in her personal capacity for any debt that she claimed William owed to her. Sonya did not need any authorisation to make such a claim, and any claim that she did make would be at her own risk. Nor in fact did Slattery J make any order concerning any claim that Sonya may have had as trustee for any fees or reimbursement out of the assets of the trust.
William received the statement of facts upon which Sonya based her application for judicial advice on 14 May 2015. By that means William learned that Sonya proposed to sue him to recover the amount of $285,000. That apparently caused William to think that the assets available to him would be inadequate if he only received the value of his half shares in No 93 and No 95 following their judicial sale.
On 21 May 2015, William's solicitors wrote to Sonya's solicitors to inform them of his intention to seek leave to amend his summons in the 66G proceedings to add a claim for family provision.
On 22 May 2015, Sonya's solicitors replied and stated that Sonya would not consent to William filing an amended summons. Between May 2015 and February 2016, the parties attempted mediation and the matter made its way into the family provision list. It does not appear that William's amended summons was ever filed.
On 12 February 2016, Hallen J ordered that William's application for family provision proceed by way of pleadings and granted William leave to file a statement of claim. William filed a statement of claim on 26 February 2016.
William made an application for provision out of the notional estate of the deceased pursuant to Part 2 of the Family Provision Act 1982 (NSW). The claim was made under the Family Provision Act rather than the Succession Act 2006 (NSW) because the deceased died before that Act commenced: see Succession Act 2006 (NSW) sch 1 s 11.
There may be some doubt as to whether the order for family provision that William seeks is the transfer of the deceased's interest in No 95 to him absolutely (closing submissions par 1(c)) together with a grant of a life interest in the income from No 93, or whether in relation to No 95 William only seeks a portable Crisp order in relation to the deceased's interest in that property (par 4). In later submissions, in response to a possibility raised by the court, William said that his preferred outcome is a "swap order", which would lead to William becoming the owner of the fee simple in No 95, and Sonya becoming the sole owner of No 93, subject I assume to William having some right for life to the income of No 93.
William applied for family provision more than eight years after the expiry of the prescribed period of 18 months contained in s 16 of the Family Provision Act. As a result he must obtain the leave of the court to make the application. Sonya argues that William should not be granted leave and opposes William's application for a family provision order.
As an alternative, if his application for a family provision order is unsuccessful, William maintains his application for orders under s 66G of the Conveyancing Act. William does not want an order that will lead to the sale of No 95 if, as a result of these proceedings, William will have the sole right to reside in that property. In respect of No 93, if that property would remain in co-ownership, William wants trustees for the sale of that property to be appointed.
In addition to these claims for relief, William makes a money claim against Sonya in her personal capacity. He claims that he paid Sonya $249,900 on 6 December 2004 and $70,000 on 24 July 2006, and seeks declarations that Sonya continues to hold those monies on trust for him, as well is an order that Sonya account to William for the sum of $319,900.
As an alternative to his trust claim, William claims that Sonya is indebted to him for the two sums and seeks an order for judgment against Sonya in those amounts together with interest.
Sonya filed a cross claim against William on 29 April 2016. She makes money claims against William in her personal capacity and as trustee of the testamentary trust established under the deceased's will. It will be convenient to defer the description of the claims made by Sonya in her cross claim until the following section, where I address the money claims made by the parties.

[7]

Money claims made by the parties

The parties made a number of money claims against each other throughout the course of the proceedings. William and Sonya both claimed against each other in their personal capacities, Sonya claimed against William in her capacity as trustee of the trust, William claimed against Sonya in her capacity as trustee of the trust, and Sonya claimed against the trust itself.
I will list the various claims in the order in which they will be considered by the court: 1. William claims that he is entitled to be paid sums of $249,900 and $70,000 by Sonya in her personal capacity. 2. Sonya claims that William is indebted to her personally in the sum of $267,555 (although the nature of that claim is contingent in a way that I will explain below). 3. Sonya originally claimed in her capacity as trustee that William is obliged to pay her half of a number of unauthorized drawings that he made against a loan facility to which William and Sonya are joint borrowers, which is secured by a mortgage over No 93, plus half of the interest that has accrued in respect of the additional drawings. 4. Sonya claims in her capacity as trustee that William it is obliged to pay her 50% of certain outgoings paid out of the trust assets in respect of No 93 and No 95. 5. Sonya claims in her capacity as trustee that William is obliged to pay her half of the rent that he received from the lease of No 93 and lodger's fees in respect of No 95 in excess of the amounts received by the trust from those sources. 6. Sonya claims in her capacity as trustee that William is obliged to pay an occupation fee in respect of his occupation of No 95 on the basis that William allegedly ousted her from No 95 on about 8 May 2013. 7. Sonya claims in her personal capacity that she is entitled to be reimbursed out of the assets of the testamentary trust for expenses paid on behalf of the trust out of her own pocket. The amount claimed is half of $112,110.98, being $56,055.49. 8. Sonya claims in her personal capacity that she is entitled under the terms of the testamentary trust to be paid an administration fee, which Sonya has calculated by reference to evidence of commercial rates charged by trustees as being $168,162.50. 9. Sonya claims in her personal capacity that she is entitled to be reimbursed out of the assets of the trust for the costs of the application for judicial advice that was determined by Slattery J that Sonya has borne personally, plus an additional amount for the legal fees of these proceedings.
The first six of the claims described above are properly capable of determination in these proceedings, as they are claims in respect of which William and Sonya are the only proper parties, even though Sonya has claimed in different capacities. The seventh to ninth claims are not properly capable of determination in these proceedings, as they are claims that Sonya makes personally on the basis that she is entitled to payment from the assets of the trust.
The claims that have been raised in the evidence by Sonya that she has a personal right to recover money out of the trust assets have not been pleaded. The proceedings are not properly constituted to determine the claims because Sonya has not joined all of the beneficiaries. However, the claims remain relevant because, to the extent that they are valid and will be pursued by Sonya, they may reduce the value of the assets of the trust and thus the potential notional estate of the deceased. The court will be required to form a view about the extent to which the assets of the trust may be depleted by these claims, even though it is not in a position to finally decide their validity or amount.
It is necessary to decide or assess these various claims before considering William's application for a family provision order, as the claims may affect William's financial position and also the size of the notional estate that may be available for distribution.
The parties have provided to the court a number of documents which will assist in simplifying the task of resolving or assessing the various claims.
First, Sonya provided a schedule called "Assets and Liabilities of the Testamentary Trust established pursuant to the last Will of the late Souad Bkassini". This document first listed by value all of the uncontroversial assets of the trust, including the half share in No 93 and No 95. The total value stated is $1,693,634.89. It then listed five claims that Sonya has made against William in her cross claim as trustee of the trust. The total of these claims is $194,902.50. Finally, it listed additional liabilities of the trust, being $55,352 as the trust's half share in the mortgage secured by No 93, and then three amounts to which Sonya claims to be entitled in her personal capacity to be reimbursed from the assets of the Trust. The total amount of the claims made by Sonya is $521,965.97. If all of the claims and obligations are valid, then the net value of the trust's assets would be $1,311,219.42.
Secondly, the parties provided the court with a document called "Joint Supplementary Submission" (Joint Submission) in which the parties have attempted to address the sundry claims that require consideration for the purpose of reaching agreement where that is possible, and where not, focusing on and identifying the areas of disagreement.
To some extent the Joint Submission overlays the parties' pleadings so that it informs the court as to the issues that have eventually been recognised by the parties and identifies the areas of agreement and dispute. It is a useful document in-so-far as it provides a proper basis for the court to elide a number of complexities and technical difficulties in assessing some of the evidence and submissions in relation to the issues raised by the pleadings.
Thirdly, the parties provided competing statements of William's assets and liabilities to the court. Those statements exhibit some measure of agreement, and identify where the parties are at issue concerning William's financial position.

[8]

William's personal claim against Sonya

It is common ground between the parties that William paid two amounts to Sonya in her personal capacity: $249,900 on 6 December 2004 and $70,000 on 24 July 2006.
The former amount was received by William as a result of a successful claim under an insurance policy in relation to an injury suffered by William, and the latter was an amount received by William following the conclusion of an employment-related claim that he made.
William's primary claim is that Sonya holds the two sums on express trust for him. He alleged in pars 11 and 13 of the statement of claim that each amount "was provided by the plaintiff to the defendant on the basis that the defendant would hold the money for the plaintiff, that it would remain the plaintiff's money and that it would be returned when he needed it and requested its return".
Alternatively, William claims that the two amounts were repayable as loans. However, William accepted at the hearing that if the two sums had been loaned to Sonya, they would have been repayable on demand. As William did not claim repayment until he filed his statement of claim on 12 February 2016, the loans would be statute-barred under s 14(a) of the Limitation Act 1969 (NSW), under which the limitation period for a cause of action founded on a simple contract is six years running from the date on which the cause of action first accrued to the claimant. Where a debt is repayable on demand, the right of action accrues when the loan is made, and it is that time from which the limitation period begins to run, rather than some later date upon which demand is actually made: see Fischer v Nemeske Pty Ltd [2015] NSWCA 6 (Barrett JA; Beazley P and Ward JA agreeing), following Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566; [1956] HCA 51.
Consequently, William adjusted his case at the hearing to claim that he and Sonya had a running account between them. William relied upon Meagher, Gummow and Lehane's 'Equity: Doctrines & Remedies' (5 ed), where the learned editors say at [39-010]: …When the nature of the dealings between the plaintiff and the defendant necessitates the keeping of an account, consisting of debts and credits, receipts and payments, on both sides, no question of set-off or counterclaim arises. It is only when a balance has been struck or ascertained, as the result of the taking of an account, that any sum is due by either party to the other. Set-offs and counterclaims have to do with counter veiling claims. No question of a countervailing claim can arise in the case of a running account.
In putting his claim on this alternative basis, William appeared to seize upon a statement made by Sonya in cross-examination to the effect that she and William had a "running account".
William did not plead a claim based upon the settlement of a running account between himself and Sonya. If it is available to him, it would not lead to an order that Sonya pay him $319,900. Rather, Sonya would be ordered to pay the balance after the account was settled, after allowing for any amount payable by William to Sonya.
In her defence, Sonya pleaded that there was no intention to create trusts in relation to either payment, she relied upon the presumption of advancement in relation to the payment of $249,900 and claimed that the payment of the $70,000 to her was the partial repayment of the debt owed by William and the deceased to her and her husband.
William gave the following evidence in his primary affidavit concerning the circumstances in which he made the payment of $249,900 to Sonya: 150. Shortly before I was to receive my compensation payout I investigated ways in which I might invest those monies. At the time I had wanted to purchase an investment unit. I had observed that I could buy a unit in Sydney for less than $250,000. I said to Sonya words to the following effect: "I can buy a unit with the amount I receive I would like to purchase an investment unit from the monies I have received from my claim. What do you think Sonya?" Sonya replied: "You cannot do that Dad because it will cause you to lose your compo payments". I also said: "I think then me and your mother should pay off the mortgage on 93 Frazer Street" but Sonya said to me, "You don't want to do that, it is better to let it pay itself off. What about I hold it for you? I can use it to help pay off my mortgage. It will be your money and will get it back to you when you need it and I will pay you interest that is equal to what you would get from the Bank. That way I save on some interest and you still get the same rate that you would have got from the Bank". 151. My wife and I agreed with that proposal and we then had a conversation with Sonya. I said to Sonya: "Your mother and I have decided to lend you this money to help you so that you can use it to pay off your mortgage. You can repay it when you are able to with interest at what we would get from the Bank." Sonya then replied, "When you require the money back and I am in a position to repay you just tell me and I will return it to you with interest."
Sonya said in par 116 of her 12 April 2016 affidavit that she had always treated the $249,900 as a gift and had always believed that it was a gift from William. She gave evidence of the assistance that she provided to her father in relation to the making of the claim that led to the receipt of the $249,900. Sonya gave evidence in par 118 of her primary affidavit of a conversation with her father and mother, which included: 118. … When I spoke to my parents, we had a conversation in both Arabic and English to the following effect: I said: "Your policy is going to get paid out. You are going to get $250,000." Mum: "You'd better give it to her, because you promised you would." Dad: "Yes you can keep it. You're the only one helping us and you deserve it. Just don't tell anyone. What are you going to do with it?" I said: "Put it on our home loan"…
Sonya gave evidence in par 119 of a conversation with her mother in which the deceased persuaded her to take the gift.
William's and Sonya's affidavits were both sworn over a decade after William made the two payments to Sonya. It is highly likely that the recollection of each witness concerning the precise circumstances in which each of the payments was made has diminished, and each witness may be influenced by the self-interested nature of the evidence they have given.
William did not seek to recover either sum until he filed his statement of claim on 12 February 2016, which was about a decade after he had made the payments to Sonya.
It is to be remembered that William's evidence was that Sonya had agreed to hold the money and return it to William when he needed it and requested its return. William's financial needs became acute after his falling out with Sonja in May 2013, when Sonya used her power as trustee of the testamentary trust to cut off much of William's income. William's need for money was so acute that he made unauthorized drawdowns under the loan facility that was secured by a mortgage over No 93 of $8675 on 12 December 2015 and $30,050 on 14 December 2015. Yet he did not demand repayment of the alleged loans until some months afterwards.
In relation to William's claim that Sonya holds the two sums on an express trust for him, the relevant principles are as summarised by Pembroke J in McEvoy v McEvoy [2012] NSWSC 1494, where his Honour said: [3] Where the existence of a trust is in issue, the principles are well established. The question is whether there is language or conduct which shows a sufficiently clear intention to create a trust. No formal or technical words are required: Registrar of the Accident Compensation Tribunal v FCT [1993] HCA 2; (1993) 178 CLR 145 at 165-166. Any apt expression of intention will be sufficient. In order to infer the relevant intention, the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties: Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) [2000] HCA 25; (2000) 202 CLR 588 at [33]-[34]. Subsequent conduct can be just as much an indicator of the coming into existence of a trust as it may be of the existence of an agreement: Reitano v Reitano [2012] NSWSC 1127 at [25]; Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72 at [46] (Hodgson JA, Mason P and Handley JA agreeing); Owens v Lofthouse [2007] FCA 1968 at [51] (Weinberg J); Strang v Strang [2009] NSWSC 760 at [68] (Nicholas J); Stillisano v Adami [2010] SASC 351 at [70] (White J). [4] The overall question is whether in the circumstances of the case, and on the true construction of what was said or written, a sufficient intention to create a trust has been manifested. It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created whether or not the creator is precisely aware of so doing, provided that, in substance, the creator intends that his or her actions should have the legal effect of creating the relationship which is known in law as the trust. If the language and conduct is such that an intention to create such a legal effect is manifested, then a trust will be created whether or not the words "trust" or "trustee" are used: Jacobs' Law of Trusts in Australia, 7th ed (2006), p 56; Owens v Lofthouse at [49]; Stillisano at [30]. [5] The objective nature of the question was emphasised in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, where Heydon and Crennan JJ said at [114]: The intention referred to is an intention to be extracted from the words used, not a subjective intention which may have existed but which cannot be extracted from those words. This is as true of unilateral declarations of alleged trusts as it is of bilateral covenants to create an alleged trust. It is as true of alleged trusts which are not wholly in writing as it is of alleged trusts which are wholly in writing. In relation to alleged trusts which are not wholly in writing, the need to draw inferences from circumstances in construing the terms of conversations may in practice widen the extent of the inquiry, but it does not alter its nature.
Although in his affidavit evidence extracted above William claimed that Sonya said "It will be your money", he also said that Sonya said: "I will pay you interest". The payment of interest is conventionally associated with loans. William's evidence was that he said: "Your mother and I have decided to lend you this money" and that Sonya could "repay it" when she was able. William said that Sonya replied that upon request and when she was in a position to do so: "I will return it to you with interest".
Considered as a whole, these are clearly words of loan and not trust. There was no suggestion of any agreement that Sonya would hold the money as a separate fund capable of being the basis of a trust. On the contrary, William said "you can use it to pay off your mortgage".
I am not satisfied that the evidence establishes that Sonya agreed to hold the $249,900 on an express trust for William.
William paid the $249,900 to Sonya by cheque. William says that if an express trust was not created, the words spoken at the time of the transaction obliged Sonya to repay the amount, so that it was a loan. Sonya's response is that, if the circumstances in which the money was paid to her were capable of giving rise to a resulting trust, in her case a presumption of advancement arose as she is William's daughter, and the evidence does not satisfy William's burden of establishing that he did not intend to make a gift when he paid the money to Sonya. The learned authors of Jacobs' Law of Trusts in Australia (8th ed) consider at [12]-[21] the uncertain state of the law as to whether the principles concerning resulting trusts apply to voluntary transfers of personalty. It is not necessary in the present case to attempt to resolve any juridical uncertainty on this issue. For the reasons that follow, I am of the view that the payment is now irrecoverable by William.
If the making of the payment to Sonya took effect as a gift because, as a matter of law, this is not a circumstance where a resulting trust can arise, then the payment is plainly not recoverable. If the circumstances may give rise to a resulting trust, then the question will be whether William has rebutted the presumption of advancement in favour of his daughter. In the face of the starkly different versions given by William and Sonya as to the circumstances in which the $249,900 was paid by William to Sonya, I am not sufficiently persuaded that William's version reflected reality to be satisfied that William has rebutted the presumption of advancement, assuming it to apply. Accordingly, I would find that William made a gift of the money to Sonya.
If that view of the evidence were wrong, then the consequence would be that William made a loan of the money to Sonya that was repayable on demand, and is now statute-barred for the reasons considered above.
The evidence does not establish that William and Sonya conducted a running account as that concept is known to the law, such that the payment of the $249,900 was intended by both William and Sonya to be a payment as part of an enforceable series of payments, with the effect that at any time the one was liable to the other according to what the balance of the account was. I do not accept that Sonya's reference to a running account in the course of her cross-examination was sufficient to justify a finding that there was a legally enforceable running account between the parties, as opposed to an informal reckoning of where the parties were in a long-running exchange of benefits within the family. In any event, as William did not plead a claim based upon a running account, it would not be appropriate for the court to permit him to make such a case adventitiously out of the results of Sonya's cross-examination.
As to the payment of the $70,000 to Sonya, William gave the following evidence: 157. The payment to Sonya was at her suggestion. Sonya said words to the effect of, "Dad, when you get your settlement monies from the Maritime Container Services case, pay it to me and then you don't have to pay tax. Also, if it shows up in my account you will not have to declare it to WorkCover. I can give it back to you when you need it." I agreed to give her the money on that basis, feeling confident that I could access that money at any time. I trusted her because she was my daughter who was also a solicitor who was giving me advice. I said to her, "Okay, if you think that is the best thing". 158. I have advanced to Sonya about $320,000. I had thought that the monies were loaned to Sonya, but I have recently learned that it may be that the monies were actually held on trust for me by Sonya…
In her affidavit dated 12 April 2016, Sonya responded to William's evidence concerning the $70,000 payment in the context of her evidence that she and her husband had loaned $267,555 to her parents. She said at par 49 that the $70,000 was a partial repayment of the loan.
The conversation that took place between William and Sonya at the time clearly contemplated, on William's version, that he was making a loan to Sonya. William's evidence was: "I had thought that the monies were loaned to Sonya, but I have recently learned that it may be that the monies were actually held on trust for me by Sonya". That evidence implies that William himself thought that he made a loan, but he had recently received advice that a trust may have been created. In these circumstances, I could not be satisfied that Sonya agreed to hold the $70,000 on trust for William.
Sonya did not claim that William paid the $70,000 to her as a gift. She said that it was a partial repayment of a net debt that William and the deceased owed to Sonya and her husband at the time. I will consider Sonya's claim that she made enforceable loans to William below.
Whether or not the payments that Sonya made to William and the deceased were legally recoverable, the evidence clearly establishes that Sonya made a substantial number of payments to or for the benefit of her parents. Either the $70,000 was a repayment of amounts loaned to William and the deceased, or it was effectively a gift and formed part of a series of reciprocal gifts made within the family. In either event, it would not now be recoverable by William.
If, on the contrary, the $70,000 was paid to Sonya as an enforceable loan, it was repayable on demand, and would now be statute-barred.
Consequently, William's claim that he is now entitled to be paid $319,900 by Sonya fails.
It will be necessary to deal with the costs of this aspect of William's claim below. It is not part of William's claim for a family provision order, and in principle William should be required to bear his own costs of this aspect of his claim, and should be required to pay Sonya's costs, which should have been borne by her personally rather than as trustee of the testamentary trust. I will return to this issue below.

[9]

Sonya's personal claim against William

Sonya did not plead in her cross claim that William is indebted to her in her personal capacity. Nonetheless, she claimed in her 12 April 2016 affidavit that, as at that date, William was indebted to her and her husband jointly for the sum of $267,555. Sonya said that of this sum, $111,303.64 was advanced during the time that the deceased was alive. Sonya did not ask for an order that William repay the amount of the alleged debt, but only sought to rely upon her claim defensively as a set off against any indebtedness that William may succeed in establishing against her personally.
As William has failed in his claim against Sonya, the issue of whether Sonya has a right of set off does not strictly arise.
It is not in the circumstances necessary for the court to decide whether Sonya would have been permitted to rely upon this unpleaded set off claim.
However, I will explain why I would not have found that the evidence establishes that Sonya is entitled to enforce the repayment of the alleged debt claimed against William.
I accept that Sonya kept a record of payments that she and her husband made to or for the benefit of William and the deceased. Sonya said that she only recorded payments that were to be repaid, and had not recorded other payments that she accepted had been intended as gifts.
Sonya did not give evidence of specific conversations or other communications with William and the deceased that would be capable of establishing that there was an enforceable agreement that William and the deceased would be jointly liable in law to repay the amounts claimed by Sonya. The alleged debts are based on no more than assertions by Sonya as to the legal consequences of the payments having been made by Sonya and her husband.
I have noted that Sonya, in her 24 April 2017 affidavit, in which she provided supplementary evidence on various issues in support of her case, gave evidence in par 81 to explain why she did not include in her affidavit in support of her application for probate of the deceased's will that the deceased owed a debt to Sonya and her husband. The explanation given was that after the deceased died, William said to her: "I will pay you the money we owe you". If that statement was made by William it would not have had any effect on any debt legally owed by the deceased to Sonya and her husband. It was apparently a statement made after the payments relied upon by Sonya up to that time had been made. I do not consider that this statement, if made by William, would have imposed a legal obligation upon William to repay moneys paid by Sonya and her husband for the benefit of William and the deceased.
The legal consequences of the payments must be considered in the context that William made a gift to Sonya of $249,900 on 6 December 2004, and that the payment of $70,000 on 24 July 2006 was either a gift or a repayment of monies paid to or for the benefit of William and the deceased.
The evidence establishes that William and the deceased often relied upon Sonya to manage their affairs because of their limited command of English and their inexperience in financial dealings.
All of the payments that Sonya now seeks to recover were made when the relations between the members of the Bkassini family were reasonably amicable. Whatever may be the truth of the claims now made by Sonya concerning William's conduct, the payments were made at times when family relations were sound.
Sonya did not seek to assert that the alleged debt was recoverable until she delivered her statement of facts in the application for judicial advice on 14 May 2015. That was some two years after her estrangement from William occurred, and appears to have been in response to the commencement of William's application for orders under s 66G of the Conveyancing Act on 29 January 2015.
The High Court in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; 209 CLR 95 laid down the following in relation to the issue of when the court should conclude that the parties to a transaction had an intention at the time they entered into it that the transaction would be enforceable at law as a binding contract: [24] …Yet "[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts". [25] Because the inquiry about this last aspect may take account of the subject-matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties. [26] In this context of intention to create legal relations there is frequent reference to "presumptions". It is said that it may be presumed that there are some "family arrangements" which are not intended to give rise to legal obligations and it was said in this case that it should not be presumed that there was an intention to create legal relations because it was a matter concerning the engagement of a minister of religion. For our part, we doubt the utility of using the language of presumptions in this context. At best, the use of that language does no more than invite attention to identifying the party who bears the onus of proof. In this case, where issue was joined about the existence of a legally binding contract between the parties, there could be no doubt that it was for the appellant to demonstrate that there was such a contract. Reference to presumptions may serve only to distract attention from that more basic and important proposition. (References omitted).
I respectfully adopt the following observations of Pembroke J in McEvoy v McEvoy [2012] NSWSC 1494 concerning the applications of these principles in a family context: [35] In this case, I do not think that the arrangement made between the first plaintiff and Bill McEvoy in relation to the acquisition and financing of the Jamberoo property amounted to a legally binding agreement. I am not satisfied that in the amicable family context that then existed, there was any contractual intention: Ashton v Pratt (No 2) [2012] NSWSC 3 at [32]. I repeat what I said in Conway v Critchley [2012] NSWSC 1405 at [6]: The formation of a legally binding agreement requires something tangible. Among other things, there must be actual contractual intention by each participant as well as reasonable certainty of terms and subject matter. A loosely formed shared idea, based wholly or partly on common expectations, mutual optimism and misplaced enthusiasm, to which greed and the hope of financial gain may be added in varying degrees, is not a contract. Nor does a mere consensus amount to a contract: ABC v XIVth Commonwealth Games (1988) 18 NSWLR 540 at 548. It is of the essence of contract that there be a voluntary assumption by each participant of a legally enforceable duty: Ermogenous v Greek Orthodox Community [2002] HCA 8; (2002) 209 CLR 95 at 105. Even more formal arrangements may not amount to a contract if the requisite intention is absent: South Australia v Commonwealth [1962] HCA 10; (1962) 108 CLR 130 at 154.
I am not satisfied that the circumstances in which any payments were made by William to Sonya, or by Sonya and her husband to William and the deceased, justify a conclusion that objectively the parties to the transactions agreed that legally enforceable obligations to make repayments would arise. As I have said, Sonya acted as the informal financial manager for her parents. In aggregate, substantial amounts were paid each way. The payments that are the subject of dispute were all made at times when, at least at a practical level, the Bkassini family operated as a functioning family unit. I make that finding while fully acknowledging that there may have been an undercurrent of animosity that surfaced with intense open disputes from time to time. Intense, intermittent disputes within families are not necessarily inconsistent with families operating in a domestic fashion which is objectively intended by family members not to be subject to external legal enforcement.
I have concluded that in reality the maintenance by Sonya of lists of payments and receipts was no more than an orderly attempt to monitor the position from time to time as to the relativity of the payments made both ways to ensure some level of proportionality between what had been received and what had been given.
None of the conduct of the parties before 29 January 2015 is consistent with Sonya or William believing that they had made recoverable payments to the other.
If, contrary to my finding that the payments made by Sonya and her husband made to or for the benefit of William and the deceased were not objectively intended by the parties to be recoverable loans, those payments did give rise to enforceable debts, then the debts were all repayable on demand. As such, each individual debt will have become statute-barred if it was created more than six years before Sonya formally made a claim to recover it. It is in reality an artificial exercise in the circumstances of this case to attempt to determine a time when the limitation period ceased to run. Sonya has not pleaded a claim for the recovery of the payments that she says comprise the debt owed to her by William. At par 47 of her 12 April 2016 affidavit, Sonya asserted that she had lent her parents about $267,000, and in par 50 she said that she did not propose to sue William for the debt, and was prepared to offer a covenant not to sue. An exhibit to her affidavit contained a schedule of payments. William responded in par 2 of his 14 September 2016 affidavit by refuting Sonya's claim. Sonya then in her 19 April 2017 affidavit asserted in par 5 an entitlement to rely upon the alleged debts owed by William as an "offsetting claim", and an exhibit to her affidavit referred to evidence that the payments were made. In practical terms William subsequently joined issue with Sonya as to whether he owed her the debts claimed.
It is not necessary for the court to decide the issue of whether the limitation period has ceased to run, and if so when that occurred. It is sufficient to note that if Sonya is treated as having formally made a claim for repayment of the debt by relying upon it as an "offsetting claim" in her 19 April 2017 affidavit, and if William is treated by his response as having accepted that a claim was made on that date, then any of the debts that arose before 19 April 2011 will be statute-barred. According to my calculations, based upon the schedule of payments provided by Sonya in evidence, of the total alleged debts of $261,200.46, an amount of $243,966.73 of those debts arose before 19 April 2011. If my calculations are correct, the amount of Sonya's claim which is not now statute-barred would only be $17,233.73.
In the circumstances, precision in calculation is not required. The point is that whatever may be the correct way to calculate how much of the total debt claimed by Sonya is now statute-barred, almost all of it is.

[10]

Sonya's claim for unauthorised drawings by William

Sonya pleaded in her cross claim that William had made six unauthorised redraws for a total of $41,575 from the loan secured over No 93. In his defence William only admitted the last two transactions, which were for a total of $38,625. Half of that amount is $19,312.50. However, the parties agreed in the Joint Submission that the relevant amount was $20,857.50.
I interpret the Joint Submission to mean that the parties agreed that the interest on half of the unauthorised redraws was $2785.80, but William disagrees that he is obliged to pay any amount in respect of the interest. The basis of William's position is expressed in the Joint Submission as: "As Sonya has frozen the account and William does not get the benefit of the monies, no interest should be payable". I interpret Sonya's response to be that, if the loan account has been frozen so that further redraws are not permitted, that is a result of a determination by the bank and not Sonya.
In my view, once William has agreed that he has made redraws on the loan account without the authority of Sonya as a joint debtor, and that half of the unauthorised redraws is $20,857.50, then, as well as the capital sum, William would be liable to account to Sonya for the interest on that amount that has been charged by the bank. It is irrelevant that for whatever reason William may no longer be permitted by the bank to make further redraws. He has received the benefit of the existing redraws, which have increased the aggregate amount of the loan, and accordingly the amount of interest that has been charged by the bank.
In her cross claim Sonya pleaded that William was liable immediately to account to her for these amounts, or alternatively that he was obliged to do so on the discharge of the mortgage. In his defence William did not admit this alternative claim by Sonya, but in his closing submissions he submitted that there would be a need for an adjustment for the two redraws when the mortgage was discharged. Nothing is said in the Joint Submission by William against the proposition that he is obliged to account for half of the amounts. He simply said: "Agreed".
The nature of this aspect of Sonya's claim changed after I reserved judgment. The court received a notification from counsel for Sonya that Sonya had reached an agreement with the bank that it would refund to her redraws made by William without authorisation of $38,625 (plus related interest and fees) and pay part of Sonya's legal fees in connection with that dispute. Sonya's position became that she no longer maintained this claim against William, but consequently his own financial resources would not be diminished by the need to meet this claim
Counsel for William responded to this development by acknowledging that the amount that William would be required to pay Sonya under her cross claim would be reduced. However, he submitted that the consequence would be that William would be liable to repay to the bank the amount by which Sonya's claim had been reduced. Consequently, the total amount of William's liabilities would remain unaltered. In principle, I accept that this submission is correct, although the evidence does not show what will happen concerning repayment of the bank.

[11]

Sonya's claim for reimbursement of expenses

In her cross claim, Sonya claimed that she in her capacity as trustee had paid expenses in relation to No 93 and No 95 for which she and William were equally liable, and sought a declaration that William is required to reimburse her for half of those expenses. Prayer 1 of the claims for relief shows that this claim is made by Sonya in her capacity as trustee.
The Joint Submission records, in Item 1 of Schedule A, a partial agreement between the parties as to the amount that William must reimburse Sonya as trustee. William agrees to an amount of $57,038.83 but Sonya asserts that the amount owing is $61,055.14. The difference arises because William claims to have paid $8030.62 of the expenses recorded in the schedule compiled by Sonya himself, and says that the amount that he must reimburse the trust should be reduced by half of that amount, being $4015.31.
William did not claim in his statement of claim that Sonya as trustee was obliged to reimburse him for expenses that he had paid. Yet Item 6 in Schedule A to the Joint Submission concerns an amount owed by Sonya as trustee to William. I must assume that the parties have agreed that this item should be taken into account in determining the balance owing between William and Sonya as trustee. Schedule B describes the amount as an excess in mortgage payments for No 93 paid by William compared to the payments made by Sonya. Sonya apparently accepts that she is obliged to pay William $46,752.40. William claims that the proper amount is $50,768.71. The increase claimed by William represents half of the $8030.62 referred to in the preceding paragraph above.
If William did pay the $8030.62 in expenses that he claims to have paid, he would be entitled to be reimbursed for half of that amount from Sonya as trustee. That would logically justify a reduction of $4015.31 from the amount that he is obliged to reimburse Sonya. It would not additionally justify an increase in the amount that Sonya is obliged to pay him, as that would involve double-counting.
William says in Schedule A that the payments that he made are listed in Schedule D. The reference should have been to Schedule C. That schedule contains a list of 11 items that total $8030.62, and are identified by reference numbers in Exhibit SS-03, which contains Sonya's records that were tendered in support of her reimbursement claim.
Schedule C contains an explanation that I infer is intended to provide a summary of both William's and Sonya's submissions on this dispute (without clearly identifying which is which). I infer that William says that the 11 items are all contained in Exhibit SS-02, which lists all of the alleged loans by Sonya and her husband to William that comprise the total debt of $267,555 claimed by Sonya that I have already dealt with above. William says that he used these monies to pay for the listed items. The point appears to be that, even if the money for the payments was provided by Sonya, it was provided as part of the alleged loans that Sonya does not now seek to recover in these proceedings. I infer that Sonya's response is to say that she initially included the items in the schedule in Exhibit SS-02, but subsequently realised that the payments ought to have been characterised by her as payments made in respect of the expenses of the properties for which William was liable to reimburse her for 50%. Sonya relies on par 14 of her affidavit dated 20 June 2016, where she swears that she made all of the payments listed in the schedule in Exhibit SS-03. The schedule and the associated records show that three of the items appear in Sonya's Visa statements and six items are referred to in Sonya's diary notes. I am satisfied on balance that each of the payments was made by Sonya in relation to one of the properties. Sonya has corrected the error that she originally made in relation to her description of the payments.
I find that William is obliged to reimburse Sonya as trustee for $61,055.14, and William is entitled to reimbursement of $46,752.40. The difference is a balance of $14,302.74 payable by William to Sonya as trustee.

[12]

Sonya's claims for shares in rent and lodger's fees

Sonya claimed in her cross claim that William had received and retained more rent from tenants of No 93 and more fees from lodgers at No 95 than Sonya had as trustee, and she claimed that William is liable to pay half of the difference to her.
The claim is based upon Sonya's equal co-ownership of both properties. Sonya pleaded that, between 18 May 2005 and 11 April 2013, William received rent from the tenants of No 93 of $185,512.78. The total rent paid in the period from 18 May 2005 to 30 November 2015 was $285,680.82. Sonya says that William's entitlement to half of the rent was $142,840.41, so that William had received $42,672.37 more than his half share.
This calculation is based on the fact that William received all of the rent up to 13 April 2013 and Sonya received all of the rent thereafter.
In his defence to the cross claim, William pleaded that the payments of rent to him in the period up to 11 April 2013 were retained by him with the consent of Sonya, and were distributions of income of the testamentary trust. Alternatively, William alleged that he was paid the rent with Sonya's consent under a common assumption that he would retain and spend the rent at his discretion, so that he would now suffer detriment if he were required to repay his excess share.
Sonya pleaded in her cross claim that William had also received and retained $61,130 paid by lodgers staying at No 95, so that he was required to pay her $30,565.
William's defence to this claim was in substance the same as his response to the claim for rent.
Schedule A of the Joint Submission suggests that the parties agree that the amount of Sonya's rent claim is now $21,354.06 (as Sonya has been continuing to receive the rent for No 93 and retaining all of it, so that over time the original imbalance in favour of William has been decreasing). Half of the amount of lodger's fees received by William is $36,274.25.
William asserted in Schedule A to the Joint Submission that Sonya had admitted under cross-examination at an unidentified point in the transcript that the retention of lodger's fees was a distribution of income from the trust. That assertion was denied by Sonya by reference to pages 95 and 96 of the transcript (which had nothing to do with the issue). The relevant part of the transcript is T 193.37-195.25. Sonya initially accepted that she allowed William to keep all of the lodger's fees up until about May 2003 "on the proviso that he would pay some bills". She denied that she had made a distribution of income to William under the trust. Sonya said that there was no income. The evidence does not make it clear whether in fact the trust earned income in any year in the strict sense of receipts less expenditures. No accounts for the trust were included in the evidence.
Clause 2.4 of the deceased's will empowered Sonya as trustee to pay or apply the income for the benefit of an Income Beneficiary, which included William. Clause 2.8 defined income, relevantly, as including receipts of money which is included in the assessable income of the trust for tax purposes, or is profit made by the trustee in accordance with the relevant taxation laws. It is likely, technically, that the gross amount of rent or lodger's fees was not income for the purposes of the will, without a reduction being made for relevant expenses. Strictly, Sonya probably could not have applied the whole of the rent and lodger's fees as distributions of income to William. The evidence does not permit a determination of whether any parts of the amounts paid to or retained by William could have been distributions of income (on the basis that the receipts exceeded relevant expenses). Clause 2.9 permitted Sonya to make determinations orally or by written instrument, but she was required to keep a written record of all determinations. There is no evidence of determinations to distribute income to William.
I find, however, that the reality of the matter is as set out in a letter from Sonya's solicitors to William's solicitors dated 10 October 2013 in which they said that: "Until recently our client remitted the entirety of this income to William, on the basis that William would use it to pay the utility bills on behalf of the Estate and retain any extra. His retention of these funds represents a discretionary payment of the income of the Estate to William by our client, in accordance with her powers under the trust deed…Our client continued with the arrangement despite the fact that William frequently failed to pay some utility accounts". Sonya responded to this statement by her solicitors by insisting that there was no income, but she admitted that she approved the letter. Sonya insisted that she was not now claiming back the money that she had effectively paid to William as a discretionary payment.
Although Sonya's solicitors' letter did not contain the same description of the basis upon which William was initially permitted to keep and spend the rent from No 93, I am satisfied as a matter of fact that the same arrangement was agreed to between Sonya and William in respect of the rent. While William was in a position to collect lodger's fees in cash in respect of No 95, he would not have been paid the rent for No 93 by the tenants or managing agent without the knowledge and consent of Sonya.
In my judgment Sonya allowed William to receive and spend the rent for No 93 and the lodger's fees for No 95 until the schism between the parties that occurred in May 2013. I am satisfied that that arrangement was intended by Sonya to be an informal distribution of the income of the trust to William.
The evidence is unclear as to what, if any, agreement was reached concerning William paying outgoings in respect of the two properties out of the income that he received. In particular, the evidence does not permit with any confidence a determination of whether William had agreed to pay all of the outgoings. All that can be said is that, as a result of these proceedings, William will be required retrospectively to pay the balance of his half of the outgoings.
I am not satisfied in these circumstances that Sonya has established that William has a liability to repay to her half of the amounts of rent and lodger's fees that William received before May 2013.
The evidence establishes, however, that between 7 May 2013 and 2 October 2013 William received $7000 in lodger's fees for the period after his dispute with Sonya commenced. On balance, I am not satisfied that Sonya agreed that William could retain this money as if it were a distribution of income from the trust. William is liable to pay Sonya half of this sum, being $3500.
There is some evidence that William has been able to earn income from lodger's fees after the period dealt with in the Joint Submissions. Although the amount received has not been quantified, William's final written submissions refer to William's capacity to earn $400 per week from taking in lodgers. In the absence of satisfactory evidence of the amount of any additional lodger's fees received by William, I am unable to take any such receipts into account.
I note that in Item 8 of Schedule A to the Joint Submission, William claims an amount of $8000 as an adjustment in rent, which I understand relates to rent received by Sonya in respect of No 93 that has not been included in any of the other adjustment calculations. William did not plead an entitlement to this amount, and his claim is disputed by Sonya on the ground that any rent that was received by her has been used to pay expenses, including in relation to No 95. In the circumstances I do not accept that William has established an entitlement to this amount.

[14]

Principles governing entitlement of one co-owner to an occupation fee

The Court of Appeal in Callow v Rupchev [2009] NSWCA 148, in a joint judgment of Beazley and Basten JJA and Handley AJA, set out the traditional basis upon which an occupying co-owner may be ordered to pay an occupation fee to a co-owner not in possession in the following terms: [31] The traditional grounds for charging an occupying co-owner with an occupation rent, for the benefit of a co-owner who was not in possession, were an actual ouster by the occupying co-owner which prevented the other co-owner from exercising his or her right to possession, a constructive ouster by denial of title, and a claim by the occupying co-owner to be recouped for his expenditure on permanent improvements which had increased the value of the property. The relevant principles, and the decisions on which they are based, were reviewed in Luke v Luke (1936) 36 SR (NSW) 310.
Their Honours added: [46] Under the traditional principles an actual ouster by the occupying co-owner involved a civil wrong, either a trespass to the person by assault or battery, or a physical obstruction which prevented the absent co-owner from exercising his right to occupy the property: Jacobs v Seward (1872) LR 5 HL 464 at 472-3…
The principles had earlier been set out somewhat more fully by Beazley JA (as her Honour then was), with whom Stein JA agreed, in Biviano v Natoli (1998) 43 NSWLR 695 at 700, in the following terms: A tenant in common is entitled to exercise acts of ownership over the whole of the common property without liability to be called upon to account in respect thereof: Luke v Luke (1936) 36 SR (NSW) 310. This general rule will be displaced, however, where a tenant in common has wrongfully excluded a co-tenant from exercising the right to occupation. At common law a co-tenant so excluded could sue for ejectment and for mesne profits: Goodtitle v Tombs (1770) 3 Wils KB 118; 95 ER 965, and could also bring a partition suit to charge the occupying co-tenant with an occupation rent: Pascoe v Swan (1859) 27 Beav 508; 54 ER 201. Long Innes CJ in Eq in Luke v Luke said at 314: "by excluding [a] co-owner from the exercise of his legal rights the tenant in common who so excluded his co-owner had committed a legal wrong". Long Innes CJ in Eq rejected the proposition that a co-owner who remained in occupation of property was, by that circumstance alone, subject to an occupation fee. An entitlement to an occupation fee only arose where there was conduct sufficient for the court to infer a denial of the claimant's title: see Chieco v Evans (1990) 5 BPR 11,297; Jones v Jones at 441 per Lord Denning MR. In Forgeard v Shanahan (1994) 35 NSWLR 206 Meagher JA reiterated the principles which govern the right to claim an occupation fee. His Honour stated at 223: ... Turning to the liability of a co-owner in occupation to pay an occupation fee, the position at law is fairly clear. He was not liable unless he excluded his co-owner, in which case he rendered himself liable in ejectment and for mesne profits, or if he constituted himself a bailiff, in which event he would be liable in an action of account, like any other bailiff: Re Tolman's Estate (1928) 23 Tas LR 29 at 31; Rees v Rees [1931] SASR 78 at 80-81. Indeed, the whole bias of the law against making a co-owner in occupation liable to account is precisely based on the rationale that if such a liability were to exist a co-owner could, by abstaining from entering into occupation, turn his co-owner into an involuntary bailiff. As far as equity is concerned, an occupation fee will be exacted in at least two circumstances: first, in a partition suit (or related litigation): if there has been an exclusion, the tenant in occupation will be charged with an occupation fee (see, eg, Pascoe v Swan (1859) 27 Beav 508; 54 ER 201); this is an example of equity following the law; and secondly, if the owner in occupation claims an allowance in respect of improvements effected by him, equity will permit such an allowance only on terms that he is accountable for an occupation fee - this is an example of he who comes to equity having to do equity: see Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476. There was no real dispute as to the correctness of these principles.
The Court of Appeal in Callow v Rupchev observed at [32] and [33] that the traditional grounds for determining when an occupation fee was payable became established in cases between siblings and other relatives, decided before significant changes in the law and cultural changes concerning home co-ownership between domestic couples, whether married or otherwise, after the Second World War. Their Honours then considered at [35] to [61] what they described as "'new' principles, based on cases dating from the 1970s" that "have established that a forceful ouster is not necessary where the domestic relationship has broken down and one co-owner, for practical reasons, can no longer live in the property with the other, and leaves".
The Court of Appeal concluded the following: [59] In McKay v McKay [2008] NSWSC 177, Brereton J reviewed a number of the authorities discussed above and concluded at [51]: I, therefore, agree with Purchas J in Dennis v McDonald and Beazley JA in Biviano v Natoli, that the basic principle that a tenant in common is not liable to pay an occupation rent by virtue merely of his being in sole occupation of the property does not apply in the case where a matrimonial or similar relationship has broken down and one party is, for practical purposes, excluded from the family home. Upon breakdown of a domestic relationship, if it becomes no longer reasonable or practicably sensible to expect the partners to co-occupy the one property, the one who remains in possession may be taken to do so to the exclusion of the other, and to be liable to pay an occupation fee. At present, however, Biviano would seem to restrict that to a case in which the exclusion was not authorised by a court order - whether under matrimonial legislation or an [apprehended personal violence order]. [60] This statement of principle may be accepted, subject to the qualification that, viewed in the context of the broader authorities, Biviano should not be seen as restricting the allowance of a notional occupation fee to those cases where the exclusion was not required or authorised by a court order. That conclusion accords with the statement of the law set out by K Gray and SF Gray, Elements of Land Law (5th ed, OUP, 2009) at [7.4.44] in the following terms: To this basic common law principle of rent-immunity between co-tenants there emerged, over the years, a number of overlapping exceptions, most of which involved some trauma in the personal or family relationship of the co-owners. It came to be accepted, for instance, that an occupation rent is payable by a co-tenant whose sole occupation was achieved by the intentional ouster or violent exclusion of another co-tenant or where termination of a personal relationship made it "unreasonable" to expect continued joint occupation. Likewise a co-tenant who claimed credit for improvements, repairs or mortgage outgoings paid on the co-owned land was normally required to give credit for a notional rent to be assessed in respect of any sole occupation which he had enjoyed.
The development in the law that recognises an entitlement in a co-owner in a domestic context to receive an occupation fee when forced to leave because of the breakdown in the relationship with the co-owner, and without the need to establish forceful ouster, reflects the reasonable expectation of the co-owners to enjoy equal and complete occupation of the property and the real loss and cost to the excluded co-owner from the fact of exclusion from the enjoyment of the expectation.
Sonya relied upon the authorities that have established the 'new' principles that I have considered, but those principles will not usually be appropriate for the situation where a domestic co-owner is not forced to leave the property held in common, but the co-owner dies and their interest in the property devolves to a party other than the remaining co-owner.
The nature of the problem may be illustrated having regard to the decision of the House of Lords in Jacobs v Seward (1872) 5 LR HL 464, which the Court of Appeal in Callow v Rupchev cited at [46] as authority for the traditional principles governing actual ouster. The House of Lords held that, where there were two co-tenants of fields used to grow grass for hay under leases from different co-owners, one co-tenant could not sue the other in trespass where the other grew grass on the whole of the land held in co-tenancy, and harvested and removed the grass for use as hay. That was so as long as the defendant co-tenant did nothing to exclude the plaintiff, and only used the land for its proper purpose, and did not in any way destroy the common property. The only action available to the plaintiff was a statutory action for an account in relation to the profits from the use of the common property.
The point is that in the traditional case each co-owner is entitled to full use of the property owned in common as if they were the only owner, without committing trespass, provided they use the property for its proper purpose and do not in any way destroy it.
The case where the interest of a co-owner passes by devolution to a party outside the pre-existing domestic relationship between the co-owners may be the reverse of the case the subject of the 'new' principles. The new co-owner may be entitled to an order for judicial sale of the property unless the remaining co-owner can avoid that result by means of some relief such as a family provision order in relation to the devised interest in the property. But pending any sale of the property, the usual expectation will be that the property will continue as the home of the remaining owner and will not be the home of the new owner.
Although in this case the deceased devised her interest in No 95 to her daughter, Sonya, she could have chosen a stranger as trustee of the testamentary trust. It may be instructive to reflect upon the consequences of the deceased's solicitor or accountant, having been appointed as trustee, exercising rights akin to those exercised by the defendant co-tenant in Jacobs v Seward. William might return home one night to find a stranger sitting at the kitchen table having dinner after having cooked sausages on the stove!
This concern is not limited to the case where the new co-owner is a trustee and a stranger to the relationship between the original co-owners. Sonya was a daughter as well is a trustee, and she had a right under cl 3.1(o) of the deceased's will "to permit any Beneficiary to occupy property included in Trust Fund rent free or otherwise and/or whatever terms which the Trustee in its absolute discretion thinks fit". Sonya could have permitted William or her brothers or herself or the deceased's grandchildren to "occupy" No 95 as a co-tenant. Putting aside the possibility that William would be given the right, it would remain the case that none of the other Beneficiaries had a real need or expectation that they could live in No 95 as their home in the same way as William.
The same would be the case even if the deceased had left her interest in No 95 to one of the Beneficiaries outright. It would still be a matter of concern that the law would oblige William to pay an occupation fee to the new co-owner if he took steps which prevented them from making full use of the property in the same way as the deceased had before her death. That is at least so in cases where the new co-owner has no real need to reside in the property, and would not suffer any real loss as a result of the property continuing to be the home of the remaining co-owner in accordance with that person's natural expectations.
The present case should be determined by applying the traditional principles, but having regard to the reality that No 95 has always been William's home, and none of the other beneficiaries of the deceased's will, including Sonya, have had any genuine need or desire to occupy the property with William.
In my view the court is entitled to look closely at the real circumstances of the co-ownership.

[15]

Significance of the use of locks by one co-owner

Even in a case where the common property is agricultural land, the House of Lords in Jacobs v Seward had the following to say concerning the use of locks (at 473 per Lord Hatherley LC): It appears to me that there is not a single particle of evidence or circumstance of fact found in the case which would justify us in arriving at such a conclusion. All that is alleged that is approximate to it is this, that one tenant in common carried away this crop, and that he put upon the gate which was there, a lock. It is found expressly that there is no evidence as to whether that gate was always kept locked or not. The only circumstance that is supposed to lead to that inference is, that there is a finding that the Defendant did allow the Plaintiff's son to enter, or (as the expression is) did "open the gate to the Plaintiff's son" to enable him to go upon the land to carry off some former crop which existed upon the land. But even if there had been a finding that the gate was locked, that would not have been sufficient unless it had been shewn that the Plaintiff was excluded by that locking, or that on some occasion when he applied to have it opened it was not opened. The locking was essential if the grass was to be converted into hay, in order to prevent its being stolen and carried away by other persons during the course of the night, these fields being in the neighbourhood of London. Nothing whatever is said about what the object and intent of that putting on the lock was, and nothing is said whatever to the effect of the Plaintiff being thereby excluded, or of his ever having made application and having been refused entrance, nor is it said that when the gate was opened to the Plaintiff's son by the Defendant to allow him to enter, there was any difficulty upon the subject, or that anything passed between the parties which shewed that the intention of putting the lock there was to exclude the co-tenant in common.
Some of the observations made by Brereton J in McKay v McKay [2008] NSWSC 177 are material to this problem. In that case Brereton J found that a father on the one hand, and a daughter and the daughter's husband on the other, were tenants-in-common in equal shares in a residential property (albeit in equity). The three co-owners had lived in the property before the daughter and her husband were forced to leave the property because of a breakdown in personal relations. Brereton J said: [52] In this case, the plaintiffs left the property, in a sense voluntarily, in February 2002. However, I think it was not reasonable or sensible to expect them to continue to live there with the defendant. That involves no attribution of fault, simply that it was no longer sensible to expect all three to live there when there had been unpleasant, even violent, incidents between them. That would, on my view, entitle them to an occupation fee. But in this case, there is, in any event, more. The plaintiffs returned to the property once, but on their second attempt to return, found that the gates had been locked. The mere placing of a lock on a gate may not be enough to amount to exclusion [Jacobs v Seward (1872) LR 5 HL 464, 473]. However, in that case Lord Hatherley LC pointed out first, that there was no evidence as to whether the gate was kept locked or not - simply that there was a lock on it; secondly, that the defendant had allowed the plaintiff's son to enter when a request had been made; and, thirdly, that there was no evidence as to what was the object and intent of putting on the lock. In the present case, the evidence is that the gate was in fact locked. Moreover, the plaintiffs requested they be provided with keys and there was no response to their requests. In the course of this oral evidence, Mr McKay - when asked what he would have done had the plaintiffs attended and asked to be let in - said, "I would have made sure I had a witness and if they'd asked to come in, I'd have let them in, but I wouldn't have let them come in the place when I wasn't present because I was fearful of goods being taken and I would not have wanted them to come in unless I had somebody with me because of their actions and the way they had been behaving towards me". That intent is quite inconsistent with the rights of the plaintiffs as co-owners to occupy the property and to come to and from it as they please. [53] Thus, while it is true that in a sense they departed voluntarily from the property, that was in circumstances where it was desirable if not inevitable that one or other of the parties do so. After they departed, they were excluded physically by the lock on the gate, and that lock was accompanied by an intention inconsistent with their legal rights as co-owners. In those circumstances, I am satisfied that they were excluded in the relevant sense, and are entitled to an occupation fee against Mr McKay. [54] The proper measure of an occupation fee would seem to be half of the market rent of the property for the period of the exclusion [Biviano v Natoli]…
As appears from these authorities, where a lock is put upon a property or an existing lock changed, that is not the end of the matter. It is necessary for the court to consider the significance of the actions of the remaining co-owner in relation to the issue of whether in reality the co-owner who is not in possession has been excluded from the genuine use of the common property, and this may require the separate consideration of the issue over the length of the period of supposed exclusion.
This is an important practical consideration when it comes to changing the locks to a home so that the remaining co-owner can be confident of privacy and security. A home is a very special place, in that the occupants will store their treasures and will be most vulnerable, particularly when sleeping. It would be absurd to treat the locks in a home the same way as a padlock on a gate in a paddock. Even in cases where the new co-owner has some particular genuine need for access to the common property, the law should not necessarily recognise the right of access as being unqualified; to be exercised at will by the new co-owner at any time of the day. A measured approach is possible whereby requests for access can be made in circumstances that do not unreasonably impinge upon the amenity, privacy and security of the remaining co-owner.

[16]

Revocation by one co-owner of licence granted by the other

A further legal issue that requires consideration concerns the circumstances in which one co-owner has authority to revoke a licence granted to a third party by the other co-owner to enter upon the common property. This issue arises because of the dispute between the parties about whether, on 7 May 2013, Sonya effectively ejected William's fiancée from No 95.
In State of New South Wales v Koumdjiev [2005] NSWCA 247 Hodgson JA (with whom Beazley JA, as her Honour then was, and Hislop J agreed) said: [31] There is little authority or textbook discussion concerning the position where one tenant in common of property purports to grant permission to another person to enter the property, and another tenant in common purports to refuse or revoke that permission. … [40] In my opinion, the Hong Kong case is incorrect insofar as it asserts that, so long as a licence granted by a tenant in common does not purport to give exclusive possession, such a licence may both authorise another person, in the absence of the grantor and for an indefinite period, to do whatever a tenant in common can do, and also not be terminable by other tenants in common of the property. In my opinion, that gives too little weight to an incident of possession, namely the right or power to grant or withhold permission to others to enter property. Although one tenant in common can transfer or lease its interest, I do not think one tenant in common can, without such a transfer or lease, grant a licence to another, irrevocable by other tenants in common, if that licence is of a kind that goes beyond what is reasonable and incidental to the grantor's possession and use and enjoyment of the property in common with the other tenants in common, and which interferes with the possession and use and enjoyment of the property by other tenants in common. [41] For example, suppose there are two tenants in common of a small house, and one of them purports to grant a licence to twenty people to live in the house. If this amounted to excluding the other from possession, it would be a trespass; but if it fell short of excluding the other person, but was substantially detrimental to the other tenant in common's use and enjoyment of the property, in my opinion such a licence could be terminated by the other tenant in common, assuming that it went beyond what was reasonable and incidental to the grantor's possession and use and enjoyment of the property. That is, in my opinion, any licence in excess of what is reasonable and incidental to one tenant in common's possession and use and enjoyment of the property, and which prejudices the other tenant in common's possession and use and enjoyment of the property, is a licence terminable by the other tenant in common. Otherwise, in my opinion, there can be no reasonable reconciliation of the rights of both tenants in common to have possession and use and enjoyment of the property.
Consequently, in my view, in the present case Sonya did not have a right to terminate Ms Zhao's licence to be present at No 95 on 7 May 2013, as that was only a licence that did not prejudice whatever rights to the common property that Sonya may have had.

[17]

Assessment of amount of occupation fee

It is also necessary to consider the principles that govern the assessment of the appropriate occupation fee where it is established that one co-owner has wrongly excluded the other from enjoyment of the common property.
In Biviano v Natoli, Beazley JA made the following observations concerning how the amount of any occupation fee should be calculated (at 704): It is surprising that there is not more authority on this question. In my opinion, the starting point for the determination of the question is first, the principle that a co-tenant is entitled to the use and occupation of the whole of the premises and secondly, that the entitlement of the ousted tenant is to an occupation fee. The occupation fee is in fact mesne profits arising from the occupying co-tenant's wrongful ouster. Mesne profits are not rent: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39. They are calculated on the open market value of the premises: see Rock Bottom Fashion Market Pty Ltd (In liq) v H R & C E Griffiths Pty Ltd (unreported, Queensland Court of Appeal, 6 March 1998 per Dowsett J at 10-12). "The measure... is a reasonable sum in the nature of rent": see Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 at 252 per Somervell LJ. This is often proved in fact by relying on the amount or rental payable under an existing lease: see Atkin's Court Forms (2nd Ed) Vol 24 at para22; Halsburys Laws of England (4th Ed) Vol 27 para 255; Rock Bottom Fashion Market Pty Ltd (In liq) v H R & C E Griffiths Pty Ltd. Notwithstanding that a co-tenant has a right to occupy the whole property, I do not consider that it is appropriate to merely take the rental value for the whole of the property. It would be inequitable to do so because an actual letting of the property where there is already a co-tenant in occupation would not attract a market rental based on full occupation. It may not even attract 50% of the market rental. The onus of establishing the quantum of the occupation fee falls upon the party claiming it - namely, the ousted co-tenant. The respondent proved the rental value of the property based on there being no other person already in occupation. He did not prove the rental value on the basis that the appellant and her daughter also occupied the property, as they were entitled to do. Notwithstanding that, I am of the opinion that as the appellant did not seek to assert any lesser figure than 50%, that is the appropriate percentage to apply…
In-so-far as Beazley JA referred to the proof of the reasonable amount payable by relying on the amount of rental payable under an existing lease, by reference for example to the decision of the Queensland Court of Appeal in Rock Bottom Fashion Market Pty Ltd (in liq) v HR & CE Griffiths Pty Ltd [1998] QCA 033; [1998] ANZ Conv R 549, her Honour appears to be referring to cases where the plaintiff is solely entitled to possession of the whole of the property which is occupied by the defendant in circumstances that make the defendant a trespasser, such as when a lessee continues to occupy demised premises after the termination of the lease. It is natural in such a case that the occupation fee should equate to the rental value of the property.
Beazley JA seems to say that when the property is owned in co-ownership and one co-owner excludes the other, any occupation fee should be calculated having regard to the fact that the excluded owner has only lost the right to use the property equally with the excluding owner. It is, with respect, entirely logical to conclude that in the usual case a third party would not be prepared to pay 50% of the market rent, if the third party's entitlement to enjoy the property had to be fully shared with the excluding owner. If that is correct, then I would suggest, with respect, that the observation by Brereton J at [54] in McKay v McKay, made in reliance upon Beazley JA's judgment, that: "The proper measure of an occupation fee would seem to be half the market rent of the property for the period of the exclusion", will not always be correct.
In Biviano v Natoli at 704, Beazley JA said that the onus of establishing the quantum of the occupation fee falls upon the claimant, in this case Sonya. If that is the case, then the claimant should be required to lead evidence of the market rent for the lease of the claimant's interest as co-owner, on the basis that the other co-owner will retain all of his or her rights in respect of the common property. The question is what Beazley JA meant when she said "that as the appellant did not seek to assert any lesser figure than 50 per cent, that is the appropriate percentage to apply". I have taken her Honour to mean that, at the trial in that case, the appellant did not contest the appropriateness of the occupation fee being simply 50% of the market rent for the freehold. I have not taken her Honour to mean that the court will countenance the claimant putting forward an inappropriate proof (being the value of the market rent on the assumption of exclusive possession) so that the occupation fee will be calculated on that basis unless the other co-tenant puts forward positive evidence for some lower amount that takes into account the continuing entitlement of that co-tenant. In the present case William did not accept that the basis upon which Sonya calculated the amount of the occupation free was a proper way to do so.

[18]

Entitlement of Sonya to occupation fee

It will now be appropriate to address Sonya's claim for an occupation fee in relation to the evidence that was put before the court.
It is necessary to put Sonya's claim for an occupation fee from William in its proper context.
It is true that Sonya was equally entitled to occupy No 95 by reason of the fact that at law she was a tenant in common with William. However, No 95 was the former matrimonial home of William and the deceased which they had occupied from 1979 until the deceased's death in 2005. Sonya acquired her title under the deceased's will as trustee of the testamentary trust. The circumstances in which Sonya acquired her interest in the property did not affect her common-law right to enjoy the occupation equally with William, but at least so long as she did not take any steps to have the property sold, as a matter of common sense the fact that she held her interest as trustee of the discretionary trust is relevant to the reality of the likelihood that Sonya would wish to occupy No 95 on equal terms with William.
Sonya at all material times had her own place of residence with her family and no need or actual desire to occupy No 95 with William.
Up until May 2013, Sonya was able to access No 95 for whatever limited purposes she desired, and was in possession of a key for that purpose. The real source of the turn of events that led to the alleged exclusion of Sonya from No 95 was Sonya's intolerance of William living in the former matrimonial home with Ms Zhao. From that time, on her own admission, Sonya has not been on speaking terms with William, and I infer would not have wanted to enter No 95 when there was any possibility of her confronting or having to converse with William, or Ms Zhao.
William acknowledged that he had changed the locks and placed a chain on the back door immediately after the events that led to the breakdown in his relationship with Sonya.
William made a suggestion that his purpose in changing the locks and placing a chain on the back door was not to exclude Sonya, but was part of a campaign that he engaged in to cause the lodger at the time to pay him rent rather than pay the rent to Sonya. I will return to this issue below. There may be some logic in William having chained the back door to prevent the lodger getting into the house, but that could not be a reason for changing the locks. The original locks would have prevented the lodger gaining entry to the house. The only person other than William who had a key that would work on the original locks was Sonya. The changing of the locks must have been directed at Sonya.
William gave evidence that he came home to No 95 one night to find Ms Zhao standing out in the street. It was William's position that Sonya had forced Ms Zhao out, telling her that she had no right to be in the property.
Ms Zhao gave evidence that Sonya let herself into the house with her key and, finding Ms Zhao there, yelled at her something like: "This is my house why are you here?" Both Sonya and Ms Zhao gave evidence that Sonya then called someone who could speak Mandarin to act as an interpreter. Ms Zhao said that Sonya asked her through the interpreter whether she was with William because of his money and properties, and that when she replied that William was a nice man and treated her well, Sonya replied: "No that is not true because William used to beat his wife and he has other women as well". Sonya also said: "In the Lebanese religion if your wife dies you cannot remarry, if you marry him you will violate his religion". Later, Sonya said in English: "This is my house, you can't stay here, you have to get out". Ms Zhao said that Sonya pushed her outside the house and closed the door and said: "If you marry my dad I will send someone to kill you". Ms Zhao had to wait outside on the street crying for about two hours until William came home.
Sonya said in her affidavit in reply to William's affidavit that she attempted to converse with Ms Zhao, but gained the impression that Ms Zhao did not understand what she said. Sonya said that she was told through the interpreter that William had asked Ms Zhao to stay in the house. She also said that the conversation was not heated, and that she did not force Ms Zhao out. Sonya said: "I contacted my father and he hurled abuse at me". The order in which this evidence was given suggested that Sonya called William after she had left No 95.
Sonya elaborated her evidence on this subject in an affidavit dated 28 April 2017. She said that she attended No 95 with her husband, George, and said that after they discovered Ms Zhao in the house, she telephoned William who was in Melbourne at the time. Sonya said that she asked William what Ms Zhao was doing in the house, as William had told her that she would live at a relative's house. Sonya said that she said to William, "You said she wouldn't be living here," and that William replied: "What do you want me to do? I can't leave her out on the street". The conversation conveyed that William was allowing Ms Zhao to live in the house. Sonya said that the conversation concluded with William yelling and swearing and saying words to the effect: "Burn your God, I am your father you're not my father, I will do what I want".
Sonya said she left the house with George to collect the rent from the lodger, before returning to continue speaking with Ms Zhao. It was at this point that Sonya called a friend to act as an interpreter. She said that she first called a friend who spoke Cantonese, but that this friend said that Ms Zhao appeared not to understand Cantonese, and recommended that Sonya find someone who speaks Mandarin to act as an interpreter. Sonya then called a person whom she referred to as a "contact" to interpret in Mandarin.
One of the things that Sonya said that she said to Ms Zhao through the interpreter was: I don't know if my father told you but we own this house with him. It is our family home for the kids and grandchildren. My father said that you live with your family and that you don't live here. I was shocked to find you living here when my father said you don't live here. I was also upset with my father.
Sonya relayed the remainder of the conversation that she said occurred via the interpreter and said that Ms Zhao walked her and George out the front door when the conversation finished. Sonya did not call George or the interpreter to give evidence in the proceedings. The only evidence of the conversation was that given by Sonya and Ms Zhao.
Ms Zhao was cross-examined on the subject of her conversation with Sonya (T 147.3 to 147.44): Q. You gave some evidence in your affidavit about an occasion when Sonia Sarkis came to the house at 95 Fraser Street, do you remember that evidence? A. INTERPRETER: I don't know, who's Sonia? Sonia I know. Q. William's daughter? A. INTERPRETER: Yes. Q. You had a conversation with William's daughter through a translator that was speaking over the phone; is that right? A. INTERPRETER: On the telephone conversation, no. At my home. At my home. Q. That took place in 2013, didn't it? A. INTERPRETER: Approximately, yes. Q. Four years later you came to prepare your affidavit in these proceedings; is that right? A. INTERPRETER: How did you calculate? Okay, 2013, yes, it's about right. Q. By then, that is to say by 2017, you'd forgotten some of the detail about what was said at that meeting at your house. That's right, isn't it? A. INTERPRETER: I can remember some of the content when we were talking that time. Q. But you've forgotten some of the content; is that right? A. INTERPRETER: I have tried my best to remember. What I've forgotten was very, very rare, very little. Q. Where you said in your affidavits "Sonia said to me 'If you marry my dad, I will send someone to kill you'", that never happened, did it? A. INTERPRETER: It's not happened. I'm still here, but she said that. Q. I'm suggesting to you that you might be mistaken in your recollection about that conversation; do you agree with that? A. INTERPRETER: I had a deep impression over this, I had a good memory about this because that words threatened me. I was very, very terrified and scared at that time. Q. Was Sonia Sarkis' husband George with her the whole time this conversation was occurring? A. INTERPRETER: Yes.
Sonya was cross-examined about her meeting with Ms Zhao on 7 May 2013 (T 196.42 to 199.50): Q. When you found Lijin at the property on 7 May 2013 that upset you very much; didn't it? A. Yes, it did. Q. There is no way that you want to take up and occupation the premises at number 95; is there? A. Well, actually, Mr McNally, I would have loved to have been living there while I'm renovating my house. Q. I see. What with your whole family? A. Yes. Q. Did you ask? A. Well, I can't make contact with my father. Q. It's pretty simple, isn't it? You could get your solicitors to make a request if that's what you like? A. Well, we made requests for keys and that was difficult. Q. You have keys to the premises; don't you? A. A key. Q. Let's be realistic. There is no way you would want to live in the premises with Lijin being there with your father; would you? A. Well, my mother never wanted my father to be living there with any woman. Q. It upset you so much when you discovered her there that you kicked Lijin out of the premises on 7 May 2013; didn't you? A. No. Q. Do you say that when you met her there, after being initially surprised, it was quite a civil meeting? A. I couldn't speak to her, she couldn't speak to me. Q. Indeed you know there's a dispute as to what happened during that meeting; don't you? A. Yes. … Q. I'm just referring to your first affidavit which you filed in these proceedings which is 12 April 2016? A. Yes. Q. In that affidavit at paragraph 134 you give a version as to what occurred on 7 May 2013? A. Could I see that version? Q. Not just yet, I'll let you have a look at it shortly but you say that you attempted to converse with Li but she couldn't understand? A. That's correct. Q. You say the conversation was not heated? A. It was it wasn't heated on my side, it was heated there was a part of it when she started raising her voice and I went, and then she started smiling. Q. You refer to that in your second affidavit but in your first affidavit this is what you say in paragraph 135, you say, "She said through the interpreter, "Your father ask me to stay here". You then say, "The conversation was not heated and I did not force her out. I contacted my father"? A. Yes. Q. You say he was abusive towards you? A. Yes. Q. There's no suggestion there at all that Lijin started screaming at you, is there? A. She wasn't screaming at me, she was screaming at the interpreter. She wasn't Q. Just a minute, there's no suggestion that Lijin was screaming at any time in that particular, in your first affidavit, is there? A. Perhaps I should have put more detail, Mr McNally. I didn't realise, I thought it was a fabrication that my father made up. I didn't think that it would be an affidavit that Li would put forth. Q. But what you've done is you've set forward there conversation that you had in respect of or conversation with Lijin, you've put that in your first affidavit, haven't you? A. Did I make a reference to a conversation, yes. Q. You knew it was an important issue because your father was saying that you had kicked out Lijin from the premises? A. I actually didn't know it was an important issue. It was just one of those things that my father went crazy at me for. I didn't know that it was going to be an important issue until we got the affidavit from Lijin. Q. On your version of the conversation there was nothing at all for Lijin to be upset about, was there? A. She, well it was an awkward situation, Mr McNally. She was a woman that couldn't understand me, I couldn't understand her. I rocked up at the house thinking that the house has been robbed to find her opening the door and my father told me she wasn't living there so it was a very awkward situation. Q. In your second affidavit you paint a picture of it being a calm conversation between you were pleasantries were exchanged? A. It was, it was pleasantries exchanged after a certain point. When I got the second translator, in fact I actually forgot that there were translators, it was Lijin's affidavit that reminded me that there were two interpreters because, that's right, she couldn't the first one was Cantonese and she spoke Mandarin. It was awkward in the first part and then in the second part it was very pleasant. Q. You left on a pleasant basis? A. Absolutely, she closed the door after us and walked us out. Q. It all seemed very civil and calm? A. Absolutely, she was very she was actually very sweet, she said she said, "I know you struggled to have to fall pregnant" and she said something else, she said, "I will speak to your father. I understand". She was actually very nice to me. Q. On your version of events there was absolutely no reason at all for Lijin to be out on the street crying later that day, was there? A. Absolutely not, she locked the door after us. Q. But if in fact Lijin's version was correct then there's every reason for her to be out on the street crying because you pushed her out of the house? A. Mr McNally, I wouldn't do that and second of all I was pregnant, heavily pregnant. Q. But if her version is correct there's every reason for her to be out on the street crying, isn't there? A. Her version isn't correct. Q. Would you answer the question? A. If, yeah, if I kicked her out I would understand that she would be crying. Q. You did kick her out, didn't you? A. I did not kick her out. Q. Because you were upset that someone was taking the place of your mother in your mother's house? A. No, Mr McNally.
I do not feel able to make findings with any precision concerning the substance of the conversation that took place between Sonya and Ms Zhao. Ms Zhao conceded that her understanding of English was very limited, and the circumstances in which the interpretation took place were not ideal. As Sonya's own evidence established that she was upset to find Ms Zhao in the house, and her conversation with William ended with William strenuously asserting that he could permit Ms Zhao to live in the house if he wished, it is improbable that Sonya had the mild conversation with Ms Zhao that Sonya claimed took place. Sonya's evidence establishes that it was her view that she owned No 95 equally with William, and that the property was the family home for the kids and grandchildren, not William and Ms Zhao. It is significant that Sonya's husband did not give evidence to corroborate Sonya. No explanation was provided for the absence of any evidence from George or from the interpreter.
It must be remembered that it was this event that precipitated an emotional upheaval in the family that spawned many regrettable consequences including these proceedings. Sonya conceded that Ms Zhao's presence at No 95 upset her. The consequences of that discovery suggest that Sonya was extremely upset.
I accept, however, Ms Zhao's evidence that Sonya, by one means or another, required her to leave the property, that she complied, and that she was locked out and subsequently spent time upset and crying in the street until William returned. I also accept William's evidence that when he returned he found Ms Zhao outside in the street.
William, as a tenant in common of the property, was entitled to invite his fiancée to live with him at No 95. Sonya was not entitled to eject Ms Zhao. In-so-far as William changed the locks and put a chain on the back door, his actions had the practical effect of denying Sonya free access to the house, but not to the rest of the property. William's conduct did restrict Sonya's equal enjoyment of the whole of the property. However, it cannot be ignored that William's actions were a response to Sonya's ejection of Ms Zhao and her implicit refusal to allow Ms Zhao to live with William in the house. There is at least an element of justification in William's conduct in protecting his long-standing home and his fiancée.
The issue is more complicated because the granny flat was occupied by a lodger called Mr Christian Lemech between 1 August 2011 and 6 December 2013. Mr Lemech gave evidence in Sonya's case. He said that he made an agreement with Sonya to rent the granny flat for $250 per week including utilities. He paid Sonya $1000 in cash every four weeks during the term of his licence. This continued after May 2013, but instead of paying Sonya on the property, he met Sonya on the street in front of the property to hand her the cash. The reason for the change was that Sonya said to Mr Lemech: "I don't want to come into the property to collect the rent from you". That is more evidence that Sonya did not want to enter No 95, even though there is no apparent reason why she could not have entered the yard to meet Mr Lemech.
Mr Lemech's evidence was that he had a cordial relationship with William up until May 2013. Thereafter, William demanded that Mr Lemech pay him the rent directly rather than pay it to him through Sonya. Mr Lemech refused and continued to pay Sonya. On the basis of Mr Lemech's evidence, William then engaged in a form of guerrilla warfare by frequently disconnecting the electrical power from the granny flat, which ultimately had the effect that Mr Lemech terminated the arrangement in November 2013.
From May 2013, Sonya ceased to pay any of the rent from the granny flat to William. I infer that it was this action by Sonya that caused William to try to persuade Mr Lemech to pay the rent directly to him. As one of two tenants in common, William was entitled to receive half of the rent. Sonya's conduct prevented William receiving his share of the rent and was in a real way a denial of William's title to the property.
The detail of Sonya's evidence concerning the events of 8 May 2013 is contained in her affidavit dated 28 April 2017. William's evidence on the subject was included in his 7 December 2015 affidavit, although Ms Zhao's affidavit was not made until 18 April 2017. 28 April 2017 was the Friday before the commencement of the hearing on 1 May 2017. I do not know when Sonya's affidavit was served on William. It was formally filed in court and read on 4 May 2017. Sonya's affidavit not only dealt with the discussion with Ms Zhao in more detail, but it also deposed to conversations with William that were related to the circumstances in which William changed the locks and put a chain on the back door.
Sonya gave evidence of a telephone conversation with William on 8 May 2017, in which William accused her of kicking Ms Zhao out of the house, and said that it was his house and Ms Zhao "will live where I want her to live". Sonya said that he added: "You come here I will bury you near your mother. I don't care that you're pregnant I will kill you and your unborn kids. Try me?"
Sonya gave evidence of another telephone conversation with William on that or the next day, in which William accused her of taking his papers from the house and said: "… Give me back my paperwork. I've changed the locks. You can't get into the house. You come here I will kill you and bury you. If you come to the front door, I will kill you. It's my house."
According to Sonya, she felt terrified of William, but after many months she returned to No 95 with her brother Sid, in the company of a police officer, and found when she put her key into the front door, it did not work. She saw a chain on the back door. She then said in her evidence: "Due to fear of my father, I have not returned to the Property since that day".
William was examined in chief on 1 May 2017. He was not asked about the conversations deposed to by Sonya in her affidavit. William was cross-examined briefly on the subject on 2 May 2017 as follows (T 89.30 to 90.12): Q. Up until about 2013 Sonya had a key to your house, didn't she? A. WITNESS: Yes. Q. You had a disagreement with Sonya following which you changed the locks and put a chain across the back door, is that right? A. INTERPRETER: When I did that the disagreement had not become bigger. Since my late wife passed away her room that she used to sleep in was kept locked, no one to go in. I had my clothes in it. My stuff in it, bank books, all the bank books, accounts and three banks in Lebanon. A. WITNESS: And the chequebook, my chequebook, the home all home every A. INTERPRETER: Every time you paid, one paid they would stamp the book. A. WITNESS: All the withdrawals in my small box. A. INTERPRETER: In a drawer and in a small box. A. WITNESS: And Sonya, they take my passport Lebanon, they take my Lebanese passport, they took before my citizen, Australian citizen, all everything I asked them they ..(not transcribable).. When I ask I want them I no see of them. Who take them? Sam doesn't have key. Sid doesn't have key. Rachel have key. A. INTERPRETER: I took it away from her. When she was bringing the kids I would wait for her in the street to open up for her and then she threw the key at me, she said, "If I can't use it to open the door why did you give me the key?" After now we get to Chris. A. WITNESS: Chris, they used to Q. I haven't asked you any questions about Chris, Mr Bkassini. A. INTERPRETER: They're altogether. A. WITNESS: Altogether, sorry. Q. Could you just do me the courtesy of attending to my question, Mr Bkassini. A. WITNESS: Sorry, sorry.
This cross-examination is plainly not very informative. William was not cross-examined about the conversations that Sonya said she had with him in her final affidavit. He was not asked questions about how he would have responded if he had been asked for a key before the offer was made in his defence to the cross claim.
A difficulty that exists in this case is that, apart from Sonya's strong emotional attachment to No 95 as her childhood home, and the home of her mother, Sonya had no need at all for access to the property except to see her father. She never had any real prospect of earning income from the property except for the discretionary trust's half interest in any rent payable by lodgers in respect of the granny flat. It is her evidence that the real and operative reason why she never after 8 May 2013 tried to enter the property for whatever reason she may have had was that she was afraid that William might commit violence towards her. There is no doubt that the relationship between William and Sonya descended into bitterness, but the operative cause of that was the conduct of Sonya in response to learning that William had decided to live with Ms Zhao in the property, whereby she cut-off William's access to all of the money he had previously received during the time when Sonya complied with the deceased's directions in her memorandum of wishes.
The evidence strongly supports a conclusion that the Bkassini family was tempestuous and given to strong words. I have found it difficult to accept that any particular member of the family made a particular statement on the uncorroborated evidence of any other member of the family. I am prepared to accept that William may well have threatened Sonya's life, as she claims, but I also note Ms Zhao's evidence, extracted above, that Sonya threatened that, if she married William, Sonya would send someone to kill her. Such statements, if made, could never be condoned, but I suspect they may have been made with some regularity within the family. There is no evidence that any member of the family ever acted to carry out such threats, or that there was any real intention to do so. Statements of that nature are still serious threats which cannot be ignored. However, if William made such a threat to Sonya following the events of 7 May 2013, I do not accept that Sonya believed that William would carry out the threat, or that she did not from that time forward try to gain access to the property for the reason that she was in fear of her life.
These conclusions are reinforced by Sonya's own evidence when she said that, on about 10 May 2013 at 5:55 AM, she received a phone call from William in which he said that his legs hurt and asked if Sonya would come over to massage his legs. Sonya's husband George took the phone and William invited him to come over to see how Ms Zhao looked after him. It seems unlikely that Sonya would fear that William intended to kill her in circumstances where he was calling and asking for her to come over and massage his legs.
William's defence to the cross claim, which was filed on 16 May 2016, contained an offer by William to give Sonya keys to No 95 if she genuinely wished to occupy the premises. There is no evidence of any request by Sonya to be given a key before the date the defence to the cross claim was filed. There is no evidence as to when Sonya sought to accept that offer, but in her 24 April 2017 affidavit she said that William made one key available to be collected from his solicitor, which occurred on 21 December 2016. Sonya said in her affidavit that she received the key (a photograph of which she exhibited to her affidavit). She said that she did not recognise the key and did not know whether it was a key to open a door to the house, the granny flat or to the garage. It is evident that Sonya has not tried to use the key since she received it.
William gave some evidence that after May 2013, if Sonya wanted something to do with the property she would send her husband, George over to deal with him. The implication was that William and George satisfactorily dealt with Sonya's concerns. Unfortunately, William did not give any detailed evidence on this matter, so I am unable to make any findings of fact on the extent to which William gave Sonya practical access to No 95 by dealing appropriately with George.
There is some evidence that on limited occasions William denied access to No 95 to solicitors and real estate agents appointed by Sonya to inspect the property. William said during cross-examination that he did not allow Sonya's agent to access No 95 because Sonya had stopped him going to No 93 (T 91.05).
In these confused circumstances, I have concluded that Sonya has not established an entitlement to payment of an occupation fee by William, and if such a fee were payable, Sonya has not led evidence to establish what the proper amount of that fee would be. As I have said above, in cases such as the present it would not be proper for the claimant in the position of Sonya to simply prove the market rent on the basis of exclusive possession, so that a burden is then cast upon the remaining co-owner to prove what a stranger would pay for the benefit of non-exclusive ownership with that co-owner. At most, Sonya only sought access to No 95 occasionally and for limited purposes.
Sonya had no desire herself to occupy the property in conjunction with William as her home, or for any other continuing purpose. She did not suffer any real loss from her lack of access to No 95, either as trustee or in her personal capacity. I do not make any finding of wrongdoing on Sonya's part, but I have found that in fact Sonya ejected Ms Zhao from the property. Ms Zhao was William's licensee, and the granting of the licence to Ms Zhao was not a denial of Sonya's title to co-ownership of No 95. Sonya also refused to pay any of the lodger's fees from Mr Lemech to William (or alternatively to explain to him why none of those fees could be paid because they were needed to meet the expenses of the property, if that was the case).
Given Sonya's conduct towards Ms Zhao and the breakdown of the relationship between William and Sonya, I do not accept that William's conduct in securing his home by means of locks that would prevent Sonya gaining access at will constituted an ouster of Sonya sufficient to found a right to receive the occupation fee that she has claimed. I find that Sonya has not made out her claim for an occupation fee from William.

[19]

Sonya's personal claim against the assets of the trust

Sonya gave evidence that the only liquid asset of the trust was an amount of $4454.22 that was in a bank account in the name of the deceased. The deceased's estate was almost entirely comprised of her title to No 93 and No 95 in co-ownership with William.
Accordingly, it was necessary for Sonya to pay expenses of the trust, including its legal expenses, substantially out of her own pocket. Sonya dealt with this matter principally at pars 165 to 168 of her affidavit made on 12 April 2016.
Sonya did not plead these claims in her cross claim, but they were dealt with by William because the value of the notional estate of the deceased will be reduced by the amount that the trust is liable to reimburse Sonya for expenses that she has paid on account of the trust.
Sonya listed the expenses that she had paid in the schedule that is Exhibit SS-03. The total amount of the expenses that she claimed was $107,406.77.
This schedule formed the basis of Sonya's claim as trustee of the trust that William was liable to her to reimburse the trust for half of this amount. The amount finally agreed upon by the parties, as set out in Item 1 to Schedule A to the Joint Submission, was $61,055.14. I have dealt with this claim above, and at par 108 I stated the conclusion that William was obliged to pay that sum to Sonya. I also recorded the agreement that Sonya as trustee was liable to pay William $46,752.40, so that William would owe a balance to Sonya of $14,302.74.
The significance of these matters is that, if Sonya paid a total amount of $107,406.77, or some similar amount, of the trust's expenses, she will be entitled under clause 5.8 of the deceased's will to be reimbursed for that amount when the assets of the trust are realised, as that term provides for an indemnity in favour of the trustee against all liabilities incurred by her in the execution of the trust. If William is required to pay Sonya as trustee the net amount of $14,302.74, the amount by which the notional estate of the deceased will be diminished will be $93,104.03.
Sonya also claimed in her evidence that she is entitled to be paid an administration fee under the terms of the trust. Clause 5.4 of the will provides: A Trustee (other than an authorised trustee corporation or company of the type referred to in clause 5.3) is entitled to remuneration for its services at the rate per annum charged by an authorised trustee company carrying on business in New South Wales to be selected by the Trustee.
This claim was also not pleaded in Sonya's cross claim, but it needs to be taken into account because, if it is a liability of the trust, the notional estate of the deceased will be correspondingly reduced. Sonya claimed an entitlement to an amount of $168,162.50. The claim is as set out in the schedule that forms part of Exhibit 11 and is based on the rates charged by Perpetual Trustee.
For the reasons that I have explained in more detail above, the court cannot make a determination in these proceedings as to Sonya's entitlement to be reimbursed for expenses and to be paid an administration fee, as Sonya personally is effectively making a claim against herself as trustee, and not all of the beneficiaries have been joined.
As I understand the position taken by William, he broadly accepted Sonya's entitlements as claimed. William's counsel said that he would wish to confirm the amount of the claim for an administration fee, but nothing further was said on that subject. The quantum of Sonya's entitlements, particularly in respect of the administration fee, was not investigated with any thoroughness in the evidence.
The effect of William's acceptance of Sonya's claims in principle is that it will be appropriate for the court to take into account those claims in a broad way in determining William's entitlement to any family provision order, assuming that he is given leave to pursue that claim out of time, and that he establishes that he is entitled to the making of such an order.

[21]

Should William be granted leave to apply out of time?

Section 16 of the Family Provision Act relevantly provides, in relation to when applications under that Act were required to be commenced: (1) In this section, prescribed period in respect of an application in relation to a deceased person, means: (a) where the Court has, in an order made under section 17, specified a period in relation to the application - that period, or (b) in any other case - the period of 18 months after the death of the deceased person. (2) An order under section 7 shall not be made unless the application for the order is made within the prescribed period in respect of that application or within such further period as the Court may, having regard to all the circumstances of the case but subject to subsection (3), by order, allow. (3) The Court may not make an order under subsection (2) allowing an application in relation to a deceased person to be made after the end of the prescribed period unless: (a) the parties to the proceedings concerned have consented to the application being made after the end of that period, or (b) sufficient cause is shown for the application not having been made within that period.
In so far as s 16(3)(b) required, as is applicable to the present case, that William must show sufficient cause for his application not having been made within the stipulated 18 month period, substantially the same criterion is applied as is made relevant to a similar application by s 58(2) of the Succession Act, and the same principles apply. Hallen J has recently collected and restated those principles in Penninger v Penninger [2017] NSWSC 892: [97] In Moore v Randall [2012] NSWSC 184 at [39], White J (as his Honour then was) wrote that the expression "sufficient cause" means "sufficient explanation or sufficient justification or excuse for the application not having been made within the prescribed period." [98] In Verzar v Verzar [2014] NSWCA 45 at [24], in the Court of Appeal, Meagher JA wrote that "[t]he sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time". [99] Clearly, permitting the Court to "otherwise order" was included in the Act to avoid the section becoming an instrument of injustice. Yet, "[t]he time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality": Verzar v Verzar [2012] NSWSC 1380 at [98]. … [102] In Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572 at [84]-[90], I set out the applicable legal principles relating to an application to extend the time, as follows: The decision of the court to extend time is a discretionary decision. Other than sufficient cause being shown, there are no statutory criteria that must be taken into account. There are no rigid rules in regard to the exercise of the discretion. The principles governing that exercise of discretion under the Act are clear. Apart from the reason(s) for the lateness of the claim, the factors to which the court must look, include whether beneficiaries under the Will would be unacceptably prejudiced if time were to be extended; whether there has been any unconscionable conduct by either side; and, finally what is the strength of the claim made by the party seeking an extension of time: see, for example, John v John; John v John [2010] NSWSC 937 at [37]-[51] per Ward J; Campbell v Chabert-McKay [2010] NSWSC 859 at [45]-[47] per White J; Durham v Durham [2010] NSWSC 389 at [15] per Ball J; Taylor v Farrugia [2009] NSWSC 801 at [14] per Brereton J; Burton v Moss [2010] NSWSC 163 at [31] ff, per Macready As J, in which the relevant earlier cases are referred to. The onus lies on the applicant to establish sufficient cause. It will be for the court to determine the strength of the applicant's claim. The prejudice to which the section looks is any prejudice occasioned by the delay in lodging the claim rather than any disappointment that might occur consequent upon readjustment of the interests under the will in order to make provision for the applicant: Cetojevic v Cetojevic [2006] NSWSC 431; McCann v Ward & Anor [2010] VSC 452 at [11]. Where there has been a long period since the deceased died, the lapse of time, itself, might create prejudice in any fact-finding exercise: Vasconelos v Bonetig [2011] NSWSC 1029 at [21]. In De Winter v Johnstone (NSWCA, 23 August 1995, unreported), Sheller JA held that the concept of "unconscionable conduct" referred to above was "directed towards a deliberate holding off [in bringing proceedings] designed to lull the beneficiaries into a false sense of security". Cole JA, while not expressing a concluded view, said that it must be doubted whether a change of mind (because of some change in the financial and material circumstances of the Plaintiff which has occurred after the expiry of the limitation period) constitutes unconscionable conduct. As to the strength of the claim, in De Winter v Johnstone, Powell JA considered that as an application for extension of time was invariably dealt with at the time of the application for substantive relief, no extension of time ought to be granted unless it was established that the applicant seeking an extension of time would, in the event of the extension being granted, be entitled to an order for substantive relief. By contrast, Sheller JA considered that it was only necessary for the applicant to show that the application was not bound to fail. Where the delay is not unduly long and the estate remains undistributed, ignorance during the period within which proceedings are to be commenced, of the right to claim, followed by a prompt application to extend the time once the right to claim becomes known, will usually be a sufficient explanation: Clark v Burns [2011] VSC 394 at [6]. … [104] Meagher JA noted in Verzar v Verzar [2014] at [33]-[35]: There are at least two respects in which the strength of the application sought to be made out of time may be relevant to whether there is 'sufficient cause' to extend the time for making it. The first is whether the application as made has sufficient prospects of success to justify an extension. That assessment should be of the application viewed at the time it is or is likely to be heard because of the provisions of s 59(1)(c) and (2)… The second respect in which the strength of the application may be relevant is if allowing the out of time application to proceed would or may have the effect of improving the applicant's position from that which would have obtained had the application been made in a timely manner. That is the consideration referred to by Tobias JA in Durham v Durham at [24], [37] when confirming the correctness of the approach adopted by the judge in that case and by Bryson J in Davison v Staley (unreported, Supreme Court of NSW, 21 August 1996)… Because the assessment of adequacy of provision for proper maintenance, education and advancement in life is to be made at the time the Court is hearing the application (ss 59(1)(c) and (2)), when addressing this question it is necessary first to consider when the application would have been likely to have been heard if made in a timely manner and then to compare the position in that event with the position in fact, namely that the application has been made out of time. Ordinarily, this analysis would assume, as is usually the case and as happened in this proceeding, that the application for an extension of time and the application for substantive relief are made in one proceeding and dealt with in a single hearing. (That was not the case with applications for extensions of time made under the Testator's Family Maintenance and Guardianship of Infants Act 1916: see De Winter v Johnstone [1995] NSWCA 120 at p 17 per Powell JA). [105] As well as taking into account the reasonableness of the conduct of the applicant, it will also be necessary to have regard to the history of the proceedings, the conduct of the other parties, the nature of the litigation, and the consequences for the parties of the grant, or refusal, of the application for extension of time, "the size and nature of the estate, the position of the individual applicants, the rightful expectations of those already interested under the will, and, to some extent at least, the importance that there be some finality and certainty in the administration of a deceased person's estate": Harrison v Harrison [2011] VSC 459 at [292]. [106] Also relevant to the present case, is what was said in Mansfield v Mansfield [2003] WASC 214 at [65]: The authorities also show, as in Young v Kestel, that in some circumstances a failure to make an application under the Act in the prescribed time may be explained and justified by a lack of information in the hands of an applicant. A lack of information may support the view that the applicant was not in a position to make a responsible decision about whether or not to institute proceedings under the Act. [107] Likewise, an applicant who is under a reasonable misapprehension as to the extent of his, or her, interest under the deceased's Will, provides a sufficient reason explaining the delay in commencing proceedings: In re Marland (decd) [1957] VR 338. [108] Although in another context, the High Court said in Sophron v The Nominal Defendant (1957) 96 CLR 469 at 475: … it is a mistake to attempt to reduce the expression 'sufficient cause' to a closer or more rigid definition than the legislature has chosen to provide. The words no doubt are concerned with the justice of the case. There must be some positive reason for concluding that as between the parties it would be just to extend the period for giving notice. Fault on the part of the claimant in failing to give notice… must be an element affecting the justice of extending the time and so on the other side must be the prejudice which the nominal Defendant has or may have suffered because of that failure. [109] As I wrote in Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris at [117]: Ultimately, justice is the paramount consideration in determining whether to extend the time for making an application…

[22]

William's explanation for the delay in commencing the application

It will be convenient to begin by examining William's reasons for not commencing an application for a family provision order in the period up to his falling out with Sonya in May 2013.
Originally William submitted that he did not make a claim within the prescribed time period because he did not receive a copy of the deceased's will, was unaware that he was a beneficiary of a discretionary trust, and instead thought that he owned both properties. He claimed not to have known that he could make an application for a family provision order. In final submissions, however, William accepted that Mr McKenzie's recollection of events, aided by a file note, was more likely to be accurate than his, and accepted that it was more likely than not that Mr McKenzie referred to the Family Provision Act during their meeting.
However, William also submitted that he was told that it was the deceased's wish that Sonya exercise her responsibilities for his benefit, but was not told of the non-binding nature of the memorandum of wishes, was not told that he had a right to a claim (only that he may have had a right), was not told of the contingent nature of the rights of a beneficiary of a discretionary trust, and was not given full and frank advice because Mr McKenzie was in a position of conflict. Counsel for William submitted that it was likely that William, with his limited education and English, did not understand the implications of a discretionary trust, and would have relied upon Sonya to guide him in relation to his affairs.
William referred to the decision of Ward J (as her Honour then was) in John v John [2010] NSWSC 937, in support of the proposition that to deny his application, the court would need to find that he understood and appreciated his right to make a claim, and by extension understood the nature of the testamentary trust, when he failed to pursue a claim for a family provision order.
William also relied upon the fact that Sonya carried out her duties as trustee in accordance with the memorandum of wishes until their falling out in May 2013. Counsel for William described William as being lulled into a false sense of security by his reliance upon Sonya and her continued payment of monies to him until that time.
Sonya submitted that William had given 'no satisfactory explanation for not commencing the claim within time' and referred the court to evidence of William obtaining legal advice several times. Sonya referred to William seeing Mr McKenzie in 2005, retaining Colin Daley Quinn solicitors in 2013, and visiting a public solicitor.
It is not clear on the evidence when William visited the public solicitor, as the fact of his doing so arose during cross-examination and was not clearly articulated. Counsel for Sonya said in final submissions that William said that he visited the public solicitor in 2005, within a week of speaking with Mr McKenzie.
The transcript records the following exchange (T 74-75): Q. Did you ever see Mr McKenzie on your own? A. INTERPRETER: When we did the will I went in on my own and I was waiting for my daughter to go in to interpret for me. Q. Was this in May 2005, was it? A. INTERPRETER: I don't know what month. Q. When you had this meeting, the one where you were in by yourself, Mr McKenzie explained to you the Family Provision Act, didn't he? A. INTERPRETER: If Mr McKenzie explained it to me, I would not understand him. Q. Do you recall now whether or not you had a discussion with Mr McKenzie in this meeting that you had with him by yourself about the Family Provision Act? A. INTERPRETER: No. How it is shared, I spoke to him first. I want the same as my wife. A. WITNESS: Fair my way, go for my way. After my wife, go for the children. My wife is same. We ..(not transcribable).. long time like this. Q. Did Mr McKenzie discuss with you the Family Provision Act? A. INTERPRETER: Maybe he did, but I did not understand. Maybe I do not A. WITNESS: Didn't explain to me; Sonia. A. INTERPRETER: Maybe he did. When I went to Sonia, Sonia should explain to me. I did go once to see Mr McKenzie to tell him what happened to me, what my daughter did to me. A. WITNESS: They said to me "Go see another lawyer". I only remember this now. Q. Did you follow that advice and go and see another lawyer? A. WITNESS: Yes. Q. Who was that lawyer? A. WITNESS: This lawyer the public solicitor. Q. Did the public solicitor give you advice about your rights in connection with the will and family provision? A. INTERPRETER: I went to see him to ask him about the loan and what can I do. Q. My question was did that lawyer give you advice about the will and family provision? A. INTERPRETER: Did not explain to me. A hundred per cent maybe he understood me; maybe he did not understand me. Then I made another appointment after talking to someone, made another appointment. A. WITNESS: And I tell them what I want, they said five minutes I stand you for the lawyer. The lawyer come, they said to me, "I see you before", I say, "Yes, before I don't understand what I want. Now I can explain to you what I want". They said, "What happened?" I said, "I want to know because I got home and the bank and the A. INTERPRETER: I have money. I need to know, I don't have anything in my hands. Q. When did this conversation happen, was it 2013? A. INTERPRETER: I don't remember the date but I remember going to see her. Q. Was it shortly after you had a falling out with Sonya? A. INTERPRETER: Yes, yes. Q. It would have been the same year, would it, as you had a falling out with Sonya? A. INTERPRETER: Same month, even same week. Q. Do you remember the name of this lawyer that you spoke to? A. INTERPRETER: I don't know her name but if I see her I would recognise her.
Contrary to Sonya's submission, it seems that William visited the public solicitor in 2013, following his falling out with Sonya. William said that he visited Mr McKenzie following the falling out in 2013. The plaintiff said (T 74.31): 'I did go once to see Mr McKenzie to tell him what happened to me, what my daughter did to me.'
It will be convenient to use this extract from the transcript of William's cross-examination to make a number of observations about the manner in which William gave his evidence.
This extract from the transcript is reasonably representative of most of William's cross-examination. William sometimes responded to questions in halting English, and sometimes did so by answering questions that had been interpreted to and from the Arabic language by the interpreter. (While it is undesirable for witnesses to give evidence in this way, experience shows that witnesses with limited command of English often find themselves unable to restrain themselves from attempting to answer questions in English).
Often William's replies in English were not articulate, and it is not clear that he was successful in conveying the meaning he intended. The interpreter did his best to ensure that William only gave his answers in Arabic, but as the transcript shows he was not always successful. It appeared from listening to the interaction between William and the interpreter that, when questions and answers were translated to and from Arabic, the interpreter sometimes had difficulty conveying the meaning of questions to William, or satisfying himself that William had formulated answers in Arabic that were logically responsive to the questions as translated.
To the extent that all of this happened, it was my assessment that although William was sometimes slightly belligerent, he was not being disrespectful when he could not help responding to questions in English, and that he generally tried to give proper responses. With no disrespect meant towards William, I concluded that William sometimes struggled to understand questions that were put to him, whether in English or Arabic, and found it difficult to formulate logical responses.
Generally, it appeared to me that William tried to give proper answers in accordance with his own perceptions of the events the subject of the questions. Whether William's version of events was always an accurate one is another matter. There were many issues that the parties sought to explore in the evidence where there were stark differences between the evidence given on behalf of William on the one hand and Sonya on the other. Many of those issues do not require resolution, and in many cases it would not be feasible for the court to attempt to do so on the evidence that is available.
The relevance of these observations to the issue of whether William should be permitted to make a claim for a family provision order out of time is that I am satisfied by the way that William gave his evidence that he would have had real difficulty in understanding the concept of an application for a family provision order and the nature of the relief that could be given, as well as the existence of a deadline for making the application, unless those matters were fully explained to him in a simple manner. The only way that that could have happened was if a person who understood the difficulty that William would have in understanding the subtleties of the law in this area carefully translated an explanation to him. The only person who as a practical matter was in a position to provide the necessary translation for William was Sonya.
I would be unwilling, in the absence of clear and detailed proof of the explanation given to William, to conclude that William would have gained an adequate understanding of the relevant aspects of the law governing the making of family provision orders by an explanation given by a strange lawyer in the English language.
Sonya submitted that the issue was not whether William had a complete understanding of his legal rights, but whether he was ignorant of the time limit and his rights. Sonya said that the evidence given by Mr McKenzie that William was disappointed with the outcome of the will in 2005 indicated that William knew enough to know that there was a 'scheme of ownership' of the properties and that 'he had the ability to do something about it'. Counsel for Sonya submitted that the court should 'go one step further' and conclude that William knew that there was a time limit.
In my view, William should not be denied the opportunity to make an application for a family provision order because of his delay in making the application until after May 2013, when he came to appreciate fully that he had not received the deceased's interest in No 93 and No 95 under the will, and that all of his rights to enjoy the benefits of those interests depended upon the exercise of Sonya's discretion under the testamentary trust.
I have reached that conclusion because of a combination of two factors; being the limitations on William's understanding of the true effect of the will and the testamentary trust, and the fact that Sonya acted in a manner that was highly supportive of William and fully in accordance with the deceased's memorandum of wishes, until May 2013 when Sonya took very strong exception to the discovery that William's Chinese fiancé may have been living with William in the former matrimonial home.
While the evidence supports the view that Mr Mackenzie did inform William that the deceased had not left her interest in the properties to him, that she had created a testamentary discretionary trust, and that William may have had rights under the Family Provision Act, I have concluded that it is improbable that Mr Mackenzie gave William a full explanation, or that William gained an adequate grasp of his true legal position and what he was required to do if he wished to challenge the effect of the deceased's will. Mr Mackenzie clearly, and properly, recognised that he had a conflict of interest as he had been retained by Sonya as the executor and trustee under the deceased's will. Mr Mackenzie told William that he would have to obtain advice from another lawyer. It is inherently unlikely that Mr Mackenzie would have provided to William a comprehensive advice in simple terms that William may have been capable of understanding.
The evidence given by William that he was not given a copy of the deceased's will is probably correct, and I accept it. There is no evidence that William's true legal position was explained to him in Arabic by anyone, and in particular by Sonya who was the person upon whom William habitually relied when it came to legal affairs that required a full understanding of English.
It is improbable in any event that Sonya would have had an interest in explaining to William that he had a right if he was unhappy with the terms of the deceased's will to challenge it by making an application under the Family Provision Act.
There is no evidence that William was sufficiently aware of any need to make an application within a limited period to cause him to actually seek legal advice on the issue, as recommended by Mr Mackenzie.
The primary factor, however, is that whatever incomplete understanding William may have had concerning the manner in which he might challenge the deceased's will, he had faith in the loyalty of his daughter, Sonya, who complied with the terms of the memorandum of wishes in a manner that gave William substantially all of the benefits that he would have received from a successful application under the Family Provision Act, save for the possible legal ownership of the deceased's interests in the two properties.
It was reasonable in those circumstances for William to not even contemplate in a serious way whether he should make any application to a court that might disturb the deceased's will, risk serious dissension in his family, and cost a lot of money.
I will now consider the significance of the change in circumstances that occurred after William and Sonya fell out in May 2013, and Sonya used her power as trustee of the deceased's discretionary trust to exclude William from all of the benefits that he had previously enjoyed in accordance with the deceased's memorandum of wishes.
Although William claimed to have discovered that he did not own the properties following his falling out with Sonya in May 2013, he did not file the statement of claim seeking a family provision order until February 2016.
William submitted that he took action in the form of s 66G proceedings on the advice of his solicitors, and only decided to make a family provision claim after he became aware of Sonya's claim that he was indebted to her for an amount exceeding $285,000 as a result of seeing the statement of facts in Sonya's application for judicial advice. William relied upon the fact that his solicitors wrote to Sonya's solicitors to advise them of his intention to seek a family provision order within a week of receiving the statement of facts.
William also submitted that it was significant that he had not knowingly allowed any time limit to expire. In those circumstances, counsel for William submitted that it was reasonable that William pursued the 66G claim and attempted to reach a resolution without going to court, before he applied for family provision relief.
In response, Sonya submitted that the court should distinguish William's case from the case where someone who was ignorant of the time limit promptly made an application for a family provision order upon learning of the time limit.
Apparently, guided by his initial legal advice, William took the view that his interests would be adequately served by commencing s 66G proceedings that would lead to the severance of his interest in No 93 and No 95 from those of the deceased's estate by the sale of the properties.
I accept William's evidence that, when he became aware that Sonya intended to make a claim against him for the repayment of a substantial sum of money, he decided on advice that he should commence proceedings for a family provision order.
William notified Sonya of his intention to seek a family provision order very shortly after learning that Sonya intended to sue him for a substantial amount of money, but did not formally institute those proceedings for some time while attempts were made to mediate the dispute within his family. William said at one point in his evidence that he did not want to pursue legal proceedings against his daughter.
I am satisfied that William should not be denied the right to make an application for a family provision order by reason of the additional delay up to the time when he filed his statement of claim.
By the time William sought the legal advice that led to the commencement of the s 66G proceedings, the 18 month period for the commencement of proceedings for a family provision order had long since elapsed. It is not unreasonable that William may have been advised simply to commence the s 66G proceedings in order to avoid the costs involved in seeking a family provision order and the risk of not being granted leave to apply out of time. It is likely that William's lawyers at the time made some judgment that balanced the ability of William to maintain himself with the proceeds of half interests in each of the properties against the risks and costs of seeking a better outcome by means of a family provision order. When, unexpectedly, William became aware that he may be liable to Sonya for a substantial amount, it may not unreasonably have tipped the balance in favour of William seeking leave to claim a family provision order against Sonya.
As the deadline had long expired, William did not by reason of the additional delay knowingly allow the 18 months to elapse without commencing his application.
It was not unreasonable for William to further delay his application, after having given Sonya notice of his intention to make it, by attempting to achieve a mediated settlement and avoid dragging the family into contentious and protracted litigation.
The status quo, during the period in which William further deferred the formal commencement of his application for a family provision order, was that Sonya as the trustee of the testamentary trust was in full legal control of the assets of the trust and the disposition of its income. The further delay did not in any real way prejudice the trust or its beneficiaries. It is true that a collateral dispute arose between the parties concerning Sonya's access to No 95, and other matters, but I do not consider those disputes to be material to the issue of whether William ought to be permitted to pursue a family provision application out of time.

[23]

Prejudice

Sonya submitted that she will suffer prejudice if the court allows William to bring his application out of time. In particular, she claimed to have expended a lot of time and some of her own money administering the estate, in circumstances where she herself had personal debt upon which she was paying interest.
Sonya also claimed that Sam, as a beneficiary, would be prejudiced if the court allowed William to make a late application, because of work he has done on the properties for free, and said that the reasonable expectations of the deceased's grandchildren are also relevant.
In response to Sonya's allegation of prejudice, William submitted that, because the whole of the deceased's estate was held on trust, there had been no distribution to any beneficiary and therefore no beneficiary who could claim to be prejudiced. William also submitted that this was not a case where his prospects were greater now than they would have been had he applied in time.
William characterised Sonya's claim that she was prejudiced because of the money she expended maintaining the properties as being artificial. The expenditure, William said, was incurred by Sonya as trustee and was also being claimed by Sonya in her cross claim.
William asserted that "any claim of prejudice effectively evaporates once it is recognised that [William] is no longer claiming an interest in fee simple in the estate's share of No. 95, but only an interest for his lifetime". In such circumstances, William submitted, the estate's interest in No 95 would be preserved.
I accept William's submissions on this issue. I do not accept Sonya's argument that William should be denied the entitlement to make a claim for a family provision order by reason that his conduct in making the application out of time has caused any prejudice to the estate or the beneficiaries.
At the end of the hearing, William did not resist Sonya's claim that she was in principle entitled to be paid out of the estate the sum of $168,162.50 under cl 5.4 of the will that gave her a right to be remunerated for her actions as trustee of the trust. I have also found that in principle Sonya is entitled by cl 5.8 of the will to be reimbursed for all expenses of the trust that she paid personally. Consequently, Sonya has not been prejudiced because of the delay by William in making his application.
As Sam gave evidence in support of William's case, I would not find that William should not be given leave to make an application for a family provision order by reason of some minor prejudice that Sam may have suffered because of work that he did on the properties for free. In any event, under the testamentary trust, Sam is one of the Capital Beneficiaries, so to some degree the work that he did preserving the properties may have been in his own interests.
I am satisfied that the strength of William's application for an appropriate family provision order is sufficient to justify the court permitting him to pursue his application out of time.
That conclusion follows primarily from the terms of the deceased's memorandum of wishes and from the reality that William in essence seeks a family provision order that will implement the deceased's wishes in a manner that is not susceptible to the exercise of any discretionary power by Sonya.

[24]

Alleged failure of the William to disclose his assets

Sonya also submitted that, apart from being outside the time limit, William should not be allowed to make an application for a family provision order because he failed to put his financial situation openly and accurately to the court. Specifically, Sonya submitted that William failed to disclose land that he owned in Lebanon, two Arab Bank accounts, and the financial resources of his wife, Ms Zhao. Sonya said that the court 'cannot guess at what else exists' and suggested the court should consider William to be dishonest because he provided false information to the Department of Immigration and Centrelink.
William acknowledged that he failed to disclose the land he owned in Lebanon in his first affidavit dated 7 December 2015 but relied upon his disclosure in a later affidavit dated 21 December 2015. Counsel for William submitted that this disclosure, as it was made before Sonya put on any evidence, showed that William's disclosure of the land in Lebanon was not a result of Sonya flushing him out. William explained in the later affidavit that he had been trying to sell the land for the last two years but had been unable to do so. In another later affidavit dated 14 September 2016, William said that he did not include the parcels of land in Lebanon because they were 'not worth much due to their location amongst a mainly Hezbollah held area'.
Sonya submitted that William's evidence in this regard was not convincing, because he did not provide any evidence of trying to arrange a sale or of contacting an estate agent. However, William had acknowledged both of these facts in his affidavit dated 21 December 2015. He explained that he had been unable to travel to Lebanon to make the arrangements and that it had been 'too difficult to try making those arrangements over the telephone'.
In relation to William's failure to disclose money he held in an Arab Bank account and his failure to disclose his car, counsel for William submitted that these were minor assets in comparison to the size of his other assets (namely his half-interest in the two properties) and the size of the estate (the other half-interest in the two properties).
In respect of Ms Zhao's assets, counsel for William acknowledged that William claimed that she had no assets in his first affidavit, but suggested that he may not have known of her assets in China and argued that Ms Zhao, in any event, was under no obligation to use her assets to support her husband.
Ms Zhao, in her affidavit dated 18 April 2017, stated that she owned a one bedroom unit in China but that she was not permitted to sell it on the open market. According to Ms Zhao, Chinese law requires her to hold the property for herself or her family or to sell it back to the government. She also described receiving a Newstart Allowance of $419 per fortnight from Centrelink, having a bank account with the St. George Bank with a balance on 31 March 2017 of $301.70, and owning a 1998 Toyota Corolla motor vehicle.
I am satisfied that the proper course for the court to take is to decide William's application for a family provision order on its merits, and not to deprive him of the benefit of this claim because of any failure on the part of William to be candid with the court in relation to his assets or the assets of his wife.
William properly disclosed his properties in Lebanon before his ownership of those properties was brought to the attention of the court by Sonya. The photograph of one of those properties is consistent with the property being arid and relatively undeveloped. There is no reason for the court to doubt William's evidence that by reason of their location, William has not been able to sell the properties, and that the properties are of dubious value.
Sonya tendered a valuation of William's properties in Lebanon apparently prepared on about 30 May 2016 by a Lebanese valuer called Mr William Yacoub Tarabay. Mr Tarabay valued the properties as having a combined value of US $343,000 but noted that "it is known that construction market is undergoing a phase of inactivity which is affected by the supply and demand in the area". Mr Tarabay's report did not comply with the expert code of conduct and he did not give evidence. As I understand it, William did not oppose this evidence because in practical terms it complied with the Family Provision Practice Note No SC EQ 7 par 21(a). William accordingly listed the two parcels of land in Lebanon in his own list of assets handed up at the hearing as having a value of $456,117. As I understand William's position, he maintained his claim that the properties were not readily saleable.
The real question concerning William's properties in Lebanon is whether they are likely to be able to be realised in a relatively short time for an amount of money that would have a material effect on the court's determination of the issue of whether the deceased's will makes an inadequate provision for his proper maintenance. In the light of the terms of the deceased's will and her memorandum of wishes, and the value of the two properties owned by William and the deceased, I do not accept that the properties in Lebanon have been shown to have a realisable value that is sufficient to affect the issue in any material way.
I am also not satisfied that the evidence that was tendered concerning the assets of William's wife is sufficient to support a claim that William has not been candid to the court. It is not clear from the evidence that William had a clear, independent understanding of the nature and value of his new wife's assets in China when he commenced his claim or served his evidence.
The evidence concerning the existence, nature, value, and realiseability of Ms Zhao's one-bedroom unit in China is extremely unclear, as a result of the way the issue came to light and the limitations on the evidence that was available. It is clear that Ms Zhao believed that there are significant limitations under Chinese law upon her ability to realise the value of the unit for her own benefit. It is fair to conclude from the way that Ms Zhao explained her understanding as to the effect of the relevant Chinese law that her understanding is unclear.
Sonya claimed in her list of the assets of William and Ms Zhao that she handed up during the hearing that Ms Zhao had two units in China that had estimated values of $242,284 and $430,825.54. The evidence does not justify a finding that Ms Zhao owned two units in China or that the units identified by Sonya had the values claimed. The evidence (Exhibit 10 pp 167-211) demonstrates that title searches are not available to the public in China and that there are various modes of title to property including what would be recognised in this State as public housing and also housing on collective land. It is sufficient to note that not all housing units are saleable on the open market and there are restrictions and costs involved in selling various types of residential property. The evidence does not justify the court in rejecting the evidence given by Ms Zhao. Proving the nature of Ms Zhao's title to the property in which she lived in China and the value of that property to her would be a complex and probably expensive exercise. The court does not ordinarily require parties in family provision applications to go to such lengths in relation to properties owned in foreign countries by their partners. I am not satisfied that whatever property Ms Zhao has in China will in any readily realisable or significant way improve the financial circumstances of William and Ms Zhao.
It would be wrong in all of the circumstances for the court to conclude that William's failure to disclose to the court such assets as his new wife might have in China is a proper ground for refusing him any family provision order to which he might otherwise have been entitled.

[25]

The regime under the Family Provision Act

Section 7 of the Family Provision Act conferred power upon the court, subject to s 9, to make an order for such provision out of the estate of a deceased person in favour of any eligible person as ought, in the opinion of the court having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of that person. William, as the husband of the deceased, is an 'eligible person' within par (a)(i) of the definition of that term in s 6 of the Act.
Section 9 of the Family Provision Act contained provisions affecting the court's powers under s 7. It relevantly provided as follows: … (2) The Court shall not make an order under section 7 or 8 in favour of an eligible person out of the estate or notional estate of a deceased person unless it is satisfied that: (a) the provision (if any) made in favour of the eligible person by the deceased person either during the person's lifetime or out of the person's estate… … is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person. (3) In determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person, the Court may take into consideration: (a) any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to: (i) the acquisition, conservation or improvement of property of the deceased person, or (ii) the welfare of the deceased person, including a contribution as a homemaker, (b) the character and conduct of the eligible person before and after the death of the deceased person, (c) circumstances existing before and after the death of the deceased person, and (d) any other matter which it considers relevant in the circumstances. (4) Nothing in subsection (3) (a) limits the generality of subsection (3) (b), (c) and (d) and the Court may consider a contribution of the same nature as that referred to in subsection (3) (a) or of a different nature in so far as it considers it relevant under subsection (3) (b), (c) or (d).
Section 9 of the Family Provision Act created what has been described as a 'two-stage process': Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, [15] (Mason CJ, Deane and McHugh JJ). Section 9(2) stated that a court shall not make a family provision order unless it is satisfied that the provision made by the deceased "is, at the time the Court is determining whether or not to make such an order, inadequate for [their] proper maintenance, education and advancement in life…". Section 9(3) then set out matters that the court may take into consideration when determining "what provision (if any) ought to be made".
In Singer v Berghouse, Mason CJ and Deane and McHugh JJ explained the process as follows: [18] The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for 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. [19] 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…

[26]

Stage one: whether the provision made for William was inadequate

The final position adopted by William was that the court should designate the deceased's interests in No 93 and No 95 as notional estate, grant him a portable Crisp order in respect of her interest in No 95, and grant him a life interest in the income from the deceased's share in the net proceeds of sale of No 93.
Sonya's first closing submission was that William has the onus of demonstrating that he cannot satisfy his financial requirements from his own resources. Her position was that William has not satisfied this onus as the evidence shows that he can adequately provide for himself even if he receives no continuing benefit from the will of the deceased.
Sonya initially submitted that both properties should be sold and that William's need for accommodation would be adequately met by the purchase of a two-bedroom home unit near a park. Her final position was that William could buy a two-bedroom house in the area where No 95 is situated for a little less than $1 million, or that William and his wife could move to China to reside in Ms Zhao's apartment, or that they could move to Lebanon and build a house on William's land, and that they could invest the balance of their assets and live on the income, whether or not it would be supplemented by any residual entitlement to the pension.
In the usual case an applicant for a family provision order seeks to obtain a greater share of the testator's estate than the testator decided to leave the applicant in his or her will.
That is also true in William's case but in a somewhat exceptional way. In this case the deceased did not give any part of her estate to William in her will. Instead, the deceased established a testamentary discretionary trust and armed her trustee, Sonya, with a complete and absolute discretion as to whether or not William would enjoy any benefit from her estate.
However, by her instructions to her solicitor, Mr Mackenzie, the deceased expressed her wish that William would have the right to continue living in No 95 until his death or until he left the premises, and by her memorandum of wishes she expressed her intention that Sonya would use her best endeavours to administer the trust primarily for the benefit of William in relation to both income and capital.
I find on the basis of this evidence that it was the deceased's firm intention that William receive the benefits expressed in her memorandum of wishes, and that the reason why she created the testamentary discretionary trust was that she wanted to preserve the capital of her estate for her children and grandchildren, and in particular wanted to avoid placing the capital at risk by giving it to William in circumstances where it could be dissipated by reason of William's gambling practices.
The deceased's wishes have been thwarted by the decision of Sonya to exercise her discretionary power as trustee to cut off William entirely from the receipt of any benefits from the trust, and furthermore to exercise her statutory right to obtain orders for the sale of both properties.
If that course on Sonya's part is successful, William will be ejected from his home and will be required to find an alternative residence that is much less commodious than his home of some 38 years.
It is clear that Sonya decided to exercise her trustee's discretion in the manner that she did by reason of her rejection of William's decision to remarry a Chinese woman and to make No 95 his matrimonial home. That is clear from the fact that between the death of the deceased in 2005 and the family schism in 2013, Sonya faithfully carried out her mother's wishes without any demur, and maintained a close relationship with her father notwithstanding all of the bitter recriminations that she has raised against him in these proceedings.
Sonya did not seek to make out a case that the deceased asked her to exercise her trustee's powers in the manner that she did if William remarried. There is no evidence that the deceased intended such a qualification to be implicit in her memorandum of wishes, notwithstanding the reference in par 7 to her request that her wishes be "implemented as nearly as may be possible and prudent in the light of circumstances generally pertaining at the time that she makes decisions". The memorandum of wishes does not suggest that the deceased intended that William be cut off from her bounty if he remarried. This point is all the stronger because there is some evidence that William unkindly said to the deceased on occasion that he intended to find a Chinese partner after her death. If there is any truth in this assertion made by Sonya against her father in her case, it is significant that there is no evidence that the deceased expressed any wish that William be deprived of any enjoyment of the benefit of her estate if he remarried.
The decision to exclude William from receiving any continuing benefit from the deceased's estate was entirely personal to Sonya and was made to further her own emotional reaction to William's relationship with Ms Zhao.
This is not a case where an executor who is resisting a family provision application by an eligible person is seeking to perform the executor's duty to uphold the testator's will. This is a case where Sonya as trustee is seeking to enforce her own wishes, contrary to the expressed wishes of the deceased. Correspondingly, in substance this is a case where William as applicant is seeking by means of his family provision application to uphold the substance of the deceased's wishes, not to subvert them.
Sonya's ultimate preference was that William receive nothing from the notional estate of the deceased, and that the orders that govern the judicial sale of both No 93 and No 95 under s 66G of the Conveyancing Act permit Sonya to bid as trustee for the purchase of both properties, to set off against the purchase price William's debts to the trust, and to raise a mortgage on the properties to enable their purchase. As I understand it, Sonya may facilitate the purchase by deferring or forgiving the debts owed to her by the trust. If that objective is achieved, Sonya will effectively gain control of the whole of the matrimonial property of her parents, and William will be left to his own devices without any benefit from his late wife's share of the assets that they built up over many years by their mutual toil.

[27]

Significance of the deceased's memorandum of wishes

The memorandum of wishes made by the deceased in the present case may be significant for two main reasons. First, it is an express statement of what the deceased hoped to achieve by her testamentary arrangements. Secondly, it provides an implicit record of the deceased's judgment as to the extent to which any unsatisfactory conduct on William's part should disentitle him from receiving benefits under her will. In relation to this second matter, the deceased was aware of the conduct that Sonya has attempted to prove in these proceedings as a basis for her submission that William has disentitled himself by his own actions from enjoying the deceased's bounty. Yet the deceased, who was the best judge of these matters, has delivered her own judgment in her memorandum of wishes.
In Salmon v Osmond [2015] NSWCA 42 Beazley P (with whom McColl and Gleeson JJA agreed) said: [69] Courts have long accepted that a deceased's statements explaining the reasons for a particular testamentary disposition are admissible as evidence of the deceased's motive or knowledge and accordingly are a relevant consideration in the Court's determination under s 59: Hughes v National Trustees, Executors and Agency Company of Australasia Limited [1979] HCA 2; 143 CLR 134 at 149-153 per Gibbs J (with whom Mason and Aickin JJ agreed). [70] The relevance of a testator's wishes was also considered by Dixon CJ in Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; 107 CLR 9. His Honour had first observed, at 19, that the words "adequate" and "proper" in the statutory provision were "always ... relative", having regard to a claimant's age and situation generally. As his Honour explained: "What is 'adequate' must be relative not only to [the claimant's] needs but to [the claimant's] own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions." [71] His Honour then commented upon the consideration that was to be given to the testator's wishes: "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 vested in the Court." [72] Although these comments were directed to the actual testamentary dispositions made by the deceased in that case, it follows that a testator's explanation of why he made those decisions must be given appropriate weight. The weight that is given will depend, inter alia, upon whether it is apparent from the evidence that the testator's wishes and testamentary intentions are soundly based and not, for example, attributable to irascibility, mere dislike, or based on lack of information, or wrong information. On the evidence and as was apparent from his Honour's findings, the deceased's reasons for preferring Michael in his will were well based and the Court should pay appropriate regard to them.
Her Honour continued: [76] In my opinion, there is merit in the argument advanced by the appellants in support of the first issue. Although his Honour was required to determine whether Kerryn was left without adequate provision and, if so, what provision to make for her, he was required to make that determination with due regard to the wishes of the testator and to the circumstances of the other beneficiaries under the will. [77] I agree with his Honour that the deceased's wishes are not determinative. Whilst a court determining whether an eligible person has been left without adequate provision for support and maintenance is required to have regard to the testator's wishes, it is not bound by those wishes if it otherwise determines that a claimant has been left without adequate provision and support and that provision ought to be made.
The Court of Appeal in that case was concerned with whether the trial judge had given appropriate weight to the testator's explanation of why he made particular dispositions in his will. That is a different question to that which arises in the present case, as the memorandum of wishes is not an explanation for a disposition in the deceased's will in favour of William, but an explanation of how the deceased intended the testamentary discretionary trust that she established by her will to operate. Nonetheless, in my opinion the decision provides substantial support for the proposition that the memorandum of wishes is admissible as evidence of the deceased's motive in making the testamentary arrangements that she did, and is a relevant consideration under ss 7 and 9 of the Family Provision Act in determining whether the deceased's will makes adequate provision for the proper maintenance of William. The unusual feature of the present case is that the memorandum of wishes is not an explanation for why William has received less than he thinks is appropriate, but is an expression of expectation as to why William should have received more than he has in fact received.

[28]

Need for provision to be proper as well as adequate

Sonya based her submission that William has the onus of demonstrating that he cannot satisfy his financial requirements from his own resources on the judgment of Gaudron J in Singer v Berghouse (above) at 227. That aspect of her Honour's judgment does not support the submission made by Sonya. Her Honour said (footnotes omitted): It is well settled that the preliminary question which arises under testators' family maintenance legislation, namely, whether the provision (if any) is inadequate, is to be determined in the light of all the circumstances of the case. It follows, at least as a matter of law, that the issue goes beyond the question whether the applicant has needs and requirements that cannot be met from his or her own resources. Conversely, if an applicant does establish needs and requirements of that kind, he or she will have gone a very long way towards satisfying and, as a general rule, will satisfy the requirement in s.9(2)(a) of the Act. That was the point of Hunter v. Hunter to which the Master referred in his decision. There may be cases where, given the circumstances and the size of the estate, an applicant will, in practical terms, only succeed by proving needs and requirements that cannot be satisfied from his or her own resources. But that is a practical consideration only. And it will not even be a practical consideration in a case where the estate is sufficient to meet the moral claims of all members of the family.
Gaudron J explicitly said that the issue goes beyond the question whether the applicant has needs and requirements that cannot be met from his or her own resources. Although her Honour dissented, this aspect of her judgment was consistent with that part of the judgment of Mason CJ and Deane and McHugh JJ that is set out above.
The essential point is that the provision made for William by the will of the deceased must not simply be adequate, but it must be adequate for the proper maintenance of William. Given the importance of this issue to the resolution of the present dispute, it will be appropriate to set out the consideration of the authorities undertaken by Hallen J in Hedman v Frazer [2013] NSWSC 1915 in the following terms: [97] The word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, whereas "proper" prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at 145 [72], [77]. [98] These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476: The use of the word "proper" in this connection is of considerable importance. It connotes something different from the word "adequate". A small sum may be sufficient for the "adequate" maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his "proper" maintenance. So, too, a sum may be quite insufficient for the "adequate" maintenance of a child and yet may be sufficient for his maintenance on a scale that is "proper" in all the circumstances. [99] Dixon CJ and Williams J, in McCosker v McCosker, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word "proper", that: It means "proper" in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent. [100] In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Gibbs J said, at 502: [T]he words "adequate" and "proper" are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards. [101] In Vigolo v Bostin, at 228, Callinan and Heydon JJ said: [T]he use of the word "proper" … implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of the kind which was made here…The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the "station in life" of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future. [102] Santow J pointed out in Gardiner v Gardiner (NSWSC, 28 May 1998, unreported), that "adequate" and "proper" are independent concepts. He said, at 12: "Adequate" relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. "Proper" depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied … [103] In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered. [104] His Honour further observed in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]: The question of what level of maintenance or advancement in life is "proper" depends on all of the circumstances of the case "including 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" (Singer v Berghouse 181 CLR 201 at 210).
Contrary to the submission made by Sonya, in the present case William has a relatively strong claim that it would be proper for him to at least be able to live at No 95 for as long as his health permits him to do so, even if he does not own it outright. Both William and the deceased acquired No 95 through their mutual hard work over many, many years and both would have had a reasonable expectation that the property would be their permanent home. That observation is founded on the long-term efforts of both parties to the marriage rather than the broad general rule proposed by Powell JA in Luciano v Rosenblum (1985) 2 NSWLR 65 at 69-70.

[29]

Appropriateness of testamentary discretionary trust

The next matter of general significance that requires consideration is the nature of the testamentary discretionary trust created by the deceased's will and the terms of her memorandum of wishes.
Although the deceased chose to create a testamentary discretionary trust and to appoint Sonya as her trustee, by her memorandum of wishes she stated how she required Sonya to administer the trust during William's lifetime, although she acknowledged consistently with the manner in which such trusts operate that Sonya would not be bound by the terms of the memorandum, but that it should operate "in expectation however that [Sonya] would use her best endeavours to ensure that the terms of the Memorandum are implemented as nearly as may be possible and prudent in the light of circumstances generally pertaining at the time that she makes decisions". The deceased's expectation was that the income and capital would be used for the benefit of William during his lifetime.
As has been noted above, Sonya faithfully implemented the deceased's wishes until William formed a partnership with Ms Zhao and subsequently married her. Thereafter Sonya did everything within her power to deny William any benefits under the will or the trust. Sonya justified this position by submitting in her final submissions that the deceased "took into account her obligation to make some provision for her husband in spite of the way that he had treated her, and struck a balance". Sonya submitted that "knowing what she knew and having suffered what she suffered, [the deceased's] desire to provide a modest and discretionary provision for William can hardly be rejected as unjustified". Sonya correctly submitted that the deceased had made a deliberate decision to make a non-binding memorandum of wishes, and then submitted: "[The deceased] knew things change. William had at least one serious relationship, and on the evidence, was waiting for his wife to die so that he could find a Chinese woman. As events unfolded the trust supported William until he remarried".
The evidence justifies an inference that the deceased structured her testamentary affairs in the manner that she did because she wished to protect her estate from the risk of dissipation because of gambling by William. It does not justify the gloss that Sonya has tried to put on the deceased's thinking that emerges out of the submission considered in the previous paragraph. In particular, there is no basis for interpreting either the will or the memorandum of wishes as being intended to provide a vehicle to deny William any benefit from the deceased's estate if he should remarry, whether a Chinese woman or otherwise.
In fact, William's fate in the present case is an exemplar of the proposition that discretionary testamentary trusts will usually provide an inappropriate mechanism for ensuring that a beneficiary under a will receives adequate provision.
Again, it will with respect be appropriate to borrow from the judgment of Hallen J in Hedman v Frazer, where his Honour said on this subject: [180] As stated earlier, each of Lucie and Georgia is an object of the RMR Discretionary Trust, which is a discretionary trust. As such, other than in respect of distributions already made, each has no enforceable rights to either the property or income of the Trust and is reliant, for any future benefit, upon the exercise of discretion of the trustee in her favour. A discretionary object has no legal, or equitable, interest in the property of a discretionary trust until the trustee exercises its discretion in that beneficiary's favour. Until that point, a discretionary beneficiary's interest is merely an expectation or hope. [181] In Belfield v Belfield [2012] NSWCA 416; (2012) 83 NSWLR 189, Campbell JA wrote (at 206 [71]): … when the FPA was enacted in 1982, it was common and well known that there were significant advantages for a person with some capital (who I will call the instigator) to arrange the setting up of a family trust, with a structure like that of the present trust deed. Common features of such trusts were that the trust was established by a settlor who was not the instigator or someone the instigator wished to benefit, the eligible beneficiaries were relatives by blood or marriage of the instigator, and there could be a discretionary allocation of income each year amongst eligible beneficiaries and ultimately a discretionary allocation of capital amongst eligible beneficiaries. Other common features were that there was power to alter the eligible beneficiaries, certainty achieved by provisions stating where income, and capital respectively would be distributed in default of a specific allocation of income or capital, and distribution of capital delayed for as long as permissible under the rule against perpetuities but with a discretionary power to advance the distribution date: see, for example, I J Hardingham and R Baxt, Discretionary Trusts, (1975) Sydney, Butterworths. Those discretions were usually conferred on the trustee of the trust. Such trusts enabled an instigator who was concerned to provide for a family, usually a parent or grandparent, to arrange for assets that they had accumulated to be made available to different members of the family as the need for money presented itself. Such trusts also had the effect of lessening the impact of death duties, while death duties remained in force in Australia, and of lessening the impact of income tax on the members of a family unit considered collectively, by enabling income to be appointed to those members of a family who had a lower marginal rate of taxation. [182] In Gregory v Hudson (No 2) (NSWSC, 18 September 1997, unreported), it was said (at pp 10-12): Mr Broun QC puts that the authorities clearly show that a provision in a will that trustees might pay additional moneys out of the estate for the benefit of the applicant is not a proper provision. He cites Re Brown [1972] VR 36. In that case, after citing some decisions from New Zealand and Canada, together with the note of Re WTN see McLelland, CJ in Eq. (1959) noted 33 ALJ 240, Norris, AJ said at 39, "It is true to say that in most of the cases the fact that a discretion to increase a benefit existed was not regarded as rendering adequate a provision which otherwise was inadequate. I think, nevertheless, it is consistent with the authorities to say that such a discretion is not to be excluded from consideration in determining whether or not adequate provision has been made, and that it may in an appropriate case render adequate a provision otherwise inadequate." He then cites Re Allen [1922] NZLR 218. Dickey in Family Provision after Death (LBC Sydney 1992) says at p 121, "There is some authority for the proposition that where a person is in need of provision but the quantum of provision made for him or her from a deceased's estate is wholly dependent upon the discretion of trustees, this provision is not adequate. In all probability, however, this is not an inflexible rule. In all probability the question of whether provision of this kind is adequate depends upon the particular facts and circumstances of the case. … I consider, with respect, that Professor Dickey's comment is close to the mark. Ordinarily, a benefit provided under a discretionary trust is a fairly illusory benefit because it can be terminated without reason and there is little likelihood of a discretionary beneficiary being able to force the trustee to pay her a benefit. Hartigan's case shows that even if there is a memorandum of wishes, there is no obligation on the trustee to take that into account. Furthermore, even though the trustees say that they intend to follow the wishes, they are not bound to do so, and indeed, circumstances may change in such a way that they feel it is not proper to continue to follow the memoranda of wishes and carry out the spirit of what the deceased intended. … It seems to me that where a wealthy man, with an estate of at least 11 million dollars, leaves the bulk of the benefits to his widow under a discretionary trust over which she has no control, he has not made proper provision for his widow. The community would expect that the widow of such a man would at least have a home in her own name and some capital to which she could resort whenever she felt like it. [183] This decision was followed by Master McLaughlin (as his Honour then was) in Gill v Permanent Trustee Co Ltd (1999) NSWSC 394); in McCullum v Permanent Trustee [1999] NSWSC 1219; Novak-Niemala v Perpetual Trustee Co Ltd [2002] NSWSC 251; and Stansfield v National Australia Trustees Ltd [2004] NSWSC 1107 and by Macready AsJ in Tucker v Tucker [2012] NSWSC 1302. [184] In Taylor v Farrugia, Brereton J wrote, at [62]: Provision for eligible persons may be inadequate or improper in form as well as, or as distinct from, in quantum. Thus, provision which is dependent upon the exercise of a discretion by the trustee of a discretionary trust will often, though not invariably, be inadequate or improper [Re WTN (NSWSC Unreported, 3/7/59, McLelland CJ in Eq; referred to in [1959] 33 ALJ 240; Gregory v Hudson (No 2) (New South Wales Supreme Court, Young J, 18 September 1997, unreported. [185] None of these decisions mean that the court should act in total disregard of the potential availability of wealth to an applicant for a family provision order from sources owned, or administered, by others.

[30]

The significance of William's character and conduct

The final general matter that requires consideration in this case is the use to which Sonya has sought to put the discretionary entitlement of the court under s 9(3)(b) of the Family Provision Act to take into consideration the character and conduct of William before the death of the deceased. A great deal of the forensic effort in this case on Sonya's part was devoted to establishing disentitling conduct of William, including violence towards the deceased, gambling, at least one extra-marital relationship, and violence towards the deceased's children.
These proceedings have arisen and to some extent been consumed by a desire on Sonya's part to deny her father any continuing benefits under the deceased's will for entering into a second marriage after the death of the deceased and to invite his new wife to live in the former matrimonial home.
The deceased made her will in the terms that she did, and trusted her daughter, Sonya, to faithfully implement her memorandum of wishes because she viewed William as an inveterate gambler who could not be trusted with a gift of the capital in her estate. She created a structure that had the broad intent that William would enjoy the benefit of the income of her estate on a basis that would ensure that the capital would survive for distribution to her children.
The court can only assume that the deceased decided upon this course, which she implemented shortly before her death, as a matter of her own volition and with full knowledge of all the deficiencies of conduct and morality that Sonya has seen fit to allege in these proceedings against William. There was no person better equipped than the deceased to make her own judgment as to the proper way for her to treat William's past conduct in relation to how he should receive the fruits of her estate after her death. Certainly the court is not remotely in a position to judge the matter as justly as the deceased.
So far as I am concerned, it is the deceased who should be the final judge of William's conduct, his entitlement to forgiveness (in so far as it may have been needed), and the appropriate measures that should be adopted to protect the deceased's estate for the benefit of her children from the consequences of any character flaw of William that was a matter of concern to her.
That approach is consistent with the observations made by Hallen J in Underwood v Gaudron [2014] NSWSC 1055 where his Honour said: [242] Of course, the Act does not refer to "reprehensible" conduct. It refers to "the character and conduct of the applicant before and after the date of the death of the deceased person". Furthermore, to conclude that justice would be better served by rejecting the judgment of a competent testator or testatrix as "unjustified", where that testator's, or testatrix's knowledge of the virtues and failings of the members of his, or her, family, equips him, or her, for the responsibility of disposing of his, or her, estate in far better measure than can be afforded to a court by affidavits sworn after his, or her, death and which frequently provide an incomplete and superficial reflection of family relations and characteristics, should only be reached when the court is satisfied that the requirements of the Act are established.
Of course, the present is not a case where the testator has judged that the provision to be made for a beneficiary should be reduced by reason of that beneficiary's conduct. It is a case where a testamentary provision has been chosen by the deceased notwithstanding any shortcomings in the beneficiary's conduct and the intent of that provision has failed, and where the question arises in the context of the deceased's executor and trustee trying to deny any provision to the beneficiary for her own reasons, rather than in upholding the testamentary wishes of the deceased.
Far from this being a case where the court should have to trawl through and resolve the rights and wrongs and ups and downs of a long and somewhat tempestuous marriage, it is a case where the court should proceed upon the basis that the deceased has made a carefully judged, reasonable and rational assessment in the exercise of her own testamentary rights as to how she should dispose of her estate. To the fullest extent possible the court should give effect to the spirit of the deceased's will, read in the light of her memorandum of wishes. That is what I will do. The course that the parties took, however, required me to review the various issues of fact that the parties so passionately fought over, despite the reality that the exercise was futile.
A single example will suffice. An issue fiercely in contention was whether many years in the past, in the presence of the deceased, at a suburban RSL club, William left the premises holding the hand of another woman, and whether that signified that he was being unfaithful to the deceased, or whether as William claimed he was walking behind the woman, having faithfully promised his friend, the recently deceased husband of the woman, that he would look after her. The idea that the court would sit in judgment on this matter in the context of an application for a family provision order, and consider supplanting the judgment of the deceased herself with the its own judgment, is entirely misguided.

[32]

The deceased's estate

All of the assets in the deceased's estate of any significant value have now become subject to the trust established by the deceased's will.
Those assets primarily consist of a half share in No 93 valued at $820,000 and a half share in No 95 valued at $825,000. As I understand par 6 of the Joint Submission, the parties agreed that the assets of the trust were as stated in a document handed up during the hearing (subject to various adjustments that depended upon the court's findings concerning the amounts owed by and to Sonya as trustee). Relevantly, that document valued the deceased's half share in No 93 at $820,000, and her interest in No 95 at $825,000.
Later, in the context of submissions made by Sonya concerning whether orders should be made to make William the sole owner of No 95 and her the sole owner of No 93, Sonya made a submission that No 95 was worth $250,000 more than No 93. I do not propose to act upon that submission, as I consider it to be contrary to the convention adopted by the parties in the Joint Submission.
The trust also owns two parcels of land in Lebanon that have been given a value of $43,000, not taking into account the costs of transferring the title, which are said to be significant. Given the relatively low value of these properties and the doubt as to the costs involved in realising them, it is in my view appropriate to ignore their value for present purposes. At 22 April 2017, the trust had money in the bank of $5634.89. It will be appropriate to round the value of the assets to $1,650,000.
It is no longer appropriate to add William's obligation to pay half of the unauthorised drawdowns (that amount will now be a debt owed by William to the bank).
The assets of the trust should be increased by the net amount of $14,302.74 payable by William: see par 108 above.
William must pay $3500, being half of the amount of the lodger's fees received after 13 May 2013: see par 123 above.
That gives a total value of the assets in the trust of $1,667,802.74, say $1,670,000.
For the sake of this assessment, I will deduct the trust's share of the loan secured by mortgage over No 93 ($55,352), the full amount of the expenses of the trust paid personally by Sonya ($107,406.77), the administration fee claimed by Sonya ($168,162.50) and 90% of the legal costs of Sonya ($148,247.04) and 90% of the legal costs of William ($160,200). The deduction of 10% for the failed personal claims is arbitrary, and is more justifiable in Sonya's case than William's because of the work that was done in quantifying Sonya's claim. On this basis the total amount to be deducted would be $639,368.31, say $640,000.
Sonya will be liable to pay capital gains tax if No 93 is sold. The Joint Submission contained a calculation of the amount of CGT payable as being $153,296.38 upon certain assumptions. I will adopt $150,000. Sonya would also have to pay CGT if No 95 was sold. The parties did not include the amount payable in the Joint Submission, but I infer it would be slightly more than the amount of CGT payable on the sale of No 93.
I will therefore adopt $880,000 as the present net value of the trust's assets, on the assumption that I will make that it will only be necessary to sell No 93 to raise cash to meet the trust's liabilities.
An obvious consequence of this assessment of the net value of the assets of the trust is that almost all of that value ($825,000) would be attributed to the trust's interest in No 95, if an order were made that had the effect that William was entitled to enjoy the benefit of that interest for the remainder of his life. William's additional claim that he be entitled to the income from the balance of the trust during his lifetime would have little value. Only about $55,000 would remain in the trust that could be the subject of discretionary determinations by Sonya as trustee.

[33]

William's financial position

At present, William is entitled to a half interest in No 93 ($820,000) and a half interest in No 95 ($825,000), giving a total real estate value of $1,645,000.
I propose to approach the assessment of William's financial position by dealing first with assets and liabilities that have been clearly established and which are readily realisable or payable in cash.
I propose to use the schedule of William's and Ms Zhao's assets and liabilities provided to the court by Sonya as a basis for this exercise (noting that the items are not all accepted by William).
I propose to ignore the value of William's two burial plots at Rookwood and his 1994 motor vehicle, as neither asset is of great value, and constitutes property for which William has a need. William has IAG shares valued at $3290.35. He has $690.04 in a Commonwealth Bank account and $13,093.56 in an Arab Bank term deposit. The total of these assets is about $17,000. The total value of William's readily available assets is therefore $1,662,073.95.
William's share of the loan secured by mortgage over No 93 is $55,352. I found above at par 108 that the balance of the amount that William owes to Sonya as the trustee of the trust is $14,302.74, and I found at par 123 that William owes Sonya $3500 as half of the approved amount of lodger's fees that he received after May 2013.
William is also liable to the bank for the unauthorised redraws of $38,625. He may also be liable for interest and costs, but any additional obligation cannot be quantified. The bank has frozen two of William's accounts with balances of $8849.25 and $16,663.81. I will assume that the net amount that William owes to the bank is $13,111.94. (The final outcome of William's position in relation to the redraws is extremely uncertain on the evidence).
The parties agree that William will be required to pay CGT if No 93 is sold. The amount payable by William will be slightly less than the amount payable by Sonya, as William will be subjected to a lower tax rate. There was a minor difference in the calculations of the CGT payable by William made by the parties. I will adopt $130,000 as the approximate midpoint of the figures stated in the Joint Submission.
The total amount of liabilities payable by William if No 93 is sold would on the basis set out above be $216,266.68, say $216,000.
William claims that No 95 is in need of extensive repairs, which he assesses requires the expenditure of about $104,500. This is not a substantial amount for the repair of an old house. I will proceed on the basis that if No 95 continues to be William's residence for the balance of his life, he will pay this amount to repair the property. Of course, this will not be an expense to William if No 95 is sold.
As I have noted above, William's solicitor gave evidence that his legal costs on the ordinary basis were estimated to be $178,000. I have assumed for the purposes of assessing the net value of the trust's assets that William would not recover 10% of these costs because of his pursuit of his failed claim against Sonya personally. That amount would represent $17,800. I do not know what percentage recovery was assumed by William's solicitor when he calculated the costs that William would recover on the ordinary basis out of the total of his legal costs. If I adopt a percentage of 75% recovery, then William will have to find a further $59,333 (being the difference between his actual legal costs and his costs paid on the ordinary basis). Although it is arbitrary, I will assume that William and Sonya will pay no net amounts to the other as the costs of their failed personal claims. It is sufficient to note that in broad terms William may be required to meet additional legal costs of an amount in the order of the $77,000.
If the assumptions that I have made to this point are accurate then the total liabilities and expenditures faced by William would be $397,500, which would leave $422,500 out of William's half share of $820,000 in the value of No 93, which is a figure that does not allow for the selling costs.
The purpose of this exercise cannot be to determine in any accurate way what capital will be left to William after the sale of No 93. Its purpose can only be to adopt a rational basis for making a broad estimate of what William's capital position may be, as some steps in the process are no more than reasonable assumptions, and other steps involve unsubstantiated estimations.
An allowance must be made for William's properties in Lebanon. The only evidence of their value is the appraisals considered above, which William has accepted give the properties a nominal value of $456,117. I am not satisfied that it would be valid to treat those properties as being readily realisable assets with that value. William has not been able to sell the properties to date, and I am prepared to accept his evidence that because of their location and undeveloped state it would be difficult to find buyers for the properties. William has faced difficult financial circumstances since May 2013, and I find that it is probable that if it had been practically feasible for William to sell the properties, he would have done so in order to relieve his difficulties. In my view the proper way to regard William's ownership of the properties in Lebanon is as a potential source of capital in a substantial but indeterminate amount at some unknown future time. The properties should not be treated as an immediate source of capital or income to William.
I reject Sonya's submission that Ms Zhao has substantial assets in China that should be treated as augmenting William's financial position for the determination of his application for a family provision order. I am not satisfied that Ms Zhao has assets that are either of significant value or are readily realisable in a way that will provide a financial return to her. Ms Zhao has been living in Australia with William since about May 2013, and there is no evidence that she has received any capital or income from any source in China of any significance during the time that she has lived with William. The evidence is that before she moved in to No 95, Ms Zhao lived in the home of a relative. Nothing in the evidence of Ms Zhao's lifestyle suggests that she has access to any significant readily realisable wealth.
It is therefore not necessary to consider in detail the question of the extent to which it would be appropriate to take into account Ms Zhao's financial position in determining William's entitlement to a family provision order, and the nature of any such order that should be made.
So far as William's income is concerned, I have recorded above that his counsel acknowledged in submissions that William is able to licence part of No 95 to lodgers for a fee that is currently $400 per week.
In addition, according to the Joint Submission, William receives a pension that is currently $661 per fortnight. He can earn up to $292 per fortnight with no effect on the pension. For every dollar over that amount, the pension will reduce by $.50. Consequently, if William receives $800 per fortnight from a lodger, his pension will be reduced by $254 to $407, which will give a total fortnightly income of $1207.
William's pension will not be reduced by any capital interest that he has in No 95 as long as that is his place of residence. William may own assets other than his residence up to a value of $375,000 before his pension is reduced by reason of holding additional assets. For every $1000 of assets over that figure, the pension is reduced by $3.
Remembering that the calculation that I have made above of the value of William's share in the proceeds of sale of No 93 is an imprecise approximation, I have calculated that the amount that he will retain after all costs and other necessary payments will be in the order of $439,000 (being $422,500 net from the sale of No 93 plus the total of about $17,000 referred to in par 333 above), which is $64,000 above the limit of $375,000. The excess of $64,000 would lead to a further reduction in William's pension of $192 per fortnight to $215. His total income would then be $1015 per fortnight.
These calculations assume that William is able to permanently earn income from lodgers; they do not take into account any income that William may be able to earn by investing his capital; and they must be considered to be relatively imprecise.
At present, Ms Zhao is receiving a government benefit of $491 per fortnight.

[34]

Relationship between William and the deceased

Notwithstanding that I have already expressed the view that the deceased's judgment of William's conduct should be given paramount effect, it is necessary that I give some attention to the evidence by which Sonya attempted to justify an outcome that William be permanently deprived in the future from any benefit from the deceased's estate.
It should always be remembered that these matters did not apparently concern Sonya in the period between the grant of probate and May 2013, as during that period Sonya carried out the deceased's memorandum of wishes, and indeed on occasion travelled with her father overseas and stayed with him in the same apartment.
On Sonya's case, William was an abusive man who beat the deceased regularly and was unfaithful to her. On William's case, William and the deceased were involved in a small number of violent incidents over the course of their marriage, their relationship substantially improved when the deceased became ill, and he had only one affair.
Sonya submitted that William's abusive behaviour was disentitling conduct and referred to the provision in s 9(3)(b) of the Family Provision Act by which the 'character and conduct of the eligible person before and after the death of the deceased person' is something that the court may take into consideration when determining 'what order (if any) ought to be made'. Although this forms part of the second stage of the two-stage process, in accordance with the majority judgment in Singer v Berghouse (above), the relationship between William and the deceased is relevant to determining whether the provision made for the plaintiff was inadequate for the purposes of s 9(2).
It is not warranted that the court be required to engage in a minute examination of all of the allegations made by Sonya and the responses of William concerning the relationship between William and the deceased over the many years covered by the evidence. It will be sufficient to consider the principal aspects of that evidence.

[35]

Evidence of Sonya and her witnesses

In her affidavit dated 12 April 2016, Sonya gave evidence that William and the deceased were 'separated under the same roof' and she exhibited a Social Security Job Search Allowance Claim made by the deceased in 1993 in which the deceased ticked a box stating her marital status as 'separated'. She said that there were many incidents of domestic violence in their family home and that she observed William physically striking, pushing, and pulling the hair of the deceased. She recounted an incident during 2005 when William pushed the deceased and screamed at her 'I can't wait until you die and in the ground so I can be done with you'.
To support her claim Sonya provided a copy of a letter dated 25 September 1991, provided to her by a constable at the Marrickville Police Station. In the letter, the constable said that the Marrickville Police had attended No 95 on several occasions for domestic violence problems.
Sonya also gave evidence of William being unfaithful to the deceased with a woman named Layla, and suggested that William may have had an affair with a woman named Linda Khoury.
In response to the assertion made by William and several of his witnesses that William looked after the deceased when she became ill, Sonya acknowledged that William assisted the deceased with 'some home care' and visits to the hospital and to the doctors, but said that William was only at the deceased's bedside in hospital when he came with her or visited at her specific request.
Sonya's account of the relationship between William and the deceased is supported by her brother, Sid Bkassini. Sid gave evidence of William being unfaithful to the deceased and being violent towards her on many occasions, including one incident where he hit her in the face with a closed hand and left her lying on the floor bleeding.
Mary Rose Barber, a solicitor who was the daughter of a friend of the deceased, gave evidence in her affidavit dated 26 May 2015 that the deceased often sought refuge from William in her parents' house. She said that she had seen the deceased in a distressed state, crying uncontrollably and bruised on various parts of her body. She described two occasions upon which she saw bald patches in the deceased's hair, and claimed that the deceased told her that William had pulled her hair so hard that it came out by the roots. She also said that the deceased told her that William said that he wished she would "hurry up and die" because he had Chinese women waiting for him.
Ms Barber said that she advised the deceased on how to unilaterally sever the joint tenancy of No 95 with William after the deceased "pleaded" with her for advice about how to protect her share of the property for the children. She said that she prepared the relevant documentation for the deceased and met with both the deceased and Sonya in early 1994, but did not lodge the document for registration. Sonya in her affidavit dated 12 April 2016 stated that she herself completed the registration.

[36]

Evidence of William and his witnesses

In his affidavit dated 14 September 2016, William admitted to having an affair in 1977 but said that he was never unfaithful to the deceased again. He said that he and the deceased were never estranged or separated. He described how he helped the deceased dress herself and get to appointments when she became sick, and did things around the house such as washing up. In response to Sonya's claim that he told the deceased that he could not wait for her to die, William said: "I strongly deny ever saying such a thing…"
As to the allegations of abuse, William denied that he was violent towards his wife other than one "incident in South Hurstville some 40 years ago". He said that the only times that an ambulance was called to their home in South Hurstville were to take the deceased to hospital when she was about to give birth and when she experienced a miscarriage.
During cross-examination, counsel for Sonya asked William whether he hit the deceased with a closed fist during the incident in South Hurstville. William denied hitting his wife with a closed fist during that incident and indicated that he hit her with the back of his hand.
Counsel for Sonya also asked William if he remembered an apprehended domestic violence order in 1992. William said that he remembered and said that he often got into fights with his children. Counsel then asked him if he hit or slapped the deceased when these fights occurred. William said that he pushed the deceased when she intervened in the fights.
Sam Bkassini, in his affidavit dated 13 September 2016, gave evidence that he never witnessed William lay a hand on the deceased and went so far as to say that he "personally would have attacked him had he done so as would have Sid". He also gave evidence that he was aware of the affair that William had with a woman named Layla, and that William had said that it was a mistake of which he was not proud. He said that William had always denied having an affair with Linda Khoury.
Sam Bkassini's wife, Maria Bkassini, gave evidence in her affidavit dated 13 September 2016 that the deceased never mentioned being separated from William and that William helped his wife in the kitchen and around the house, and with getting out of bed, after she became ill.
William's remaining witnesses consisted of various other relatives and friends. These witnesses included: Camille Hawa, the brother-in-law and second cousin of the deceased; Gaby Hawa, Mr Hawa's daughter and a niece of the deceased; Hanna Nader, one of Mr Hawa's nieces and a family friend of the Bkassinis; and Elias Sarkis, William's first cousin. Each of these witnesses gave evidence that they never knew the deceased and William to have separated and that William looked after the deceased when she became ill. Ms Nader and Mr Sarkis in particular gave evidence that they never recalled hearing or seeing William being violent or abusive to the deceased.
William also called George Ghossein, the brother of Mary Barber. Mr Ghossein gave evidence in his affidavit dated 14 September 2016 that he never witnessed or heard of William being violent or abusive towards the deceased. In response to Ms Barber's claim in her affidavit that she witnessed the deceased in a distressed state, Mr Ghossein said that he never saw the deceased in such a state, and never witnessed the deceased crying or bruised.

[37]

Parties' submissions

William submitted that his "relationship with the deceased was not as bad as claimed by the defendant".
William acknowledged that there was an incident where he assaulted his wife in 1978, but submitted that Sonya and Sid, who gave evidence of the event, were respectively three and five years old at the time. William also acknowledged that an apprehended violence order was taken out against him in 1992.
William submitted that Sonya embellished her evidence to portray his relationship with the deceased as worse than it was. He relied upon the evidence outlined above to support his claim that he and the deceased were never separated, and that he looked after her during the course of her terminal illness. William said that Sonya, if she had been honest, would have originally included the details of her parents' relationship in the later years of the deceased's life that she disclosed in cross examination.
Sonya submitted that the history of violence could be well established on any reading of the evidence as a whole. She referred to formal documents in which the deceased stated that she and the plaintiff were separated and the apprehended personal violence order in 1992.
Sonya drew attention to the fact that, in cross examination, William denied hitting the deceased with a closed hand but did not appear to deny hitting her with an open hand. She relied upon the evidence given by Mary Barber and by Sid. She said that Sam "had a significant interest in the outcome" of the case, appearing to suggest that he coloured his evidence for that reason. She also said that the court could infer that William was violent to the deceased from his admission that he hit Sid when he was fourteen or fifteen years of age.
Both parties also submitted that the relationship between William and deceased should be characterised by having regard to the wishes of the deceased contained in her will and memorandum of wishes. William submitted that the memorandum of wishes establishes that the deceased wished to provide for William. Sonya submitted that the deceased "plainly made a deliberate decision to put the binding part of her testamentary intention in the Will and the rest in an expressly non-binding memorandum of wishes".
In closing oral submissions, counsel for Sonya submitted that the testamentary disposition of the deceased should be viewed through the prism of the deceased intentionally giving the defendant the power to determine how her estate should be administered. The will, he argued, was the true expression of the deceased's testamentary disposition, and the memorandum of wishes was intentionally executed to be non-binding. Sonya's argument in essence was that the deceased did not intend to leave any property to William and intended to give Sonya the power to decide the circumstances in which William should be provided for.
I concluded earlier that the deceased did want William to enjoy the benefit of her estate during his life but wanted to ensure that he did so in a manner that preserved her capital for the benefit of her children. I have not accepted Sonya's argument that the essence of the deceased's testamentary intention was that William should only enjoy such benefits from her estate as Sonya for her own reasons determined from time to time were suitable.
It is necessary to put the evidentiary dispute between the parties as to William's conduct and its significance to his application for a family provision relief into a proper context.
In the usual case, the significance of the applicant's character and conduct towards the deceased will arise at both stages of the process of determining the applicant's claim, in circumstances where the applicant's case is that the testator has made a provision for the applicant that is less than the provision that is adequate for the proper maintenance, education and advancement in life of the applicant and in circumstances where that outcome is what was intended by the testator. In that context the question will be whether the testator was justified in making the provision that he or she did by reason of the testator's consideration of the significance of the applicant's character and conduct. If that is the issue, it may generally not be necessary for the court to engage in a thorough investigation of the character and conduct of the applicant over a period that may run into decades. Speaking generally, it may be sufficient if relatively isolated examples of character and conduct are established that are judged to be sufficient to support the testamentary determination made by the testator.
In my view the issue of William's character and conduct has been raised in the present case in a different context. That context is whether William's character and conduct in relation to the deceased was so reprehensible as to disentitle him from any family provision order, and to leave him to survive on the adequacy of his own resources, notwithstanding that the deceased expressed an intention that he enjoy the whole of her estate during his lifetime, without having access to the capital, subject to the discretionary judgment of her trustee to be exercised on the expressed wish that she would use her best endeavours to implement the memorandum of wishes.
The difference may be thought to be subtle, but in my view the forensic consequences are significant. The question is not whether there is sufficient evidence of bad character or conduct to justify the provision made by the testator and to decline to alter the effect of the will. The question is whether the character and conduct is sufficiently reprehensible to deny the applicant what the testator intended.
Quite apart from the fact that the testator will almost always be the best judge of this question, with whose judgment the court should be loath to interfere, it is not likely to be a realistic subject-matter for reliable forensic judgment on the part of the court. The evidence covered a period of at least 14 years between the matters referred to in the Marrickville Police letter dated 29 September 1991 and the death of the deceased on 18 May 2005. It would be necessary for the court to conduct a far reaching and detailed enquiry before it could make balanced findings concerning the nature of William's conduct in relation to the deceased.
There is no reason for the court to reject the evidence of any of the witnesses entirely, and I do not understand the parties to have submitted that the court should do so. I broadly accept that all of the witnesses have attempted to give honest evidence of their recollections, but the court has no means of judging the extent to which individual recollections have been coloured by personal relationships and the passing of time. William admitted to one incident of infidelity many years before the deceased's death, and the evidence before the court does not justify a positive finding that William engaged in further infidelity. William did not deny that there were instances of domestic violence, and it is likely that he has minimised the frequency and seriousness of his violent conduct. The court has no real basis for judging the extent to which William's recollection is genuine, even if it is false. It is probable that there were a significant number of serious cases of violence that would individually be described as reprehensible. However, this conduct should be measured against the evidence of the many witnesses who gave what I accept to be genuine evidence that over long periods of time they had not experienced or become aware of improper conduct by William in his relationship with the deceased. I cannot see how the court can make any sound judgment about the overall seriousness of the delinquent conduct engaged in by William, balanced against the long passages of time when the many people close to him and the deceased did not experience that improper conduct.
That is why I have come to the view that the proper judge of this issue can only be the deceased.

[38]

Relationship between deceased and other persons who have claims upon her bounty

This is not a case where William's claim must be measured against strong and deserving competing needs of other eligible beneficiaries. The evidence establishes that Sonya and her husband are relatively well off. Sonya has not made a case that she has exercised her trustee's discretionary powers in the manner that she has because of some unexpected change in the circumstances of the beneficiaries of the trust that has caused her to decide that it would be proper for her to distribute part of the trust to the other beneficiaries in preference to William. Sonya has given no evidence of any plan to distribute the assets of the trust to any other beneficiaries during William's lifetime.
Sam gave evidence that he does not want to receive any distribution from the trust in preference to his father.
Sid gave evidence of his circumstances in an affidavit dated 22 April 2017. Sid said that he and his wife currently owe the defendant and her husband about $35,000, and said that his home requires a lot of repairs and improvement. He said that two of the motor vehicles he owns require repairs, and that about three to four years ago the Child Support Agency determined that he should pay his wife, from whom he has been separated from time to time, $300-400 per week in child support.
Sid also gave evidence that he found it difficult to work due to being morbidly obese, having pain in his knees from arthritis, having high blood pressure and suffering from depression. He also gave evidence that he needs extensive dental work. A statement of his and his wife's fortnightly income annexed to his affidavit described Sid as earning an estimated $1400 per fortnight, his wife earning $2387.15 per fortnight, and the two of them receiving $643.28 in allowances from the government. Their net income was listed as $4,430 per fortnight and their net expenditure as $5,137.96.
However, for present purposes it is significant that there is no evidence that Sonya has used her trustee's power to distribute any of the trust's assets to Sid at any time after the death of the deceased in 2005, or that she has any proposal to do so.

[39]

Adequacy of the provision made for William

The question is whether, for the purposes of s 9(2) of the Family Provision Act, the provision made in favour of William by the deceased out of the deceased's estate is, at the present time, inadequate for the proper maintenance and advancement in life of William.
That question requires an affirmative answer for two reasons. First, given the length of time that William has lived in No 95, and the effort that he must have made in concert with the deceased to acquire the unencumbered title to that property, I am satisfied that William will not be able to acquire a new residence that is proper in the circumstances and still have an adequate buffer of capital to provide for future contingencies and to supplement his income, if a family provision order is not made.
The effect of the deceased's will is that William has a half interest in each of No 93 and No 95 worth a total of $1,645,000. If a family provision order is not made and both properties are sold, William will have realisable net assets valued at about $1,352,000. This amount comprises William's $1,645,000 interest in the properties minus expenses of approximately $293,000 (being the $397,500 in liabilities and expenditures referred to in par 340 minus the $104,500 in repairs to No 95 referred to in par 338, which will not be necessary if No 95 is sold). William will also have some prospect of realising the value of his Lebanon properties, income from his pension, and some benefit in sharing living costs with Ms Zhao. He has no prospect of receiving any further distributions by Sonya as trustee of the trust. In my view, this is not an adequate outcome for William's proper maintenance and advancement in life, given the total original value of the net assets of William and the deceased, which they had accumulated over many years of mutual and strenuous effort.
Secondly, the measure of what would be the proper provision for William's maintenance and advancement in life is the statement by the deceased in her memorandum of wishes and her instruction to her solicitor to the effect that William should be entitled to live in No 95 for his lifetime or as long as he chooses to live there, and that the income of the testamentary trust that the deceased established should be used for William's benefit.
The deceased's wishes should be given paramount effect in preference to the wishes of Sonya who, I am satisfied, has exercised her trustee's discretion for her own reasons after many years of compliance with the wishes expressed by the deceased.

[40]

Stage two: what provision (if any) ought to be made?

The second stage of the two-stage process is to determine what provision (if any) ought to be made. As noted earlier, s 9(3) of the Act stated that: (3) In determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person, the Court may take into consideration: (a) any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to: (i) the acquisition, conservation or improvement of property of the deceased person, or (ii) the welfare of the deceased person, including a contribution as a homemaker, (b) the character and conduct of the eligible person before and after the death of the deceased person, (c) circumstances existing before and after the death of the deceased person, and (d) any other matter which it considers relevant in the circumstances.
As envisaged by the majority in Singer v Berghouse, I have addressed many of these matters in my consideration of the first stage of the process. It is not in my view necessary in the circumstances of this case for me to repeat my consideration of these matters.
Once all of the issues raised by the parties in this case have been dealt with, as I have attempted to do above, the final question of what family provision order should be made in William's favour becomes a relatively simple one.
First, I am satisfied that an adequate provision for the proper maintenance and advancement in life of William should include that William be entitled to live in No 95 for his lifetime if he chooses to do so, or in equivalent accommodation if he becomes unable to.
Secondly, the wishes stated by the deceased that William should be able to live at No 95 for life, and that her capital should be used for his benefit, should be respected, but so should her wish that her capital should be preserved for the benefit of her children. Consequently, the family provision order should not involve a gift of the deceased's half interest in No 95 to William. It should be in the nature of a Crisp order. A Crisp order is an order that ensures that a person who is granted a life estate is not disadvantaged if they have to leave the property that is subject to the life estate, for example, if through old age they become unable to maintain the property and need to move into something smaller or into an aged care facility. In Dimic v Djekovic [2014] NSWSC 1502, Hallen J described the effect of a Crisp order as follows: [172] What is described in the cases as a "Crisp order" is an order of the kind made by Holland J in Crisp v Burns Philp Trustee Co Ltd (Supreme Court (NSW), Holland J, 18 December 1979, unrep), except in part, in L G Handler and R Neal, Mason and Handler's Succession Law and Practice in New South Wales (1985, LexisNexis Butterworths) at p 13580, at [9433]). Such an order gives an applicant an interest for life in real property, or in an interest in real property, with the right to it (should the need arise) for the purposes of securing, for the applicant's benefit, more appropriate accommodation. That type of order is intended to provide flexibility, by way of a life estate, the terms of which could be changed to cover the situation of the applicant moving from her own home to retirement village to nursing home to hospital. The flexibility provided by such an order underlies the notion that a "Crisp order" confers a "portable life interest": Court v Hunt (Supreme Court (NSW), Young J, 14 September 1987, unrep), cited with approval by Ipp JA in Milillo v Konnecke [2009] NSWCA 109, at [47]-[48].
It will be appropriate for the parties' legal representatives to give careful attention to any special terms of the order that should be included to accommodate the fact that William will own half of the title to No 95 outright, and be entitled only to a portable life interest in the balance.
As it is now inevitable that orders will need to be made for the sale of No 93, in order to pay the costs of the proceedings and to meet various other expenses, William will by virtue of his half ownership of that property retain an amount of capital without the need for any family provision order in that respect. I have estimated the amount that William will retain after various payments have been made to be $432,500, but the actual amount may be more or less depending upon what occurs, including the actual sale price obtained for No 93, and whether William is ultimately successful in realising the value of the properties in Lebanon. The amount of capital that William is able to maintain will provide some buffer for him against contingencies, and give him access to a capital amount for some level of discretionary spending.
William will receive income in periods during which he can find lodgers to live in No 95. William will retain an entitlement to receive a pension the amount of which will be affected from time to time by his additional capital, income from that capital, and income from licensing part of No 95 to lodgers.
That will be a reasonable outcome for William, but it will not have the effect that he will be able to live a prosperous life.
The value of the deceased's half interest in No 95 will be retained for the benefit of the deceased's children upon William's death in accordance with her will.
William submitted that the family provision order should have the effect that he should receive the income from what remains of the deceased's share in No 93 after it is sold. As I have explained above at par 329, if the assessment of the trust's financial position after the completion of these proceedings and the completion of all obligations occurs is approximately correct, the net assets will be reduced to about $55,000. There is no point in making an order that William be entitled to the income from that amount during his life, and in any event in my view it will be appropriate for the court not to make a family provision order in William's favour that further limits the effectiveness of the testamentary trust created by the deceased. While it is true that the deceased stated her wish that the income of the trust be applied for the benefit of William, she also made the trust a discretionary one which gave Sonya power even in conformity with the deceased's wishes to apply the assets of the trust for the benefit of beneficiaries other than William. It is appropriate that the deceased's intention in this respect be implemented. It is most unfortunate that the assets of the trust have been depleted to the extent that they have, largely by the costs of this litigation.
I should record that during the parties' submissions I raised the possibility that the court may be able to make orders that had the effect that William would become the sole owner of No 95, and Sonya would become the sole owner of No 93, by reason of a family provision order being made that transferred the deceased's interest in No 95 to William on condition that he transferred his interest in No 93 to Sonya.
William supported that suggestion, but it was rejected by Sonya on the basis that unnecessary obligations to pay CGT and stamp duty would be triggered, and in any event the trust would not be left with any cash and would be required to sell No 93 to meet the costs of the proceedings and other expenses. I accept that when the effect of all of the transactions and obligations that I have considered above are taken into account there is no virtue in pursuing what the parties have called a swap order.
The result is that the only orders that I propose to make under the Family Provision Act that will affect the assets of the trust are a Crisp order in favour of William in respect of the trust's half ownership of No 95, as well as an order that Sonya pay an appropriate portion of William's costs of the proceedings on the ordinary basis, after an allowance is made for his failed claim against Sonya personally.

[41]

Should notional estate orders be made?

There will be no assets available to meet those orders unless the court is able to make notional estate orders against an appropriate part of the assets of the trust.
Essentially the whole of the estate of the deceased has been distributed to Sonya as trustee of the trust. Section 24 of the Family Provision Act has the effect that, if the court is satisfied that an order for provision ought to be made on the application, and finds that, as a result of the distribution, property became held by a person as trustee, or subject to a trust, the court may, subject to ss 27 and 28, make an order designating as notional estate of the deceased such property as the court may specify, being property which is held by, or on trust for, the person. It follows from the conclusions that I have reached above, that the conditions for the making of a notional estate order are satisfied in this case, subject to the question of whether ss 27 and 28 of the Family Provision Act are satisfied.
I do not understand Sonya by her submissions to have contested the fact that the requirements ss of 27 and 28 are satisfied in this case. In any event, I find that they are satisfied. The family provision order that I propose to make will not interfere with the reasonable expectations of any person in relation to property, as the combined effect of the deceased's will and her memorandum of wishes is that the proposed order falls substantially within the benefits that the deceased contemplated would be enjoyed by William in the execution of the trust, so the other beneficiaries should have expected this outcome to occur: see s 27(1)(a). Nothing has been suggested to the effect that there will be any substantial injustice or lack of merit in making a family provision order in relation to the deceased's interest in No 95: see s 27(1)(b). No other relevant matter has been suggested in opposition to such a notional estate order being made: see s 27(1)(c). The provisions in s 27(2) that concern prescribed transactions are not material in this case, and having regard to the value and nature of the deceased's interest in No 95, there is no reason why the proposed notional estate order should not be made in relation to that property see s 27(2)(a).
In finding that the proposed notional estate orders will not interfere with the reasonable expectations of any person, I have proceeded on the basis of my understanding that William has not submitted that such orders should be made in respect of any part of the assets of the trust if the effect would be to deprive Sonya of the ability to recover any amount that she would otherwise be entitled to recover from the assets. In calculating the value of the assets in the trust that will be available to meet any family provision order made in favour of William, I have attempted first to exclude all amounts that the evidence suggests may be required to meet legitimate claims made by Sonya.
Section 28(1)(a) is satisfied because there are no assets in the deceased's estate that would now allow the proposed family provision order to be made. The proposed notional estate order is not in excess of that necessary to enable the proposed family provision order to be made, as the two are coextensive: see s 28(2).
As William is only entitled to make the present application by virtue of an order made by the court under s 16(2) of the Family Provision Act, s 28(5) of that Act has the effect that the court may not make the proposed notional estate order unless it is satisfied that the assets of the deceased's estate that have been distributed to Sonya as trustee are held by her as trustee only and that no part of the property to be the subject of the notional estate order has vested in interest in any beneficiary under the trust. It has not been suggested that any of the assets of the trust have become vested in interest in any beneficiary.
It will therefore be appropriate for the court to make a notional estate order under s 24 of the Family Provision Act in respect of the deceased's interest in No 93 or its proceeds of sale to support the proposed family provision order in favour of William in respect of that interest.
It will also be necessary to make a notional estate order in relation to so much of the net proceeds of sale of No 93 as is necessary to support the proposed order in favour of William for an appropriate part of his costs of these proceedings. I am satisfied by parity of reasoning with that set out above that the court will be authorised by the Family Provision Act to make that notional estate order.

[42]

Proposed orders

Given the complexity of the issues dealt with in this judgment I will require the parties to confer and to prepare short minutes of order to give effect to the determinations that I have made.
In summary, it will be necessary for the orders to deal with the following matters: 1. each of the findings that I have made in relation to the claims made by and against William and Sonya, and in Sonya's case whether personally against William or as trustee of the trust; 2. an order should be made under s 16(2) of the Family Provision Act that has the effect of extending the time for William to make his application under that Act up to the date when he filed the pleading in which he made that claim; 3. a Crisp order should be made under s 7 of the Family Provision Act in favour of William in respect of the deceased's interest in No 95; 4. a notional estate order should be made under s 24 of the Family Provision Act in respect of the deceased's interest in No 95 to support the Crisp order; 5. an order should be made in favour of Sonya that an appropriate amount of her costs of contesting William's application for a family provision order should be payable out of the assets of the trust on the indemnity basis; 6. an order should be made in favour of William that an appropriate amount of his costs of his application for a family provision order should be payable by Sonya on the ordinary basis; 7. a notional estate order should be made under s 24 of the Family Provision Act in respect of the net balance of the trust's interest in the sale price of No 93 to support William's order for costs; 8. appropriate orders will be required to deal with the costs of the individual money claims; 9. an order must be made under s 66G of the Conveyancing Act to provide for the sale of No 93 by trustees for sale (having regard to the fact that Sonya has withdrawn her interest in personally bidding for that property so long as it adjoins No 95 which will be William's residence).
In-so-far as this list of matters to be dealt with in the court's orders deals with issues of costs it may be regarded as provisional, as the present matter raises unusual costs issues in relation to which the parties have not yet made submissions. I will hear the parties on the question of the costs orders that should be made.
I will hear the parties on these outstanding matters, but they should proceed on the basis that the court will not welcome any continued unreasonable or unnecessary disputation.

At a glance

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Judgment (43 paragraphs)

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Legislation Cited (5)

Cases Cited (70)