Ali v Ali
[2011] NSWSC 261
•07 April 2011
Supreme Court
New South Wales
Medium Neutral Citation: Ali v Ali [2011] NSWSC 261 Hearing dates: 21 and 22 February 2011 Decision date: 07 April 2011 Before: Tamberlin AJ Decision: 1. In proceeding 2008/281384 order that:
a) pursuant to s 7 of the Family Provision Act 1982 (NSW), provision be made from the estate of the deceased for each of the plaintiffs to receive a one-third share of the net distributable value of the estate after the taking of accounts;
b) otherwise the proceeding be dismissed;
c) costs of this proceeding be paid from the estate of the deceased on an indemnity basis.
d) liberty to apply on 2 days' notice
2. In proceeding 2010/211560 order that:
a) the matter be referred to an Associate Justice of the Equity Division to inquire into and assess the amount of rent paid to the defendant by the tenant of the property at 41a Esk Avenue, Green Valley, as well as any reasonable expenses relating to the proper repair or maintenance of the premises incurred by the defendant;
b) the defendant pay to the first plaintiff all rental moneys paid to her by the tenant of the property at 41a Esk Avenue, Green Valley, less any reasonable expenses relating to the proper repair or maintenance of the premises following the inquiry referred to in order 2(a) above;
c) the matter be referred to an Associate Justice of the Equity Division to inquire into and assess the amount of rent paid to the defendant by the tenant of the property at 41b Esk Avenue, Green Valley, as well as any reasonable expenses relating to the proper repair or maintenance of the premises incurred by the defendant;
d) the defendant pay to the first plaintiff all rental moneys paid to her by the tenant of the property at 41b Esk Avenue, Green Valley, less any reasonable expenses relating to the proper repair or maintenance of the premises following the inquiry referred to in order 2(c) above;
e) costs of this proceeding be paid from the estate of the deceased on an indemnity basis.
f) liberty to apply on 2 days' notice.
Catchwords: WILLS AND ESTATES - intestacy - family provision claim -power to make orders affecting immovable property of deceased in New South Wales - no power to make orders affecting property outside of New South Wales - orders to adjust entitlements of claimants on intestacy appropriate.
WILLS AND ESTATES - administratrix - duty to get in assets - appropriate to order account for rent for properties forming part of estate.
EQUITY - trusts - express trust - no evidence of present intention to create a trust.Legislation Cited: Family Provision Act 1982 (NSW)
Probate Administration Act 1898 (NSW)Cases Cited: Ciaglia v Ciaglia [2010] NSWSC 341
Maks v Maks (1986) 6 NSWLR 34
Savic v Kim [2010] NSWSC 1401
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Taylor v Farrugia [2009] NSWSC 801
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191Category: Principal judgment Parties: Matter 2008/281384
Jasveen Mofia Ali (First Plaintiff)
Janifa Ali (as tutor for Adilah Zafirah Ali) - (Second Plaintiff)
Rehana Ali (Defendant)Matter 2010/211560
Rehana Ali as administratrix of the estate of Mohammed Azam Ali (First Plaintiff)
Dewa Nand as attorney for Rehana Ali (Second Plaintiff)
Janifa Ali (Defendant)Representation: Counsel:
Matter 2008/281384
R Wilson (Plaintiffs)
P O'Loughlin (Defendant)Matter 2010/211560
Warren McKeon Dickson, Solicitors (Plaintiff/Defendant Rehana Ali)
P O'Loughlin (Plaintiffs)
R Wilson (Defendant)
Solicitors:
Business Lawyers (Liverpool) Pty Ltd (Plaintiffs/Defendants Janifa Ali, Jasveen Ali, Adilah Ali)
File Number(s): 2008/281384; 2010/211560
Judgment
INTRODUCTION
These proceedings relate to the estate of the late Mohammed Azam Ali ("the deceased") who died intestate on 29 April 2007 aged 46 years. He is survived by his wife Janifa Ali from whom he was separated at the date of his death. They were not divorced. Rehana Ali is his de facto wife with whom he had been living since 1998 in Fiji and to whom he was betrothed in a Muslim ceremony in that year. He had two daughters with Janifa Ali, Jasveen Ali, now aged 23 and Adilah Ali, now aged 19.
Letters of Administration on Intestacy of the deceased's estate in respect of his New South Wales property were granted by the Supreme Court of New South Wales to Dewa Nand as attorney for Rehana Ali on 18 February 2009.
The New South Wales estate of the deceased consisted of two properties at 41a and 41b Esk Avenue, Green Valley ("the Esk Avenue properties") which are agreed to have a value of $369,000 each. The deceased also left assets in Fiji and Letters of Administration were granted to his wife, Janifa Ali, on 17 July 2007 by the High Court of Fiji.
There are two proceedings currently before me. Jasveen and Janifah as tutor for Adilah are the plaintiffs in proceeding No. 2008/281384 and seek declarations that Rehana, as administratrix of the deceased estate, holds the Esk Avenue properties on trust for them together with consequential orders. Alternatively, they seek provision out of the estate of their father pursuant to s 9 of the Family Provision Act 1982 (NSW).
In the other proceeding now before me (No. 2010/211560) Rehana Ali is the first plaintiff and seeks an account from Janifa Ali in respect of rent and expenses which relate to the Esk Avenue properties.
THE ISSUES
There are three primary issues. These concern (i) the claim by the daughters that the Esk Avenue properties are held in trust for them, (ii) the family provision claim by them and (iii) the claim for account brought by Rehana Ali.
The questions which arise in relation to the trust claim are whether there is sufficient evidence to find that the Esk Avenue properties are held on trust for Jasveen and Adilah; whether there is any sufficient writing to satisfy such a claim, and whether in the event a trust is made out as a condition of relief the daughters should repay the moneys totalling in the order of $139,000 paid by a company owned by Rehana Ali, Eastwind Pty Ltd ("Eastwind") to discharge a mortgage on the properties.
In relation to the family provision claim questions arise as to whether each daughter has a sufficient need to warrant the making of an order and as to what order should be made taking into account all relevant considerations.
With respect to the claim for an account the question is whether the plaintiff Rehana Ali was entitled to receive rent from the Esk Avenue properties, the amount received by Janifa Ali, and whether she should be required to account to Rehana Ali for rent received and to pay such rent to her as part of the estate of the deceased.
LEGAL PRINCIPLES
The deceased left property both in New South Wales and Fiji. Where a person dies whilst domiciled outside New South Wales and leaves property in New South Wales it is necessary to consider the principles regarding the jurisdiction of this Court and the matters which can be taken into account when determining whether and if so what provision should be made by way of family provision under the Act. The relevant principles were considered by Brereton J in Taylor v Farrugia [2009] NSWSC 801 at [26] where his Honour said in relation to a testator who died in Malta leaving real and personal property both in Malta and New South Wales:
"Both Salvatore and Emanuela died domiciled in Malta, leaving real and personal property both in Malta and in New South Wales. In those circumstances the relevant law is, as stated by Scholl J in Re Paulin [1950] VLR 462 at 465, that in connection with the application of testator's family maintenance legislation, first , the Courts of the domicile alone can exercise jurisdiction under the testator's family maintenance legislation of the domicile in respect of movable and immovable property in the place of domicile; secondly , the Court's of the domicile alone can exercise such jurisdiction in respect of movable property of the deceased outside the place domicile; but thirdly , Courts of the situs alone can exercise such jurisdiction in respect of immovable property of the deceased out of the place of domicile, and Courts of the place of domicile cannot exercise such jurisdiction [see also Pain v Holt (1919) 19 SR (NSW) 105; Re Sellar (1925) 25 SR (NSW) 540; Re Donnelly (1927) 28 SR (NSW) 34; Re Osborne [1928] St R Qd 129; Re Butchart [1932] NZLR 125, 131; Ostrander v Houston (1915) 8 WWR 367; Heuston v Barber (1990) 19 NSWLR 354; Balajan v Nikitin (1994) 35 NSWLR 51]. It follows that any order made by this Court can affect only immovable property of the deceased in New South Wales ; it cannot affect movable property in New South Wales, nor any property outside the State. However, in deciding what order should be made affecting immovable property in New South Wales, the Court is entitled nonetheless to take into account assets beyond the reach of its jurisdiction which inform the extent to which eligible persons and beneficiaries and others having claims on the deceased's testamentary bounty have and will receive provision . The Court can also take into account assets beyond the reach of the jurisdiction in deciding what order to make in respect of costs relating to the assets in the jurisdiction [see Re Paulin and Re Donnelly ]." (Emphasis added.)
The relevant principles have been summarised by Hallen AsJ in relation to family provision claims in Savic v Kim [2010] NSWSC 1401 at [28]-[86]; White J in Ciaglia v Ciaglia [2010] NSWSC 341 at [50]-[53] in relation to the need for writing to create an interest in land and fraud on the statute, and by McLelland J in Maks v Maks (1986) 6 NSWLR 34 at 35-36 in relation to the need for writing to prove the existence of a trust and the standard of proof. The leading High Court decisions are found in Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 at 208-211 and Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 at [11]-[12] and [115].
In each case the factual context and history, must be carefully considered and the authorities emphasise that there are no universally valid tests such as whether a claimant is an adult or a spouse or whether a disposition is generally speaking fair or equitable. Primary attention must be directed to the criteria of what is "adequate" provision and/or "proper" maintenance and support for the applicant in all the circumstances. The criteria are flexible and may vary according to contemporary accepted community standards. The making of an order is not based on a necessity to show dire need or destitution on the part of the applicant.
ESTATE
The parties are unable to agree on the precise amount of the net distributable value of the estate. The plaintiffs contend that it is in the order of $493,524 to which could be added an amount of $46,116 making a total of $539,640 and the defendant claims it is about $619,000. The principal differences relate to the amounts of rent which may be recoverable by the estate which the plaintiffs claim is about $87,000, and there is also a dispute as to legal costs. On the evidence available to me at this stage it is not possible to be precise as to specific figures because accounts need to be taken. However, for the purpose of determining whether a provision should be made I do not consider the difference affects my conclusion that some substantial further provision should be made for the daughters and I consider this can be expressed as a percentage of the net distributable assets when finally determined. The conclusion I have reached is that each of the claimants and Rehana Ali should receive a one-third share of the net distributable estate after accounts have been taken. In reaching this conclusion I have proceeded on the basis that the net distributable value is an amount somewhere between the amounts contended for by the parties. Whether the figure for net distributable assets is that claimed by the plaintiffs or the defendant I do not consider it makes any significant difference for the purpose of deciding the appropriate share to be allocated as between the plaintiffs and the defendant.
BACKGROUND
In October 1985 the deceased married Janifa, his first wife. In 1987 their daughter Jasveen was born and in 1991 another daughter, Adilah was born. The deceased and Janifa separated in February 1996 but did not divorce and in February 1998, Rehana Ali commenced a de facto relationship with the deceased and lived with him in Suva. In October 1998 there was a Muslim betrothal ceremony between Rehana and the deceased.
In the period from June 2001 until December 2001 various aspects of a property settlement were negotiated between the deceased and Janifa Ali. During 2001 these negotiations were carried out and on 20 December 2001 orders were made by consent in the Family Court of Australia, giving effect to the Terms of Settlement agreed by the parties, which included the following provision:
"That by way of property settlement the wife [Janifa] transfer to the husband all her right title and interest in property know as ...Esk Avenue, Green Valley ... and the husband shall indemnify and keep indemnified the wife in respect of all amounts owed by the parties to the National Australia Bank Limited."
The Esk Avenue properties were transferred by Janifa to the deceased on 22 December 2005. An outstanding loan in the order of $139,000 was paid out to the National Australia Bank in November 2005 by the deceased and Rehana Ali through the Fijian company, Eastwind.
The claim of the daughters to the Esk Avenue properties which is based on the existence of a trust is that in about June 2001 Janifa Ali had a telephone conversation concerning the properties of the parties in which the deceased said that he would give two properties at Bonnyrigg Heights and Hinchinbrook to Janifa and that he would keep the Esk Avenue properties until the youngest of the girls Adilah and Jasveen turned 18 when they would get the property. He is alleged to have said that he would hold the Esk Avenue properties on trust for the girls until then and that it was better that he hold them rather than Janifa to ensure that there was no risk if she decided to remarry. Janifa alleges that she agreed to that whereupon the deceased said he would repay the mortgage from the income in Fiji. The terms of this statement are set out in an affidavit of Janifa Ali sworn on 17 February 2011, one working day before the hearing before me. It was not mentioned by her in any earlier affidavit. Nor is there any record or any corroboration of this conversation.
Both parties referred and made submissions in relation to correspondence between the solicitors and correspondence with the deceased. On 3 July 2001 the solicitor for Janifa Ali wrote to the deceased in Suva stating as follows:
"We have been instructed by Mrs Ali that certain discussions have recently taken place whereby an agreement has been reached as follows:
1. That you transfer the property 30 Sanderling Street, Hinchinbrook to her.
2. That you transfer the property 29 Mount Street, Bonnyrigg to her together with the contents.
3. That she transfer her interest in the properties 41a and 41b Esk Avenue, Green Valley.
The parties have further agreed that you will hold this property on trust for the children in equal shares . We assume that the childrens [sic] interest will vest in them on their attaining their majority namely 18 years of age.
The parties have further agreed that you will be responsible for paying the mortgage on the Green Valley properties from your resources in Fiji but the rent from those properties is to be paid to Mrs Ali by way of Child Support." (Emphasis added.)
It is claimed that this letter read in context with other correspondence provides evidence of the trust.
On 2 October 2001 the solicitor for Janifa Ali wrote to the solicitor for the deceased and after referring to a discussion stated:
"As we understood it I Ali wished to retain the Esk Avenue property and that he would ultimately transfer that property to the children.
However our client requires we understand this would be the agreement between the parties that he pay her $440.00 per week Child Support pursuant to the Agreement together with school fees, uniforms and excursions. Our client would then seek the right to Caveat the Esk Avenue, property as security for payment of Child Support until the youngest child attains the age of 18 years." (Emphasis added.)
This letter was replied to by the solicitor for the deceased on 30 October 2001 stating that on his instructions:
"I Ali agrees to the proposal for him to retain Esk Avenue and to Transfer the Sanderling Street and Mount Street properties to your client as well as transferring Motor Vehicle ....
My client indicates that your client has agreed not to see [sic] child support.
My client opposes a Caveat on the Esk Avenue property and note [sic] your clients [sic] consent not to require a caveat.
Please prepare Terms of Settlement to reflect this agreement and forward to me for my clients [sic] signature."
On 12 November 2001 the solicitor for Janifa Ali wrote to the solicitor for the deceased stating:
"It appears this matter has now been settled in principle and we advise that our client will not be seeking to caveat the properties 41a and 41b Greenvalley [sic] nor will she seek a formal Child Support Agreement between herself and I Ali but will rely on his undertaking to her that he will support the children."
On 6 December 2001 the solicitor for the deceased stated that:
"I acknowledge receipt of the Terms of Settlement in relation to the property matter however I note that there is no Child Support Agreement.
Please let me have a Child Support Agreement confirming that the property transfer is to be in lieu of child support.
My client also indicates that the agreement that the parties have reached are [sic] on the basis that all of the properties will go to the children and that in any event that she either remarries or goes into a defacto [sic] relationship, that she draw up a mutual will with my client, with each consenting to each of the properties that are the subject of these orders are to go to the children." (Emphasis added.)
This was responded to by letter of 7 December 2001 from Janifa Ali's solicitor stating that:
"In relation to the suggestion there be mutual Wills our client has not agreed previously with your client in the terms set out by you in this letter.
As a matter of general law each of the parties is required to look after their children and to make a Will in respect of each of their children. Our client certainly has the intention of leaving her property to her children and believes that I Ali will do the same . Our client is not prepared to enter into a mutual Will as suggested. May we also remind you that Section 81 of the Family Law Act requires the parties to sever their financial relationship." (Emphasis added.)
On 20 December 2001 the parties finally agreed, and embodied provisions in Terms of Settlement, that by way of property settlement in return for consideration for the transfer to her of two properties at Hinchinbrook and Bonnyrigg Heights, Janifa would transfer to the deceased all her right title and interest in the Esk Avenue properties and the deceased would indemnify and keep her indemnified in respect of all amounts owed to the National Australia Bank.
There is no provision in that final arrangement in relation to any trust for the benefit of the daughters. However, it is apparent that at times in the course of the correspondence the deceased expressed an intention to give the Esk Avenue properties to his daughters.
WITNESSES
Although the two daughters were not completely frank in their disclosures of receipts and gave late evidence of matters which clearly should have been provided at an earlier stage, I am satisfied that I now have before me sufficient evidence of their assets, liabilities and means at their disposal to make a decision in this matter.
In particular, there was no disclosure by Jasveen in her first affidavit of receipt of $50,728 from AXA. Although she says that this money has now been spent, it was nevertheless important to make the disclosure of its receipt at an earlier stage.
In the case of Adilah there was no disclosure until shortly before the hearing of the amounts of income that she received nor of an amount of $41,776 received from AXA on the death of the deceased which was used to buy a car and pay for on-going costs of university. I also note that she changed her evidence on the hearing in relation to her HECS debt.
In relation to Janifa Alia, I consider that although she was defensive in giving her evidence and not open in her answers, nevertheless I accept the substance of her evidence. The important exception relates to a late affidavit of 17 February 2011 in which she claims that there was a telephone call in about June 2001 during which the deceased is alleged to have said he would hold the Esk Avenue properties on trust for the girls until they turned 18. I am not persuaded that this conversation took place in those or any similar terms having regard to the lateness of the evidence and its obvious importance; the fact that it records a conversation of which there is no written verification and in which the language said to have been used is of a technical and legalistic nature and unlikely to have been used by the deceased and which appears to be designed to meet the contingencies of the case for the applicants in relation to the existence of a trust. It is also to be noted that there is no corroboration of this statement having been made to Janifa Ali by the deceased.
I have also taken into account the fact that Janifa Ali collected rent after the death of the deceased for which she has not accounted and that she has resisted the taking of an account in relation to the rent.
In relation to Rehana Ali, I do not think she was untruthful in any material respect but I am not persuaded that her overall financial position is limited to the extent to which she suggested in evidence. She impressed me as an astute and capable person with keen commercial ability as evidenced by the substantial business she conducts in Fiji and her property interests there. I accept her evidence as to the relationship with the deceased as being close and affectionate in the period from 1998 to his death in 2007 and the fact that she entered into a Muslim betrothal ceremony with the deceased in 2008.
TRUST
The case for Jasveen and Adilah Ali is that the evidence establishes that a trust was declared by the deceased in June 2001 and that there is nothing contrary to this submission in the correspondence leading up to the Terms of Settlement in December 2001. More specifically, they submit that the letter of 3 July 2001 which refers to an "agreement" that the Esk Avenue properties would be held on trust proves that there was a trust entered into for the children's benefit in equal shares in respect of the property. They contend that the correspondence confirms the conclusion that the deceased wished to benefit his children and give them the Esk Avenue properties and that there is nothing in the correspondence inconsistent with this position.
For Rehana Ali it is submitted that the Court should not accept the evidence of Janifa Ali as to the trust arrangement bearing in mind the late filing of the affidavit of Janifa Ali setting out the alleged terms of the conversation said to embody the terms of the trust and also that the correspondence indicates that the parties were negotiating and working towards a position ultimately embodied in the Terms of Settlement of 20 December 2001. In those final terms there is no reference to any trust or restriction as to the future ownership or disposition of the Esk Avenue properties to or by the daughters and the Terms of Settlement exclusively embody all relevant arrangements and exclude the provision of any trust arrangement as alleged.
In determining whether there was any trust, it is important to bear in mind the context in which the correspondence took place. The parties in this correspondence were negotiating with a view to a family property settlement in respect of their assets. The final arrangement is embodied in the Terms of Settlement of December 20. Although there is reference to the deceased wishing to benefit the children by "ultimately" giving them the Esk Avenue properties, I am not persuaded that there is sufficient evidence to establish the existence of a trust arrangement.
The reference in the letter of 2 October 2001 to the deceased "wishing" to retain the Esk Avenue properties and "ultimately transfer [them] to the children" is indicative of future intent rather than a confirmation of a present existing trust.
Further, the statement in the letter of 7 December 2001 is important when it says that Janifa Ali has an intention of leaving her property to her children and believes that I Ali will do the same. This is inconsistent with the existence of an understanding at that point that the deceased had previously made a binding declaration of trust. Also in that letter it is clearly stated that I Ali has not agreed previously with Janifa Ali in relation to the terms set out in the letter of 7 December 2001 which letter includes a reference to an agreement that all of the properties "will" go to the children.
I consider that this correspondence is inconsistent with the existence of a binding oral trust and I do not accept the evidence of Janifa Ali that there was an oral declaration of trust as stated by her having regard to the contrived and legalistic form of language she says was used and the lateness of the evidence. It was a critical statement and one would have expected it to have been raised or referred to at an earlier stage.
I note that it was suggested by the plaintiff that there had been a fraud on the trust by denying its existence. There are two reasons why this argument should be rejected. First that there was no persuasive evidence of the existence of any trust. Secondly, there was simply no evidence which would justify the conclusion that there was any fraud or intent to deny the existence of or defeat a "trust" on the part of any party. In these circumstances this argument has no evidentiary foundation.
FAMILY PROVISION
Pursuant to the Probate Administration Act 1898 (NSW), s 61B, Rehana Ali is entitled to the prescribed amount of $200,000 together with half of the residue of the estate. The remaining one-half of the residue of the estate is to be divided between the two daughters, Jasveen and Adilah. On initial estimates of the defendant this meant that Rehana would receive about $406,000 on intestacy and the daughters about $103,000 each.
The plaintiff Adilah Ali is 19 years old and during the deceased's lifetime was wholly financially dependent upon him. She finished high school in 2008 and studied business for one year at the University of Western Sydney and in 2010 enrolled in a first-year course towards a Bachelor of Psychology at Macquarie University. In her first affidavit of 27 January 2011 she said that she had assets in a Commonwealth Bank savings account in the amount of $600 and that she had car expenses and other living expenses of $500 per week. She said that she had been employed at various times in 2010 working in postal logistics, and as a marketing assistant and holds a permanent casual clerical position with the Mezzo Group.
She stated that she would need university fees in the future and would need living expenses until she was able to graduate and commence working full-time.
In her later affidavit filed shortly before the hearing on 17 February 2011 she said that she was in the second year of a psychology degree which is a six-year course. She receives some income from the Mezzo Group as a business information researcher during university term of about $400 per week gross together with $240 per fortnight by way of Youth Allowance. During university vacation periods she works longer hours with the Mezzo Group and receives about $500 to $600 per week but this excludes receipt of the Youth Allowance. She said that she had debts to HECS in an amount of $25,000 and anticipates that her future eduction costs will amount to a total of $96,000 at the end of the six-year period. She wants to practise as a clinical psychologist and set up her own private practice. She also states that she would like to purchase a small unit in which to live which she estimates would cost in the order of $310,000.
In addition she says that she enjoyed a close and loving relationship with the deceased. She disclosed that on his death she received an amount of $41,776 from an insurance company and used this money to buy a car and pay for the on-going costs of attending university. This disclosure was not made until shortly before the hearing.
The plaintiff Jasveen Ali filed an affidavit on 28 January 2011 in which she confirms that she was studying law in the period 2007 to 2010. She is 23 years old. In a subsequent affidavit of 17 February 2011 she states that she had always had a close and loving relationship with the deceased. She states that she owed $95,000 for fees incurred during her law degree at Bond University and approximately $10,000 HECS fees for business and commerce studies at Sydney University in 2005. She graduated from Bond University on 12 February 2011 and says that she also owes about $3,000 to Optus for a telephone debt.
Having just completed her degree she has no present source of income and she must attend the College of Law to finish off her legal studies. She intends to do an MBA degree and then a Real Estate Agent's course. She proposes to ultimately work as a business broker.
She discloses in the later affidavit filed shortly before the hearing that she has received $50,728 from the insurance group AXA as a consequence of her father's death and has spent about $20,000 of this on university fees at Bond University. The balance was spent on day-to-day living as a student. In addition she discloses that she received $25,000 in 2007 from Westpac Bank from a life insurance policy of the deceased and gave this money to her mother. She anticipates that her future education expenses would be $6,000 for practice legal training, $30,000 for an MBA degree and $1,500 for a Real Estate Agent's course. In addition she needs to discharge a fee debt of $95,000 and HECS debts of $10,000. She states that she seeks a provision that would enable her to put down a substantial deposit on a property which she anticipates would cost in the order of $300,000 to $330,000.
I am satisfied that after cross-examination there has now been full disclosure, although belated, of the daughters' financial position.
The plaintiffs' mother Janifa, confirms that she married the deceased in October 1985 and confirms that Jasveen was a law student at Bond University and that her tuition and accommodation fees and living expenses were high. She also confirms that there was a close and loving relationship between the daughters and the deceased. She says that the deceased has provided cash sums to the daughters and herself and purchased clothing for them when they visited him in Fiji after 2001 and that the deceased had interests in two AXA superannuation funds.
She states that the assets of the deceased in Fiji at the date of death included shares in the company Eastwind and that he also had shares in an investment company together with several parcels of land.
She states that the deceased made payments to bank accounts of Jasveen totalling $38,078 between May 2003 and April 2007 and to accounts of Adilah totalling $14,850 during 2004 and 2005. She states that the deceased made deposits to an account of hers totalling $36,700 between October 2003 and April 2004. In addition the deceased has provided cash sums to Jasveen, Adilah and herself and purchased clothing for them on occasions when they visited him in Fiji.
In her affidavit of 21 October 2010 she states that she received rent from the Esk Avenue properties and from that source she made payments of rates and insurance on the properties and paid some of the daughters' living expenses. Under the relevant law in Fiji it appears that the administrator on intestacy holds the properties in trust to distribute as to the personal chattels plus $2,000 and one-third of the residuary estate to the surviving wife and as to the remaining two-thirds to the issue of the deceased.
Rehana Ali gave evidence that she is 39 years old and that she met the deceased in 1998 and began a de facto relationship with him which continued to his death in 2007. In October 1998 there was a Muslim betrothal ceremony with the deceased. Since that date they have lived as husband and wife in a "de facto" relationship. She has a number of substantial business interests in Fiji. She has two children from a previous relationship who are now aged 19 and 18 and are both financially dependent on her.
Her present financial circumstances are that she works for the company Eastwind on a full-time basis putting in long hours. This work involves managing a staff workforce of 60 people at 6 different locations in Fiji, dealing with bankers, suppliers and creditors. She receives an amount of AUD$538 per fortnight from Eastwind. Her fortnightly expenses are $774 and she says that her income does not satisfy her living expenses but she receives financial assistance from various family members. She has assets in the form of property and states that her total assets amount to $670,000. All the properties are mortgaged to the Colonial National Bank and she says that her liabilities total $522,000. Although she receives about $2,970 per month from properties in Suva, these moneys are used to repay mortgages. Her total equity in assets is said to be $148,000 approximately.
In about April 2010 she says she received approximately AUD$205,900 from AXA from the deceased's retirement fund and at December 2010 she had used approximately AUD$161,412 to pay for expenses in the administration of the estate. She also states that the daughters were given a sum of money from the retirement fund at that time which has previously been referred to as the AXA payments. She states that as at the date of death the Fijian assets of the deceased amount to AUD$287,727. (I note that documents show the Fijian estate was sworn to have a value of Fijian$550,000. Some at least of the estate in Fiji is tied up in assets and securities and will not be available until sometime in the future.)
On her calculations in accordance with New South Wales intestacy laws she would be entitled to approximately $432,400 from the estate and to be reimbursed for expenses in administering it. She calculates that Adilah and Jasveen under New South Wales law of intestacy would receive approximately $116,000 each from the estate but this amount does not include an adjustment for further legal and other expenses estimated to be AUD$25,000. She expresses an intention to come to live eventually in Australia but has no immediate plans. She states that Fijian law does not recognise de facto relationships and that under Fijian law on her calculations Janifa will receive approximately $10,920 from the Fijian assets together with personal chattels and one-third of the residuary estate, totalling approximately $103,200 and the plaintiffs would receive two-thirds of the residuary, so that on her calculations Adilah and Jasveen would each receive approximately AUD$92,270 from the Fijian estate.
The plaintiffs are adults and have received substantial amounts of funds from the deceased and their mother, they have very substantial present debts and large commitments in relation to their past and future education. They are both young and at the beginning of their lifetime careers. Although they may later earn substantial sums in their respective professions, at present they are in need of substantial support having regard to their education needs. In addition to these they will have substantial liabilities in relation to securing accommodation and other expenses of living such as clothing, food, transport, insurance, some reasonable entertainment and perhaps some travel.
They are by no means left in what could be described as a "destitute" position or a position of "hardship" and they may be entitled to receive approximately $100,000 each on intestacy together with other moneys from Fiji. In the immediate foreseeable future I consider that they have substantial need for further provision and that it is appropriate for their proper maintenance, advancement and education in all the circumstances to receive a significant increase over and above what they would receive on an intestacy. I have taken into account the fact that they will probably receive some additional financial benefits from the Fijian assets but I do not think that this disentitles them from receiving a significant provision from the estate of the deceased in New South Wales.
Counsel for the daughters referred to the fact that the deceased had made a will in 2005 leaving the Esk Avenue properties to his daughters. This was not the subject of a grant of probate and I note that in December 2010 a motion for revocation of the Letters of Administration brought by Adilah was dismissed by the Court. Counsel also said that it was relevant to take into account that Rehana Ali did not contribute to the building up of the deceased's estate in New South Wales. I have taken this into account.
In coming to a conclusion as to the amount of any provision, I have taken into account the position of Rehana Ali and formed the view that her needs are not of the same event, order or significance as those of the daughters. The evidence before me indicates that she is an experienced, astute and successful businesswoman who is able to administer a number of properties and at least one substantial enterprise in Fiji with a staff in the order of 60 people.
Having regard to all the circumstances in the present case and the competing needs of the parties I am satisfied that the relative entitlements of the widow and the two plaintiffs on the intestacy in this matter should be adjusted and varied. I consider that this can best be done by a provision that each of the plaintiffs and the defendant in the family provision proceeding should receive one-third of the net distributable amount in the New South Wales estate after taking into account all appropriate assets and expenditure including legal costs. At this stage it is not feasible to specify a precise amount because this will depend on the consequences of taking an account and the precise figures arrived at as a consequence of that accounting.
Accordingly, I propose to make an order that the estate be adjusted as I have indicated so that the shares of the parties in the New South Wales assets of the deceased are varied to provide that each daughter and Rehana Ali is to receive one-third of the net distributable amount.
ACCOUNT
This matter can be dealt with briefly. Rehana Ali is the Administratrix of the estate of the deceased in New South Wales and she has a duty to get in the assets of the estate in New South Wales. Included in the estate assets is rent in respect of the Esk Avenue properties. The evidence of Anika Fleet, a solicitor for the Administratrix, together with the correspondence attached and the evidence in the cross-examination of Janifa Ali clearly establishes that Janifa Ali has received substantial amounts of rent from the properties in the period from the death of the deceased in respect of 41a Esk Avenue, and between the date of the deceased's death and September 2009 in respect of rents relating to 41b Esk Avenue. The rentals were in the order of $270 and $260 per week in respect of each property and the amount is substantial. The precise amount cannot be established on the present state of the evidence and it is apparent that there have been expenses incurred in relation to the properties in respect of maintenance, rates and taxes and other payments. Janifa Ali has agreed that there are bank statements from which estimates or calculations can be made in relation to at least some of the expenditures.
The claim of Janifa Ali to receive the rent was based on the alleged existence of a trust and the existence of an alleged copy of a will in favour of her children, Jasveen and Adilah. I am not satisfied that there was any trust established nor does the evidence support the conclusion that there was a valid will. The only document in evidence which purports to be a copy of a will is unverified and no witness was called to support its execution or authenticity. Nor was any evidence led to support a conclusion that there was in fact a valid will.
In view of this material there is sufficient basis laid for requiring an account in respect of the rent received and expenses from Janifa Ali and for an order that any outstanding rent net of proper expenses be paid to Rehana Ali as Administratrix.
Accordingly, I propose to order that an account be taken and that the net amount of any rents after appropriate deductions be paid to Rehana Ali for distribution by her as Administratrix of the assets of the estate.
CONCLUSION
I dismiss the application in proceeding No 2008/281384 for a declaration of trust. I will make orders in the family provision application as indicated in these reasons and I grant the application in proceeding No 2010/211560 for an account.
ORDERS
The Court orders:
1. In proceeding 2008/281384 that:
a) pursuant to s 7 of the Family Provision Act 1982 (NSW), provision be made from the estate of the deceased for each of the plaintiffs to receive a one-third share of the net distributable value of the estate after the taking of accounts;
b)..otherwise the proceeding be dismissed;
c)..costs of this proceeding be paid from the estate of the deceased on an indemnity basis.
d)..liberty to apply on 2 days' notice.
2. In proceeding 2010/211560 that:
a) the matter be referred to an Associate Justice of the Equity Division to inquire into and assess the amount of rent paid to the defendant by the tenant of the property at 41a Esk Avenue, Green Valley, as well as any reasonable expenses relating to the proper repair or maintenance of the premises incurred by the defendant;
b) the defendant pay to the first plaintiff all rental moneys paid to her by the tenant of the property at 41a Esk Avenue, Green Valley, less any reasonable expenses relating to the proper repair or maintenance of the premises following the inquiry referred to in order 2(a) above;
c) the matter be referred to an Associate Justice of the Equity Division to inquire into and assess the amount of rent paid to the defendant by the tenant of the property at 41b Esk Avenue, Green Valley, as well as any reasonable expenses relating to the proper repair or maintenance of the premises incurred by the defendant;
d) the defendant pay to the first plaintiff all rental moneys paid to her by the tenant of the property at 41b Esk Avenue, Green Valley, less any reasonable expenses relating to the proper repair or maintenance of the premises following the inquiry referred to in order 2(c) above;
e) costs of this proceeding be paid from the estate of the deceased on an indemnity basis.
f) liberty to apply on 2 days' notice.
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Decision last updated: 11 April 2011
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