Barbuto, Bradley v Barbuto; Barbuto, James v Barbuto

[2019] NSWSC 1023

Supreme Court

New South Wales

Medium Neutral Citation:

Barbuto, Bradley v Barbuto; Barbuto, James v Barbuto [2019] NSWSC 1023

Hearing dates:

1 – 4 July 2019

Date of orders:

13 August 2019

Decision date:

13 August 2019

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The parties, within 7 days, should provide a form of orders in each case to reflect these reasons. The matter will be listed for argument on the form of orders, if there is any dispute, and for the argument on costs.

Catchwords:

CIVIL PROCEDURE – Hearings – Order that proceedings be heard together – Two separate proceedings, each seeking a family provision order out of the same estate – Agreement by parties that both proceedings be heard consecutively, with the evidence in one being evidence in the other – Uniform Civil Procedure Rules 2005 (NSW) r 28.5 – Proceedings involve “a common question” and otherwise “desirable to make an order” under the rule

 

SUCCESSION – Family Provision – Each Plaintiff, a child of the deceased, applies for a family provision order under Chapter 3 of the Succession Act 2006 (NSW) – The Defendant is the widow of the deceased but was separated from him at the date of his death – Close relationship despite separation – Deceased left Will – Where testamentary trust providing for payment of income or capital to each Plaintiff at the discretion of the Defendant – Initially, issue about nature and value of the estate – Resolved by the date of hearing by Defendant agreeing to proceeds of sale forming part of the estate of the deceased – Estate of moderate value – Whether adequate and proper provision not made in Will of the deceased for each Plaintiff and if so the nature and quantum of the provision to be made

 

SUCCESSION – Family Provision – Extension of time for the making of the application required in respect of one applicant’s claim – Parties to the proceedings consent to the application being made out of time pursuant to s 58(2) of the Succession Act

  SUCCESSION – Family Provision – Necessity for applicant to make full and frank disclosure of his financial circumstances – Where applicants fail to make full disclosure – Large number of documents produced for inspection – Documents inspected and summary prepared – Documents relate to gambling and betting history of each applicant – No suggestion, until the oral evidence of one of the applicants that documents do not record accurately his betting history

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Family Law Act 1975 (Cth)
Family Provision Act 1982 (NSW)
Income Tax Assessment Act 1997(Cth)
Legal Profession Uniform Law (NSW)
Probate and Administration Act 1898 (NSW)
Succession Act 2006 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Anderson v Hill [2017] NSWSC 1149
Belfield v Belfield (2012) 83 NSWLR 189; [2012] NSWCA 416
Bkassini v Sarkis [2017] NSWSC 1487
Bondelmonte v Blanckensee [1989] WAR 305
Borebor v Keane (2013) 11 ASTLR 96; [2013] VSC 35
Bowditch v NSW Trustee and Guardian [2012] NSWSC 275
Bowyer v Wood (2007) 99 SASR 190; [2007] SASC 327
Burke v Burke [2015] NSWCA 195
Butcher v Craig [2009] WASC 164
Carey v Robson (No 2) [2009] NSWSC 1199
Chan v Chan (2016) 15 ASTLR 317; [2016] NSWCA 222
Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392
Christie v Manera [2006] WASC 287
Collings v Vakas [2006] NSWSC 393
Crossman v Riedel [2004] ACTSC 127
Day v Perpetual Trustee (Supreme Court (NSW), Master Macready, 3 August 2001, unrep)
Foley v Ellis [2008] NSWCA 288
Forsyth v Sinclair (No 2) (2010) 28 VR 635; [2010] VSCA 195
Fulton v Fulton [2014] NSWSC 619
Gill v Permanent Trustee Company Limited [1999] NSWSC 394
Goodsell v Wellington [2011] NSWSC 1232
Gorton v Parks (1989) 17 NSWLR 1
Green v Perpetual Trustee Co Limited (Supreme Court (NSW), Hodgson J, 10 July 1985, unrep)
Gregory v Hudson (No 2) (Supreme Court (NSW), Young J, 18 September 1997, unrep)
Grey v Harrison [1997] 2 VR 359
Hampson v Hampson (2010) 5 ASTLR 116; [2010] NSWCA 359
Harkness v Harkness (No 2) [2012] NSWSC 35
Hawkins v Prestage (1989) 1 WAR 37
Hedman v Frazer [2013] NSWSC 1915
Heyward v Fisher (Court of Appeal (NSW), Kirby P, 26 April 1985, unrep)
Howarth v Reed (Supreme Court (NSW), Powell J, 15 April 1991, unrep)
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134; [1979] HCA 2
Hunter v Hunter (1987) 8 NSWLR 573
In re Coventry [1980] Ch 461
Jodell v Woods [2017] NSWSC 143
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Kohari v Snow [2013] NSWSC 452
Lemon v Mead (2017) 53 WAR 76; [2017] WASCA 215
MacGregor v MacGregor [2003] WASC 169
Mann v Starkey [2008] NSWSC 263
Marks v Marks [2003] WASCA 297
Maynard v Maynard [2018] NSWSC 1961
McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82
McCullum v Permanent Trustee Co Ltd [1999] NSWSC 1219
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Mead v Lemon (As Executor of Estate of Wright) and Baldock and Burt and VOC Group Ltd [2018] HCATrans 152
Meres v Meres [2017] NSWSC 285
Novak-Niemala v Perpetual Trustee Co Ltd [2002] NSWSC 251
Oxley v Oxley [2018] NSWSC 91
Page v Page [2016] NSWSC 1218
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19
Reeves v Commissioner of Police [2000] 1 AC 360
Salmon v Osmond [2015] NSWCA 42
Sgro v Thompson [2017] NSWCA 326
Shepherd v Shepherd [2010] NSWSC 167
Singer v Berghouse (No 2) (1994) 181 CLR 201
Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522
Smith v Johnson [2015] NSWCA 297
Stansfield v National Australia Trustees Ltd [2004] NSWSC 1107
Steinmetz v Shannon [2019] NSWCA 114
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stojanovski v Stojovski [2016] NSWSC 976
Stott v Cook (1960) 33 ALJR 447
Strang v Steiner [2019] NSWCA 143
Sung v Malaxos [2015] NSWSC 186 (Supreme Court (NSW), Hodgson J, 10 July 1985, unrep)
Taylor v Farrugia [2009] NSWSC 801
Tucker v Tucker [2012] NSWSC 1302
Verzar v Verzar [2012] NSWSC 1380
Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep)
White v Barron (1980) 144 CLR 431
Wilcox v Wilcox [2012] NSWSC 1138
Yee v Yee [2017] NSWCA 305

Texts Cited:

G E Dal Pont Law of Costs, (3rd ed, 2013, LexisNexis Butterworths)
R Atherton, “The Concept of Moral Duty in the Law of Family Provision – a Gloss or Critical Understanding?” (1999) 5 Australian Journal of Legal History 5

Category:

Principal judgment

Parties:

Proceedings 2018/99730:
Bradley Dominic Barbuto (Plaintiff)
Jacqueline Barbuto (Defendant)

  Proceedings 2018/124370:
James Francis Barbuto (Plaintiff)
Jacqueline Barbuto (Defendant)

Representation:

Counsel:
Proceedings 2018/99730:
Mr A G Rogers (Plaintiff)
Ms T Catanzariti (Defendant)

 

Proceedings 2018/124370:
Mr A M Gruzman (Plaintiff)
Ms T Catanzariti (Defendant)

 

Solicitors:
Proceedings 2018/99730:
Armstrong Legal (Plaintiff)
Brown Wright Stein Lawyers (Defendant)

  Proceedings 2018/124370:
B M Salmon Layton & Co (Plaintiff)
Brown Wright Stein Lawyers (Defendant)

File Number(s):

2018/99730, 2018/124370

Judgment

1. HIS HONOUR: For hearing commencing on Monday, 1 July 2019 were two different actions, being proceedings 2018/99730 and proceedings 2018/124370, in which the Plaintiff, Bradley Dominic Barbuto, and James Francis Barbuto, respectively, each of whom is an adult child of the deceased, Frank Nickolas Barbuto (“the deceased”), sought, amongst other things, a family provision order under Chapter 3 of the Succession Act 2006 (NSW) (“the Act”). These reasons, and the orders made, determine both proceedings.

2. Both are contested proceedings in which the Defendant, Jacqueline Barbuto, the widow of the deceased and the mother of each Plaintiff, has opposed the relief being sought. In relation to the claim by Bradley, her opposition is to the quantum of the provision that he seeks, whilst in relation to the claim by James, she seeks an order that his proceedings be dismissed.

3. I have referred to Jacqueline as the widow of the deceased, even though there is no dispute that, at the date of the deceased’s death, being 23 April 2017, she was, and had been for many years, separated from him (and in a relationship with another man). However, a divorce order, in respect of their marriage, had not been made. I shall return to the nature of the relationship later in these reasons.

4. Hereafter, I shall refer to the parties, who are family members who share the same surname, by his, or her, first name, respectively, in order to avoid confusion. By doing so, I do not mean to convey any disrespect or suggest any undue familiarity.

5. Regrettably, this is yet another case in which there is a great deal of antagonism between the parties, which appears to be deep, bitter, and, in the case of Bradley, reasonably longstanding. It can only be such antagonism that has led to the case between adult children and their mother being allowed to be heard over four days, and to have caused the parties to incur the quantum of costs, which, on any view, are disproportionate to the value of the deceased’s estate.

6. Pertinent to the proceedings is what I wrote in Fulton v Fulton [2014] NSWSC 619, at [1]:

“This is a sad and a regrettable case. It demonstrates, once again, that contentious proceedings involving an estate and family members, 'where the drama of the family rifts unfolds with all the ill-feelings, resentment and animosity between the protagonists climaxing on public display, are unavoidably destructive of what is left of the deceased's family. Win or lose, the family will most likely be torn further apart irretrievably': Chiu Man Fu v Chiu Chung Kwan Ying [2012] HKCFI 82, at [1].”

7. The proceedings by Bradley were commenced by Summons filed on 29 March 2018. He sought a declaration that a property situated at Bangor, in New South Wales (“the Bangor property”), at the date of the deceased’s death or alternatively on the date on which probate was granted in relation to the deceased’s estate, was held by Jacqueline, on trust for the deceased, and that upon its sale, one-half, or in the alternative, all, of the proceeds of sale, were held on behalf of the estate of the deceased. He also sought consequential relief. (Bradley did not, in his Summons, seek a family provision order under Chapter 3 of the Act. He sought a family provision order in an amended Statement of Claim filed on 26 June 2018, to which reference will be made later in these reasons.)

8. On 4 May 2018, the Court ordered, in Bradley’s matter, and without opposition, that the matter proceed by way of pleadings.

9. Bradley then filed a Statement of Claim on 15 May 2018, followed by an amended Statement of Claim on 26 June 2018. In the amended Statement of Claim, Bradley sought, for the first time since he commenced his proceedings, a family provision order. Jacqueline filed a Defence on 6 July 2018. Bradley filed a Reply on 3 September 2018.

10. The proceedings by James were commenced by Summons filed on 19 April 2018, in which he sought similar relief to that sought by Bradley, as well as a family provision order pursuant to s 59 of the Act, and consequential orders. On 20 August 2018, following an unsuccessful private mediation held in both matters, the Court ordered, in James’ matter, and without opposition, that the matter proceed by way of pleadings. A Statement of Claim was filed on 31 August 2018, which was followed by Jacqueline’s Defence, on 21 September 2018, and then a Reply, by James, on 10 October 2018.

11. The claims, by each of Bradley and James, other than his claim for a family provision order, respectively, by the date of the hearing, were no longer being pursued. In written submissions dated 21 June 2019, served on Bradley and James, counsel for Jacqueline wrote:

“On a without admissions basis, in order to facilitate the just, quick and cheap resolution of the real issues in the proceedings, the Defendant has agreed to pay the whole of the Bangor Proceeds to the Deceased’s estate net of any tax payable, either as a matter of law or because the Defendant has elected in her discretion to pay the whole of the Bangor Proceeds net of any tax payable to the Deceased’s estate.”

12. (There was a suggestion, in oral submissions, by her counsel, that notice of Jacqueline’s intention to pay the net proceeds of sale into the estate, had been given in correspondence sent prior to the date the submissions were served: Tcpt, 4 July 2019, p 367(34) – p 369(6). Evidence about the correspondence may be relevant when the issue of costs is determined.)

13. Following receipt of the written submissions, the matter was listed before me, in order to confirm that the only issue for determination that remained, in each case, was the claim for a family provision order: Tcpt, 25 June 2019, p 1(32-48).

14. This was confirmed, again, at the commencement of the hearing, on 1 July 2019: Tcpt, 1 July 2019, p 1(31-41). The parties also confirmed that there was no longer any need to refer, in detail, to the trust aspect of each case, and that it would only be necessary to refer to the estate of the deceased, as the proceeds of sale of the Bangor property were to be treated as falling into the actual estate of the deceased.

15. Despite these concessions, the proceedings continued over 4 days. At the hearing, Mr A G Rogers of counsel appeared for Bradley; Mr A M Gruzman of counsel appeared for James; and Ms T Catanzariti of counsel appeared for Jacqueline.

16. A family provision order may be made in relation to property that is not part of the deceased’s estate, but is designated as “notional estate” of the deceased by an order under Part 3.3 of the Act: s 63(5). As will be read, there is property that may be designated as notional estate of the deceased. However, the parties agreed that there would be no need to designate such property as notional estate, as there were assets of sufficient value in the estate of the deceased for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, in both cases: s 88(b) of the Act.

17. Section 57(1) of the Act provides that “eligible persons” may apply to the Court for a family provision order. It is not in dispute that, as a child of the deceased, Bradley and James is each an eligible person within s 57(1)(c) of the Act. The language of the subsection is expressive of the person’s status, regardless of age, as well as his, or her, relationship to the deceased. It is not necessary that the child be a dependant at the time of the deceased’s death in order to be an eligible person under this head of eligibility (as dependency is not an element of the definition of an “eligible person”).

18. Bradley did not commence the family provision aspect of the proceedings within the time prescribed by the Act. It is unnecessary to go into the reasons why the Summons was not filed within time, because counsel for Jacqueline, at the commencement of the hearing, stated that if a family provision order is to be made, the parties to the proceedings consent to the application being made out of time: Tcpt, 1 July 2019, p 2(40-43). (Consent of the parties to the application being made out of time, is one way the Court can determine an application made out of time: s 58(2) of the Act.)

19. James commenced the family provision proceedings within the time prescribed by the Act (not later than 12 months after the date of the death of the deceased): s 58(2) of the Act.

20. As the deceased had dealt with all of his estate in his Will, to which reference will be made, the parties agreed that there is no scope for the operation of the intestacy rules, with the result that it is only necessary, hereafter, to refer to the Will of the deceased.

21. As often occurs where there are different Plaintiffs, in separate proceedings, making a family provision claim in relation to the same estate, the parties, well before the commencement of the hearing, agreed that both of the proceedings would be heard consecutively, with the evidence in one being evidence in the other, so far as material. No Notice of Motion to that effect was filed, but in the circumstances, that was not necessary. (The proceedings could not be consolidated, without leave, because different solicitors act for the different Plaintiffs.) The agreement between the parties was confirmed at the commencement of the hearing: Tcpt, 1 July 2019, p 1(13-30).

22. In my view, that was a sensible, and appropriate course, as there are no difficulties in terms of trial management, the complexity of procedural issues, or in determining the cross-admissibility of evidence; factual, and credit, issues that overlap, that are, or that may be, relevant to both claims, may be determined, thereby avoiding the unsatisfactory prospect of judgments with conflicting findings on the same issues; the possibility of two appeals, with potential delays if the proceedings are not heard and determined at the same time, will be avoided; Jacqueline may have been put to less expense in defending only one hearing, rather than two; the just, cheap and quick hearing of all of the matters in dispute will be facilitated; and the most efficient and expedient use of resources, for the parties, and, by implication, the Court, will be achieved. For those reasons, it was “desirable” to make such an order: Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 28.5.

23. Shortly after the commencement of the hearing, with the consent of the parties, and in the exercise of the Court’s discretion, I made an order to that effect: Tcpt, 1 July 2019, p 3(13-30).

24. It is also convenient to deal with both proceedings together in these reasons for judgment.

Some background facts

25. The following facts are either not in dispute or, where stated, are facts in dispute that I am satisfied should be resolved as stated. To the extent that any of these facts are in dispute, the facts stated should be regarded as the findings of the Court.

26. The deceased was born in March 1948 and was aged 69 years at the date of his death.

27. Jacqueline was born in July 1950 and is 69 years old.

28. The deceased and Jacqueline met in mid-to-late 1966 and they were married in December 1968.

29. James was born in July 1969 and is now 50 years old.

30. Bradley was born in November 1972 and is now 46 years old.

31. The deceased and Jacqueline separated in about 1995. There is evidence, to which reference will be made, that suggests they continued to have a relationship, even after their separation, and their subsequent agreement as to the adjustment of their property interests.

32. A short time after their separation, Jacqueline moved into a property at Cronulla (“the Cronulla property”) that they had earlier jointly owned and the deceased’s interest in which was transferred to her pursuant to that agreement.

33. Jacqueline met her current partner, Doug Anderson, in about July 1996. In June 1997, they moved to Jindabyne where they stayed for about 2 years, after which they returned to live, together, in about 1999, in the Cronulla property.

34. James married Kellee in March 1995. They have four children, namely Mitchell, who was born in June 1996, and who is 23 years old; Blake, who was born in July 2000, and who is 19 years old; Ryan, who was born in November 2003, and who is 15 years old; and Claire, who was born in March 2010, and who is 9 years old.

35. Shortly after completing his studies, Bradley entered into a de facto relationship with Tanya Salamon. They moved to Perth, Western Australia, together, where Bradley started a career as an Aboriginal Teaching Assistant. They separated in 2009. Their daughter, Imogen, was born in October 2006, and she is presently 12 years old.

36. In 2010, Bradley met Nuraiman (Lulu) Saleh, while on holiday in Bali. The relationship, initially, was a long-distance one, as she experienced some difficulty in returning to Australia, with Bradley. They married in October 2013, in Perth, and remain married. They have two children, namely Dominic, who was born in August 2014, and who is presently 5 years old and Bronte, who was born in November 2015, and who is presently 3 years old.

25. Bradley admits that in 2013, the deceased contributed $2,000 towards the costs of his wedding, at which the deceased attended, and in 2014, the deceased contributed $7,000 to assist with the costs of obtaining an Australian visa, for his wife, Nuraiman. He also admits that as an adult, the deceased “would occasionally give me small amounts of money towards payment of my bills when I was in strong financial need” which amounts “did not exceed a few hundred dollars on any occasion”: Affidavit, Bradley Dominic Barbuto, 19 May 2018 at par 99-101.

26. In the “Statutory Declaration by a supporting witness in relation to a Partner or Prospective Marriage visa application”, dated 1 December 2014, signed by the deceased, he states that because Bradley and his wife lived in Perth and he lived in Sydney, “[I] don’t get to see them as often as I would like. However, I have been in their company for a week in Nov ’12, another 10 days in Oct,’13, 15 days over Xmas 2013, and have just spent a week with them in Nov’ 14”. He described his relationship with Bradley as “still very close”.

27. The deceased was involved in the life of each of his grandchildren, although he seemed to have had a particularly close relationship with his grandson, Blake. James gives examples of the deceased contributing $2,000 “to help pay for Blake’s fees when he made the NSW School Boys Tour to Mackay”; of “help[ing] Blake with his driving lessons”; and the deceased being “present at all my [James’] children’s swimming carnivals, athletic carnivals, and football games”. James describes the deceased being “very generous” to his children: Affidavit, James Francis Barbuto, 18 April 2018 at par 25, 27-28.

28. (Jacqueline gives evidence that the deceased expressed a wish that Blake be given his car if Blake cleaned the deceased’s pool, mowed the lawn of the Bangor property and got his driver’s licence. She says that she does not know if Blake has his driver’s licence, but observed that Blake did not clean the pool or mow the lawn of the Bangor property: Affidavit, Jacqueline Barbuto, 19 September 2018 at par 59.)

29. Bradley gave evidence of the deceased having flown to Perth to attend the birth of Bradley’s first child, Imogen, and having attended her baptism: Affidavit, Bradley Dominic Barbuto, 19 May 2018, at par 51.

30. It follows from the evidence of each of Bradley and James that the position of the deceased’s grandchildren as discretionary objects, should not, and cannot be ignored by the Court.

31. In circumstances to which I shall come, Jacqueline maintains a relationship only with Bradley’s daughter, Imogen: Tcpt, 3 July 2019, p 248(9-10).

The properties of the deceased and Jacqueline

44. The deceased and Jacqueline purchased the Bangor property, as joint tenants, in about June 1977, for $17,950. It remained in their joint names at the date of the death of the deceased.

45. In about 1994, the deceased and Jacqueline purchased a unit at Cronulla which I have described as the Cronulla property for $179,000. It was purchased by way of a “Fully Drawn Advance” secured by way of a registered mortgage over the Bangor property: Affidavit, Jacqueline Barbuto, 19 September 2018 at par 15.

46. On or about 16 October 2007, the deceased and Jacqueline entered into a Financial Agreement pursuant to s 90C of the Family Law Act 1975 (Cth). It was asserted by Bradley and James that as a result of the Financial Agreement, Jacqueline was to transfer her interest in the Bangor property, held jointly, to the deceased, and that he was to transfer his interest in the Cronulla property, held jointly, to her. It was also asserted that whilst the deceased transferred his interest in the Cronulla property to Jacqueline in October 2007, she did not transfer the Bangor property to him, then, or ever.

47. Jacqueline asserts that she and the deceased agreed that the Bangor property would not be transferred to him despite the terms of the Financial Agreement. Her oral evidence, at Tcpt, 3 July 2019, p 257(40-44), and then at Tcpt, 3 July 2019, p 258(17-24), which I accept, was:

“You’ve given evidence to say that Frank said “Don’t worry about transferring Bangor to me”, do you remember that, words to that effect?

A. Words to that effect yes.

…

Q. You say that the only reason was that Frank decided that he didn’t want the property transferred into his name and did he give a reason for that?

A. Yes. He said:

‘We both worked hard for Bangor and we both paid that off. Jacq you and I worked for Bangor. You have paid the majority of Cronulla, you have paid for all the renovations, I don’t feel I own Cronulla, that should be yours.’”

48. In this regard, it is to be noted that there is no evidence at all, and it was not suggested to Jacqueline otherwise, that in the 9 years following the Financial Agreement being executed, the deceased did anything to cause Jacqueline to transfer the Bangor property to him. I shall also refer to the evidence of Mr Christopher Brown, a solicitor and long-time friend, who conferred with the deceased shortly prior to the date on which the deceased executed his Will, and to whom statements were made by the deceased about the Bangor property: Affidavit, Christopher Herbert Brown, 13 June 2019.

49. In any event, as the proceeds of sale of the Bangor property are acknowledged to be part of the deceased’s estate, the issue is no longer a relevant one, other than perhaps on the question of costs.

50. Upon the death of the deceased, Jacqueline inherited the Bangor property by survivorship. A Notice of Death, dated 7 June 2017, was lodged for registration, and, subsequently, the title to the Bangor property came to be held solely in her name.

51. On 28 February 2018, Jacqueline sold the Bangor property for $1,050,000. The net proceeds of sale, after the payment of conveyancing costs, agent’s commission, and the costs of sale, were $987,135.

52. There is evidence, which I accept, that prior to its sale, and following the death of the deceased, Jacqueline and Doug worked on the Bangor property. The improvements cost $38,714, and this amount has been repaid to them from the proceeds of sale. (Although it was not originally conceded, by the conclusion of the hearing, the deduction of that amount from the gross proceeds of sale was no longer an issue.)

53. Although in each Statement of Claim, respectively, Bradley and James sought the removal of Jacqueline as trustee of each Trust, and also as executor of the deceased’s Will, respectively, those claims for relief were not persisted with at the hearing.

The deceased’s Will

54. The deceased was diagnosed with cancer, and made his Will on 2 March 2017. This Court granted Probate of the deceased’s Will to Jacqueline, the executrix appointed thereunder, on 2 November 2017.

55. The Will is a lengthy and detailed document. It comprises 27 pages. First, the deceased revoked “all previous testamentary acts”: Clause 1.

56. Clause 2 of the Will contained “General Definitions” and “Special Definitions”.

57. In Clause 3 of the Will, Jacqueline was appointed as the executrix and trustee.

58. There was, then, the gift of one-half of the residue of the deceased’s estate to a testamentary trust, with Jacqueline named as the trustee and the appointor of the Trust, and her (“My spouse”), James (“the First Principal Beneficiary”), the children of James, the grandchildren of James, or any associated trustee of a trust or corporation, named as the discretionary objects of that testamentary trust ("the first testamentary Trust"): Clause 5. (Elsewhere in the Will, the trust was referred to as the “F N Barbuto No 1 Will Trust”.

59. There was a gift of the other one-half of the residue of the deceased’s estate to a different testamentary trust, with Jacqueline as trustee and appointor of the Trust, and her (“My spouse”), Bradley (“the Second Principal Beneficiary”), the children of Bradley, the grandchildren of Bradley, or any associated trustee of a trust or corporation, named as discretionary objects of that testamentary trust ("the second testamentary Trust"): Clause 6. (Elsewhere in the Will, the trust was referred to as the “F N Barbuto No 2 Will Trust”.

60. Clause 7 of the Will, relevantly, provided the rights and powers of the Trustee. One such power, contained in Clause 7(c), was:

“in the sole discretion …from time to time and as often as My Trustees shall think fit to pay or apply the whole of or such part or parts of the income or capital or both to which any beneficiary under this my will is entitled or contingently or presumptively entitled to such beneficiary or (if an infant) to the parent or guardian of such beneficiary or to any other person or persons for the maintenance education benefit support or advancement in life of any such beneficiary without being responsible to see to the application of any such income or capital so paid or applied.”

61. In the Schedule to the Will, Clause 7F permitted the Trustee to exercise any powers and discretions conferred “in such manner as if my Trustees were not trustees and under no fiduciary obligation in exercising such powers and discretions (and notwithstanding that my Trustees for the time being or from time to time shall be a sole trustee”).

62. Clause 7N provided a power to vary the trust on certain terms and conditions.

63. There was no dispute, at the hearing, that the practical effect of the deceased’s Will is to empower Jacqueline, as the Trustee of each testamentary trust, to determine who is to benefit, by way of capital and/or income, from the deceased's estate and that, as she, herself, is an object of each Trust, she may allocate the entire estate to herself should she so choose. (In stating this, I do not intend to imply any criticism of Jacqueline or suggest that she would not properly perform her duties as a trustee.)

64. No distribution or payment has been made from either the first testamentary trust or the second testamentary trust to any discretionary object. This was unsurprising bearing in mind the commencement, and continuation, of the proceedings.

The nature and value of the estate and property that may be designated as notional estate

65. The parties agreed that, at the date of death, the gross value of the deceased’s estate was $1,081,894. They also agreed that the liabilities of the estate, at the date of death, were $4,259: Ex. 1/2; Tcpt, 1 July 2019, p 4(42) – p 5(36).

66. On the second day of the hearing, the parties agreed that the gross value of the deceased’s estate, at the date of hearing, was $1,203,854: Tcpt, 1 July 2019, p 109. The estate now consists of the net proceeds of sale of the Bangor property ($987,135) and interest accrued thereon ($22,419), proceeds of a superannuation fund ($158,007), cash in bank ($429), shares ($25,862) and a car ($10,000).

67. (The deceased and Jacqueline also had a joint bank account in which there was $2,649 at the date of death. It is one-half of this amount, or $1,324, which may be designated as notional estate. However, as earlier noted, in view of the value of the estate, and considering the amount of provision being sought by each of Bradley and James, it was accepted, at the commencement of the hearing, that one-half of the jointly held bank account will not be designated as notional estate: s 88 of the Act: Tcpt, 1 July 2019, p 5(48) – p 6(14). Jacqueline also accepted that since she has received, and/or retained, the whole amount of the proceeds of the joint bank account, the Court may take the notional share of the deceased ($1,324) as a financial benefit she has received as a result of his death.

68. After some discussion, and on the second day of the hearing, the parties were able to agree that there were liabilities of the estate, almost all of which were repayments to Jacqueline for amounts she has paid, and the amount accepted by counsel was that found in Ex. 1/5 ($29,818).

69. It follows that the value of the deceased’s estate, before deduction of any costs, is estimated to be $1,174,036. It is an estate of moderate value before any costs of the two proceedings are deducted.

The Costs of the Proceedings

70. Section 99(1) of the Act provides that the Court may order that the costs of proceedings under Chapter 3, in relation to the estate or notional estate of a deceased person (including costs in connection with mediation), be paid out of the estate, or notional estate, or both, in such manner as the Court thinks fit. The section confers a discretion in respect of costs that is no more confined than the general costs discretion.

71. Usually, in calculating the value of the deceased's estate available from which a family provision order may be made, the costs of the proceedings should be considered with circumspection. Unless the overall justice of the case requires some different order to be made, the applicant for a family provision order, if successful, normally would be entitled to an order that her, or his, costs and disbursements, calculated on the ordinary basis, should be paid out of the estate of the deceased; while the defendant, as the person representing the estate of the deceased, irrespective of the outcome of the family provision proceedings, normally will be entitled to an order that her, or his, costs, calculated on the indemnity basis, should be paid out of the estate. The size of the deceased’s estate, and the conduct of a party, may justify a departure from what is said to be the usual rule.

72. As Basten JA put it in Chan v Chan (2016) 15 ASTLR 317; [2016] NSWCA 222, at [54]:

“In considering an amount by way of provision, it is appropriate also to have regard to the diminution of the estate on account of legal costs.”

73. However, this statement does not mean that parties should assume, in all cases, that this type of litigation can be pursued, safe in the belief that all costs will be paid out of the estate: Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) (2010) 28 VR 635; [2010] VSCA 195; Harkness v Harkness (No 2) [2012] NSWSC 35. I have made this statement, many times, in the context of a claim for a family provision order, particularly in relation to estates with a relatively small value.

74. Mr D Evans, the solicitor with the carriage of the matter on behalf of Bradley, affirmed an affidavit on 11 June 2019. In that affidavit, he disclosed that his firm was acting pursuant to a costs agreement, signed by Bradley, on 13 July 2017 and that the firm was acting “on a contingency basis”, meaning that Bradley’s legal fees were only payable “… on the successful outcome of his case whether this occurs through negotiation or by Court Order”. He also disclosed that the costs agreement “allows … to charge an uplift fee of 10% on the successful outcome of the matter”.

75. Mr Evans estimated that Bradley’s costs and disbursements, calculated on the ordinary basis, at the conclusion of the 4 day hearing, would total $94,516. He did not identify, in the affidavit, what, if any, part of those estimated costs and disbursements, was the amount of the uplift fee. He estimated Bradley’s fees, calculated on the indemnity basis, at the conclusion of a 4 day hearing, to be $118,033, all of which remains unpaid.

76. Mr S J Burns swore an affidavit on 20 April 2018, referring to James’ costs of the proceedings, calculated on the ordinary basis, up to and including the date of the mediation. He did not disclose, in that affidavit, that James had entered into a conditional costs agreement with his firm. However, in his affidavit sworn on 11 June 2019, the estimated costs and disbursements, inclusive of GST, to the date of the conclusion of the 4 day hearing, was said to total $91,000, all of which remains unpaid. Of that amount, $3,450 was described as “an uplift factor included in the calculation of the Plaintiff’s Solicitor’s costs of 10% pursuant to the Conditional Costs Agreement between the Plaintiff and the Plaintiff’s solicitors dated 23 June 2017”.

77. Mr Burns stated that the costs are only payable pursuant to the Conditional Costs Agreement by the Plaintiff “if he obtains a successful outcome from the Proceedings i.e. by way of a Settlement or an order being obtained against the Estate”. He stated that “[T]here is no uplift on Counsel’s contingency Costs Agreement”.

78. Mr Burns estimated the total costs and disbursements, calculated on the indemnity basis, to completion of the hearing, were $121,031, inclusive of GST.

79. Finally, Mr Burns stated, at [11]:

“I note that the Costs and Disbursements are higher than normal for matters of this nature given that there are a number of additional matters involved in the Proceedings relating to, inter alia, Notional Estate of the Deceased, an issue concerning a Financial Agreement between the Deceased and the Defendant pursuant to the Family Law Act 1975, the potential removal of the Defendant as Trustee of the Trusts created by the Deceased’s Will, and an issue about preservation of Estate assets pending this matter being determined, and this matter being heard together with another Claim on the Estate by the Plaintiff’s brother, Bradley Barbuto.”

80. (I should mention that I have, now, dealt with the obligation of a solicitor to disclose the existence of a conditional costs agreement in, at least, two judgments, namely in Anderson v Hill [2017] NSWSC 1149 at [35]-[38], and at [40]-[41] and in Oxley v Oxley [2018] NSWSC 91 at [57]-[90].)

81. In Oxley v Oxley, at [88], I wrote:

“It follows that if there is any conditional costs agreement, the nature of that agreement, and its effect on the payment of the costs of the party, including any term relating to an uplift fee, should be disclosed in each affidavit of costs that is relied upon by either party.”

82. Legal practitioners, particularly those that practice in this area, should, by now, be well aware of these two decisions.

83. In relation to each matter, s 181 of the Legal Profession Uniform Law (NSW) deals with "conditional costs agreements" and states that such an agreement may provide that the payment of some, or all, of the legal costs is conditional on the successful outcome of the matter to which those costs relate. Section 182 provides that a conditional costs agreement may provide for the payment of an uplift fee.

84. Because a copy of each conditional costs agreement was not in evidence, the Court is unable to state whether the conditional costs agreement, respectively, is one that complies with s 181. However, for the purpose of this aspect, I shall assume, in each case, that it does.

85. None of the parties made any submissions, in writing, as to the entitlement of a plaintiff to an additional amount for costs for the uplift fee, or the reasons why any such amount should be passed on to a defendant by an order for costs calculated on the ordinary basis. Perhaps, this is because counsel for each of Bradley and James were told (at Tcpt, 1 July 2019, p 9(37) – p 10(21)) of authority to the effect that an “uplift fee” is not part of the ordinary costs of a Plaintiff: G E Dal Pont, Law of Costs (3rd ed 2013, LexisNexis) at [17.55]; Stojanovski v Stojovski [2016] NSWSC 976; Page v Page [2016] NSWSC 1218, at [38]. (Although Page v Page was the subject of an unsuccessful appeal, there was no comment on the principle referred to – Page v Page [2017] NSWCA 141, per Sackville AJA, at [70]). (Also see Day v Perpetual Trustee (Supreme Court (NSW), Master Macready, 3 August 2001, unrep) in which the Court dealt, at length, with the reasons for not usually allowing the charge of an uplift factor. His Honour, in that case, regarded the uplift fee as a financing cost which should not be passed on to the residuary beneficiaries.)

86. On the second day of the hearing, the Court was informed, from the Bar table, without objection, that the estimate of Bradley’s costs and disbursements, calculated on the ordinary basis, earlier given, had not included the uplift fee, and were $94,516: Tcpt, 2 July 2019, p 112(40-45).

87. The Court was also informed, from the Bar table, without objection, that James’ costs, calculated on the ordinary basis, excluding the uplift factor, were estimated to be $88,406 and that the uplift fee was estimated to be $2,594: Tcpt, 2 July 2019, p 112(33-38).

82. Ms C Homer, the solicitor for Jacqueline, with the day to day conduct of the matters, estimated Jacqueline’s costs and disbursements, inclusive of GST, calculated to the conclusion of a 4 day hearing, of both proceedings, to be $177,434. (In fact, this estimate should be reduced by $3,850, being the costs of the private mediator and mediation room, which amount has already been paid out of the estate of the deceased.): Affidavit, Cherrie Homer, 11 June 2019 at par 4-6. It follows, that the estimate of Jacqueline’s costs, for both proceedings, is $173,584.

83. It is tragic that the costs, as set out above, of the proceedings, which, in total, amount to $356,506, are so high. There is merit in the submission that, at least, in part, the costs have been higher than they might have been otherwise, because of the trust dispute, which appears to have been kept alive until about one week before the hearing.

84. The parties informed the Court that it would not be possible to deal with how the burden of costs should be borne as there may be documents, served by Jacqueline, which may be relevant on the issue of costs. I shall allow the parties an opportunity to consider these reasons for judgment and then if the issue of costs is not agreed, I shall list the matter for argument at a convenient date. One can only hope that further costs will not be incurred in arguing about costs: Tcpt, 1 July 2019, p 8(4-37). (If the hearing is any guide, this is likely to be no more than a forlorn hope.)

85. Almost at the conclusion of the submissions, counsel for Jacqueline stated that “if James’ claim is dismissed, and there is no adverse costs order in relation to the matter of the Bangor property, then [Jacqueline] will not be pressing costs against James”: Tcpt, 4 July 2019, p 355(36-39).

86. However, this concession may not determine the costs issue in those circumstances, as I apprehend that James would seek an order that, whatever the result, some of his costs should be borne by Jacqueline personally rather than out of the estate of the deceased.

87. It should also be made clear that the discussions during the course of the hearing, and the estimates that the legal representatives have provided and which have been used by the Court, are not to be treated as having been accepted as actual costs and disbursements by the opposing parties. One, or more, of the parties, may require a formal assessment of the costs and disbursements that are ordered to be paid out of the estate of the deceased.

88. For the purposes of the proceedings, it appears that if orders were made that all of the costs are to be paid out of the estate of the deceased, the value of the estate out of which any order for provision for each of Bradley, and James, could be made, is $817,530: Tcpt, 2 July 2019, p 112 – p 114.

89. Based upon these estimates, the amount that would be held, on behalf of each testamentary trust, by Jacqueline as trustee, would be in the order of $408,750.

Eligible Persons

96. There was no dispute that the only eligible persons are Bradley, James and Jacqueline. Only Bradley and James have made a claim for a family provision order. However, Jacqueline has given evidence of the bases of her claim on the bounty of the deceased. She has not raised her financial circumstances as a competing financial discretionary object. Each of the parties was cross-examined.

97. The parties did not suggest that any of the deceased’s grandchildren was an eligible person.

98. In an affidavit sworn by Ms Homer on 25 June 2019, a person by the name of “Nikki” was referred to as another person who may be an eligible person. Initially, investigations did not reveal her full name, or her whereabouts. In this regard, Ms Homer had made enquiries of the deceased’s brother, Natale Barbuto, and two friends of the deceased, namely Robert Coombs and Phillip Whyte, each of whom was a witness in the proceedings, but none of whom could provide any information.

99. Subsequently, a search of the deceased’s laptop computer revealed a person called “Nikki Finch” and an email address for her. Following email correspondence, to which was attached the prescribed form of notice, Ms Homer spoke, by telephone, to Ms Finch, who stated that she was “not interested in making a claim. I’m not a blood relative”: Affidavit, Cherrie Homer, 25 June 2019 at par 14-16.

100. In the circumstances, I am prepared to disregard the interests of Ms Finch, a person by, or in respect of whom, an application for a family provision order may be made, but who has not made an application even though the notice of the application by each of Bradley and James, and of the Court's power to disregard her interests, was served on her recently: s 61 of the Act.

Jacqueline’s silence regarding her financial circumstances and resources

101. Although a discretionary object of each trust, Jacqueline is entitled to elect to remain silent about her financial resources and needs and simply look to the Court to not disregard the deceased’s freedom of testamentary disposition and his nomination of her, respectively, as a trustee and discretionary object, regardless of her financial resources or needs: Meres v Meres [2017] NSWSC 285, at [85]. The Act specifically provides that her interests, as a beneficiary, and I would suggest, a potential beneficiary, cannot be disregarded, even though she has not made a claim: s 61.

102. She is entitled to rely upon the terms of the Will and her competing claim as a chosen potential object of the deceased’s testamentary bounty.

103. Even though stated in the context of a named beneficiary, in Sammut v Kleemann [2012] NSWSC 1030, at [137]-[140], I set out the principles in a case where the beneficiary does not disclose her, or his, financial resources. The Court of Appeal, in Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285, at [94], per Meagher JA (Basten and Campbell JJA agreeing), stated the principle, far more succinctly:

“The fact that an executor has not led evidence as to the financial position of any beneficiary or beneficiaries will often provide a basis for the court to infer that each has sufficient income and resources to meet his or her needs: see, for example, Anderson v Teboneras [1990] VR 527 at 535-536; Mason v Permanent Trustee Co Ltd (Supreme Court, Macready M, 5 December 1996 unreported), at 6). The justification for that inference is an assumption that the executor has acted in accordance with his or her duty to lead such evidence, if relevant.”

104. Also see Poletti v Jones (2015) 13 ASTLR 113; [2015] NSWCA 107, at [23].

105. Even if I infer that Jacqueline has no financial need for provision from the estate of the deceased, and, that, on a comparative basis, she is significantly better off than each of Bradley, and James, her silence does not mean that her competing claim upon the bounty of the deceased should not be evaluated. As will be read, what is “proper” requires an evaluative judgment that has regard to all relevant circumstances, not merely the financial circumstances of the parties and of beneficiaries.

106. As I also stated in Meres v Meres, the consequences of not disclosing a beneficiary’s financial resources and needs, simply means that the Court, in considering those resources and needs, may draw the inference to which I have referred above. Thus, in reaching the conclusion in regard to the family provision order sought by Bradley and James, respectively, the Court will not disregard the competing interest of any discretionary object as a claimant upon the bounty of the deceased. In this way, the Court will give due regard to "what the testator regarded as superior claims or preferable dispositions" as demonstrated by her, or his, Will: Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19, per Dixon CJ, at 19.

107. Neither Bradley, nor James, has given evidence going to any of his children’s financial circumstances, respectively. Nor, it would seem, did Jacqueline seek any information, for the purposes of the proceedings, about his, or her, financial resources and needs. However, prior to the mediation, in a letter dated 12 July 2018, sent to the solicitors for each of Bradley and James, the solicitors for Jacqueline noted that there was “… some awkwardness in that objects of the testamentary trusts include your client’s children and unborn children” and suggested “that the other objects of the testamentary trusts should be separately represented at the mediation, particularly as some of them are minors. They or their legal representative may wish to attend the mediation”: Ex. 4.

108. There is no suggestion that the course suggested by the solicitors for Jacqueline was agreed to, or taken up, by either of Bradley or James, and there is no evidence of the financial circumstances of any of the grandchildren of the deceased.

109. James and Jacqueline, by counsel, each agreed that if provision is made for the relevant applicant, it should be borne out of the half share of the estate which passes to the relevant testamentary trust in respect of which he is a discretionary object. Counsel for Bradley took a different view submitting that the provision should be borne out of the deceased’s estate. He did not specifically state how the burden of that provision should be borne.

110. In view of the submission made by counsel for Jacqueline that the case brought by James ought to be dismissed, the submission made on behalf of James is difficult to understand. Be that as it may, s 65(1)(c) of the Act provides, amongst other things, that a family provision order must specify the manner in which the provision is to be provided, and the part or parts of the estate out of which it is to be provided.

111. In my view, it would be more consistent with the deceased’s intentions to ensure that any provision made for either of Bradley, or James, should be paid out of the part of the estate in which he is named as a discretionary object. In this way, if the proceedings brought by James were dismissed, the value of the first discretionary trust will not be reduced by any part of the provision made for Bradley being borne by its one-half share.

Some additional findings

112. I am satisfied that the following facts about the relationship of the family members have been established. I have taken some of these matters from Jacqueline’s evidence, which, as will be read, I accept, in particular, where there is any conflict with the evidence of either Bradley or James.

113. The deceased and Jacqueline kept in regular contact even after their separation and the commencement of her relationship with Doug. They would speak, on average, about once a week, following their separation, about twice a week, when she and Doug were living in Jindabyne, and more often when they returned to live in Sydney. I accept her description of their relationship as being that of “close friends”: Affidavit, Jacqueline Barbuto, 19 September 2018 at par 28.

114. In 1999, when the deceased required surgery for prostate cancer, it was Jacqueline who provided emotional, and other, support, to him. She would take him to various doctors, specialists and hospital appointments. Whilst he was in hospital, she cleaned his house and washed his clothes.

115. When the deceased was in hospital recuperating from liver surgery, Jacqueline would visit him almost daily, and when he was discharged from hospital, she stayed with him for a few days. She did the same when he was in hospital, for 5 weeks, for pelvic exenteration. (The deceased referred to this in his email to Bradley on 10 March 2017 to which reference will be made.)

116. During the last weeks of his life, Jacqueline regularly visited the deceased in hospital. Whilst she was not there all the time, she was regularly in attendance, on most days, for different periods of time.

117. In 1994, the deceased and Jacqueline borrowed $20,000, which they gave as a gift to James and his wife, Kellee. They used the amount gifted as a deposit on their new home. It was Jacqueline who made the fortnightly repayments on the loan. She was also a guarantor on the borrowing made by James and Kellee.

118. Although James did not give any evidence about it, I accept that the deceased and Jacqueline, in about March 1994, also gave James $2,000 (by way of a term deposit with the Commonwealth Bank) towards his own landscaping business called “A Better Pave”.

119. In February 2017, James visited the deceased at the Bangor Property, to assist him with pumping the pool and some maintenance around the property. James, in his Affidavit, 18 April 2018 at par 33, provides a description of the visit:

“[w]e then went upstairs and had a cup of tea and I said to him: ‘While you are still with us, have you got all your financials and Will sorted?’ He said ‘Yes, you don’t need to worry about it. It is all going to Blondie’ [which I knew to be my mother]. I said: ‘What do you mean? The house, your savings, my Grandmother’s inheritance, everything?’ He said: ‘Don’t worry, me and your Mother are leaving you and Brad $5,000:00 each. We’ve worked out that as long as we leave you something, you can’t contest the Will. I’ll speak to your Mother about it and I’ll look into it’.”

120. There is little, if any, relationship, between each of Bradley, and James, respectively, with Jacqueline at the present time. That, perhaps, is demonstrated by, amongst other things, the hard fought nature of this litigation.

121. Bradley gave evidence that he “believed the deceased was manipulated to change his Will and everything last minute”: Tcpt, 1 July 2019, p 100(34-44). (I shall return to this topic later in these reasons.) Furthermore, he appears to have had little to do with Jacqueline since about 2013.

122. In relation to Jacqueline’s relationship with Bradley there was no dispute that they have had no meaningful contact since 2013. In cross-examination, Jacqueline asserted that the event that led to the breakdown of their relationship was as follows, at Tcpt, 3 July 2019, p 246(26) – p 247(14):

“A. I can remember exactly 'cause we were watching State of Origin in June 2013 and I noticed that Brad and his daughter, Imogen, were having pizzas, homemade pizzas, and so I rang up and said to Brad, ‘Oh,’ and Imogen, ‘we're having homemade pizzas tonight too. Go the Blues,’ and Imogen said to me, ‘Are you coming for dad's wedding?’ I said, ‘What's this about dad getting married?’ So Brad gets on. He said, ‘I'm getting married, mum,’ and I said, ‘Why? Why the rush? Who are you getting married to?’ and he mentioned his present wife. ‘Are you going to come?’ and I said, ‘Brad, I can't. I'm having major knee replacement surgery so I won't be able to come. Why the rush? You've only met her on holidays. Why don't you take it a bit slowly? You have a daughter that you have to look after. How could you possibly marry someone that you haven't got the funds to look after?’ Bang.

Q. You understood either from that conversation or otherwise that you were invited to come to the wedding?

A. I couldn't get there. I'd had major knee surgery.

Q. But--

A. I couldn't travel.

…

Q. --the question that you were asked was did you appreciate that Bradley might be upset that you were--

A. Yes.

Q. --criticising his decision--

A. Yes.

Q. --to marry?”

123. (In his affidavit made 19 May 2018, Bradley indicated his relationship with Jacqueline became “estranged” due to Jacqueline “taking sides” with his former partner over a family dispute about the paternity of a child, and the stresses of his parents’ separation. The time period of these events is not specified. In any event, it is clear that there has been a long period of estrangement between Bradley and Jacqueline.)

124. In relation to James, Jacqueline gave evidence that she considered that she had previously had a good relationship with James, although in about February 2017, they had “a little tiff”, when James had raised the deceased’s Will: Tcpt, 3 July 2019, p 242(47) – p 243(3). She had not realised the importance of this event, as it was James who had consoled her following the death of the deceased. However, thereafter, despite attempts by her to resume their contact, he had not answered her text messages or her telephone calls. She came to regard their relationship as having completely broken down, as evidenced by her not being permitted to see his children, and not being invited to one of his children’s 21st birthday party.

125. She gave a very detailed answer, in re-examination, as to the extent of the breakdown of their relationship at Tcpt, 3 July 2019, p 263(15-40):

“Q. You also said that you tried to contact your grandchildren?

A. Via text messages.

Q. If I show you your phone, can you highlight some of those text messages?

A. The last one - I, I sent text messages on all their birthdays. I even sent Christmas presents on the very first year that were returned to me, opened by I presume Kellee because she wrote the note saying that they couldn't accept them. I don't know if the children ever got to see that they got these presents. For the older boys there was money in gift cards 'cause that's what the older kids want. For Claire there was a big package of clothes. It was pretty heartbreaking getting that all sent back. I know that they were a little bit late but I couldn't go over to their place. But the last text message I sent to my son, James, was for his daughter, Claire, 'cause she doesn't have a mobile - the boys all do - "Would you please wish Claire a very happy ninth birthday, love always, Oma." His answer was:

‘She will be having a great day surrounded by the love of family and friends, something you in your greed gave up on a long time ago. You had the power to change all this but decided not to, but that's the bed you and Doug made and you have to sleep in it. Bit easier for him. He still sees his daughter and grandchildren whilst leaving your life in tatters.’

Pretty awful to receive that. My grandkids mean the world to me. I don't know why they were involved in any of this. I've never had an argument with any of my grandchildren.”

126. I also accept that following the death of the deceased, and before its sale, Jacqueline cleaned out the Bangor property and that she boxed up items that she knew belonged to either Bradley or James. Although James did not return her calls, a mutual friend, Mr Whyte arranged to have James collect the boxes containing property of James, from him.

127. (The reason for making findings about the nature of the relationship between the parties relates to a consideration of the terms of the deceased’s Will and the likelihood of each of Bradley and James receiving provision out of the deceased’s estate as a result of the exercise of discretion by Jacqueline.)

128. I shall refer to the relationship of the deceased with each of Bradley and James later in these reasons.

129. For completeness, I should mention that the evidence, that I accept, discloses that the deceased had a relationship with all of his grandchildren. Indeed, Mr Whyte, one of the witnesses called by Jacqueline, said in cross-examination that the deceased had discussed his grandchildren “in glowing terms”: Tcpt, 3 July 2019, p 284(15-16).

The Circumstances regarding the making of the deceased’s Will

130. Mr C H Brown, a Partner in the firm of solicitors representing Jacqueline, swore an affidavit on 13 June 2019 and he was cross-examined.

131. Although the affidavit was served close to the hearing, and although counsel for each of Bradley and James, initially, objected to the Court reading it, each counsel fairly conceded that if he was given an opportunity, overnight, to consider the primary documents relating to the instructions given to Mr Brown (which had been produced), no prejudice would be suffered: Tcpt, 1 July 2019, p 39(50) – p 42(21).

132. Uniform Civil Procedure Rules 2005, r 10.2(1) provides that a party intending to use an affidavit that has not been filed must serve it on each other interested party not later than a reasonable time before the occasion for using it arises. Uniform Civil Procedure Rules 2005, r 10.2(2), provides that a party who fails to serve an affidavit as required by subrule (1) may not use the affidavit except by leave of the court.

130. Because the affidavit of Mr Brown was served late (on 14 June 2019), I consider that it was not served a reasonable time before the occasion for using it arose. However, in circumstances where the evidence of the conversations said to have occurred were, realistically, unlikely to be able to be challenged, in any significant way, by either of Bradley or James, and where Mr Brown was available for cross-examination, I granted leave to read his affidavit.

131. In the affidavit, Mr Brown gave evidence that he had known the deceased for more than 50 years. They met in High School; they played rugby together for many years, until about 1983; and they had met at various school reunions both before, and after, that date. He gave oral evidence that he had not seen the deceased for, perhaps, 20 years, before February 2017, when the deceased and Jacqueline attended at his office.

132. Until February 2017, Mr Brown had not been engaged by the deceased to provide legal services to him.

133. Mr Brown gave the following evidence in his affidavit:

“9.   Frank attended my office with Jacqui at approximately 2.00pm. on Tuesday, 28 February 2017. Frank gave me a colour photograph of the players in our team, in our last match together in 1983 at Coogee Oval. Frank called out names of players in the photograph and we reminisced together about rugby and old times. Frank said to me words to the following effect:

I have terminal cancer. I will die soon. I need to make my will and make sure that I give everything to Jacqui. Bob Coombs suggested that you are the man to put things in order for me. I have not kept in touch with my old mates from the SHOBS. I am ashamed at the way I treated Jacqui, and forced her to leave me. I want to put things right.

10.   I said words to the following effect:

Frank, I will do what you ask me to do. I’m sorry to see you in this state, but me being sorry doesn’t help you.

11.   Frank then said to me words to the following effect:

Jacqui is to get everything. Jamie and Brad are to get nothing. They have behaved disgracefully towards Jacqui and me. Jacqui and I have been separated for many years – that was all my fault for siding with the boys against her. We are still married, merely separated. I am glad that she has Doug, he is a good man and supports her emotionally in a way that I should have. Jacqui is my rock. We are Catholics and never divorce.

12.   I said words to the following effect:

Mate, how long have you got?

13.   Frank said words to the following effect:

Probably not more than 3 months, it is inevitable.

14.   I then said words to the following effect:

Mate, you need to make a will, probably an enduring power of attorney and probably an enduring guardianship.

If I have understood you correctly, you want all of your estate to go to Jacqui and nothing to the boys. Is that correct?

15.   Frank then said words to the following effect:

Correct. I am ashamed at both of them. I’ve had a big argument recently with James. He demanded that our house go to Bradley and himself and that Jacqui get nothing. I told him that Jacqui is getting everything. At times, Jacqui and I were each working 3 jobs to pay for the unit and the house and Jacqui was a good mother. The boys have treated her very badly. I want Jacqui to have the lot, and after I am gone, it will be up to Jacqui to decide if she gives anything to the boys or the grandchildren.

16.   I then said words to the following effect:

I understand your intentions. I can draft a will, now, so that you give all of your estate to Jacqui. Separately though, is it possible for you to talk to the boys and explain how you feel, attempt some reconciliation?   

17.   Frank then said words to the following effect:

Waste of time. Had enough. Don’t want anything more to do with them. Both gamblers, can’t be trusted. Blake is going to same way, under the influence of Jamie. Anything that I might give to Brad will go straight to the casino. Brad has had a number of relationships, and cannot be trusted. I should have listened to Jacqui all those years ago. Jacqui was right. I was wrong, I drove her away. I fear for the future of my grandchildren.

18.   I then said words to the following effect:

You might think about writing a letter to the boys, explaining how you feel. The boys could get the letter after you are gone. The letter is not a will, and may help Jacqui to engage with the boys, after you are gone. Sometimes a statutory declaration is used.

19.   Frank then said words to the following effect:

I will think about it.”

137. Mr Brown also gave evidence of the discussion regarding a will that created testamentary trusts (which it is not necessary to repeat). He then wrote, in the affidavit:

“22.   Frank then said words to the following effect:

I agree. Make the will giving everything to Jacqui, now. Then I can think about a more complex will with trusts, later.

23.   I then handwrote a will for Frank, which was executed by Frank in the presence of myself and Madelaine Inglis. The execution of the will by Frank was witnessed by Madelaine Inglis and myself, in the presence of each other and Frank. …

…

26.   Before printing the suggested structure for testamentary trusts on the whiteboard, I said to Frank words to the following effect:

We need to consider who should succeed Jacqui as appointor of the testamentary trusts, if Jacqui dies or loses capacity. Normally in the case of the first testamentary trust it would be the secondary beneficiary, James and in the case of the second testamentary trust, the secondary beneficiary, Bradley.

27.   Frank then said words to the following effect:

No, I don’t want James or Bradley. Neither can be trusted. There would be nothing left for the grandchildren. Chris, can it be you?

28.   I then said words to the following effect:

Normally, it would be trusted family members, at least 2, and if need be, if you want, I would agree to act jointly with them as substitute appointor.

29.   Frank then said words to the following effect:

Okay. Then put in Mark Sloane and Glen Barbuto, my nephews with you, Chris.

30.   I then said words to the following effect to Frank:

This will that you’ve just signed appoints Jacqui as sole executrix and beneficiary. You should consider appointing Jacqui as your enduring power of attorney and enduring guardian, so that she can act on your behalf, even though you lose capacity.

31.   Frank then said words to the following effect:

I agree.

…

33.   Frank then said words to the following effect:

I’ll think about contacting the boys, but they don’t deserve anything. I’m ashamed of them. Making my will today has been a relief.

34.   I then said words to the following effect:

Jacqui, you have said virtually nothing all day. Is there anything you want to ask?

35.   Jacque [sic] then said words to the following effect:

No. Frank and I are still married, and I’ll be with him to the end. It is very upsetting to think that our sons are only concerned about property, and not about their father.

Thank you for looking after Frank.”

138. The handwritten Will, which was duly executed by the deceased and dated 28 February 2017, revoked all former Wills, appointed Jacqueline as the sole executrix and trustee and left to her the whole of the deceased’s estate: Affidavit, Christopher Herbert Brown, 13 June 2019, Annexure A.

139. In an email dated 3 March 2017, the deceased wrote to Ms M Inglis, the solicitor who was to prepare the Will including the testamentary trusts, attaching “a list of my assets and how I would like to see them dispersed. These are not set in concrete and were a guideline for Jacqui to think about”.

140. The attachment was in the following terms (Affidavit, Christopher Herbert Brown, 13 June 2019, Annexure C):

“DISPERSEMENT OF ASSETS

ASSET	RECIPIENT
HOUSE	JACQUI (Joint ownwers [sic])
IAG Shares	MITCHELL
AMP Shares	RYAN & CLAIRE	Shares to be held in trust. Any dividends to be reinvested in shares. When Ryan turns 18 he is to receive half of the shares. Claire to receive balance of shares when she reaches 18 y.o
Car	JACQUI	Initially ownership to be transferred to Jacqui but ownership to be transferred to BLAKE when he obtains his driving licence.
Challenger Annuity	JACQUI
One Path	Jacqui	$50,000 to be invested and held in trust for Bradley’s children. Upon reaching the age of 18years each child to receive a share of this trust the share to be paid is the value of the fund divided by the number of eligible children $100,000 to be invested in a trust fund to be named THE NORMA BARBUTO EDUCATION TRUST. This trust will pay the school fees (from Kingergarted [sic] to 12 year only) for Jamie’s and Bradley’s Children and any offspring they may have.. Payment to be made to the school direct upon receipt of school invoice. in addition each child shall receive an allowance of $200 p.a. for uniforms, books etc for years Kindy to Year 6 For years 7 to 12 This allowance shall be increased to $300.p.a This allowance to be made to their parents at the beginning of each school year. $10,000 each to Jamie & Bradley The balance to be used for renovation/repair of house.”

141. I should refer, next, to the cross-examination of Mr Brown. Importantly, Mr Brown, in cross-examination, gave evidence that:

1. He had not seen the “Regrets” letter, and even now, had not read it: Tcpt, 3 July 2019, p 268 (1-2).

2. He had a clear recollection of the events of the meeting with the deceased and Jacqueline, despite the passing of over 2 years, because “this was clearly in my mind because meeting Frank in these circumstances was a shocking experience for me”: Tcpt, 3 July 2019, p 268(38-46).

3. He confirmed that the deceased said that “he was ashamed of his behaviour … he was ashamed that he had taken the side of the boys against his wife, that he was ashamed that he had driven her away, he was responsible for the separation”: Tcpt, 3 July 2019, p 269(25-28).

4. The deceased had described Jacqueline as “my rock”. Mr Brown was unaware that they had been, and were, separated, until he met with them on 28 February 2017: Tcpt, 3 July 2019, p 269(35-47).

5. The deceased said that he intended not to leave anything to his two sons, and that all of his estate should go to Jacqueline. He said that he did not trust either of them; that both were gamblers; and that he had, and Jacqueline had, been treated “disgracefully.” The deceased had not elaborated on the conduct of either Bradley, or James, that the deceased regarded as “disgraceful” and Mr Brown did not ask him about that conduct: Tcpt, 3 July 2019, p 270(4-10).

6. It was Mr Brown who had suggested that the deceased try to be in touch with his sons; that he sit down with them and have a discussion; and that he reconcile his feelings about them. Mr Brown also suggested that the preparation of a letter, or to otherwise write down his thoughts and feelings, might achieve this. The deceased had responded that he would think about it: Tcpt, 3 July 2019, p 270(12-33).

142. Neither counsel for Bradley, or James, suggested that Mr Brown’s evidence should not be accepted. I am more than satisfied that I should accept his evidence and I do so. Importantly, I accept that it was Mr Brown who suggested that the deceased reduce to writing his thoughts and feelings.   

The deceased’s letter of “Regrets”

143. For reasons to which I shall come, there is a dispute about the role that Bradley and James assert the deceased played in the creation, or amendment, of the letter. I shall return to that topic shortly.

144. What follows, under this heading, is what I am satisfied has been established by the evidence.

145. The deceased is said to have written a letter which is headed “Regrets”. The copy letter in evidence is undated, but it was sent, as an attachment, from the deceased’s computer, on 6 March 2017, with an email, to Jacqueline.

146. I shall not set it out in full, but so far as is relevant, it provides:

“…

Until I was forced to think about the ‘regrets’ I may have, I had only one. That was the way I treated my wife Jacqui that caused her to leave me. Jacqui and I met when we were both very young and fell in love. We had two children, bought a house. We both worked several jobs to keep our home after being let down by our builder. The brunt of these extra jobs fell to Jacqui. She actually worked three jobs at once to keep us afloat.

Although we worked several jobs each over the years we never left our children unattended whilst they were young. If Jacqui was working, I was home looking after our children. When I was working a second job, Jacqui was home to look after them. In the early years when Jacqui had medical problems. I took time of [sic] work to look after the kids. We did not have the Grandparent support to help out.

WE had a very rewarding life together.

We both came from similar dysfunctional family backgrounds and always wanted better for our kids. Jacqui worked her ass off to make sure that our kids had a better life than we had. If a problem arose between me and the kids. She always took the kids side. After all these were her babies and a mother’s love knows no bounds. During our twenty years of separation Jacqui and I have maintained close contact with each other. We both agree that the separation was probably a good thing, it was not because we stopped loving each other but we just could not live together harmoniously.

She has been my best friend and my soul mate for FIFTY years.

I am extremely grateful to Doug for looking after Jacqui over the past 20 Years. He treats her the way I should have treated her.

However since my diagnosis that I only have months left and not years I have done some serious reflexions [sic] on my life.

I now realise that my worst regret is that I have been a lousy parent.

Bradley has serious gambling and psychological problems. I regret that Jacqui and I did not pick up on these sooner rather than after he was an adult and out of our control. If we had, maybe so many innocent people would not have been hurt by his actions.

Jamie is my real failure. After all the time I spent with him during his earlier years following him and supporting him through all his sporting activities I have been heartened by his application of these same efforts in his own children.

But underneath he still has a preoccupation with gambling and drinking.

Unfortunately he has passed on these afflictions onto his son Blake. Blake is struggling with his school work, yet Jamie allows him to miss school to attend race meetings. Jamie came to see me following my latest diagnosis and rather than ask if there was anything he could do for me or to help console his mother his only concern was his inheritance.

I have written a new will that leaves everything to Jacqui, I have requested that Jacqui sets up trusts for the grandchildren using the ‘family money’ left to me by my mother. I have excluded both Jamie and Brad from this family money because neither of them understand or respect what being part of the Barbuto family means. What Jacqui does with her money is up to her.”

147. There is no suggestion that a copy of the letter was sent to either Bradley, or James, prior to the death of the deceased.

148. For reasons to which I shall come, I am satisfied that Jacqueline played no part in the creation, or revision, of the “Regrets” letter. I accept her evidence that she first saw the letter when it was sent to her as an attachment to the email of 6 March 2017. Bradley, and James, each disputed that the letter was written by the deceased. Counsel for each cross-examined Jacqueline about the letter. I shall return to the reasons why I consider that the “Regrets” letter was written by the deceased later in these reasons. I shall also refer to the weight to be given to the “Regrets” letter later in these reasons.

Credibility of the party Witnesses

149. Counsel for Jacqueline made lengthy submissions concerning the credibility of each of Bradley and James, whilst each counsel for Bradley and James, respectively, submitted that Jacqueline should not be believed about parts of her evidence.

150. At the outset, I state that I have no hesitation in accepting Jacqueline’s evidence where it conflicts with the evidence of each of Bradley and James, neither of whom did I find to be a satisfactory, or credible, witness. Whilst each appeared intelligent and articulate, I did not find either to be candid with the Court about his financial circumstances, and particularly in relation to his gambling activities. I considered that each was conscious of the effect of his evidence upon the case being advanced.

151. On the other hand, I found Jacqueline to be forthright, and responsive to the questions asked of her, and on only one occasion, did she display high emotion about a particular question. In my view, she was endeavouring to, and did, give, truthful evidence. I found each of Bradley and James to be a far less credible and reliable witness than Jacqueline.

152. In reaching this conclusion, I have focussed upon the inherent plausibility, or implausibility, of the evidence, particularly regarding gambling, having regard to the undisputed, or indisputable, evidence, the contemporaneous documents, and the summary, in each case, that was tendered.

153. In Collings v Vakas [2006] NSWSC 393, a case decided under the Family Provision Act 1982 (NSW), Campbell J (as his Honour then was) stated at [66]-[68]:

"Before the Court can make an order in the plaintiff's favour, it needs to be satisfied that she was left, at the testator's death, without adequate provision for her maintenance, education or advancement in life. It is clear that she owns no real estate (unlike her brothers), and that she has ongoing family responsibilities.

However, before a court can be satisfied that a plaintiff has been left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff's financial situation. In the present case, even though there are two elements of the plaintiff's financial situation about which I am satisfied (that she owns no real estate, and has family responsibilities), when another crucial element of the plaintiff's financial situation (namely, her income and expenditure) is not satisfactorily proved, it is not possible to conclude that she has been left without adequate provision.

In these circumstances, the plaintiff's claim is dismissed."

154. A similar approach was taken by McLaughlin As J in Foye v Foye [2008] NSWSC 1305, in which his Honour wrote, at [14]-[15] and [41]:

"It cannot be emphasised too strongly that it is incumbent upon an applicant for provision to disclose to the Court as fully and as frankly as possible all details of that applicant's financial and material circumstances. Where an applicant is living with a spouse or partner, that obligation extends also to the circumstances of such spouse or partner. It is quite inappropriate for an applicant to fail (as Edward has failed in the instant case) to set forth the financial and material circumstances of his wife, and then to say that he was not asked to provide any information concerning her finances. Whether or not he is expressly requested to provide such information, an applicant has an obligation to place that information before the Court.

Neither the Court nor the Defendant should be required to embark upon a search for information which Edward himself had an obligation to provide frankly and voluntarily in support of his claim. If he chooses not to inform the Court of the details of the finances of the wife with whom he is living, then the Court is entitled to draw appropriate inferences from that omission.

...

I have already referred to the obligation of an applicant for provision to place before the Court as fully and as frankly as possible all information concerning the applicant's financial and material circumstances. I have also referred to the fact that it is not the responsibility of the Defendant to elicit evidence concerning those circumstances which the applicant herself fails to provide voluntarily."

332. In Gregory v Hudson (No 2) (Supreme Court (NSW), Young J, 18 September 1997, unrep), 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 C 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.”

333. Gregory v Hudson was followed by Master McLaughlin (as his Honour then was) in Gill v Permanent Trustee Company Limited [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.

334. In Taylor v Farrugia, Brereton J (as his Honour then was) 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.”

335. The point raised by these decisions was more recently, and succinctly put, in Lemon v Mead (2017) 53 WAR 76; [2017] WASCA 215, in which Buss P wrote, at [188]:

“In my opinion, a provision under a testator's will may not make adequate provision from his or her estate for the proper maintenance, etc, of a person mentioned in s 7 of the Act if, in all the circumstances, the form of the provision is not adequate or proper. That is, the evaluation by the court of the adequacy or propriety of a provision in a will is not confined to whether, in all the circumstances, the actual or potential quantum of the provision is adequate and proper.”

336. Mead v Lemon (As Executor of the Estate of the late Michael John Maynard Wright) and Leonie Angela Maynard Baldock and Alexandra Odette Burt and VOC Group Limited [2018] HCATrans 152, was the subject of a special leave application, which was refused upon the basis that there were insufficient prospects that the appeal would succeed.

337. More recently, in Bkassini v Sarkis [2017] NSWSC 1487, Robb J, before quoting what I had written in Hedman v Frazer, wrote, at [304] that a discretionary object’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”.

338. An earlier example of such a view is Shepherd v Shepherd [2010] NSWSC 167, at [53]-[55], in which McDougall J concluded that a will had made inadequate provision for an adult beneficiary, a son of the deceased, who had no vested entitlement to income and who was entirely dependent upon the trustees (his brother and sister) exercising their discretion in his favour from time to time.

The gambling issue

339. A significant part of the case advanced by Jacqueline was that Bradley and James each acknowledged that he gambles and that this was a relevant matter to consider in determining the form of provision that the deceased determined should be made for each of them. In the case of James, the gambling seems to be conducted on a more regular and structured basis.

340. As I understood the submission, Jacqueline’s case was not that gambling was misconduct that would deprive an order being made, or that each of Bradley and James should not gamble if he chooses to, bearing in mind gambling is not an illegal activity. The submission was that neither should look to the deceased’s estate, in his claim for a family provision order, to indirectly supplement funds dissipated in engaging in that activity, by making provision for “needs” that could be met, otherwise, in whole, or in part, if each did not gamble. In other words, the Court should take into account the gambling conduct of each where it is said to have a direct, or an indirect, effect on the fortunes of each, and that of their respective families. It was submitted, by way of example, that an adult child who suffers an illness, or a disability, in mid-life, is one thing; an adult child who squanders his, or her, money gambling, is another. (In my view, it is also relevant that there is evidence that the deceased disapproved of each of Bradley and James gambling.)

341. In Green v Perpetual Trustee Co Limited (10 July 1985, unrep), Hodgson J wrote that the Court could not "have regard to any likelihood of dissipation of any provision for the plaintiffs except in relation to the actual order" which was made, and that "such consideration could suggest that there should be terms attached to the order to prevent dissipation".

342. In Howarth v Reed (Supreme Court (NSW), Powell J, 15 April 1991, unrep) Powell J referred to the possibility of a provision not being applied by the person for the purposes intended by the Court. His Honour wrote, at 43:

"While, as will be apparent from what I have earlier written, I am deeply concerned at what I regard as the totally unrealistic approach to the management of their affairs adopted by Mr and Mrs Howarth, which approach, if persisted in, will almost inevitably lead to the benefit of any Order which might be made in Mrs Howarth's favour being dissipated in short order, it seems to me that, while that is a matter which may bear on the form of Order to be made, it is not a matter which ought, without more, to be regarded as disqualifying Mrs Howarth from receiving the benefit of any Order to which she might otherwise be entitled. Nor is this a novel view, for a similar approach is reflected in the following passage in the judgment of Young J in Bondy v Vavros ..."

343. Reliance was placed on what Campbell JA wrote in Hampson v Hampson (2010) 5 ASTLR 116; [2010] NSWCA 359, at [97]-[102]:

"Ray v Moncrieff [1917] NZLR 234 concerned an applicant who was the only son of a deceased, who had been left the income of a sum of money, with the capital of that sum on his mother's death. The applicant was an able-bodied labourer, and ‘a chronic drunkard’. Chapman J rejected the argument that the applicant should be treated as a man suffering from a chronic disorder, such as being maimed or insane. His Honour said, at 235:

‘[I]t would be a novel use of the powers of this Act to relieve the son of his burdens when the only result would be to set free his resources to be spent in drinking. The Court in these cases is asked to make good some failure on the part of the testator to perform his duty. It seems to me he has most thoroughly endeavoured to do his duty towards the applicant.’

Similarly, in Bondy v Vavros (Supreme Court of NSW, Young J, 29 August 1988, unreported at 10) Young J (as his Honour then was) contemplated that:

‘... if one can see that a plaintiff is a spendthrift and the testator has arranged his will in such a way as to limit the funds flowing to the plaintiff, then one may very well come to the conclusion that the plaintiff has failed to establish that there has been any breach of moral duty.’

In such a situation, if a plaintiff had been left periodical income, then even if another plaintiff who was similarly situated but not at serious risk of frittering away capital could have obtained a capital sum in lieu of the income stream, it might be concluded that for that particular plaintiff the income stream was adequate and proper provision.

I should here mention that the passage I have quoted from Bondy v Vavros was preceded by the following statement:

‘If a person is entitled to an order, what they do with the money that they receive is their business and it is none of my affair if I very much fear that the money may be wasted on wine, women and song in a short period of time.’

That statement has sometimes been treated as though the court should disregard the likely use that an applicant will make of an award (eg Michael Bienke v Brian Bienke; Estate of the Late Harold Bienke [2002] NSWSC 804 at [24]), or disregard it at the jurisdictional stage though possibly taking it into account in the form of the order (Howarth v Reed, Supreme Court of New South Wales, Powell J, 15 April 1991 unreported at 42). In my view that involves a misreading of the statement in its context. The statement is part of the same paragraph that I have quoted at [98] above, and precedes the passage I have quoted at [98]. The sentence I have quoted at [98] commences with the words ‘On the other hand, when one is considering what a wise and just testator would have done, ...’. The sense of the whole of the paragraph is, if a person is entitled to an order (ie, to receive what is adequate for proper maintenance, education and advancement in life, or what the wise and just testator would have given him) it is no further concern of the court that there is a prospect that the applicant might waste the money.

However, to the extent to which the wise and just testator would take it into account, the prospect of the applicant wasting the money is a legitimate matter to take into account in deciding whether the applicant has been left without adequate provision for proper maintenance, education and advancement in life.

There is ample precedent, and justification in principle, for a tendency of an applicant to spend excessive amounts of money unwisely (whether through an addiction to alcohol, drugs or gambling, or simply through habitual spendthrift characteristics) to enter into consideration for the purposes of the second stage of the process identified in Singer v Berghouse (No 2), namely, once jurisdiction is established, formulation of an order under the Family Provision Act. Some examples from the caselaw are collected and discussed in the appendix to this judgment."

344. Hampson v Hampson was a case involving the applicant’s use of marijuana, and was not one involving gambling.

345. Yet, the Court remembers the words of Lord Hoffmann in Reeves v Commissioner of Police [2000] 1 AC 360, at 368, albeit in a different context:

"…there is a difference between protecting people against harm caused to them by third parties and protecting them against harm which they inflict upon themselves. It reflects the individualist philosophy of the common law. People of full age and sound understanding must look after themselves and take responsibility for their actions. This philosophy expresses itself in the fact that duties to safeguard from harm deliberately caused by others are unusual and a duty to protect a person of full understanding from causing harm to himself is very rare indeed…."

The undertakings proffered by each of Bradley and James

346. During the course of the hearing, there was discussion regarding whether any condition should be imposed by the Court in relation to the manner in which any family provision order: s 65(1)(d) of the Act. Each of Bradley and James consented to a condition being imposed.

347. Each of Bradley and James was prepared to give an undertaking to the Court, in relation to any provision out of the estate that was made for him. The type of undertaking that might be given was discussed during submissions but, at that time, no undertaking was proffered by either of them.

348. In the case of Bradley, the Court was informed that he was prepared to give the following undertaking to the Court:

“The Plaintiff undertakes to the Court that, to the extent that the Court orders provision for the Plaintiff exceeding the total of the amounts paid to creditors pursuant to order 3 above, that the Plaintiff shall not apply any of such provision for the purposes of gambling of any description.”

349. On 16 July 2019, by email sent on behalf of Bradley, by his solicitor, the undertaking set out, in essence, was that any lump sum ordered to be paid out of the estate of the deceased should be paid into the trust account of the Plaintiff’s lawyers, Armstrong Legal; and that, thereafter, it be used to pay the debts to HSBC, Macquarie Leasing, and Centrelink, in whole or to the extent possible.

350. (The document also contained an undertaking given by Bradley, in relation to not using any provision made for him on gambling. That portion of the undertaking has been set out earlier in these reasons.)

351. After the hearing had concluded, in the case of James, the following document was provided, without opposition, by his legal representative, to the Court:

“UNDERTAKING TO COURT AND AUTHORITY TO RECEIVE

Any order for provision in favour of the Plaintiff out of the Estate of the Deceased be satisfied by payment to the Solicitors for the Plaintiff, Messrs Salmon Layton & Co, for application by those solicitors, for the sole purpose of reduction of the principal sum of the mortgage secured on xx Aldgate Street Sutherland, held jointly by the Plaintiff and Kellee Barbuto (Mortgage), and, in particular, not in reduction or payment of the Plaintiff's Solicitor’s costs in the proceedings.

The Plaintiff irrevocably UNDERTAKES TO THE SUPREME COURT OF NEW SOUTH WALES that he authorises and directs his Solicitors to receive and to apply the said sum to the reduction of the principal sum of the Mortgage, and will not, for a period of 12 months from the time of receipt by his Solicitors of the said sum, increase, or direct or authorise any person to increase the reduced principal sum of the Mortgage, or to redraw against the mortgage.”

352. The form of undertaking was not precisely in the terms that had been discussed at the hearing. In view of the conclusion to which I have come in relation to the claim by James, this does not matter.

Determination

353. As stated, there is no dispute that each of Bradley and James is an eligible person. James commenced the proceedings within time and Jacqueline consents to the time for the making of Bradley’s application being made out of time. Accordingly, in the case of Bradley, the extension of time for the making of the application is not an issue.

354. Then, the first question for determination is whether, at the time the Court is considering the application, adequate provision for the proper maintenance or advancement in life of each has not been made by the Will of the deceased.

355. Bearing in mind the terms of the deceased’s Will, there is a prospect that each of Bradley and James might receive nothing by way of income, or capital, out of the deceased’s estate. Whether each does, depends entirely upon the exercise of discretion, in his favour by Jacqueline. To date, neither has received any distribution from the relevant trust, but I do not regard this as indicative of what might occur in the future.

356. The contingent nature of the disposition to each of Bradley and James under the deceased’s Will, arising from the discretionary nature of each testamentary trust, without more, might compel the conclusion that the provision in the Will for each of his children by the deceased was not adequate for that child’s proper maintenance or advancement in life.

357. As earlier stated, a court cannot describe, in terms of universal application, what adequate provision for the proper maintenance or advancement in life will entail for a parent in respect of an adult child. In many cases, as has earlier been said, adequate provision for proper maintenance will not require the parent to support a capable adult child for the rest of his, or her, life.

358. But every case will depend on its own facts, and in my view, the facts of the two claims are very different.

359. Overall, whilst Bradley has not disclosed what he spends on gambling, I am satisfied that he has disclosed, in broad terms, his financial circumstances. However, his expenditure on gambling, as disclosed in the summary document, does lead to the view that his claimed needs are not as great as he alleged, or if they are, that some of those needs could be alleviated by spending less on gambling.

360. In relation to gambling, the Court is morally neutral. However, there is merit in the submission made on behalf of Jacqueline that Bradley should not seek provision out of the deceased’s estate to effectively supplement what he spends on that activity. The Court may take his gambling into account where it has a direct, or indirect, effect on the family fortunes.

361. Counsel for Jacqueline submitted that the Court should make an order for provision that enables him to pay off his debts: Tcpt, 4 July 2019, p 349(8-13). At the hearing, counsel for Jacqueline agreed that those debts (being the debts from Centrelink, Macquarie Leasing, HSBC and Bradley’s car loan) totalled “around [$]110[,000] to [$]120[,000]” and that the amount should be updated as at the date of any orders that were to be made: Tcpt, 4 July 2019, p 349(15-35).

362. I note that it had earlier been agreed that Bradley’s debts arising from Centrelink, Macquarie Leasing and HSBC, and not the car loan (which Bradley’s affidavit evidence indicates has been put on hold), totalled in the order of $81,337: Tcpt, 4 July 2019, p 318 (23-26).

363. On behalf of Jacqueline, it appears to have been accepted that some provision should be made for Bradley with a number of conditions which were raised on the final day of the hearing, to all of which Bradley, in the undertaking subsequently received by his legal representative, appears to have agreed.

364. The first condition was that he should disclaim any future interest in the second testamentary trust, in which he is a discretionary object. The second condition was that the lump sum should be paid to Bradley’s solicitors upon the basis that they would pay Bradley’s debts to the extent they were able to out of the lump sum provision that is made. The third condition was that to the extent that there was any surplus, that surplus should not be used to pay the difference between any costs recovered and any costs that Bradley was required to pay his solicitors pursuant to the conditional costs agreement.

353. (I note that, in the correspondence received by the Court on 16 July 2019, Bradley’s solicitors also forwarded correspondence from Jacqueline’s solicitor, in which it was asserted that the undertaking provided by Bradley’s legal representative was, in their view, “not sufficient”. They deemed it appropriate that the undertaking should be coupled with an order that any provision made should be held on trust and a copy of the undertaking should be provided to the trustee; but that if the Court deemed the undertaking to be sufficient, then the orders and undertakings should expressly make clear any provision made should not be used for the costs of the proceedings, and that the undertaking should specify what provision would be used for, rather than what it would not be used for gambling).

354. I am satisfied that some provision ought to be made for Bradley and, in my view, the lump sum of $90,000 should be provided out of the estate of the deceased, upon the condition that it be used to repay his debts in whole or in part. An additional condition to be imposed is that he should disclaim any further interest as a discretionary object. In reaching my conclusion regarding the quantum of provision, I have, naturally, borne in mind the relevant matters in s 60(2) of the Act.

355. I do not accept that the lump sum provision should be enough to enable the payment of all of his debts (if they are, in fact $110,000 to $120,000.) In my view, that would exceed any obligation owed by the deceased to him.

356. The burden of the provision made for Bradley should be borne out of the Second Discretionary Trust. In this way, the deceased’s desire to ensure that any provision made in favour of one or other of his children be borne out of one half of his estate will be achieved.

357. In relation to James, Jacqueline submitted that the Court could not be satisfied that the provision made for him in the Will of the deceased was inadequate, for three reasons, namely that he had failed to make full and frank disclosure about his financial circumstances, and, in particular, his gambling; second, that he had no “needs” that could not be met from his own resources; and third, that to the extent that he has a “need”, such “need” is the result of James’ own choices. In those circumstances, his claim should be dismissed.

358. Respectfully, I agree. I am simply not satisfied that James gave what I regard as a broadly complete picture of his financial circumstances. To the extent that he did disclose his circumstances, considering his situation in life, at the present time, I am not satisfied that adequate provision for his proper maintenance, education or advancement in life had not been made by the Will of the deceased. In particular, he is secure in accommodation; he and his wife have an income that is sufficient to meet their expenditure; and he also has superannuation to protect him from some of the exigencies of life. Whilst he does have the burden of a debt secured by mortgage, he has been able to pay the debt in the usual manner out of his and his wife’s income.

359. Even if he has some "needs", that is not all that the Court is required to consider. Merely because financial relief could be given to assist him, does not mean that there is justification for judicial interference with the dispositions made in the Will of the deceased. The question whether “adequate” provision has been made “directs attention, not merely to an applicant’s financial needs, but also to the size and nature of the deceased’s estate, the relationships between the deceased and the applicant and others with claims upon his bounty, and the circumstances and needs of those other persons. The evaluation involved in deciding whether ‘adequate’ provision has been made is to be guided by applying the Court’s assessment of what would, in the circumstances, be right and appropriate, according to prevailing community standards and expectations”: Squire v Squire [2019] NSWCA 90, per Meagher JA (with whom Macfarlan JA and Simpson AJA agreed), at [10].

360. As well, the Court must not forget the word “proper”, which is also used in the section, the meaning of which has been discussed earlier in these reasons.

361. Furthermore, to the extent that he does have any needs in the future, he will remain an object of discretion of the First Discretionary Trust and, depending upon his disclosure of such needs to Jacqueline, and her consideration of other competing discretionary objects at that time, she may exercise her discretion in his favour.

362. All of these considerations led me to find that there was no failure, on the part of the deceased, to make adequate provision for James. Accordingly, his claim fails at the jurisdictional stage. That finding concludes the matter and leads to the dismissal of the proceedings.

363. But, if (contrary to my foregoing conclusion), I were satisfied that James had been left without adequate provision for his proper maintenance or advancement in life, I would have turned, then, to make an evaluative judgment as to what provision, if any, ought to be made out of the estate of the deceased for his maintenance, education or advancement in life having regard to the facts known to the Court at the time the order were made.

364. All of the considerations that need to be made at that stage, also produces the result that, as a matter of discretion, I would not be satisfied that a family provision order ought to be made for him. In this regard, I do not overlook the fact that the Court is not invested with a discretion to remake a deceased’s Will upon some principle of fairness or to achieve equality amongst various claimants.

365. As Kitto J wrote in McCosker v McCosker, at 580:

“This is the kind of case in which it would be much more pleasant to be open-handed with the testator’s estate than to confine oneself to the jurisdiction under the Act. But even if I felt sure that I understood the whole situation so well that I could deal with the estate more justly than the testator dealt with it, I should still not feel justified in asserting that when he decided to give the respondent no more than he had already given him, and to leave his estate to members of the family who had been closer to him and to whom he had his own reasons for being generous, he failed to recognise a moral duty which lay upon him.”

378. Whilst James might feel a sense of grievance, or hurt, as a result of the unequal disposition of the deceased’s estate, he has not established, to my satisfaction, that further provision for him out of the estate ought to be made. In this regard, by his own failure to properly disclose his financial circumstances, he is the author of his own misfortune.

379. Accordingly, the claim by James for a family provision order should be dismissed.

380. In the circumstances, in light of the dispute between Bradley and Jacqueline as to the terms of the undertaking, now that the quantum of the provision is known, I invite the parties to discuss the precise form of the undertaking to be given, or alternatively, the condition regarding payment of the lump sum. The order for provision for him should be made “in lieu of the provision” made for him in the Will of the deceased.

381. The parties, within 7 days, should provide a form of orders, in each case, to reflect these reasons.

382. The matter will be listed for argument on the form of orders, if there is any dispute, and for the argument on costs.

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Decision last updated: 14 August 2019