Borebor v Keane
[2013] VSC 35
•19 February 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2009 05250
IN THE MATTER of the will and estate of ULRICH ALEXANDER BRAUNTHAL deceased
BETWEEN:
| RICHIE BOREBOR | Plaintiff |
| - and - | |
| PATRICIA ANNE KEANE (who is sued as the executor of the will and estate of ULRICH ALEXANDER BRAUNTHAL deceased) & ORS (according to the schedule annexed) | Defendants |
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JUDGE: | HARGRAVE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 and 20 April 2012 and 22, 24 and 25 January 2013 | |
DATE OF JUDGMENT: | 19 February 2013 | |
CASE MAY BE CITED AS: | Borebor v Keane | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 35 | |
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TESTATOR’S FAMILY MAINTENANCE – Deceased treated plaintiff as if she were his daughter – Plaintiff not in fact the deceased’s daughter – Deceased assumed responsibility to maintain plaintiff – Large estate – Order for provision made.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Newton | Wills & Probate Victoria |
| For the First Defendant | Mr G McCormick | Francisdaniel Lawyers |
| For the Second, Third and Fourth Defendants | Mr M Clarke | Sackville Wilks |
TABLE OF CONTENTS
Factual narrative................................................................................................................................. 3
Applicable law.................................................................................................................................. 16
Did Alex have a responsibility to make provision for Richie in his will?............................ 21
What amount of provision should be ordered?......................................................................... 28
Should any protective orders be made?....................................................................................... 33
Conclusion and orders.................................................................................................................... 35
HIS HONOUR:
Ulrich Alexander Braunthal (‘Alex’) died alone in a nursing home on 6 March 2008, aged 84 years. He had for some years been suffering from dementia. He was not married; had no children; his two half-brothers, Frank and Heinz, had pre-deceased him; and his only living relatives were three nephews: Anthony, Simon and Michael. The nephews played no significant part in his life, and played no role in his care during his declining years. Such care and support as Alex received during this time was from his accountant, Angelo Gangemi.
By his will dated 13 August 1991, Alex appointed his previous secretary, Patricia Keane, as his executrix. He gave her a specific bequest of $150,000 and gave the balance of his estate as follows:
(1) one third to be shared equally between two of his nephews, Anthony and Simon, and their mother, Noelene, Heinz’s widow. They are the second, third and fourth defendants;
(2) two thirds to his half-brother Frank. As Frank died before Alex, there is an intestacy as to two thirds of Alex’s estate. In the absence of any claim for provision from the estate, the residuary estate will be divided equally between the three nephews as Alex’s next of kin.[1] There is no evidence that the nephews have any financial need.
[1]Administration and Probate Act 1958 (Vic), s 52(1)(f)(vi).
The estate is a large one. Alex conducted a successful business and was an extremely frugal man. The estate is valued at about $4.75 million.
The residuary estate approximates $3.15 million. This case concerns how that amount should be distributed.
The plaintiff, Richie Borebor (‘Richie’) makes a claim for provision from the estate. Richie is 26 years old. She has an infant son and receives no support from the father. She also supports her mother and aging grandparents. She lives in Manila in the Philippines, owns no property and has significant financial needs.
Richie’s principal claim was for the whole of the residuary estate, on the basis that she was Alex’s biological daughter.[2] But that claim must fail, as DNA testing has established that she is not his daughter.
[2]Relying on s 52(1)(f) of the Administration and Probate Act 1958.
Richie persists with her claim for provision from the estate, on the basis that Alex treated and supported her during his lifetime as if she were his daughter and, accordingly, had a responsibility to make provision for her in his will.[3] On behalf of the estate, Ms Keane accepts that Alex had such a responsibility, and supports the Court making an order providing for her from the estate. The nephews and Heinz’s widow, Noelene, oppose that course. They contend that Alex had no responsibility to make provision for Richie in his will. Alternatively, if that contention fails, they contend that the amount of any such provision should be less than that put forward by Richie. So the issues for determination are whether Alex had a responsibility to make provision for Richie in his will and, if so, what amount of provision should be ordered.
[3]Administration and Probate Act 1958, s 91.
These issues arise in highly unusual circumstances, as narrated below.
Factual narrative
Alex was born to Jewish parents in Germany in about 1924. With the Nazi regime in power, and with the war approaching, his parents sent him to England to school in 1933. After the Second World War, he migrated to Australia with his father.
Alex had two half-brothers, Heinz and Frank. Heinz lived in Australia, married Noelene and had two children, Anthony and Simon. Frank migrated to America and had one child, Michael.
Alex was married for a short while in the 1950s. In about 1965, he became engaged to Dr Margaret Pickles, a psychiatrist. The engagement lasted until 1971, when it became apparent to Dr Pickles that they would not marry. Dr Pickles gave evidence that Alex was traumatised by the Holocaust, even though he was not personally placed in a concentration camp. In 1968, she referred Alex to another psychiatrist for treatment and Alex received psychiatric treatment for some years.
From some time prior to 1981, Alex conducted a business, through a company bearing his name, importing goods from overseas to Australia. The goods were principally food ingredients, including monosodium glutamate, gelatine, food powders, food colourings and food preservatives. He imported products from the Philippines, Thailand, Israel, Taiwan and other places.
Alex conducted his business from rental premises in which he also lived. It appears that he never owned any real estate.
Between April 1981 and September 2005, Ms Keane was Alex’s secretary and only employee in the business. She gave evidence that Alex travelled overseas about three times a year for the purposes of his business and that he particularly liked travelling to Asia.
From about 1982, Mr Gangemi was the accountant for Alex and his company.
Alex told Noelene Braunthal that he had a number of sexual relationships with young women when he travelled overseas in Holland, Poland, Thailand, China and the Philippines.
Alex made statements to Dr Pickles to similar effect, which gave her the impression that Alex became ‘very much a womaniser or ‘player’ particularly in his later life and with women he met whilst travelling.’
In a conversation with Noelene in 1967, Alex told her that he was ‘not physically able to father any children’.[4] There is no evidence of the deceased having told any other person that, prior to meeting Richie’s mother, he was unable to father children.
[4]Noelene affidavit sworn 7 December 2009, [4].
Alex travelled to Manila in the Philippines in 1986. Richie’s mother, Norita Borebor, waited on him at a function in a restaurant in the hotel where he was staying. They spoke, she liked him and they went to Alex’s hotel room at the end of the function. Norita stayed with Alex in his hotel room for about a month while he conducted business in Manila. They had sex daily. When his business was done, Alex returned to Australia and Norita returned to the provincial home town where she was born, Bicol. Soon afterwards, Norita discovered she was pregnant. She contacted Alex and told him that he was the father. According to Norita, this caused Alex to travel back to Manila a number of times during her pregnancy, and they met and stayed at the same hotel each time. When Richie was born, Alex sent a cheque to support her.
There is good reason to adopt caution when assessing Norita’s evidence. She swore her affidavit and gave oral evidence before the results of DNA testing were known. In her oral evidence, she said that she had never had sex before she met Alex and did not have sex with any man other than Alex before Richie was born. The results of DNA testing prove that evidence to be false. So I have treated Norita’s evidence with appropriate scepticism, and only act upon it where it accords with the probabilities or is supported by other credible evidence.
I accept Norita’s evidence about some historical matters, which are supported by other evidence. Norita swore that Alex provided her with financial support for Richie from an early age, particularly with respect to her private school education. She said that she moved to Manila when Richie was about nine years old and worked as a housekeeper. From this time, there was regular telephone contact with Alex. At first, Richie could not speak English and so, to enable her to speak with Alex, he paid for a private tutor to teach her. There was regular telephone contact between Alex and Norita, and Alex and Richie. They also exchanged correspondence until that was replaced by email.
In her affidavit, Richie supported her mother’s account as to Alex’s involvement in her life and gave some further details. She said that, in addition to paying for her school fees, Alex provided Norita with general living expenses. She gave an account of very frequent telephone and email contact with Alex during her high school years – involving about three telephone calls per week and at least one email a week from Alex. She said that regular contact with him continued until late 2006, when all contact suddenly stopped. As appears below, that was when Alex was suffering dementia and made an irrational decision to leave the conduct of his business to his accountant, Mr Gangemi, and to travel to Germany at the age of 82 in an endeavour to establish a new business in his home country.
Ms Keane also gave general evidence which supports Norita’s account of Alex providing financial support for Richie and having frequent contact with her. She recalled Alex talking on the telephone about his daughter Richie, Alex’s attempts to bring Richie to Australia to live with him, and openly discussing Richie with Alex from that time. Ms Keane assisted Alex to transfer money to Richie and, at Alex’s direction, forwarded all correspondence from Richie to Alex when he was travelling overseas. When Ms Keane retired in 2005, Alex was still corresponding with Richie and providing her with financial support.
Mr Gangemi’s evidence also supports Norita’s general account. He said that he spoke with Alex about Richie, who Alex described as his daughter, from the late 1990s. Alex told him that he was sending Richie money via an Australian intermediary to assist with her school fees and living expenses. Mr Gangemi produced evidence of payments made from the company account to the intermediary between October 2003 and September 2006. He said that these 24 payments did not include any money paid by Alex before that period and did not include any moneys paid by Alex from his private accounts.
The last few years of email correspondence between Alex and Richie establishes that he was transferring about $300 per month to her for schooling and living expenses at that time. In addition, the email correspondence evidences a series of ad hoc payments by Alex to Norita for her medical expenses and those of her parents.
Many of the letters and emails between Alex and Richie have been lost, particularly in the early years. The available correspondence supports a general finding that Alex treated Richie as his daughter from the time of her birth until he ceased contact with her in late 2006. I will set out some aspects of the correspondence, and other evidence, which supports this general finding.
When the time came for Richie to start school, it was necessary to register her birth. Norita sought and obtained Alex’s help to register Richie’s birth, with him as the named father. In February 1994, when Richie was nearly seven years old, Alex wrote his name and signature on an ‘Affidavit of Acknowledgment’ in support of Richie’s birth registration; thus deposing that he believed he was Richie’s father and that she was born on 23 May 1987. Ms Keane gave clear evidence that the writing and signature on the affidavit were Alex’s. I accept that evidence.
Alex visited Norita and Richie in the Philippines in 1995, when Richie was about eight years old. Alex told Norita that he wanted Richie to attend a private school in Manila. I accept Norita’s evidence on this issue. It accords with the probabilities, as there is ample evidence that Richie attended private schools in Manila from soon after this visit and that Alex paid the fees.
When Richie was about 12, Alex considered the possibility of her moving to Australia to live with him and complete her schooling. Alex mentioned this possibility to Ms Keane, who was against it because Alex would not be able to care for a young girl. Alex recorded his thoughts on this issue in a letter to Richie dated 9 August 1999. As with all of Alex’s correspondence, it is typed in broken English with many misspellings, and some interpretation is required. The correspondence is, however, easy enough to understand. It is best to set out the correspondence from Alex as I understand it, not as it was written. I will do this when setting out the text of any of his correspondence.
On this basis, the 9 August 1999 letter from Alex to Richie was in the following terms:
Dear Richie
I received your letter safely and want to comment on it. Namely, I think you wrote in very good English and, unlike me, your writing is very good and really easy to read. It is not only very neat but very easy to read and the sentences are well formed and really excellent.
I am glad you are working hard indeed, and really I would like to help you much more than I have been able to do to date. I have asked the Immigration Department about you coming here, but they have signalled they won’t give you a visa and think you will be better off in your country and feel more comfortable. You might and probably would feel terribly lonely here. You know I just live here in a small house all on my own and have no friends really here at all. Thus it would have been nice to have your company, but you would miss all your relatives, of whom you have so many in Bicol, and unless you make friends in school you would feel very lonely.
Of course, you could watch television, but honestly the shows are not very entertaining really. After a few weeks you would speak perfect English and this would be no problem for you. I know some Filipinos here who would take [you] to live with them. They have two children, I think the daughter is about 21 and the son is about 17, and of course they speak Tagalog at home. That was really kind of them to offer but it is now much harder to get a visa to come to Australia than before. Also, I go away quite a lot and then you would be on your own.
Now we are enjoying winter and at night the temperature is dropping down to about 7-9 Celsius and in the daytime goes up to about 15 Celsius. Today it rained and I could not play tennis. I know I am getting very old and have to take care. The only medicine I take is a quarter of a tablet every morning against diabetes, which is not too bad for me, and I hear next year there are new tablets coming here from America which will be much better for me.
I am terribly busy all day here, and don’t know what to do first. My business was very quiet for some three years but now seems to have picked up for some goods.
I have set out this letter in full because, in addition, to showing Alex’s thoughts about Richie’s possible migration to Australia, it provides an early example of Alex admitting to Richie that he had no friends of his own, and of Alex sharing the private details of his life and business with Richie. The correspondence between Alex and Richie shows that this sharing of private and business information continued until Alex ceased corresponding with Richie. As appears below, I infer that by this time Alex’s mental state was deteriorating and he was acting irrationally.
Alex’s correspondence to Norita shows an intense interest in the way Richie was being brought up and educated. Alex gave advice to Norita and Richie in strong terms. I infer he believed that he was entitled to give the advice because he was Richie’s father and was providing financial support for her. For example, on 31 August 1998, Alex wrote to Norita about Richie’s dental hygiene and health:
Richie seems to have a lot of trouble with her teeth, and I told you when I was in Manila she should not be given any sweets to suck as they are bad for your teeth or her teeth. Also, she should be taught how to clean her teeth regularly after every meal, and really at her age she should have good teeth. It is a shame they have been badly neglected and, as her mother, you have to take responsibility for this. I could not make out what the total of all the doctors’ bills was but sent 7,000 Pesos. I was really surprised and worried to hear Richie has Dengue fever, as I did not know this is endemic to Manila and thought it was only up-country in the wild places like jungles.
…
I would like to get receipts for all the payments you have made to the dentist and doctor, so that I can check that the money has been used for those purposes. So would you mind sending me these please and oblige me.
I am really sorry to hear Richie has had so many medical problems at so young an age. Perhaps she should sleep under a mosquito net.
The 31 August 1998 letter continued at length on the topic of Richie’s education. Alex was critical of Norita for not ensuring that Richie was properly educated and able to speak English. For example:
I also told you in my last letter that I would like to get a letter from Richie written by herself, not written by you or someone else. When I spoke to her briefly she did not seem to be able to speak English and it really is most important that she should be able to do so, as she won’t get a job that is any good if she has no qualifications as there are many girls who can speak quite good English. You should be speaking English to her at home, and if you are not doing this you are neglecting your duties as you are always doing with her …
Norrie, I started this letter a long time ago as you can see. I really did not know how to try and tackle the problem of Richie’s Education. You always told me how talented she is, but I have never heard anything really about how she is getting on. For instance, for her age, where does she stand in class … I have paid for special English tuition. What is the point of paying for this if she is particularly poor in this … What is your idea of her future. I can’t get permission for Richie to come to Australia, and I can’t really influence her life at all. What will be her future? She has to be pushed and you are the one that has to do this, as when she grows up she will have to do something for work. How would she go to college if her educational standard is so very low. … I don’t know what to do as you ignore all this and just smile and let it go. Don’t you feel some responsibility? What is she going to do in these years that are the most important in her life? Please try and think about it a bit. I know it is hard for you [but] try try try.
I have just telephoned you. Perhaps you should look at another school. I just don’t know. Fifty-eight pupils is too many.
Regards
Alex
About a year prior to this letter, when Richie was about 10, Alex had written to Norita complaining about Richie’s lack of proficiency in writing the English language, about the cost of Richie’s dental treatment and other matters. Alex concluded this letter (which is undated) in the following terms:
Richie will be left money by me when I pass away, but how soon will this money be spent by you for all your relatives? It won’t go to her and how can she profit by it? I just don’t know. I have tried to encourage you to follow the right path with her but you seem to wish to avoid it deliberately, and my suggestions make you very angry. How can I keep giving money for projects I don’t approve of which are not going to her? What is she really going to do when she does grow up, have you ever thought about it?
In a letter dated 19 August 2000, Alex wrote to Richie about a variety of subjects. The letter is disjointed and appears to be intended for both Richie and her mother, given Richie was only 13 at the time. The letter deals with Alex’s concerns about Richie’s future, his continuing concerns about his business, his concerns to ensure that the money he was sending was being used for the purposes it was provided, arrangements for a possible visit to Richie and Norita in the Philippines, details of Alex’s current overseas trip and other matters.
Of particular importance, this letter contains the first written indication that Alex entertained doubts as to whether Richie was his daughter. After expressing concern about his future, he wrote:
What I would like to do to help you on your way, and I am sorry I have not been able to help you more till now, would be to leave you a sum of money. AS A DAUGHTER YOU WOULD NOT HAVE TO PAY AS MUCH inheritance tax on what I leave you, but what is necessary to accomplish this is perhaps have a blood test done on you and possibly your mother. The people involved would then airmail [the samples] to Australia [for testing] and they could issue some certificate. Even this would be quite expensive.
Anyhow this could be done any time of course, no great hurry.
Alex’s idea of obtaining DNA testing to establish if Richie was his daughter emanated from Mr Gangemi. He said that he suggested to Alex that he should get DNA testing done and, if the tests showed Richie was his daughter, that he should make provision for her in his will.
The letter continued on another theme of Alex’s correspondence, his concern that any money he gave to Richie would be used for her benefit and not for the benefit of her relatives. On that topic, Alex wrote:
I feel your mother thinks she has a mission in life to help her family, at least her brother and sister and her mother and father. They really need a lot of help because the situation in your country is so very difficult. Therefore, I would like to make out my will in such a way that the benefit of what you will get goes to you personally and not all at once, so perhaps for a time you will always have some income. So the money would be invested in Australia and would get some interest, and probably would be safer than in your country which does not appear to be very stable …
…
Getting back to your relatives, I can’t help them really but would like to help you in later life when I am gone and want to make sure the money is going in the right direction AND NOT squandered on other people and then it is gone.
Alex visited Richie and her mother in the Philippines in 2001, when Richie was about 13, for the last time. At that time, Alex was 76 years old.
In a letter dated 4 January 2002, when Richie was about 15, Alex expressed concerns and best wishes about both Richie and her mother and shared some personal and business information with Richie.
The paternity issue was not pursued by Alex with any particular vigour. It was not until May 2004 that Alex first asked Richie to provide him with hair samples. In a letter dated 5 May 2004, dealing with other issues, Alex asked Richie to send him ‘five hairs or so’ and said he would explain to her what he needed them for when they next spoke. Although she could not remember dates, Richie said that she recalled conversations with Alex about the possibility of providing blood samples and hair samples. As to the blood samples, she recalled a conversation with Alex, in which he said there would be a problem with blood samples drying up and so, instead, he requested hair samples including follicles (‘he specified that it should have like the white ones at the top’). Richie recalled sending the hair samples on two occasions, because Alex said he had lost the first samples. That evidence is supported by Ms Keane, who recalled Alex having a hair sample on his desk for a long period of time. I infer that Alex chose not to have the hair samples tested.
There are a number of emails in which Alex complains about his perceived excessive expenditure by Richie on basic items such as telephone expenses. Alex also adopted the position, for a time, that he would not pay for Richie to attend college when she finished high school. Alex changed his mind about Richie attending college. In a letter or email dated 14 June 2004, he said he was ‘very glad to hear’ that she had started college. In this letter, Alex thanked Richie for her ‘very nice letter’, complained about being unable to contact her on the mobile phone, enquired about her college course, enquired about the health of her grandparents and asked whether his monthly payment of 12,000 Pesos (about $300) was sufficient to cover medicine for Richie’s grandparents. He also provided some information about his business. He signed the letter ‘Dad’.
Richie exhibited some of the above correspondence, and later correspondence, to her affidavit. Other correspondence was exhibited to affidavits sworn by her mother, Ms Keane and the estate’s solicitor. Richie also exhibited a printout from her email account, showing frequent email contact between her and Alex in the period March to October 2006. During the trial, she was asked to produce all of the emails listed. In response, she produced a large volume of email correspondence from December 2004 to October 2006, comprising over 400 pages. Counsel for the nephews criticised the late production of these emails. But I think nothing turns on that. They could have been asked for earlier, as their existence was indicated by the printout from Richie’s email account exhibited to her affidavit and, in any event, the emails speak for themselves.
I have read all of these emails. In my opinion, they support my finding above, that Alex treated Richie as his daughter until the time he ceased contact with her in late 2006. Further, these emails are consistent with Mr Gangemi’s evidence that Alex was an eccentric and extremely frugal man whose mental faculties were diminishing before he left for Germany in 2006. Although Mr Gangemi’s evidence was not entirely clear as to the time from which Alex’s mental faculties started to fail, Mr Gangemi said that it was before he left for Germany in October 2006. Before that time, Mr Gangemi noticed that Alex’s memory was failing. He said that Alex would ask the same question up to three or four times a day or would forget things which he had told him only an hour or so earlier. Further, Mr Gangemi referred to the circumstances of Alex’s departure for Germany in October 2006 as evidence that his mental faculties were failing:
well, I think it probably did start before he left for Germany because when he left he just cleared out. He didn’t clear his flat. I got a phone call from the agent saying, ‘Alex has left and he’s left all the rubbish in the apartment’ …
So he was a very eccentric man? --- He was.
Even before his memory started failing him? --- Yes.
Alex’s emails between December 2004 and October 2006 are consistent with more than mere eccentricity. They reveal a continuing decline in his thinking, consistent with him developing dementia. Although the previous correspondence was disjointed, and in some respects involved scrambled thinking, these aspects of his correspondence became noticeably worse during the period of these later emails. They show that Alex was becoming increasingly forgetful, repetitive, confused, inconsistent and deluded.
Alex’s diminishing mental state during this period is also evidenced by the events surrounding Alex’s irrational decision to vacate his apartment in October 2006 and travel to Germany at the age of 82, with a view to establishing a new business in his home country. He was there for only a short time, returning to Australia about six weeks later in November 2006. He then took up temporary accommodation in a backpackers’ hostel in Melbourne. Soon after, he was found wandering the streets lost. The police took him to the Royal Melbourne Hospital, where he was diagnosed with frontal lobe dementia.
Because of Alex’s dementia, an application was made by a social worker in the Victorian Civil and Administrative Tribunal for a guardianship and administration order. Mr Gangemi, who had been visiting Alex in hospital, was asked to attend the hearing. He suggested that Anthony Braunthal, Alex’s nephew, should attend as he was the closest relative. As Anthony was not prepared to attend, Mr Gangemi did. As a result, his accounting firm was appointed as administrator of Alex’s estate and the public advocate was appointed as Alex’s guardian.
Alex’s declining mental state during this period is also evidenced by the evidence of Dr Pickles. Alex telephoned her from the Royal Melbourne Hospital when his mental state was being assessed in late 2006. He asked her for help. She suggested that Noelene and his nephews, as family members, could help. He became angry at this suggestion and said that they wouldn’t help. Dr Pickles also recalled that Alex ‘became very sexually explicit during the phone call.’ In her opinion as a psychiatrist:
[Alex’s] uncharacteristically sexual language when speaking to me and unrestrained openness left me with little doubt that he was suffering dementia as it is a common symptom of dementia for the sufferer to simply say anything that is on their mind. When I contacted the hospital, the hospital confirmed that the deceased was suffering frontal lobe dementia and advised me that the deceased had already been assessed and certified as having lost capacity.[5]
[5]Affidavit, [11].
Before turning to consider the issues for determination, it is convenient to summarise my impressions gained from reading the whole of the available correspondence. In summary, the correspondence reveals:
(1) a warm relationship between Alex and Richie, on the express basis that he was her father;
(2) continued financial support by Alex for Richie and, to a lesser extent, for her mother and grandparents;
(3) Alex’s continuing and intense interest in Richie’s education, work prospects and financial future;
(4) consistent complaints by Alex that he was not being given enough information about Richie’s academic progress, or the opportunity to speak directly with her teachers in that regard;
(5) Alex’s concern to ensure that he was able to have frequent and meaningful communications with Richie, both oral and written. Alex often complained that Richie was not contacting him enough or was uncontactable. He also apologised for his own short breaks in communications;
(6) a fulsome sharing of information between Alex and Richie about a range of matters affecting their daily lives, including Alex’s business, their health, Richie’s education, current affairs, Richie’s mother and grandparents and current affairs affecting the Philippines;
(7) Alex’s continual anxiety about his business and financial affairs, consistent with his frugal nature. Although he often complained about the decline of his business, the financial information produced by Mr Gangemi shows those complaints to have little objective basis, as his business continued to generate healthy profits year in year out;
(8) Alex’s sense of entitlement to give advice to Richie and to criticise her, on the basis that he was her father and was providing her with financial support.
Taking the correspondence and other evidence as a whole, Alex is revealed as a lonely and friendless man, whose only significant attachments were to his business and his relationship with Richie. I find that Alex was emotionally attached to Richie. He showed her affection in his unique and eccentric way, often involving tough love, and Richie reciprocated with love, affection and obedience for the most part to his wishes. Taking the evidence as a whole, I find that Alex led Richie to believe that she was his daughter and that she could rely upon him for financial support and fatherly guidance. Their relationship was a rewarding part of Alex’s life.
Alex acted in this way towards Richie, notwithstanding any doubts which he had as to whether she was in fact his biological daughter. Although the suggestion that he obtain DNA testing of bodily samples came from his accountant, Mr Gangemi, Alex must have had his own doubts about his paternity of Richie. The circumstances in which he had met and had sexual intercourse with Norita must have given him cause to wonder whether Norita had sex with other men around the time of her pregnancy; and he had told Noelene that he could not father children.
Applicable law
The Court’s power to make an order for provision, or further provision, out of the estate of a deceased person is contained in s 91 of the Administration and Probate Act 1958 (Vic) (‘the Act’).
There are two jurisdictional requirements to the making of an order under s 91. First, it must be established that the deceased had responsibility to make provision for the proper maintenance and support of the applicant for the order: s 91(1). Secondly, if such responsibility is established, the court must be of the opinion that the will of the deceased does not make adequate provision for the proper maintenance and support of the applicant for the order: s 91(3).
By s 91(4) the court is commanded, in determining each of these two jurisdictional requirements, and also in determining the amount of any provision or further provision to be ordered if the two jurisdictional requirements are met, to have regard to the matters set out in paras 91(4)(e) to (o) of the Act and, under para 91(4)(p) to have regard ‘to any other matter the Court considers relevant’.
The mandatory command of the legislature to take account of the specified matters was introduced by the amendments to the Act in 1997. Prior to these amendments, the standard or test to be applied in determining the two jurisdictional requirements was that stated by Lord Romer, in delivering the judgment of the Privy Council in Bosch v Perpetual Trustee Company Ltd:[6]
Their Lordships agree that in every case the Court must place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish, husband or father.
[6][1938] AC 463, 478-9.
That standard or test continues to apply to the determination of the two jurisdictional questions. The Court must consider, in light of the specified matters, what provision a wise and just testator would have thought it was his or her moral duty to make for the applicant.[7]
[7]Blair v Blair [2004] VSCA 149, [40]-[41]; Lee v Hearn (2005) 11 VR 270, [4]; Vigolo v Bostin (2005) 221 CLR 191, [11]-[25] per Gleeson CJ, [117]-[121] per Callinan and Heydon JJ.
A testator may have responsibility to make provision for persons with whom he or she has no direct family relationship. In State Trustees Ltd v Bedford,[8] Neave JA (Tate JA and Davies AJA agreeing) stated:
130Family relationships have become increasingly diverse. Changes in the law have resulted in ties based on affection, rather than formal legal status, receiving greater recognition for a variety of legal purposes. Part IV itself recognises that a person may have a moral duty to provide for the maintenance and support of another person, even in the absence of a de jure marriage or a de facto relationship, or a parent/child relationship.
131A man and a woman[9] may have an emotional commitment to each other akin to that of family members, even if they do not live together. Such a commitment may exist even though the parties are not financially dependent on one another and neither party contributes to the building up of the other parties’ property. The scope of Part IV is not confined to those in relationships which do not conform to traditional ideas about male/female and parent/child relationships.[10]
[8][2012] VSCA 274.
[9]Or a same sex couple.
[10]Ibid, 130-1.
In considering the two jurisdictional requirements, the question arises as to the time at which the relevant facts and circumstances must be considered. A temporal question also arises if the two jurisdictional requirements are satisfied, and the court reaches the stage of considering the amount of any provision which should be ordered and the terms of any such order. Both questions are dealt with by authority. In Prosser v Twiss,[11] Lush J said:
There is of course conclusive authority for the proposition that the question whether adequate provision has been made must be determined by a consideration of the facts existing and eventualities which might reasonably have been foreseen at the date of the testator’s death, whereas the question what order should be made is to be decided by reference to the state of facts existing at the time of the hearing by the court...
[11][1970] VR 225, 232 (Emphasis added). See also McKenzie v Topp [2004] VSC 90, [15], decided after s 91(4) of the Act came into force.
A related question in applications under s 91 is the knowledge which is to be attributed to the hypothetical wise and just testator in determining whether he or she has complied with his or her moral duty to make adequate provision for the proper maintenance and support of the applicant. In this regard, the conduct of the testator is to be considered on the basis that he or she was, at the time of death, fully aware of all the relevant circumstances,[12] including reasonably foreseeable eventualities existing at the date of death, whether or not actually known to the testator. [13]
[12]McKenzie v Topp [2004] VSC 90, [15], per Nettle J.
[13]Prosser v Twiss [1970] VR 225, 232.
In considering both the jurisdictional questions and the amount of any order to be made for further provision, each case depends upon its own facts. There are no inflexible rules.[14]
[14]Bladwell v Davis & Anor [2004] NSWCA 170.
If the two jurisdictional requirements are established, the Court proceeds to consider what order for further provision (if any) should be made. The Court’s general approach to this task was conveniently summarised by Nettle J (as he then was) in McKenzie v Topp in the following terms:
Section 91 of the Act confers wide power to make such order as is thought fit in all the circumstances of the case. It is plain, however, that the discretion is not untrammelled or to be exercised according to idiosyncratic notions of what is thought to be fair or in such a way as to transgress unnecessarily upon the testatrix’s freedom of testation, but rather carefully and conservatively according to current community perceptions of the provision which would be made by a wise and just testatrix.[15]
[15][2004] VSC 90, [63].
Where a will does not make adequate provision for the proper maintenance and support of the particular applicant, and further provision for the applicant will not unduly prejudice other beneficiaries for whom the deceased had a responsibility to make provision, the Court adopts a reasonably generous approach. The cases include some colourful statements of this approach. For example, in Blore v Lang Fullagar and Menzies JJ stated that, in assessing the need of an applicant for further provision, that need may extend beyond ‘the bread and butter of life’ to include ‘a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit’.[16]
[16](1960) 104 CLR 124, 135.
To similar effect is the approach in Worladge v Doddridge, where Williams and Fullagar JJ approved the following statement:
Proper maintenance is (if circumstances permit) something more than a provision to keep the wolf from the door – it should at least be sufficient to keep the wolf from pattering around the house or lurking in some outhouse in the backyard – it should be sufficient to free the mind from any reasonable fear of any insufficiency as age increases and health and strength gradually fail.[17]
[17](1957) 97 CLR 1, 12 – citing Re Harris (1936) 5 SASR 497, 501.
The authorities also permit the Court, where the size of the estate permits and there will be no serious prejudice to the rights of other beneficiaries, to order further provision beyond the immediate and likely future needs of the applicant. In addition, the Court should consider the contingencies of life and may provide for a ‘nest egg’ to guard against unforeseen events.[18]
[18]For example, Penn v Richards [2002] VSC 378, [33].
If a beneficiary under the will gives no evidence as to further need beyond the disposition made in his or her favour by the will, the Court may assume that the beneficiary has adequate resources for his or her proper maintenance and support.[19]
[19]Anderson v Teboneras [1990] VR 527, 535.
In determining the amount of further provision to be ordered, the Court may take into account the responsibilities of the applicant for provision. For example, the claimant’s responsibility to provide for his or her dependents, such as young children or other dependent family members.[20]
[20]Goodman v Windeyer (1980) 144 CLR 490, 498-9.
The relevance of the size of the estate as a significant consideration in determining applications for further provision was discussed by Debelle J in Bowyer v Wood & Ors.[21] In that case, while recognising that the size of the estate does not justify the Court in rewriting the will in accordance with its own ideas of justice and fairness, Debelle J noted the continued reference in the cases to the size of the estate as a relevant factor.[22]
[21](2007) 99 SASR 190.
[22]Ibid, [41].
In Re Buckland,[23] Adam J considered a claim by a daughter for provision from her father’s very large estate. The estate was sufficiently large, as here, to enable other competing claims to be ignored. Adam J reviewed the relevant authorities and made a series of observations about the proper approach to be adopted in determining whether adequate provision has been made for a claimant’s ‘proper maintenance and support’ in such circumstances and, if not, what amount of further provision should be ordered. These observations may be summarised as follows:
[23][1966] VR 404.
(1) A generous, and not ‘niggardly’ approach is justified.[24]
[24]Ibid, 414.
(2) The amount of provision should not be limited by the standard of maintenance provided by the deceased or by the standard of living to which the claimant has been accustomed.[25]
[25]Ibid, 413.
(3) A generous approach does not, however, justify the Court in ordering more than is needed for the claimant’s ‘proper maintenance and support’; as those words ‘place a ceiling upon what the Court may properly do’.[26]
[26]Ibid, 415.
(4) The Court may be justified in making provision for contingencies that would be disregarded in smaller estates or if there were relevant competing claims:
For a child, particularly a dependant daughter of an exceptionally wealthy father, the standard of maintenance may justly be set high ensuring a degree of comfort and freedom from anxiety for the future which for those not so circumstanced might well seem somewhat extravagant, but it should fairly come within the conception of maintenance and support. The greater the estate the more may contingencies, even remote contingencies which may arise in the future, be provided for in the assessment of such maintenance.[27]
[27]Ibid, 415.
The observations of Adam J in Re Buckland[28] were approved and adopted by Gillard J in Re Buckland (No 2).[29]
[28][1966] VR 404.
[29][1967] VR 3.
I turn to consider the issues for determination.
Did Alex have a responsibility to make provision for Richie in his will?
It was submitted on behalf of Noelene and the nephews that Alex had no responsibility to make any provision for Richie in his will, for two principal reasons. First and foremost, because it must be assumed that Alex, as a wise and just testator, knew all of the relevant circumstances existing at the date of his death. On this basis, it was contended that a wise and just testator in Alex’s position would not, if he had known that Richie was not in fact his biological daughter, have made any provision for her in his will.
Second, it was contended that the facts in this case do not allow for a finding that Alex treated Richie as though she was his daughter because, reading Alex’s emails from December 2004 until he left for Germany, he had effectively abandoned any assumption of responsibility to maintain Richie during his lifetime or to make provision for her in his will. In this respect, reliance was placed upon some emails from Alex which are highly critical of Richie and her mother.
I do not accept either of those submissions. The first submission takes no account of the fact that Alex must have doubted whether Richie was his daughter. Notwithstanding those doubts, he nevertheless proceeded to treat Richie as though she were his daughter, led her to believe that this was so, and assumed a responsibility to maintain her during his lifetime. Following Mr Gangemi’s suggestion that he arrange DNA testing to ascertain whether Richie was in fact his daughter, he had ample opportunity over many years to arrange that testing. After his initial suggestion about blood samples, he waited for about four years before asking for the first hair sample. It was provided by Richie without demur. When he said he lost it, she provided him with a second sample. Ms Keane said that she saw the hair sample sitting on his desk for a long period of time. I infer that Alex chose not to obtain DNA testing, because he had become emotionally attached to Richie and it did not matter to him, one way or the other, whether in fact she was his daughter. The fact that he did not include Richie in his will is not to the point. He either had a responsibility to make provision for Richie in all the circumstances or he did not. If he did, then the Court has to power to make an order for the provision.
As to what the hypothetical wise and just testator would have done in Alex’s position if he knew that Richie was not his daughter, reliance was placed upon the High Court’s decision in Magill v Magill.[30] That case concerned a claim by a man against his ex-wife for deceit, because she had falsely represented that the children he had maintained were his children. It was contended that certain statements made by Heydon J in that case provide a safe guide to the way in which a wise and just testator might act in the postulated circumstances here. Reliance was placed upon the statements by Heydon J concerning the man’s loss of opportunity to make a crucial choice as to whether to love, nurture and support a child who is not his own.[31] I do not accept that these statements have any relevance in the present context. This is not a case where Alex blindly believed Norita’s assertion that Richie was his daughter. As I have said, he obviously entertained doubts about that matter and had a full opportunity to test those doubts. He chose not to do so but, instead, to continue treating and supporting Richie as though she were his daughter. It was that conduct which created a moral responsibility to make provision for Richie in his will.
[30][2006] HCA 51; (2006) 81 ALJR 254.
[31]Ibid, [218], [240]-[241].
The second principal submission involves a selective reading of Alex’s emails after December 2004, and takes no account of the fact that Alex’s mental state was deteriorating from that time.
Particular reliance was placed upon two emails sent by Alex on 27 August 2006. In the first email, Alex contended that he had ‘heavy obligations now’ and that he could not afford to continue paying Richie’s college fees and living expenses. That was an irrational contention, given the size of Alex’s wealth and the evidence concerning the profitability of Alex’s business. On this false basis, Alex berated Richie in the following terms:
I have heavy obligations now and I cannot pay your fees and living expenses anymore. You were forcing me all the time to pay and pay and pay. I have paid for you and your mother now for 12 years. I cannot do so anymore. You have been too demanding and too greedy and I cannot go on anymore with the payments. I told you they would come to an end soon. I don’t feel I have any obligations to you. You are 20 and I am 82 so it’s up to you to find some way. Don’t count on me anymore. Your demands have been over the top. I am not a benevolent society to pay you all the time on any whim. There is nothing I can do. Did you say you are in debt? If so, that is your fault. I suggest you stop your studies and face the world and go back to your province. There is no more money from me. Just a trifle. When your mother said she was pregnant she said I should send her $US500 and then no more demands. I paid the money many years ago and she immediately started dudding me. You will have to look after your life yourself and don’t come to me and keep making demands. Get that into your head and don’t keep badgering me for money. You may have to work somewhere. In 12 years I paid you many thousands of US dollars and now you want more and more. Nothing doing. Blame yourself. You have turned out to be very expensive for me. Regards Alex.
Later that day, Alex wrote to Richie:
Dear Richie, all your accusations are punk[32] and untrue I am sorry to say. I have told you frankly where I stand. I have sent you and Norrie hundreds of thousands of Pesos over the years and now it has to stop and you can’t believe it. I never promised to pay for the rest of your life. You are still a young girl and will need to fend for yourself at some stage. I am getting sick of your emails. Why do you have to borrow a few Pesos to send an email? Anyhow, my emails to you are really a waste of time. I can see you are not grateful for what I did in the past. So what can I say? You are good at one thing, your English. Maybe you can get hold of some job where you can use it for a job. Alex.
[32]I think Alex meant ‘worthless’ by the use of the word ‘punk’.
There were other emails to like effect after December 2004. On this basis, it was contended that Alex abandoned any responsibility which he had previously assumed to maintain Richie during his lifetime or to make provision for her in his will.
I do not accept that selective reliance upon emails of this kind assists an argument that Alex had no moral responsibility to provide for Richie in his will. That submission takes no account of Alex’s declining mental state, or of the inconsistency in his emails, over this period. Although there are examples of emails of this kind, the emails are interspersed with contrary expressions by Alex of his affection towards Richie and of a desire to keep helping her by both financial assistance and parental guidance. Unjustified rebukes of the kind quoted above were sometimes followed by Alex apologising and expressing a desire to keep supporting Richie. For example, on 25 April 2006 Alex wrote to Richie complaining about investing money in her university studies ‘for nothing’ and expressed the view that she was unlikely to ever obtain gainful employment in the Philippines. He described her continued studies as ‘crazily ambitious’ and likely to lead to nothing. Only two days later, on 27 April, Alex returned to the role of a caring and supportive parent:
Dear Richie, I just got your email about the money that had been received. I am glad that it has come as usual and you have at least got it. I really don’t think you should work and study all day and then work at night. You could get a nervous breakdown and they are going to give you a very unfair wage. It may be good for you to do some extra work but certainly not too much. It could be bad for your general health. Are you able to get your mother really nourishing food? I am living on frozen meals which I heat up and they taste not too bad. When I go to Germany the food will be rather better I think. I am still worried about getting a girl who can fix everything up. [The email then continued with Alex describing his business, domestic and health issues.]
I am glad you are still getting on well with your studies of course. If you want to send on any of the emails not received by me since Friday I would certainly like to see them. What is happening with your vice-presidency at your university? I never tried to ring that teacher again, it was hopeless.
All the best to you and your mother then. Regards Alex.
A similar pattern occurred in the final weeks before Alex left for Germany with a view to establishing a business there. On 6 October 2006, Alex accused Richie of misleading him about the use of a $260 transfer, particularly as to the cost of medicine for Norita. He concluded his email:
Is it all a plan to be nasty to me and blame me for all your misfortunes? Why are you doing this to me, to prove me wrong etc? Regards Alex.
Richie replied with surprise and dismay at being accused of fraud by Alex. She offered to send receipts for the medicine, which cost less than Alex had understood. Alex replied the next day, 9 October 2006, with another apology:
Dear Richie, I assumed wrongly and thought you had spent all the money on the tablets, medicine and the doctor. But it appears you had to spend most of it on your living expenses. I can’t really guess what you meant as you did not explain anything to me of it. Is your mother better now?? Regards Alex.
And then, in his final email sent a few days before he left for Germany, Alex told Richie of his imminent departure, related some business information, noted that Richie was not interested in his business and concluded: ‘Sorry I have let you down. I admit it. Anyhow, the weather here was hot this afternoon and I have not really packed as yet. Regards Alex.’
As I have said, the email correspondence from Alex during this period was inconsistent and in large part irrational. His mental state was clearly deteriorating. These emails do not provide a safe guide as to Alex’s true feelings and sense of responsibility towards Richie. They are the confused ramblings of a mentally infirm man.
The legislation requires me to consider each of the matters set out in paragraphs 91(4)(e) to (o) of the Act. I proceed to do so.
Section 91(4)(e) of the Act requires the Court to consider the relationship between Alex and Richie. I have described that relationship above. Notwithstanding his doubts about paternity, Alex treated Richie as though she were his daughter and allowed her to treat him as her father. He raised no objection to her calling him ‘Papa’ and, although Alex signed most of his correspondence ‘Regards Alex’ or with words to that effect, there are examples of Alex signing correspondence ‘Love Alex’ or ‘Love Dad’. Alex’s relationship with Richie commenced from her birth. It involved financial support, reciprocated affection and parental guidance.
Section 91(4)(f) of the Act requires the Court to consider any obligations or responsibilities of the deceased to other beneficiaries. In this case, Alex had no duty to any of his next of kin, at least beyond the bequests which he made in his will. This is a case where the Court can ignore any responsibility which Alex may have had to make provision for any other person.
Section 91(4)(g) of the Act requires the Court to consider the size and nature of the estate. The estate is sufficiently large to enable the Court to ignore the interests of the other beneficiaries. There is no other claim for provision. As appears below, the amount of provision which I will order will have the effect of leaving a very significant residuary estate to be divided amongst Alex’s next of kin.
Section 91(4)(h) of the Act requires the Court to consider the financial resources and needs of the applicant and of any other beneficiary of the estate ‘at the time of the hearing and for the foreseeable future’. There is no evidence of any need by the other beneficiaries at any time. On the other hand, the evidence establishes that Richie had and has significant needs. When Alex ceased paying her university fees and living expenses in October 2006, Richie was forced to stop her studies and find employment. Although she is well employed by Filipino standards, her income is insufficient to meet the expenses of herself and her family unit – comprising her son, her mother, her mother’s partner and her grandparents. Richie has a cultural obligation to support her family unit.
Paragraphs 91(4)(i) and (j) of the Act require the Court to consider the health and age of the applicant and other beneficiaries of the estate. The only relevant matter is Richie’s health and age. She is young, aged only 26 years, and in good health.
Section 91(4)(k) of the Act requires the Court to consider any contribution (not for adequate consideration) of the applicant to the building up of the estate or the welfare of the deceased. Although Richie did not contribute to the building up of Alex’s estate, she did make significant contribution to his welfare. As appears above, Alex was emotionally attached to Richie and obviously gained considerable benefit from his relationship with her.
Section 91(4)(l) of the Act requires the Court to consider any benefits previously given by the deceased to the applicant or any beneficiary. In this regard, it is relevant to consider the financial support which Alex gave Richie from her birth until October 2006. By Philippine standards, that was significant financial support. By Australian standards, especially having regard to Alex’s wealth, the support was of a small amount – of about $5,000 per year at most. These financial benefits imposed no burden upon Alex and did no more than provide for Richie’s day-to-day living and educational expenses.
Section 91(4)(m) of the Act requires the Court to consider whether the applicant was being maintained by the deceased before death and the extent to which the deceased had assumed any responsibility for that maintenance. This matter is highly relevant to the existence of a moral duty in this case. From her birth until October 2006, Alex maintained Richie and assumed a responsibility to do so. Although he sometimes complained about the amount of the maintenance he was providing, those complaints were irrational given his wealth and income.
Section 91(4)(n) of the Act requires the Court to consider the liability of any other person to maintain the applicant. In that regard, the father of Richie’s young son has some responsibility. Notwithstanding that responsibility, he provides Richie with no maintenance to support their son.
Section 91(4)(o) of the Act requires the Court to consider the character and conduct of the applicant or any other person. In my opinion, Richie’s conduct towards Alex was beyond reproach. She corresponded with him regularly, even when she was a teenager and obviously had better things to do. She endured his ramblings and complaints about many things. She has engaged in no conduct which could have a negative effect upon Alex’s responsibility to provide for her.
Section 91(4)(p) of the Act requires the Court to have regard to any other matter that it considers relevant. In this regard, I have considered the principal submissions made on behalf of Noelene and Alex’s nephews. For the reasons given, I conclude that those matters do not undermine any responsibility which Alex otherwise had to provide for Richie in his will.
In the unusual circumstances of this case, I have no hesitation in concluding that Alex had a responsibility to make provision for Richie in his will. I proceed to consider the amount of provision; and whether it should be the subject of any form of protective order, to ensure that the benefit of such provision is enjoyed by Richie.
What amount of provision should be ordered?
The establishment of the two jurisdictional requirements for the making of an order for provision out of Alex’s estate does not mean that the Court is required to order that provision be made. The making of any order for provision out of a deceased estate is discretionary.
The size of the residuary estate, the lack of any competing claims on that estate, and Richie’s obvious needs for provision, all justify making an order for provision in Richie’s favour. They also justify adopting a generous, and not niggardly, approach to framing the order for provision. As noted above, however, the legislation places a ceiling on the amount to be provided, requiring the Court, albeit acting with generosity given the size of the estate, to nevertheless make an order which relates to Richie’s needs.
It was contended on Richie’s behalf that her needs include: the provision of appropriate housing; a fund to supplement her income while she completes her studies; a fund to supplement her income while she has a responsibility to maintain her infant son, her mother and her grandparents; a fund to provide a nest egg for contingencies; and a fund to enable her to pursue, if she is able, a university course in Darwin – with a view to the possibility of her emigrating to Australia on a permanent basis and earning commensurate wages in Australian dollars.
Final submissions proceeded on the basis that, apart from any provision for the cost of Richie studying in Darwin, these needs should be assessed by reference to their cost in the Philippines.
I will deal first with the cost of housing. In order to assist with its task, the Court was provided with economic evidence as to the cost of housing and the cost of living in the Philippines, on various assumptions. The solicitors for the estate, which supports Richie’s claim, obtained a written report from Ms Princess Ventura, an associate director of Urbis Pty Ltd. Ms Ventura has a Bachelor of Arts (Economics), an MBA from Monash Business School and has worked as an economist for a number of years for the World Bank in international development. She is herself of Filipino birth. The parties accepted that she had sufficient expertise to express her opinions. The Court ordered that Ms Ventura express her opinions as to the range of costs of an average sized apartment or house comprising each of three bedrooms and five bedrooms in Quezon City, Manila. Opinions were sought as to the cost of both three and five bedroom accommodation, because Noelene and Alex’s nephews acknowledge that any order for provision should allow for Richie to purchase a three bedroom house, for herself, her child and her mother; but dispute Richie’s claim for provision to purchase a five bedroom house, so she can also accommodate her aging grandparents and have a spare room which visiting family members from her province could use when visiting her in Manila.
In Ms Ventura’s opinion, the current range of costs of an average sized three bedroom apartment or house in Quezon City, Manila, is likely to be around AUD$118,000 to AUD$154,000. The current range of costs of an average sized five bedroom apartment or house is likely to be around AUD$311,000 to AUD$433,000.
Each of these ranges relates to ‘the premium/luxury end of the market’, as there are no reliable statistics in the Philippines for lesser forms of accommodation. In cross-examination, Ms Ventura acknowledged that this accommodation was not for the average or lower income local Filipino families, but was largely lived in by higher earners and foreigners. In final submissions, the parties proceeded on the basis that the Court’s award of provision for this cost should be at the lower end of the appropriate range. The issue for determination is whether the Court is justified in ordering provision based on the cost of a three or five bedroom house.
On behalf of Noelene and Alex’s nephews, it was contended that provision should be made for a three bedroom house, in the sum of $118,000 or thereabouts, as the evidence does not justify treating Norita’s partner or the grandparents as Richie’s dependents. Richie’s counsel, and counsel for the estate, submitted that the evidence justified a finding that Richie had assumed a cultural responsibility to provide for Norita’s partner and her grandparents, in circumstances where she is the only person in the household who is capable of earning a regular and significant income.
The evidence establishes that Norita is unwell and in any event cares for Richie’s son, and Norita’s husband has been out of work for some time and only able to obtain occasional part-time employment. He will share a room with Norita in any event. The grandparents are in their 70s and are unable to work. In all the circumstances, given the size of the estate, I will adopt a generous approach. I will allow the sum of $350,000 to enable Richie to purchase a suitable five bedroom home to accommodate herself, her son and her extended family. I have not restricted the amount to $311,000, the bottom of the luxury range, because Richie will need to furnish the house in a manner commensurate with its cost.
I recognise that the house will be too large once Richie’s grandparents die, and that provision for a house of this size may therefore include an aspect of provision for contingencies. It cannot, however, be assumed that Richie’s immediate family will remain limited to her and one child. She is only 26 years old, is well educated already and will probably further her education. I infer that she will likely form a relationship, and perhaps have more children. If she does, the extra bedrooms may be filled.
Next, it is agreed that some allowance should be made for the difference between Richie’s income, presently about $5,000 per annum, and the cost of maintaining her, her son and her mother. For the reasons given, I would include the cost of maintaining her grandparents. In this regard, allowance needs to be made for the fact that Richie intends to complete her studies. Before Alex stopped paying for her tuition, Richie completed two and a half years of a four year course at the Philippine School of Business Administration. This may be sufficient to qualify her to study at the Charles Darwin University, or she may need to complete that course to satisfy one of the entrance requirements in Darwin. If Richie cannot study in Australia, she will finish her course in the Philippines. So Richie may be unemployed for between two and five years.
Ms Ventura’s evidence is that the current cost of living for Richie, her son and her extended family in Manila is likely to be between approximately AUD$9,600 to AUD$11,700 per year. The grandparents are elderly but there is no evidence of their life expectancy. Any money awarded under this head for provision can be invested and earn interest. In all the circumstances, having regard to the fact that Richie may take an extended break from work while she completes her studies, I will order provision of $75,000 under this head.
I will allow a further $100,000 for a ‘nest egg’ and for contingencies. Richie is young, has a young child, and the cost of providing for her parents and her aging grandparents is unknown. The evidence indicates that medical expenses in the Philippines are high.
That leaves the question of the prospect that Richie may come to Australia and study. That, of course, is her choice. She has sworn, however, that she wishes to do so if she can. Her intention is not unreasonable, as the evidence indicates that she has realistic prospects of gaining entry to Charles Darwin University to study for a degree and of obtaining a student visa allowing her to pursue her studies in Australia. If she completes a degree in Australia, there is also a realistic chance that she may gain permanent residency for her and her son.
The estate is sufficiently large to enable Richie’s desire to exploit the available opportunities to migrate to Australia, for the purpose of improving her life, that of her son, and earning an Australian income to provide for her family in the Philippines in accordance with Filipino cultural practices. If Richie obtains a university place in Darwin, she would need to support herself during a three year degree course. The evidence indicates that she has some support in Darwin, from a family related to her mother’s partner, and that this family has provided her with accommodation and support when she has visited Australia for the purposes of this proceeding. Her familial contacts in Darwin give rise to the significant possibility that she may be able to obtain part-time employment while she studies. The tuition cost of a three year accounting degree at Charles Darwin University is presently about $50,000. I will allow another $50,000 for the extra cost of living in Darwin over that in the Philippines. So, I will allow a further $100,000 to provide Richie with the opportunity to attend university in Darwin with a view to eventual migration to Australia.
The evidence discloses that Earlwin Fong has, to some extent, supported Richie while she has pursued this case. He has paid some out of pocket expenses associated with her and her mother travelling to Australia for the purposes of the proceeding, and has otherwise assisted Richie with living expenses for her and her extended family. In his affidavit, Mr Fong said that these expenses approximated $70,000. However, when pressed in cross-examination, he was unable to provide any detailed break-up of the amount. I am not satisfied that he has spent that amount, even when interest on borrowed moneys is taken into account. Mr Fong said that he expected to be repaid, although the payments were not made as loans but rather out of a sense of cultural obligation to assist. Richie would like to repay Mr Fong for his generosity and, in addition, has other small debts in the Philippines. Doing the best I can, and having regard to the size of the estate, I would allow a further $50,000 to cater for Richie’s obligations to repay her loans in the Philippines and to honour her moral commitment to repay the amounts advanced by Earlwin Fong for the benefit of her and her family unit. Of course, to the extent that Mr Fong has paid Richie’s expenses associated with the conduct of this proceeding, there cannot be any double-counting. Evidence can be put before the Costs Court on that issue if no agreement as to costs is reached.
For the above reasons, I will order that provision be made for Richie out of Alex’s estate in the total sum of $675,000. I turn to consider whether any form of protective order should be made, to ensure that this amount is used solely for Richie’s benefit, including her existing responsibilities to provide for her child and her family unit as discussed in these reasons.
Should any protective orders be made?
The evidence of Earlwin Fong was criticised by all counsel. On one issue, however, all parties agreed that weight should be given to his evidence. Mr Fong said that it was important to protect Richie against claims by a wide range of persons, outside of her family unit as discussed in these reasons, for hand-outs. For example, Mr Fong gave the following evidence:
What's your concern about the misuse of the money? Is it that she'll make a rash decision or that those around her might put their hand out? What's the actual concern that you have?---The culture thing about the Philippines is, obviously it's a poor country, and my concern is in a way that, that she may have - I've basically said to her, she might make immediate friends all of a sudden and I said all your cousins and relatives or - people might come out of the wood works and, once they know that something's happened and basically you're going to have people on your doorstep. I said, ‘I don't want that to happen, you should keep it quiet’, and I said to her, ‘If you do make a decision, make sure you don't - it doesn't matter what temptation it is, keep it all to yourself, move your family away from other relatives so that you can find a place in another province or buy a condo and just live away from family and don't let them know where you are.’ Because I know for a fact that the culture - whether it's the Philippines or some other Third World country, they're all the same, you know, there's a possibility that something like that can happen.
Now, I've known Richie since this case, but my wife - and we've been supporting her before the case, even before this had happened. I know that she's level-headed and I know she's not that type of person, but look, any in their own mindset, if you won Lotto, anything can change. Even if it was here, if you won Lotto, you know, you're bound to spend money frivolously on unnecessary things. So I've just tried to keep her level-headed and said, ‘Look, it's for the interests of your family to look after your child and your mother and your grandparents that you spend things wisely’, and I've just tried to give her great advice every time I talk to her or email her so that it's in her mind that she's got to look after her family and not every other person who is possibly going to sponge off her.
In all the circumstances, the parties joined in a submission to the Court that some form of protective trust should be imposed by the Court over the amount of any order for provision, to ensure that the provision is used for the intended purposes and not wasted. I accept that such an approach is necessary.
In my opinion, having regard to Richie’s relatively young age and the age of her young son, a trust should be imposed for a period of 20 years. The trustee should be directed to apply the amount of the provision in accordance with these reasons. Any significant assets such as a house or apartment should be owned by the trustee on Richie’s behalf. Otherwise, the trustee should require proof that the moneys are being expended for the approved purposes. A generous approach should be adopted. The trustee should pay Mr Fong such amount as he can prove to the trustee’s reasonable satisfaction he has paid for Richie’s benefit; including any interest on moneys lent by him to assist her.
I will hear the parties as to the precise orders to be made. Subject to those submissions, I have in mind creating the trust by Court order, as a condition of the order for provision;[33] and ordering that the further provision be paid to the Associate Justice who is the Senior Master to be held and managed as trustee in accordance with the terms of the trust and these reasons.
[33]Section 96(2) of the Act.
Conclusion and orders
For the above reasons, I conclude that Alex had a responsibility to make provision for Richie in his will. I will make an order for provision in the sum of $675,000, subject to a trust for Richie’s benefit, together with an amount to cater for management of the fund for a period of 20 years. Submissions proceeded on the basis that Richie’s costs and expenses of the proceeding would be paid out of the estate, and I will so order. Those costs should be on an indemnity basis. I note that Richie’s solicitors have acted on a no win – no fee basis and have taken considerable risk in undertaking this proceeding on her behalf.
I will hear the parties as to the precise form of the orders to be made.
SCHEDULE OF PARTIES
| S CI 2009 05250 | |
| BETWEEN: | |
| RICHIE BOREBOR | Plaintiff |
| - and - | |
| PATRICIA ANNE KEANE | Firstnamed Defendant |
| ANTHONY BRAUNTHAL | Secondnamed Defendant |
| SIMON BRAUNTHAL | Thirdnamed Defendant |
| NOELENE DEAN | Fourthnamed Defendant |
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