Boyd v Roberts

[2024] NSWSC 1310

Supreme Court

New South Wales

Medium Neutral Citation:

Boyd v Roberts [2024] NSWSC 1310

Hearing dates:

9 and 10 October 2024

Date of orders:

18 October 2024

Decision date:

18 October 2024

Jurisdiction:

Equity - Family Provision List

Before:

Slattery J

Decision:

An order for family provision made in favour of the plaintiff in the sum of $450,000. The deceased’s Commonwealth Bank bank accounts designated as notional estate for the payment of the order for provision. Payment of the sum of $100,000 of the order for provision is deferred for 12 months but accrues interest in the meantime. Provisional orders for costs made subject to the parties being able to argue for other costs orders.

Catchwords:

SUCCESSION — Family provision — Claim by adult child – notional estate – plaintiff brings a claim for family provision against the estate of her deceased father – the plaintiff’s mother, the deceased’s first wife died in 2006 and the deceased was remarried to the defendant in 2008 – the defendant was divorced with four children – plaintiff lives temporarily with the deceased and the defendant but then goes her own way after family friction – the deceased and the defendant build up assets together and are on the verge of retirement at the time of his death in 2023 – at the time of the deceased’s death the defendant held money on deposit in a joint bank account with the deceased and the defendant and the deceased conducted a self-managed superannuation fund containing real property assets – the plaintiff is married with one child and holds no real estate and wishes to acquire a property in the area where she currently lives, on Sydney’s northern beaches – whether a family provision order should be made against the estate of the deceased in favour of the plaintiff – the estate is inadequate to meet any family provision claim of substance – not in contest that property in the bank account and the superannuation fund of or controlled by the defendant could be designated as notional estate – whether an order for provision should be made against property that could be designated as notional estate.

Legislation Cited:

Civil Procedure Act 2005, 101

Succession Act, 2005, s 59, s 87

Uniform Civil Procedure Rules 2005, r 42.4

Cases Cited:

Drury v Smith [2012] NSWSC 1067

Evans v Levy [2011] NSWCA 125

Kitteridge v Kitteridge [2022] NSWSC 193

Luciano v Rosenblum (1985) 2 NSWLR 65

Singer v Berghouse (No. 2) (1994) 181 CLR 201

Category:

Principal judgment

Parties:

Plaintiff: Eliza Kate Boyd
Defendant: Kerrie Debra Roberts

Representation:

Counsel:

Plaintiff: Ms P Muscat
Defendant: Mr A Hill

Solicitors:

Plaintiff: Fox & Staniland
Defendant: Aubrey Brown

File Number(s):

2023/347323

Publication restriction:

No

JUDGMENT

1. Peter Dale Roberts died on 29 May 2023, aged 63. He was survived by his only biological child the plaintiff, Eliza Kate Boyd and his second wife, the defendant, Kerrie Debra Roberts. Eliza's mother, the deceased's first wife, Lee-Anne Therese Roberts, died on 22 May 2006. Eliza was 33 and Kerrie almost 64 at the time of the hearing. In her Summons dated 1 November 2023, the plaintiff seeks orders for provision out of the estate and/or the notional estate of the deceased under Succession Act 2005, Chapter 6.

2. The plaintiff and the defendant referred to one another and to their immediate family members by their first names. For convenience, the Court will adopt the same course in these reasons, without intending disrespect to any party or witness.

3. The deceased died intestate. None of the parties sought that his estate be administered upon intestacy. There are but few assets in the estate. Most of the deceased’s estate is now held by the defendant, Kerrie. If Eliza can establish that she is entitled to an order for provision, she seeks that the provision be ordered from the deceased’s estate and his notional estate, as defined under Succession Act, Chapter 6.

4. These proceedings were efficiently conducted over two days on 9 and 10 October 2024 by the parties and their legal representatives. Ms P Muscat of counsel appeared for Eliza instructed by Fox & Staniland, solicitors. Mr A Hill of counsel appeared for Kerrie instructed by Aubrey Brown, solicitors.

5. There were no substantial credit issues in the proceedings. The Court accepts both Eliza and Kerrie as generally reliable witnesses who were doing their best to recall historical facts, many of them from the distant past. The Court has not accepted the whole of the evidence of each of them. The Court needs resolve only few of the conflicts between their accounts of past events and has done so where required and explained his reasons for choosing between them.

6. The following is a concise narrative of the history relevant to the matters in contest. The narrative does not cover all the factual controversies and history before the Court; but merely those facts that bear most closely upon the issues to be determined. This course has been taken to enable the parties to resolve their dispute without further delay. This narrative represents the Court's findings on the matters covered, except to the extent that the context indicates that only the parties' allegations are being recorded in these reasons. For reasons of economy, this narrative does not always include reference to versions of the facts that have been rejected.

Peter Roberts and His Family

7. The Court accepts Eliza’s account of having an idyllic childhood before the death of her mother, Lee-Anne, in May 2006. The deceased and Lee-Anne used IVF procedures to assist in Eliza’s conception and they had no other children. She was doted upon as an only child and was the centre of her parents attention. She was brought up in a comfortable and enriching social and physical environment on Sydney’s northern beaches.

8. The deceased and Lee-Anne were both outgoing and entrepreneurial. The deceased had excellent sales and commercial skills. Initially, he was a buyer for Woolworths and travelled often for work. Together with her sister, Lee-Anne co-founded a women’s swimwear and clothing shop at Newport Beach trading under the name “Larx”. When she was young Eliza spent many hours at Larx absorbing the lively retail environment there.

9. The deceased and Lee-Anne led an active social life with a wide circle of friends. They were sufficiently financially successful that the family could travel regularly overseas for holidays, to Greece, London, the USA, and interstate to Queensland, usually Noosa Beach.

10. Eliza and her father were “extremely close” and had, as she describes it, “an incredible bond”. She looked up to him admiringly. She describes him as, “the cool dad who loved being active and was also the life of the party”. He promoted Eliza’s development by attending all her sporting games, even though she confesses she was not “very good” at sport. But he was “extremely passionate” about supporting his only daughter. He encouraged her singing and became her softball coach for several years, including one where her team won a grand final.

11. Eliza recalls, and the Court accepts, that her parents had a happy marriage and she does not ever recall them fighting. In 1997, the deceased and Lee-Anne purchased a block of land in joint names in Mona Vale and built a home. Eliza was 10 when they moved in there in 2001.

12. A few years later, in January 2004, the deceased took employment with Loftex, a manufacturer and distributor of a range of textile products, as its National Sales Manager. The deceased’s warm interpersonal skills endeared him to the management of that company, and he stayed with it for the next 19 years. He had made friends with its owner and managing director, Mr Feng (Frank) Zhang, in about 1993 when the deceased was working as a buyer for Woolworths. Mr Zhang was a most impressive witness who gave reliable evidence from an independent non-family perspective. The deceased and Mr Zhang became not just business associates but friends who saw one another and their respective families socially and who conversed over a drink after work about life in the wider world.

13. But also in 2004, Lee-Anne was diagnosed with a rare and aggressive form of breast cancer. By the time of its diagnosis, the cancer was Stage 4 and had spread throughout her body. Lee-Anne was given chemotherapy to try and arrest its further spread. After Lee-Anne’s initial chemotherapy treatment the family holidayed in the USA together, visiting Disneyland and cruising in the Caribbean. But Lee-Anne’s cancer returned.

14. The deceased led the fight against his wife’s cancer doing all he could to search out additional medical treatment for Lee-Anne both in Australia and overseas. But Lee-Anne succumbed to the cancer and died in May 2006. Eliza was then only 14. Lee-Anne did not leave a valid will and nothing was given directly from her estate or set aside for Eliza at the time. There is a suggestion in the evidence that Lee-Anne made an informal will which was not valid, but its contents are unclear.

15. The deceased was distraught at Lee-Anne’s death and did not cope well, suffering depression and insomnia. Eliza and the deceased travelled a little together and then she went on a school singing tour to New Zealand. By the time she returned, the deceased told her that he had met, the defendant, Kerrie, who was divorced, with four children and living in the Blue Mountains.

16. Having formed a relationship with the deceased, Kerrie made every reasonable effort to make Eliza, the teenager, feel accepted and part of her life. She took Eliza shopping and consciously spent much time with her. But the mission was almost futile. Kerrie was striving against the cyclonic temperament of a teenage girl who had lost her mother. And the evidence makes quite clear that Eliza ever remained uncomfortable about how quickly her father formed a relationship with Kerrie after Lee-Anne’s death. This 15-year-old girl was hardly capable of making courteous way for the new woman in her father’s life.

17. This was a time of high emotion for the deceased, Eliza and Kerrie. Therefore, it is not surprising that the evidence in these proceedings contains widely differing perspectives on some events during that period of Eliza’s and Kerrie’s lives. Eliza agrees that she was difficult, and she was. Kerrie gives a vivid account of some of Eliza’s bad behaviour at the time, which is mostly accepted. Kerrie’s evidence that Eliza was very rebellious during this period and that the deceased was an excellent father figure to Kerrie’s children is also backed up by evidence from Kerrie’s son, Cale Bainbridge, and her daughters Kristy and Tahnee.

18. Eliza changed schools, to give her a fresh environment with new associations after her mother’s death. The deceased began spending more time in the Blue Mountains with Kerrie. Eliza took advantage of the greater opportunities for mischief that this made available to her.

19. Under-supervised and still trying to come to terms with her mother’s death, she did not treat school attendance as a priority. She partied with the “wrong crowd”. She disappointed her father.

20. In about January 2007 the deceased told Eliza that he was going to marry Kerrie. Eliza was accepting she perceived that Kerrie was “nice” to her. But the proposal, within 12 months of Lee-Anne’s death was also too quick for Eliza, and has been long remembered.

21. The deceased and Kerrie married in January 2008 and remained married for the next 15 years until the deceased's death. After the wedding, both Eliza and the deceased moved to the Blue Mountains to live with Kerrie and the two of her four children who were still living at home. The deceased smoothed over the change for Eliza by promising that they would move back to Mona Vale within the year. He no doubt meant this at the time but obstacles to this plan arose.

22. When they were married Kerrie had just been through an unpleasant divorce and was living in rented property in Wentworth Falls. Kerrie was working for a real estate agency in Leura. She had stable employment up there in the mountains. Her children were settled in the mountains. The pressures against a move back to Mona Vale were growing. This new blended family lived in the rental property for a few months before the deceased purchased another home in the Darwin Avenue, Wentworth Falls in about April 2008 for $725,000, cementing a permanent move up there.

23. This was a further wrench for Eliza. She feels that not only had she lost her mother but she lost the home that she, her mother and father had shared and to which she was sentimentally attached with its many triggers for memories of her former life with her mother.

24. The deceased kept the Mona Vale property for some years. It was rented out from 2007 to 2012 and sold in the middle of 2012 for $1,168,000.

25. But Eliza’s behaviour was sliding further. She clearly wanted to leave the home in the Blue Mountains and she made living there impossible for her father and for Kerrie. She only lasted six months with the deceased, Kerrie, and Kerrie’s two children. At the age of 16 she was asked to move out of the family home in the Blue Mountains.

26. Eliza moved in with her then boyfriend in Katoomba and was working in a fast-food outlet there. She moved between houses over the next two years and spend short prints of time back at the family home in Wentworth Falls. But apart from those brief stays she never returned to live with the deceased and Kerrie after about the first six months of their marriage.

27. Eliza’s relationship with her father at this time was poor. This is hardly surprising. He had accepted Kerrie as replacement for Lee-Anne when Eliza was not ready to accept the change. She describes the relationship during the following years as “up-and-down” and it was certainly difficult, unpredictable and troubling for her father. Kerrie’s evidence of the poor relationship between father and daughter in this period is vivid and is mostly accepted.

28. Then began a period of restlessness. From 2010 to 2016, Eliza moved around the city and near regional area, living in Toowoomba, Margie, Curl Curl, Mosman and Balgowlah. Eliza also lived for about five months in 2016 with the deceased’s mother, Eliza’s paternal grandmother, Elaine, in her apartment in Dee Why, which was a safe place for Eliza while she was looking for other accommodation.

29. But leaving home and the passage of time allowed Eliza to stay in touch with her father to their mutual benefit. Eliza says, and the Court accepts, that by the time she was about 22 years old, in about 2014, they had patched up their relationship and had managed to re-establish “a close bond”.

30. And that bond remained throughout their lives. This is evident from many sources, including other family members and text messages exchanged between the deceased and Eliza in the last months and years of his life. The deceased exchanged supportive, affectionate, and confiding text messages with Eliza on a regular basis throughout her late 20s and early 30s as she matured and dealt with life events.

31. Kerrie had become a successful Blue Mountains real estate agent and in 2014 she was able to establish her own real estate agency, Kerrie Roberts Real Estate. She was the principal of the agency, and she engaged other agents as consultants or employees from time to time depending upon the demands of the marketplace.

32. Eliza met her husband, Matthew William Boyd in 2016. They were married in February 2022. Kerrie made a special effort to welcome Matthew into the family. The deceased walked her down the aisle and toasted her at the wedding celebrations. This did not happen of course without Kerrie’s strong support in organising, with the deceased, a surprise reception for Eliza and Matthew at Culburra Club, a venue near a property on the south coast of New South Wales that the deceased and Kerrie had purchased as their retirement destination. Photos of the day help reinforce the veracity of Eliza’s evidence about this day.

33. The deceased had a friendly and easy relationship with Matthew. The deceased ultimately became an enthusiastic and an involved grandfather when Eliza and Matthew had their first child, a son, Kai. Again, the photographs reinforce this conclusion.

34. In the three pandemic years before the deceased died in May 2023, Eliza and the deceased would talk on the phone on a regular basis, especially when he was at work at North Ryde at Loftex. The deceased felt freer to speak to Eliza when he was at work. Kerrie says she supported his relationship with Eliza and from her perspective she tried. But caught in the middle, the deceased felt he laboured under some constraints trying to speak with Eliza on the telephone when he was at home. Whether Kerrie’s inquiries about who he was speaking to on the telephone operated as a deterrent to ringing Eliza at home, may have been the explanation. It is difficult to know on the precise reasons do not need to be unravelled. But the Court accepts that he conducted many of these conversations when he was at work in North Ryde. On the weekends when he was at home in the Blue Mountains, he would send her text messages rather than telephone her.

35. Father and daughter also caught up with one another every two months or so between 2019 and mid-2022. By then, Eliza was working as a HR Manager in the aged care industry based in the Northern Beaches suburb of Dee Why. So, it was easy for them to meet from their workplaces. Sometimes they would each drive and meet at Belrose shopping centre between Dee Why and North Ryde for lunch. Sometimes Eliza would drive over to North Ryde and go out to lunch with her father from there.

36. The deceased and Kerrie had long planned for their retirement. As early as 2010, they had purchased a home with spectacular ocean views on the south coast of New South Wales at Culburra Beach. This Culburra Beach property had been acquired in Kerrie’s name. By mid-2022, they were ready to retire and moved down to live in the Culburra Beach property. By all accounts the deceased was enraptured with this property and its location, praising its qualities to anyone who would listen to him about the subject.

37. After Kerrie and the deceased moved to the Culburra Beach property Eliza and Matthew visited them there on long weekends and whenever they could snatch a weekend away. Kerrie and the deceased both welcomed them to stay.

38. Despite the move to Culburra Beach, face-to-face contact was kept up in other ways. Kerrie and the deceased would come back to Sydney every few months and whilst there meet up with Eliza and Matthew. Sometimes they would stay at a hotel in Brookvale and the two couples would go out locally for dinner to a local RSL club or Italian restaurant. After the move to Culburra Beach, Eliza tried to get some father – daughter time together with the deceased but it never worked out.

39. But Kerrie and the deceased’s retirement was cut tragically short by his early death at the age of 63 in May 2023. So far as the parties are aware the deceased never made a will. But there was some controversy in the proceedings about the deceased’s expression of testamentary wishes to which these reasons now turn.

The Deceased's Gifts to Eliza and Discusses His Testamentary Intentions

40. Fact-finding in contests of evidence where a party deploys self-serving statements about the testamentary intentions of a deceased person must be approached cautiously. It is important to assess the overall consistency of such statements with the other evidence.

41. This kind of issue led to several contests in these proceedings. The first related to a gift from the deceased’s mother. The second arose from statements that the deceased made to Eliza.

42. Each of the deceased’s marriages were to entrepreneurial women. Lee-Anne co-founding a retail shop and Kerrie founding her own real estate business. But entrepreneurship was evident in the generation before. The deceased’s mother, Elaine had been an accomplished property investor.

40. In about 2016, Elaine sold the property that she owned in Queens Parade, West Newport from which proceeds of sale of about $800,000 were derived. Elaine’s practice had been when winding down her property portfolio to split the proceeds of sale of the properties that she owned among her four children as she sold them. The deceased would have been entitled to $200,000 from Elaine as part of such a split of the proceeds of sale of the West Newport property. In fact, the ultimate figure was $198,000 but conventionally the parties referred to the figure as $200,000 and these reasons will proceed with that conventional use of language because the difference from the correct amount is minimal.

41. But the $200,000 went to Eliza. There is some controversy about exactly how this came about, namely whether the idea was being promoted by Elaine or by the deceased. But and this is not a controversy that the Court needs to decide but it seems that both Elaine and the deceased were behind the idea of the money going to Eliza, who needed it in 2016. The Court does accept Eliza’s evidence that her grandmother, Elaine, explained the gift to her partly on the basis “you [Eliza] didn’t get anything from the sale of Mona Vale, which I think should have gone to you” and Elaine further said “I would like to help you so I intend to give the money directly to you”.

42. And that is what happened. But Tahnee Bainbridge, Kerrie’s daughter, supports Kerrie’s case that the deceased’s gift on of the $200,000 from his mother to Eliza was under some pressure from Eliza. The Court accepts their evidence that the idea of this gift may have been promoted by Eliza and was not necessarily the spontaneous suggestion of Elaine. But it was the decision of the deceased to make the gift. And importantly long after the $200,000 gift was made the deceased acted spontaneously on the basis that he should give more to Eliza by arranging part of his bonus to go directly to her without Kerrie’s knowledge.

43. Another contest arose between the parties as to what Eliza was required to do with the $200,000. Eliza acknowledges that the deceased wanted her to use the money to go towards a deposit for the purchase of a property of her own. Kerrie’s case is more explicit that this was a condition on which the money was given. In the Court’s view, at best, Elaine and the deceased offered informal expression of optimal intent about how they would like to see the money spent, in what they perceived was Eliza’s best interests.

44. But Eliza did not save the $200,000 towards a deposit on the future purchase of a house. Kerrie’s case puts that much of the money was wasted in a manner which was consistent with the criticisms which deceased voiced to Kerrie about Eliza, that she was lazy and wasteful and profligate with funds in her hands.

45. Kerrie’s evidence on this is partly accepted. Up until about 2016, it is probable that from time to time the deceased was critical of Eliza’s poor management of the money in her hands and that she was not working hard enough. He after all was a very hard worker, as was Kerrie. And Kerrie’s case is accepted to the extent that it contends that the deceased was urging Eliza to set aside the funds for a deposit on a future home and that Eliza did waste part of the $200,000. And over the four years from 2016 she spent the whole $200,000.

46. But Kerrie’s case in this respect does not consider the changes in Eliza’s life and the more complex demands on Eliza from 2016 onwards of a relationship, of motherhood and steadying in her outlook on earnings and money management. When Eliza received the $200,000, she was about 25 years old. She used part of the money for a three-month trip around South America and some of the funds upon her returned to pay for rental bond and home furnishings. But by then, she was in a relationship with Matthew. He became unexpectedly unemployed, and she needed to dip into the funds to meet general living expenses for six months. Then Kai was born and purchases for the newborn came to the fore, a bassinet, a pram, clothes, a bath and the like, together with a new car. Then Eliza did not work for a period of two years after Kai was born further depleting the funds. Household income was further challenged by the pandemic commencing in 2020 when Matthew lost his job and needed to take lower paid employment.

47. The financial evidence now shows Eliza displayed greater maturity in financial management at the age of 33 than she had at 25. After returning to work in the aged care sector, since the birth of Kai, she has recently been promoted from HR Manager to Operations Manager for an aged care service provider, coordinating consultants and care workers over many domestic sites mainly in the Northern Beaches area. Her recent promotion speaks to her organisational skills and work ethic and the long-term interest that the deceased showed in her being promoted within her workplace. Whatever criticisms Kerrie may have validly offered in the past about Eliza’s work ethic and money management, and they had validity, maturity, motherhood, and the necessity of managing life’s challenges have changed her into a far more responsible person. And it should be said that most of the $200,000 was not spent frivolously but on then pressing household and parental needs.

48. But behind the scenes this $200,000 gift led to tension between Kerrie and the deceased. Kerrie saw the $200,000 as going a long way towards satisfying the deceased’s testamentary obligations to Eliza. The deceased wanted to make a will and to do so in an open way so that Kerrie and he fully understood and accepted one another’s testamentary intentions. Kerrie wanted their joint matrimonial property to be split five ways, between her four children and Eliza, with 20% going to each child upon the death of the last of the deceased and Kerrie.

49. The Court accepts that deceased wanted to benefit Eliza more directly with a gift to Eliza in his will. But he was not able to get Kerrie’s agreement to that course in the short term and he was not prepared to make a will without Kerrie’s consent. The deceased described dealing with Kerrie on this issue as “hard work”. The deceased’s logic, expressed directly to Eliza about the discussions that he had had with Kerrie, was that Kerrie’s former husband was a decent person, was well off financially and would be no doubt look after his and Kerrie’s four children in his will and on that basis the deceased should give more than 20% of their joint matrimonial property to Eliza. But the deceased could never get Kerrie’s agreement, and he contented himself with telling Eliza what he really wanted to do with his will.

50. This course of events is consistent with undisputed fact that despite being a businesslike and efficient person who dealt prudently with his property, that the deceased never made a will.

51. But the deceased occasionally had one-to-one discussions with Eliza about his testamentary intentions. The Court accepts her evidence about these discussions. One argument in the deceased’s mind against retiring early was to keep making money, among other objectives to assist Eliza. He said to her, “I just want to work enough to buy enough properties to leave behind so you’ll have no stress. I’m working hard so I can leave behind an easier life for you and then you can do the same for Kai.” In the end, the deceased left this conundrum with Eliza on the basis, “I’ll work it out, don’t worry”.

52. Eliza’s evidence about the deceased expression of his testamentary intentions is well supported by, Mr David Roberts, the deceased’s brother who gave evidence by AVL from Chicago. Mr David Roberts had an excellent relationship with the deceased, although they lived on different continents. Their youngest brother, Mark, died unexpectedly in June 2020 during the Covid pandemic. This led to some soul-searching discussions between the brothers about their testamentary intentions. David Roberts says, and the Court accepts, that the deceased said to him the following on different occasions:

“I need to prepare a simple will to make sure my inheritance is passed on to Eliza and eventually to Kai. Leanne and I had always wanted the proceeds from a Mona Vale home in the Newport shop to go to Eliza.”

“I need to get my Will done just in case I kicked the bucket unexpectedly to make sure Eliza is taken care of financially.”

56. As late as September 2022, David Roberts came out to Australia to see his family including his brother, the deceased. They had dinner one night in Manly in which the deceased confided in him a strong sense of personal testamentary obligation towards Eliza arising from the fact that Eliza had not received anything directly when her mother had died. The deceased said the following to his brother:

“I need to prepare a will immediately to make sure Eliza gets the benefit financially of what Leanne and I built up together.”

57. Upon David Roberts enquiring what the deceased financial situation was and the deceased explaining that he was working one day a week for Loftex on full salary, the deceased went on to explain:

“I made a huge profit from the sale of the Leura house [the Gladstone Road, Leura property], some $2.1 million recently. This means I was able to buy an investment property in downtown Leura, start renovating Culburra and can also take care of Eliza.”

58. Kerrie did not hear such sentiments from the deceased. But this is not surprising. After some years of tension with Kerrie on the subject, the deceased was trying to work out his own way to look after Eliza.

59. Mr Zhang’s evidence proves two important conclusions in the history of these parties. First, he gives an account that the deceased confided in him that he (the deceased) had been arguing with Kerrie about how much he would provide for Eliza in his will. The deceased told Mr Zhang that the Mona Vale house was acquired through the earnings of Lee-Anne and the deceased before he married Kerrie. The deceased said to Mr Zhang, “I want to give the money I got from it to Eliza, but Kerrie doesn’t agree. I will work it out with her.” The deceased wanted to benefit Eliza by will with some of the value that of Lee-Anne and he had built into the Mona Vale property but could not reach agreement about this with Kerrie.

60. Second, in the absence of clear agreement on this subject with Kerrie the deceased began to take matters into his own hands. One afternoon in August 2021, he asked Mr Zhang for a favour. The deceased explained that he had helped out Kerrie and her children and wanted to benefit Eliza by giving some of the bonus that was due to him from Loftex directly to Eliza. Mr Zhang agreed and transferred three amounts of $10,600 to Eliza’s bank account from his personal bank account in August 2021, August 2022, and December 2022. This is concrete proof of the tension between the deceased and Kerrie on this subject and of the deceased’s desire to give something of value to Eliza to pass on the assets that her mother had created and that he had taken into his marriage with Kerrie.

The Deceased and Kerrie Build their Assets

61. The deceased had a robust work ethic and was proud of the assets that he had contributed to building. His positive business outlook was the subject of great praise from Mr Zhang, who described him as “a tireless worker” who “remained consistently passionate about his products, customers and job”. Mr Zhang’s oral evidence bespoke a very high level of admiration about the work skills and business loyalty of his friend, the deceased. Mr Zhang took a strong interest in the deceased’s broader family and was able to observe the strong bond between the deceased and Eliza and how regularly she would visit him in the office in North Ryde. He described the pair as having “a profound connection of love, trust and support between them, which I saw was a source of immense comfort for Peter”. Like all of Mr Zhang’s evidence, this is accepted.

62. The deceased’s commitment to his work at Loftex and loyalty to Mr Zhang is powerfully demonstrated by a simple fact. The deceased commuted by road daily from the upper Blue Mountains to North Ryde a trip of two hours each way during peak hours. The deceased was prepared to put up with an exhausting four-hour daily commute to stay with the job and with the employer that he liked. This commute was particularly demanding on days that the deceased had to catch a 7 AM flight to Melbourne to meet Victorian clients. This entailed leaving the Blue Mountains at 4:30 AM and rising before that.

63. And Mr Zhang appreciated that loyalty, paying the deceased well with high level of bonus incentives for sales success. As National Sales Manager, the deceased was paid a base salary of approximately $200,000 and received a further $200,000 in annual bonuses.

64. Kerrie’s real estate expertise became well-established in the Blue Mountains area. She mainly sold residential real estate and in 2016 established a profitable agency in the local area under her own name. Kerrie was very entrepreneurial during the marriage. Not only did she establish Kerrie Roberts Real Estate in 2016 but in December 2018 she entered a partnership with her daughter Kristy to open a bulk foods retail store in Katoomba, which only closed due to the difficulty of operating long-term within the reduced trading conditions of the pandemic.

65. From about 2009, Kerrie and the deceased began to expand their property investments. Apart from the Culburra Beach property, which has been mentioned above, the couple purchased upper Blue Mountains properties that probably came to their attention through Kerrie’s real estate business expertise and local knowledge. They purchased a property in Bellevue Road, Wentworth Falls in November 2009, which they sold in January 2015 for $445,000. The couple purchased another property in Sandbox Road, Wentworth Falls in January 2017 which they sold in September 2019 for $295,000.

66. They later purchased properties that are more relevant to the issues in these proceedings. In December 2020, they jointly purchased a property in Gladstone Road, Leura which they sold in May 2022 for $2,200,000. And in June 2022, P & K Roberts Superannuation Pty Ltd, the trustee of the deceased’s and Kerrie’s superannuation fund, purchased a property in Megalong Street, Leura.

67. Kerrie’s contribution to the household was far more than just to its income. Kerrie also undertook a full load of household responsibilities, cooking, cleaning, caring not only for her husband but the children who from time to time lived with them. There is no question of the quality and depth of her support for the deceased in this respect.

68. The deceased was an enthusiastic property investor and spoke to Eliza about each of these properties from time to time. Some of the properties were purchased in Kerrie’s name only, for example the Culburra Beach property and the Sandbox Road property in Wentworth Falls. But the others are in joint names or in their superannuation fund. The text message evidence shows that in his communications with Eliza, the deceased was sensitive to how much of his joint marital pool of assets with Kerrie was in Kerrie’s name.

69. As the deceased conversation with his brother David shows and Mr Zhang confirms, Mr Zhang offered him an incentive to stay on as National Sales Manager working only one day a week but otherwise on full salary in what was the last year of his life. This was yet another indication of how valuable the deceased was as an employee and what a good relationship he had with Mr Zhang.

70. Kerrie says that there was a joint plan to retire to Culburra Beach and that is undoubtedly right. But the deceased was still keen to receive an income, partly to try and set aside some funds for Eliza. Kerrie says that she was also determined to shut down her real estate agency business and move permanently to Culburra Beach. But her oral evidence and the financial evidence is clear that after the deceased’s death, spending time alone in Culburra Beach was not very satisfying for her. She needed a distraction to assist her in coping with the deceased’s death. And staying close to family in the Blue Mountains was a major priority for her. She had neither finally sold nor closed her real estate agency business before the deceased’s death in anticipation of moving to Culburra Beach.

71. So, she continued to operate the business from about September 2023 and into this year. She is past her most active years but the Court judges that she still has some earning capacity at the age of 63 as she has demonstrated until a few months ago. And despite completing building work at the Culburra Beach property which she and the deceased planned before his death, the Court infers that she will still spend a considerable portion of her time in the Blue Mountains with family and from where she can, if she wishes, gain the personal satisfaction of working in the real estate business in which she has well-developed expertise. It is unclear from the evidence if she does sell the business in the future whether it has much market value.

72. One other aspect about the deceased’s and Kerrie’s assets should be briefly mentioned. Kerrie says, and the Court accepts, that her relationship with Eliza was good until Eliza foreshadowed these proceedings. This can be accepted, because it is quite consistent with the solid support that Kerrie always gave to Eliza and Matthew up until the deceased’s death. And Kerrie acknowledged in her own evidence that the deceased loved Eliza. The difficulties that have now emerged only came to the fore in text messages exchanged in the emotionally fraught time in the days after the deceased funeral. It is not necessary to go into those exchanges, except to say that in the Court’s experience of such cases it is not unusual for such tensions to arise at a time of great grief. Kerrie has now taken a very cynical view of Eliza and emphasises that even the deceased called her “entitled” at times. But these reasons, and the relief given, show Eliza does have valuable rights against her father’s estate.

Eliza’s Current Financial Position and Future Needs

73. Eliza and Matthew’s Income and Assets. Prior to February 2024, Eliza was employed on a part-time basis, as a HR Manager at an aged care provider and worked four days per week. In February this year, she was promoted to become the Operations Manager within the same company. She has held this position since then and earns $6080 gross income per month and $4,840 in net income from this role.

74. Eliza’s husband Matthew is employed as a form worker and earns an hourly rate. His income varies depending upon the number of hours worked, whether he has worked overtime, whether he has worked weekends or public holidays and other factors associated with the availability of contract work to his employer. Eliza says that his monthly net income is on average $13,944 gross and $10,001 net. Thus, together Eliza and Matthew earn an average of approximately $14,800 per month in the hand before deducting their monthly expenses.

75. There is a degree of fluctuation in these figures, partly because of the variable nature of Matthew’s work.

76. Eliza and Matthew do not own any real property and despite their earning capacity they have negligible savings. The couple have accrued joint superannuation of approximately $100,000 and have two cars being an older Nissan and new Izusu Utility. Eliza’s net assets excluding superannuation are about $40,000 and Matthew’s net assets excluding remuneration are about $65,000. These assets include depreciating items such as motor vehicles.

77. Eliza and Matt’s current expenditure and future liabilities. Whilst they have reasonable earning capacity, Eliza and Matthew have significant liabilities. They incur a total average monthly expenditure of approximately $11,800. The bulk of their expenses comprised rent for the house they live in in Mona Vale, NSW which is $5400 per month and various loan repayments for credit card debt, car loan, personal loans, fines and amounts owed to the Australian Tax Office which aggregate into a combined liability of $1,984 per month. The remaining expenses are utilities, insurance, and other ordinary living expenses which appear reasonable for a young couple living in Sydney.

73. Their monthly expenses need not be further detailed but as Mr Hill put to Eliza, the difference between monthly net income and monthly declared expenses should leave them with a monthly surplus of about $3,000. But capturing the true monthly expenses figure was difficult as Eliza conceded, saying “I don’t believe I've accounted for everything in there because every month is different. Some months we have really good months, some months not so much.” But even accepting that the surplus is $3000 per month, theoretically the couple can save $36,000 a year. The point made in Eliza’s case is that even on that optimistic scenario of saving $36,000 a year, it will take many years for them to accumulate the capital for a deposit on a house and in the meantime house prices are rising further out of their reach.

74. Eliza and Matthew face rising future expenditures. Kai presently attends a public school on the Northern Beaches and attends before and after school care. Eliza wishes to send Kai to a private school for his high school education.

75. Eliza and Matt also say that they would like to have a second child. Eliza anticipates that a potential future expense would be the cost of in vitro fertilisation should she be unable to fall pregnant naturally. Then they will bear the costs of raising a second child including the cost of sending the child to a private high school.

76. Eliza says that she would like to purchase a home in the Northern Beaches area in the future. Kerrie says that the deceased encouraged Eliza to move to a more affordable place to live than the Northern Beaches, and he no doubt asked her to consider that. But Eliza grew up in that part of Sydney and has friends there and her desire to stay there is not unreasonable.

77. Elaine’s Will. Christopher Roberts, an older brother of the deceased and therefore an uncle to Eliza has made clear that Elaine is elderly and quite incapable. She is suffering severe dementia, is in poor health and is now acknowledged to be unable to make another valid will. Elaine’s will gives the deceased’s share of Elaine’s estate to his only child, Eliza. He estimates, the Court accepts that upon Elaine’s death that Eliza is likely to receive an amount of approximately $155,000, less estate costs and expenses from Elaine’s estate. The timing of that bequest is clearly uncertain beyond saying it is likely to happen sometime in the next few years.

Kerrie’s Current Financial Position and Future Needs

83. Kerrie’s Income and Assets. At the time of the hearing, Kerrie was 63 years old and has been a successful realtor. She owns the Culburra Beach property unencumbered. Like all litigants in the family provision matters Kerrie was under an obligation to provide up-to-date information about her assets and income. But she did not provide an up-to-date written kerbside assessment or valuation of the Culburra Beach property. Kerrie’s oral evidence was that she obtained a “drive-by” valuation from a local real estate agent who valued the property between $1,600,000 and $1,800,000, which can be accepted for present purposes. Kerrie also has two cars being a Tesla Y Series which is registered to the company through which she conducts her real estate business Kepe33 Pty Limited and an older Mazda motor vehicle.

84. Other than the Culburra Beach property which is held in her name, and the assets held in the SMSF, Kerrie has approximately $628,284 in cash held in on deposit in Commonwealth Bank bank accounts which were accounts held jointly with the deceased. She is also set aside money for her tax liability generated in respect of her real estate business, run through Kepe33 Pty Limited.

85. As to Kerrie’s earnings, her affidavit evidence declared most but not all her income. She earns around $1,380 per month in interest on this the Commonwealth Bank bank deposits and she receives $2,578 in rental income from the Megalong Street property, which is held in the superannuation fund. Additionally, she works part time, 1 day a week for $225 at a friend’s boutique clothing store. But she says she intends to give that up and retire, once she has financial certainty following the conclusion of these proceedings.

86. Kerrie and the deceased had planned to retire with the deceased at the Culburra Beach property. But since his death in May 2023 after a gap of about four months until September 2023 when she gave up work altogether, she has resumed managing real estate listings in the Blue Mountains area through her real estate business. She explained in cross examination that this additional real estate business keeps her busy and allow her to spend time with her daughters.

87. This additional real estate income was not included in her affidavit evidence and its inclusion would have presented a more balanced picture of her willingness and ability to utilise her earning capacity after the deceased’s death. It should be factored into consideration. From each successful sale, she earns about 1.5-2% of the sale proceeds as income depending upon the employee or consultant involved in depending upon the nature of the property is sold.

88. For the financial year ending June 2023, Kerrie earned approximately $50,000. Exhibit J is a summary of the commission Kerrie is likely to earn in the 2024 financial year (or possibly into the current financial year) on the seven sales on which she is entitled to commission and shows potential earnings of just under $84,000 before tax, which will need to be deducted.

89. Kerrie and the deceased had a substantial joint income in the 12 months before he died when he was working one day a week on full salary. It was clear from what Kerrie said when asked about whether this money was saved, that much of it was spent rather than set aside for future contingencies. She said “we had holidays… We did good holidays and we just lived our life well” and “we bought a Tesla”. Both sides in this case have been looking critically at the spending of the other party at various times in their lives. But a realistic view is that both sides had a willingness to spend money at various times of their lives when that money could otherwise have been put aside to meet future contingencies. Kerrie and the deceased thought that they had enough savings to meet all future contingencies associated with their retirement, and that they could spend his income in 2022 – 2023 but fate has put a different perspective on that decision.

90. Neither side in this case should be overly critical about the other’s spending. The Court is not critical of Kerrie for this spending. She could not see what was coming. Nor is it critical of Eliza for her spending of the $200,000 in the way that she did over time. The Court has tried to adopt a practical perspective based on the realistic circumstances of each of them at the time the spending took place.

91. Kerrie’s current and future liabilities. Kerrie has $4,251 in monthly expenses. These expenses are comprised of rates notices associated with owning property, utilities, insurance, travel, entertainment, and a range of other ordinary living expenses.

92. Kerrie says she plans to retire within the next 12 months and has a strong desire to do so. This decision has become more focused for her as result of her husband’s unexpected early death. She intends to live in the Culburra Beach property until she is unable to maintain the property herself, at which time she says she will go into a nursing home. Kerrie will require funds to which she can look to meet financial contingencies.

93. Other than the ordinary increases in medical expenses associated with aging, Kerrie has no immediately foreseeable medical expenses other than some planned elective surgery that has been postponed for reasons associated with these proceedings.

94. The superannuation fund. P & K Roberts Pty Limited is the trustee of the self-managed superannuation fund that the deceased and Kerrie operated together. It is not in dispute that the trust deed provides a general power to distribute capital and income of the superannuation fund to a range of persons including the deceased and Kerrie. Their accountant, Mr Michael Lord, indicated that he prepared a binding death benefit nomination on behalf of the deceased in favour of Kerrie. But by the time he died, this had lapsed by operation of law, as it is required to be renewed every three years. Kerrie is presently the controller of the trustee and controls the exercise of the power of appointment under the trust deed. An appointment could have been made under the trust deed in favour of the deceased on time before his death but such an appointment did not take place.

95. The sole asset of the superannuation fund is the Megalong Street property. It is rented out and the superannuation fund derives an income of $2,578 from it each month. This is quite a low return. The superannuation fund’s financial statements for the 2023 fiscal year show that the fund earned $40,660 in revenue from residential property, which may perhaps indicate a more realistic future earning potential for the Megalong Street property.

96. The Megalong Street property is valued in the financial statements of the superannuation fund for the 2023 financial year at approximately $1,017,000. Kerrie is doubtful that is its current value and says that should currently be valued somewhere between $900,000 and $1 million. But it should also be said that with an experienced eye to real estate Kerrie invested in this property with a view to long-term capital growth.

97. Cash in Kerrie’s name. The balance of the combined joint bank accounts of the deceased and Kerrie at the date of his death was $1,362,716.93. But substantial amounts have been drawn down to reduce that balance since his death. $385,274.54 was deducted for building/renovation costs for the Culburra Beach property. The Court is satisfied that the Culburra Beach property needed renovation to accommodate the deceased and Kerrie comfortably in their retirement and they had planned those renovations. Kerrie went ahead with them notwithstanding her husband’s death. Her decision to do so was questioned, as was the increased cost of these renovations from the original quotation. But the Court is satisfied it was reasonable for Kerrie to undertake those renovations and the cost increase is explicable.

98. Two other major amounts have reduced the balance of these combined joint bank accounts: a taxation liability of $83,414.85 and money paid for legal fees to the solicitors for the defendant, Aubrey Brown in the sum of $121,619.58. This brought the balance of the joint accounts to $772,407.96. There are identified cash withdrawals of $32,910 which would have left the theoretical balance of $739,497.96. The cash withdrawals appear to have been for Kerrie’s personal expenditure.

99. That leaves, as is demonstrated by Exhibit L, a gap in what is supposed to be in the joint accounts at the time of the hearing, namely $632,227.43. The difference is $107,270.53. How that difference was applied by Kerrie since the deceased’s death is unclear on the evidence, but it clearly came out of the account and was applied by her for some purpose. Given the cash withdrawals and the unaccounted-for difference between the present funds in the joint accounts and the major identifiable payments out of these joint accounts, all that can be said is that Kerrie has not managed the joint accounts with the principal objective of their conservation after she was put on notice of these proceedings.

100. Legal fees. Kerrie’s legal fees associated with these proceedings have largely been paid as indicated above. They total $132,402.20 of which $121,619.58 has been paid. The difference can be rounded to about $10,000.

101. The plaintiff’s total legal fees including estimates to the conclusion of the proceedings are $126,080.62. The Court made orders under Uniform Civil Procedure Rules 2005 r 42.4 capping these costs.

Analysis of the Issues

102. The question for present determination is whether an order for provision should be made in Eliza’s favour out of the estate or any property designated as the notional estate of the deceased. The analysis commences with a statement of the applicable law is then applied to the facts as found in the narrative of findings.

Applicable Legal Principles

103. Whether an order provision should be made in any case is provided for in Succession Act, s 59(1)(c):-

“(1)   The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:

…

(c)   at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.”

104. There are many judicial statements summarising the operation of what is said to be a two-step provision. For example in Singer v Berghouse (No. 2) (1994) 181 CLR 201 at 209, the High Court of Australia said of the test under the previous legislation:-

“The first question is, was the provision (if any) made for the applicant "inadequate for [his or her] proper maintenance, education and advancement in life"? The difference between "adequate" and "proper" and the interrelationship which exists between "adequate provision" and "proper maintenance" etc. were explained in Bosch v Perpetual Trustee Co8. The determination of the first stage in the twostage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder9, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors.”

105. Whether the two-step test operated with the same full vigour in the current legislation has been recently discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. But such considerations are not an issue in this case, which is a very clear one on the question of whether or not adequate provision has been made for Eliza, an eligible person who has received nothing from the estate of the deceased.

106. Some other authorities have explained in more detail the meaning of the words in the legislation "adequate", "proper", and "advancement in life". Some of these authorities have been conveniently collected in the decision of Hallen AsJ in Drury v Smith [2012] NSWSC 1067 at [153], [154], [155], [158] and [160], which relevantly provides:-

“[153]   Master Macready (as his Honour then was) in Stiles v Joseph (NSWSC, 16 December 1996, unreported) said, at 14-16:

"Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541)

In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274...

In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said:

'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.'

The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that:

'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'"

[154]   In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J at [114] noted:

"In the context of the Act the expression "advancement in life" is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase "advancement in life" has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the "maintenance and support" of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."

[155]   In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:

"The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)."

…

[158]   Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word 'proper', that:

"It means "proper" in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."

…

[160]   In Vigolo v Bostin [2005] 221 CLR 191, at 228, Callinan and Heydon JJ said:

"[T]he use of the word "proper" ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."”

Analysis

107. Ms Muscat conducted Eliza’s case with commendable moderation, only putting a realistic view of what order for provision she submitted should be made on the clearly established facts. She focused upon the cash assets and the superannuation fund which it is not contested are both capable of being designated as notional estate. And Mr Hill conducted Kerrie’s case by carefully emphasising the reasons for the Court taking a cautious approach about making any order for provision.

108. The parties were frank in both opening and closing submissions about their positions and the outcomes for which they were contending in the circumstances of this case. They had both thought carefully about the reasons for those outcomes and articulated them well through their counsel.

109. Ms Muscat submitted that an order for provision should be made in the plaintiff’s favour in the sum of $600,000 and that the two Commonwealth Bank bank accounts and the superannuation fund should be designated as notional estate to meet that order for provision. In contrast, Mr Hill submitted that no order for provision should be made. The parties’ submissions are discussed below with the analysis of the issues.

110. In this case, the Court should make an order for provision out of the deceased’s estate in favour of the plaintiff, Eliza. She is an eligible person. The deceased had a strong personal bond with her as his only biological daughter, a bond which was underpinned by marked affection on both sides. The deceased recognised her as an intended object of his testamentary bounty. There is clear accepted evidence that the deceased wanted to benefit her under his will but that due to lack of consensus on that issue with the defendant, Kerrie he never made a will. But there are many signs through several reliable witnesses, apart from Eliza herself, that the deceased wanted to make a will benefiting Eliza.

111. The deceased recognised that directly or indirectly the sale of the Mona Vale home that he had built up with Lee-Anne had been ploughed into his pool of marital assets with Kerrie. His powerful sense of testamentary obligation to Eliza was closely informed by a sense that she deserved to have a clearly defined part of what he and Lee-Anne had built up together by their hard work, difficult though it was now to separate that out from his combined assets with Kerrie.

112. None of Eliza’s conduct as a teenager is remotely close to disentitling conduct. Ugly though it was at the time Eliza’s conduct was understandable in a teenager reacting to the emotionally wrenching events of her mother’s death and her father’s relatively quick re-partnering and remarriage. From her perspective fate and her father’s new relationship, suddenly removed her mother and her father’s primary attention from her.

113. Even Kerrie’s case indirectly supports the idea that provision should be made in some way for Eliza – but her case suggested that be done in a different way. Kerrie recognised and agreed that one fair approach to the couples’ will making was to give Eliza 20% of the joint matrimonial property of the deceased and Kerrie. And she was prepared in substance to enter a mutual wills pact to that effect.

114. But such an arrangement would be attended by uncertainty and impracticality. Eliza would only benefit from such an arrangement after the expected lifespan of Kerrie which is likely to be well after the time of Eliza’s maximum need for capital, which is now. And what Kerrie’s assets were at such a time of course is subject to the uncertainty of how she might benefit her children by her first marriage during her lifetime. By the time the case came on for hearing Kerrie was not even prepared to make that will.

115. Eliza does need capital now for her advancement in life. A child does not have an entitlement in this branch of the law to expect a parent will provide a house for him or her. But the evidence suggests that if Eliza and Matthew receive sufficient to fund the deposit on a house that their present income will enable them in the long-term to meet mortgage payments on the house. The opportunity to purchase a house and to stabilise their financial future is the most obvious and compelling way that Eliza could be advanced in life at this time. Eliza and her husband work hard in reasonably stable jobs and they need a chance to get ahead in the long-term with some form of capital investment. This opportunity for her and her husband now is the kind of opportunity that the deceased valued and which should not be deferred until after Kerrie’s death.

116. Various figures have been given for the purchase of houses on the Northern Beaches. But Eliza and Matthew may have to make a trade-off between funding the deposit on the purchase of a house in that area, or using funds to buy in a less expensive area but having more money to contribute towards the price of the house. The Court therefore does not gain much assistance from considering house prices in the Northern Beaches area in these reasons.

117. These considerations must be balanced against Kerrie’s needs. The Court recognises that as the deceased’s widow her financial position and accommodation must be kept secure, should the Court intervene to make an order for provision. There is little in the estate. The two items of potential notional estate that are suggested in Eliza’s case are the Commonwealth Bank joint accounts now containing approximately $632,000 and the superannuation fund.

118. The issues can be simplified here because the Court will not designate the superannuation fund as notional estate. The superannuation fund is an important component of a stable financial future for Kerrie. The Court will not cause Kerrie to have to sell its principal asset, the Megalong Street property, which provides future capital growth and present income for her. Subject to the operation of Succession Act s 87 which is discussed below, the Court would only designate the joint accounts as notional estate.

119. The amount that should be awarded to Eliza therefore should be moulded around the need to keep as much financial stability for Kerrie as is reasonably possible in the circumstances. In the Court’s view, an award of $600,000 as claimed in Eliza’s submissions together with costs would be too much for Kerrie to bear financially. But the Court should look to the extent possible to providing a sum for Eliza that gives her realistic options in buying a first home but which she would still have to principally fund herself. In the Court’s view doing the best it can to balance these considerations the Court will make an order for provision of $450,000 out of the estate and/notional estate of the deceased in favour of Eliza. Part of the reasoning for selecting this figure in relation to Kerrie’s financial needs is set out below after the discussion in relation to Succession Act s 87.

120. Succession Act s 87 provides as follows:

“The Court must not make a notional estate order unless it has considered the following--

(a) the importance of not interfering with reasonable expectations in relation to property,

(b) the substantial justice and merits involved in making or refusing to make the order,

(c) any other matter it considers relevant in the circumstances.”

121. Kerrie submits that the provisions of Succession Act s 87(a)-(c) weigh against making an award designating any notional estate on grounds of "not interfering with reasonable expectations in relation to property", "the substantial justice and merits of making or refusing to make an order”, and other relevant circumstances. She puts general submissions relating to both the Commonwealth Bank accounts and the superannuation fund.

122. Kerrie’s submission in relation to the superannuation fund is persuasive. She points out that the sole asset in the superannuation fund is the Megalong Street property. There is not a substantial fund of cash within the superannuation fund so that if the superannuation fund is designated as notional estate to meet an order for provision, it is likely that the Megalong Street property will have to be sold. She submits that it is undesirable for the Court to make an order requiring the Megalong Street property to be sold now when the deceased and Kerrie planned to use it for long-term capital gain within a low tax superannuation environment.

123. There are three reasons why the Megalong Street property should not be designated as notional estate. First, Kerrie’s long-term financial welfare would be best served by preserving her superannuation to its maximum extent. Superannuation is a tax-sheltered environment from which she can earn income to fund her retirement. That was her and the deceased’s plan and it was a good one. Secondly, Kerrie said that prices in the Leura property market were not at their best at the present time and were presently unlike the Sydney city market and it was not a good time to force a sale of that property. Thirdly, the corporate trustee has not been joined as a party to these proceedings. That is not an insuperable obstacle is the defendant is the controller of the corporate entity and she is amenable to the Court’s orders. But it is a complication that can be avoided.

124. But the Commonwealth Bank joint bank accounts should be designated as notional estate to meet the order for provision of $450,000 determined by the Court to be appropriate. Mr Hill submits on Kerrie’s behalf that if this award is taken from the Commonwealth Bank bank accounts it will severely impact her cash resources and that a designation should not be made as it will interfere with her reasonable expectations in relation to her property within Succession Act s 87(a). Mr Hill submits that Kerrie and the deceased have built up this fund through property investment in wise husbanding of their cash resources to provide for retirement and that expectation built up over many years should not now be interfered with by an order of the court. Mr Hill also submits that for the same reasons the s 87(b) “substantial justice and merits” of the case mean that the Commonwealth Bank accounts should not be designated as notional property.

125. But the impact of a designation over the Commonwealth Bank bank accounts can be significantly alleviated if the whole picture of Kerrie’s circumstances is considered and her obligations to Eliza are staggered over a period of 12 months. Kerrie should be required to pay now the sum of $350,000 of the $450,000 which will be designated as notional estate.

126. The Commonwealth Bank bank accounts currently have a rounded combined balance of $632,000. But this sum needs to be reduced by the balance of the defendant’s legal fees and the plaintiff’s legal fees the combined figure for which can be rounded to $136,000. That leaves a rounded balance of $496,000 ($632,000 -$136,000). After paying $350,000 from the Commonwealth Bank bank accounts Kerrie will still have a balance of $146,000 ($496,000 - $350,000), which is a sufficient sum to meet Kerrie’s expenses in the near term.

127. The balance of $100,000 should then be paid within a further 12 months. This will leave Kerrie with flexibility and more available cash in the short term, while she plans for the longer term. Deferring part of the payment obligation in this way will allow Kerrie to consider her options about how to generate supplementary funds to meet the balancing payment of $100,000 in the longer term. To generate some funds to maintain a prudential cash balance she may wish to (a) attempt to increase rent on the Megalong Street property, or she may wish to (b) utilise her real estate and other earning capacity for a little longer. With these adjustments, in the Court’s view, an award of $450,000 should not be too burdensome for Kerrie.

128. Kerrie’s circumstances may permit her to make earlier payment of the balance of $100,000. If they do, she should have a financial incentive to pay that sum earlier. Therefore, the Court will make the sum of $100,000 due at the same time as the $350,000 and the $100,000 will accrue interest but will not yet be payable until first anniversary of these orders. Interest will commence accruing 28 days after these orders at the rates of interest prescribed from time to time under Civil Procedure Act, s 101.

Conclusions and Orders

129. The parties foreshadowed that they would want to put submissions about questions of costs and other consequential orders. The Court was told that offers without prejudice except as to costs been made. The Court will appoint an occasion for those submissions to be made once the parties have had an opportunity to absorb these reasons for decision.

130. The matter will be listed a date to be appointed by arrangement with chambers at the mutual convenience of the parties for a hearing of no more than one hour within existing costs caps. As the Court foreshadowed during final submissions, the parties should plan for that hearing on the basis that during that hour they should be ready to dispose of all incidental issues and all remaining questions of costs, including the making of lump sum cost orders so that there are no residual disputes about quantification or payment of costs or any other issues that are an obstacle to the beneficiaries receiving their distributions from the estate as soon as possible.

131. These reasons the Court makes the following orders and directions:

1. ORDER that the two Commonwealth Bank bank accounts identified in exhibit E are designated as notional estate of the deceased to be applied to the extent necessary to meet the order for provision made in favour of the plaintiff in order (2) of these orders;

2. ORDER subject to order (3) that pursuant to Succession Act, s 59 that the plaintiff shall receive a legacy of $450,000 out of the estate or the notional estate of the deceased;

3. ORDER that of the sum of $450,000 the subject of order (2) that the sum of $350,000 shall be paid within 28 days of the date of these orders and the remaining $100,000 shall be paid on or before the date 12 months hence, namely 18 October 2025, together with interest accrued up to the date of payment calculated at the rate from time to time prescribed on judgments under Civil Procedure Act 2005 s 101 with such interest to commence to accrue 28 days after the date of these orders;

4. ORDER subject to further order that the plaintiff’s costs of these proceedings be paid out of the estate on the ordinary basis;

5. ORDER subject to further order that the defendant’s costs be paid out of the estate on the indemnity basis;

6. GRANT liberty to apply to the parties to vary orders (4) and (5) in light of the making of offers by either party on a without prejudice basis except as to costs and to seek any other consequential orders including the making of lump sum cost orders under Civil Procedure Act s 98(4)(c); and

7. NOTE that when the proceedings are relisted the parties should prepare their evidence for the relisting on the basis that there will be a single occasion to resolve all outstanding disputes in relation to costs and the quantum of costs at the one hearing to reduce future contests about the administration of the estate of the deceased.

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Decision last updated: 18 October 2024