Cahn v Kosmin - [2022] NSWSC 751

Supreme Court

New South Wales

Medium Neutral Citation: Cahn v Kosmin [2022] NSWSC 751
Hearing dates: 18, 19 May 2022, last submissions 1 June 2022
Decision date: 08 June 2022
Jurisdiction: Equity
Before: Meek J
Decision:
Additional provision awarded. Parties to address on the question of costs.

Catchwords:
SUCCESSION — Family provision — applicant daughter — substantial inter vivos provision — resources depleted through bankruptcy — very substantial testamentary provision — obligation of applicant to provide accurate financial information — moderate additional provision awarded

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 56
Evidence Act 1995 (NSW), s 136
Family Provision Act 1982 (NSW), s 9(2)
Succession Act 2006 (NSW), ss 60, 61
Uniform Civil Procedure Rules 2005 (NSW), r 7.8

Cases Cited:
Bassett v Bassett [2021] NSWCA 320
Bindoff v Trust Company (Australia) Ltd [2016] NSWSC 1100
Browne v Dunn (1893) 6 R 67
Chan v Chan [2016] NSWCA 222; (2016) 15 ASTLR 317
Georgopoulos v Tsiokanis [2022] NSWSC 563
Gorton v Park (1989) 17 NSWLR 1
Hinderry v Hinderry [2016] NSWSC 780
Jodell v Woods [2017] NSWSC 143
Limberger v Limberger [2021] NSWSC 474
Mitchell v Hamilton [2005] NSWSC 1097
Sammut v Kleemann [2012] NSWSC 1030
Smith v Johnson [2015] NSWCA 297; (2015) 14 ASTLR 175.
Strang v Steiner [2019] NSWCA 143
West v Mead [2003] NSWSC 161

Texts Cited:
Practice Note SC Eq 7

Category: Principal judgment
Parties: Tracy Faye Cahn (Plaintiff)
Gary Kosmin as executor of the estate of
Lilliane Sarah Cahn (First Defendant)
Stewart Cahn (Second Defendant)
Representation:
Counsel:
I E Davidson SC / P D Reynolds (Plaintiff)
B J Skinner (Second Defendant)
Solicitors:
P Williams and Company Lawyers (Plaintiff)
Kosmin & Associates (First Defendant)
Crompton + Walsh Pty Limited (Second Defendant)

File Number(s): 2021/37100

TABLE OF CONTENTS

Family details - paragraph 4
The deceased’s estate - paragraph 8
Costs - paragraph 68
The deceased’s Wills - paragraph 75
These proceedings - paragraph 93
Evidence - paragraph 101
Credit - paragraph 111
Early background details - paragraph 124
Some details regarding Tracy and Stewart - paragraph 135
Stewart’s business dealings - paragraph 148
Michael’s and Stewart’s business involvement - paragraph 177
Michael’s death - paragraph 209
Stewart’s financial difficulties - paragraph 220
Events leading up to the penultimate Will - paragraph 237
Events from the penultimate Will until Tracy’s bankruptcy - paragraph 262
Tracy’s bankruptcy and subsequent events - paragraph 295
Tracy’s financial position - paragraph 318
Tracy’s needs - paragraph 342
Tracy’s health - paragraph 346
Isabelle’s health - paragraph 350
Stewart’s financial position - paragraph 357
Stewart’s health - paragraph 374
Cross-examination of Tracy on various issues
Tracy’s health - paragraph 375
Tracy’s bankruptcy - paragraph 392
Tracy’s financial position and resources - paragraph 401
Tracy’s assets and the value of Tracy’s business - paragraph 403
Tracy’s income - paragraph 413
Absence of tax returns - paragraph 424
Costs of Isabelle’s education - paragraph 429
Tracy’s expenses generally - paragraph 454
Absence of the NAB “trust account” - paragraph 463

Cross examination regarding Tracy’s claim for provision and needs
School trip to Israel - paragraph 483
Holiday allowance - paragraph 486
Tracy’s further education - paragraph 491
Isabelle’s educational costs - paragraph 496
Claim for accommodation - paragraph 497

Legal principles - paragraph 508
Tracy’s submissions - paragraph 529
Stewart’s submissions - paragraph 580
Income and expenditure schedule - paragraph 603
Determination - paragraph 619
Conduct of the parties - paragraph 626
Testamentary intentions - paragraph 645
Tracy’s contribution to the deceased’s property and welfare - paragraph 651
Tracy’s health and ability to work - paragraph 655
Tracy’s post 2017 financial misfortune - paragraph 667
Tracy’s financial resources - paragraph 684
Tracy’s claim for provision - paragraph 699

Judgment

HIS HONOUR: These proceedings are family provision proceedings relating to the estate of the late Lilliane Sarah Cahn (the deceased/mother) brought by her daughter, Tracy Faye Cahn (Tracy), for an order of additional provision out of the estate of the deceased.
There is no dispute that Tracy as a child of the deceased is an eligible person.
Without intending any disrespect, it is convenient to refer to the parties and the immediate family members in the proceedings by reference to their given names.

Family details

The deceased was born in February 1934 and died on 9 February 2020, aged 85, of pancreatic cancer: CB 86.
The deceased married Michael Myer Cahn (Michael/father) in July 1960. Michael was born in April 1929 and died on 29 January 2000. There are two children of the marriage namely Tracy who was born in January 1962 and is currently aged 60 and the second defendant (Stewart) who was born in April 1964 and is currently aged 58.
Tracy had a relationship with Joe Payton (Joe) and has one child from that relationship, a daughter Isabelle who was born in August 2005 and is currently aged 16. Tracy’s relationship with Joe broke down and they have not cohabited for many years.
Stewart entered a relationship with Sally Young (Sally) (referred to by Tracy as Sally Dempsey: CB 11) in or about 1996 and has one child from that relationship namely James born in August 1997 (Stewart referred to the year of James’ birth as being 1996 in his affidavit at CB 401, but during evidence clarified the date as being 1997: T136-137). James is currently aged 24.

The deceased’s estate

The deceased had an interest by way of a fractional holding as tenant in common in two units (unit 1 and unit 2) in Dumaresq Road Rose Bay (the Dumaresq units).
The rights regarding the interest were governed by a co-ownership deed dated 15 February 1988.
It appears that there was no specific or distinct interest in each of unit 1 and 2, rather an interest in both units.
On 13 April 2022 the Court directed the parties to provide an agreed schedule as to assets and liabilities and costs. The parties in compliance with the direction prepared a joint schedule which was marked without objection as Ex JS1.
There were some aspects in relation to the figures for costs in the joint schedule which lacked clarity when regard was had to the updating costs affidavit of Jacques Kosmin sworn 7 April 2022: CB 375. During the hearing I asked for that to be checked: T141-142.
Subsequent to the hearing by email dated 30 May 2022 to my Tipstaff, Stewart’s solicitor in response to my query provided:

a further affidavit of Jacques Kosmin sworn 27 May 2022 correcting errors in an earlier affidavit sworn 26 April 2022 (Kosmin correcting affidavit); and

an updated agreed schedule of assets and liabilities and costs.

It was agreed by the parties that the Kosmin correcting affidavit would be read by Stewart, without objection.
I have marked the updated agreed schedule as Ex JS2.
In referring to dollar amounts in the judgment I have in most instances omitted reference to cents, rounded figures, and otherwise approximated some of the figures.
As at the date of the deceased’s death she held an interest in the Dumaresq units. The inventory of property attached to the grant of probate (which I will refer to below) allocated a value of $1,050,000 to unit 1 and $700,000 to unit 2.
According to both Ex JS1 and Ex JS2 the deceased’s assets at the date of death were as follows:

Property at Dumaresq Road Rose Bay - $1,750,000

St George Bank cash management account - $24,063

St George Bank retirement access account - $2,095

Yellow Brick Road (Investment Account) - $105,526

Total: $1,881,684.

The deceased had a liability being an ANZ loan account in respect of the units in the sum of $168,237.
There were funeral expenses of $7,285 and other expenses paid out of the estate of the deceased included an Emanuel Synagogue Account in the sum of $1,818 and outstanding strata levies in the sum of $13,828.
The Dumaresq units were sold following the deceased’s death and the net proceeds of sale were $4,008,192.
An interim distribution of $2.5 million in the sum of $1.75 million to Stewart in December 2021 and $750,000 to Tracy on 22 April 2022 was made.
It transpired that the figures in Ex JS1 regarding the monies held in a controlled monies account and for costs were incorrect. The agreed position as appears from Ex JS2 is that as at 27 May 2022, the deceased’s assets comprised:

Monies held in trust $77,197.64

Monies held in controlled monies account $1,500,041.49

Total: $1,577,238.13

Ex JS2 disclosed liabilities as follows:

unpaid costs of executor incurred to date $6,532.75

anticipated future costs of executor $6,148

possible/potential further liability of the estate $14,500

Those amounts total $27,180.75.
Ex JS2 records a net distributable estate of “$1,555,058.13” apart from certain disputed assets (see below). That figure is a typographical error and should be $1,550,057.38.
That figure is in addition to the $1.75 million distribution to Stewart and $750,000 distribution to Tracy.
Both Ex JS1 and Ex JS2 record there is some dispute in relation to a number of assets of the deceased including: a Hyundai Getz motor vehicle; proceeds of a claim made on the deceased’s insurance contents policy after the deceased’s death in the sum of $9,416; the contents of the deceased’s home and the deceased’s personal effects (the disputed assets).
Paragraph 17 of the Kosmin correcting affidavit refers to three amounts in addition to the net figure of $1,550,057.38 described as:

“a. plus $14,500 if the Plaintiff’s claim for reimbursement of storage expenses is not pressed or is not successful);
b. plus $9,415 if the insurance claim is recovered as an asset of the estate; and
c. plus the realisable value of any of the Deceased’s personal items and household goods as are recovered as an asset of the estate.”

Regrettably, the issues regarding this were left in an unsatisfactory state.
Regarding storage costs Mr Williams, Tracy’s solicitor emailed Jacques Kosmin on 8 September 2021. The email (CB 672-673) stated:

“I am instructed that:
1. The items are stored at KSS Storage at Moore Park
2. There are two storage units, being A104 and C036, at a cost of $453 & $264 respectively.
3. There were establishment and administrative costs of $273.
3. Storage commenced prior to the passing of the deceased, in December 2019.
4. The estimate of total expenditure to date is approximately $14,500.
Ms Cahn is in the process of obtaining the relevant records regarding the storage units.
It is the case that this is an expense that should be borne by the estate, and would be pleased if you could confirm receipt of this email and advise as to what further information and documentation you require to proceed with payment.”

The affidavit of Gary Komin, the executor, on the same date (8 September) indicated that this was a potential liability of the estate as claimed by Tracy.
On 9 September 2021, Mr Crompton, Stewart’s solicitor emailed Jacques Kosmin (CB 675) in response to an email about estate expenses and said:

“2. He is not presently able to for a view about whether the storage costs etc (totalling ~$14,500) are properly expenses of the administration of the estate. To begin to consider that question, he would initially require the following (please provide this material):
a. An written inventory of what is in the 2 storage units.
b. A copy of the contract with the operator of the storage units, KSS.
c. When were the items placed in the storage units?
d. What firm (of removalists I couriers I etc) transported the items to the storage units
e. Are the items (or any of those items) in the storage units insured? If so, what is the name(s) of the insured?
f. Are any of the items on the attached valuation in the storage units?
g. A copy of each invoice said to comprise the estimated $14,500 expense

3. Unless and until he is able to form a view about the issue identified in 2 above and advises you otherwise, he is not agreeable that the storage costs etc should be paid from estate funds.”

Mr Skinner cross examined Tracy regarding storage fees (for items of the deceased’s property), the insurance claim (for damage to the curtains) and the Hyundai Getz motor vehicle.
In relation to the storage fees, Tracy agreed that she had rented premises since June 2020 to store goods and chattels specifically “Fridges, tables, my mother's personal effects, some of my mother's furniture, household goods”: T79. She accepted that the expense for doing that is quite significant. She was asked whether an alternative was to sell some of the items: T80.
That led to an exchange in cross examination in which Tracy for her part indicated that she could not “sell the items because they're part of her [mother’s] estate”.
Tracy indicated that she could not communicate directly with Mr Kosmin because “he will only take communication from my solicitor” then asserted that “Mr Kosmin has not been communicating with my solicitor for at least ‑ almost ten months, if not more”: T80.
Tracy stated “My brother and I had a discussion where we agreed to store her furniture until we decide what to do with it”: T80. On further questioning it appeared that no decision had been made as between Tracy and Stewart regarding sale of the furniture: T80.
Tracy agreed that she had not produced a list of the items currently in storage: T80. It was suggested to her that Mr Kosmin had written in December (2021) asking the questions about the whereabouts of the estate property and that he had had no response. Tracy indicated that she did not believe that Mr Kosmin had sent it to the right place and that Mr Kosmin had not written to her solicitor: T81.
The matter was taken up again by Mr Skinner on the second day of the hearing: T87-89. Whilst there appears that there were issues with letters being sent to the incorrect email address for Mr Williams (CB 680), other correspondence touching upon the inventory of property does appear to have been addressed to the correct email for Mr Williams (Mr Compton’s letter 1 December 2021: CB 681; letter from Mr Kosmin 13 December 2021: CB 686).
Tracy did not adduce in evidence any documents matching the description of “the relevant records regarding the storage units” referred to in Mr Williams email dated 8 September 2021.
In relation to the insurance claim for damage to the curtains, Tracy denied that she had made a claim for $7,000 for damage to curtains belonging to her mother on her behalf: T81.
There is in evidence a “remittance advice” from APIA dated 25 July 2020 directed to the deceased regarding payment of an insurance claim for curtains in the amount of $9,415.44: CB 690. The remittance advice states, “This amount has been credited to your nominated bank account”. That letter is dated at least five months after the deceased’s death. Mr Kosmin by letter dated 13 December 2021 provided the remittance advice to both the parties’ solicitors noting that the payment belonged to the estate and that unless he received details as to where the payment was banked, the executor would be obliged to make further enquiries of the insurance company “which will [obviously] incur additional costs”: CB 686.
On 14 August 2020, Jacques Kosmin wrote to Stewart’s then solicitor Ian Day (CB 670) noting

“We have written to Australian Pensioners Insurance Agency Pty Limited (APIA), requesting them to provide to us details of the account to which payment of $9,415.44 has been made on 25 July 2020. To date, we have not received a reply.”

There is no record of any amount of $9,415.44 appearing on or about 25 July 2020 in the statements for Tracy’s NAB Classic Banking account (Classic Banking account) and NAB iSaver account (iSaver account) (see Ex TFC-3 pages 18 and 55). However, there are no records produced by Tracy for her ANZ Access Advantage account (ANZ account) for the period covering July 2020, notwithstanding request for production of that material: CB 822.
In relation to the car, it does appear as if the deceased made a payment out of her St George portfolio cash management account on 24 June 2016 in the sum of $5,000 with an annotation “Hyundai” with a further amount coming out the following day of $600 also with the annotation “Hyundai”: see paragraph 3 and annexure “G” to Stewart’s affidavit affirmed 10 May 2022. Tracy was cross examined about the purchase of the car and asserted that the deceased had received from Tracy an amount of about $4,000 and may have put that in a different account: T97. There was a dispute about it.
Tracy accepted that it had been transferred into her name: T82. She claimed its value is approximately $2,000 “which is the whole value of the car which has been scratched to death by various people on the property and which is probably worth a lot less now”: T82.
Stewart was also cross examined regarding the car: T135-136. It was put to him that Tracy told him that she proposed that it be used for Isabel to be learning to drive. He responded “She mentioned she would have liked the car and I said that's a matter for the executor to decide. I would have not had any objections to it”: T136.
In light of the production by the parties after the hearing of the revised schedule Ex JS2, I enquired whether is it now agreed, that subject to the paragraph 17a-c items that the net distributable estate (in addition to the amounts of the interim distributions) is $1,550,057.38.
I noted that apart from paragraph 25 in Stewart’s outline of submissions dated 10 May 2022 (DS) there did not appear to be particular submissions made in relation to the above-mentioned three items in paragraph 17a-c.
I enquired whether the parties proposed to make any particular submissions in respect of those items. I asked the parties that if not, to advise if no determination is sought in respect of those items. I indicated that if so, any such submissions should be provided by 4pm on Thursday 2 June 2022.
Each of Stewart’s and Tracy’s counsel availed themselves of the opportunity to provide submissions.
Other than as follows, Mr Skinner indicated that he did not wish to make any submissions in respect of the three items in paragraph 17a-c.
Mr Skinner submitted (on this issue) that there is insufficient evidence to determine the issue of potential liability (of the disputed assets) and that ultimately, they will be a matter for the executor to pursue and determine.
He further submitted that as matters stand, Tracy has in her possession items of personalty belonging to the estate and has declined to provide an inventory. Mr Skinner submitted that the Court is simply not able to make findings as to whether the value of the disputed assets should be considered in determining the value of the estate: Stewart’s submissions 31 May 2022.
Tracy’s counsel by submissions (on this issue) dated 1 June 2022 stated:

“The Plaintiff agrees that there is insufficient evidence before the Court to determine the three items in question (i.e. storage fees, insurance proceeds and personal effects).
It is observed though that, if the First Defendant is not proposing on paying the storage fees, then the Court should proceed on the basis that the amount available for distribution is $1,564,557.38 (Mr Jacques Kosmin’s latest affidavit, para 17(a)). The figure of $1,550,057.38 referred to in Mr Kosmin’s affidavit at para 14 assumes that the storage expense of $14,500 has been paid from the estate, whereas the import of the Second Defendant’s submissions appears to be that it will not be paid.
It is further submitted that, in relation to the insurance claim, the Court should make a finding that the Second Defendant’s claim that insurance monies belonging to the estate were paid to the Plaintiff was not proven. The Second Defendant has maintained up to and including the hearing that it would prove that the Plaintiff received these funds (see for example the letter dated 28 April 2022 CB tab 39 page 818 at para 5(b)). There is, however, no evidence that she received any such payment. Where the Second Defendant maintained an allegation that the Plaintiff had received this sum, but he failed to prove the allegation, the consequence of the lack of evidence should be that the claim is rejected. The Court would be concerned with the suggestion implicit in the Second Defendant’s submission that the executor may embark on further processes after the hearing to pursue the alleged $9,415 insurance distribution, presumably at the expense of the estate (especially given that the executor has given sworn evidence to the Court as to what is available for distribution).”

The value of the disputed items is relatively minimal in light of the size of the estate.
A purpose of directing the parties to provide to the Court an agreed schedule of assets and liabilities and costs, is to facilitate the just, quick and cheap determination of the real issues in dispute and the proceedings: s 56 Civil Procedure Act 2005 (NSW).
There was no formal claim in the proceedings by the executor for recovery of the disputed assets nor any formal claim by Tracy for reimbursement from the estate for storage fees.
Whilst there was some cross examination of Tracy on the issues regarding the regarding storage fees, the insurance claim and the Hyundai Getz motor vehicle as I have noted above, there was not any cross examination of Stewart in respect of the items other than the car. Nor did Tracy’s counsel seek to cross examine the executor and Jacques Kosmin regarding the items.
With respect to the figure of $14,500 for Tracy’s claim for reimbursement of storage expenses, there does not appear to be correspondence resolving the issue. There are no receipts in evidence for the claims and no evidence supporting the reasonableness of the figure.
Regarding Tracy’s 1 June 2022 submission, I do not think it is correct to say that the executor is not proposing on paying the storage fees. The executor was not cross-examined about that.
In circumstances in which, each parties’ counsel agreed in post hearing submissions that there is insufficient evidence before the Court to determine the three items in question (i.e. storage fees, insurance proceeds and personal effects), I do not propose to proceed to resolve those issues by making findings in particular the findings urged by Tracy’s counsel.
Apart from the submissions of all counsel that there was insufficient evidence before the Court to resolve the issues, there were other impediments to findings urged by Tracy’s counsel.
In relation to the insurance claim, in circumstances in which there were complaints made by Stewart regarding some lack of production of Tracy’s bank accounts I do not regard it as being appropriate to make a finding that Stewart’s claim that insurance monies belonging to the estate were paid to Tracy was “not proven”, if what is meant by that, that I should determine the claim. I say more about Tracy’s lack of production in relation to bank accounts below.
The total value of the disputed items is not entirely clear, but in any event not significant. The paragraph 17a&b items are asserted as having a value to the extent of $23,915 apart from any realisable value of the deceased’s personal items and household goods.
For the above reasons, I am not prepared to proceed on the basis that the net value of the deceased estate is so significantly different than the net figure of $1,550,057.38, as to have any material difference for the necessary determination of Tracy’s claim for provision.

Costs

Ex JS1 provided an estimate of the costs of the parties to the proceedings. This was the least in part revised in Ex JS2. Below are the figures from Ex JS2.
Tracy’s costs as at 5 April 2022 were $124,861 (on an indemnity basis) and $87,860 (on the ordinary basis). There was an estimate of further costs up to and including completion of a two day hearing of $60,000.
Costs of the executor as at 26 April 2022 were $31,727 (paid) with unpaid additional costs of $6,533.
Stewart’s costs as at 6 April 2022 were in the sum (on an indemnity basis) of $25,206.50 with an estimate of further costs of $34,237.50.
Tracy has paid an amount of $16,059 on account of her costs and disbursements.
The executor’s costs that have been paid to date have been paid out of the estate. Stewart’s costs that have been paid to date been paid from his own funds and not out of the estate.
Ex JS2 contained an endnote as follows:

“The plaintiff and the second defendant are agreed that the assets of the estate (other than the real estate the subject of cl. 3(a) of the Will) will for practical purposes be fully exhausted by payment of the executor’s costs plus either or both of the costs of Stewart Cahn and Tracy Cahn as are ultimately ordered to be paid from the estate. Accordingly, for present purposes, the parties agree that cl 3(b) of the Will is of no present relevance and that all of the assets to be distributed to beneficiaries are (subject to any orders made in these proceedings) to be divided 70% in favour of Steward Cahn and 30% in favour of Tracy Cahn.”

The deceased’s Wills

The deceased made a number of Wills.
In a Will dated 25 February 1991 the deceased appointed Michael as executor and in the event that he survived her left him the whole of her estate, with the exception of items of jewellery and personal adornment which were gifted to Tracy.
In the event that Michael did not survive her, the deceased appointed a solicitor Gary Kosmin as executor and gave:

an interest in a unit at Ocean Avenue Double Bay (the Ocean Avenue unit), jewellery and items of personal adornment to Tracy;

an interest in two properties in Riley Street East Sydney to Stewart; and the residue to Tracy and Stewart in equal shares as joint tenants.

On 18 May 2011 the deceased made a further Will by which she appointed Gary Kosmin as executor and gave:

her interest in unit 2 to Stewart; and

the residue to Tracy and Stewart as tenants in common in equal shares.

On 13 November 2013 the deceased made her final Will by which she appointed Gary Kosmin as executor.
The substance of the gifts under that Will provided for Stewart to have the sole benefit and use of unit 2, and for both Stewart and Tracy to have equal shares as tenants in common of the benefit and use of unit 1.
The Will provided for sale of the deceased’s interest in the Dumaresq units and after payment of legal fees and real estate commission for the balance to be divided 70% to Stewart and 30% to Tracy.
The deceased gave the residue of her estate to Tracy and Stewart as tenants in common in equal shares.
On 15 July 2020 probate of the 13 November 2013 Will was granted to Gary Kosmin.
In relation to Tracy’s entitlement under the deceased’s Will, Tracy’s counsel had in pre-trial written outline of submissions dated 9 May 2022 (PS) made a calculation as to Tracy’s entitlement under the Will in light of the size of the estate based on her percentage entitlement from the sale of the Dumaresq units and an amount from the deceased’s cash resources: PS [47].
The pre-trial submissions on behalf of Tracy in relation to what provision ought to be made for her whilst at one point indicated that she was not seeking an amount greater than half the available estate (PS [50]), at another point claimed that an order distributing to her 50% of the available estate ought to be made: PS [55].
When I sought during the hearing to understand what was meant by the submission that Tracy does not seeking an amount greater than half of the available estate, there was discussion about the figures: T147-148.
However, in light of the further affidavit of Jacques Kosmin sworn 27 May 2022 the figures that had been advanced by Tracy’s counsel during the hearing had to be revised.
As I understand it, the position is now set out in an email dated 31 May 2022, received from Tracy’s junior counsel and that Mr Skinner agrees with that position, subject to the issue regarding the disputed assets that I have noted above. I have marked that email MFI 3.
Based on the net distributable estate of $1,550,057 it is agreed that Tracy’s entitlement under the Will (apart from the existing proceedings) is approximately $1,215,017, comprising the amount of $750,000 of the interim distribution and an amount of approximately $465,017 (being 30% of the balance remaining).
Whilst the earlier calculation from Tracy’s counsel (PS [47]) had included a component of cash as being part of Tracy’s entitlement, the parties now agree that there are no cash resources in the residue of the estate (clause 3(b) of the Will) and the only cash available for distribution (leaving aside the disputed assets) is the remaining net proceeds of sale of the Dumaresq units: Ex JS2.
Thus, in light of the revised figures, in MFI 3 Tracy’s counsel did a recalculation of the amount referenced in PS [55]. The recalculation was a figure of approximately $2,025,029.
However, despite the revised figure Tracy counsel have indicated that they do not propose to argue that the maximum entitlement for Tracy should exceed an amount of $1,901,352.50: MFI 3.

These proceedings

On 9 February 2021 Tracy filed the summons in these proceedings (just within time) naming Gary Kosmin in his capacity as executor as the first defendant.
The summons sought a family provision order to which I have referred and in addition an order restraining the executor from dealing with the estate of the deceased pending determination of the family provision claim. The summons additionally sought payment of costs of the application.
On 5 April 2021 Stewart filed a summons in proceedings 2021/93277 seeking a family provision order for additional provision out of the deceased’s estate. That summons was abandoned and dismissed by consent on 1 September 2021, including a consent costs order that Stewart pay a sum of approximately $16,000 to the estate, which has been paid: T138, 142-143.
On 1 September 2021 Tracy was granted leave to file and serve an amended summons joining Stewart as a second defendant. Further orders were made pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 7.8 to permit Stewart to have the conduct of the proceedings on behalf of the deceased’s estate and noting that Gary Kosmin as executor agreed to be bound by any order entered or made in the proceedings.
The orders further provided for the costs of the executor and in particular costs in relation to the filing and serving of prescribed affidavits to be paid out of the estate on the indemnity basis.
A specific order was made directing that the costs of Stewart acting on behalf of the estate (and notional estate of the deceased in the conduct of the hearing) be reserved. The order appears to have been framed in that form on the basis that Stewart had sought to be joined in order to protect his own interests under the deceased’s Will.
On some occasions in family provision proceedings procedural arrangements are made for an executor to play, for want of better description, a neutral role in the proceedings by filing and serving affidavits prescribed by the Practice Note SC Eq 7 or as otherwise directed by the Court and otherwise playing a limited or observational role in the proceedings and leaving the substantive defence of the proceedings to a beneficiary who is particularly interested in the outcome: see for example Mitchell v Hamilton [2005] NSWSC 1097 at [41] per Macready M.
On hearing of these proceedings consequent upon the order made in September 2021 Gary Kosmin did not appear at the hearing or otherwise provide submissions. The defence of Tracy’s claim was left to Stewart as Second Defendant.

Evidence

The affidavit evidence in Tracy’s case included five affidavits affirmed by her respectively on 9 February 2021, 31 March 2021, 6 September 2021, 2 May 2022 and 17 May 2022. There were two exhibits TFC-1 & TFC-2 to the 2 May 2022 affidavit and another exhibit TFC-3 to the 17 May 2022 affidavit. Tracy was cross-examined as noted below.
There were two affidavits read from Tracy’s solicitor Paul Williams. The first, affirmed on 5 April 2022 related to costs. The second, affirmed on 3 May 2022 related to the circumstances of an interim distribution of the estate made by the executor. Mr Williams was not cross-examined.
Stewart read in the proceedings the executor’s affidavits, being affidavits in accordance with the provisions of the Practice Note and updating affidavits. The affidavits included four affidavits from the executor Gary Kosmin, three of which were sworn on 12 April 2021 (paragraph 9.1, 9.3 & 9.4 Practice Note SC Eq 7) and an updating 9.1 affidavit sworn 8 September 2021. There were four affidavits sworn by Jacques Kosmin, the first two dated respectively 9 April 2021 and 7 April 2022 relating to the costs of the proceedings and the third was dated 26 April 2022 being an updating 9.1 affidavit. The fourth affidavit being the Kosmin correcting affidavit.
Neither Gary Kosmin nor Jacques Kosmin were cross-examined.
The affidavit evidence in Stewart’s case included three affidavits affirmed by him. The first affidavit affirmed 5 April 2021 had been filed by Stewart in the proceedings brought by him for family provision relief (2021/93277).
There was no objection to Stewart having leave to adduce that affidavit as evidence in these proceedings. An exhibit SBC-1 to that affidavit was tendered. The other two affidavits relied upon by Stewart were affirmed on 6 April 2022 and 10 May 2022. Two exhibits SBC-1 & SBC-2 to the 6 April 2022 affidavit were tendered.
Stewart was cross-examined as noted below.
There were two additional affidavits read in Stewart’s case being an affidavit of costs from his solicitor David Crompton affirmed on 6 April 2022 and an affidavit from Melissa Anne Dean (Ms Dean) sworn on 10 May 2022.
Neither Mr Crompton nor Ms Dean were cross-examined.
Various documents were tendered by Tracy and Stewart, and became exhibits in the proceedings (in some cases subject to limitations on the use of the evidence).

Credit

Tracy was at times somewhat combative and argumentative in giving her evidence. At times she volunteered information beyond the remit of the question. A number of examples of these types of responses emerged from her cross examination:

T38:

“Q. .. At the end of the day when you were made bankrupt the property was sold, wasn't it?
A. Correct.
Q. So, that was the logical end to the body corporate getting paid, wasn't it?
A. I'm not sure what we're trying to establish here. I don't understand your line of questioning.” (My emphasis)

T44:

“Q. So, there were no steps taken by you to actively market the property for sale at any stage, were there?
A. Well, given that we were trying to go through other means we hadn't quite reached that stage yet. There was ‑ that doesn't say anything about intent. It just means we hadn't got up to that stage yet. We were trying other means of doing it.
Q. That stage was available to you, I suggest, as early as 2018?
A. It may have been available.
Q. That is, to place the property on the market?
A. Mm‑hmm.
Q. You just didn't do it, did you?
A. I don't agree with your line of questioning so I'm not going to answer that.” (My emphasis)

T76-77:

“Q. So it's open ended as to how many trips at $10,000 you would like to spend for Isabel to travel to the United States?
A. It's open ended as to the amount of time she wishes to see her father, and I don't see why any restriction should be put on that whatsoever. Given that she may only see him once a year.
Q. Isn't one of the restrictions whether you've got the money or not?
A. I'm not going to answer that question. (My emphasis)
..
I find it insulting that you're suggesting that my daughter should not see her father. I mean, sorry, but I can't continue with this line of questioning. It's very upsetting for me and I'm just going to - I'm just going to stop right now. I can't. I can't go on with somebody asking me questions that intimate that my child shouldn't see her father. I think it's unreasonable, it's unethical and it's amoral and I refuse to answer any more questions and I'd like to recess right now.” (My emphasis)

T80-81:

“.. I just think I'm not breaking the law and I can't afford to break anymore laws or do anything that Mr Kosmin deems I can't. I've been given no instruction as to what to do with the furniture, end of story. You could say the same for the other side. It is not my decision. It's a joint or mutual decision. I'm sorry if that upsets you.” (My emphasis)

T98:

“Q. Has your daughter had Facetime contact with her father?
A. Of course, she has.
Q. You don't refer to that anywhere in your evidence, do you?
A. I don't refer to every single second of my life. You can't ‑ I mean, a phone call could be Facetime, it could be a video call. It could be anything. I mean, I don't see the relevance of that question or the point, to be honest.” (My emphasis)

Tracy is no stranger to litigation and as noted below, the evidence in the proceedings revealed snippets of information relating to a variety of proceedings in the Local Court involving neighbours of Tracy and in the New South Wales Civil and Administrative Tribunal (NCAT) involving strata disputes and also bankruptcy proceedings.
In her evidence, Tracy revealed a degree of hostility and anger regarding people she had conflict with.
For example, in relation to questioning of Tracy regarding NCAT proceedings, the exchange in cross-examination included the following (T92-93):

“Q. The proceedings in NCAT to which you refer were proceedings you and the body corporate relating to a dog, were they not?
A. No. There was different proceedings relating to their ‑ their biased taking me to Court significant times for bankruptcy for ridiculous sums of money and then throwing lawyers' fees at me. So, there was more than one NCAT proceeding and at the time, the strata, the owners of the strata ‑ and this is incredibly well‑documented and I could even bring a witness in ‑ the owners of the strata were asked to pay ‑ pay for their own legal fees because there were ‑ there was not a general agreement or a by‑law made about that dog case and, so, it was really up to a couple of corrupt members to pay for it themselves, but they managed to get off that, too. So, if ‑ you know. So, there is certainly another side to this story.” (My emphasis)

In particular, Tracy viewed the terms of the deceased final Will as being unfair and made allegations that her mother was manipulated by both Stewart and Jacques Kosmin. This included the following exchanges in cross-examination:

T99:

“Q. You now know the contents of your mother's 2013 will?
A. Yes.
Q. And you know that your mother specifically refers to a bequest to you of the Ocean Avenue property, doesn't she?
A. That was specifically given to me in my father's will along with the two properties that were given to my brother in my father's will. Now suddenly those two properties disappeared into the ether and all of a sudden the only property that was given was mine which should have been given to me at the age of 24, but it was used in their business to support their mortgages and their costs and their funds, so I don't accept that my mother willingly gave over 30% to myself. In fact, at the end of her life she wanted to give Isabel 30%, me 30% and her son 30% because she was very well of the fact that she was manipulated into that position. (My emphasis)
Q. I won't deal with that answer, your Honour, as being non‑responsive.
A. I don't care if you want to deal with it or not, to be quite honest.” (My emphasis)

T101-102:

“Q. You understood from the terms of your mother's will that she was making an adjustment between you and your brother to take into account the fact that you had already been gifted the property in Ocean Avenue?
A. That's incorrect.
Q. Well, I'm sorry, madam
A. Well, you asked me. That's my answer. Incorrect.
..
Q. Can I suggest to you, finally, that your mother's attempt in writing her will in 2013 was to achieve equality between you and your brother subject to adjustment due to the fact you had been given the Ocean Avenue property?
A. Not all because that was never equal. I was ‑ I never had as much as my brother did. Ever. And I was given the property as I should have been in the beginning and there would have been no argument had my father kept his promise and his will been allowed.
Q. Finally‑‑
A. My mother was completely manipulated. She would never had done that to me or my daughter. (My emphasis)

Q. You've not advanced one skerrick of evidence in these proceedings to suggest your mother was manipulated, have you?
A. I don't know. Read the ‑ manipulation is very hard to pinpoint if you know anything about narcissistic emotional abuse. It's not always obvious. In fact I have produced my father's will which shows my mother was incorrect in her assumptions. My mother never had a good head for finances. My brother considered that she owed him when she owed him nothing. He acted like it was his house. So, you're incorrect in that assumption, sir. This whole thing's a travesty of justice. My poor dead mother would roll over in her grave if she saw this, as would my father. He never would have divided things unequally. It's disgusting. I don't see any psychiatric attempt at looking at what's wrong with my brother. (My emphasis)
Q. You recall yesterday that I referred you to a letter from Mr Kosmin written to your mother recording the fact that at the outset of writing the will in 2013 you alleged undue influence. You recall that letter?
A. Yes, I do recall that letter. Which I've just seen for the first time. He didn't send it to me and I have no record of my mother's letters. Mr Kosmin could have been covering ‑ is covering for himself. I can see the undue influence. Every single person who's ever known or met my parents could see the undue influence. And I don't believe Mr Kosmin acted without impropriety. (My emphasis)
Q. So, Mr Kosmin you accuse of impropriety?
A. Absolutely.” (My emphasis)

In relation to relatively uncontroversial matters, on the whole, I accept that Tracy attempted to give a truthful account in her evidence.
However, where the questioning focused upon aspects of her disputes with others, in particular strata disputes, I doubted her account was objective.
I deal below with submissions regarding Stewart’s involvement in respect of the deceased’s last Will. Suffice to say, I reject any suggestion that Stewart manipulated the deceased in respect of her Will.
I reject Tracy’s evidence in respect of any impropriety of Jacques Kosmin in respect of the deceased’s last Will. There was no credible evidence of any impropriety in that respect.
One main concern that I had regarding Tracy’s evidence, and it focuses upon a fairly critical matter, was in relation to the accuracy of her estimation of her expenses and lack of clarify regarding the income available to her - particularly having regard to relatively contemporaneous documentary materials in Ex 2D2 being the documents produced by the Emanuel School and her lack of production of recent income tax returns.
I refer to this more below.
Stewart, in contrast to Tracy, gave evidence in a calm, deliberate and considered way.
Other than as I comment below regarding some aspects of his evidence, I accept that Stewart attempted to give a truthful account in his evidence.

Early background details

The following background details are not in any serious dispute.
The deceased was born in Paris, France. Her parents were killed in the holocaust during World War II. The deceased was raised as an orphan by relatives in London.
Michael’s mother passed away when he was very young and his father placed him in a Jewish orphanage in London.
Michael joined the British Army and saw some service, leaving the army in the late 1940s. He worked a variety of jobs including as a London cabbie, a dispatcher for the taxis and then as a book/magazine publisher.
In 1950, the deceased moved into a flat with her elder brother Sidney in London. She completed an apprenticeship as a hairdresser, which was her vocation.
The deceased and Michael met through mutual friends and married in July 1960 in London.
Both Tracy and Stewart were born in London, and they lived their early childhood there.
In about in 1968 the family migrated to Australia: CB 7, 390 (another reference to 1966 seems to be mistaken: CB 391). They settled in Sydney, residing initially in a unit in Old South Head Road Rose Bay.
Michael undertook a variety of jobs and moved into marketing and was also a magazine publisher. The deceased did not work after the move to Australia other than part time for Michael when needed.
Stewart indicates the family moved in the late 1960s and early 1970s to live in a number of locations in Vaucluse being initially a duplex in Mons Avenue, then a unit in Diamond Bay Road.
From about 1974 the family moved to another unit in Diamond Bay Road (Diamond Bay unit).

Some details regarding Tracy and Stewart

Tracy was educated at Rose Bay Primary School and then went to Dover Heights Girls High School for four years and finished her last two years of high school at Moriah School.
Stewart attended Rose Bay Public School. He later attended high school but did not finish high school or attend university.
Each of Tracy and Stewart provided evidence of their relationship with the deceased growing up. There are a number of differences in their description of the relationships although both of them indicate that their relationship with their mother was somewhat difficult. Tracy noted this was due to the fact that her mother was always agitated and anxious especially in Tracy’s younger years. Each in somewhat different ways state that their relationship with the deceased improved after they had left home.
After Stewart left school in 1979 he worked initially as an office junior for International Artists it seems for approximately 18 months.
At that point he commenced working for his father’s company Showcase Publications for approximately 6 months as an assistant and then as a room service waiter at Noah’s Hotel in North Sydney for approximately 6 to 9 months.
It was during this period that he suffered a knee injury whilst playing football.
In about 1981 Stewart moved out of home.
From 1981 until August 1986 Stewart worked for Donald Knight (Mr Knight) in Paddington. His role was to sell advertising space in publications. He was paid commission only and provided his services as a contractor through a company Stewart Cahn Enterprises Pty Ltd (SCE). The job was suggested to him by his father who had previously worked with Mr Knight.
In about 1983 while riding a push bike to work Stewart was knocked off the bike by a bus and ultimately received compensation of $12,000 from State Transit.
Tracy attended the University of New South Wales from 1980 and graduated with a Bachelor of Arts (Psychology) (Honours) in 1983.
She took a gap year in 1984 and then returned to University of New South Wales in 1985 to undertake research and tutoring in psychology.
In June 1984 or thereabouts Stewart purchased a unit at Beach Road Bondi for $60,000 (Bondi unit). The purchase was funded by a loan of $55,000 from the ANZ Bank (ANZ).
Stewart was involved in a relationship with Ms Dean for approximately 10 years from 1985 until the mid 1990s. She deposed to the fact that Stewart and she had lived together in a domestic relationship after the early parts of that period.

Stewart’s business dealings

In relation to Stewart’s business dealings and property purchases from the mid 1980s, each of Tracy and Stewart gave an account in their affidavits regarding this. There was also documentary evidence regarding the dealings. What I set out below is taken from the affidavit and testimonial evidence. In particular I have placed reliance upon the contemporaneous documentary material.
The main dispute regarding this aspect of the background history focused upon Stewart’s financial dealings with his parents and the extent of the assistance he received from them.
In August 1986 Stewart had dealings with Alan Hyman (Mr Hyman) (who was working with Stewart for Mr Knight).
By deed made on 11 August 1986, Stewart through SCE and Mr Hyman through Alan Hyman Enterprises Pty Ltd (AHE) purchased from Mr Knight trading as Don Knight & Associates a publishing business (essentially the rights to publish the publications they had been selling to customers for Mr Knight on commission) for $450,000. The purchase price was to be paid as the sum of $12,500 on the execution of the deed, a further sum of $12,500 on expiration of 14 days from the date of the deed, with the balance to be paid over a period of 4 years from the date of the deed.
The price of $450,000 was later reduced by about $40,000, by agreement with Mr Knight, in consequence of some publications not transferring: CB 397. When Stewart informed his father regarding the agreement to purchase the rights from Mr Knight, his father arranged for Stewart to speak with a contact at the ANZ regarding establishing an overdraft to cover expenses. His father agreed to guarantee an overdraft of $3,000 which was granted.
According to Stewart, within a short time of commencing trade the business repaid the amount of the overdraft and his father was never called upon to pay anything to the ANZ in respect of that overdraft.
In 1987 Tracy commenced part time at the University of New South Wales studying a Masters of Commerce degree in Marketing and Human Resource Management.
After graduating Tracy worked in the human resources area and consulted to large corporations for a number of years.
In about 1987 Michael and the deceased sold the Diamond Bay unit and purchased the Dumaresq Units.
Each of the units were two bedroom units.
The parents moved into unit 1 which was the larger of the two units. Additionally, they closed off the door of a second bedroom of unit 2 and opened the door from that bedroom into unit 1, making unit 2 a one bedroom unit.
Tracy claims that her parents supported and assisted Stewart in a number of ways. Stewart began to work in Michael’s business.
In 1987 Michael, according to Tracy, purchased the Ocean Avenue unit, which was a two-bedroom unit for $74,000: CB 9-10.
There were some discussions between Tracy and her father regarding the Ocean Avenue unit. Tracy states that she was told by her father that the Ocean Avenue unit was in her name. However, Tracy further states that the Ocean Avenue unit was actually held in both parents’ names (CB 10), which appears supported by the fact that in both parents’ Wills dated in February 1991, they gifted their interest in the Ocean Avenue unit to Tracy: CB 260, 715.
Whether the Ocean Avenue unit was held by the parents in joint tenancy or as tenants in common is not clear. However, what is clear is that title to the Ocean Avenue unit was transferred into the deceased’s name consequent upon Michael’s death in 2000: CB 10. After the 1987 purchase of the Ocean Avenue unit Tracy moved out of the family home and into the Ocean Avenue unit where she resided for about 25 years (until about 2012).
In about mid 1988 Mr Hyman told Stewart that he had lost interest in the business and asked Stewart whether he wished to buy him out, which he did.
At about the time that Stewart was negotiating to buy Mr Hyman out of the joint venture he spoke with his father and enquired whether his father wished to take over Mr Hyman’s share so that they could run the business as equal partners. His father agreed to this: CB 399.
Sometime prior to Mr Hyman indicating to Stewart that he wished to sell his interest in the venture, Mr Hyman and Stewart bought two terraces in Riley Street, Darlinghurst.
Michael not only paid funds to purchase Mr Hyman’s share of the business but also bought out Mr Hyman’s share of the Riley Street properties at the same time: CB 399.
On 14 May 1988 Stewart and Mr Hyman (or their companies) entered into a consulting agreement with Constable Care Children Safety Program Ltd in relation to certain promotions in Hong Kong.
On 23 August 1988 Stewart, Mr Hyman and their companies entered into a deed to terminate the partnership which deed also provided for AHE to sell its one half share in the partnership to SCE for $50,000.
At about the same time in August 1988, Stewart purchased a property at Tamarama for $650,000 (Tamarama property): CB 397, 515, 631. His bank manager assisted with organising the loan facility (interest only commercial bills) for $525,000. Stewart sold the Bondi unit for $169,000 and used the net proceeds of sale to enable him to complete the purchase of the Tamarama property: CB 398.
Stewart initially rented out the Tamarama property, the rental of which largely covered the loan payments, and then later in 1991 moved in with Ms Dean to the Tamarama property: CB 398.
In his affidavit Stewart stated that he had no recollection of asking his parents to provide any financial assistance in respect of the purchase of that property or for servicing the borrowings: CB 398. Stewart was cross examined regarding this.
When Stewart was challenged in cross examination regarding the assistance of his parents to acquire the Tamarama property, he stated that “They provided no direct financial assistance”. When asked whether the provision of a second registered mortgage was indirect financial assistance, he stated “No, I don't believe so.”: T119.
He was then challenged about his disbelief that provision of a mortgage to support a facility provided to him is indirect financial assistance, in the context of his being a property manager for a real estate company. He stated that he did not understand the question: T119. I asked a number of questions regarding the facility.
It appears clear from the contemporaneous ANZ documents (CB 32-43) that Michael and the deceased did provide in support of Stewart’s borrowings, second registered guarantee mortgage over the Dumaresq units, a guarantee and a letter of support: CB 33.
Stewart’s answer about indirect financial assistance perhaps reflected some lack of full appreciation of the support or benefit that was provided by his parents to enable funds to be borrowed.
Although it is not entirely clear from the evidence it would appear that in the process of the refinancing in perhaps 2001 or in any event by 2010 the deceased had become directly liable for the debt.

Michael’s and Stewart’s business involvement

In May 1990 Stewart’s partnership with his father was formalised when they formed SMC Media Services Pty Limited (SMC) to conduct business. (“SMC” stood for Stewart and Michael Cahn): CB 399.
An investigation report dated 19 April 2000 from an administrator later appointed to SMC states that on 17 May 1990 SMC incorporated as a trustee company for the Advertising Sales Trust. The report goes on to indicate that on 26 June 1990 it was acquired [by Michael and Stewart] as a shelf company to trade the business previously carried on by SCE: CB 534.
On 26 June 1990 Stewart and his father were appointed as directors of SMC each holding 50 of the 100 shares in the company.
At that point the business operated at Elizabeth Street Surry Hills.
Stewart states that they used a separate company Adrema Pty Limited (Adrema), which traded as “National Sports Marketing” to operate the production functions of the business: CB 399.
The April 2000 investigation report (see below), suggests that SMC was the registered proprietor of the business name “National Sports Marketing” and traded under this name for the purpose of sports related promotional marketing: CB 534. Notwithstanding that, it seems that at least by November 1999 the business name “National Sports Marketing” was, according to Stewart, exclusively utilised by Adrema: CB 534.
Apart from SMC, SCE and Adrema, there was also a partnership operated as “SB Cahn & M Cahn”.
SCE operated as a marketing, public relations promotions and sponsorship coordinator, primarily involved in telemarketing and promotions by way of promotional products such as T shirts, books, badges and the like: CB 534.
The business was often marketed through the character “Constable Care” visiting schools and hospitals teaching child safety and raising brand awareness through the distribution of sponsored books and T shirts: CB 534.
Stewart claimed that the title to the character “Constable Care” resided with him personally and was licensed to the company for its use: CB 534.
In or about June 1990 Michael and Stewart applied to the ANZ for a revision of their loan facilities. The details of the application and indicative terms and conditions are set out in a letter from the ANZ to Michael and Stewart dated 15 June 1990 together with annexures: CB 32-43.
One of the facilities provided was the existing loan of $525,000 provided by way of commercial bill to Stewart personally.
The security for Stewart’s commercial bill facility included a first registered mortgage over the Tamarama property and a second “Registered Guarantee mortgage” over the Dumaresq units. Stewart’s parents provided a guarantee in support of that borrowing limited to a principal sum of $150,000 plus interest and bank fees.
A particular aspect of the borrowings was a commercial bill in the sum of $380,000 provided to SCE and/or the partnership.
As at June 1990 the guarantee provided by Michael and the deceased for the ANZ borrowings was limited to principal of $150,000.00 plus interest: T 116.
During 1989-1991 Tracy moved to Europe where she lived and worked in London and Paris.
In late 1991 Tracy returned to Sydney and worked in human resource management for Price Waterhouse and then Nestle.
For approximately 3.5 years in total during her relationship with Stewart Ms Dean was employed by SMC and also in a business run by Stewart called “Community Screen and Print” (CSP). Tracy says that she did not work at SMC and was not paid a salary by it: CB 143. In her affidavit Ms Dean recounts her observations of Tracy’s attendance at the Newtown premises of CSP. Ms Dean was not cross examined. I accept Ms Dean’s account that Tracy attended at the premises whether she was paid for doing so or not.
In 1994 SMC secured a significant contract to supply promotional materials and staging of events for the NSW Fire Brigade. That rapid expansion caused some cash flow issues which Stewart and his father were managing. They sold the Riley Street properties at about this time.
In about 1994 the Australia Taxation Office (ATO), according to Stewart, ruled that all of the contractors that provided sale services to SMC, who had been paid commissions on invoices, were treated as employees. This resulted in SMC being assessed to a very significant PAYE tax liability. Stewart was not able to recall the precise amount but suggested that it was in the order of $800,000 or $900,000.
Stewart had a number of discussions with his father and an accountant Bob Lowy regarding this.
Ultimately the accountants were able to negotiate an arrangement with the ATO pursuant to which the ATO agreed the liability could be repaid by an initial lump sum and monthly instalments until the balance of it was repaid.
On 25 October 1994 Stewart sold the Tamarama Property for $945,000.00 (CB 632) and moved to a rented unit in Bondi: CB 401.
After repaying the ANZ Loan facility he was left with an amount in the order of $420,000 (or more) which he paid to the ATO: CB 401.
The arrangement with the ATO required SMC to pay $6,000.00 per month to the ATO. SMC met those payments until some point in early 2000: CB 401; T120.
In 1995 Tracy returned to the University of New South Wales part time to undertake her Masters in Psychology, graduating in 1999. She worked in human resources for Morgan & Banks part time, where she did both recruitment and psychological testing.
Stewart states that in 1996 the stress resulting from the financial difficulties led to the breakdown of his relationship with his then partner Ms Dean who left him.
Later in 1996, or thereabouts, as noted above, Stewart commenced a new relationship with Sally and their child James was born in August 1997.
On 27 June 1997 Michael ceased to be a director of SMC (CB 535), some two and a half years before his death. Michael’s resignation was consequent upon a recommendation by the accountant Bob Lowy.

Following Michael’s resignation as a director he continued to hold his shares in SMC and he continued to work in the business coming into the office daily until he became unable to work approximately three to four months before he died in January 2000.
On or about 30 June 1999 the loan facility from the ANZ was refinanced through the National Australia Bank Ltd (NAB): CB 524, 527, 535.
The NAB’s security for the facilities of SMC included a registered mortgage, debenture over all the company’s assets and undertaking, and a guarantee an indemnity given by Michael, the deceased and Stewart and a first registered mortgage given by Stewart’s parents over their residential property: CB 527.

Michael’s death

Michael died, after a short hospitalisation, due to chronic lymphatic leukemia: CB 393.
Consequent upon Michael’s death in 2000 his Will (dated 12 February 1991) appointed the deceased as executrix and left the whole of his estate to the deceased.
Stewart in his affidavit evidence stated that his father did not leave a Will: CB 393. However, it became clear in cross examination that in the course of preparation of the proceedings he became aware that his father had made a Will in 1991: T128.
Michael’s Will dated 12 February 1991 formed part of Ex TFC-1: CB 260-263. Under that Will his estate was left to the deceased. A consequence of that was that the deceased received whatever interest or share Michael had in Michael’s business interests with Stewart.
Precisely what the deceased’s received from Michael’s estate is not clearly disclosed in the evidence. There is no copy of any grant of probate or inventory of property regarding Michael’s Will or estate in evidence.
Nonetheless, some details emerged in the evidence.
Upon Michael’s death in 2000 Stewart made arrangements with the funeral directors to pay for his funeral. Funeral directors invoiced him for the cost of the funeral ($4,375). At the time Stewart did not have the funds available to pay for the invoice and ultimately the funeral directors commenced proceedings and obtained a judgment against Stewart. Stewart having confessed to the claim, sought and was granted leave to pay the debt by instalments: CB 627.
Tracy claims Stewart took Michael’s 1968 Mercedes after their father passed away: CB 144.
Tracy also states that when her father died he had approximately $35,000 in an account and that her mother had other “accountants” (sic) which shortly after her father’s death had in excess of $50,000: CB 16.
Michael at least held an interest with the deceased in the Ocean Avenue unit at the time of his death which, subject to the nature of the holding, was either transferred to the deceased upon Michael’s death pursuant to his Will or was received by the deceased as a result of her surviving Michael.
Subsequently, the deceased gifted the Ocean Avenue unit to Tracy in 2008.

Stewart’s financial difficulties

Within months of Michael’s death at the end of January 2000 the businesses that had been operated by Stewart and his father got into financial difficulty (or perhaps existing difficulties came to a head).
On 29 March 2000 Stewart, who was a director of SMC appointed Ron Dean-Willcocks as voluntary administrator of SMC.
The company was trading at Little Collins Street Surry Hills. The premises were leased pursuant to a lease agreement which was proposed to be assigned to Adrema. The company’s assets were secured by a fixed and floating charge in favour of the NAB. The investigator’s report dated 19 April 2000 refers, as I have noted above to there being an issue regarding the intellectual property “Constable Care”, which Stewart had advised was held by him personally: CB 534.
The investigator’s report dated 19 April 2000 indicates that Stewart had claimed that the financial difficulties may be attributed to “Aggressive recovery procedures by the ATO”: CB 535.
As at the date of the appointment of the administrator the net asset deficiency was in the order of $903,024: CB 538, 545.
By the time SMC was put into voluntary administration the amount for which the deceased was contingently liable as guarantor had risen to about $179,000: T121-122.
Shortly after the administrators were appointed to SMC in April 2000 Stewart had a conversation with the deceased. The conversation is set out in paragraph 120 of his affidavit at CB 402-403:

“Me:    One of the reasons I called the administrators in is because I couldn't take the stress anymore. Trying to run the business and continue to pay the mortgage on for this property and have enough money to live just got too much. I already paid more than my share of the tax debt when I sold Tamarama. Dad was supposed to be looking after the remainder of the debt and making up to me what I had lost.
Mum:    What the fuck are you talking about?
Me:    I told you. The deal I had with Dad when I sold Tamarama was that he would make it up to me and get me another house near the beach. And, if he could not do that, he would give me the $400,000 I paid to the tax office from his estate.
Mum:    How can that happen? This is my house.
Me:    That's what Dad promised me. The accountant says I should be claiming from Dad's estate. And its worse. Now that the business is no more, the mortgage over this house will need to be paid or the bank will sell it.
Mum:    I cant afford to be paying a bank.
Me:    Mum, you have to face realities. Dad always kept these things away from you but he is no longer hear [sic] to do that. So you will need to accept the debt owing to the bank is yours not mine – I have well and truly paid my share.
Mum:    I cant understand how this could be. What are we going to do?
Me:    If you acknowledge that the bank debt is yours, not mine, and agree to give me unit 2 out of your estate first before Tracy and I divide the rest, I will live with that and not claim against Dad's estate.
Mum:    That's fair. Done.
Me:    In that case, I wont make a claim, and to help, I do my best to pay the bank for the moment until we know what is going on with the business. But you have to make a will – don't leave me holding the bag like dad did.”

The conversation was admitted into evidence subject to a limitation under s 136 Evidence Act 1995 (NSW), limiting the effect of the evidence to be proof of the words spoken and not as to the truth of their contents.
Stewart was cross examined regarding the conversation: T124.
It was put to Stewart that as a result of saying to the deceased “You will need to accept the debt owing to the bank is yours not mine” that she agreed to become directly liable as a borrower rather than merely contingently liable as a guarantor. Stewart responded that “She made the decision”: T124.
Following further questioning it appeared that Stewart’s rationale for his approach to, and conversation with, the deceased was that he regarded the total debt of SMC that had to be repaid to the ATO as being his and his father’s, for which he had contributed to from the proceeds of a sale of the Tamarama property “well in excess of my share of the debt”: T125.
It was in the context of Stewart’s evidence that he paid in excess of one half of the share of the ATO debt, that he regarded the deceased as being responsible for his father’s part: T125.
Whilst he accepted that his mother was not a director of SMC and she had no involvement in the running of SMC he noted that “She provided the guarantee with my father”: T125.
In late 2001 the loan over the Dumaresq Road units was refinanced by Howard Finance Ltd.
In mid-2001 (or thereabouts) Stewart became aware that Adrema was carrying on a business for which a travel agent’s licence was needed, which Adrema did not hold. He caused Adrema to be placed in liquidation.
Proceedings were brought against Stewart and another employee of Adrema by the Department of Fair Trading which subsequently resulted in an adverse judgment against him and the other employee.
At about the same time, Sally left Stewart (with James, then aged 4) and Stewart suffered “a physical collapse”: CB 401. Tracy says that the separation occurred in about 1999: CB 11. I accept Stewart’s evidence as to the timing of separation.

Events leading up to the penultimate Will

Since the early 2000s Tracy has worked as a psychologist in private practice.
Tracy states that after her father’s death in 2000 she became “my Mother’s sole companion as my brother Stewart rarely socialised with my mother and Stewart did not travel with my Mother”.
Stewart states that after he commenced to live in unit 2 from 2001, he and the deceased “each began to accept the faults of the other and formed an adult relationship which developed into being a close one”: CB 392 (Tracy CB 14).
It is clear that Tracy was involved in at least some arrangements for booking and paying for trips which she undertook with the deceased.
This included a trip in September 2001 where Tracy travelled with the deceased to Israel, London and Paris.
There was some dispute regarding a trip on the Queen Mary 2. Tracy states that she made all of the bookings and payments for the trip (CB 134) though Stewart disputes that Tracy paid for the trip and states that he had paid for it. He dated the trip as being in 2000 (CB 387) whereas Tracy states that the trip was occurred in June 2007: CB 14, 134. Tracy’s basis for dating the trip as later is that she says that Isabelle went on the trip and was aged two at the time: CB 14, 134. She produced an itinerary dated in June 2007 and photos of herself a mother and Isabelle on the vessel: CB 179 – 185.
I accept that the inherent likelihood is that Tracy did in 2007 arrange the bookings and made at least some payments for the trip.
Tracy organised other trips with her mother including to Cains, Port Douglas and the Gold Coast.
In approximately late 2001, in order to re-establish an income, Stewart entered into an agreement with a friend and former colleague Rod Newland to produce publications on shared profit basis.
Stewart continued in this business for some time until Mr Newland died in 2009.
In about 2003 Tracy started going out with Joe (an American) who was a property manager and developer. He then started to live with Tracy in the Ocean Avenue unit.
Joe did not have permanent residency and he had travel back to the United States at different times and Tracy also travelled to the United States and lived with Joe in Colorado.
From Isabelle’s birth in 2005 Joe resided with Tracy and Isabelle as a family up until 2009.
When in Australia Joe regularly travelled up and down the eastern seaboard undertaking property research for investment and development.
When the global financial crisis occurred, Tracy recounts that Joe’s investments were decimated and he was made bankrupt: CB 11.
In 2008 when the deceased gifted the Ocean Avenue unit to Tracy, according to Tracy, the Ocean Avenue unit was valued at approximately $450,000: CB 14.
In 2009 Tracy was diagnosed with breast cancer and had treatment in Australia. Her relationship with Joe was put under difficulties as a consequence of her health and his financial bankruptcy and they separated at that time: CB 12.
Tracy indicates that at no point has Joe ever provided assistance for Isabelle’s education, welfare and maintenance and that since 2009 he has only had a limited relationship with Isabelle and does not have any active involvement in her upbringing, although Tracy acknowledges that Joe regularly telephones Isabelle on a weekly/fortnightly basis.
In 2009, following Mr Newland’s death Stewart carried on the business for a few more years until he closed the business in 2012.
Stewart then engaged in several part-time jobs including painting, cleaning, coaching rugby and working as a surf instructor.
Eventually through a friend, Stewart was offered a job as a property manager at Ray White, Elizabeth Bay which he accepted. Stewart has held that job since that time until the present day.
In about 2010, Challenger (which Howard Mortgage Ltd had become known as) corresponded with the deceased to the effect that the loan would need to be refinanced.
As noted above, it would appear that in the process of the refinancing in perhaps 2001 or in any event by 2010 the deceased had become directly liable for the debt.
In 2010 Tracy accompanied her mother on a trip to Fiji with Isabelle and states that she paid for the flights and accommodation.
In 2011 Tracy and the deceased went on a trip to Vittel France, where the deceased’s mother was buried in order to place a new headstone on the grave.

Events from the penultimate Will until Tracy’s bankruptcy

On 18 May 2011 the deceased made her penultimate Will.
In June 2011 there were further financing proposals involving Stewart and the deceased.
On 20 June 2011 Australian Securities Ltd wrote to CGA Commercial Group (Australia) Pty Ltd stating that it had conditionally approved a loan for $235,000 on terms contained in an attached loan application and financial services guide.
The document was shown to Stewart in cross examination. He agreed it had been signed (on 23 June 2011) by him as a proposed guarantor and by the deceased as a proposed borrower: T126. Stewart agreed he would have assisted the deceased (regarding the application) in trying to refinance the existing loan, although stated that the “loan was never executed” and “it was never taken up on”: T126-127. The document became Ex P3: T127.
On 21 October 2011 Stewart corresponded with Tracy by email regarding the inherited debt which had been secured over the units. The emails were admitted on a limited basis pursuant to s 136 Evidence Act as being evidence of Stewart’s statements and not evidence as to the truth of them. Stewart indicated that he had been trying to have the debts restructured for nearly two years and had been unable to do so.
He appeared to be requesting Tracy’s assistance in respect of securing refinancing.
On the same day Tracy responded by email indicating that she was “organising for a mortgage to be done on the property” [Ocean Avenue unit] and requested the name of Stewart’s mortgage broker stating “and I [sic] we can go from there”: CB 550.
In late 2011 Tracy sold the Ocean Avenue unit for $580,000: T41 (Stewart said the figure was $581,000: CB 406) and she purchased a unit at New South Head Road Rose Bay (NSHR unit) for $875,000: T41 (Stewart claimed the amount was for more than $900,000: CB 406).
Tracy states that by way of background she had initially rented the NSHR unit so she could be near her mother, visit her daily and help look after her. The owner of the NSHR unit died in about 2011 and Tracy was offered by the estate the opportunity to purchase the unit: CB 19.
There was some lack of clarity regarding the size of the mortgage that Tracy took out with the NAB to complete that purchase. It was suggested to her in cross examination that it was for $250,000. She indicated that she did not know if that was correct and thought “it was more $400,000 because a lot of reparations had to be done to the unit”: T41.
On 29 March 2012 (some 5 months later) Jacques Kosmin wrote to the deceased regarding “two very important matters involving yourself, being the property at Dumaresq Road and your Will”: CB 448.
The letter was admitted on a limited basis as evidence of what was said in the letter and not as truth of the contents.
The letter contained certain details of what Mr Kosmin indicates to the deceased were statements of which Stewart had informed him including the following (admitted on the limited basis):

“In addition, Stewart informed the writer that Tracy had been allowed to live rent free for a period of 20 years and was then ‘given’ the unit in Double Bay which she subsequently sold and used the proceeds to purchase her current residence. In addition, Stewart ‘lost’ his home to pay back joint debts of Stewart, your late husband and yourself in the sum of $480,000.00 which amount Stewart repaid in 1992. Further, the current debt of $200,000.00 secured over your property was also the result of a joint debt of Stewart, your late husband and yourself. In the circumstances, Stewart may have claim against you for one half of the amount he paid out together with the interest since 1992 and for one half of the current loan!”

The letter went on to add:

“In the circumstances, Stewart has requested that if you are not prepared to transfer the title to the property to Stewart (subject to life estate in your favour), then your Will should be amended to provide for Stewart to receive all your interest in the property and the balance of your Estate to be divided equally between Stewart and Tracy.”

Whilst there appears to have been some discussion between Stewart and Mr Kosmin, who had written the letter, it is not entirely clear whether Mr Kosmin was conveying precisely what Stewart had said to him or Mr Kosmin’s own interpretation of what Stewart had said.
Mr Kosmin was not called for cross examination and accordingly it remains unclear whether the contents of the letter record a direct quote from Stewart or merely represent Mr Kosmin’s interpretation of discussions with Stewart.
On 4 July 2012 the ANZ wrote to the deceased confirming approval of “your application for a home loan for $230,000”: CB 552.
Between 11 March 2013 and 28 October 2013 there was a series of correspondence from Jacques Kosmin to the deceased regarding the provisions of her Will and the ANZ mortgage. The letters, 11 March 2013 (CB 730), 31 March 2013 (CB 732), 17 June 2013 (CB 733), 9 July 2013 (CB 450) and 28 October 2013 (CB 735) provide some context as to the genesis of the 13 November 2013 Will.
Those letters, other than the letters dated 31 May 2013 and 9 July 2013, were admitted pursuant to s 136 Evidence Act on a limited basis as evidence of what Stewart said and not as to the truth of what he said.
In January 2016 Tracy travelled with her mother and Isabelle to Club Med in Bali and paid for the accommodation (including a deluxe room with a terrace) and for the flights.
In about late 2017/early 2018 over the Christmas New Year period the deceased was hospitalised with renal failure and kidney issues for over two weeks: CB 15. Tracy states, and I accept, that she spent every day with her mother keeping her company, and after her mother was discharged from hospital, provided care for her for many weeks.
As I noted below, Tracy was made bankrupt in 2018.
Having regard to the significance of that on her financial circumstances, one might have expected that there would be quite a degree of detail and documentation explaining the circumstances of that.
There was some though not a great deal of detail in Tracy’s initial affidavit affirmed 9 February 2021. It is possible that one reason for that is that, the affidavit discloses on the cover sheet (CB 5) at that stage Tracy was self-represented.
The context for the lead up to Tracy’s bankruptcy appears at least in part from later evidence including some of the documents in Ex SBC-2.
The catalyst appears to have been, a dispute or a number of disputes which Tracy had with the owners of the strata plan/body corporate (OSP) for the NSHR unit.
There is an OSP ledger commencing at 1 July 2015 going through to 1 October 2018: CB 646-654. The ledger appears to show entries for both the unit lot and garage lot.
The first page for the unit lot discloses entries commencing on 1 July 2015 and ending 1 July 2017 recording at the foot of the page (CB 646) levy arrears and owner invoices due in the sum of $15,354 and interest on arrears in the sum of $1,218.
The OSP commenced proceedings against Tracy in the Local Court at Sydney.
On 1 August 2017 they filed a notice of motion for default judgment for the total sum of $16,165 and on the following day, 2 August 2017, judgment was entered against Tracy for that sum.

When I asked about use of the words “spandrels”, Tracy gave a response referring to a special levy in respect of that and outlined details of charges concluding (T90):

“.. All of this was absolutely corrupt at its, at the least, and the entire body corporate was dismissed as a result of myself and another person taking them to Court.”

A little later Tracy referred to the fact that is an NCAT judgment regarding some of these matters stating in part (T92):

“.. there is judgment about the bias of these people which is, again, as I repeat, resulted in their dismissal in the strata - strata choices dismissal from the building following that particular situation.”

Later, during the course of submissions, I referred to the fact that reference had been made to proceedings in NCAT and judgments and I asked counsel whether there was any proposal to provide to the Court copies of the judgments.
Ultimately the position was that I was informed that I should proceed on the basis that neither party proposed to provide information about those judgments: T139-140.
Tracy accepted the fact that she had not disputed at least in the bankruptcy proceedings the judgment on which the bankruptcy notice was based, nor disputed the amounts in the ledger (commencing at CB 646) she was cross examined on. However, clearly in her mind there remains some residual concern as to whether it was correct or fair: T92.19-24.
In the above context, given the lack of detail regarding the merits Tracy’s dispute with the body corporate and the precise reasons for the default which led to the mortgagee sale of the Ocean Avenue unit, I do not think I can in light of the answers given by Tracy in cross examination and in the absence of further information make any specific finding adverse to Tracy regarding the reasons for her financial difficulties which led to her bankruptcy.
Despite the evident intent of Mr Skinners’ cross examination of Tracy, I am not prepared to accept that Tracy acted in a way to be the author of her financial misfortune since 2017, or at least not substantially so.
On the other hand, I am not prepared to accept that Stewart acted unreasonably in declining to commit to the conditions proposed by the bankruptcy trustee. In this regard I have already referred to the evidence that Jacques Kosmin was not acting for Stewart. As I have noted the issue of whether Stewart acted reasonably or not in declining to assist Tracy and to indemnify the trustee was not further pursued in cross examination: T135.

Tracy’s financial resources

The extent to which the figures in the scenarios put forward on Tracy’s behalf both as to Tracy’s capital needs and recurring needs can be relied upon are connected to the reliability of the estimates by Tracy of income and expenses.
Tracy’s initial disclosure of income was stated to be $2,500 per month, almost entirely made up of Centrelink payments, and Mr Skinner noted that for “unexplained reasons” Tracy’s level of income had in May 2022 risen to $4,000 per month: CB 147; DS [17].
However, Tracy in her affidavit affirmed 31 March 2021 indicated that whilst she had disclosed her income as being the Centrelink Newstart allowance of $2,500 per month, she was trying to return to work and (then) currently managed about 10 hours per week on average. She stated that she recently had around $600 per fortnight from her work resulting in a corresponding reduction of her new start allowance such that her monthly income remained around $2,500: CB 84. She then expressed a hope that she could slowly increase her hours of work “but I cannot hope to return to a busy, full time practice”.
In Tracy’s 2 May 2022 affidavit the estimate of average gross monthly income as $4,000 included benefits she received from Centrelink. One possible explanation, for the increased amount, although not expressly advanced by Tracy in that affidavit, is simply that she has been successful in securing work that has increased her level of income.
Whilst I note that the Revised Schedule altered the income figure for the financial year commencing from 1 July 2021, I otherwise accept Mr Skinner’s responses (referred to above) in (1), (2) and (5) regarding the income details in the schedule. I also accept the comment in (3) that the Schedule comprises much by the way of extrapolation.
Another difficulty with Tracy’s failure to produce the bank statements for the “trust account” (Ex 2D3), and with the late production of only a single page indicating the current available balance, is that there was no disclosure in the proceedings of the transactions on that account during the 20 month period from September 2020 when the amount of approximately $137,000 was transferred to the account until 17 May 2022 when the account had the balance of approximately $95,000.
Clearly amounts have come out of the account. It is possible that amounts might have been deposited to the account including, some income amounts. I simply do not know. In Tracy’s affidavit affirmed 17 May 2022 at [8] she stated that payments for the services as a psychologist are paid into an account that she maintains with NAB. That evidence does not necessarily establish that all income or other financial benefits for Tracy were exclusively banked to the Classic Banking account.
In any event, no reason was advanced to me as to why the statements for the “trust” account had not been produced other than Tracy’s answer in cross examination noted above. The fact that she herself did not get bank statements for the “trust” account does not really explain why she did not seek to obtain and produce the statements in response to the notices to produce or otherwise for the purposes of the proceedings.
It leaves the Court in a position in which it has no evidence as to whether Tracy has received monies that have been deposited to that account over that 20 month period.
That is of some significance because, apart from what I have mentioned above, the transactions on the other three accounts for which she did produce statements, do not disclose balances anywhere near the level of the amounts that is in what Tracy described as this “trust account”.
I have concern over Tracy’s estimate of her annual expenses ($209,655 plus $10,000: CB 153). The indication of that level of expense having regard to an income of $48,000 per annum (the figure referred to by Tracy’s counsel in submissions but revised by Tracy’s counsel by reference to MFI 4 to a level of $55,952 for the financial year ended 30 June 2021 and $48,927 for the financial year post 1 July 2021 to date), is somewhat extraordinary. Expenses of that level are in the order of 4 times the amount of an income of approximately $48,000 (gross) per annum.
Whilst, Tracy’s counsel did attempt to provide some calculations in the Revised Schedule regarding her expenses, I regard Mr Skinner’s criticisms that the expenditure part of the Revised Schedule comprises much in the way of extrapolation and does not attempt to distinguish between one-off and recurrent expenditure as having real force.
As I have noted above Tracy’s answers to the cross-examination regarding her expenses did not fill me with confidence regarding her ability to accurately place before the Court details of her expenses. It left me in the invidious position that I could not have confidence in Tracy’s estimate of expenses as being a reasonably accurate representation of the current position.
As is evident, I remain troubled and a degree unconvinced regarding the accuracy of Tracy’s financial resources, particularly in the context in which she clearly had opportunity to put before the Court details of the bank statements relating to the account she described as a “trust account” (Ex 2D3) and when the cross examination demonstrated that estimates of her expenditure in particular the costs associated with Isabelle’s schooling were substantially inaccurate.
I further bear in mind the fact that there were no income tax returns produced by Tracy, despite requests from Stewart’s legal representatives, noting that some returns which apparently had been prepared were not produced and other returns had not been prepared.

Tracy’s claim for provision

I asked during the hearing asked whether the (total) sum of $1.9 million was the figure that Tracy was actually seeking.
Mr Davidson SC indicated that that was an interesting question and that there was a related question as to whether the extent to which he ought to be giving a view about the figure that should be awarded: T148.
As I have noted in the initial part of this judgment, the subsequent revision of the figures (see MFI 3) has not resulted in variation of the submission on Tracy’s behalf to argue that Tracy’s a maximum entitlement should exceed the figure of approximately $1.9 million.
I had a brief exchange with Mr Davidson SC regarding the decision of Hallen J in Limberger v Limberger [2021] NSWSC 474 noting that the Court of Appeal in Bassett v Bassett [2021] NSWCA 320 had approved his Honour’s comments: T148.
Ultimately Mr Davidson SC, apart from marking out the total of $1.9M as a maximum figure, did not put to me any specific figure or specific range of figures by way of suggested provision for Tracy. I did not press him to do so.
The submission that Tracy’s claim or desire to undertake a PhD in psychology is simply fanciful, to my mind does have some force. In relation to her claim for funds to study for a PhD, I do not regard it as being appropriate that she should be given additional provision at an apparent cost of $144,000 to undertake a 3-4 year PhD course in circumstances where while she claims the benefit to her is “Unlimited” (T20) she has not “anticipated” (by way of any quantifiable estimate), what additional income she might receive as a result of undertaking a PhD degree (T20) and there is no other evidence quantifying in any clear way what financial benefit might accrue to her from doing that.
I do not propose to make any specific provision for other expenses for the cost of replacement vehicles for Tracy’s claim.
I have addressed earlier the problematic issue of Tracy’s estimate of costs for Isabelle’s schooling. The current position is Tracy’s account with the school is in credit and it seems that Tracy, with the assistance of subsidisation of fees and some waiving of fees, has been able to cover Isabelle’s school education.
I have no difficulty in accepting that the payment for Isabelle to go on the school trip is an appropriate and reasonable expenditure for Tracy. Nonetheless, it is a somewhat different question as to whether any specific provision ought to be given for that by way of Court order.
In circumstances in which the deceased did not have a history of funding Isabelle’s school expenses, for which Tracy has received considerable assistance from the school, I do not regard it as being appropriate for Tracy to be given any specific funding to cover the costs of Isabelle’s remaining high school education.
In any event, the award of provision which I contemplate below, ought permit Tracy to pay the balance of the $10,000 amount for Isabelle’s overseas trip, noting that $2,000 of that $10,000 amount has already been paid, being provided out of the distribution of the $750,000 which Tracy received: T76.
There is no certainty that Isabelle will attend university. I do not regard it as being a potential need that ought to be specifically included in the award of provision out of the deceased’s estate for what would be a contingent expense.
Should Tracy seek to supplement in some way any cost associated with that in the event (which is yet uncertain) that Isabelle determines to attend university, then that is a matter for Tracy.
I have already referred to the cross examination of Tracy regarding at least the cost of rental accommodation in Randwick. In the proceedings, Tracy only provided evidence regarding the cost of purchase of accommodation in Rose Bay.
Despite Mr Skinner’s submission, it is not entirely correct to suggest that there is no explanation for Tracy’s need to reside in Rose Bay other than it being her wish.
In Tracy’s affidavit affirmed 6 September 2021, in reference to pricing regarding unit 1 Dumaresq units, Tracy outlined a number of reasons as to why that unit (“our current home”) was then suited to the requirements of Isabelle and herself notably, as the unit:

has two bedrooms;

has off street parking, necessary for transporting Isabelle to and from school and other appointments on a daily basis;

has both a balcony and a courtyard, which provide additional space for herself and also necessary for their dog (noting that the dog provides companionship and security for Isabelle and it is important that any future home can accommodate a dog);

is located in Rose Bay, which is an area and suburb with which Isabelle is familiar and is comfortable for her given her Asperger’s and her anxiety;

has a suitable area for her office, which although not a separate room, is separate from the living areas of the home and allows Tracy to undertake her professional commitments as required (noting that Isabelle also utilises this area from time to time to complete her homework and study);

is close to Tracy’s friends and close to Isabelle’s friends

CB 98-99.

However, I understood Mr Skinner’s point to be that each or most of those factors could easily be said to be applicable to accommodation in Randwick or its surrounds. There is force in that.
Apart from the details set out in her affidavit affirmed 6 September 2021, the only updating details of costs of accommodation in Rose Bay was provided in Tracy’s affidavit affirmed 2 May 2022 referring to two further sales in Rose Bay (CB 154, 282). One of those properties was the sale of a two bedroom unit in the avenue at Rose Bay in May 2021 for $1.855 million. The other was the purchase by Stewart of his current unit in November 2021 for $2.1 million.
During Tracy’s cross examination she indicated that in terms of looking for properties to rent she looked in areas of a 5 to 8 kilometre circumference of Isabelle’s school.
Stewart did not adduce in evidence the cost of properties for purchase in Rose Bay or any other area. During Tracy’s cross examination the only material that was forthcoming regarding accommodation related to the cost of rental of properties in Randwick.
I was not provided with any evidence regarding the cost to purchase available properties within the Randwick area.
I was left in the position that the only evidence regarding costs for purchase of accommodation related to properties in Rose Bay and not to other areas such as Woollahra, to where Tracy will shortly be moving and Randwick where Isabelle’s school is.
One of the properties that Tracy identified in her affidavit affirmed 6 September 2021 which she stated would have been suitable for Isabelle and herself to live in having regard to their needs was a property in Hamilton Street Rose Bay that had been sold in September 2020 (being a two bedroom, one bathroom unit with a sunroom/study and parking) at a price of $1.264 million: CB 100. Tracy noted that the stamp duty on a property purchased for $1.2 million is approximately $50,567: CB 100.
Tracy has already had from the hands of her parents and in particular from the deceased significant provision both during the deceased’s lifetime and pursuant to her Will.
Tracy has had the benefit of living in the Ocean Avenue unit from approximately 1974 until 2008 when it was gifted to her by the deceased. At that stage it was valued at approximately $450,000. Tracy continued to live in the property until 2011 at which point of time it was sold for $580,000. She then used the proceeds of the sale that property to purchase the NSHR unit. Thus, as at 2011 Tracy had received not only the benefit of living rent free in the Ocean Avenue unit for decades, she also had the use of a capital sum of $580,000 from the sale of that property.
That sum coupled with her entitlement under the estate of the deceased in the sum approximately $1.215 million amounts to capital sum benefit of $1.795 million from the hands of the deceased (both inter vivos and testamentary).
Such provision by any account is very significant provision for a parent to give to an adult child such as Tracy who is very well educated.
The amount of those benefits both inter vivos and testamentary coupled with my concern regarding the lack of reliable detail in respect of Tracy’s expenses counsels against an award of provision in the order seemingly sought on her behalf for multiple needs from the deceased’s estate up to a maximum of approximately $1.9 million.
Clearly Tracy has a need for accommodation. Overall, I consider that some further provision ought to be provided for Tracy to enable her to have a reasonable prospect of securing appropriate accommodation for herself and Isabelle to purchase. In saying that I am not suggesting that provision should be given to cover the entire cost of accommodation of Tracy’s preferred choosing.
I do not consider that the entire cost of accommodation in the order of that sought by Tracy should be funded out of the deceased estate by an additional order for provision, particularly in circumstances in which there was a lack of reliable evidence adduced by Tracy about the extent of her income and expenditure.
Clearly there are areas other than Rose Bay which Tracy could reasonably live with Isabelle. Tracy gave evidence in her affidavit of 6 September 2021 of two-bedroom properties sold in or March-April 2021, which although she stated was not suitable for her, were sold at prices between $1,077,500 and $1,176,000: CB 99. Of the properties in Rose Bay which Tracy asserted were suitable to her there was a two-bedroom unit with parking and a sunroom/study sold in September 2020 for $1,264,000: CB 100.
Whilst that material is somewhat dated, Tracy did not adduce more recent material regarding the cost of accommodation.
To the extent that Tracy’s claim for provision is based on a significant gap between unfunded recurring needs and income, in light of my findings, I’m not prepared to accept that any provision should be made based on the scenarios put forward by Tracy’s counsel.
As a general guide, though not a rule, adult children should not expect a level of provision that funds them into unencumbered accommodation, supplements a gap between their income and expenditure (and at least not for the balance of their expected life) and additionally provides them with a fund for contingencies.
Bearing in mind the unsatisfactory evidence regarding Tracy’s financial position, but recognising she has need for suitable accommodation (though not the ideal she seeks) doing the best I can, I consider that in light of all the circumstances, Tracy should receive an amount of provision out of the deceased’s estate a sum of $1.45 million from the net proceeds of the sale of the Dumaresq units in lieu of the provision that Tracy receives under the Will.
Based on the figures for Tracy’s existing entitlement of approximately $1.215 million, that represents an additional provision of approximately $235,000.
I envisage that that amount together with her disclosed resources and earning capacity will enable Tracy to be able to secure appropriate accommodation and leave her with other funds to allocate as may be appropriate to at least some of her other claimed needs including a buffer for exigencies.
The award of $1.45 million would permit Tracy to purchase either outright or purchase with some degree of borrowing accommodation in the order of $1.2 million plus stamp duty.
Ultimately it would be a matter for Tracy whether she chose to spend $1.2 million for accommodation or in excess or underneath that.
I consider that there is a good degree of force in Mr Skinner’s submission that there is a practical obligation on an applicant to make decisions logically and in their best interests including living in an affordable area, and otherwise managing the budget to live within her or his means.

If accommodation is purchased by Tracy for about $1.2 million or $1.25 million including stamp duty, provision of $1.45 million would leave her with an amount of respectively $250,000 or $200,000 which coupled with her savings of $95,000 would provide her with a lump sum of $345,00 or $295,000 as a buffer for contingencies.
The amount awarded, if appropriately handled by Tracy to live within the means available to her, would permit her to make choices as to what expenditure she deploys to matters such as replacement vehicles or education or health expenses apart from accommodation.
In the result I have determined that in lieu of provision given to Tracy under the Will of the deceased that she should receive a legacy of $1.45 million from the net proceeds of the sale of the Dumaresq units, being approximately $235,000 more than the approximately $1.215 million, estimated to be her entitlement under the Will.
I note that Tracy has already received a distribution of $750,000. Thus, the amount Tracy should further receive as a further distribution from the estate is an additional $700,000.
The intent of the order is that Stewart should receive the balance of the net proceeds of the sale of the Dumaresq units.
The final impact of the order for both Tracy and Stewart will no doubt be affected by the question of costs.
Both parties indicated that the question of costs should abide the ruling of the court. I will follow that course.
The orders of the Court are:

In lieu of provision given to Tracy under the Will of the deceased that she should receive a legacy of $1.45 million from the net proceeds of the sale of the Dumaresq units to the intent that Stewart should receive the balance of the net proceeds of the sale of the Dumaresq units.

The matter is stood over to 9:30 AM on 22 June 2022 to enable the parties to address on the question of costs.

In the event that the parties are able to agree on the question of costs they have liberty to provide my Associate with proposed orders in that respect.

In the event the parties are unable to agree on the question of costs they should provide a short outline of submissions 48 hours in advance of the above-mentioned listing date.

**********

Decision last updated: 09 June 2022

Medium Neutral Citation:	Cahn v Kosmin [2022] NSWSC 751
Hearing dates:	18, 19 May 2022, last submissions 1 June 2022
Decision date:	08 June 2022
Jurisdiction:	Equity
Before:	Meek J
Decision:	Additional provision awarded. Parties to address on the question of costs.
Catchwords:	SUCCESSION — Family provision — applicant daughter — substantial inter vivos provision — resources depleted through bankruptcy — very substantial testamentary provision — obligation of applicant to provide accurate financial information — moderate additional provision awarded
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Evidence Act 1995 (NSW), s 136 Family Provision Act 1982 (NSW), s 9(2) Succession Act 2006 (NSW), ss 60, 61 Uniform Civil Procedure Rules 2005 (NSW), r 7.8
Cases Cited:	Bassett v Bassett [2021] NSWCA 320 Bindoff v Trust Company (Australia) Ltd [2016] NSWSC 1100 Browne v Dunn (1893) 6 R 67 Chan v Chan [2016] NSWCA 222; (2016) 15 ASTLR 317 Georgopoulos v Tsiokanis [2022] NSWSC 563 Gorton v Park (1989) 17 NSWLR 1 Hinderry v Hinderry [2016] NSWSC 780 Jodell v Woods [2017] NSWSC 143 Limberger v Limberger [2021] NSWSC 474 Mitchell v Hamilton [2005] NSWSC 1097 Sammut v Kleemann [2012] NSWSC 1030 Smith v Johnson [2015] NSWCA 297; (2015) 14 ASTLR 175. Strang v Steiner [2019] NSWCA 143 West v Mead [2003] NSWSC 161
Texts Cited:	Practice Note SC Eq 7
Category:	Principal judgment
Parties:	Tracy Faye Cahn (Plaintiff) Gary Kosmin as executor of the estate of Lilliane Sarah Cahn (First Defendant) Stewart Cahn (Second Defendant)
Representation:	Counsel: I E Davidson SC / P D Reynolds (Plaintiff) B J Skinner (Second Defendant) Solicitors: P Williams and Company Lawyers (Plaintiff) Kosmin & Associates (First Defendant) Crompton + Walsh Pty Limited (Second Defendant)
File Number(s):	2021/37100