Charnock v Handley - [2011] NSWSC 1408

Supreme Court

New South Wales

Medium Neutral Citation: Charnock v Handley [2011] NSWSC 1408
Hearing dates: 21 November 2011
Decision date: 16 December 2011
Jurisdiction: Equity Division
Before: Hallen AsJ
Decision:
(a) Order that the time for making the Plaintiffs' application be extended up to and including 1 February 2011, the date of the filing of the Summons.
(b) Having found that each Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, order that the first Plaintiff is to receive out of the notional estate of the deceased, a lump sum of $9,665 and the second Plaintiff is to receive a lump sum of $7,750.
(c) Order that each of the lump sums should be paid within 28 days, or such other time as the parties agree, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment.
(d) Order that the Plaintiffs' costs of the proceedings assessed and agreed at $5,000, should be paid out of the property designated as notional estate of the deceased within 28 days, or such other time as the parties agree, failing which, interest at the same rate should be paid, calculated from that date until the date of payment.
(e) Make no order as to the Defendant's costs to the intent that he will pay his own costs of the proceedings.
(f) Being satisfied that as a result of the distribution of the deceased's estate, property became held by the Defendant, order that the amount of $22,415, forming part of the amount held by the Defendant in his Navigator Personal Retirement Fund, be designated as notional estate and that such sum be paid to the Plaintiffs for the purposes of satisfying the family provision order for each of them and their costs of the proceedings.
(g) Order that each of the lump sums, costs, and any interest accrued thereon should constitute a charge on the said Navigator Personal Retirement Fund until it is paid.
(h) Order that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

Catchwords: Claims by adult children of the deceased for family provision order under Succession Act 2006 out of the estate or notional estate of the deceased and an order designating property as notional estate - The deceased provided for the whole of his estate to pass to a friend - No provision for Plaintiffs - Estate fully distributed to Defendant - Plaintiffs' application out of time - Whether property should be designated as notional estate - Whether special circumstances established - Nature of property designated
Legislation Cited: Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Succession Act 2006
Succession Amendment (Family Provision) Act 2008
Uniform Civil Procedure Rules 2005
Cases Cited: Alexander v Jansson [2010] NSWCA 176
Barna v Barna [2008] NSWSC 1402
Blyth v Spencer; Spencer v Neville [2005] NSWSC 653
Bondelmonte v Blanckensee [1989] WAR 305
Burton v Moss [2010] NSWSC 163
Campbell v Chabert-McKay [2010] NSWSC 859
Carr v Finance Corporation of Australia Ltd (No. 1) [1981] HCA 20; (1981) 147 CLR 246
Carstrom v Boesen [2004] NSWSC 1109
Cooper v Dungan (1976) 50 ALJR 539
Collins v McGain [2003] NSWCA 190
Cetojevic v Cetojevic [2006] NSWSC 431
De Winter v Johnstone (NSWCA, 23 August 1995, unreported)
Dobb v Hacket (1993) 10 WAR 532
Durham v Durham [2010] NSWSC 389
Gorton v Parks (1989) 17 NSWLR 1
Hampson v Hampson [2010] NSWCA 359
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
John v John [2010] NSWSC 937
Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Lewis v Lewis [2001] NSWSC 321
McCosker v McCosker (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Mansfield v Mansfield [2003] WASC 214
Marland (decd), In re [1957] VR 338
Palaganio v Mankarios [2011] NSWSC 61
Permanent Trustee Company Ltd v Fraser (1995) 36 NSWLR 24
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9
Randall v The Public Trustee (2000) NSWSC 500
Richardson v Rearden [2006] NSWSC 1252
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Smith v Woodward (NSWSC, 9 September 1994, unreported)
Sophron v The Nominal Defendant (1957) 96 CLR 469
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Szlazko v Travini [2004] NSWSC 610
Taylor v Farrugia [2009] NSWSC 801
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported);
Zirkler v McKinnon [2002] NSWSC 285
Texts Cited: Macquarie Dictionary
Oxford Dictionary
Category: Principal judgment
Parties: Lynda Charnock (first Plaintiff)
Sara Stockwell (second Plaintiff)
Robert Handley (Defendant)
Representation: Counsel:
Dr C Davidson (Solicitor) (Plaintiffs)
Mr L Ellison SC (Defendant)
Solicitors:
Darryl Perkins Solicitors (Plaintiffs)
Roberts Mann Solicitors (Defendant)

File Number(s): 2011/39763

JUDGMENT

The Nature of the Application

HIS HONOUR: Lynda Charnock and Sara Stockwell, each of whom is a child of Thomas Bennett ("the deceased"), apply for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act"). The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 ("the former Act"), which was repealed, effective from 1 March 2009. A family provision order is an order made by the Court, under Chapter 3, in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life, of an eligible person.

The Plaintiffs commenced the proceedings, by Summons filed on 1 February 2011, that is, outside the time prescribed by s 58(2) of the Act (not later than 12 months after the date of the death of the deceased). In their Summons, the Plaintiffs sought an order extending the time for the making of their application.

The Defendant named in the Summons is Robert William Handley, who was a friend of the deceased and the person to whom Probate in common form of the deceased's Will was granted. He opposes the application of the Plaintiffs for extension of time and the claims for provision otherwise.

Without any undue familiarity, or disrespect intended, in these reasons, I shall refer to each of the Plaintiffs, individually, and any other family member, after introduction, by her, or his, given name. For ease of reference, I shall refer to the Defendant as such.

Background Facts

The following facts are uncontroversial.

The deceased died on 28 July 2009. He was then aged 67 years (having been born in April 1942). The cause of death was rectal carcinoma with liver metastases.

The deceased was married to Christine Beryl Davidson-Cornwell in 1976. The Plaintiffs are the children of their marriage.

The marriage of the deceased and Christine irretrievably broke down in about 1995. I shall return to the circumstances of the marriage breakdown and its aftermath later in these reasons.

The deceased left a Will that he made on 27 July 2009, Probate of which was granted, on 17 December 2009, by the Supreme Court of New South Wales.

The deceased's Will provided for the whole of the deceased's estate to pass to the Defendant absolutely.

In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, value of $79,665. No liabilities were disclosed. The estate was said to consist of moneys held in a superannuation account ($73,936) and moneys in a credit union account ($5,729). (I have omitted a reference to the cents and shall continue to do so.)

On 6 January 2010, the Defendant caused a notice of intention to distribute to be published in the Hawkesbury Gazette (a newspaper covering the Hawkesbury area, north-west of Sydney). It is unlikely that either of the Plaintiffs would have seen the advertisement, as it was not published in the area in which they lived.

It appears that the Defendant received the funds of the estate ($78,949), from his solicitor, in early February 2010. More than six months had passed since the death of the deceased. From those funds, he paid $5,122 for the deceased's funeral and a further $10,824, inclusive of GST for a burial site and for a memorial plaque. He also paid $176 for a Latin cross and a Masonic emblem.

There is some dispute as to the expenditure of the balance of the estate. However, after payment of the funeral and associated expenses, to which I have referred ($16,122), the net estate, then available for distribution, would have been $62,827.

Since there is no dispute that the whole of the estate was distributed to the Defendant, beneficially, there is no actual estate. An important question is whether there is any property that may be designated as notional estate as the Defendant says that he has expended all of the estate that was distributed to him.

The Plaintiffs' costs and disbursements of the proceedings have been estimated to be about $5,000 (inclusive of GST and upon the basis of a one day hearing). Christine, their mother, who is a medical practitioner, as well as a solicitor admitted in the ACT, appeared for them in the proceedings. This limited their costs and disbursements. Naturally, there was no dispute about the reasonableness of the estimate.

The Defendant's costs and disbursements of the present proceedings, including senior counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a one day hearing), have been estimated to be $24,000.

Litigation over estates of this size is inadequately provided for under our system of justice and whilst it is not for the Court to direct a party as to legal representatives who should, or should not, be retained in a matter, the retention of senior counsel, in this case, should be commented upon. Senior counsel was briefed, with "fees for the entire matter including the hearing, the mediation and other appearances and advice, inclusive of GST" totalling $16,500, or more than 25 per cent of the value of the net distributable estate. (I do not suggest that the fees charged are unreasonable for the work that was done by senior counsel.) There is simply no obvious legitimate reason for briefing senior counsel in such a small estate.

In an estate of this size, with not particularly complex issues, the Defendant should have avoided such an extravagance if he hoped to obtain an order for costs and disbursements out of the estate, which included counsel's fees.

At the conclusion of the hearing, the Defendant accepted that if the Plaintiffs were successful, they should receive a lump sum order for the amount of their costs out of the notional estate. If the Plaintiffs were unsuccessful, he submitted that there should be no order as to costs.

The Plaintiffs agreed with the first concession, but said that in the event that they were unsuccessful, they should receive, in any event, a lump sum costs order for the amount claimed.

There is no dispute, in this case, that the Plaintiffs' proceedings were not commenced within time. The proceedings should have been commenced on, or before, 28 July 2010. However, the first notice, given to the Defendant, of any claim was identified in a letter dated 13 January 2011 from the Plaintiffs' then solicitors. As I have already recorded, the Summons was not filed until 1 February 2011.

The persons described as eligible persons, within the meaning of the Act are the Plaintiffs and Christine. There was no suggestion that the Defendant was an eligible person or that there were any other eligible persons. There was, therefore, no need to serve any notices informing of the Plaintiffs' claims.

Matter arising after conclusion of the Hearing

I should mention that following the completion of the hearing, I received further lengthy written submissions from each side. No leave to make further submissions was sought. My Associate simply received an e-mail from the Plaintiffs' solicitor and written submissions from senior Counsel for the Defendant not objecting to the "amended Submissions" sent by the Plaintiffs' solicitor "being considered by the trial Judge and forming part of the court file".

The hearing is the time and place for the presentation of evidence and arguments. The observations by Mason J, as he then was, in Carr v Finance Corporation of Australia Ltd (No. 1) [1981] HCA 20; (1981) 147 CLR 246 at 257-258 apply:

"I should express my dissatisfaction with the way in which the appellants' case has thus far been presented. I have already referred to the absence of any reference to s. 57(5) before the matter reached this Court. After argument had concluded in this Court lengthy written submissions dealing with issues not hitherto raised and a further affidavit were filed. The affidavit asserts that the mortgages were extended but no attempt is made to specify the extended expiry dates or the facts giving rise to the alleged extension. The material was submitted without leave having been given by the Court. The impression, unfortunately abroad, that parties may file supplementary written material after the conclusion of oral argument, without leave having been given beforehand, is quite misconceived. We have to say once again, firmly and clearly, that the hearing is the time and place to present argument, whether it be wholly oral or oral argument supplemented by written submissions."

However, the issue to which each set of submissions referred, was a critical one in the case, and the legal representative of each party should have given consideration to it prior to the hearing, not several days after it.

In view of the importance of the matters raised, I have considered each of the additional submissions.

The Statutory Scheme - Introduction

I shall discuss the statutory scheme that is relevant to the facts of the present case briefly. I have set out most of what I state hereunder in a number of other cases. I shall not repeat all of the principles.

The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Legal rights of inheritance are not created. Nor does it impose any limitation on the deceased's power of disposition by his, or her, will. It is only if the statutory conditions are satisfied, that the Court is empowered, under the Act, to alter a deceased's disposition to produce a result that is consistent with the purpose of the Act. Even then, the Court's power to do so is discretionary.

Extension of Time

Section 58(2) of the Act provides that an application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown.

The decision of the Court to extend time is a discretionary decision. Other than "sufficient cause being shown", there are no statutory criteria that must be taken into account. There are no rigid rules in regard to the exercise of the discretion. The expression "sufficient cause" means sufficient explanation, or sufficient justification or excuse, for the application not having been made within the prescribed period.

Apart from the reason(s) for the lateness of the claim, the factors to which the Court often looks, include whether beneficiaries under the deceased's Will would be unacceptably prejudiced if time were to be extended; whether there has been any unconscionable conduct by either side; and, finally what is the strength of the claim made by the party seeking an extension of time: see, for example, John v John [2010] NSWSC 937 at [37]-[51] per Ward J; Campbell v Chabert-McKay [2010] NSWSC 859 at [45]-[47] per White J; Durham v Durham [2010] NSWSC 389 at [15] per Ball J; Taylor v Farrugia [2009] NSWSC 801 at [14] per Brereton J; Burton v Moss [2010] NSWSC 163 at [31] - [58], per Macready AsJ, in which the relevant earlier cases are referred to.

The onus lies on the applicant(s) to establish sufficient cause and, thus, to provide the reason(s) for not commencing within time, to demonstrate a lack of prejudice due to the delay in instituting proceedings, and any unconscionable conduct by the defendant or other beneficiaries. It will be for the Court to determine the strength of the applicants' claim.

In Cetojevic v Cetojevic [2006] NSWSC 431 at [58], Campbell J (as his Honour then was) explained that the prejudice to which the section looks is any prejudice occasioned by the delay in lodging the claim.

In De Winter v Johnstone (NSWCA, 23 August 1995, unreported), Sheller JA held that the concept of "unconscionable conduct" referred to above was "directed towards a deliberate holding off [in bringing proceedings] designed to lull the beneficiaries into a false sense of security". Cole JA, whilst not expressing a concluded view, said that it must be doubted whether a change of mind (because of some change in the financial and material circumstances of the Plaintiff which has occurred after the expiry of the limitation period) constitutes unconscionable conduct.

As to the strength of the claim, in De Winter v Johnstone , Powell JA considered that as an application for extension of time was invariably dealt with at the time of the application for substantive relief, no extension of time ought to be granted unless it was established that the applicant seeking an extension of time would, in the event of the extension being granted, be entitled to an order for substantive relief. By contrast, Sheller JA considered that it was only necessary for the applicant to show that the application was not bound to fail.

It has been said that it is futile to extend the time if the Plaintiffs' proceedings are bound to fail.

Perhaps, also relevant to the present case, is what was said in Mansfield v Mansfield [2003] WASC 214 at [65]:

"65 The authorities also show, as in Young v Kestel , that in some circumstances a failure to make an application under the Act in the prescribed time may be explained and justified by a lack of information in the hands of an applicant. A lack of information may support the view that the applicant was not in a position to make a responsible decision about whether or not to institute proceedings under the Act."

Likewise, an applicant who is under a reasonable misapprehension as to the extent of his, or her, interest under the deceased's Will, provides a sufficient reason explaining the delay in commencing proceedings: In re Marland (decd) [1957] VR 338.

Although in another context, the High Court said in Sophron v The Nominal Defendant (1957) 96 CLR 469 at 475:

"... it is a mistake to attempt to reduce the expression 'sufficient cause' to a closer or more rigid definition than the legislature has chosen to provide. The words no doubt are concerned with the justice of the case. There must be some positive reason for concluding that as between the parties it would be just to extend the period for giving notice. Fault on the part of the claimant in failing to give notice... must be an element affecting the justice of extending the time and so on the other side must be the prejudice which the nominal Defendant has or may have suffered because of that failure."

Ultimately, the question to be determined is whether, having regard to all the circumstances of the case, it is fair and just to grant, or to refuse, the application.

The Substantive Provisions of the Act

The key provision is s 59 of the Act. The Court must consider, first, whether the applicant is an eligible person within the meaning of s 57 (s 59(1)(a)). I n New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made. Relevantly, one category is "a child of the deceased" (s 57(1)(c) of the Act).

Once eligibility is established, the Court must determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is only if it is satisfied of the inadequacy of provision, that the Court considers whether to make a family provision order (s 59(2)). It may take into consideration, then, the matters referred to in s 60(2) of the Act. In this way, the Court carries out a two-stage process.

Other than by reference to the provision made in the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) leaves undefined the norm by which the Court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education or advancement in life. The question would appear to be answered by an evaluation that takes the Court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education or advancement in life of the applicant.

In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education and advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.

Under s 59(1)(c) of the Act, the time at which the Court gives its consideration to the question is the time when the Court is considering the application.

The first stage of the process provided for by s 59(1)(c) has been described as "the jurisdictional question": Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the Court will consider whether it can make an order for provision for the maintenance, education or advancement in life of a particular applicant.

Whether the applicant has a "need" or "needs" is a relevant factor at the first stage of the enquiry. It is an element in determining whether 'adequate' provision has been made for the 'proper' maintenance, education or advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 at [42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).

In the event that the Court is satisfied that the power to make an order is enlivened (i.e. it is satisfied the applicant is an eligible person, and, where necessary, that factors warranting have been established, and that adequate provision for the proper maintenance, education or advancement in life of the person has not been made), then, the Court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the Court at the time the order is made.

The second stage of the process arises under s 59(2) and s 60(1)(b). Mason CJ, Deane and McHugh JJ, in Singer v Berghouse (No 2) , at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the Court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.

The discretion should be exercised carefully and conservatively according to community perceptions of the provision that would be made by a wise and just testator or testatrix: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 146. The standards of the wise and just testator, or testatrix, of today, not of an era ago, are pertinent to that assessment: Permanent Trustee Company Ltd v Fraser (1995) 36 NSWLR 24 at 35.

Section 60 of the Act, at least in part, is new. It provides:

"(1) The Court may have regard to the matters set out in subsection (2) for the purpose of determining:

(a) whether the person in whose favour the order is sought to be made (the "applicant") is an eligible person , and

(b) whether to make a famil y provision order and the nature of any such order.

(2) The following matters may be considered by the Court :

(a) any family or other relationship between the applicant and the deceased person , including the nature and duration of the relationship,

(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant , to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person 's estate,

(c) the nature and extent of the deceased person 's estate (including any property that is, or could be, designated as notional estate of the deceased person ) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,

(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant , of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person 's estate,

(e) if the applicant is cohabiting with another person-the financial circumstances of the other person,

(f) any physical, intellectual or mental disability of the applicant , any other person in respect of whom an application has been made for a family provision o r der or any beneficiary of the decease d person 's estate that is in existence when the application is being considered or that may reasonably be anticipated,

(g) the age of the applicant when the application is being considered,

(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person 's family, whether made before or after the deceased person 's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant ,

(i) any provision made for the applicant by the deceased person , either during the deceased person 's lifetime or made from the deceased person 's estate,

(j) any evidence of the testamentary intentions of the deceased person , including evidence of statements made by the deceased p e rson ,

(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person 's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,

(l) whether any other person is liable to support the applicant ,

(m) the character and conduct of the applicant before and after the date of the death of the deceased person ,

(n) the conduct of any other person before and after the date of the death of the deceased person ,

(o) any relevant Aboriginal or Torres Strait Islander customary law,

(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person 's death or at the time the application is being considered."

It can be seen that s 60(2) enumerates 15 specific matters which the Court may take into account, together with "any other matter the Court considers relevant", for the purposes of determining eligibility, whether to make a family provision order , and, if so, the nature of any such order. There is no mandatory command to take into account any of the matters enumerated. None of the matters differentiate in their application between classes of eligible person. Similarly, there is no distinction based on gender.

There is no definition in the Act of "financial resources" (which term is referred to in sub-s (2)(d)). However, there is a definition of that term in the Property (Relationships) Act 1984, which I consider helpful:

'"financial resources" ... includes:

(a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,

(b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties ...,

(c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and

(d) any other valuable benefit."

Of course, sub-s (2)(d) refers, also, to "earning capacity", which means no more than the capacity to find employment to earn or derive income.

Section 60(2)(p) is open ended. It enables the Court to look beyond the specific statutory matters that are set out in the immediately preceding sub-sections and to consider any other matter it considers relevant.

Considering each of the matters set out in s 60(2) does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the Court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical. For example, when considering eligibility under sub-s (1)(a), many of the matters in sub-s (2) will be largely, if not wholly, irrelevant.

Furthermore, consideration of some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and of other eligible persons, as well as of the beneficiaries named in the deceased's Will, whilst others do not. Importantly, also, many of the matters in sub-s (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).

Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.

This does not mean, however, that some of the matters referred to in s 60(2) will not be relevant to the jurisdictional question to be determined at the first stage.

Section 61 of the Act permits the Court to disregard the interests of any other person by, or in respect of, whom an application for a family provision order may be made (other than a beneficiary of the deceased's estate), but who has not made an application. However, the Court may disregard any such interests only if:

(a) notice of the application, and of the Court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of Court; or

(b) the Court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.

Section 65(1) of the Act requires the family provision order to specify:

(a) the person or persons for whom provision is to be made; and

(b) the amount and nature of the provision; and

(c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided; and

(d) any conditions, restrictions or limitations imposed by the Court.

The order for provision out of the estate of a deceased person may be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner the Court thinks fit" (s 65(2) of the Act). If the provision is made by an order for the payment of an amount of money, that order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).

An order for provision may be made out of the estate of the deceased. As the deceased died leaving a Will, his estate includes all property that would, on a grant of probate of the Will, vest in the executor of the Will (s 63(2) of the Act). (I shall discuss the notional estate provisions shortly.)

Section 66 of the Act sets out the consequential and ancillary orders that may be made.

Any family provision order under the Act will take effect, unless the Court otherwise orders, as if the provision was made in a codicil to the Will of the deceased, or in the case of intestacy, as in a Will of the deceased (s 72(1) of the Act).

Section 99 of the Act provides that the Court may order that the costs of proceedings in relation to the estate, or notional estate, of a deceased person (including costs in connection with mediation) be paid out of the estate, or notional estate, or both, in such manner as the Court thinks fit.

There is one other principle to which I should refer and that relates to small estates. In Randall v The Public Trustee (2000) NSWSC 500, Master Macready (as his Honour then was), in a claim involving an estate which had a gross value of approximately $64,000 and a net value of almost $30,000, commented at [4]:

"In a small estate such as this, it is appropriate that it be settled early in order to avoid the amount of costs. I do not know why this did not happen on this occasion, but it is a matter which requires the attention of people, particularly those experienced in the area, such as the Defendant, to try to make sure that at a very early stage attempts are made to settle."

Young CJ in Eq (as his Honour then was), in Szlazko v Travini [2004] NSWSC 610 said:

"10 It is certainly true that there are many decisions which say that the executor's duty is as I have set out. They are summarised in Professor Dickey's book Family Provision After Death (LBC, 1992) p 183 and the principal decisions are Vasiljev v Public Trustee [1974] 2 NSWLR 497; Dijkhuijs v Barclay (1988) 12 Fam LR 367 and Warren v McKnight (1996) 40 NSWLR 390.

11 However, it must be remembered that the utterances of the learned Judges in those cases were directed to a particular point. Whilst the law is that the executor is expected to put before the Court all material necessary for the Court to make its decision, none of the Judges ever thought when they were saying this that any executor would take into his head that he must defend Family Provision Act proceedings as if they were a jury trial in a fraud case. Furthermore, as is plain from judgments such as Jackson v Riley Cohen J, 24 February 1989, unreported and Propert v O'Connor Master Macready, 29 July 1994, unreported, there is a duty upon practitioners, and this attaches to defendants as well, to compromise claims in relation to small estates and to be careful when presenting evidence not to allow the costs of the defence to exceed sensible proportions. Accordingly, although the executor has the duty in the authorities, he or she must be careful to have a due sense of proportionality. These days, executors in a small estate would be expected not to look under every bushel for evidence, but to put forward before the Court the essential material and to seek to compromise, if at all possible, in a way that would save both the plaintiff and the other beneficiaries' costs."

In small estates particularly, the court should be careful not to foster the proposition that obstinacy and unreasonableness will not result in an order for costs: Dobb v Hacket (1993) 10 WAR 532, at 540.

Notional Estate

The notional estate provisions of the Act are dealt with in Part 3.3 of the Act. However, in s 3 of the Act, "notional estate" of a deceased person is defined as meaning "property designated by a notional estate order as notional estate of the deceased person". "Notional estate order" means "an order made by the Court under Chapter 3 designating property specified in the order as notional estate of a deceased person".

It has been said, in respect of the notional estate provisions in the former Act that an applicant for provision "may now apply in the same proceedings for orders for relief and designating property as "notional estate" thereby compelling the "disponee" of a "prescribed transaction" to provide money or property for the purpose of making financial provision for the applicant": Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422 at 441. The same principle applies in respect of a person to whom property has been distributed.

Section 63(3) of the Act provides that a family provision order may not be made in relation to property of the estate that has been distributed by the legal representative of the estate in compliance with the requirements of s 93, except as provided by subsection (5).

Section 63(5) provides that a family provision order may be made in relation to property that is not part of the estate of a deceased person, or that has been distributed, if it is designated as notional estate of the deceased person by an order under Part 3.3 of the Act.

Importantly, the power to make a notional estate order does not arise unless the Court is satisfied that (a) the deceased person left no estate, or (b) the deceased person's estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, or (c) provision should not be made wholly out of the deceased person's estate because there are other persons entitled to apply for family provision orders or because there are special circumstances (s 88).

Furthermore, the Court must not designate as notional estate, property that exceeds what is necessary, in the Court's opinion, to allow the provision that should be made, or, if the Court makes an order that costs be paid from the notional estate under s 99, to allow costs to be paid as ordered, or both (s 89(2)).

Section 78 of the Act provides:

"78 Notional estate order may be made only if family provision order or certain costs orders to be made

(1) The Court may make an order designating property as notional estate only:

(a) for the purposes of a family provision order to be made under Part 3.2, or

(b) for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate of a deceased person be paid from the notional estate of the deceased person.

(2) The Court must not make an order under subsection (1) (b) for the purposes of an order that the whole or part of an applicant's costs be paid from the notional estate of the deceased person unless the Court makes or has made a family provision order in favour of the applicant."

Section 79 of the Act, relevantly, deals with the designation of property where the estate of the deceased has been distributed. The section provides:

"79 Notional estate order may be made where property of estate distributed

The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that on, or as a result of, a distribution of the deceased person's estate, property (whether or not the subject of the distribution) became held by a person (whether or not as trustee) or subject to a trust."

The effect of a notional estate order is that a person's rights are extinguished to the extent that they are affected by a notional estate order (s 84A).

Section 85 provides:

"85 More than one notional estate order may be made

The Court may make one or more notional estate orders in connection with the same proceedings for a family provision order, or any subsequent proceedings relating to the estate of the same deceased person."

The Court's power to make a notional estate order is circumscribed by other sections. Section 87 provides:

"87 General matters that must be considered by Court

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

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

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

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

In John v John at [118] - [120], Ward J said:

"[118] What amounts to "reasonable expectations in relation to property" was considered in Petschelt v Petschelt [2002] NSWSC 706, at [68], by McLaughlin M (as the Associate Justice then was), who said:

That phrase does not, however, indicate the person by whom those reasonable expectations are held. Clearly the Court must consider the reasonable expectations of the First Defendant in relation to property. By the same token, however, the Court should also consider the reasonable expectations of the Deceased herself in relation to property, and also, possibly, the reasonable expectations of the Plaintiff.

[119] In D'Albora v D'Albora [1999] NSWSC 468, at [53], Macready M (as the Associate Justice then was) gave examples of the circumstances which might give rise to reasonable expectations for the purposes of this section:

Under s 27(1)(a) the Court has to consider the importance of not interfering with the reasonable expectations in relation to the property. Such reasonable expectations may well occur in a number of circumstances. For example, a beneficiary who receives a property may have spent money on the property or worked on the property ... Another common area where one often sees in this matter is where there is a promise in relation to the property and the acting by an intended beneficiary on the fact of that promise.

[120] Similarly, in Wentworth v Wentworth [1992] NSWCA 268, Priestley JA, with whom Samuels AP and Handley JA agreed, referring to the "more general precautionary provisions" in ss 26 and 27 of the Family Provision Act, said:

S 27(1) for example, says the Court shall not make an order designating property as notional estate unless it has considered, amongst other things, the importance of not interfering with reasonable expectations in relation to property. If someone is in possession of property, otherwise than by gift, after having given up something of equivalent value in order to obtain that property, it would be entirely reasonable for that person to expect to remain in possession of it."

I have little doubt that the Defendant is a person whose "reasonable expectations" should be considered since he was the sole beneficiary named in the Will of the deceased, and in the events that happened, a person who received the deceased's benefaction.

The "substantial justice and merits" referred to in s 87(b) are linked to the making, or refusing to make, an order designating property as notional estate: Smith v Woodward (NSWSC, 9 September 1994, unreported).

The position of all parties should be considered in respect of s 87(b) and (c).

In determining what property should be designated as notional estate of a deceased person, the Court must have regard to the value and nature of any property the subject of a distribution from the estate of the deceased, any changes in the value of property of the same nature as the property referred to, in the time since the distribution was made, and any other matter it considers relevant in the circumstances: s 89.

Importantly, in this case, reference must be made to s 90, which provides:

"90 Restrictions on out of time or additional applications

(1) This section applies to proceedings where:

(a) an application for a family provision order is made later than 12 months after the date of the death of the deceased person, or

(b) an application for a family provision order is made in relation to an estate that has been previously the subject of a family provision order.

(2) The Court must not make a notional estate order in the proceedings unless:

(a) it is satisfied that:

(i) the property to be designated as notional estate is property that was the subject of a relevant property transaction or of a distribution from the estate of a deceased person or from the estate of a deceased transferee, and

(ii) the person who holds the property holds it as a result of the relevant property transaction or distribution as trustee only, and

(iii) the property is not vested in interest in any beneficiary under the trust, or

(b) it is satisfied that there are other special circumstances that justify the making of the notional estate order."

The meaning of "other special circumstances" in s 28(5) of the former Act, which was, in its terms, similar to s 90(2)(b) of the Act, has been considered in a number of cases (see, for example, Lewis v Lewis [2001] NSWSC 321; Zirkler v McKinnon [2002] NSWSC 285; Blyth v Spencer; Spencer v Neville [2005] NSWSC 653; Cetojevic v Cetojevic ; Campbell v Chabert-McKay ; John v John; Alexander v Jansson [2010] NSWCA 176. ("Incapacity" of the applicant was referred to in the former Act but that reference does not appear in s 90.)

The following summary regarding s 90(2)(b) may be gleaned from the authorities which dealt with s 28(5) of the former Act:

(a) The sub-section in the Act gives no direct indication of the nature of special circumstances; the term is incapable of precise, or exhaustive, definition; s 28(5) of the former Act gave some indication of the types of circumstances that may count as special circumstances, namely circumstances involving such things as property not finally vesting in interest, and lack of capacity in the plaintiff; those matters may amount to special circumstances under s 90.

(b) The term prescribes a verbal formula that is commonly used where it is intended that judicial discretion should not be confined by precise definition, or where the circumstances of potential relevance are so various as to defy precise definition.

(c) The qualifying adjective, "special", looks to circumstances that are unusual, uncommon or exceptional; the Oxford Dictionary defines "special" as meaning "of such a kind as to exceed or excel in some way that which is usual or common; exceptional in character, quality or degree"; the Macquarie Dictionary states the meaning: "of a distinct or particular character or purpose"; "being a particular one"; "particular, individual or certain"; "different from what is ordinary or visual"; "extraordinary, exceptional".

(d) A circumstance may be "special" by reason of degree, as well as of kind; circumstances need not be unique to be special, but they will be unusual; it is legitimate to have regard to a combination of factors in reaching the conclusion that they are special.

(e) More should be demonstrated to prove "special circumstances" than to justify an extension of time; the latter requires "sufficient cause" to be shown; however, to establish such special circumstances does not require the Court to exclude circumstances considered under s 58(2).

(f) In a case where an extension is sought, the sub-section superimposes a further requirement, or extra hurdle, over and above the matters that a Court will consider under s 87.

(g) Whether circumstances answer the description must depend upon the context in which they occur; it is the context that allows one to say that the circumstances in one case are markedly different from those in the usual run of cases. Their existence is also, in a sense, evaluative in character.

White J in Campbell v Chabert-McKay , in relation to s 28(5) of the former Act, dealt with the term "other special circumstances". His Honour held:

"85 In Cetojevic v Cetojevic [2006] NSWSC 431 Campbell J (as his Honour then was) assumed without deciding (at [79]) that more is required to establish "other special circumstances" under s 28(5)(d) than is required to obtain an extension of time under s 16.

86 I accept that more is required to establish "other special circumstances" under s 28(5)(d) than would be required to obtain an extension of time. But I do not agree that to establish such other special circumstances the court is to exclude circumstances considered under s 16. Mr Willmott stressed that the plaintiff needed to establish not just special circumstances, but other special circumstances to justify the making of an order designating property as notional estate.

87 In my view "other special circumstances" are not special circumstances other than those considered under s 16 or s 8. Section 16 requires the court to have regard to all the circumstances of the case in deciding whether to extend time. This must include any special circumstances. Similarly, if an application is made for additional provision under s 8, the court is required by s 9(3)(d) to consider any circumstance it considers relevant.

88 The scheme of s 28(5) is that the circumstance described in s 28(5)(c) is to be regarded as a special circumstance. When s 28(5)(d) refers to "other special circumstances" it is referring to special circumstances other than that referred to in s 28(5)(c). Thus, in s 28(5)(d), the incapacity of an applicant is described as a special circumstance. But incapacity would have to be relevant to the exercise of discretion under s 16 whether to grant an extension of time.

89 For these reasons, I do not accept that matters relevant to the decision to extend time under s 16 are excluded from consideration under s 28(5)(d)."

Section 93 of the Act relevantly provides:

"93 Protection of legal representative who distributes after giving notice

(1) The legal representative of the estate of a deceased person may distribute the property in the estate if:

(a) the property is distributed at least 6 months after the deceased person's death, and

(b) the legal representative has given notice in the form approved under section 17 of the Civil Procedure Act 2005 that the legal representative intends to distribute the property in the estate after the expiration of a specified time, and

(c) the time specified in the notice is not less than 30 days after the notice is given, and

(d) the time specified in the notice has expired, and

(e) at the time of distribution, the legal representative does not have notice of any application or intended application for a family provision order affecting the estate of the deceased person."

Whilst it seems that the Defendant complied with the section, the words of Young CJ in Eq, which are particularly apt in the circumstances of this case, in Carstrom v Boesen [2004] NSWSC 1109 at [12], should be remembered:

"The Court has often said to executors that they must distribute estates early, but there does need to be considerable discretion when there is a likelihood of a claim being made under the Family Provision Act. It would seem to me to be wise practice, in circumstances such as the present, to indicate to possible claimers by letter - especially when they do not live in the area covered by the newspaper in which the ad is being placed - that they should either, within the next X days, notify that they will be making a claim or, alternatively, there will be a distribution."

Applicable Legal Principles - Substantive Application

In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these principles were stated in the context of the previous legislation, they are equally apt in a claim such as this one.

Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the former Act, that it is not appropriate, to endeavour to achieve a 'fair' disposition of the deceased's estate. It is not part of the Court's role to achieve some kind of equity between the various claimants. The Court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Rather, the Court's role is of a specific type and goes no further than the making of 'adequate' provision in all the circumstances for the 'proper' maintenance, education and advancement in life of an applicant.

In Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the Court to be vigilant in guarding "against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant".

The Court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation ( Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, per Dixon CJ at 19; McKenzie v Topp [2004] VSC 90 at [63]). Freedom of testamentary disposition remains a prominent feature of the Australian legal system.

Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales at 19; Walker v Walker (NSWSC, 17 May 1996, unreported); Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 at [11]; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.

In relation to a claim by an adult child, the following principles, in my view, are relevant:

(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.

(b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia .

(c) There is no need for an adult child to show some special need or some special claim: McCosker v McCosker (1957) 97 CLR 566 ; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.

(d) The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd .

(e) Although some may hold the view that equality between children does not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not entirely consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court's determination of the applicant's case.

In Barna v Barna [2008] NSWSC 1402, Brereton J noted:

"[27] The obligation to make provision for persons for whom the community would expect a testator to make provision does not import an obligation to deal with children equally. A testator is entitled to deal differently with his or her children, and the quality of the relationship that the testator has with each of the claimants on the estate is a relevant consideration."

I make it clear that I do not intend what I have described as "applicable legal principles" to be elevated into rules of law. Nor do I wish to suggest that the jurisdiction should be unduly confined. I identify them merely as providing useful assistance in considering the statutory provisions, the terms of which must remain firmly in mind.

Credibility of Witnesses

I am satisfied that, generally, there were not many facts seriously in dispute between the parties. The essential facts that were in dispute related to the conduct of the Defendant following the death of the deceased and his failure to fully disclose, to the Plaintiffs, the nature and value of the deceased's estate.

There was very little cross-examination of Lynda or Sara, or of Christine, who also swore a number of affidavits that were read in the proceedings. There was even less cross-examination of Maureen Pankhurst, the deceased's sister and aunt of the Plaintiffs.

I have no hesitation in accepting each as a witness of truth.

I note that it was suggested that Christine had said, during the hearing in which the deceased had made a claim for damages for personal injuries that she would not give evidence to assist the deceased in that claim, unless she was paid $40,000 "off the top - $20,000 for each daughter".

I accept Christine's evidence that she did not say any such thing. I accept that she said that she would give evidence of what had happened on the day of the accident on which the deceased was injured and about his medical treatment. I also accept her evidence that it was the deceased's solicitors retained in respect of that claim, who advised the deceased to sign an irrevocable authority allowing them to make the payment to each of the Plaintiffs. That she met with the deceased's barrister, suggests that it was highly unlikely that her appearance at Court was unexpected.

I also accept that it was necessary for the Plaintiffs to obtain a copy of the deceased's Will from the Supreme Court as they did not receive a copy from the Defendant.

In relation to the conversation in October 2010 between Sara and the Defendant as to the size of the estate, to the extent that there is any conflict, I accept her evidence. I am also satisfied that he told her the deceased lived in housing commission accommodation and that he had about $5,000 in a credit union account that had been used to pay for medical treatment.

Having observed the Defendant, I did not find him to be quite as forthright as were the other witnesses. I have not forgotten that he stated that the deceased "forbade me to tell the plaintiffs if he was sick or if he died". However, I do not think that this justifies the Defendant's conduct, overall, following the death of the deceased.

In his affidavit, the Defendant said that following the advertisement of the notice of his intention to distribute the estate, he distributed it, because "[A]t no time had I received any notice of a Family Provision claim by the Plaintiffs or any other person". That he did not receive such notice is hardly surprising, when the advertisement was not placed in a newspaper where the Plaintiffs were likely to see it as they did not live in the area covered by the newspaper; when he did not inform either of them, or any members of their family, of the deceased's illness or death; and where he failed to disclose that the deceased had children in the deceased's Death Certificate.

I found his explanation of the reasons why he told Sara what he did about the nature and value of the estate when he spoke to her in October 2010, quite unconvincing. The Defendant's affidavit evidence on this topic was "I then told her the details of the estate". He admitted that what he told her was inaccurate.

I accept the Plaintiffs' submission that the failure to make full disclosure to the Plaintiffs, delayed, if it did not actively discourage, the making of the claim for a family provision order.

The Defendant was well aware, by the date of his conversation with Sara, that there had been significantly more in the deceased's estate and that the distribution to him had been made out of the deceased's estate and not otherwise. He had, after all, stated in the inventory of property, attached to the Probate document, that the property owned solely by the deceased included the amount of $73,936 in the Clearview Retirement Savings Account.

Equally, if not more, unconvincing, was the Defendant's evidence about the expenditure of the deceased's estate following distribution. In his formal affidavit, all that he had said was that "the estate has been fully distributed". Then, on the same day, he had sworn a lengthier affidavit, in which he explained that he had made the funeral and associated payments to which I have referred. He then wrote:

"On 4 July 2010, I went on a cruise with a close friend. I paid for all of the travelling costs for both of us out of the monies I had received from the deceased including cruise fees of $19,212, airfares of $14,200 and passport landing fees and spending money of approximately $12,000."

He had stated, in his affidavit, that he had received $78,949 "after payment of legal fees and disbursements". When he was asked to explain the amount unaccounted for (after the payment of funeral and associated expenses and the costs of the holiday), and to identify when it was spent, his evidence was as follows:

"Q. You heard his Honour say that after the big payments, funeral, trip expenses, there was about, on the mathematics, about 17,000 left?

A. Somewhere around that.

Q. Do you have any of that $17,000 left today?

A. No I don't.

Q. Was it disbursed or spent?

A. Yes.

Q. By you?

A. Yes it was.

Q. Over what period? You got the money in February 2010, over what period did you distribute this money or spend it?

A. About eight to 10 months.

Q. Up to?

A. Perhaps towards the end of the year.

Q. How was the money gotten rid of?

A. It was dispensed in strict accordance of what Tom asked me to do, to give it away in small amounts to various charities. For example, the Cancer Council because he had two cancers, and the church, St Vincent de Paul, all of the regular charities, Masonic charities, and generally to dispense it in small amounts because he didn't want a big fuss made, he didn't want things to go out in his name.

Q. Approximately how many charities or funds or organisations received this money?

A. More than 10.

Q. Do you remember what the biggest one was?

A. $500, it went to the church, St Matthew's Church Windsor for a - what was that for - I can't remember. That was for the memorial mass or as a gift to the church.

Q. Did you keep a record of how this money was distributed or disbursed?

A. Not specifically, no."

This information did not appear in any of his affidavits. He explained this omission:

"Q. Is there any reason you failed to disclose in your affidavits that you had made donations totalling up to $17,000 out of the estate?

A. I didn't, I didn't discuss that with anyone and I didn't discuss what I had done with all the money I don't think at any stage except in general terms.

Q. But the proceedings having been commenced and you filed affidavits, why did you not disclose in your affidavits that there had been distributions made by you to charities out of the deceased's estate?

A. Your Honour, I didn't have receipted proof of those donations and I don't believe that - you know, that it was necessary at that stage or at any stage, really. I just simply didn't believe that it was necessary. I did mention that the estate was exhausted in accordance with Tom's wishes."

I do not accept this explanation.

The Defendant did not produce any bank records disclosing the receipt, or expenditure, of the moneys distributed to him. In circumstances where the whole of the estate was distributed and said by him to have been expended, more is required than simply making that assertion. Also, one would think that prudence required him to keep records identifying the dates of donations made and the recipients of the donations, especially as some of the amounts gifted were in excess of several hundred dollars.

Importantly, the Defendant disclosed that he had an amount of $135,000 held in a Navigator Personal Retirement Fund. Yet, he did not disclose to the Court the source of moneys in that Fund, or for how long he had held those moneys. He produced no account statements relating to the account of the Fund.

In the circumstances, I am not satisfied that the Defendant has expended all of the estate that was distributed to him.

Relevant Facts

I set out the additional facts that I am satisfied are either not in dispute, or that, in my view, have been established by the evidence. I do so by reference to s 60(2) of the Act.

(a) any family, or other, relationship between the applicant and the deceased person, including the nature and duration of the relationship

The following comment has been made by Campbell JA in regard to the Court's consideration of the totality of the relationship between the applicant and the deceased in Hampson v Hampson [2010] NSWCA 359:

"80 The requirement to have regard to the totality of the relationship can in many cases be satisfied by considering the overall quality of the relationship assessed in an overall and fairly broad-brush way, not minutely. Consideration of the detail of the relationship is ordinarily not called for except where there is an unusual factor that bears on the quality of the relationship, such as hostility, estrangement, conduct on the part of the applicant that is hurtful to the deceased or of which the deceased seriously disapproves, or conduct on the part of the applicant that is significantly beneficial to the deceased and significantly detrimental to the applicant, such as when a daughter gives up her prospects of a career to care for an aging parent. Neither entitlement to an award, nor its quantum, accrues good deed by good deed. Indeed, it is a worrying feature of many Family Provision Act cases that the evidence goes into minutiae that are bitterly fought over, often at a cost that the parties cannot afford, and are ultimately of little or no help to the judge."

I have earlier stated that each Plaintiff is a child of the deceased. The context of their childhood should not be forgotten. Each gives evidence, as does Christine, that the deceased was physically and verbally violent. His violent outbursts became worse as the Plaintiffs became older and they found him to be unpredictable. In addition, he also developed a gambling problem.

Following the breakdown of his marriage, the deceased moved to Sydney. At this time, Lynda was in year 12, and Sara was in year 10, of high school. Despite the fact that he moved, the Plaintiffs maintained contact with the deceased and he with them (although in the case of Sara, their last contact was in 2006). Initially, they saw each other reasonably often, although as time passed, the regularity of their face-to-face contact lessened.

The deceased visited Lynda in her flat (prior to her marriage) and saw Sara at Christine's house. He saw the Plaintiffs, together, at a restaurant or cafe in Canberra.

The Defendant agreed that this was not a case of bare paternity and did not submit that either Plaintiff was estranged from the deceased. The parties agreed that the relationship of Lynda and of Sara with the deceased was not close, but I am satisfied that it was closer than the deceased suggested.

For example, between 1997 and 2006, the deceased came to Canberra two, or three, times a year and Lynda met him, sometimes alone, and sometimes with Sara, usually at a coffee shop. They would speak by telephone "a few times a year". When Lynda was studying in Armidale, the deceased would meet her at the train station in Sydney. In 2005, on two occasions, the deceased met Lynda's then husband to be and his son.

Following the birth of her daughter, in 2007, Lynda telephoned the deceased who came to Canberra. She sent photographs of her baby daughter to the deceased, and on her daughter's first birthday, the deceased sent a birthday card. Christine recollects being present when the deceased telephoned Lynda on her mobile telephone in March 2008. In May 2008, the deceased sent Lynda a birthday card on which he stated "From your Dad ... I love you". He also sent her a photograph of herself, as a baby, with him.

In 2001, Sara introduced her then boyfriend, now husband, to the deceased. They had lunch together, and on this occasion, Sara met the Defendant.

The Defendant tendered a document in which he stated what he had done for the deceased. Included in the document is a statement that he "drove Tom to Canberra on a number of occasions to see his family".

I am satisfied that each of the Plaintiffs cared for the deceased and he for them. I am also satisfied that the deceased's conduct prior to the breakdown of his marriage was a significant cause of the lack of closeness in the relationship. I accept the heartfelt evidence given by Sara in the witness box, that she remained afraid of the deceased and did not discuss anything with him that "would set him off".

I am also satisfied that the parent/child relationship continued throughout the whole of the life of each Plaintiff, although, in the case of Sara, she had no contact with the deceased after 2006.

(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate

Leaving aside any obligation, or responsibility, arising as a result of their relationship as parent and child, the deceased did not have any legal, or financial, obligation to either of the Plaintiffs imposed upon him by statute or common law.

However, an obligation, or responsibility, to make adequate provision for each Plaintiff's proper maintenance, education, or advancement in life is recognised in the case of a child. Any obligation, or responsibility, to his children was that naturally arising from his parental relationship to them.

There were no legal obligations or responsibilities owed by the deceased to the Defendant. He was a friend of the deceased. They had met in 1997.

(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered

I have dealt with this earlier in these reasons.

(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate

Lynda and her husband, as will be seen from the table below, have assets (excluding superannuation) with a net value of approximately $89,000. She holds a permanent position in the Australian Public Service, although she is currently on leave without pay. She earns approximately $60,000 gross per annum. She is caring for her children. Her husband is in full time employment in the public service. Her step son has special medical and educational needs. If she were to return to work full time childcare costs for the next four years would be in the order of $40,000 per annum. She is currently studying part time in order to complete her nursing degree. As at March 2011, her household's monthly expenditure was approximately $6,787.

Assets

(a)

Matrimonial home (joint) (est):

$439,000

(b)

Toyota motor vehicle (est):

$ 24,500

(c)

Holden motor vehicle (est):

$ 6,600

(d)

Furniture and chattels (est):

$ 10,000

(e)

Joint bank account:

$ 1,000

(f)

Superannuation (est):

$ 27,000

(g)

Superannuation (husband):

$123,416

Liabilities

(a)

Matrimonial home (joint):

$379,256

(b)

Credit card:

$ 1,000

(c)

Car loan:

$ 9,000

(d)

Finance for washing machine:

$ 1,500

(e)

Surgery costs:

$ 1,750

Danial Charnock's income (as at March 2011) was disclosed as follows:

(a)

2010 - Taxable income:

$ 78,165

(b)

2009 - Taxable income:

$ 61,368

(c)

2008 - Taxable income:

$ 57,231

Sara and her husband, as will be seen from the table below, have assets (excluding superannuation) with a net value of approximately $175,500. She also holds a permanent position in the Australian Public Service. She earns approximately $40,000 per annum gross, based on working three days a week. She has just returned to work part time after two years absence caring for her two year old son. Her husband has just commenced a new job and is still on probation. His salary is approximately $75,000 per annum. Their son has a chronic kidney condition for which he needs regular monitoring and specialist appointments. It is possible he may need further surgery on his kidney. She is currently studying part time to complete a Bachelor of Arts. Childcare costs are approximately $14,000 a year for three days care a week. Her household's monthly expenditure as at March 2011 is estimated to be $7,869.

Joint Assets

(a)

Matrimonial home (est):

$490,000

(b)

Investment property (est):

$415,000

(c)

Car (est):

$ 20,000

(d)

Furniture and chattels (est):

$ 10,000

(e)

Superannuation:

$ 56,960

(f)

Superannuation (husband):

$ 69,180

Joint Liabilities

(a)

Matrimonial home:

$327,351

(b)

Investment property:

$406,984

(c)

Credit card:

$ 1,250

(d)

Car loan:

$ 14,324

(e)

Personal loan:

$ 8,500

(f)

Debt due to Body Corporate:

$ 1,050

Matthew Stockwell's income (as at March 2011) was disclosed as follows:

(a)

2010 - Taxable income:

$ 53,321

(b)

2009 - Taxable income:

$ 72,992

(c)

2008 - Taxable income:

$ 67,461

The Defendant has assets, including a home in a retirement village on which he has a 99-year lease. It is valued at approximately $350,000. He has a car worth $35,000 and $135,000 in a personal retirement fund. He is aged 68. He works as a bus driver, part time, and has an income from an allocated pension. He has no debts.

(e) if the applicant is cohabiting with another person - the financial circumstances of the other person

Lynda is co-habiting with her husband, her stepchild who is aged 8 years, and two children aged 4 years and 14 months. I have referred to her husband's financial circumstances above.

Sara is co-habiting with her husband and son. I have referred to her husband's financial circumstances above.

(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated

Lynda has a number of chronic medical conditions. She needs surgery for a gynaecological problem. She has oesophageal reflux and needs regular endoscopies. In the future she will need regular colonoscopies to monitor for bowel cancer. She is on daily medication.

Sara also suffers from oesophageal reflux and needs regular endoscopies. In the future she, too, will need regular colonoscopies to monitor for bowel cancer. She suffers severe hay fever and has problems with anxiety. She is on daily medication.

The Defendant does not allege any physical, intellectual or mental disability.

(g) the age of the applicant when the application is being considered

Lynda was born in May 1978 and is presently aged 33 years. Sara was born in July 1980 and is presently aged 31 years.

(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant

"Contributions" are not defined in the Act. However, as stated in the sub-section, what may be considered includes financial and non-financial contributions, including to the welfare of the deceased. It has not been suggested that either of the Plaintiffs made any relevant contribution.

It has been submitted on behalf of the Plaintiffs that because the deceased retained the proceeds of sale of the former matrimonial home, this is a form of indirect contribution by them. I do not accept this submission. There is no suggestion that either of the Plaintiffs had any entitlement to any share of the former matrimonial home.

(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate

The deceased made a gift of $20,000, in early 2000, to each of the Plaintiffs. Each of the Plaintiffs used the amount to repay a HECS debt and for living expenses. Neither Plaintiff received anything from the deceased's estate.

(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person

While this sub-section permits the Court to accept evidence of the reasons for the provision, or lack of provision, it does not compel the Court to attribute any particular weight to that evidence, or to accept the deceased's statement as establishing the truth of what is asserted.

In this case, the deceased left a "Statement" which the Defendant says was discussed with a solicitor some time before the deceased signed it on the day before he died. The Statement is in the following terms:

"Up until about 1996 I was married Christine Beryl Davidson (sic). There are two children of that marriage Lynda (aged 34) and Sara (aged 31).

My marriage to Christine ended in about 1997 at which time I suffered a complete break down both mental and physical. At that point of time I left the home and since that time have been completely estranged from my said daughters.

The last contact I had with my daughter Linda (sic) was at about my birthday in April, 2008. She telephoned me to advised (sic) that she had had a baby and that I was now a grandfather. In fact the baby had been born 20 months before her phone call. She had not even advised me that she was married. After having been advised of the birth of my grandson I travelled to Canberra and by use of the Canberra phone book found the address of my daughter Sarah (sic). I went to her home as I had some photographs to give her. I also asked if she would give me a contact number for Lynda but she refused to do so. She invited me into the house and shortly after Lynda phoned presumably at the request of Sara. Subsequently I met Lynda at McDonalds where she allowed me to see the baby which I took some photographs.

Other than the above occasions, I have had absolutely no contact from my daughters since the break down of my marriage. Both of them know where I live but make no attempt to contact me either by telephone or in person. No cards are sent to me at Christmas or my birthday. I do not even know what their present addresses are, whether they are married or not or what names they presently use.

As far as I am concerned my daughters have completely cut off contact from me and I do not feel obliged in any way to make any provision out of my estate for their benefit."

I am satisfied that the Statement does not accurately describe the relationship between each of the Plaintiffs and the deceased. It contained inaccuracies that have been identified by Lynda, which inaccuracies it is not necessary to repeat. Even the Defendant admitted that it contained some inaccuracies.

In the circumstances, it is difficult to accept as valid all of the complaints made about the Plaintiffs by the deceased in the Statement.

I have also seen a copy of an earlier Will of the deceased made in September 2003. In this Will, the deceased provided a pecuniary legacy of $10 each to the Plaintiffs "in the hope they will buy a lottery ticket and enjoy the winnings in my memory". The deceased also acknowledged a debt of $10,000 and gave the remainder of his estate to the Defendant absolutely.

(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so

There is no evidence that the deceased maintained either Plaintiff, wholly or partly, before his death.

(l) whether any other person is liable to support the applicant

Each Plaintiff is married so that an obligation might arise from the marriage relationship. Otherwise, there is no other person with a specific liability to support the Plaintiff.

(m) the character and conduct of the applicant before and after the date of the death of the deceased person

I am satisfied that the character and conduct of each Plaintiff was such that it does not disentitle either to provision out of the estate.

(n) the conduct of any other person before and after the date of the death of the deceased person

This sub-paragraph enables me to consider the conduct of the Defendant. He, of course, is the sole chosen object of the deceased's testamentary beneficence. He tendered a document that set out what he had done for the deceased. In relation to the financial contribution, it was not supported by any original documents.

I am satisfied that he was a close and good friend to the deceased and that he assisted him as much as he could.

(o) any relevant Aboriginal or Torres Strait Islander customary law

This is not relevant in the present case.

(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered

I am satisfied that, on his separation from Christine, the deceased entered into a property settlement with her, the effect of which was to provide for the proceeds of sale of their matrimonial home, to be paid to the deceased.

Determination

Claims for a family provision order present particular difficulties where the estate is small. Any provision made by the Court in favour of the applicant or applicants must, in this class of case, be made at the expense of the beneficiary who has had to defend the claims. The case becomes even more difficult where it is said that the estate has been distributed.

There is no dispute that each of the Plaintiffs is an eligible person or that no provision was made for either of them in the Will of the deceased.

The first issue is whether an order should be made pursuant to subs 58(2) of the Act extending the period for each Plaintiff to make her application under the Act.

The Defendant did not dispute that the Plaintiffs did not know of the death of the deceased at any time within the period prescribed by the Act for making the application. He acknowledged that he did not tell them, despite knowing that they were the deceased's children, of the death of the deceased. He did not inform them of any funeral arrangements. As the informant, he did not identify the Plaintiffs as the deceased's children on the deceased's Death Certificate and falsely represented on that document that there were "not any" children of the deceased. He did not tell their aunt, Maureen, whose telephone number he knew, of the deceased's death, or of the funeral arrangements, so that she could convey the information to the Plaintiffs. He did not identify the deceased's family on the deceased's headstone.

When the Defendant did speak to Sara, in October 2010, he misled her as to the nature and value of the deceased's estate at the date of death. At this time, an extension of time for the making of the application would still have been required.

The Plaintiffs did not see a copy of the deceased's Will until January 2011. They did not receive the copy that the Defendant said he sent in October 2010. (Whether or not he mailed them a copy of that Will following the telephone conversation, as he asserts, need not be decided. I am satisfied, even if he did, that they did not receive it.) It was also only in January 2011, that the Plaintiffs became aware of the true value of the deceased's estate at the date of death.

I accept that the Plaintiffs took three months from finding out about the deceased's death until they made a claim. I am satisfied that this delay is explained by the difficulty in obtaining a copy of the deceased's Will and Probate documents which difficulty arose because they were not named as beneficiaries and because the death certificate of the deceased stated that the deceased had no children. Following receipt of these documents, they sought legal advice and then, shortly thereafter, commenced proceedings.

In my view, nothing turns on the delay of three months between the end of October 2010 and February 2011. It was not suggested to either Plaintiff, in cross-examination, that she unnecessarily delayed in making the application once she found out about the contents of the deceased's Will and the estimated value of the deceased's estate. Nor was the evidence about the causes of the delay in making the claim challenged.

In view of the conduct of the Defendant, following the death of the deceased, I am unable to find that he will be unacceptably prejudiced by an order extending the time for the making of the applications.

I am, however, able to find that his conduct was unconscionable. I have earlier referred to this conduct.

Finally, in view of the conclusion set out below as to the provision that ought to be made for each Plaintiff, I am of the view that making an order extending time is not futile.

In all the circumstances, I am satisfied that "sufficient cause" has been shown for the making of an order extending the time for the making of the Plaintiffs' application until the date of the filing of the Summons.

Since one of the preconditions for the making of an order designating property as notational estate is that it is for the purposes of a family provision order, I must next consider whether, at this time, adequate provision for the proper maintenance, education, or advancement in life of each Plaintiff has not been made by the Will of the deceased.

No provision was made for either Plaintiff in the Will of the deceased. There is no scope for the operation of the intestacy rules. Whilst neither Plaintiff is destitute, in my view, each requires an amount for "education and advancement in life". Even though the relationship between her and the deceased was not as close as it might have been, for each of his children some provision ought to have been made by the deceased.

I am satisfied that the lack of provision results in inadequate provision having been made for each out of the estate, or notional estate, of the deceased and that an order for provision ought be made in favour of each.

I then turn to the question what amount of provision should be ordered in favour of each Plaintiff? In my view, had there been an estate of about $62,827, an order for a more significant lump sum than I shall order for Lynda and for Sara could have been made. The usual order for costs in their favour would also have been made. The balance could have been used by the Defendant to pay his own costs of the proceedings.

In reaching this conclusion, I have considered not only the respective financial position of each Plaintiff but also her relationship with the deceased. I also consider the competing claim of the Defendant who is the chosen beneficiary. In determining whether they are able to receive any amount by way of provision, I shall deal with what property should be designated as notional estate.

Since there is no estate, I am satisfied that the deceased's estate is insufficient for the making of a family provision order, or any order as to costs, that I am of the opinion should be made.

The more difficult question, then, relates to the designation of property as notional estate and the ability of the Defendant to satisfy any order that is made.

The Plaintiffs submit (albeit after the conclusion of the hearing) that the word "property" where it appears before "whether or not the subject of distribution" is "property" in s 79 that may be different from the "property" designated as notional estate and specified in the order as notional estate.

The Defendant accepts that s 79 does not place any limitations on the property of the Defendant that can be designated as notional estate, but submits that there is nothing in the relevant section that indicates that the Defendant's own "property" can be considered. He also submits that "as a matter of general principle, if the legislature wished to provide for the court to have the power to encroach upon other property, it would have expressly said so". It is also submitted that "[T]he right to private property is as important as the right to testamentary freedom."

Reference was made to the decision of White J in Campbell v Chabert-McKay at [76] and [78], although in the context of designating property as notional estate where there had been a prescribed transaction (under the former Act).

In that case, the Plaintiff was a daughter of the deceased whose application was brought under the former Act. Relevantly, about 6 weeks or so before the deceased died, he had entered into a contract for sale of approximately 40 hectares of real estate that he owned. The sale was completed on 23 December 2004, three days before the deceased's death. On the deceased's direction, the purchase price of $950,000 was paid to the defendant who banked the whole of the amount in her own bank account. From that sum, the defendant, in accordance with the wishes of the deceased, paid $200,000 to the plaintiff in February 2005. After the payment to the plaintiff, the defendant placed $800,000, on a term deposit. This enabled White J to infer that her bank account was already in credit to an amount of at least $50,000.

His Honour held:

"[76] I therefore conclude that subject to ss 26, 27 and 28 of the Family Provision Act, it is open to make an order designating as notional estate of the deceased, property held by the defendant. It is not necessary that the property which might be so designated be capable of being traced to the moneys received by the defendant from the sale of Lot 4. In determining what property, if any, should be designated as notional estate by reason of the prescribed transaction, regard is to be had to the amount received by the defendant pursuant to that transaction (s 27(2)(a)).

...

[78] The estate has been fully distributed to the defendant. Pursuant to s 24, but subject to ss 27 and 28, an order may be made designating as notional estate of the deceased such property of the defendant as may be specified. Again, it is not necessary to be able to trace the property distributed to assets held by the defendant, but in this case there will be no difficulty in tracing the principal assets the defendant inherited, namely Lots 1 and 3, and 53 of the shares in Scuderia Veloce Pty Ltd."

It is submitted by the Defendant that Campbell v Chabert-McKay is able to be distinguished because the proceeds of sale of the real estate passed into the defendant's bank account and then into other assets. In the present case, it is said that there was never any mixing of the distributed estate with the Defendant's own property (the Navigator Personal Retirement Fund).

I do not accept the Defendant's submission. Firstly, there is no evidence about the factual matter relied on. Even if there were, as I shall explain, all that s 79 requires is for the Court to be satisfied that, on, or as a result of, a distribution of the deceased person's estate, property (whether or not the subject of the distribution) became held by a person (whether or not as trustee). The words, on their ordinary and natural meaning in this context, apply to an act that effects a disposition of property from the estate of the deceased to the recipient of the distributed property.

Neither party referred to the judgment of Ward J in Stern v Sekers; Sekers v Sekers , where her Honour held that the power to designate property as notional estate in s 24 of the former Act was linked only to property held by, or on trust for, the person who received the distribution:

"... Relevantly, again, the property which may be so designated is "property which is held by, or on trust for, the person ..." (which must be a reference back to the person referred to at the beginning of the section in the phrase "as a result of distribution from the estate property became held by a person").

Nor was there a reference to the passage at [193]:

"[193] I am of the opinion that the construction adopted by Macready AsJ in Prince v Argue is correct and that, for there to be a designation of property as notional estate for the purposes of s 23 of the Family Provision Act , it is necessary that the property the subject of the prescribed transaction, must remain held by, or for the benefit of, the person first receiving the property as a result of the prescribed transaction in question (at least unless there are successive transactions so intertwined that the first transaction involving the act or omission of the deceased or distribution of his or her estate can be said to be a cause of the property so being held for on behalf of that subsequent person). That is not the case here. Similar logic applies to s 24 of the Family Provision Act and this (sic) the power to declare distributed estate as notional estate will ordinarily subsist only while the distributed estate is in the hands of the party to whom it was first distributed."

There is nothing in s 79 that requires the property designated as notional estate to be the same property as the distributed property, or property into which the distributed property can be traced. In my view, what is spoken of is "designating property specified in the order" as notional estate, which phrase is not, necessarily, linked to the property held "on or as a result of a distribution".

It follows, then, that if the court is satisfied that someone (the Defendant) has received a distribution from the deceased's estate (the distributed property), it is possible to designate as notional estate, property of that person (moneys in the Navigator Personal Retirement Fund), even if that property is not something into which it would be possible to trace any specific property of the deceased.

In this case, on, or as a result of, the distribution of the deceased's estate, the Defendant held an amount of $78,949. Section 79 of the Act was, therefore, engaged. Upon being satisfied of that fact, the court is empowered to make an order designating property specified in the order as notional estate of the deceased.

I gain support for this view by Richardson v Rearden [2006] NSWSC 1252, in which Campbell J (as his Honour then was) said at [22] - [23]:

"[22] I turn to the application under the Family Provision Act 1982. That application is brought late, and at a time when the estate has been distributed. Because the estate has been distributed, the plaintiff can only succeed if the court makes an order designating certain property as notional estate - Lewis v Lewis [2001] NSWSC 321 at [57]. In cases like the present, where the deceased did not enter any prescribed transaction, the power of the court to designate notional estate relates to:

... such property as [the court] may specify, being property which is held by, or on trust for, the person or the object of the trust, whether or not that property is the property distributed. (Section 24 Family Provision Act 1982)

[23] That provision means that if someone has received a benefit from a deceased estate, it is possible to designate as notional estate an asset of that person, even if that asset is not something into which it would be possible to trace any specific asset of the testator. That ordinarily gives the court a fairly wide power to do practical justice, and make sure that the assets of a deceased estate end up, so far as at least their value is concerned, in the hands that the court decides are the appropriate ones to enable the deceased to fulfil his or her obligations. However, in the present case, even that broad power will not be adequate to meet the present situation of the plaintiff. There is simply no asset that can be identified, of any person who received benefits from the estate of the deceased, which could be designated as notional property. Under these circumstances, the application under the Family Provision Act 1982 would inevitably fail, even if the extension of time were granted."

I am also supported in my interpretation of the section by a consideration of s 89(3) of the Act, which specifically limits the court's power to designate property as notional estate in circumstances where it is held on trust. That sub-section, relevantly, provides:

"(3) If, as a result ... of a distribution from the estate of a deceased person or from the estate of a deceased transferee, property becomes held by a person as a trustee only, the Court must not designate as notional estate any property held by the person other than the property held by the person as a trustee as a consequence of any such relevant property transaction or distribution ." (My emphasis)

Importantly, the limitation set out in this sub-section ("as a consequence of any such ... distribution") does not appear in relation to property that was distributed but which was not held as trustee by the person to whom it was distributed.

Accordingly, I am satisfied that I may make an order designating any property of the Defendant as notional estate. However, in deciding whether to do so, I am next required to consider the matters in ss 87, 88, and 90(2)(b).

In relation to s 87, what must be considered are the reasonable expectations in relation to property. Whilst the Defendant may have expected to inherit the deceased's estate, because of what the deceased had told him, the Defendant gave evidence that he was aware, in general terms, of the rights of certain persons, including children of a deceased person, to make a claim for provision out of the deceased person's estate. He had discussed the topic with his solicitor following the death of the deceased and he had been advised of those rights. No doubt, he had been advised of the orders that the Court could make if an application for a family provision order was made. He knew it was possible that a claim could be made.

With this knowledge, any expectations that the Defendant had to retain all of the property of the deceased that was distributed to him were not reasonable. I have dealt with his evidence on this topic earlier. He simply had no idea what either of the Plaintiffs would do when they found out that the deceased had died and when they were informed, accurately, of the nature and value of the deceased's estate.

In those circumstances, he could not have reasonably expected each of the Plaintiffs to not make a claim.

Perhaps, in other circumstances, it might have been reasonable for the Defendant to have assumed, after the prescribed period for making a claim expired, that no claim by either Plaintiff would be made. There is no evidence that he did think this, or if he did, the circumstances that led him to that view, at least until October 2010. It was not until then that he spoke to one of the Plaintiffs, and even then, he did not tell her everything. Nor does he give evidence that she told him what her intentions were regarding the estate of the deceased.

The Defendant did not ever speak with Lynda.

There is no suggestion that the Defendant came into possession of the distributed property after he gave up something of equivalent value. Accordingly, there could be no reasonable expectation on that basis.

The position in which the Defendant found himself once proceedings were commenced is predominantly his own doing.

I have also considered his expenditure of part of the amount distributed on the holiday, which expenditure he says was made between December 2009, prior to the distribution, and July 2010. Whilst it may be that the amount distributed was spent in the expectation that it was his to deal with, the basis for holding that belief was not reasonable.

His evidence was that most of the costs of the holiday was paid for after the prescribed period, but whether it was or not, the Defendant could not reasonably have formed the view at the time of the payment or payments that no claim would be made for provision by one, or both, of the Plaintiffs once she, or they, ascertained that the deceased had died and of her rights under the Act.

The Defendant gave no evidence about the circumstances of how moneys came to be held in the Navigator Personal Retirement Fund account. He gave no evidence of having any other bank account at the time of the distribution or as at the date of hearing into which the amount distributed to him was placed.

Nor did he give any evidence of any expectations regarding the retention of all of the funds in that account. He remains working part-time, so it cannot be suggested that the income from that account is his only source of income.

In the circumstances of this case, I do not consider that any expectations to retain all of the distributed amount (after payment of the funeral and associated expenses) and to use those funds as he wished, not only for himself, but for the benefit of a third party, for whom the deceased had no obligation to provide, were reasonable.

I have little doubt, based upon the Defendant's conduct and the competing claims of each of the Plaintiffs, that the substantial justice and merits involve making a designating order. However, it is in respect of how much should be so designated, that the real difficulty arises.

As I have said, in this regard, I must consider not only the Plaintiffs but also the Defendant. This requires me to consider whether the making of a designating order will affect his financial and material circumstances. In this regard, a comparison of financial and material circumstances of each of the Plaintiffs and the Defendant must be made.

Section 90 is then engaged because the Plaintiffs' application for a family provision order is made later than 12 months after the date of the death of the deceased. I must turn, next, to whether there are any "other special circumstances" that justify the making of a notional estate order.

The speed taken to wind up the estate was prompt, but permissible, as was the time when the estate was distributed. Accordingly, those matters, on their own, would not have constituted "other special circumstances".

What, then, are the "special circumstances" within the meaning of s 90(2)(b) of the Act? I am of the view that, in addition to the matters relating to the Defendant's conduct following the death of the deceased, another special circumstance is the deceased's decision to make no provision for the Plaintiffs, which appears to have been based upon apparent errors of the type made in the Statement.

Having found "other special circumstances", I turn then to whether all of the estate that was distributed should be designated as notional estate.

Even though there is no dispute that the amount distributed to the Defendant was $78,949, after the payment of legal fees and disbursements, I do not consider that all of it should be designated as notional estate. In relation to the funeral and associated expenses, ($16,122) these would not have formed part of the estate in any event.

I am satisfied, having considered the sections to which I have referred, as well as the financial and material circumstances of the parties, as well as the Defendant's competing claim as a beneficiary named in the deceased's Will, and otherwise, that, as a matter of discretion, I should only designate part of the Defendant's property, in an amount of $22,415, being, for the most part, the amount that I am not satisfied has been spent by him and an amount for costs, as notional estate.

That amount should be used to pay to Lynda a lump sum of $9,665 and to Sara $7,750, as well as their costs of the proceedings ($5,000).

I do not propose to make any order for costs of the Defendant. There is little practical purpose in doing so. Also, he defended these proceedings advancing his own interests and, in this regard, the proceedings were adversarial. (By this I mean, he was not protecting the position of other beneficiaries.) The result is that he will have to pay his own costs of the proceedings.

The orders that I make are that:

(a) The time for making the Plaintiffs' application be extended up to and including 1 February 2011, the date of the filing of the Summons.

(b) Having found that each Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, order that the first Plaintiff is to receive out of the notional estate of the deceased, a lump sum of $9,665 and the second Plaintiff is to receive a lump sum of $7,750.

(c) Order that each of the lump sums should be paid within 28 days, or such other time as the parties agree, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment.

(d) Order that the Plaintiffs' costs of the proceedings assessed and agreed at $5,000, should be paid out of the property designated as notional estate of the deceased within 28 days, or such other time as the parties agree, failing which, interest at the same rate should be paid, calculated from that date until the date of payment.

(e) Make no order as to the Defendant's costs to the intent that he will pay his own costs of the proceedings.

(f) Being satisfied that, as a result of the distribution of the deceased's estate, property became held by the Defendant, order that the amount of $22,415, forming part of the amount held by the Defendant in his Navigator Personal Retirement Fund, be designated as notional estate, and that such sum be paid to the Plaintiffs for the purposes of satisfying the family provision order for each of them and their costs of the proceedings.

(g) Order that each of the lump sums, costs, and any interest accrued thereon, should constitute a charge on the said Navigator Personal Retirement Fund until it is paid.

(h) The exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

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Decision last updated: 16 December 2011

Medium Neutral Citation:	Charnock v Handley [2011] NSWSC 1408
Hearing dates:	21 November 2011
Decision date:	16 December 2011
Jurisdiction:	Equity Division
Before:	Hallen AsJ
Decision:	(a) Order that the time for making the Plaintiffs' application be extended up to and including 1 February 2011, the date of the filing of the Summons. (b) Having found that each Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, order that the first Plaintiff is to receive out of the notional estate of the deceased, a lump sum of $9,665 and the second Plaintiff is to receive a lump sum of $7,750. (c) Order that each of the lump sums should be paid within 28 days, or such other time as the parties agree, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment. (d) Order that the Plaintiffs' costs of the proceedings assessed and agreed at $5,000, should be paid out of the property designated as notional estate of the deceased within 28 days, or such other time as the parties agree, failing which, interest at the same rate should be paid, calculated from that date until the date of payment. (e) Make no order as to the Defendant's costs to the intent that he will pay his own costs of the proceedings. (f) Being satisfied that as a result of the distribution of the deceased's estate, property became held by the Defendant, order that the amount of $22,415, forming part of the amount held by the Defendant in his Navigator Personal Retirement Fund, be designated as notional estate and that such sum be paid to the Plaintiffs for the purposes of satisfying the family provision order for each of them and their costs of the proceedings. (g) Order that each of the lump sums, costs, and any interest accrued thereon should constitute a charge on the said Navigator Personal Retirement Fund until it is paid. (h) Order that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.
Catchwords:	Claims by adult children of the deceased for family provision order under Succession Act 2006 out of the estate or notional estate of the deceased and an order designating property as notional estate - The deceased provided for the whole of his estate to pass to a friend - No provision for Plaintiffs - Estate fully distributed to Defendant - Plaintiffs' application out of time - Whether property should be designated as notional estate - Whether special circumstances established - Nature of property designated
Legislation Cited:	Family Provision Act 1982 Probate and Administration Act 1898 Property (Relationships) Act 1984 Succession Act 2006 Succession Amendment (Family Provision) Act 2008 Uniform Civil Procedure Rules 2005
Cases Cited:	Alexander v Jansson [2010] NSWCA 176 Barna v Barna [2008] NSWSC 1402 Blyth v Spencer; Spencer v Neville [2005] NSWSC 653 Bondelmonte v Blanckensee [1989] WAR 305 Burton v Moss [2010] NSWSC 163 Campbell v Chabert-McKay [2010] NSWSC 859 Carr v Finance Corporation of Australia Ltd (No. 1) [1981] HCA 20; (1981) 147 CLR 246 Carstrom v Boesen [2004] NSWSC 1109 Cooper v Dungan (1976) 50 ALJR 539 Collins v McGain [2003] NSWCA 190 Cetojevic v Cetojevic [2006] NSWSC 431 De Winter v Johnstone (NSWCA, 23 August 1995, unreported) Dobb v Hacket (1993) 10 WAR 532 Durham v Durham [2010] NSWSC 389 Gorton v Parks (1989) 17 NSWLR 1 Hampson v Hampson [2010] NSWCA 359 Hawkins v Prestage (1989) 1 WAR 37 Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 John v John [2010] NSWSC 937 Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422 Kleinig v Neal (No 2) [1981] 2 NSWLR 532 Lewis v Lewis [2001] NSWSC 321 McCosker v McCosker (1957) 97 CLR 566 McGrath v Eves [2005] NSWSC 1006 McKenzie v Topp [2004] VSC 90 Mansfield v Mansfield [2003] WASC 214 Marland (decd), In re [1957] VR 338 Palaganio v Mankarios [2011] NSWSC 61 Permanent Trustee Company Ltd v Fraser (1995) 36 NSWLR 24 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9 Randall v The Public Trustee (2000) NSWSC 500 Richardson v Rearden [2006] NSWSC 1252 Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 Smith v Woodward (NSWSC, 9 September 1994, unreported) Sophron v The Nominal Defendant (1957) 96 CLR 469 Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 Szlazko v Travini [2004] NSWSC 610 Taylor v Farrugia [2009] NSWSC 801 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 Walker v Walker (NSWSC, 17 May 1996, unreported); Zirkler v McKinnon [2002] NSWSC 285
Texts Cited:	Macquarie Dictionary Oxford Dictionary
Category:	Principal judgment
Parties:	Lynda Charnock (first Plaintiff) Sara Stockwell (second Plaintiff) Robert Handley (Defendant)
Representation:	Counsel: Dr C Davidson (Solicitor) (Plaintiffs) Mr L Ellison SC (Defendant) Solicitors: Darryl Perkins Solicitors (Plaintiffs) Roberts Mann Solicitors (Defendant)
File Number(s):	2011/39763

Assets
(a)	Matrimonial home (joint) (est):	$439,000
(b)	Toyota motor vehicle (est):	$ 24,500
(c)	Holden motor vehicle (est):	$ 6,600
(d)	Furniture and chattels (est):	$ 10,000
(e)	Joint bank account:	$ 1,000
(f)	Superannuation (est):	$ 27,000
(g)	Superannuation (husband):	$123,416

Liabilities
(a)	Matrimonial home (joint):	$379,256
(b)	Credit card:	$ 1,000
(c)	Car loan:	$ 9,000
(d)	Finance for washing machine:	$ 1,500
(e)	Surgery costs:	$ 1,750

(a)	2010 - Taxable income:	$ 78,165
(b)	2009 - Taxable income:	$ 61,368
(c)	2008 - Taxable income:	$ 57,231

Joint Assets
(a)	Matrimonial home (est):	$490,000
(b)	Investment property (est):	$415,000
(c)	Car (est):	$ 20,000
(d)	Furniture and chattels (est):	$ 10,000
(e)	Superannuation:	$ 56,960
(f)	Superannuation (husband):	$ 69,180

Joint Liabilities
(a)	Matrimonial home:	$327,351
(b)	Investment property:	$406,984
(c)	Credit card:	$ 1,250
(d)	Car loan:	$ 14,324
(e)	Personal loan:	$ 8,500
(f)	Debt due to Body Corporate:	$ 1,050

(a)	2010 - Taxable income:	$ 53,321
(b)	2009 - Taxable income:	$ 72,992
(c)	2008 - Taxable income:	$ 67,461