Colantuono v Colantuono; Colantuono v Colantuono

[2009] NSWSC 1445

CITATION:	Colantuono v Colantuono; Colantuono v Colantuono [2009] NSWSC 1445 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	16,17 and 18 November and 14 December 2009
JUDGMENT DATE :	18 December 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Ward J
DECISION:	Orders for provision made.
CATCHWORDS:	SUCCESSION - family provision and maintenance - principles upon which relief granted – application made by two adult sons for provision from mother’s estate – mother survived by husband of 40 years, to whom entire estate left under will – breakdown in relationship between father and sons - whether inadequate provision made for sons – if so, what provision ought to be made – whether property held jointly by mother with father prior to her death ought be designated notional estate – held that inadequate provision made – jointly held property designated notional estate – legacies ordered.
LEGISLATION CITED:	Evidence Act 1995 Family Provision Act 1982 Testators Family Maintenance and Guardianship of Infants Act 1916
CATEGORY:	Principal judgment
CASES CITED:	Armstrong v Sloan [2002] VSC 229 Bladwell v Davis [2004] NSWCA 170, Ipp JA Caska v Caska [1999] NSWSC 289 Cetojevic v Cetojevic [2006] NSWSC 431 Collings v Vakas [2006] NSWSC 393 Cooper v Dungan (1975) 9 ALR 93 Cropley v Cropley [2002] NSWSC 349 D’Albora v D’Albora [1999] NSWSC 468 Diver v Neal [2008] NSWSC 304 Doyle v Smith (unreported, NSWCA 21 September 1994), Foley v Ellis [2008] NSWCA 288 Howe v Lowry [2009] NSWSC 451 Jones v Dunkel (1959) 101 CLR 298 Kalmar v Kalmar [2006] NSWSC 437 McGrath v Eves [2005] NSWSC 1006 McLeod v Radnidge [2009] NSWSC 1105 Nicholls v Hall [2007] NSWCA 356 O’Loughlin v Low [2002] NSWSC 222 Petschelt v Petschelt [2002] NSWSC 706 Singer v Berghouse (No 2) (1991) 181 CLR 201 Strano v Jovsevski [2008] NSWSC 380 Varnel v Heyes [2008] NSWSC 978 Vigolo v Bostin (2005) 221 CLR 191 Wentworth v Wentworth (unreported, Court of Appeal, 3 March 1992)
PARTIES:	Vincenzo Colantuono (Plaintiff/First Cross Defendant in 3769/07 and Defendant in 4316/07) John Colantuono (Defendant/Cross Claimant in 3769/07) Colantuono Pty Limited (Second Cross Defendant in 3769/07) Antonio Colantuono (Plaintiff in 4316/07)
FILE NUMBER(S):	SC 3769 of 2007; 4316 of 2007
COUNSEL:	R D Wilson (Antonio Colantuono) J Needham SC (John Colantuono) G McNally SC (Vincenzo Colantuono & Colantuono Pty Limited)
SOLICITORS:	L Rundle & Co (Antonio Colantuono) Breene & Breene (John Colantuono) Colin Daley Quinn (Vincenzo Colantuono & Colantuono Pty Limited)

- 42 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WARD J

FRIDAY 18 DECEMBER 2009

3769/07 VINCENZO COLANTUONO V JOHN COLANTUONO
4316/07 ANTONIO COLANTUONO V VINCENZO COLANTUONO

JUDGMENT

1 Two sets of proceedings were heard by me involving claims for provision out of the estate of the late Antonia Colantuono. Evidence in each set of proceedings was treated as evidence in the other. Without any disrespect to the members of the Colantuono family I will refer to them for convenience by their first names.

2 Proceedings numbered 3769/07 were commenced by Antonia’s surviving spouse, Vincenzo, seeking an order for exclusive possession of his former matrimonial home at Sans Souci, which, at the time of the death of his wife, was occupied by one of their sons, Giovanni (John). John had cross-claimed in those proceedings for a declaration that Vincenzo held certain assets on constructive trust and also claiming provision under the Family Provision Act 1982 out of the estate of his late mother. All that remained in issue by the time of the hearing before me in these proceedings was John’s claim under the Family Provision Act, the balance of the proceedings having been settled on terms which apparently allowed Vincenzo back into possession of the family home and without granting any relief under the cross-claim for John.

3 Proceedings numbered 4316/07 were commenced by another of Vincenzo and Antonia’s sons, Antonio, who also seeks provision out of his late mother’s estate.

4 Antonia died on 6 December 2006, leaving her husband, Vincenzo, (who is now aged 71 and has remarried) and three adult children – a daughter, Alfonsina, now aged 43, Giovanni (referred to throughout these proceedings as John), now aged 38, and Antonio (now aged 31). A fourth child, Pietro (Peter), had predeceased his mother. No application is made by Alfonsina for provision out of the estate.

5 The deceased left a will made on 27 April 1977, at a time when her first three children were young and her fourth, Antonio, had not yet been born, naming her husband Vincenzo as executor and leaving the whole of her estate to him. Probate of the will was granted to Vincenzo on 30 September 2008. Prior to the grant of probate, various steps were apparently taken to transfer into Vincenzo’s name assets which had been jointly held by the couple.

6 The assets of the estate comprise a half share in a company, Colantuono Pty Limited, which was incorporated on 5 May 1980 and through which it seems Vincenzo carried on business (prior to his retirement) as a builder. Colantuono Pty Limited owns property located on Rocky Point Road, Sans Souci, comprising a two storey building with two retail shops on the ground floor and two residential units (built by Vincenzo over a number of years) above the retail shops, from each of which a small rental return is earned by the company. This property has recently been valued at $1 million. If it were to be sold it would, I am told, be subject to capital gains tax.

7 The value of the estate shareholding in the company must also take into account the company debts and other assets. There is a debt claimed by Vincenzo to be owing to him of $600,000 (the estate’s effective share of which would be $300,000) and a provision in the accounts for debts of $270,975.00 (half of which was owed to Antonia).

8 At the time of Antonia’s death, Vincenzo and Antonia owned, as joint tenants, a property at The Promenade, Sans Souci (the matrimonial home) (now valued at $1.75 million) and two factories at Mortlake (now valued at $620,000 and $635,000 respectively) those factories also producing a small rental income. The couple jointly held term deposits with Westpac totalling approximately $300,000.

9 Antonia’s share in the jointly held assets, as at today’s valuation would thus be approaching $1,652,500. As there was no severance of the joint tenancies prior to her death, Antonia’s interest in the Sans Souci and Mortlake properties and in the Westpac term deposits passed, on her death, by way of survivorship to Vincenzo. Application is made in these proceedings for Antonia’s interest as joint tenant in those assets to be designated as notional estate.

10 On the calculations provided to me, the estate is worth roughly $512,281.00, leaving aside its share of the disputed debt of $600,000. Taking into account the respective parties’ costs of the proceedings, assuming these were to come out of the estate, would reduce the net estate to about $126,000.

11 As sons of the deceased, both John and Antonio are eligible persons entitled to apply for provision out of the deceased’s estate pursuant to the Family Provision Act and there is no question that they have brought their claims within the time required under that Act.

12 It was not disputed by Vincenzo that there was inadequate provision for each of John and Antonio under their mother’s will, there being no provision at all made for them thereunder. However, it is submitted that any provision to be made for them should be small and that no property should be designated as notional estate for the purpose of making any such provision. Alternatively, it is submitted that as the Rocky Point Road property (acquired in 1988 by the company) is the only property which would be subject to capital gains tax upon sale, if any property is to be designated as notional estate and sold, it should be a property where no capital gains tax is payable.

Issues

13 The issues for determination are relatively straightforward:

(i) was the provision, if any, made in favour of each of John and Antonio inadequate for his proper maintenance and advancement in life?

(ii) to what extent should property formerly held jointly by Vincenzo and Antonia, and now held in Vincenzo’s name, be designated notional estate of the deceased?

(iii) what orders, if any, should be made for the proper provision out of Antonia’s estate for the maintenance and advancement in life of each of John and Antonio?

Background facts

14 Beyond the facts set out above, I note the following further matters by way of a brief background to the current disputes.

15 Vincenzo and Antonia were married for over 40 years. They had migrated separately to Australia from Italy at different times, met here and were married in 1964. They had four children, three of whom survived Antonia.

16 Vincenzo worked variously as a roofing supervisor/cabinetmaker or builder (although there was a dispute as to whether he held a builder’s licence over the whole of the relevant time) during the course of his working life and in various other jobs. Relevantly, however, Vincenzo worked over a number of years to carry out improvements to the Sans Souci property and to build the second storey extension above the Rocky Point Road shops. It is for this reason that he seems to have been prepared to accept a low rate of return from his investment in the Rocky Point Road properties (and at least in part why he is reluctant to dispose of any the respective properties, to which it is said he has an emotional attachment). Antonia worked for some time during the marriage as a kitchen hand and as a seamstress but her main role (without any criticism of this) appears to have been as a housewife and mother.

17 Although the level to which Antonia had been in control of financial matters within the household was disputed, Vincenzo seems to have accepted that he and Antonia together worked to accumulate the family assets, with particular focus on the acquisition of property. What also seemed not to be disputed was that Antonia took responsibility for managing the family’s finances, at least to the extent that her practice (during the years her husband was employed) was to take charge of his wages packet (according to John and Antonio, this was because their father was a gambler); that she (as also did Vincenzo) wrote cheques from time to time to pay household bills; that she earmarked funds to go towards payment off of their investments; and that she kept a close eye on the income due from their joint property investments (usually going with her husband to collect rental payments from tenants and instructing her sons what to do in relation to those payments on at least one occasion when she and her husband were away on holidays and unable to collect the moneys personally).

18 Broadly, it seems fair to say that Vincenzo and Antonia worked together over their long marriage to accumulate interests in property and that they did so with the view to building up assets for the family. Both John and Antonio gave evidence of conversations with their mother in which she said, in effect, that it was their responsibility to help the family and that when they grew older, and/or married, some of that property would be theirs. I was left with the impression that Antonia had a strong sense of family and that she regarded the assets jointly held with her husband as family assets in a very literal sense.

19 There was a dispute as to the extent to which John and Antonio, as children, had assisted their parents in the construction and development of the various properties; and as to their respective contributions to the household finances.

20 Both John and Antonio gave evidence that, as children, they (and their brother Peter) had been required to assist on building sites and to help in the manufacture of items used or sold by their father in his business. Vincenzo dismissed the utility of this assistance, pointing to the relatively young age of his sons and their lesser physical strength at the relevant times. Nevertheless, the accounts given by John and Antonio of their respective roles on building sites including the Rocky Point Road site and the work they did cutting metal sheeting in the family garage were broadly consistent. From the description of what they had done, accompanied by illustrative gestures in the witness box (acknowledging, as they did, the greater role played by their older and more physically strong brother, Peter), and the evident feeling with which that evidence was given, I accept that they did make a contribution (consistent with their age) to the development of the assets of the family.

21 John, in particular, gave evidence of his childhood in emotive terms, describing himself as “a slave”. Although there was perhaps some exaggeration as to the level of assistance given by the sons on the respective building sites (their perceptions no doubt having been to some extent coloured by their age at the time and perhaps by their current feelings towards their father), I nevertheless accept that there was an expectation within the Colantuono family that the children would assist their parents beyond what might be described as the normal household chores and that they would contribute where they could to the finances of the household. I accept Antonio’s evidence that he (and I would infer his siblings) had no real choice but to work on the sites (rather than, for example, playing with their school friends) and that this was not simply a means of keeping them occupied or amused.

22 Evidence was also given by John of various jobs in which he was engaged, while still a minor, such as at a restaurant with his father and a modelling assignment, neither of which is disputed by Vincenzo. John says he was required to give his pay packet for this kind of work to his mother. Vincenzo says he was not aware of that. However, John’s account of the payment by him to his mother of his modelling earnings is supported by a document dated 1 February 1987 which he signed (which he says he was forced to do) when he later demanded from his parents the sum of $700 representing earnings from that modelling assignment – Exhibit 1 p 41). The fact that such an acknowledgement was prepared at all (it was handwritten and signed by Vincenzo) and its terms “This is a total payment of money owing to me. (They don’t owe me anything)”) seem to me to confirm that there was a degree of tension within the family produced by John’s demand to have access to what he (not unreasonably) seems to have regarded as his money (and an implicit acknowledgement by his father that this money in fact had been earned by John and initially given to his mother and/or father).

23 Whether payments out of his wages once John was older might better have been described as “board”, as suggested by Senior Counsel for Vincenzo, Mr McNally SC, (which seems to me to be reasonably arguable) does not affect my conclusion that, from a young age, there was an expectation that the children would contribute to the livelihood of the Colantuono family (and would receive, in due course, a benefit in return).

24 The family expectations placed on the children in this regard are, in my view, relevant when considering in due course not only what the community expectations would be of their mother, as testatrix, in the circumstances which have arisen but also as to what could be said to have been Vincenzo’s (and their) reasonable expectations as to the jointly held family property. I accept the evidence of John and Antonio that they were encouraged to contribute (financially and otherwise) to the family endeavours on the basis that, when they grew older and/or married, their parents would assist them in the acquisition of property of their own.

25 Vincenzo and Antonia seem to have considered it important to encourage their children to invest in or acquire property and assisted at least some of their children in so doing. So, for example, financial assistance was provided to their daughter, Alfonsina, and her husband on two occasions in the 1980s for the acquisition of successive matrimonial homes. Later, assistance was (apparently willingly) given to enable John to acquire a property in London.

26 In 1994, a property was bought by Vincenzo and Antonia in Greenwell Point in the name of John and Antonio. That property was sold in 2003. It appears that around half of the moneys from the sale (there was a dispute as to whether this sum amounted to $60,000 or $67,000 but it was not suggested that this was material) were provided to John the following year to assist him in the purchase of a property at Cunard Walk in London. No amount was paid to Antonio for his share in the property at this time (although Antonio accepts that Vincenzo had offered to do so). In the witness box Vincenzo was prepared to accept that a similar amount was due to Antonio. The acquisition of the Greenwell Point property seems to be a further example of the assistance which Vincenzo and Antonia together considered it appropriate to give to their children.

27 In or about 2002, each of John and Antonio was allotted a share (described as a non-beneficial share) in Colantuono Pty Limited. Vincenzo explained that this was in order to enable the sons to make decisions on behalf of the company if anything were to happen to him or his wife. In May 2008, some time after Antonia’s death, those two shares were transferred (without consent from either John or Antonio) into Vincenzo’s name. There was no application as such to treat those two shares as notional estate.

28 John worked as an apprentice hairdresser from about 1986 and qualified as a hairdresser in 1989. He says that he saw this as his only way to “escape” from the family situation. (It was apparently Vincenzo’s wish that his sons join with him in the building business.) In 1997 it seems there was some argument within the family when John travelled overseas. After returning to Sydney for a time in 1998, John subsequently returned to London. He purchased a unit there in the late 1990s (which he later sold to acquire the property at Cunard Walk with the assistance from his parents of a half share in the proceeds of sale from the Greenwell Point property). John worked in London, and built up a profile, as a “celebrity” hairdresser until shortly before his mother’s death in 2006, but while he was overseas he visited his mother two or three times a year and remained in contact with her (T 72).

29 Antonio initially commenced TAFE studies in horticulture, which he says he was forced to abandon when his father became ill (with heart problems in the late 1990s). Subsequently, Antonio completed a Diploma in Community Services at Loftus TAFE and then a Bachelor of Social Work degree in 2002/3 at the University of Sydney. (He was, at the time he swore his first affidavit in these proceedings, a case worker with the Red Cross and he now works as a counsellor with the Department of Juvenile Justice in Campbelltown on a salary of just under $900 per week. He is seeking to renew that contract position.)

30 For some time prior to Antonia’s death, it seems that Vincenzo was unwell due to his heart problems. Antonio gave evidence, which I accept, that during this period he (Antonio) carried out a significant amount of work on landscaping the gardens and painting the Sans Souci home. (Vincenzo did not seem to deny this – rather, his complaint was that he did not like the colour Antonio had chosen for the paintwork.)

31 At some time in the late 1990s,Vincenzo contracted hepatitis C. He was placed on medication which was subsequently withdrawn (apparently due to concern as to the potential adverse side-effects of the medication). Ultimately, Vincenzo travelled to the Philippines for treatment there, which appears to have been successful in leading to a remission or improvement in his condition. During that treatment, Vincenzo met his now wife, Nessie. (She came to Australia and was employed as his carer in late 2007 or early 2008 before their marriage in late 2008.)

32 In January 2006, Antonia was diagnosed with Erdheim-Chester disease. In October 2006 Antonio contacted John in London after a domestic incident following which Antonia was hospitalised. Antonia alleged that she had been assaulted by Vincenzo. There does not seem to be a dispute that Antonia was unwell at the time. For Vincenzo, it was submitted that she was delusional. Antonio and John were (understandably) upset at their mother’s condition and her allegations. It seems that this incident precipitated a (or perhaps simply exacerbated an existing) breakdown in the relationship between Vincenzo and his sons.

33 A guardianship order was made appointing Antonio as Antonia’s guardian in October 2006 and in November 2006 an apprehended violence order was granted to Antonia against Vincenzo. Vincenzo’s evidence was that, in order to avoid dispute within the family, he moved out of the matrimonial home and did not contest the apprehended violence order.

34 As noted above, Antonia died in December 2006. Vincenzo’s second wife, Nessie, whom he met when she acted as a carer for him in the Philippines during his treatment, gave evidence in the proceedings. She confirmed her belief that her visa conditions would permit her to work but said that her principal role was to care for her husband. Nessie has an adult son and owns property in the Philippines, the benefit of which is now enjoyed by her son.

Reasons

35 Before turning to the question whether any property should be designated as notional estate, it is necessary to address the adequacy (or otherwise) of the provision made by the deceased for each of John and Antonio during her lifetime and out of her estate, since the power of the court to designate property as notional estate is dependent on the court first being satisfied that an order for provision ought to be made on the application. Hence, the order in which I have listed the respective issues for determination.

36 The test required to be applied on Family Provision Act claims of the present kind is that outlined in Singer v Berghouse (No 2) (1991) 181 CLR 201, and approved in Vigolo v Bostin (2005) 221 CLR 191. It is a two stage test.

37 The first stage is a question of fact, namely whether the provision (if any) made for the applicant is inadequate for his or her proper maintenance, education and advancement in life. An assessment of whether the provision made, if any, was “inadequate” involves an assessment as to what level of maintenance was appropriate having regard to the applicant’s financial position; the size and nature of the estate; the relationship between the applicant and the deceased; and the relationship between the deceased and other persons who have legitimate (and in this sense competing) claims upon the deceased’s bounty.

38 A factual finding of inadequacy of maintenance is necessary in order to enliven the statutory power to make an order for provision, as was recognised in Collings v Vakas [2006] NSWSC 393 at [66] per Campbell J.

39 Therefore, even though there is not a serous contest as to the question of adequacy of the provision made for either John or Antonio under the will, it is necessary for me to consider and make findings of fact on this issue.

40 The second stage of the Singer v Berghouse test, which involves the exercise of discretion, is to assess the proper level of maintenance and adequate provision which should be made. The factors to be taken in account in making such a determination are contributions to the property and welfare of the deceased; the character and conduct of the applicant in relation to the deceased; and the circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased).

(i) Inadequacy of provision by deceased?

41 There was no provision made for either John or Antonio under the deceased’s will. Some provision had been made for John during the deceased’s life time (insofar as he received monetary assistance to acquire the property in London).

42 I note that the question as to the adequacy of the provision falls to be decided having regard to facts as they exist at the time of the hearing, not at the time of the death (Nicholls v Hall [2007] NSWCA 356 at [40]).

· Applicants’ financial circumstances

43 Evidence was given by each of John and Antonio as to his particular financial circumstances.

John

44 John gave evidence that his net asset position is $59,434.46. His main asset is the property he owns in London. There is an issue as to how much equity John has in this property. The property is said to be worth approximately £360,000. It is subject to a mortgage of £208,000. John believes he also has a liability for “Landlords Living Abroad tax” (which he assessed at approximately £17,280 owing from August 2007). It has been tenanted and John has been earning rental income from the property. However, his tenants have recently given notice and will be vacating the property some time soon. John’s evidence was unclear as to the steps he was taking to re-lease the property. He expressed concern that even if re-leased quickly there will be at least six weeks in which the property will not produce a rental income and that if he misses successive mortgage repayments then the lender will foreclose.

45 There is some doubt as to the amount of any outstanding Landlords Living Abroad Tax. An invoice (dated 7 May 2008) from John’s previous real estate agents in London shows that, at least as at May 2008, the tax had been deducted and that the amount of the monthly deduction was then only £161.09. It is said that John’s failure to tender any later invoices than the May 2008 invoice allows a Jones v Dunkel inference to be drawn. I accept that insofar as John has not put before the court full details of the taxation position affecting his London property it should not be assumed that his equity in that property is diminished by outstanding taxes to any material degree.

46 There is also an issue as to whether or not John, as an overseas resident, would be in a position to claim deductions (from any UK tax otherwise payable by him) for interest/loan costs incurred in relation to the UK property. Notwithstanding John’s views to the contrary, it seems likely on the material put forward on behalf of Vincenzo that he could do so.

47 That said, I think that it is unnecessary for me finally to determine the present equity John has in his London property. On the figures produced, I am satisfied there is some equity (presently likely to be at least in the order of £35,000 and perhaps as high as £42,000) in the London property but it is not clear whether (and, if so, how quickly) that equity could be realised. As noted above, at the time of hearing, John’s tenants were due shortly to vacate. If, as a result, John is placed in a position where he defaults in his mortgage repayments and the mortgagee were (as John fears) to foreclose, then any balance remaining after payment of the mortgage and other property debts would presumably be to John’s account. It may well be that a mortgagee sale would not realise as much as a vendor sale. However, if the mortgagee were to move to exercise its rights, then it would presumably be open to John to seek to market the property himself. Meanwhile, if there is a default in repayment but the mortgagee does not foreclose, then the equity will reduce until such time as the property is re-leased or John is otherwise in a position to recommence repayments. Either way, at present John does not appear to be in a position to make immediate use of the equity tied up in the property in order to purchase a property in Sydney.

48 Currently, John works approximately 50 hours per fortnight in a hairdressing salon, earning approximately $623 per week. His evidence as to future earning capacity was sketchy to say the least. That said, it is clear that John’s earning capacity is presently affected by two factors.

49 First, there is a practical difficulty in that John is only able to work reduced hours. This is because, in August 2009, John was sentenced (after pleading guilty to an offence of reckless wounding in relation to a domestic violence incident with his then partner) to two years’ periodic detention with a non-parole period of one year. He has continued to work in a hairdressing salon since then but, due to his restricted work hours, he has been unable to do so full time and his position was demoted from that of manager.

50 Secondly, evidence was tendered on his behalf from Professor Woods of a psychological condition suffered by John and a need for continuing psychological care. Professor Woods prepared a report dated 5 November 2009 (Ex A), following an attendance by John for consultation and psychological assessment on 3 November 2009 and a follow-up telephone consultation on 4 November 2009. John had previously attended for consultation and assessment in relation to the assault charges in July 2009, after which Professor Woods had produced a report dated 11 August 2009. The 11 August report was attached to and referred to in Dr Wood’s 5 November report.

51 Professor Woods diagnosed John as suffering from Dysthymic Depression and chronically high underlying anxiety, noting that his history of relationships is consistent with one associated with “battered wife syndrome”. John’s pattern of dysfunctional behaviour, he said, has “quite adverse consequences across most, if not all, areas of his life and as such his condition is of ‘clinical concern’”. Professor Woods noted that John’s levels of depression and anxiety had intensified since his initial assessment in July and remained in clinically severe ranges and that John continued to express suicidal ideations. Professor Woods found that John’s “level of functioning and quality of life will likely deteriorate unless treatment is obtained”. By reason of the “deeply ingrained” nature of John’s condition, he considered that any therapeutic intervention would need to extend over two to three years and to be on a weekly basis. Professor Woods reported that the “currently recommended scheduled fee for clinical psychologist is $206 per hourly session”.

52 Some of the factual assertions upon which Professor Woods based his report (relating to aspects of the relationship between John and his father) were repeated in John’s affidavits in these proceedings (and were the subject of denial by Vincenzo). Other such factual assertions were not repeated in John’s affidavits, of which a number were not put to Vincenzo in cross-examination. No objection was made to the tender of Professor Woods’ report on this basis and no submission was made that any less weight ought to be attributed to his opinion on this ground. Professor Woods was not cross-examined. I accept Professor Woods’ findings as to John’s mental health. This is of significance when considering John’s position both on the first stage of the Singer v Berghouse test and in considering what provision, if any, would be proper for him.

53 John owes money for legal fees arising out of his defence of his criminal prosecution (including fees payable to Professor Woods, who gave evidence in those proceedings in relation to his psychological condition) totalling $52,498.05. He has an American Express credit card bill of approximately £13,000 and his bank account is overdrawn. He has received financial support from friends whom he would wish to be in a position to repay.

54 John gave some evidence as to what he believes it would cost for him to re-establish a celebrity profile in England (or to establish one afresh in Australia). That evidence was general in nature and ultimately I was unable to put much weight on the opinions expressed by John in this regard, particularly in light of his professed lack of knowledge of comparable earnings in the Australian hairdressing industry.

55 The evidence suggests that John will be unable, in view of his conviction, to return to England at least for some time (hence John’s wish to acquire a property from which he could operate his own hairdressing salon). It was submitted by Mr McNally that it would be appropriate for John to sell his house in London and, if so, that somewhere in the order of $270,000 would be received from such a sale. If John’s concerns as to his tax or other property liabilities were to prove to be correct, then the amount of any sale proceeds would be reduced but it seems unrealistic to suggest that he would not be able to recoup at least £35,000 (or, say, around at least $70,000) if the property could be sold relatively quickly for a sum close to its estimated worth. There is, however, no conclusive evidence as to this (it largely being based on John’s assertions).

56 Submissions were made by Senior Counsel for John (Ms Needham SC) to the effect that even if he were to sell the London property John would not currently be able to buy a house in Australia because a standard mortgage calculator shows that a 25 year principal and interest loan of $600,000 (which would be required for John to acquire a relatively modest two bedroom property in the Paddington area as he wishes) would cost over $900 per week and his income is substantially less than that.

Antonio

57 Antonio is the youngest of Vincenzo and Antonia’s children.

58 At the time of the hearing, he was living in a de facto relationship. He was due to marry on 28 November 2009, ie shortly after the conclusion of the hearing before me. The evidence that both he and his fiancée gave was that they hope to commence a family in 2010 and to have a number of children. Antonio does not own any real property. His fiancée owns a unit, which is mortgaged. Her evidence was that the funds used to acquire the property were a loan from her parents and/or family friends and that she is expected to make repayments. It does not appear that there is any formal loan agreement in place. (Perhaps, like the Colantuono family, there was an expectation that her parents would assist in the acquisition of a home by her.)

59 Antonio’s fiancée (now I assume his wife) is qualified as a lawyer and has previously worked in that capacity. She currently works as a migration agent part time while she is undertaking a Graduate Certificate in Arts (English) at the University of Sydney preparatory to commencing a Master of Teaching course which she proposes to do next year. Her earning capacity will thus be reduced by her studies as well as the plans she and Antonio have to start a family. Nevertheless, it cannot be said she has little earning capacity.

60 As noted above, Antonio is currently working in Campbelltown as a counsellor. He earns about $900 a week. He has a HECS debt of approximately $12,000. He has little in the way of assets (a superannuation fund entitlement, car and some savings - Exhibit P2/A) but no health issues to affect his future earning capacity. (Antonio did not press a claim to half of the proceeds of the Greenwell Point property, though it was submitted that this should be taken into account in increasing any capital sum awarded by way of provision to him.)

· Size and nature of the estate

61 The net value of the estate was a matter of dispute, both as to the value of the Rocky Point Road property owned by Colantuono Pty Limited (now accepted to be $1 million) and as to the claim by Vincenzo that he is owed a debt of $600,000 from the company in relation to work carried out by him for the construction of the residential units. (Of course, even if there is a debt of that amount owed to Vincenzo by the company, the estate’s “share” of that debt would be proportionate ie presumably $300,000.) It is further submitted by Mr McNally that the probate value of the company did not allow for the liabilities of the company which stood in the 2008 balance sheet at $289,401. (In the 2009 accounts, the current debts owed by the company totalled $270,975.)

62 As to the $600,000 debt, it was submitted by Counsel for Antonio (Mr Wilson), whose submissions were adopted in this regard by Ms Needham, that this should be rejected on the basis that it did not appear in any of the books or accounts of the company; that the 1997 “agreement” said to give rise to it was no more than a quote to do the work should it have been requested by a third party on commercial terms; and that there was no evidence that the units had cost $600,000 to build – the amount being likely to have been no greater than $465,000.

63 It is said in reply by Mr McNally that the same degree of legal formality should not be expected in relation to debts of this kind as there would be in large companies; that Vincenzo had spent a number of years constructing the units; that the moneys used to construct the units had come from the sale of other properties jointly owned by Mr and Mrs Colantuono as joint tenants (referring to Exhibit B p 1.55); and that even if there was no debt then there was at least a constructive trust in relation to the moneys expended by Vincenzo and the improvements made (although there was no constructive trust claim pleaded as such).

64 The sole document relied upon by Vincenzo to establish the “debt” he claims was owed to him (and to Antonia, presumably) by the company is a handwritten quote in an invoice book (which book, the evidence revealed, bore a logo which had been superseded as at the date of the invoice) (Exhibit 3). Although the invoice (or quote) bears the hand printed name of Antonia, it was not signed by her. I cannot help but think that this was a document akin to that earlier signed by John in relation to the wages acknowledgement (ie that on payment of $700 nothing further was owing to him), and thus one intended by Vincenzo as some sort of record if he should need to rely upon it for some purpose but without necessarily having any intent to create a legal obligation.

65 On its face, the document is no more than a quotation. Although, as a controlling director of the company, Vincenzo could presumably have committed it to the acceptance of this quotation (even though it might have exceeded the actual cost of the building works), there is no documentary evidence that he did so. The so-called debt is not shown in the books of the company. A liquidator assessing the assets and liabilities of the company would in my view be rightly sceptical as to whether any legal liability was owed in that amount.

66 I do not consider this should be treated as an enforceable claim against the company for the purposes of assessing the likely value of the estate. That said, I do not exclude the possibility that Vincenzo (and Antonia) may together have had some claim on the company for monetary contributions made by them to the building of the Rocky Point Road extension. Given the size of the estate (and the potential amount of any notional estate) nothing seems to me to turn on this.

· Relationship between deceased and applicants/others with claim on estate

67 John says (and I accept) that he had a close and loving relationship with his mother. This is supported by Antonio’s evidence that his mother was very excited whenever John visited from the UK and that she was in regular telephone contact with him while he was in the UK; and by Vincenzo’s (subsequently withdrawn) oral evidence as to his wife’s emotional reaction to John moving overseas. I regard it as significant that John returned home, and effectively gave up his career and lifestyle in London, almost immediately after he heard of his mother’s physical deterioration in October 2006.

68 Antonio also had a close relationship with his mother. In particular, he took care of his mother in the latter stages of her life when she was in a state of ill-health and suffering cognitive impairment. He provided emotional and other support when difficulties arose in the relationship between Antonia and Vincenzo. He was obviously considered an appropriate person to be appointed as guardian for Antonia in late 2006.

69 Counsel for John and Antonio, respectively, both approached the question of the relationship between the deceased and her husband in the last years of her life with commendable sensitivity. It is not appropriate for me to make any comment on whether or not allegations of the kind which I understand were made by the deceased towards the end of her life (as to the conduct towards her by her husband) were correct or were, as was suggested for Vincenzo, the product of delusions which may have affected her towards the end of her life. The fact remains that whether or not the allegations of assault/rape were true, there was clearly a difficult family situation in the last year of the deceased’s life and that, when informed by his brother of that situation, John returned at once from the UK (in effect, foregoing both his career and the life he had established for himself in the UK) in order to be with and assist his mother at a time in which he, not unreasonably, would have perceived her to have been in great need of emotional and other support.

70 I have considered above their contributions to the property of the deceased, the most recent being Antonio’s landscaping of the gardens and painting of the home. I accept that both John and Antonio gave assistance and contributed to the property and welfare of their mother and that their relationship with her was a close and loving one.

Conclusion as to first issue

71 While John has some equity in the UK house it is by no means the case that this can be readily realised (nor is it clear how much net income this will produce); he has a reduced earning capacity at present and the impact on his future earning capacity of his psychological state is unclear. He has not inconsiderable debts. Antonio is in a more comfortable position, with a reasonable earning capacity, but has limited assets, some debts and is apparently about to embark on family life in hardly affluent circumstances.

72 Even if the net estate is worth only about $126,000 (or perhaps less, if a claim can be made by Vincenzo for the alleged debt) the lack of any provision for either son strongly suggests there was inadequate provision for them.

73 Having regard to the above factors, the making of no provision at all for either John or Antonio in the will (even though some provision had earlier been made during Antonia’s lifetime for John) leads me to conclude that there was inadequate provision for both of them as a matter of fact and thus that the first part of the test in Singer v Berghouse is satisfied.

(ii) Notional Estate

74 Having found, as a matter of fact, that there was inadequate provision for John and Antonio under the will, the second stage of the test in Singer v Berghouse requires the making of a holistic and multi-faceted judgment of an evaluative kind as to the proper provision to be made for them (Kalmar v Kalmar [2006] NSWSC 437 at [67] per White J; Foley v Ellis [2008] NSWCA 288 at [3] per Basten JA). In that regard, it is necessary to determine whether the estate is to be notionally expanded to include any notional estate.

75 The power to designate property as notional estate is enlivened if there has been a prescribed transaction and the court is satisfied that an order should be made for provision.

76 The non-severance, before Antonia’s death, of the joint tenancy between Vincenzo and Antonia in respect of the Sans Souci matrimonial home, Mortlake factories and the Westpac term deposits is a matter clearly capable of giving rise to a designation of notional property.

77 Section 22(1) of the Act deems the entry into a prescribed transaction if sub-paragraph (a) is satisfied and if valuable consideration in money or in money’s worth for the act or omission is not given (b). Subsection 22(4)(b) of the Act provides, in effect, that a person is deemed to do or omit to do an act as a result of which property is held by another person or subject to a trust for the purposes of s 22(1)(a) if, holding an interest in property which would, on the person’s death, become, by survivorship be held by another person (whether or not as a trustee) or subject to a trust (as the deceased clearly did as joint tenant of the Sans Souci and Mortlake properties as well as the Westpac term deposits) and to exercise a power to prevent this happening that person does not exercise the power before he or she ceases (by reason of death or the occurrence of other event) to be so entitled. In Cetojevic v Cetojevic [2006] NSWSC 431, Campbell J held that a failure to sever a joint tenancy is an event which falls within s 22(4)(b).

78 Pursuant to s 23 of the Act, if the court is satisfied that an order for provision ought to be made on the application, then (because the severance of the joint tenancy took effect on the death of the deceased) there is power, subject to ss 26, 27 and 29, to make an order designating as notional estate of the deceased such property as the court may specify, whether or not that property was the subjection of the prescribed transaction.

79 However, s 27(1)(a) of the Family Provision Act requires the court, before making an order in relation to notional estate, to consider “the importance of not interfering with reasonable expectations in relation to property. Reliance is placed on this by Mr McNally. It is submitted that the reasonable expectation of Vincenzo was that he would acquire his wife’s interest in the Sans Souci and Mortlake properties, and the Westpac term deposits as joint tenant, and would then derive his income from them as he had during his wife’s lifetime; and that to designate any of that property as notional estate would interfere with his reasonable expectations in that regard.

80 There seems no doubt that the fact of a joint tenancy may found a reasonable expectation that the property so held would be enjoyed solely and absolutely by the survivor upon the death of the other joint tenant(s). In Button v Lynch [2002] NSWSC 1148 at [83], McLaughlin M, as the Associate Justice then was, noted:

In the circumstance of the instant case, it was the reasonable expectation of the First Defendant (and, doubtless, also of the Deceased) that the First Defendant would be the absolute owner of the property which he and the Deceased held as joint tenants, to the intent that he should receive the absolute ownership of his residence at Shoalhaven Heads, and that he should continue to receive the income from the commercial premises at North Street, Nowra.

81 However, in Petschelt v Petschelt [2002] NSWSC 706 at [68], McLaughlin M noted of the phrase “reasonable expectations in relation to property”:

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. I have already observed that the inference can legitimately be drawn that the Deceased expected that the Plaintiff would be provided with appropriate accommodation by the First Defendant. Further, it would also appear that the Elanora Heights property would not have been sold and the Warriewood property would not have been purchased had the Second Defendant not come into the lives of the First Defendant and the Plaintiff. (my emphasis)

82 In D’Albora v D’Albora [1999] NSWSC 468 at [53], Macready M, as the Associate Justice then was, stated:

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.

83 In Wentworth v Wentworth (unreported, Court of Appeal, 3 March 1992), Priestley JA, with whom Samuels AP and Handley JA agreed, said the following of the relevant provisions:

In coming to the second point, to what I said about the clear object of Division 2 I need to add that the Division, in striking at attempts to avoid the operation of the Act, has been carefully drawn so that the transactions aimed at as objectionable and intended to fall into the net of the "prescribed transaction" provisions are restricted to those which in substance are, at least, in the nature of gifts or sham transfers or for less than true value. I derive this view both from the words of s22(1)(b) itself and the more general precautionary provisions in s26 and s27. S27(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. (my emphasis)

84 In Doyle v Smith (unreported, 21 September 1994), on an application was brought by two children of the deceased’s first marriage against the deceased’s second husband, McLaughlin M said:

The problem confronting the Court is the practical situation that the defendant acquired with the deceased the house property as joint tenants. The defendant then, upon the death of the deceased, became the sole owner of that joint property. That is the defendant's residence and has been since 1986 — for nine and a half years. If there were a separate estate or if there were sufficient funds available apart from that house property, it is possible that I might be satisfied that the second plaintiff was entitled to the benefit of an order for provision in her favour ...

In the instant case I can think of few matters more important than the security which an elderly couple in the twilight of their years might have in their residence. The expectations of the defendant and, presumably, of the deceased that each would acquire the interest of the other upon the death of the other spouse in the house property which had been purchased with their joint funds was an expectation which was not only reasonable but one which any member of the community would expect to be fulfilled.

I do not consider that it would be in any way proper for the Court to interfere with that expectation and with that the security of the accommodation which the defendant and the deceased expected that the survivor would have in the house property which they had acquired in their joint names with their joint assets. Even if the house property had not been purchased in the joint names of the parties and even if the interest of the deceased in that house property had not by operation of law devolved upon the defendant I have no doubt whatsoever that the defendant would have succeeded in an application brought under the Family Provision Act to have awarded to him the entirety of that house property.

I do not consider that the justice and merits of this case would in any way justify the defendant at the age of 82 years being deprived of the absolute interest in his home. Accordingly, I am not prepared to make any order designating any part of the assets which were formerly owned by the deceased and which are now owned by the defendant as notional estate.

85 While there is clearly force to the submission that an order necessarily requiring the sale of the former matrimonial home would be something which could interfere with the reasonable expectations of a surviving spouse who had for a number of years held his interest in the matrimonial home as joint tenant with his wife (and thus might have expected to be able to remain there after her death), I think this needs to be balanced against the following factors.

86 First, I am satisfied that during the course of the marriage Vincenzo and Antonia had worked together for the purpose of building up property assets for the benefit of their family and had done so with the expectation that each of their children (when older, and more settled insofar as I would infer this was what was meant by the references to marriage) would be provided with assistance to establish their own separate family assets. I accept the evidence of John that his mother explained the pooling of family wages in this way and that she focussed on her immediate family (not extended family, viz the comments she had made about their uncle) in that regard. Antonio also gave evidence as to his mother’s statements as to the family properties.

87 Secondly, the provision of finance to Alfonsina not once but twice (and the latter in circumstances where her parents might well have been critical of the decisions which had led to the need for further assistance) reflects such an expectation/understanding (and counteracts the suggestion that John’s distribution from the Greenwell Point proceeds should have in some way exhausted that assistance). Though it was submitted that the assistance to Alfonsina came when Vincenzo was younger and was himself working and capable of producing financial income, I see no justification for any suggestion that the family assistance was intended to be made available only prior to Vincenzo’s retirement.

88 Thirdly, Vincenzo has an emotional attachment, it appears, to all the properties in which he has invested time and effort (even though he also conceded at least at one stage that the Sans Souci house is now too big for him and that he would be satisfied with a smaller home (without a swimming pool)) and apparently irrespective of the commercial return produced by his investments. This does not suggest to me that an order requiring him to divest himself of some of that property (where necessary to enable proper provision to be made for his sons) would be unreasonable.

89 I find that, to the extent to which it is necessary to enable proper provision to be made for each of John and Antonio, the interest of Antonia in jointly held property immediately prior to her death should be designated notional estate. I consider later the property to be so designated.

(iii) What is the proper provision to be made for John and Antonio respectively ?

90 John seeks provision to enable him to purchase a relatively modest two bedroom apartment or townhouse in Paddington (in which he may seek to establish a hairdressing salon). The evidence was that this would cost somewhere between $600,000 to $850,000, together with assistance in payment of the property expenses and property acquisition costs. (It is said that John’s current restricted working hours means that he would be unlikely to be able to finance the purchase by a bank loan.) John also seeks, by way of provision, an amount to cover the cost of his debts (approximately $100,000), the costs of continuing psychological care of $31,200, and a buffer for emergencies of, say, a further $50,000. The total provision sought by John is between $847,328 to $1,097,328 plus costs. His legal costs of these proceedings were estimated at $120,000. I understand the costs may have increased somewhat by reason of the additional hearing time required for submissions on the valuation evidence.

91 Antonio seeks provision to provide him with a substantial deposit on a family home together with a contingency amount. He acknowledges that regard should be had to his borrowing capacity (McGrath v Eves [2005] NSWSC 1006 per Gzell J) and does not seek provision to buy a home outright. He wishes to purchase a home in the St George area of about $600,000 on which there would be approximately $20,000 stamp duty and legal costs. He seeks provision of at least $368,000 in order to purchase a property of that amount. He seeks a capital sum of $250,000 to cover the vicissitudes of life and to take into account the half share he has foregone, in effect, of the proceeds of sale of the Greenwell Point property.

92 The Sans Souci property is worth approximately $1.75 million. In his affidavits Vincenzo referred to a need to spend $70,000 on a lift in this property but, in cross-examination, seemed to suggest that less than that would be required if he were simply to complete the development works to enable a lift later to be inserted. Vincenzo agreed in the witness box that at this stage of life he only needs more modest accommodation. It is submitted by Ms Needham that he would be able to buy a suitable home in the Sans Souci area for approximately $700,000. He has a potential requirement for future medical costs for which he may need to return to the Philippines (although, if so, he would presumably have the benefit of some assistance from his wife who owns property there, at least in relation to his care and accommodation there).

93 Vincenzo holds a term deposit of approximately $274,000 plus the interest in the Mortlake factories and a shareholding in Colantuono Pty Limited. It is submitted by John and Antonio that their claims can be met out of the (notional) estate while still leaving Vincenzo with a home, a comfortable income stream and a cash fund for contingencies.

94 For Vincenzo, it is submitted that this claim is premature. It is said that it is unusual for provision to be made in favour of an adult child at the expense of the surviving spouse of a long marriage.

95 Turning to the factors to be taken into account on the second stage of the

test, I note as follows:

· Contribution by the applicants to the property and welfare of the deceased

96 There was evidence given on behalf of each of the sons to the effect that they had contributed in a substantial way to the assets and estate of the deceased insofar as they had, while still children, assisted in the building up of the family assets by working on the properties and (in the case of John) by contributing to the household finances moneys received from work outside the home. There may have been some exaggeration in the description by John of his childhood as being in effect, a state of slavery. Nevertheless, I accept that the manner in which the family operated was that the children were expected to assist their parents not simply in the usual household chores but in tasks related to the development of the respective family properties and, as such, both John and Antonio made what (for children) may be seen as a significant contribution to the property of the deceased.

97 It also seems that there is no doubt that later in her life Antonio made a substantial contribution towards the welfare of the deceased, and that John was prepared, in effect, to make a life changing decision to abandon his career in England to be with his mother when she was in need at the end of her life.

· Character and conduct of the applicants in relation to the deceased.

98 I have considered this above. I accept that both sons had a close relationship with their mother. (I note that Vincenzo withdrew the comment made by him at first in the witness box that John’s decision to move overseas had “destroyed” his mother.)

· Circumstances before and after the death of the deceased including the extent of claims of other persons on the estate of the deceased.

Vincenzo

99 Vincenzo is the principal person with a competing claim on Antonia’s testamentary bounty. He gave evidence as to his current circumstances. He has re-married and now resides in the former matrimonial home with his second wife, whom he met in the Philippines when undergoing treatment for hepatitis C. He is a retired builder. He has income by way of interest on the funds held on term deposit and rental income from the Mortlake factories, retail shops and residential units at Sans Souci. The net income which he receives from the various properties is in the vicinity of approximately $60,000 per annum. Vincenzo gave evidence that he required his present income in order to live on and that he wished to install a lift (at a cost of $70,000) in the Sans Souci matrimonial home. However, he also gave evidence that the Sans Souci home was too big for him and that he could complete works on the home in order to sell it (for around $10,000).

100 Vincenzo’s evidence as to his living expenses was said by Mr McNally to have been seriously underestimated (and there is force in that submission). Reliance was placed instead on his wife, Nessie’s, estimate of costs and expenses as being more accurate and I accept that. Of course, now that the couple is married, Vincenzo no longer pays her a wage as a carer. There is a potential need for further medical treatment if Vincenzo’s condition deteriorates. There is no evidence as to the likelihood of this occurring. His condition at present seems to be stable.

101 It is said (and I accept) that Vincenzo’s contribution to the family assets was extensive; that he built the factories at Mortlake and spent four years building the units above the shops at Rocky Point Road. I do not accept the evidence of John and Antonio which sought to diminish Vincenzo’s contribution in that regard (although I accept that his contribution will necessarily have been less during periods when he suffered from his heart problems).

Other matters relevant to John’s position

102 I should note that in relation to the claim made by John for provision it was submitted that insofar as part of the claim for provision might cover debts incurred by John (and particularly debts incurred in defending criminal proceedings) an order for provision should not be made.

103 As to debts generally, I was referred to what was said in Varnel v Heyes [2008] NSWSC 978 where Associate Justice Macready noted that there had been a number of decisions under the Testators Family Maintenance and Guardianship of Infants Act 1916 standing for the proposition that an order should not be made which would merely have the effect of relieving the public revenue of a charge without conferring a benefit on the applicant. Associate Justice Macready in that case had been referred in submissions to what was said in Strano v Jovsevski [2008] NSWSC 380 (that the courts do not order provision if it is merely to go the applicant’s creditors in respect of unrelated matters) (referring to Caska v Caska [1999] NSWSC 289; Diver v Neal [2008] NSWSC 304).

104 However, on appeal, in Diver [2009] NSWCA 54 Basten JA said that:

The dicta in Caska should not be treated as establishing any general principle. A financial benefit in circumstances where an applicant’s business interests require an injection of capital may be of great assistance in permitting advancement in life. The fact that the benefit goes to paying off creditors, thereby saving the loss of an asset or reducing ongoing liabilities does not diminish the benefit to the applicant.

105 With an apt literary allusion, Allsop P, concurred, saying that:

One could envisage a particular predicament of an eligible person whereby it would be relevant to consider that any order in his or her favour would diminish the estate to meet the claims of others to no appreciable (financial or social) benefit to him or her in his or her debt-ridden condition. That is not to say, however, that relief from indebtedness may not be of significant benefit to an eligible person. A small bequest to someone with considerable debts may make the difference (as Mr Micawber said) between happiness and misery . (my emphasis)

106 Therefore, the fact that some of any moneys obtained in this application may go to discharge debts does not necessarily tend against an order for provision.

107 Secondly, the fact that these debts (or part of them) relate to the costs of defending criminal proceedings, does not seem to me to give rise to any public policy reason not to cover those debts. Nor does the fact that it might be suggested that John is, to some extent, the author of his own misfortune. (In McLeod v Radnidge [2009] NSWSC 1105 Associate Justice McLaughlin considered that “The fact that the situation in which the plaintiff presently finds himself may be regarded as being the result of his own folly, in using and becoming addicted to heroin, and in consequences acquiring a substantial criminal record and spending periods in gaol” was not determinative of the claim.) I note that Professor Woods’ assessment of the situation was that Mr Colantuono’s actions were, in all probability, influenced by his ongoing family dispute.

Community Expectations

108 It is said that the community expectation would be that, as the surviving spouse of a long marriage who is not well, Vincenzo should receive the whole of the estate.

109 There was evidence that Vincenzo had prepared a will in May 2009 leaving half of his estate to be shared between his three children. It is said that if that will were later to be changed to disinherit the sons then they would have a good Family Provision Act claim after their father’s death. (It does not seem to me, in passing, that leaving the parties a legacy of future litigation is in anyone’s interest.) Vincenzo, in the witness box, seemed to be alert to the possibility that he could readily change his will and to have that in potential contemplation.

110 As to the community expectation for surviving spouses, in Armstrong v Sloan [2002] VSC 229, Harper J in the Supreme Court of Victoria, noted (at [43]) that:

[A]rrangements made by a husband during his lifetime which on his death leave his widow in comfortable financial circumstances would ordinarily discharge his moral duty to make in his will adequate provision for her proper maintenance and support. That would (again, generally speaking) only not be so if, although comfortable, her circumstances did not allow her as a widow to maintain a standard of living comparable to that which she enjoyed as a wife.

111 In Bladwell v Davis [2004] NSWCA 170, Ipp JA said (at [53]):

…where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, would ordinarily result in the needs of the widow being given primacy.

112 In McGrath v Eves, Gzell J considered the position of claims by adult children for provision from their father’s estate:

When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous.
In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109]–[110], White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352.
White J’s decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgment, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally.
It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the Court to consider.
There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order. (my emphasis)

113 The court should be careful not to interfere with freedom of testation except in circumstances where the legislation requires this to be done. As Gleeson CJ observed in Vigolo v Bostin, the justification for interference with freedom of testation is to be found in the failure of a testator to meet the obligations which the community would expect in terms of maintenance for those persons within the class of eligible persons. It does not seem to me to be consistent with the policy identified as underlying this legislation, that the court should interfere with a testator’s dispositions beyond that which was necessary.

114 Caution was expressed in Cropley v Cropley [2002] NSWSC 349, where Barrett J said (at [53]):

It must also be borne in mind that, if the threshold is resolved in favour of intervention by the court, that intervention should only be to the minimum extent necessary to make adequate provision for the proper maintenance, education and advancement in life of an applicant. (Citing Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24; King v Foster (unreported, NSWCA, 7 December 1995).)

115 I also note the caution expressed much earlier in Cooper v Dungan (1975) 9 ALR 93 by Stephen J:

It is notorious that in this particular jurisdiction courts must 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.

116 There, in a situation where the position as between siblings was being considered, Stephen J observed that “equality may be equity”, but “in this jurisdiction equality is not in itself an aim and to seek to attain it may well indicate that the discretion exercisable in this statutory jurisdiction has miscarried” (at 99).

117 In Cropley, Barrett J adopted (at [55]) the approach to an application by a widow was that suggested by Young CJ in Eq in O’Loughlin v Low [2002] NSWSC 222:

Putting it all together, what provision should the testator have made for this lady? What, in other words, is the provision that the community would think a person in the position of the testator should have made for his widow?

118 Adapting that test to the present circumstances, what is the provision that the community would think a person in the position of the testatrix (having regard to the family history and the breakdown in the family relationship shortly before and continuing after her death) should have made for her sons?

119 In my opinion, the proper provision for his sons, assuming this can be achieved without depriving Vincenzo of the ability to maintain a comfortable lifestyle in the remaining years of his life, is for each of them to be put in a position to acquire his own home with a sum to cover his respective debts (and in John’s case ongoing medical treatment) and, to the extent necessary, a small buffer for contingencies, so as to set them on their feet. In that regard, it is no means automatically the case that provision is made to cover the vicissitudes of life. In Howe v Lowry [2009] NSWSC 451, Macready AsJ held that, given the adult daughter’s health and situation in life, the claim for a $200,000 fund for contingencies was not appropriate. John’s claim for a “nest egg” is considerably stronger than that of Antonio, who does not suffer from the mental health issues which have beset John and is in a position to earn a comfortable income, although I accept that John’s property holding in London (acquired with the contribution from his parents) might be thought to provide part if not all of such a nest egg.

120 In my view, proper provision does not mean that each son should necessarily be provided with an unencumbered house but where, as in the case of John, his borrowing capacity may be severely limited by his present circumstances, it would be appropriate for a substantial proportion if not all of the cost of a modest home to be provided by way of legacy. To an extent, the claims put forward by John and Antonio may be said to be a “wish list” and not an itemisation of their objective needs. If that is the case, and their wish lists demonstrably exceed their needs then they should not be expected to be met (see Frizelle v Old [2009] NSWSC 1259 at [174], [176] per Barrett J). It was submitted by their respective Counsel, however, that the claims made (falling within the mid-range for accommodation of the kind said to be suitable to their respective needs) could not be categorised as wish lists.

121 Each of John and Antonio (as, for that matter, did Vincenzo) has firm ideas as to where he wishes to live – John’s work (as a ‘celebrity hairdresser’) and lifestyle, he believes, require him to live in what was described by Ms Needham as the “hairdressing hub” of Sydney; Antonio wishes to establish a family home in the St George area (which he considers more multicultural in outlook and, I would infer, likely to be more suited to his anticipated family) even though this will mean he incurs more in travel expenses while he works in Campbelltown; Vincenzo, for his part, while at one point seemingly resigned to selling the matrimonial home if necessary did not wish to move across the Captain Cook Bridge. These are obviously matters of personal preference, to which each is entitled, but what I must focus on is how the needs of John and Antonio can be met with minimum disruption to the testamentary freedom of their mother and so as to leave their father in comfort in his remaining years. If they have sufficient means to acquire a modest home in a suburb reasonably close to where they work and where their lifestyle inclines them to be, then it is a matter for each of them how he may choose to spend such a legacy.

122 While I accept that it may be unusual for legacies to be sought for adult children at the expense of a surviving spouse, I am influenced by the fact that there was a strong emphasis within this family on the provision of financial assistance to the children for the acquisition of property of their own (to set themselves up in life); that the breakdown in the relationship between father and sons (had it been foreseen by Antonia) would surely have led Antonia to make provision in her will (or otherwise) for each of John and Antonio; that John’s future earning capacity is likely to be adversely affected by his present condition; and that Antonio (while not impaired in his earning capacity) could reasonably (but for the events occurring at the end of his mother’s life) have expected to have been assisted by both his parents in the acquisition of a home on the occasion of his marriage.

Conclusion

123 I consider that the jointly held assets as at the date of Antonia’s death should be designated as notional estate to the extent sufficient to make the following provision for each of John and Antonio. It seems to me that the decision then as to what property, if any, should be sold to meet any provision ordered for John and Antonio is a matter which should be left to Vincenzo’s discretion. The designation of jointly held property as notional estate does not determine how any monetary legacy is to be met out of the (notionally) expanded estate.

124 I consider that the proper provision for John is that he receive a legacy of $800,000. This will enable him to clear his debts, to acquire outright a modest two bedroom home in Paddington (say, in the order of $600,000) from which he can carry on a hairdressing business, and will provide for ongoing medical treatment and allow a buffer for contingencies of approximately $100,000. Together with any equity he is able to realise from the Cunard Walk property, this should be sufficient for him to meet his needs (as opposed to his wish list).

125 I consider that the proper provision for Antonio is that he receive a legacy of $400,000, which will give him the financial capacity to borrow sufficient funds to acquire a home in the area in which he would like to establish his family and to clear his HECS debt. With his (and his now wife’s) earning capacity and health, I see no need for any additional buffer. Insofar as his “share” of the Greenwell Point proceeds is concerned, it seems to me that as it seems likely that this would have been applied by his parents as contribution to financing the acquisition of property had it been made available at an earlier time, it should be treated as forming part of the provision I propose to make (not something over and above that provision).

126 Having regard to the estate assets out of which such provision can be met, it is clear that it will be necessary to designate some of the jointly held property as designated estate. It seems that the above provision could be met largely (if not wholly) out of the sale of the Mortlake factories (valued together at $1.255 million), leaving Vincenzo the ability, if he wishes, to remain in the Sans Souci home and to continue to earn rental from the Rocky Point Road property (using part or all of the term deposits for the costs of the proceedings), albeit that this would not permit the installation of a lift in the premises. Alternatively, Vincenzo could, as he seemed prepared to contemplate and as he seemed to accept would be more suitable at this stage of his life, sell one of the Mortlake factories and the Sans Souci property and acquire a smaller home, using part of the sale proceeds to make provision for his sons and retain some or all of the term deposits as well as the remaining Mortlake factory and the Rocky Point Road property from which he will continue to earn a rental income. Whichever way in which he chooses to meet the order for provision is ultimately a matter for him.

127 I accept Mr McNally’s submission that, to the extent possible, the designation of notional estate should avoid adverse tax consequences for the estate or for Vincenzo. I am also mindful that I should designate by way of notional estate no more than is necessary to enable proper provision to be made but that the property so designated of the disponee need not be the property the subject of the prescribed transaction.

128 In this regard I propose to designate as notional estate the Mortlake factories (valued together at $1.255 million) and the Westpac term deposits (approximately $300,000) which will provide an estate of roughly $1,681,000 (on the calculations put before me) from which it seems to me that the provision for John and Antonio can be met, together with the costs of John and Antonio on a party/party basis and of Vincenzo on the trustee basis. I will hear any submissions as to this and as to the form of the orders to be made.

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18/12/2009 - typographical error - Paragraph(s) Paragraph 28 - last sentence amended