Costello v Martens - [2009] NSWSC 1151

NEW SOUTH WALES SUPREME COURT

CITATION:
Costello v Martens [2009] NSWSC 1151

JURISDICTION:

FILE NUMBER(S):
2026 of 2007

HEARING DATE(S):
22, 23, and 24 October 2008
6 ,7, 28 April 2009

JUDGMENT DATE:
29 October 2009

PARTIES:
Tanya Costello (Plaintiff in 2026 of 2007)
Michelle Lorraine Byrnes (Plaintiff in 1013 of 2007)
Janine Robyn Peacock (Plaintiff in 2572 of 2007)
Esme Elizabeth Martens (Defendant in each proceeding)

JUDGMENT OF:
McLaughlin AsJ

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable

COUNSEL:
Mr S. Waugh (Plaintiff in 2026 of 2007)
Mr J. Simpkins SC (Plaintiffs in 1013 of 2007 and 2572 of 2007)
Mr P. Blackburn-Hart SC and Mr W. Carney (Defendant in each proceeding)

SOLICITORS:
Leigh Virtue & Associates (Plaintiff in 2026 of 2007)
Harris Freidman Hyde Page (Plaintiffs in 1013 of 2007)
John F Joseph (Defendant in each proceeding)

CATCHWORDS:
SUCCESSION - family provision - claims by three adult daughters - substantial estate - entirety of estate left to de facto partner of Deceased - claims by two of daughters compromised on sixth day of hearing - finanicl and material circumstances of remaining Plaintiff - lack of contact between Plaintiff and Deceased druing most of her adult life - whether Plaintiff has been left without adequate provision for her proper maintenance - claim by Plaintiff for provision for her advancement in life - competing claim of Deceased's de facto partner of 26 years - relevance of fact or amount of settlement of claims of other two daughters of Deceased.

LEGISLATION CITED:
Family Provision Act 1982

CATEGORY:
Principal judgment

CASES CITED:
Bosch v Perpetual Trustee Company Limited [1938] AC 463
Re Young (decd); Young v Young [1965] NZLR 294
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Goodchild v James (1994) 13 WAR 229
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 19
Palmer v Dolman [2005] NSWCA 361
Wheatley v Wheatley [2006] NSWCA 262
Foley v Ellis [2008] NSWCA 288

TEXTS CITED:

DECISION:
In each of proceedings:
1013 of 2007 MICHELLE LORRAINE BYRNES –v- ESME ELIZABETH MARTENS
2572 of 2007 JANINE ROBYN PEACOCK –v- ESME ELIZABETH MARTENS

I make orders in accordance with short minutes of order dated 28 April 2009, signed by the solicitors for the respective parties and initialled by me on that date.
I direct that the short minutes be filed.
The exhibits may be returned.
2026 of 2007 TANYA COSTELLO –v- ESME ELIZABETH MARTENS
I order that the Plaintiff receive from the estate of the late William Alick Costello (“the Deceased”) a legacy in the sum of $350,000, such legacy not to bear interest if paid on or before 29 January 2010, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898.
I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased.
The exhibits may be returned.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Thursday, 29 October 2009

2026 of 2007  TANYA COSTELLO –v- ESME ELIZABETH MARTENS
1013 of 2007   MICHELLE LORRAINE BYRNES –v- ESME ELIZABETH MARTENS
2572 of 2007  JANINE ROBYN PEACOCK –v- ESME ELIZABETH MARTENS

JUDGMENT

HIS HONOUR: These are three proceedings under the Family Provision Act 1982.
By summons 2026 of 2007 filed on 27 March 2007, Tanya Costello claims an order for provision for her maintenance, education and advancement in life out of the estate and/or notional estate of the late William Alick Costello (to whom I shall refer as “the Deceased”).
By summons 1013 of 2007 filed on 5 January 2007, Michelle Lorraine Byrnes claims an order for provision for her maintenance, education and advancement in life out of the estate and/or notional estate of the Deceased.
By summons 2572 of 2007 filed on 4 May 2007, Janine Robyn Peacock claims an order for provision for her maintenance, education and advancement in life out of the estate and/or notional estate of the Deceased.
Each of the three Plaintiffs is a daughter of the Deceased.
On 10 October 2008 an order was made in each proceeding that the three proceedings be heard together, and that evidence in each proceeding be evidence in each of the other proceedings.
The Deceased died on 15 September 2006, aged 78 years. He left a will dated 15 December 1981, probate whereof was on 20 November 2006 granted to Esme Elizabeth Martens, the executor named in such will (who is the Defendant to each of the three proceedings).
The Deceased was married only once, to Elaine Joan Costello in 1952. Of that marriage were born three children, being the three Plaintiffs.
I shall for convenience, and without intending any disrespect, refer to each of the Plaintiffs by their respective first given names.
Michelle was born in 1953, and is presently aged 56. Janine was born in 1954 and is presently aged 54. Tanya was born in 1968, and is presently aged 41.
By his will the Deceased gave to the Defendant (identified in that will as Esme Elizabeth Baxter) the entirety of his estate absolutely, after payment of his debts, funeral, testamentary and administration expenses.
The inventory of property discloses the following assets, together with the estimated values thereof:
Lands known as Morvan Park, Avella,
and Black Springs at Running Stream,
having a total area of 544.9 hectares  $2,500,000
Land known as Tallawarra, Round Swamp,
having a total area of 111.3 hectares  $600,000
Premium business account with
Commonwealth Bank of Australia  $150,000
Pensioner security account with the
Commonwealth Bank of Australia  $2,900
2002 Toyota Landcruiser  $30,000
1996 Ford Falcon station wagon  $5,000
1989 Hino table top truck  $20,000
1985 Ford tractor  $12,000
845 IAG shares   $4,600
Land being estate in fee in coal only
contained in certificate of title folio identifiers
1/1024830 and 2/1024830   $2,000
Watches, jewellery and personal effects  $2,000
Livestock   $229,000
Farm machinery and equipment  $78,000
By the time of hearing, more precise valuations of the assets of the estate had been obtained. It was noted that the three properties known as Morvan Park, Avella, and Black Springs, had together an agreed value of $1,625,000, and that the property Tallawarra had an agreed value of $595,000. The other assets of the estate, together with the values attributed thereto by the Defendant, were as follows,
Estate bank account  $39,908
2002 Toyota Landcruiser  $14,584
1996 Ford Falcon station wagon (estimated)                $3,000
1989 Hino table top truck  $777
845 IAG shares at $3.42,
3 April 2009-10-22   $2,889
Estate in fee in coal
contained in certificate of title folio identifiers
1/1024830 and 2/1024830   $2,000
Watches, jewellery and
personal effects (estimated)  $2,000
Livestock (estimated)  $172,600
Farm machinery and equipment  $53,937
Total  $2,515,695
According to the Defendant, the estate has the following liabilities:
Employees’ long service leave and
holiday pay entitlements   $11,142
Hino Truck registration and green slip  $5,250
Indebtedness of Deceased to Defendant  $126,902
Advances made by Defendant to estate  $141,000
Total  $284,294
Upon the following figures the estate has a net value of $2,231,401.
The estate has incurred liabilities in respect to the present proceedings, which are estimated by the Defendant to be in a total amount of $141,000. It is in respect of those costs that the Defendant has advanced the sum of $141,000 to the estate. It would appear, however, that the Defendant’s costs of the proceedings will be considerably less than that amount. Her solicitor estimated a total of $33,500 for a three day hearing. In the event, the hearing occupied six days. However, it would be wrong to assume that for a six day hearing the costs would be double the costs for a three day hearing.
On 17 October 2008 the Defendant filed a cross-claim in proceedings 1013 of 2007, by which she claimed declaratory and other relief seeking recognition that the Deceased held upon trust for the Defendant the foregoing properties identified in the inventory of property, and also a property known as The Valley (which had been purchased by the Deceased and the Defendant in June 1985 as joint tenants, and the Deceased’s interest wherein has passed to the Defendant by survivorship), as well as the moneys held in the Deceased’s premium business account with the Commonwealth Bank of Australia, the motor vehicles, the livestock, and the farm machinery and equipment referred to in the inventory of property; and seeking, in the alternative, specific performance of an alleged contractual arrangement between the Deceased and the Defendant, by which the Defendant was to receive one half of the Deceased’s interest in the foregoing assets.
However, on the first day of the hearing the Defendant abandoned her cross-claim and consented to an order for the dismissal thereof. In consequence, in each matter I ordered that the costs of the cross-defendant, Michelle Lorraine Byrnes, be paid out of the estate of the Deceased.
The Deceased had separated from his wife on several occasions, the final separation occurring in March 1980 (when Tanya was aged 12), and they subsequently divorced in July 1981. The Deceased entered into a de facto relationship with the Defendant in 1980, and that relationship obtained until the Deceased’s death some 26 years later.
On the sixth day of the hearing, Tuesday, 28 April 2009, it was noted in proceedings 1013 of 2007 (Michelle Lorraine Byrnes v Martens) and proceedings 2572 of 2007 (Janine Robyn Peacock v Martens) that the parties had agreed to resolve their respective proceedings in accordance with orders contained in short minutes of order dated 28 April 2009, signed by the solicitors for the respective parties, and initialled by me on that date.
It will be appreciated that the reason why orders disposing of those two proceedings in accordance with the short minutes agreed upon by the parties thereto could not be made before the determination of the remaining proceeding, 2026 of 2007 Tanya Costello v Martens, is the possibility, in consequence of such orders, that there might not remain in the estate sufficient assets to meet any order for provision an entitlement to which Tanya might ultimately establish.
Accordingly, it is necessary for the Court to proceed to a determination of Tanya’s claim, and then, in the light of such determination, to consider whether it is appropriate in the other two proceedings that orders should be made in accordance with the foregoing short minutes.
It therefore becomes unnecessary for me to set forth the financial and material circumstances of each of Michelle and Janine which will otherwise be recorded, had their claims proceeded to a determination by the Court.
In calculating the value of the estate available for distribution the costs of the present proceedings must be taken into account, since if one or more of the Plaintiffs be successful in her claim, such Plaintiff or Plaintiffs will normally be entitled to an order that her costs be paid out of the estate, whilst the Defendant, irrespective of the outcome of the proceedings, will normally be entitled to an order that her costs be paid out of the estate.
It was estimated on behalf of Tanya that her costs will total about $52,000, but that estimation was for a two day hearing. As I have already recorded, the hearing, in the event, occupied six days. However, it would be wrong merely to multiply the foregoing figure by three. I have already observed that it was estimated on behalf of the Defendant that her costs will total $33,500 for a three day hearing. Adopting a very broad approach, I would estimate that the costs of the Plaintiff for a six day hearing should not exceed $80,000, whilst the costs of the Defendant for that hearing should not exceed $50,000. Thus, I consider that the totality of the costs of Tanya and of the Defendant for a six day hearing should not exceed $130,000.
It unnecessary, for the purposes of the present calculation, to take into account the costs of the proceedings of Michelle and Janine, since the proposed settlements of their respective claims provide that there will be no order as to costs. However, it will be recalled that, when, on the first day of the hearing, the Defendant abandoned her cross-claim and consented to an order for the dismissal thereof, an order was made in each proceeding that the costs of the cross-defendant, Michelle Lorraine Byrnes, be paid out of the estate of the Deceased.
Accordingly, I consider it prudent for the Court to proceed upon the basis that the value of the distributable estate will be no less than $2,000,000, and more likely in the order of $2,100,000.
Tanya was born in 1968, and is presently aged 41 years. She was the youngest of the three children of the Deceased and was considerably younger than her two sisters.
After the separation and subsequent divorce of her parents, Tanya continued to reside with her mother. Thereafter, the Deceased made little or no contribution towards Tanya’s maintenance or education. From the time of her parents’ separation, Tanya had minimal contact with her father until his death.
On 30 October 1981, the Family Court of Australia at Parramatta made an order pursuant to section 87 of the Family Law Act 1975, approving a deed of settlement between the Deceased and Tanya’s mother. That deed provided that Tanya’s mother would transfer to the Deceased her interest in all their jointly owned properties, upon payment to her by the Deceased of a total amount of $130,000 (there being an initial payment of $90,000 and a further payment three years later of $40,000, with interest on that latter sum in the meantime). That payment represented about half of the agreed value of the joint assets of the Deceased and his former wife. No provision was made for child support of Tanya.
The Deceased was enabled to make the foregoing payment of $130,000 to his wife only as a result of a gift of that amount made to him by the Defendant. Had it not been for that gift (which required the Defendant to sell some of the properties which she herself at that time owned), the Deceased would not have been able to retain the various pieces of real estate which were referred to in the inventory of property. When discussing that proposed gift of $130,000, the Deceased and the Defendant agreed that they would make wills in each other’s favour, which they subsequently did. It will be observed that the Deceased’s will of 15 December 1981 was made within the period stipulated by the orders of the Family Court for the initial payment of $90,000 of the total amount of $130,000 to be paid by the Deceased to his wife.
After the separation of her parents there was some slight contact between Tanya and her father. From time to time she sent cards and letters to him. But it was Tanya’s evidence that, in effect, those cards and letters were sent by her under duress, at the instigation of her mother, who appears to have desired Tanya to maintain a relationship with her father. I found that explanation by Tanya for those letters and cards, which were couched in affectionate terms, to be unconvincing.
The Deceased gave to Tanya a present of $1000 for her twenty-first birthday.
It is quite apparent that, had she so wished, Tanya could have maintained a relationship with her father, especially after she reached adulthood.
During her later years at school, and whilst she was at university, Tanya was in part-time employment. Tanya holds a degree of Bachelor of Arts, and a Diploma in Education from Macquarie University, as well as a graduate qualification in accounting from the University of Technology, Sydney.
Tanya married her husband, Mark Johnson, in 1991. They have no children. Tanya is a self-employed marketing consultant. Until the end of 2007 she conducted that business in a partnership, through a company called Internship Company Pty Limited.
Tanya and her husband are equal shareholders and directors of that company. She is paid a salary by that company, the amount of her salary depending upon the earnings of the company. It was estimated by Tanya that her total taxable income for the year ended 30 June 2008 would be $55,000, of which an amount of $8,750 (gross) or $5,136 (net)) would be derived from the rental income of a one bedroom home unit which she and her husband own at Hayberry Street, Crows Nest and the balance would be the salary derived from her company since 1 January 2008 (and previously from the business which she conducted in partnership until the end of 2007).
Tanya’s husband is employed by Nestle Limited, as a national distribution manager. His most recent income tax return discloses a total taxable income of $73,616 (which includes rental income from the Crows Nest unit). The home unit at Crows Nest, which Tanya and her husband conjointly own, has an estimated value of $310,000, upon which there is a mortgage debt of $227,500. They also conjointly own a Beneteau 35 foot yacht, having an estimated value of $200,000. Tanya’s husband owns an apartment in Cowper Wharf Road, Woolloomooloo, having an estimated value of $600,000, upon on which there is a mortgage debt of $431,000, as well as a car space, having an estimated value of $90,000, upon which there is a mortgage debt of $64,400. Tanya and her husband have since 2008 resided in the Woolloomooloo apartment. Previously, that apartment had been tenanted, and Tanya’s husband received rental income therefrom.
Tanya has a superannuation entitlement of about $50,000, and her husband has a superannuation entitlement of about $150,000. Tanya also owns shares in Telstra, which she stated are presently worth about $4,200.
Although previously in good health, Tanya since February 2009 has been diagnosed as suffering from Meniere’s Disease. She is under the care of a medical specialist for that condition, for which she is taking medication. The condition has caused her a number of unpleasant symptoms, including diminution of hearing in the left ear, affected balance, nausea and loss of appetite.
Tanya’s claim must be approached in the light of any competing claims upon the testamentary bounty of the Deceased. The only such competing claims are those of the Defendant and of Tanya’s two sisters.
The Defendant was the sole object of the testamentary beneficence of the Deceased.
The Defendant was born in 1939 and is presently aged 70 years.
Throughout the entirety of her relationship with the Deceased the Defendant was in employment. At the time when she met the Deceased the Defendant (who holds degrees in engineering and economics, and other tertiary qualifications, and who has received public recognition for her services to local government and the community) was employed as Shire Engineer and Town Planner with the Rylstone Shire Council, a position which she held from December 1975 until 1994. The Deceased became a councillor of the Rylstone Shire Council in 1977. The Defendant was subsequently employed in the office of the Protective Commissioner as a financial planner, from 1995 to 2003, and from then until 2007 she was the manager of engineering services with the Department of Ageing and Disability.
From the commencement of their de facto relationship in 1980 until the death of the Deceased, the Defendant contributed her income towards household expenses incurred by herself and the Deceased, towards expenses associated with the farming activities conducted on the lands of the Deceased, and (as it was alleged by the Defendant) in meeting losses sustained in connection with those farming activities. In June 1985, the Deceased and the Defendant purchased as joint tenants a farming property known as The Valley for the sum of $120,000 (each contributing the sum of $60,000).
During the course of their relationship the Defendant lent to the Deceased moneys totalling $126,902. I was not, however, satisfied, from the Defendant’s responses under cross-examination, of the existence of an alleged agreement that the Deceased would pay interest on those loan moneys totalling $126,902.

The Defendant owns a number of pieces of real property, which were acquired by her either before or during her relationship with the Deceased, from her own earnings, or by inheritance, or from the proceeds of sale of other properties which she had earlier owned. She presently owns a propertyat Broadwater Beach (upon which stands what was described as a “weekender”). That property is not rented out. She has a half interest in a property at Wynnum West, with her two brothers. That property (which formerly belonged to their mother, who died in 2003) is currently on the market for sale, for $795,000.
The Defendant owns a property at 54 Wandell Road, Manly West, (formerly known as Wynnum West) in Queensland, which is currently vacant. For many years the Defendant has owned a piece of vacant land on the Cudgegong Road, at Rylstone, which has a present value of about $5000. She also owns a property at 31 Boronia Road, St Mary’s, in which she resides when she comes to Sydney every few weeks for medical treatment.
Apart from the jointly owned property at Wynnum West, the Defendant does not wish to rent out or sell any of the foregoing properties.
The Defendant also owns property known as The Hans Road at Running Stream (purchased in 1981 for $60,000). That property, which consists of five blocks, is currently for sale at a price of $120,000 for each block.
The property known as The Valley (the Deceased’s interest wherein passed to the Defendant by survivorship upon the death of the Deceased) has a value originally stated by the Defendant to be $300,000. However, it emerged that that value referred only to the one undivided half share owned by the Defendant during the lifetime of the Deceased. The totality of the property, now owned solely by the Defendant, has a value of $600,000.
The Defendant ceased paid employment in 2007. She conducts farming activities upon the rural property Morven Park, and the other properties in the estate. In addition, she is a councillor on the Mid-West Regional Council. The Defendant’s only sources of income are her superannuation investments, from which she receives about $4,831 a month (which is not taxable) and her Maxi account with Westpac, upon which she earns 3 percent interest per annum. In addition, the Defendant receives an allowance of $8,500 a year from the Mid-West Regional Council, for her work as a councillor. She said that she entirely expends that allowance on such council-related expenses as travel and telephone. The Defendant estimated that her total monthly income was $6,605 (which figure she said does not take into account her farm income and expenses).
The Defendant in her affidavit of 6 April 2009 estimated that her total assets had a value of $3,437,539. However, that estimation did not take into account the interest of the Deceased in The Valley, which has passed to the Defendant by survivorship. It follows, therefore, that the totality of the Defendant’s assets is in the order of $3,737,539 (of which about $2,510,000 represents the estimated value of real estate, and about $1,227,536 represents superannuation, and various bank accounts, debentures, and shares).
In addition, the Defendant owns motor vehicles, plant and equipment, which at 30 June 2008 had a depreciated value of $18,198; livestock to the value of about $19,100; and an indebtedness owed to her by the estate of the Deceased in the sum of $126,902.
I have already recorded that the claims of Michelle and Janine have been resolved between those Plaintiffs and the Defendant.
It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of Tanya.
I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties, together with a chronology from Counsel for Tanya. Those documents will be retained in the Court file.
Tanya, as a daughter of the Deceased, is an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such she has the standing to bring the present proceedings.
It will be recognised that each of the other Plaintiffs is also an eligible person, being such within the same paragraph of the foregoing definition.
The Defendant, as the de facto partner of the Deceased at the time of his death, is an eligible person within paragraph (a) of the foregoing definition.
There was also a suggestion that the Deceased was the father of two exnuptial children. Although served with a notice of claim, neither of those persons have made a claim against the estate of the Deceased. Indeed, one of those persons, John Towers, provided affidavit evidence on behalf of Michelle.
Tanya’s mother (who, had she survived the Deceased, would also, as the former wife of the Deceased, have been an eligible person within paragraph (c) of the foregoing definition) died in January 2005.
Despite the terms of the relief sought in her summons (“an order for provision for her maintenance, education and advancement in life”) Tanya, at the hearing sought provision for only her advancement in life.
Tanya’s husband hopes to retire when he attains the age of 60, in about eight years’ time. By then Tanya will be aged almost 50. It is the present intention of Tanya and her husband that when he retires they will sell all their assets, other than their yacht, and will purchase an apartment in which to reside. It is their desire that by that time they should have a totally unencumbered residence.
Their present assets have a value of about $1,200,000, and their liabilities total about $722,000. Thus their combined net asset position is estimated to be about $478,000.
Upon the retirement of Tanya’s husband, it is their aim to live in debt free accommodation, and to have the use of their yacht for purposes of recreation and enjoyment. Their income would be derived from Tanya’s husband’s superannuation and from whatever income Tanya is able to earn, and with the intention that Tanya’s superannuation (presently about $50,000) would serve as a buffer.
It is their desire to purchase an apartment in an area with which they are familiar, and which would also allow access to their yacht. To that end, Tanya is seeking from the estate a legacy in the order of between $750,000 and $800,000.
In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208 – 210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for his or her proper maintenance.

The High Court in Singer v Berghouse (at 209 – 210) said that the determination of the first stage
calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
It has been submitted on behalf of Tanya that she has been left without adequate provision for her proper maintenance.
The concept of “proper” in the foregoing phrase was considered by the Judicial Committee of the Privy Council in Bosch v Perpetual Trustee Company Limited [1938] AC 463, at 476f. The size of the estate is relevant to the concept of what is “proper” maintenance for the applicant. (Lord Romer, who delivered the judgment of the Privy Council in Bosch, used the word “maintenance” in his judgment, “where necessary as including education and advancement” (at 476).)
In the instant case I have already observed that the estate is a large one, and that Tanya is grounding her claim not so much upon any present need for maintenance, but upon a future need, being for her advancement in life, so that, by the time when her husband retires from full-time employment, in about eight years, she and her husband will be enabled to maintain their present lifestyle, and to reside in an unencumbered residence, as well as to retain their yacht, which they will use for the purposes of recreation and enjoyment.
In her affidavit of 2 November 2007, Tanya said (paragraph 10),
When it comes time for my husband and I to purchase a home, we will need to dispose of our investment properties. If we had no debts on the assets which we now have and we were to sell all of those assets now but keep our yacht, we would have about $1,000,000 with which to buy a suitable home.
There was no evidence of the kind of residential apartment, or the location thereof, which could be purchased for $1,000,000.
But even upon the foregoing approach of Tanya, that she and her husband acquire an apartment costing in the vicinity of $1,000,000 and that Tanya’s husband would retain his yacht (having a present value of $200,000), they would need an amount of about $700,000, perhaps a little more, to acquire such an unencumbered residence for such a price at the present time.
However, it will be appreciated that such an approach disregards the fact that Tanya’s husband will be in employment for another eight years and will presumably be able to make some savings during that period, and, further, that he will inevitably increase his superannuation entitlement during that period. It should also be recognised that Tanya herself will be in employment not only until her husband’s retirement, but probably for some time thereafter, since she will be aged only about 50 when he proposes to retire.
Further, a legacy in the amount presently sought by Tanya, or in an amount somewhat less (taking into account the foregoing reductions which should be recognised as being consequent upon the continuing employment of Tanya and her husband), would result in Tanya receiving at the present time an amount by way of provision for her future advancement in life, sufficient to acquire an unencumbered residence in about eight years’ time. That amount could be invested and earn interest during that period of eight years.
There are, as I have already observed, many imponderable and unquantifiable factors in the foregoing calculations.
I recognise that the question of whether of Tanya has been left without adequate provision for her proper maintenance and advancement in life must be approached within the context of, amongst other matters, the size of the estate of the Deceased, and that that estate is quite substantial. I also recognise that it is not for the Court to tell people how they should conduct their lives. If Tanya and her husband desire to maintain a 35 foot yacht having a present value of $200,000 (and that yacht replacing an earlier similar yacht of a similar value), then that is a matter for them. But, the retention of such a valuable asset in circumstances where their net assets total somewhat less than $500,000 (that is, the yacht representing more than two fifths of their net assets) and where Tanya is seeking very significant provision out of the estate, might by an ordinary member of the community be considered somewhat of a luxury (if not an extravagance).
The desire on the part of Tanya and her husband to retain the yacht in their present (and likely future) circumstances, impacts upon, first, whether Tanya has been left without adequate provision for her proper maintenance, and, further, if so, what order for provision should be made in her favour.
I have already referred to the lack of contact (indeed, more accurately, the estrangement) between Tanya and her father. I have expressed the view that it is quite apparent that, had she so wished, Tanya could have maintained a relationship with her father, especially after she reached adulthood. It is apparent that she had no desire to maintain any relationship with him. The nature of that relationship and the existence of such estrangement is relevant not only to the first stage in the two stage process identified by the High Court of Australia in Singer v Berghouse, but also to the determination of what provision (if any) ought to be made in favour of the applicant, since section 9(3)(b) of the Family Provision Act expressly provides in that regard that the Court may take into consideration “the character and conduct of the eligible person before and after the death of the deceased person”.
In Palmer v Dolman [2005] NSWCA 361 (Court of Appeal, 12 December 2005), Ipp JA (with whom Tobias and Basten JJA agreed) said, at [118],
In determining this issue [the provision that should be made for the plaintiff], I take into account the consideration that an estrangement between father and child may well reduce the moral claim that the child might have to maintenance, support or advancement in life (see Re Young (decd); Young v Young [1965] NZLR 294 at 301; Goodchild v James (1994) 13 WAR 229 at 238.
In Wheatley v Wheatley [2006] NSWCA 262 (Court of Appeal, 22 September 2006) Bryson JA (with whom Santow and McColl JJA agreed) said at [37],
The poor state of the relationship between Mr Wheatley and the testatrix, illustrated by the absence of visits during the last 13 years of her life, operates to restrain amplitude in the provision to be ordered.
In Foley v Ellis [2008] NSWCA 288, Basten JA said at [14],
Nor is the rupture in the familial ties between the applicant and her mother … to be ignored. These factors militate against an order erring on the side of generosity in assessing the applicant’s needs for maintenance and advancement in life.
Despite the lack of contact with her father, I am satisfied that Tanya has established that she has been left without adequate provision for her proper maintenance and advancement in life. Nevertheless, I consider that the calculation of the amount which she is entitled to receive must include a recognition of the lack of contact between herself and her father, being an almost total estrangement during the entirety of Tanya’s adult life.
It must be recognised however, that an order for provision is not made as a reward for services or good conduct on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct on the part of an applicant.
I have already referred to the submission that Tanya should receive from the estate a sum which will enable her and her husband in about eight years’ time to acquire an unencumbered apartment costing in the vicinity of $1,000,000. I do not consider that an adult child in the position and circumstances of Tanya is entitled to expect from her parent a testamentary benefit which will give to her an unencumbered residence.
It seems to me that, in all the circumstances of this case, Tanya has established an entitlement to receive from the estate of the Deceased a legacy in the sum of $350,000. Such a legacy, when added to their present assets (including, if they choose, the proceeds of sale of the yacht), and any savings they may accumulate in the coming eight years, together with interest which can be earned upon such legacy and the other assets and savings to which I have just referred during the eight year period, should enable them at that time acquire their desired debt free residence.
I have already observed that Tanya’s claim must be approached in the light of the competing claim of the Defendant. Quite apart from her benefits under the estate of the Deceased, the Defendant has total assets to the value of almost $4,000,0000. Even after the costs of the present proceedings are paid from the estate, and a legacy in the proposed amount is paid to Tanya, as well as the legacies to Michelle and Janine, the Defendant will still receive a very considerable amount from the estate of the Deceased (certainly in excess of $1,000,000).
It should be emphasised that the Defendant is the chosen object of the testamentary beneficence of the Deceased. She was his de facto partner for some 26 years, and they had a close and affectionate relationship. The Defendant gave him substantial financial support (especially at the time of his property settlement in the Family Court), and that support significantly contributed to the size of the Deceased’s estate. Nevertheless, even after meeting the proposed order for provision in favour of Tanya, as well as the proposed legacies in favour of Michelle and Janine, the balance of the estate will have a value well in excess of $1,000,000, which balance the Defendant will receive. Further, it should not be overlooked that independently she owns a number of substantial assets having a total value in excess of $3,700,000. In these circumstances I am not persuaded that the competing claim of the Defendant upon the testamentary bounty of the Deceased is such as will have the effect of reducing, let alone extinguishing, any order for provision an entitlement to which Tanya may otherwise have established.
It was submitted on behalf of the Defendant that neither the fact nor the amount which has been agreed between the Defendant and each of Michelle and Janine has any relevance to the outcome of the claim of Tanya.
So long as the estate of the Deceased is adequate to meet the foregoing amount to which I consider Tanya has established an entitlement, being a legacy of $350,000, as well as to meet the legacies which have been agreed upon between each of Michelle and Janine and the Defendant, I accept the foregoing submission made on behalf of the Defendant. I certainly do not consider that the amounts for which Michelle and Janine have agreed with the Defendant to compromise their respective claims have any bearing upon the amount which, after a contested hearing, Tanya has established an entitlement to receive from the estate.
The only relevance of the fact of the foregoing agreements in the claims of Michelle and Janine is, as I have already observed, to the question of whether the estate can accommodate the order for provision which it will have to meet in each of the proceedings. I am satisfied that the assets of the estate are adequate for that purpose.
I make the following orders:
In each of proceedings:
1013 of 2007       MICHELLE LORRAINE BYRNES –v- ESME ELIZABETH MARTENS
2572 of 2007  JANINE ROBYN PEACOCK –v- ESME ELIZABETH MARTENS
1. I make orders in accordance with short minutes of order dated 28 April 2009, signed by the solicitors for the respective parties and initialled by me on that date.
2.I direct that the short minutes be filed.
3.The exhibits may be returned.
2026 of 2007  TANYA COSTELLO –v- ESME ELIZABETH MARTENS
1. I order that the Plaintiff receive from the estate of the late William Alick Costello (“the Deceased”) a legacy in the sum of $350,000, such legacy not to bear interest if paid on or before 29 January 2010, and if not so paid to bear interest at the rates prescribed for unpaid legacies by the Probate and Administration Act 1898.
2. I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased.
3.The exhibits may be returned.
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LAST UPDATED:
29 October 2009