Dimic v Djekovic
[2014] NSWSC 1502
•30 October 2014
Supreme Court
New South Wales
Case Title: Dimic v Djekovic Medium Neutral Citation: [2014] NSWSC 1502 Hearing Date(s): 20 October 2014 Decision Date: 30 October 2014 Jurisdiction: Equity Division Before: Hallen J Decision: Direct the parties, within 14 days, to bring in Short Minutes of Order consistent with, and reflecting, these reasons. Orders that the proceedings be stood over to a convenient date in order to make orders.
Catchwords: SUCCESSION - FAMILY PROVISION - Plaintiff makes a claim for a family provision order - No dispute as to the Plaintiff's eligibility as a person with whom the deceased was living in a de facto relationship at the date of his death - Defendant, the sole executor named in the Will of the deceased - Some provision made in the Will of the deceased for the Plaintiff - Whether family provision order should be made, and if so, the nature and quantum of the further provision to be made Legislation Cited: Family Provision Act 1982 (NSW)
Probate and Administration Act 1898 (NSW)
Statute Law Amendment Relationships Act 2001 (Vic)
Succession Act 2006 (NSW)
Succession Amendment (Family Provision) Act 2008 (NSW)Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice, In re; Allardice v Allardice (1909) 29 NZLR 959
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Anasson v Phillips (Supreme Court (NSW), Young J 4 March 1988, unrep)
Aubrey v Kain [2014] NSWSC 15
Bartlett v Coomber [2008] NSWCA 100
Belfield v Belfield [2012] NSWSC 416
Bladwell v Davis 2004] NSWCA 170
Boettcher v Driscoll [2014] SASC 86
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland v Trustees Executors and Agency Co Limited (1966) 40 ALJR 164
Butcher v Craig [2009] WASC 164
Carega Properties SA (formerly Joram Developments Ltd) v Sharratt [1979] 2 All ER 1084; [1979] 1 WLR 928
Chen v Lu [2014] NSWSC 1053
Clifford v Mayr [2010] NSWCA 6
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Court v Hunt (Supreme Court (NSW), Young J, 14 September 1987, unrep)
Crisp v Burns Philp Trustee Company Ltd (Supreme Court (NSW), Holland J, 18 December 1979, unrep)
Cross v Wasson [2009] NSWSC 378; (2009) 2 ASTLR 201
de Angelis v de Angelis [2003] VSC 432
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54; (2009) 2ASTLR 89
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWCA 288
Forsyth v Sinclair [2010] VSCA 147
Gardiner v Gardiner (Supreme Court (NSW), Santow J, 28 May 1998, unrep)
Janette Susan Gardiner v Raymond James Gardiner as Administrator of the Estate of the Late Dulcie Eva Gardiner [2014] NSWSC 435
Goodman v Windeyer (1980) 144 CLR 490
Goodsell v Wellington [2011] NSWSC 1232
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Hertzberg v Hertzberg [2003] NSWCA 3
Hyland v Burbidge [2000] NSWSC 12
In the Estate of the late Anthony Marras [2014] NSWSC 915
Kay v Archbold [2008] NSWSC 254
Kembrey v Cuskelly [2008] NSWSC 262
Langtry v Campbell (Supreme Court (NSW), Powell J, 7 March 1991, unrep)
Luciano v Rosenblum (1985) 2 NSWLR 65
Marcuola-Bel Estate, Re; Marcuola-Bel v Thi Ly Tran [2005] NSWSC 1182
Lumb v McMillan [2007] NSWSC 386
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCann v Ward & Burgess [2012] VSC 63
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McKenzie v Topp [2004] VSC 90
Milillo v Konnecke [2009] NSWCA 109
O'Loughlin v O'Loughlin [2003] NSWCA 99
Palaganio v Mankarios [2011] NSWSC 61
Phillips v James [2014] NSWCA 4
Pogorelic v Banovich [2007] WASC 45
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Puckridge, Deceased, In the Estate of, (1978) 20 SASR 72
R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808
Re Buckland Deceased [1966] VR 404
Ross v Collins [1964] 1 All ER 861; [1964] 1 WLR 425
Sam Wardy v Gordon Salier; William Wardy v Gordon Salier; Hassiba Wardy v Estate of late Edmond Wadih Wardy, developer and Ch 3 of the Succession Act 2006 [2014] NSWSC 473
Schmidt v Watkins [2002] VSC 273
Sellers v Scrivenger [2010] VSC 320
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Sitch (deceased), Re the Will of; Gillies v Executors of the Will of Sitch [2005] VSC 308
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stiles v Joseph (Supreme Court (NSW), Macready M, 16 December 1996, unrep)
Stott v Cook (1960) 33 ALJR 447
Szypica v O'Beirne [2013] NSWSC 297
Taylor v Farrugia [2009] NSWSC 801
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Verzar v Verzar [2014] NSWSCA 45
Vidler v Ivimey [2013] NSWSC 1605
Vigolo v Bostin (2005) 221 CLR 191
Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep)
West v France [2010] NSWSC 845
West v Mann [2013] NSWSC 1852
White v Barron [1980] HCA 14; (1980) 144 CLR 431
Wilcox v Wilcox [2012] NSWSC 1138Texts Cited: J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths)
L G Handler and R Neal, Mason and Handler's Succession Law and Practice in New South Wales (1985, LexisNexis Butterworths)
Rosalind Atherton, 'The Concept of Moral Duty in the Law of Family Provision - a Gloss or Critical Understanding?' (1999) 5 Australian Journal of Legal History 5Category: Principal judgment Parties: Zagorka Dimic (Plaintiff)
Milan Djekovic (Defendant)Representation - Counsel: Counsel:
Mr L Ellison SC (Plaintiff)
Mr B Skinner (Defendant)- Solicitors: Solicitors:
Hicksons (Plaintiff)
Djekovic, Hearne & Walker (Defendant)File Number(s): 2013/192350
JUDGMENT
The Claim
HIS HONOUR: These reasons relate to proceedings in which the Plaintiff, Zagorka Dimic (also known as Zaga Dimic), seeks a family provision order pursuant to the Succession Act2006 (NSW) ("the Act"), upon the basis that she is a person who was living in a de facto relationship with John Brajkovic ("the deceased"), at the time of his death. The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 (NSW) ("the former Act"), which was repealed, effective from 1 March 2009. A family provision order is an order made by the court in relation to the estate, or notional estate, of a deceased person, to provide from that estate and/or notional estate, for the maintenance, education, or advancement in life, of an eligible person. (The Plaintiff does not seek to designate any property as notional estate of the deceased.)
The Plaintiff commenced the proceedings by Summons filed on 24 June 2013, that is, within the time prescribed by the Act (within 12 months of the deceased's death).
The Defendant is Milan Djekovic, the executor named in the Will of the deceased, to whom Probate was granted. He is a solicitor who had acted for the deceased (and the deceased's late wife) since about 1987. He had also been the deceased's Attorney, having been appointed under an enduring General Power of Attorney dated 20 July 2012. He is not a beneficiary named in the Will of the deceased.
The hearing proceeded with the reading of the evidence filed. There were only a few objections to parts of the affidavits that needed to be ruled upon. The cross-examination of each of the parties and one witness then occurred. Neither of the solicitors, whose affidavit of costs was read, was cross-examined on that affidavit. Finally, counsel for each of the parties made oral submissions speaking to his written outline of submissions, which have been retained in the court file. The estimated duration of the hearing was one day plus, and the proceedings were concluded within one day.
(There was one witness, Slavko Maronic, to whom I shall refer later, whose affidavit was relied upon by the Defendant, who was unable to attend for cross-examination because he lives overseas. Although a notice of motion was filed seeking an order that he be permitted to be cross-examined by audio-link, the notice of motion was dismissed, by consent of the parties, prior to the hearing, as he was no longer required to attend for cross-examination. Costs of the notice of motion were costs in the cause.)
Formal Matters
The following facts are uncontroversial.
The deceased died on 4 August 2012. He was then aged 86 years, having been born in September 1925.
The deceased married Ivka Maronic in about 1948, but she predeceased the deceased, having died in 1988. They remained married at the date of her death. There were no children of their marriage.
The deceased had one child, Josip Tisic (to whom I shall refer as "the son"), from a relationship that he had with a woman in Croatia. The son was born in Croatia, in about 1948, and has lived there throughout his life.
The son has one son, also called Josip (to whom I shall refer as "the grandson") who was born in January 1970, and a daughter, Natasa, who was born in 1977.
The grandson came to Australia in October 1991. He resided with the deceased and the Plaintiff for a period of time.
The grandson has four children, Jennifer, who was born in August 2000, and who is now aged 14 years; Adrian, who was born in May 2001, and who is now aged 13 years; Emalee, who was born in July 2002, and who is now aged 12 years; and Nikola, who was born in January 2007, and who is now aged 7 years. He is married to Daniela, who is the mother of Adrian, Emalee and Nikola.
There was no evidence about Natasa or whether she has any children.
The deceased's brother-in-law is Slavko Maronic. He is presently aged 77 years. His sister was Ivka. He lives in Zagreb, Croatia, with his wife, Durdica, his daughter, Zeljka and his two grandchildren, Ivan and Irena.
The deceased left a Will that he made on 3 December 2008, Probate in common form of which was granted, by this court, to the Defendant on 12 July 2013. By that Will, the deceased provided:
"3. I GIVE DEVISE AND BEQUEATH as follows:
(a) to ZAGA DIMIC an amount equivalent to half the value of my property at xx xxxx xxxx, Rose Bay ('the property') as at the date of my death and the right to occupy the property rent free for a period of up to six (6) months after my death together with all contents of the property and my personal effects and also any motor vehicle I own in Sydney as at the date of my death;
(b) to my brother-in-law, SLAVKO MARONIC an amount equivalent to the gross value of Units numbered x, x and x being two (2) two (2) bedroom and one (1) one bedroom apartments on the second floor of the building I own at xx xxxx xxxx, Bondi valued as if such units were held under strata title and separately saleable PROVIDED THAT if SLAVKO MARONIC predeceases me then equally amongst such of his children as survive me."
The deceased left the rest and residue of his estate:
"4. ... UPON TRUST to sell call in and convert into money such part thereof as does not consist of ready money and to pay thereout and out of any ready moneys forming part of my estate all my just debts funeral and testamentary expenses and all death estate probate succession and all other like duties payable in consequence of my death and to hold the balance of the proceeds of such sale calling in and conversion and any ready moneys as aforesaid or the investments for the time being representing the same UPON TRUST for such of my great grandchildren being the children of my grandson, JOSIP TISIC Junior as survive me and attain the age of twenty-five (25) years as tenants in common in equal shares."
The Inventory of Property disclosed to the court under s 81A of the Probate and Administration Act 1898 (NSW), a copy of which Inventory was attached to the Probate document, stated that the property owned solely by the deceased in New South Wales, at the date of his death, had an estimated (or known) gross value of $8,742,987 (incorrectly stated to be $8,740,188). The deceased's actual estate was said to consist of real estate in Rose Bay, Sydney ("the Rose Bay property") ($3.2 million), real estate at Bondi, Sydney ("the Bondi property") ($5.2 million), furniture watches and jewellery ($5,000), monies in current accounts ($13,000), monies in bank or financial institutions on deposit ($154,122) shares ($2,350), debts due to the deceased ($7,613), motor vehicles ($7,000) and other personal property ($153,902). (I have omitted, and shall continue to omit, any reference to cents, which explains what may appear to be mathematical errors.)
No jointly held, or other, property, in which the deceased held an interest in New South Wales at the date of his death, was disclosed in the Inventory of Property.
There was also identified, in the Inventory of Property, other property held outside New South Wales, in Croatia, being shares in "Hotel Rovinj" (AUD$8.46 million), vacant land (AUD$10,000), a car (AUD$2,800) and moneys held by a lawyer (AUD$35,380).
In an affidavit sworn 26 September 2014, the Defendant provided some evidence of the nature and current value of the property forming the deceased's estate in New South Wales, being the Rose Bay property ($3.0 million to $3.3 million); the Bondi property ($5.2 million, although if money ($300,000) were expended on it, the value could be increased to $6.5 million); net rentals from the Bondi property ($373,839); shares ($3,813); and moneys held by the Defendant's solicitors ($52,052).
There is evidence that the Rose Bay property is a "substantial ... home [sitting] on a commanding parcel of approx. 620 sq.m. and [that it] enjoys delightful harbour views from the rear of the property". It has "multiple living areas, [an] indoor pool and garaging for up to four cars". It has four bedrooms.
There is evidence that the Bondi property comprises 9 flats (six 2 bedroom and three 1 bedroom) and a retail office area. The Defendant has been told that the property does not comply with current fire safety regulations or current building code requirements. It is not currently strata subdivided.
The furniture, watches and jewellery, the motor vehicle, and other personal property of the deceased have been transmitted to the Plaintiff.
Although no liabilities were disclosed in the Inventory of Property, there were funeral and wake expenses ($17,882), expenses relating to the Rose Bay property ($15,288), various other expenses relating to the Bondi property ($169,196), taxation liabilities ($233,497) and accountancy fees ($8,030) paid out of the estate. (There remains $15,274 yet to be paid in relation to work done on the Bondi property.)
The Plaintiff has remained in occupation of the Rose Bay property since the death of the deceased. She has not paid any rent or occupation fee whilst continuing to live there.
The Defendant has made some interim distributions to the residuary beneficiaries, being $30,600 to Jennifer and $69,338 to Adrian, Emalee, and Nikola.
The current value of the property of the deceased in Croatia is unknown for a number of reasons, including that there is litigation, being a claim by the son seeking what is described as the "statutory reserved portion" of the Croatian estate, which proceedings are likely to be successful. The Defendant, who is represented by Croatian lawyers in the litigation, has been advised that the "statutory reserved portion" is equivalent to "one half of the entitlement which would have applied in the event that the deceased had left no will".
At the commencement of the hearing, the parties agreed that the gross value of the deceased's estate in New South Wales, at the date of the hearing, was $8,666,240. That value is calculated by reference to the estimated current gross value of the Rose Bay property ($3.4 million) and the Bondi property ($5.2 million) and cash held in the Defendant's trust account ($66,240).
The current liabilities known to the Defendant that are yet to be paid, total $101,415, and include income tax for the financial year ending 30 June 2014 (estimated to be $49,009), a BAS Tax instalment ($12,816), the balance of renovation costs of the Bondi property ($15,274), the balance of the renovation costs expended by the Plaintiff ($7,374) and unpaid costs and disbursements of administration payable to the Defendant's solicitors ($16,942). (I should mention that the Defendant does not intend to seek any commission from the deceased's estate.)
During the course of the hearing, the agreed value of the Rose Bay property was reduced to $3.3 million. The parties also agreed that, in the event that the Rose Bay property were sold for $3.3 million, the costs and expenses of sale would be about $80,000. For reasons to which I shall come, because of these costs and expenses, I have estimated that the net proceeds of sale of the Rose Bay property, currently, will be about $3.2 million. In the event that the Bondi property is sold for $5.2 million, the parties agreed that the costs and expenses of sale would be about $135,000; and, in the event that the Bondi property is sold for $6.5 million, those costs and expenses would be about $164,000.
In calculating the value of the actual estate, finally available for distribution, the costs of the present proceedings should also be considered, since the Plaintiff, if successful, normally, will be entitled to an order that her costs and disbursements, calculated on the ordinary basis, be paid, whilst the Defendant, as the person representing the estate in the proceedings, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs, calculated on the indemnity basis, be paid out of the estate, of the deceased.
The Plaintiff's solicitor, Mr C E Moore, in an affidavit sworn on 25 September 2014, estimated the Plaintiff's costs and disbursements of the proceedings, including senior counsel's fees, calculated on the indemnity basis, to be about $98,670 (inclusive of GST and upon the basis of a one day hearing). The estimate of the Plaintiff's costs and disbursements, calculated on the ordinary basis, was $87,945.
Neither the Plaintiff, in any of her affidavits, nor her solicitor, in his affidavit of costs, disclosed that the Plaintiff had paid any amount on account of costs and disbursements. It was not until the conclusion of the submissions in reply, that senior counsel for the Plaintiff disclosed that the Plaintiff had, in fact, paid "about $50,000" on account of those costs and disbursements.
This piece of information should have been disclosed by the Plaintiff or in the affidavit of the Plaintiff's solicitor. Subsequently, without objection, following the conclusion of the hearing, counsel for the Defendant informed the court, in a document that has been marked as Ex. C, that the agreed amount that the Plaintiff has paid is $58,828.
If an order for costs of the Plaintiff is made, some, or all, of the costs and disbursements paid will be reimbursed, with the result that her financial and material circumstances are likely to be improved. In this case, the payment will increase the capital amount that the Plaintiff has available to her to meet exigencies of life.
The Defendant's solicitor, Mr S M Hearne, in an affidavit sworn on 14 October 2014, estimated the costs and disbursements of the Defendant of the proceedings, including counsel's fees, calculated on the indemnity basis, to be $119,870 (inclusive of GST and upon the basis of a one day hearing). He stated that $55,727 has been paid out of the estate, leaving $64,143 left to be paid.
Naturally, if the parties are unable to reach agreement on the quantum of costs to be paid out of the estate, it will be for an assessor to determine the appropriate quantum of costs.
It follows that, if the liabilities ($101,415) are paid, orders for costs are made, and if the costs estimates prove accurate (in total, the balance being $152,088), the net value of the deceased's estate in Australia, available for distribution, will be about $8.4 million. It is, on any view, a large estate.
The Defendant was cross-examined on the value of the Croatian property but said that he was unable to provide an estimate of its value. Whatever its value, the residuary beneficiaries will probably receive 50 per cent, the other 50 per cent going to the son. The Defendant said, in cross-examination:
"Q. Have you attempted to put a value on what might pass to those great grandchildren?
A. From Croatia?Q. Yes?
A. Yes, I have. I have struck a great deal of difficulty in dealing with that. I have travelled to Croatia, I've had advice and that's ongoing at the moment, and uncertain.Q. Obviously it can't be a negative, it will be a positive but you don't know when?
A. That's correct, and--Q. And you don't know how much?
A. That's right. For a number of reasons, but that's correct.Q. ... have you got any idea what might be the ultimate entitlement passing to those great grandchildren?
A. No, I do not. I should volunteer that while there is no risk that it could be negative, it could well be neutral or zero."Senior counsel for the Plaintiff submitted, in writing, that "where the Australian estate is large enough to provide for the Plaintiff and the other beneficiaries under the deceased's Will, and the Croatian estate is of doubtful utility, the Plaintiff accepts that for all practical purposes, the Croatian estate is irrelevant to this litigation".
Strictly speaking, that is not entirely correct, since the existence of property of the deceased overseas "may nonetheless inform the extent to which those having claims on the deceased's testamentary bounty have received, and will receive, provision, and thus what order should be made in respect of assets within the jurisdiction [cf Taylor v Farrugia [2009] NSWSC 801, [26]]. They also provide an asset to which [the executor] can resort to meet the estate's costs, and thus can be relevant to what order is made in respect of costs [cf Taylor v Farrugia, [26], [74]]": Chen v Lu [2014] NSWSC 1053, per Brereton J, at [75].
Unfortunately, for reasons beyond the control of the parties, the value of the Croatian property is not known with any degree of certainty.
The parties agreed that the only eligible person who has commenced proceedings under the Act is the Plaintiff. Of course, the son, as a child of the deceased, is also an eligible person, but he has not commenced proceedings in New South Wales despite having been served with a notice of the application and of the Court's power to disregard his interests. He has, however, commenced proceedings in Croatia, to obtain part of the estate of the deceased held there (to which proceedings I have earlier referred).
There is evidence that the grandson is, or may be, an eligible person also, but he has expressly stated that he does not wish to make any claim for further provision because he accepts "that there will be substantial benefits flowing to my children if the terms of the deceased's Will are upheld". He has sworn a number of affidavits that have been read in the proceedings and he was cross-examined.
There is no evidence that any of the other beneficiaries named in the Will of the deceased are eligible persons but, as they are beneficiaries, the court will not disregard the interests of each of them. Later in these reasons, I shall refer to the claim of any competing claimant. (It is fair to say that the only competing claimant is the deceased's brother-in-law, Slavko. The great-grandchildren of the deceased are named beneficiaries but it was not submitted that any had a claim on the bounty of the deceased.)
The Act provides that since each of the other eligible persons has not commenced proceedings, I may disregard his, and her, interests as a person in respect of whom an application for a family provision order may be made. The Court is not permitted to disregard their interests, or the interests of the other beneficiaries, as beneficiaries.
Further Background Facts
The following facts, which, in my view, are not the subject of any dispute, or which have been established, should be noted.
The Plaintiff was born in Pristina, Serbia. She came to Australia with her first husband, Borivoje, in June 1968. She was subsequently divorced (having obtained the dissolution of her marriage in Serbia) from him. She obtained Australian citizenship in August 1982.
Before her marriage, the Plaintiff had a relationship with Radivoye Markovic, with whom she had twin children, born in July 1960. Both of her children currently live in Serbia.
Following the dissolution of her marriage, and commencing in 1970, the Plaintiff lived with Larry De Blasio, until his death in March 1980.
The Plaintiff met the deceased in mid-1988. I shall return to details of their relationship later in these reasons.
The Defendant described the deceased as "a complicated character with an irascible temperament. He was given to outbursts of anger. Conversely he could be very generous and warm and a very loving person."
The Defendant also says that he had heard the deceased say that the Plaintiff was not his wife and that "My wife died in 1988. I have no wife."
The Defendant annexed, to one of his affidavits, searches of alternative accommodation, comprising two, and three, bedroom units in Rose Bay (within 500 metres of the Rose Bay property), the price of which ranged from $1.54 million to $1.97 million. The Defendant stated that the properties were:
"...quality strata apartments or townhouses with the following features:
(a) two or most likely three bedrooms;
(b) level lift access from a single or most likely double garage level;
(c) large contemporary living areas;
(d) high quality kitchen and two bathrooms;
(e) ample indoor and outdoor entertaining spaces;
(f) impressive views or outlook; and
(g) contemporary development most likely not more than 10-15 years old."As it will be necessary, bearing in mind the submissions ultimately made, I shall use the amount of $2.0 million as a guide to the cost of alternative, suitable accommodation in which the Plaintiff might live.
Testamentary Intentions of the Deceased
The Defendant has given evidence about conversations that he had with the deceased regarding instructions for a Will. In relation to the provision for the Plaintiff, the deceased said to the Defendant, on several occasions:
"I have already done a lot for Zaga. It cost me hundreds of thousands of dollars to build another storey on her house at Dolls Point so that it is now a duplex. She is renting both of these out and has got plenty of money of her own. When we split up she will go back and live in one of the units and have a good income from the other one".
There is no dispute that the deceased did, in fact, contribute to the costs of renovating the Plaintiff's property at Dolls Point (as to which, see later).
In another conversation, the deceased said to the Defendant:
"You worry too much. Zaga knows what I have done for her and she would not be so greedy as to make a claim. I have looked after her well and she knows that apart from Braco everything is to go to the [great] grandchildren. Thanks to me she is already doing very well with two units and plenty of money. She does not need anything more. I am sure she would respect my wishes."
("Braco" is a Croatian term said to mean "little brother", which term the deceased used to refer to Slavko.)
The Plaintiff gives evidence that, shortly before the deceased's death, he said to her:
"I am sorry Zaga, I should have just left you half of everything, everything along with my great-grandchildren. Get me a telephone book so I can call Djekovic."
In relation to the provision made for Slavko, there appears to have been a written agreement between the deceased and his wife, made in November 1987. It is this agreement, the details of which it is not necessary to repeat in these reasons, that founds his competing claim upon the bounty of the deceased at least so far as it relates to the interest in the Bondi property provided to him by the deceased's Will.
Credit of the Parties
The Plaintiff gave evidence that she wished to remain living in the Rose Bay property. In her affidavits, she gave evidence that she wished to do so for a number of reasons. These included her close ties with the local community, having friends in the area, close neighbours who are of a similar age, and that her doctor, massage therapist, hairdresser and beauty salon are in the area.
In cross-examination, the Plaintiff gave the following evidence (at T21):
"Q. There is no reason why the Rose Bay property could not be sold and you could live in alternative accommodation, is there?
A. Yes, there is reason. I want to die in that house like my husband did and he fight it very strong to remain there because when they were building block of units they offer him to sell the house, house was always not for sale.Q. You don't particularly like the property?
A. I love the property. I like the house, especially inside how we decorate it.Q. You have complained to Mr Djekovic that it's not a nice house?
A. That conversation never took with Milan Djekovic. I would like to know he tell me time, when was that conversation?Q. The only connection between you and the Rose Bay property is that you want to die in it?
A. Not only that, in memory of my husband and especially those last six years when he was starting having dementia and difficulty with his life and everything. The energy of him is still there in the house now.Q. That's the only particular reason?
A. Not only that and my friends and my volunteer work, my doctors, everything, my life is there, not Rose Bay, but the Bondi Junction where I take him to doctors and therapies and the lot."She added (at T22):
"Q. You are aware that you own half the property?
A. Yes.Q. And that it would be possible for you to it would be open for the house to be sold at Rose Bay?
A. Yeah, I'm aware of it but I don't agree with it.Q. And if the house at Rose Bay was sold there would be a sum of money left over; correct? There's no mortgage on the property?
A. No, no mortgage since he's passed away.Q. It would be possible to buy another property in which you could live and you could own in that area?
A. It is possible, but that doesn't mean I agree.Q. Have you turned your mind to suitable accommodation in Rose Bay in which you could live?
A. No, it never crossed my mind. I want to stay in the house where is all my memories of my husband.Q. You understand that that is Mr Djekovic's proposal?
A. That is his proposal, not mine."In answer to some questions from the Bench, she gave the following evidence (at T27 - T28):
"Q. Mr Skinner asked you some questions about Rose Bay?
A. Yes.Q. And continuing to live in Rose Bay. And I gather that your evidence is you want to keep living there?
A. Yes, sir.Q. For as long as you can?
A. Yes, sir.Q. The principal reason you seem to have given, and correct me if this is wrong, is ... the memory of your husband?
A. Yes.Q. And you'd like to live there so you can remember your husband?
A. Yes.Q. You've also said that you have things to do in the eastern suburbs in the area of Dover Heights, Bondi Junction, and Rose Bay is reasonably close to all of that?
A. Yes.Q. Is that right?
A. Yes.Q. Now those things do not require ownership of the whole of the Rose Bay property, do they?
A. Those things I'm doing that is a part of me that I am doing because I'm not a person to stay home and cry. But when I'm in the house I always have a feeling like he is coming home from Croatia.Q. I am sorry, I think you misunderstood my question?
A. Okay.Q. As I understand it, what is being put on your behalf is that you want to own the Rose Bay property, all of it, is that right?
A. Yeah, that's right.Q. The matters that you've mentioned about keeping the memory of your husband and those sorts of things that I just mentioned to you, are not dependent on owning that property, are they? You want to live there?
A. I want to live there.Q. That seems to be your principal position, is that right?
A. Yes."The Defendant had, however, given evidence in an affidavit that, on the day of the funeral, the Plaintiff, when showing him around the ground floor living areas of the Rose Bay property said words to the following effect:
"I have never liked this house. It is far too big for us and I always wanted John to sell it. He was so stupid when he missed the opportunity to sell it to the developers who bought the next door properties and when they were keen to buy this from him too. If he had listened to me he would have made a lot of money but instead he stubbornly refused and now they have built these terrible flats and completely spoiled the harbour views. The property is now only worth half as much as he could have got for it."
It was put to the Defendant that this conversation did not occur. He stated that the conversation had occurred and that he remembered it.
This raised a question whether I should accept the Plaintiff's evidence on the topic of her desire to remain living in the Rose Bay property (as opposed to living in the Rose Bay area). I am of the view that the conversation stated by the Defendant is one that did occur and that I should accept the evidence of the Defendant and reject the denial of the Plaintiff.
I reach this conclusion because I am of the view that the Defendant would have no motive to make up such a conversation. After all, he is the executor of the estate only, not a beneficiary, and it would make no particular difference to him whether the Rose Bay property was retained or sold. The second reason is that, to accept the assertion that the conversation did not occur, would require me to be satisfied that the Defendant had made up the conversation. Considering that he is an officer of the court, as well as the executor of the deceased's estate and the Defendant in the proceedings, would require me to be satisfied of a very serious allegation. I cannot be so satisfied. Finally, bearing in mind the size and the amenities of the Rose Bay property, as described and proved independently by objective facts, it would not be surprising that the Plaintiff considered that it was too big for two people. Accordingly, the conversation is inherently believable.
However, the rejection of the Plaintiff's denial does not require me to conclude that she was not telling the truth on this topic. It may be, bearing in mind that the conversation occurred on the day of the deceased's funeral, that the Plaintiff simply did not remember the conversation. It may be, alternatively, that her view of the Rose Bay property has changed since then.
Ultimately, what is more important, in my view, is that the Plaintiff seeks the remaining one half interest in the Rose Bay property absolutely. None of the reasons she advanced would necessarily justify, or require, making provision by way of absolute ownership of that property.
Senior counsel for the Plaintiff seemed to suggest that I should infer that there was some bad feeling between the Plaintiff and the Defendant which would lead to the view that it would not be proper to keep the parties in a financial, or other, relationship.
Whilst the relationship of an applicant and the executor might very well be relevant to the nature of provision that should be made, particularly in circumstances where the relationship might lead to conflict, I am not satisfied, in the present case, that there has been any relevant conflict between the Plaintiff and the Defendant.
Supporting this conclusion is the fact that the Will provided that the Plaintiff was entitled to remain in the Rose Bay property for six months after the death of the deceased. There is no evidence that, at any time thereafter, the Defendant took any steps to interfere with her continued occupation thereof. The only occasion he has attended the Rose Bay property was on the day of the funeral. In addition, since the deceased's death, in excess of $15,000 has been spent, out of the estate, to pay outgoings on the Rose Bay property.
As importantly, the Plaintiff herself, when asked why she wished to receive the whole of the Rose Bay property, did not suggest that her relationship with the Defendant was a relevant factor. Nor was any suggestion to that effect made to him in the cross-examination of the Defendant by senior counsel for the Plaintiff.
Otherwise, there were really no matters of real dispute between the witnesses that require me to form a view of her, or his, credit.
The Statutory Scheme - The Act
Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. Although I have set out most of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is equally important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions in the application.
The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008 (NSW). A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers upon those persons, a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the deceased's power of disposition by his, or her, Will. It is only if the statutory conditions are satisfied, that the court is empowered, under the Act, to alter the deceased's disposition of his, or her, estate, to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.
The key provision is s 59 of the Act. The court must be satisfied, first, that an applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). In New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made.
Relevantly, in this case, the Plaintiff relies upon the category of eligibility referred to in s 57(1)(b) of the Act. There is no dispute that she is a person with whom the deceased was living in a de facto relationship at the time of his death. Accordingly, she has the status to bring proceedings under the Act.
Relevantly to this case, it is only if eligibility is found, that the court must determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is this mandatory legislative imperative that drives the ultimate result and it is only if the court is satisfied of the inadequacy of provision that consideration is given to whether to make a family provision order (s 59(2)). Only then may "the Court ... make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made".
Allsop P in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, commented, at [6]:
"... the expression of the task in s 59 is subtly different from the previous legislation. A prohibition against making an order unless satisfied of circumstances of an evaluative character, is different in emphasis from a permission to make an order if satisfied of circumstances of an evaluative character... The exercise of power to make the order is conditioned on the Court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements are described in s 60(1)(b) as 'whether to make [an]... order and the nature of any... order.' Section 60(2) provides a detailed body of considerations for the task in s 59."
Basten JA, at [26], put the differences this way:
"As appears from the language of the relevant provisions set out at [66]-[67] below, the Succession Act differs from the Family Provision Act in three significant respects. First, although both conferred similar powers on the Court, the conditions of their exercise differ. The Family Provision Act required that the Court 'shall not make an order... unless it is satisfied that' the provision made by the testator is 'inadequate': s 9(2). The Succession Act provides that the Court 'may... make a family provision order... if the Court is satisfied that' the testator has not made 'adequate provision' for the applicant: s 59(1). The changes in language may have been intended to remove double negatives, but there is a resultant change in emphasis. The apparent effect is to widen the discretion vested in the court. That which could satisfy a court that the provision made is 'not adequate', for the purposes of the Succession Act, might not have been sufficient to remove the prohibition under the Family Provision Act, which operated in the absence of affirmative satisfaction that the provision was 'inadequate'. There may well be no bright line boundary between adequacy and inadequacy."
Barrett JA, at [82] - [86], said:
"The court's task under the new legislation is in substance the same as that under the old. Three differences relevant to the kind of case under discussion may, however, be noted (I leave to one side as irrelevant to such cases the extension of the s 60(2) criteria to the question of 'eligible person' status); and two postulated differences may be rejected.
First, the Succession Act provisions direct attention, upon the initial inquiry into adequacy, to provision made by the deceased's will and the intestacy laws. The former legislation referred merely to provision 'out of the estate' but it was clear that the operation of the intestacy laws was to be taken into account in deciding what provision was available 'out of the estate': see, for example, Smilek v Public Trustee [2008] NSWCA 190.
Second, the Succession Act provisions confine attention, upon that initial inquiry, to provision made by the will and the intestacy laws. There is no reference to provision made during the deceased's lifetime. In this respect, there is a departure from the Family Provision Act approach under which provision made in favour of the eligible person 'either during the person's lifetime or out of the person's estate' was to be examined upon the initial inquiry into adequacy.
Attention may, however, still be given to provision made in favour of the applicant during the deceased's lifetime. That is now one of the factors to which regard may be had under s 60(1)(b) when the court is deciding whether to make a family provision order and the nature of the order: see s 60(2)(i). Under the Succession Act, therefore, provision made by the deceased while living thus has a continuing relevance with altered emphasis. Such provision is no longer something to be taken into account in deciding whether adequate provision has been made; but it may be taken into account in deciding whether an order should be made and the nature of the order.
The third difference to be noted is the Succession Act's more comprehensive catalogue of matters that may be taken into account in formulating an order for provision. Section 9(3) of the Family Provision Act empowered the court to 'take into consideration' matters there stated in 'determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person'. Section 60(1)(b) of the Succession Act allows the court to 'have regard to' the matters set out in s 60(2) 'for the purpose of determining ... whether to make a family provision order and the nature of any such order'. The Succession Act lists a greater number of such matters than did the Family Provision Act."Other than by reference to the provision made in the Will of the deceased, or, if relevant, by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) of the Act leaves undefined the norm by which the court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant. (In this case, the intestacy rules are irrelevant.)
In Grey v Harrison [1997] 2 VR 359, at 366-367, Callaway JA observed:
"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."
It was said in the Court of Appeal (by Basten JA) in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J has described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40].
Under s 59(1)(c) of the Act, the time at which the court gives its consideration to the question of inadequacy of provision is the time when the court is considering the application.
"Provision" is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA 54; (2009) 2 ASTLR 89, at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".
Neither is the word "maintenance", nor the phrase "advancement in life", defined in the Act.
The term "maintenance" usually refers to a provision for the supply of the necessaries of life. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, said, of the words "maintenance", "support" and "advancement":
"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."
In Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), at [18], stated:
"'Proper maintenance' is not limited to the bare sustenance of a claimant [cf Gorton v Parkes (sic) [1989] 17 NSWLR 1], but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility."
In J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths), at 542, the learned authors comment upon the difference between the concepts of maintenance and advancement:
"The essential difference between 'maintenance' and 'advancement' is that 'maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.
An advancement can never be made of a sum of money which the person to whom it is made can immediately pocket, but it must be made with a view to the establishment of that person in a business or profession, or otherwise in some definite way for that person's benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77 King CJ said:
"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang (1960) 104 CLR 124, per Dixon CJ at 128."
Master Macready (as his Honour then was), in Stiles v Joseph (Supreme Court (NSW), Macready M, 16 December 1996, unrep), said, at 14-16:
"Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541)
In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274...
In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said:
'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.'
The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that:
'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'"
In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J, at [114] noted:
"In the context of the Act the expression 'advancement in life' is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase 'advancement in life' has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the 'maintenance and support' of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."
In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:
"The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)."
In McCoskerv McCosker [1957] HCA 82; (1957) 97 CLR 566, Dixon CJ and Williams J stated, at 575:
"The presence of the words 'advancement in life' in the ... Act in addition to the words 'maintenance and education' is not unimportant. ... 'Advancement' is a word of wide import."
The word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, described by Rosalind Atherton, 'The Concept of Moral Duty in the Law of Family Provision - a Gloss or Critical Understanding?' (1999) 5 Australian Journal of Legal History 5, at 10, as "an objective, economic test", whereas "proper" prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at [72], [77], which seems to invite more subjective criteria.
These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:
"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."
Dixon CJ and Williams J, in McCosker v McCosker, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word "proper", that:
"It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement if life must be considered in the light of the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
In Pontifical Society for the Propagation of The Faith v Scales (1962) 107 CLR 9, Dixon CJ at 19 commented:
"The 'proper' maintenance and support of a son claiming a statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is 'adequate' must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and the other demands upon it, and also what the testator regarded as superior claims or preferable dispositions. The words 'proper maintenance and support', although they must be treated as elastic, cannot be pressed beyond their fair meaning."
In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Gibbs J said, at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
In Vigolo v Bostin, at 228, Callinan and Heydon JJ said:
"[T]he use of the word 'proper' ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here... The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."
Santow J pointed out in Gardiner v Gardiner (Supreme Court (NSW), Santow J, 28 May 1998, unrep), that "adequate" and "proper" are independent concepts. He said, at 12:
"'Adequate' relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. 'Proper' depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied..."
In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.
Having obtained instructions on the question of a Crisp order, counsel for the Defendant, in the alternative, did not advance any contrary submission in regard to the additional period sought during which the Plaintiff should be permitted to remain in occupation of the Rose Bay property. Fairly, if I may say, he accepted that, in all the circumstances, the residuary beneficiaries would not be detrimentally affected by permitting the Plaintiff to continue to reside in the Rose Bay property for the period sought. He then submitted that, in addition, the Plaintiff should receive an amount equal to 66 per cent of the net proceeds of sale of the Rose Bay property when it was sold. He submitted that such an amount would enable her to purchase, and hold in her own name absolutely, alternative accommodation. Otherwise, such a sum would provide income that she could use for her own purposes.
I do not accept the Plaintiff's principal submission that she should receive the balance of the deceased's interest in the Rose Bay property absolutely together with an additional capital sum. The Rose Bay property is simply too big for one person and it will continue to require significant maintenance. The Plaintiff does not "need" such a large home absolutely. In this regard, I refer to the difference between "need" and "want" earlier referred to.
I had considered the provision of a Crisp order in the deceased's interest in the Rose Bay property, which type of order would enable her to decide when, or if, she vacates it and moves to alternative accommodation. However, having heard the alternative submission of each counsel, I am prepared to accept that, whether justified or not, the parties do not wish to be tied together for the remainder of the Plaintiff's life and that they both consider that an amount, calculated by way of a percentage of the net proceeds of sale of the Rose Bay property, would be in the interests of the Plaintiff and also of the residuary beneficiaries.
I accept, also, that the Plaintiff should be given the opportunity to consider, and decide upon, the nature of the alternative accommodation that would best suit her. In my view, to allow her an additional period of up to two years accommodation in the Rose Bay property from the date of orders being made, will enable her to consider her future and where she wishes to then live. By that time, she will be almost 76 years of age. (Of course, if she chooses to leave before then, she may do so. In the event of her death, the Rose Bay property may be sold.)
During her continued occupation of the Rose Bay property, the residuary estate should bear the burden of the outgoings other than the costs of electricity, gas and telephone.
Then, that leaves the amount of the capital sum that ought to be provided by way of family provision order. I accept that, if the Plaintiff purchases alternative accommodation, she will require (on present estimates) about $2.0 million. There will also be stamp duty payable on the contract ($95,510) and associated costs and expenses of moving, the total of which I shall estimate to be a little more than $100,000. Thus, the costs and expenses of obtaining the alternative accommodation, on current estimates, will be in the order of $2.1 million.
In addition, I accept that the Plaintiff needs an additional capital sum for exigencies of life and to provide a modest additional income to supplement her current income. In this regard, the size of the estate of the deceased should not be forgotten.
In my view, the Plaintiff should receive, in lieu of the amount referred to in Clause 3(a) of the Will of the deceased, an amount equivalent to 80 per cent of the net value of the Rose Bay property as at the date of sale, as well as the right to occupy the property rent free for a period of up to two years after the date of these orders. By way of guide, and assuming a sale price of $3.3 million and costs and expenses of sale of about $100,000, the percentage equates to about $2.56 million.
Using the same estimates, the residuary beneficiaries will receive about $640,000. When added to the value of their entitlement to a share of the Bondi property, each will, in due course, receive a substantial inheritance.
There was no dispute that the usual costs order for each party should be made. In my view, the costs should be borne out of the residue of the estate rather than out of the proceeds of sale of the Rose Bay property.
I invite the parties, within 14 days, to bring in Short Minutes of Order consistent with, and reflecting, these reasons. I order that the proceedings be stood over to a convenient date to make orders.
The Short Minutes of Order should also deal with the return of the exhibits and the Court Book.
**********
7
20
5