Dimos v Burndred

[2024] NSWSC 434

Supreme Court

New South Wales

Medium Neutral Citation:

Dimos v Burndred [2024] NSWSC 434

Hearing dates:

15 – 17 April 2024

Date of orders:

17 April 2024

Decision date:

17 April 2024

Jurisdiction:

Equity - Succession & Probate List - Family Provision

Before:

Peden J

Decision:

See [121]

Catchwords:

SUCCESSION — Construction — General principles — Structure and scheme of will — Where share of son under will reduced by unpaid loan amount

SUCCESSION — Family provision — Claim by adult son — Whether inadequate and proper provision — Where adult son able-bodied and in comparable financial position to beneficiary resisting further provision

Legislation Cited:

Limitation Act 1969 (NSW), ss 14, 63

Succession Act 2006 (NSW), ss 32, 59, 60, 99

Cases Cited:

Allgood v Blake (1873) L R 8 Ex 160
Blendell v Blendell [2020] NSWCA 154
Chapple v Wilcox (2014) 87 NSWLR 646
Coorey v Coorey (Supreme Court (NSW), Powell J, 22 February 1986, unrep)
De Lorenzo v De Lorenzo (2020) 104 NSWLR 155
DJ Singh v DH Singh [2018] NSWCA 30
Estate Kranjac; Cadden v Widdowson [2018] NSWSC 285
Fell v Fell (1922) 31 CLR 268
Fairbairn v Varvaressos (2010) 78 NSWLR 577
Georgopoulos v Tsiokanis [2022] NSWSC 563
Haertsch v Whiteway (No 2) [2020] NSWCA 287
Hatzantonis v Lawrence [2003] NSWSC 914
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134
James v Douglas [2016] NSWCA 178
Lloyd-Williams v Mayfield (2005) 63 NSWLR 1
Middleton v Schofield [2022] NSWSC 1454
Page v Hull-Moody [2020] NSWSC 411
Perrin v Morgan [1943] AC 399
Re Allen (deceased) [1922] NZLR 218
Smith v Johnson [2015] NSWCA 297
Stone v Stone [2019] NSWSC 233
Strang v Steiner [2019] NSWCA 143
Tarbes v Taleb [2023] NSWSC 565
Taylor v Farrugia [2009] NSWSC 801
The Estate of William John Gilbert [2017] NSWSC 1138
Verzar v Verzar [2012] NSWSC 1380
Warton v Yeo [2015] NSWCA 115

Category:

Principal judgment

Parties:

Anthony Dimos (Plaintiff)
Christine Burndred (Defendant)

Representation:

Counsel:
A Rogers (Plaintiff)
I Hoskinson (Defendant)

Solicitors:
Ronayne Owens Lawyers (Plaintiff)
Turnbull Hill Lawyers (Defendant)

File Number(s):

2023/00055015

Publication restriction:

Nil

EX TEMPORE Judgment (revised)

1. This is a dispute between two siblings over the distribution of the estate of their late mother, Stamatia Dimos (Mrs Dimos), who died on 18 February 2022, aged 92 years.

2. As explained further below, by will dated 18 March 2008, Mrs Dimos left an estate, currently valued at approximately $1,018,580.45, in equal shares to her three children, Christine Burndred, the defendant and executrix of the estate, Anthony Dimos, the plaintiff, and Sylvia Caruso (Will). I refer to each of them using their first names, meaning no disrespect.

3. The primary issue in dispute is whether Anthony owes Christine money, because their mother’s bequest to Anthony is expressed with a proviso:

…if at the date of my death my son ANTHONY DIMOS has not repaid to my daughter CHRISTINE KAARD all money that she loaned to him (“Loan Amount”) then I DIRECT that ANTHONY DIMOS’s share pursuant to this clause be reduced by the Loan Amount and my daughter CHRISTINE KAARD’s share is increased by the Loan Amount to reflect the repayment of the debt.

4. Christine claims that in 2004 she loaned Anthony $198,150. Anthony claims that money was a gift. Anthony also claims that there is inadequate provision in the Will for his proper maintenance, education or advancement in life. Christine denies Anthony is entitled to any further provision, including because of her relative financial position.

5. Despite the voluminous evidence filed, I will not descend into the minutiae of the comparative relationships each of the siblings had with their late mother. I accept that each of the children had a loving and close relationship with their mother and did what they personally considered the best for her in their circumstances and hers as her mental and physical health declined.

6. However, unfortunately, this is a case in which hostility between the parties appears entrenched. In Tarbes v Taleb [2023] NSWSC 565 (Tarbes v Taleb) at [75], Meek J recently stated (citations omitted):

Whilst conduct and family relationships may, in some cases, have relevance to the outcome in family provision cases the Court disapproves of attempts by litigants in such cases to blacken each other’s character. Allegations and counter-allegations about incidents that occurred years before the deceased’s death are, generally, unlikely to advance either party’s case, and when it is sought to support them by lengthy affidavits in chief, which prompt equally lengthy affidavits in reply, they may merely deepen rifts in the family, dishonour the memory of the deceased and unnecessarily prolong the litigation …

Gift or loan?

7. In about 2003 or 2004, Christine received life insurance policy payments in respect of her recently deceased husband, Peter Kaard. At the time, her son was seven years old.

8. Christine’s evidence is that Anthony requested her financial assistance in order to purchase his family home in Cromer for $740,000, which exchanged on 6 August 2004 and settled on 19 November 2004. She says Anthony promised to repay the loan within 5 years.

9. There is no dispute that on 13 August 2004, Christine provided a cheque of $68,150 to Anthony, and on 22 September 2004 she transferred a further $130,000 to him. The effect of the advances, combined with other minor credits and debits from her account in the period between the advances, was to reduce her bank balance from $378,336.23 to $175,892.41.

10. Christine’s evidence is:

Within about a month after Tony purchased the Cromer property, I drafted a letter to Tony ("letter") confirming the loan of $198,150.00 to Tony. After I gave the letter signed by me to Tony, Tony also signed the letter. I photocopied the letter signed by Tony and me, and I gave a copy of the letter signed by Tony and me to Tony, and I retained the original letter.

11. No such letter is in evidence. Christine says she misplaced it after she showed it to her parents in 2008, and probably lost it in one of her many house moves.

12. Christine’s evidence is that in or about 2006, after she was retrenched from her then job, she needed money and asked Anthony to repay $60,000 of the loan, which he was unable to do. Instead, she took out a loan for the amount she needed.

13. Christine says that between 2004 and 2019 she discussed the repayment of the loan “on many occasions” with Anthony and Anthony’s responses were “I’m working on a few big deals and will have the money soon” and “I don’t have the money – just take my share (from mum and dad’s estate)”.

14. Anthony denies those conversations and that he requested the money or that it was a loan.

15. He claims that Christine gifted him some of the money that she obtained, following Peter’s death. He says he understood that Christine was thanking him for his assistance with Peter’s business for 18 months after he died and for giving her a job at his mortgage broking business, Ideal Home Loans. Christine denies that Anthony assisted with the business as alleged, and was not challenged on her evidence that she only worked in Anthony’s business in 2005 for 12 months and earned about $24,000. The inference she suggests is that Anthony had not provided her with assistance justifying a gift of almost $200,000.

16. To support her case, Christine also relies on documents created in 2008, when her parents prepared their last wills, replacing their 2000 wills.

17. On 18 March 2008, both of the parties’ parents prepared wills with the assistance of lawyers, Thomson Playford. Their earlier, almost identical, 2000 wills had left their estates to each other, and otherwise to their three children in equal shares. The major change in the almost identical 2008 wills was the introduction of the proviso requiring Anthony’s share to be reduced, should the “loan” not have been repaid.

18. Christine gave evidence that she showed to her parents the letter she had prepared and her bank statements demonstrating the advance to Anthony. She says she told her parents she was considering suing Anthony. I accept they asked her to wait to allow them to discuss the situation with a solicitor.

19. I do not accept that Christine made up such a story in 2008 to tell her parents. Further, at that time, the parties’ parents had full capacity and could have checked the veracity of Christine’s account with Anthony or anyone else. Anthony denies his mother spoke to him about the loan, but is silent as to whether his father discussed the loan with him.

20. The parties’ parents sought independent legal advice and made decisions based on their own personal considerations. It is apparent that the parties’ parents clearly trusted Christine at the time and retained her appointment as their sole executrix in their 2008 wills.

21. It is impossible to piece together exactly what instructions were given by the parties’ parents and the advice provided by the solicitors involved. Those parts of the solicitor’s file in evidence indicate that several weeks passed between the parents’ original conversation with their solicitor and the final execution of their new wills.

22. One undated file note of the unidentified solicitor who took instructions to prepare the wills includes:

Christine has lent Tony some money on condition [sic] that Tony repays Christine the principal plus interest at CBA overdraft rates on the amount owing – he gets 1/3 – if he hasn’t then he gets reduced by the amount + Christine gets extra.

23. A faxed overwritten copy of the Will from 2000 appears to have been sent by the parties’ father on 14 February 2008 to the solicitor with a note:

Dear Gordon,

Thank you for ringing me, I have made necessary amendments but mainly RE ANTHONY DIMOS OWES HIS SHARE TO CHRISTINE by agreement.

24. Further, an undated typed document provides the following:

PROVIDED FURTHER THAT if as at the date of my death my son ANTHONY DIMOS has not repaid to my daughter CHRISTINE KAARD the $........ she loaned to him then I DIRECT that ANTHONY DIMOS’s share pursuant to this clause 3(e) above be reduced by the sum of $....... and my daughter CHRISTINE KAARD’s share is increased by the sum of $...............to reflect the repayment of the debt.

25. It can be inferred that between 14 February and 18 March 2008 there were various conversations between the parties’ parents and the solicitors. Further instructions must have been provided before the final version of the wills were to the testators’ satisfaction and then executed by them.

26. Both final 2008 wills contained the clause 3 in question in these proceedings, which is not consistent with the file note or the typed draft clause. Rather than including interest or a specific loan amount, clause 3 refers to whether Anthony had repaid at the time of death “all money” that Christine had loaned him.

27. I do not accept the only natural inference to be drawn from the absence of a precise loan amount is that Christine had not informed her parents of the amount of money she had loaned, nor failed to show them the written agreement she had prepared and her bank statements. It is impossible to know the exact reasons for the final versions of the parties’ parents’ wills.

28. Further, I do not accept Anthony’s version of events and the nature of the transfer of money from Christine for the following reasons.

29. First, when asked what he used Christine’s money for, he gave inconsistent answers including:

1. Towards the mortgage;

2. Towards the deposit and stamp duty; and

3. He had money left over and he did not recall what he did with that.

30. Secondly, Anthony had no evidence of how he would have financed the purchase of his Cromer property, if Christine had not provided him with the large and very specific sum of money that amounted to about 27% of the purchase price of Cromer. It is surprising that Anthony had no corroborating evidence of his alleged position. It is also surprising that he did not bring forward evidence of how Christine’s money reduced the size of his mortgage and the terms of that mortgage or even his loan application.

31. Thirdly, I do not accept that Christine was prepared to give Anthony almost $200,000 for either of the reasons Anthony suggested.

1. I do not accept that Anthony “ran” Christine’s late husband’s business for 18 months without pay, in circumstances where he was working fulltime in his own business. I do not accept that it “skipped his mind” when he gave evidence about his fulltime work. Sylvia’s evidence was that she visited Anthony working on repairing photocopiers on weekends for a length of time she could not recall but perhaps “months”. I consider that is more likely to be an accurate reflection of what Anthony in fact did to assist Christine, considering his fulltime job during the week.

2. I do not accept, as Anthony volunteered in cross-examination for the first time, that Christine “interfered and stopped” Anthony from selling his shares in his business for $198,150, and for that reason gave him that exact sum of money. That suggestion is illogical, as it would mean that Anthony kept his shares and was also paid the full value of the shares by Christine for her alleged wrongdoing. Further, there is no documentary evidence to support Anthony’s assertion.

32. Fourthly, contrary to his affidavit evidence, I do not accept that Anthony was unaware that there was a reference to the loan in his parents’ wills before the litigation. However, there is insufficient evidence to conclude whether he was aware of the contents of the wills before 2020, even though Christine understood they had spoken to him about the proviso.

33. Fifthly, Anthony was an unimpressive witness. I do not accept various aspects of his evidence, and in particular his evidence of his financial circumstances, as discussed below.

34. Further, Anthony’s evidence was generally very vague and at times inconsistent. He suggested that Christine had made herself “scarce” from the time their mother went to live at the nursing home, but refused to explain what he meant by that expression. He also inconsistently gave evidence that he and Christine exchanged birthday greetings during that period, and he did in fact know about Christine’s 2015 wedding, Christine’s phone number and email, and was also informed of her new address in Caves Beach. He also accepted that he visited her home, including with his son to discuss landscaping. He suggested the reason why their relationship was poor was because of Christine’s new husband. However, there was nothing to support that conclusion. Instead, I accept Christine’s evidence that their relationship became strained because Anthony was struggling financially and did not want to, or could not, deal with his debt to Christine. That also seems consistent with Sylvia’s evidence that, by 2020, she was concerned that Christine would try to “sell him up”.

35. To the extent necessary, I prefer Christine’s evidence on all matters. I considered Christine was a credible witness. She was frank about having misplaced the document she prepared to record the loan to Anthony. She was able to clearly set out the contents of the document, based on her years of experience in office work and her recollection.

36. I reject Anthony’s attacks on Christine’s credit.

1. I do not accept that there is an inherent unlikelihood that there was any agreement as Christine alleges, because she was complaining to her parents in 2008 and before the loan was finally due. She was in need of money and had asked her brother to repay her some money and he had refused. It would be a natural thing for a daughter to tell her parents and for her parents to try and find a solution that mediated the dispute between their children.

2. I do not accept that because the parties’ parents’ wills and the solicitor notes in evidence did not include a figure, it ought be inferred that Christine never showed her parents documentation as she alleges. The reason why the quantum of the loan was not specified and no interest was required is not explained on the evidence. However, I infer from the documentary evidence that those matters were discussed with the parties’ parents and their solicitor.

3. I do not accept that, because there is not a more detailed documentary record of the loan and Christine’s attempts to encourage Anthony to pay, this demonstrates that her evidence is false. It is not uncommon for family members not to document arrangements between them for reasons of familial trust. Further, Christine’s concerns had been alleviated by her parents’ change of their wills.

37. Sylvia’s evidence also supports Christine’s account. I accept Sylvia as a credible witness, even though at times she was verbose. She candidly accepted that she was not speaking to either of her siblings in 2004 and was unaware of Christine’s advance of money to Anthony at that time. However, I accept that Christine provided a copy of both wills to Sylvia in 2011 around the time their father died and they were involved in the preparation of their mother’s power of attorney. Sylvia therefore had the opportunity to read both wills and question her siblings or her mother, before her dementia became more problematic after 2012. Her evidence is she did not do so, which suggests she trusted her parents in their decisions, or was otherwise aware of her parents’ decision to provide a resolution mechanism for the repayment of their loan in their wills.

38. I also consider the evidence of Greg Burndred supports Christine’s account. I accept his evidence that his only knowledge of the loan was from Christine. However, I also accept that he had a conversation with Christine and Anthony in about 2016, during which the loan was discussed and Anthony “abruptly left” without finalising discussions about the loan. I accept he prepared interest calculations to show Anthony to encourage him to acknowledge the benefit he had received from the use of Christine’s money over the years. Mr Burndred’s evidence was not that Christine was entitled to interest. I reject the criticism of Mr Burndred based on the printout date of the schedule of interest rates; he was candid that he could not recall when he obtained the printout and when he prepared the calculations, and the particular dates do not matter.

Conclusion

39. On balance, I consider the provision of money by Christine to Anthony was a loan and not a gift.

40. As set out above, I prefer Christine’s evidence over Anthony’s.

41. I accept Christine’s submissions that the most likely reason why Christine advanced specific sums in quick succession in August and September 2004 was because Anthony asked her to loan that money to him in connection with the purchase of his Cromer home.

42. I reject Anthony’s submission that if it was unlikely a single mother with a young child would gift that sum of money, it was just as unlikely she would loan it for 5 years. While the loan appears generous, it can be explained by the familial relationship and the hope that the loan would be paid down before the final 5 year expiry.

43. Further, I infer that the reason why the parties’ parents changed their wills to deal with the loan, was because they were informed of the loan as Christine states and, having carried out their own inquiries including through a solicitor, they decided to provide a mechanism for their children to deal with the loan that would avoid litigation.

Proper construction of clause 3 of Will

44. Anthony submitted there was no “loan” and no “loan amount” and therefore the proviso in the Will need not be fulfilled. Further, and alternatively, he submitted that there was no “debt” at the time of their mother’s death, because a claim for breach of the loan, meant to be repaid by 2009, would have been statute barred in 2022 pursuant to ss 14 and 63 Limitation Act 1969 (NSW).

45. Christine submitted that using well-known principles for the construction of wills, the word “loan” refers to the loan as found with the corresponding “loan amount”. Further, she submitted that on its proper construction the Limitation Act restriction is not engaged. I accept Christine’s construction for the following reasons.

44. In construing a will, the Court aims to give effect to what can be ascertained as the intended use of the actual words used by the testators, having regards to any admissible extrinsic evidence: De Lorenzo v De Lorenzo (2020) 104 NSWLR 155 at [50] (White JA, Gleeson JA agreeing) (De Lorenzo), citing Fell v Fell (1922) 31 CLR 268 at 273-274 (Isaacs J) and Perrin v Morgan [1943] AC 399 at 406 (Viscount Simon LC) and 416 (Thankerton L).

45. In Fairbairn v Varvaressos (2010) 78 NSWLR 577 at [19], Campbell JA (Macfarlan and Young JJA agreeing) cited a passage from Coorey v Coorey (Supreme Court (NSW), Powell J, 22 February 1986, unrep):

… [O]ne’s task is, first, if it be possible, to ascertain, what was the basic scheme which the deceased had conceived for dealing with his estate, and, then, so to construe the will as, if it be possible, to give effect to the scheme so revealed.

48. When ascertaining the intended use of a testator’s words, the Court may place itself in the position, or “sit in the armchair”, of the testator, considering all material facts and circumstances known to the testator at the time the Will was drafted: De Lorenzo at [50], citing Hatzantonis v Lawrence [2003] NSWSC 914 at [7] (Bryson J); Warton v Yeo [2015] NSWCA 115 at [35] (Ward JA), citing Allgood v Blake (1873) L R 8 Ex 160 at 162 (Blackburn J).

49. Extrinsic evidence, including evidence of the testator’s actual intention, will be admissible to assist the Court, pursuant to s 32 Succession Act 2006 (NSW), if the will’s language makes the will or any part of it meaningless, ambiguous on its face, or ambiguous in light of surrounding circumstances. In this respect, s 32 modifies the traditional common law position, according to which, evidence of what a testator actually intended is generally inadmissible: James v Douglas [2016] NSWCA 178 at [19] (Meagher JA, Leeming and Simpson JJA agreeing).

50. Here, I am satisfied that clause 3(e) of the Will enlivens s 32, since the references to a “loan” and “loan amount” are meaningless without reference to extrinsic evidence identifying the particular loan: see eg Middleton v Schofield [2022] NSWSC 1454 at [47] (Robb J). Extrinsic evidence is therefore admissible for the purposes of construing clause 3(e).

51. To the extent possible, the Will should also be given a construction which allows words used by the testator to take effect. As Emmett AJA stated in The Estate of William John Gilbert [2017] NSWSC 1138 at [17] (citations omitted):

Where there are two ways of reading an instrument, including a will, the Court should lean towards a construction that preserves, rather than a construction that destroys: ut res magis valeat quam pereat. Where a question arises as to whether an instrument, such as a will, should be construed literally or in the way in which there is every reason to believe that the maker of the will intended it to be construed, the latter is to be preferred. A testator must be taken to have meant that the words used in the will should have some effect as they stand.

52. As noted above, I accept Christine’s evidence that she showed her parents the loan letter which she created and her bank statements concerning her transfer and withdrawal for Anthony. I also accept her evidence that she discussed with her parents her concerns about Anthony’s failure to repay any amount of the loan sum, when she requested it and was in need. I accept that her parents told her they had worked out a “solution”, whereby she would receive the money from Anthony’s share of their estates and they asked her not to sue him.

53. I accept that both parents were aware of the timing and quantum of the loan. I also accept that both parents instructed their solicitor to prepare wills that incorporated their intention to ensure that Anthony had the funds at their deaths, with which to repay Christine.

54. Anthony gave much evidence about his financial and business difficulties over the years, including with the 2008 global financial crisis and the Covid 19 pandemic. The parties’ parents had provided a guarantee for his business at some point. While unnecessary to decide, it may be that the parties’ parents were aware of Anthony’s financial difficulties and considered their amended wills provided him with the means to repay the loan, which he may otherwise have struggled to do.

55. The consistent evidence of all of the siblings was that their parents wanted their estate to be split equally between their children. I consider that the testatrix’s intention in her Will was to ensure such an equal split, which would also provide Anthony with the funds to repay his sister her loan sum.

56. The parties’ parents appear to have given some thought to the exact wording of the clause, after various iterations evidenced in the solicitor’s documents.

57. I do not accept Anthony’s submission that the Court ought to find that the condition on Anthony receiving an equal third of his mother’s estate falls away, because if Christine was to sue for the debt it would be statute barred pursuant to ss 14 and 63 Limitation Act. I do not accept that the Will ought to be construed from the perspective of a contractual claim for a debt. The proviso looks to a factual matter of whether the loan amount had been repaid, not whether it was repayable in a suit by Christine against Anthony. The clause speaks of the adjustment of portions as to “reflect the repayment of the debt” and does not include any limitation based on time. This construction is further supported by the practical consideration that if the clause was intended to relate to an enforceable contractual claim, then the only benefit it provided to Christine was saving her the difficulties of suing her brother between the time the loan was repayable and the extinguishment of the limitation period. Instead, I consider that the testatrix’s intention was to provide Anthony with necessary funds to provide Christine with the equivalent of the advance she had provided.

58. In those circumstances, I am satisfied that the use of “loan” and “loan amount” in the wills are intended as a reference to Christine’s 2004 loan to Anthony in the sum of $198,150 and ought to be construed as such.

59. Because of my finding as to the loan and the proper construction of clause 3 of the Will, Anthony’s share must be reduced by $198,150 and Christine’s increased by that amount.

Extra provision for Anthony?

60. In his March 2023 affidavit, Anthony sought provision of $650,000 rather than the amount he would receive under the Will. His affidavit evidence in March 2023 was:

I have need for a sum of money to provide for the ongoing costs of living and to stop me from losing my family home. I have no savings and I struggle to meet my expenses each week. Any money that I do earn, I have to pay towards my mortgage and credit cards, and I am currently paying $5,000 a month in interest alone.

I estimate that a fund of $650,000 will better enable me to meet my ongoing living costs as it will discharge my existing mortgage.

61. He updated that position in his June 2023 affidavit:

… I have been able to refinance the mortgage on my family home with a mortgage from my employer. Notwithstanding this, my wife and I are still experiencing extreme financial difficulty. We pay the new mortgage on our property from my income, which leaves an amount of $200 per week from my income to apply to living expenses. The balance of our living expenses must be met from my wife’s weekly net income of $1,133.50…

62. Anthony’s counsel amended Anthony’s claim orally and indicated that generally his client sought to be placed in a position where he received about one third of the net estate, including the repayment of the loan sum effectively being taken from the estate. His preferred position was that all costs were paid from the estate, no loan sum was payable and he was given further provision of $100,000 borne equally by Christine and Sylvia. That would give him about $382,110. In the alternative, if the loan was repayable, then he sought that all the costs were paid from the estate and he received further provision of $150,000, that would give him about $233,960. On his calculation, if the loan was to be taken from his share he would receive about $84,000 without further provision.

Principles

63. There is no doubt that Anthony is an “eligible person” for the purposes of s 59(1)(a) of the Succession Act, and that his application was brought within time. As such, Anthony’s entitlement to family provision depends, first, on whether the Will failed to make “adequate provision for his proper maintenance, education or advancement in life”, assessed at the time the Court is considering the application: s 59(1)(c). If this is made out, the next question is whether the Court should exercise its discretion under s 59(2) to make an order for family provision and, if so, the appropriate provision.

64. The word “adequacy” in s 59(1)(c) directs the attention of the Court to the form and quantum of the provision made in a will, whereas the word “proper” directs attention to the appropriate standard of maintenance, education and advancement: Tarbes v Taleb at [202]-[203], citing Verzar v Verzar [2012] NSWSC 1380 at [127] (Lindsay J).

65. In Blendell v Blendell [2020] NSWCA 154 at [8], Meagher JA observed that these terms are relative, requiring consideration, inter alia, of the matters identified in s 60(2) Succession Act, “including the claimant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the claimant and the deceased, and the circumstances and needs of other claimants, beneficiaries and potential beneficiaries” (Gleeson and Leeming JJA agreeing).

66. Of the relevant considerations, in this, as with many, family provision cases, the question of financial need and competition for their satisfaction out of the estate are particularly prominent, because of the limited scale of the resources available: Lloyd-Williams v Mayfield (2005) 63 NSWLR 1 at [31] (Bryson JA, Giles JA and Stein AJA agreeing).

67. The fact that Anthony is an able-bodied, adult son of the deceased is also relevant consideration in this case. In Smith v Johnson [2015] NSWCA 297 at [93], Sackville AJA considered that, in the case of adult children, the adequacy of a provision was to be “assessed by reference to whether the provision is sufficient to enable [the adult child] to meet his needs, but not on an overly generous basis” (Macfarlan and Ward JJA agreeing).

68. In Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 149, Gibbs J noted that the onus falls on an adult child seeking the family provision order to establish that the deceased has failed to make adequate provision (Mason and Aickin JJ agreeing).

69. In Taylor v Farrugia [2009] NSWSC 801 at [58], Brereton J further explained that parents are not typically expected by the community to continue to provide for able-bodied adult children:

Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such as a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute.

70. In Page v Hull-Moody [2020] NSWSC 411 at [176], Hallen J adopted the above statements of Gibbs J and Brereton J, and identified a number of further principles relevant in cases involving able-bodied, adult children. Relevantly for present purposes, his Honour observed that (citations omitted):

[An] adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased…

71. The above principles are not rules of law and do not constrain the Court’s evaluative judgment under s 59, in cases involving adult children or otherwise: Chapple v Wilcox (2014) 87 NSWLR 646 at [18]–[19] (Basten JA). Nevertheless, as Barrett JA noted at [67] in Chapple, they do provide “a useful touchstone that may be applied with circumspection by judges called upon to ascertain and apply ‘the feeling and judgment of fair and reasonable members of the community’” in family provision proceedings.

72. The question as to whether an applicant has been left with inadequate provision for her proper maintenance, education or advancement in life involves a finding of fact, albeit one that is, in light of the substantive character of the matter to be decided, evaluative. It does not involve an exercise of discretion: see Strang v Steiner [2019] NSWCA 143 at [76] (Macfarlan JA) and [131] (White JA); Georgopoulos v Tsiokanis [2022] NSWSC 563 at [256] (Hallen J).

73. An applicant must disclose to the Court, as fully and frankly as possible, all details of his or her material and financial circumstances as they are at or about the time of the hearing: Stone v Stone [2019] NSWSC 233 (Stone v Stone) at [60] (Hammerschlag J), citing DJ Singh v DH Singh [2018] NSWCA 30 at [284]-[291] (Gleeson JA, Leeming and White JJA agreeing). This obligation is also consistent with parties’ obligations to facilitate the just, quick and cheap resolution of the real issues in dispute the proceedings.

74. If the Court does not have all pertinent facts or material information, then it is difficult to make the evaluative judgment sought by the applicant, which s 59(1)(c) Succession Act requires it to make: Stone v Stone at [62]-[64].

Financial position of Anthony

75. Anthony is 65 years old. His wife, Anne-Marie, is 63 years old. Anthony does not claim that he or his wife have any special medical conditions or expenses, nor that he was dependent as an adult upon his mother during her lifetime.

76. Anthony claims he is in “financial distress”, but, for the reasons that follow, I cannot make such a finding.

77. Anthony and his wife own the Cromer property, into which most if not all of Christine’s money was paid. His affidavit evidence presented to the Court his unsubstantiated estimate of the value of his property at $1.9 million as at 9 March 2023. Anthony did not attach any objective evidence of the value of the property, despite him obtaining a free internet valuation of Christine’s property in an attempt to discredit her.

78. Anthony’s estimate given on oath is very inconsistent with his loan application dated less than 2 weeks later, on 22 March 2023, that gave a valuation of $2.3 million, which he stated in cross-examination was from “the bank”. I consider the latter valuation more likely to be accurate, as it was relied upon by Anthony for the purposes of applying for a loan. However, I also consider that Anthony’s failure to be completely frank with the Court supports the conclusion of not preferring his evidence over Christine’s in relation to the loan and impacts on the Court being able to assess any entitlement to further provision.

79. All the other information Anthony included in his loan application also provided a picture of many more assets than those in his affidavit evidence. There is no explanation for the difference, nor why he did not attempt to provide the Court with the most accurate and up to date evidence of his financial circumstances. I also consider it is difficult to accept Anthony’s evidence about his financial position, where there is no corroborative objective evidence.

80. Both Anthony and his wife are in fulltime continuing employment, earning together about $128,048.73 in net income after tax. In his June 2023 affidavit, Anthony deposed that he and his wife’s living expenses are covered by their respective incomes with some surplus.

81. Those expenses allegedly include a mortgage over the Cromer property of an undisclosed amount. In his March 2023 affidavit, he deposed to the mortgage at that time being $647,000, and in the witness box he volunteered that it was still at the same level. Anthony deposed that as at June 2023, he was paying “$5,000 a month in interest alone” in relation to his credit cards and mortgage. His total annual expenses including mortgage payments as stated in March 2023 was $108,996.00.

82. However, no past or current mortgage documents, nor credit card statements, were tendered by Anthony in evidence and no explanation was provided for that omission or the failure to update his financial circumstances before the trial, being held some 10 months after his last affidavit. I note that a Court order was also made allowing the parties to file any updating affidavits.

83. Omitted from his affidavit evidence, but disclosed in cross-examination, was the fact that he has repeatedly been provided with financial assistance from his mother-in-law and his former business partner’s father. The exact circumstances of that assistance was not in evidence. However, Anthony indicated that his mother-in-law provided him an “early inheritance” of $400,000 to assist with business expenses. Further, his explanation of his receipts of money from the company Comrent Pty Ltd appeared evasive.

84. Anthony and his siblings have also received payments from their mother’s bank accounts while she was alive, which would otherwise have formed part of the estate.

85. Further, Anthony’s 29 year old daughter lives at home and has a fulltime job as a veterinary nurse, but does not pay any rent. Anthony’s other adult children are not dependent on him.

86. Working from the best available evidence, which may be more favourable to Anthony than the true current situation, it appears that Anthony and his wife’s financial position is that they own a house valued at $2.3 million and other assets valued by Anthony in his loan application of $2,698,000. Even taking the estimate by Anthony of his liabilities (that are not demonstrated by any objective evidence) at face value of $647,000, and credit card debt of $5000, the net position is he holds assets with his wife of $2,046,000. Anthony’s financial position is therefore more than double the value of his mother’s estate.

87. Further, the annual income for his wife and himself is $128,042.75. If expenses of $109,000 are taken, that still leaves a surplus of about $20,000 per annum.

88. I do not consider that Anthony is “destitute”, in the sense referred to in the authorities. He has significant assets that very much outweigh his liabilities. He is an able-bodied and employed adult. He is also supported by his wife, who is able-bodied and employed.

Financial position of Christine

89. In determining whether an adequate provision was given by the parties’ mother to Anthony, Christine’s circumstances must be taken into account, as a beneficiary under the Will, as she has disclosed them.

90. For Anthony to receive any additional provision, Christine and Sylvia’s portions would be reduced.

91. Christine’s situation was described to her by Anthony’s counsel as “under financial pressure”. I accept the following facts:

1. Christine is 67 years old and her husband Greg is 68 years old.

2. They are retired.

3. Their living expenses exceed their income from shares, and they sell shares to meet expenses. I do not accept the criticism of her summary of her actual outgoings and accept they were as she has stated.

4. They both have some medical conditions that may be typical of persons of their age, and have recently become entitled to a “health card”.

1. Christine and Greg together have about $1,000,000 in superannuation.

2. They own a home in Caves Beach outright and worth about $1,200,000.

3. They have vehicles and some bank account savings and shares worth about $300,000.

4. They have two adult children with health issues, to whom they provide financial support.

92. It is unnecessary to make further detailed findings about Christine’s position, other than to note that she does not appear significantly better off than Anthony.

93. I note, for completeness, that Sylvia has not brought forward any of her financial circumstances.

Conclusion

94. Based on the above principles and identified factual considerations, I do not consider that Anthony has demonstrated that his late mother failed to provide adequate provision for his “maintenance, education or advancement in life”. Anthony has provided incomplete, inaccurate and out of date information about his financial situation. The evidence tendered reveals that, contrary to his assertions made on oath, he is in a better financial position.

95. Anthony has provided no detailed explanation of his existing need or for his advancement in life. No evidence of any medical condition was advanced.

96. I also do not consider that Anthony is in a worse financial position than Christine.

97. Anthony will receive provision that will assist him with his liabilities, which include mortgage. The provision in the Will also assists him with the repayment of the Loan.

98. To make an order of further provision would only marginally improve Anthony’s position, but would place a burden on Christine and Sylvia.

99. I consider the Will provides adequate provision for Anthony and the community would consider that the parties’ mother’s testamentary intentions are an appropriate reflection of what a “just and wise testator” would have thought was her moral duty to make, had she been aware of all the relevant circumstances: Re Allen (deceased) [1922] NZLR 218 at 220-221 (Salmond J).

100. I consider that the parties’ late mother provided an appropriate division of her estate by dividing it equally.

Other payments by Sylvia allegedly contrary to Power of Attorney

101. In her opening submissions, Christine submitted:

Although not pleaded, the parties produced a lot of evidence trying to prove or disprove the misuse of the deceased’s money while she was still alive but most likely lost capacity. If the Court is prepared to hear the evidence, the Defendant’s position will be that both the Plaintiff and their sister Sylvia withdrew significant funds from their mother’s bank account, thus diminishing the estate assets.

Under sections 22(1) and 23 of the Powers of Attorney Act 2003 (NSW), this Court has power to set aside certain transactions.

102. On 7 April 2011, the deceased executed an enduring power of attorney to Christine and Sylvia. They were to act jointly, unless in the case of emergency, when they could act singly.

103. From about the time their mother was diagnosed with dementia, Sylvia undertook most of the financial tasks for her mother, she says with Christine’s knowledge and consent. Christine’s evidence was she did not agree to this and sought to be involved and Sylvia would not let her.

104. There is no dispute that Sylvia semi-regularly wrote cheques to each of the siblings from her mother’s account. Until 2019, Christine banked them.

105. Sylvia and Anthony explained these payments as “gifts” from their mother, but it appears likely that from at the latest 2014 the deceased had no capacity to make decisions about such gifts, as by that stage she did not always recognise her children.

106. On 25 March 2020, Christine’s lawyer sent a letter to Sylvia stating that Christine had condoned Sylvia acting alone as power of attorney earlier, but asked to return to using the power of attorney on its terms, and for a meeting to take place.

107. Sylvia did not agree and appeared to have taken offence to this letter which “shocked her” and she did not respond.

108. One explanation may have been Sylvia’s understanding of how the power of attorney operated. She considered she was entitled in 2016 to pre-pay for a particular funeral and also withdraw $4000 for her mother’s wake, despite Christine not agreeing, because it was “mum’s wishes”. Further, she considered it was “mum’s wishes” that financial gifts continued to be made from her bank account, even when she did not have the capacity to give specific instructions. She said, “if somebody needed money, or asked for it, then we were allowed to gift.”

109. After that letter, Sylvia’s attitude towards Christine included not speaking to her and ceasing to provide Christine with an equal cheque of money from her mother’s account.

110. Relations did not improve, and various solicitor letters were exchanged before and during the preparation of the case for hearing, with the siblings criticising each other.

111. Christine’s evidence demonstrates a complaint in these proceedings that Sylvia has misused her power and improperly paid out money from the deceased’s bank account to the three siblings and other relatives. Christine alleged she and her family were paid $64,800, Sylvia and her family $87,025 and Anthony and his family $78,400.

112. Sylvia accepts that she distributed some money to herself and Anthony, with no corresponding amount having been received and banked by Christine. Sylvia’s evidence was that those amounts were held in her mother’s bank account for Christine. Anthony did not suggest otherwise.

113. As there is no pleaded claim for an adjustment between the siblings concerning the difference in sums paid to each of them by Sylvia, nor did Christine commence proceedings seeking to restrain Sylvia from alleged improper conduct, I do not consider it is appropriate to ask the Court to determine such trivial amounts in the circumstances.

114. Parties ought not be bringing to Court voluminous pages and lengthy affidavits containing petty attacks about matters, such as who paid for their mother’s hairdressing and manicure appointments. As Lindsay J has stated in Estate Kranjac; Cadden v Widdowson [2018] NSWSC 285 at [14], the “net effect of [these] attacks was to diminish all parties”.

115. The Court assumes that the executrix, tasked with distributing the estate appropriately, will do so.

Costs

116. Pursuant to s 99 of the Succession Act, costs of litigation may in the Court’s discretion be ordered to be paid out of the estate.

117. The parties appeared to accept that Christine’s costs ought to be paid from the estate on an indemnity basis. It also appears accepted that if Anthony had obtained further provision, then his costs ought to have been paid from the estate on the ordinary basis.

118. However, Anthony has failed in his case on the construction of the Will and in his application for further provision.

119. Recently, in Haertsch v Whiteway (No 2) [2020] NSWCA 287 at [4] – [11], the Court of Appeal (Macfarlan, Meagher and Leeming JJA) summarised the authorities touching on the Court’s discretion in relation to costs orders in Succession Act proceedings, noting, amongst other things, that no order as to costs may be made, if the justice of the circumstances requires it.

120. On the material before me, having regard to the size of the estate’s costs estimated at $136,788.25 and all the other findings above, I consider the appropriate order is that the estate’s costs be paid from the estate on the indemnity basis. However, I will allow the parties an opportunity to seek a different costs order if so advised.

Conclusion

121. I consider the appropriate orders are:

1. Declare that in 2004 Christine Burndred loaned Anthony Dimos $198,150 (loan amount).

2. Declare that Anthony Dimos has not repaid the loan amount.

3. Declare that clause 3 of the Will dated 18 March 2008 of the late Stamatia Dimos, properly construed, requires Anthony’s share to be reduced by the loan amount and Christine’s share to be increased by that same amount.

4. Summons otherwise dismissed.

5. Costs of the estate to be paid by the estate, unless within 7 days a party files and serves evidence and submissions of no more than 3 pages seeking a different costs order and why such different costs order has not been agreed. The resisting party to file and serve any evidence and submissions of no more than 3 pages within 10 days of these orders.

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Decision last updated: 22 April 2024