Epov v Epov; Epov v Epov
[2014] NSWSC 1086
•14 August 2014
Supreme Court
New South Wales
Medium Neutral Citation: Epov v Epov; Epov v Epov [2014] NSWSC 1086 Hearing dates: 30 and 31 July 2014 Decision date: 14 August 2014 Jurisdiction: Equity Division Before: Hallen J Decision: Direct the parties to deliver, within 10 days, agreed Short Minutes of Order, in each matter, giving effect to these reasons, or failing agreement, competing versions. Stand the proceedings over for any argument as to costs to a convenient date no earlier than 10 days from today
Catchwords: SUCCESSION - FAMILY PROVISION - One Plaintiff, a widow of the deceased, and the other Plaintiff, a child of the deceased by a prior marriage - Each applies for a family provision order under Chapter 3 of the Succession Act 2006 (NSW) - Defendant also a child of the deceased by a prior marriage and a beneficiary named in the Will - Whether adequate and proper provision not made in Will of the deceased for either Plaintiff and, if so, the nature and quantum of the provision to be made for her and him Legislation Cited: Civil Procedure Act 2005 (NSW)
Family Provision Act 1982 (NSW)
Practice Note SC Eq 7
Practice Note SC Gen 18
Probate and Administration Act 1898 (NSW)
Succession Amendment (Family Provision) Act 2008 (NSW)
Succession Act 2006 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Cases Cited: Akkerman v Ewins [2003] NSWCA 190
Allardice v Allardice; In re Allardice (1910) 29 NZLR 959
Allen (Deceased); Allen v Manchester [1922] NZLR 218
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Anslow v Journeaux [2009] VSC 250
Aubrey v Kain [2014] NSWSC 15
Barna v Barna [2008] NSWSC 1402
Bartlett v Coomber [2008] NSWCA 100
Baychek v Baychek [2010] NSWSC 987
Bladwell v Davis [2004] NSWCA 170
Boettcher v Driscoll [2014] SASC 86
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Bull, Re [2006] VSC 113
Butcher v Craig [2009] WASC 164
Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris [2012] NSWSC 748,
Cameron v Cameron [2009] SASC 27
Christie v Manera [2006] WASC 287
Clifford v Mayr [2010] NSWCA 6
Cross v Wasson [2009] NSWSC 378; (2009) 2 ASTLR 201
Collicoat v McMillan [1999] 3 VR 803.
Collins v McGain [2003] NSWCA 190
Crossman v Riedel [2004] ACTSC 127
de Angelis v de Angelis [2003] VSC 432
Dennis (Deceased), Re [1981] 2 All ER 140
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Donaldson v Lawless [2013] NSWSC 861
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWSC 288
Gardiner v Gardiner (Supreme Court (NSW) Santow J, 28 May 1998, unrep)
Gardiner v Gardiner [2014] NSWSC 435
Golosky v Golosky [1993] NSWCA 111
Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490
Goodsell v Wellington [2011] NSWSC 1232
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
Langtry v Campbell (Supreme Court (NSW), Powell J, 7 March 1991, unrep).
Luciano v Rosenblum (1985) 2 NSWLR 65
MacGregor v MacGregor [2003] WASC 169
Magill v Magill [2006] HCA 51; (2006) 226 CLR 551
Marks v Marks [2003] WASCA 297
Marras, In the Estate of the late Anthony [2014] NSWSC 915
Marshall v Carruthers [2002] NSWCA 47
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Moore v Moore (Supreme Court (NSW), Court of Appeal, 16 May 1984, unrep)
Moore (bht the NSW Trustee & Guardian) v Randall [2012] NSWSC 184
O'Loughlin v O'Loughlin [2003] NSWCA 99
Palaganio v Mankarios [2013] 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
Richard v AXA Trustees Ltd [2000] VSC 341
Salmon, Deceased, Re [1981] Ch 167
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
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Sellers v Scrivenger [2010] VSC 320
Sergi v Sergi [2012] WASC 18
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
Szypica v O'Beirne [2013] NSWSC 297
Taylor v Farrugia [2009] NSWSC 801
Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572
Thornley v Heffernan (Supreme Court (NSW), McClelland J, 12 September 1995, unrep)
Tobin v Ezekiel [2012] NSWCA 285
Twomey v McDonald [2012] NSWSC 22
Verzar v Verzar [2012] NSWSC 1380
Verzar v Verzar [2014] NSWCA 45
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (Supreme Court (NSW), 17 May 1996, Young J, unrep)
West v Mann [2013] NSWSC 1852
White v Barron [1980] HCA 14; (1980) 144 CLR 431
Wilcox v Wilcox [2012] NSWSC 1138
Williams v Aucutt [2000] 2 NZLR 479Texts Cited: 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
J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (7th ed, 2006, LexisNexis Butterworths)Category: Principal judgment Parties: Maria Epov (Plaintiff in 2011/409962)
Gennady Epov (Plaintiff in 2012/168778)
Peter Epov (Defendant)Representation: Counsel:
Mr P Bates (Plaintiff in 2011/409962)
Ms P Lane (Plaintiff in 2012/168778)
Mr R K Newton (Defendant)
Solicitors:
Gerard Malouf & Partners
(Plaintiff in 2011/409962)
Phillip A Wilkins & Associates
(Plaintiff in 2012/168778)
Maurice Buckley CT Poole & Son (Defendant)
File Number(s): 2011/409962; 2012/168778
Judgment
The Claims
HIS HONOUR: These reasons relate to two different claims, in the first of which (2011/409962), a family provision order, pursuant to the Succession Act2006 (NSW) ("the Act"), consequential relief, and costs are sought by Maria Epov, out of the estate and/or notional estate of her husband, Konstantin Epov ("the deceased") and in the second of which (2012/168778), Gennady Epov, a child of the deceased, makes a similar claim. 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.
Without intending to convey undue familiarity, with no disrespect intended, and for convenience and clarity, I shall refer, hereafter, to the parties, after introduction, by her, or his, given name as each bears the surname "Epov".
Maria commenced her proceeding by Summons filed on 21 December 2011. An amended Summons was filed on 13 March 2012. There is no dispute that the Summons was filed within the time prescribed by the Act (within 12 months of the deceased's death).
Gennady commenced his proceeding by Summons filed on 28 May 2012. There is no dispute that this Summons was not filed within the time prescribed by the Act. Thus, Gennady seeks an order extending the time for the making of his application, as well.
The Defendant named in each of the proceedings is Peter Epov, a child of the deceased, the step-child of Maria, and the brother of Gennady. He is also the executor named in the Will of the deceased, to whom Probate was granted.
Neither Maria, nor Peter, opposed an order extending the time for the making of Gennady's claim. However, it remains necessary for the court to be satisfied that "sufficient cause" has been shown to enable the application to be made.
The Hearing
By agreement of the parties, both proceedings were heard consecutively with the evidence in one being evidence in the other. This was clearly necessary, and appropriate, as some of the evidence to be read was relevant to both of the proceedings. In this way, the court was able to consider, together, as it were, the claims of each of Maria and Gennady, as well as the competing claim of Peter as a beneficiary named in the Will of the deceased.
The hearing commenced with the reading of the evidence filed in Maria's proceeding; then, the affidavits relied upon by Peter in Maria's proceeding were read; this was followed by the reading of the evidence filed in Gennady's proceeding; then, the affidavits relied upon by Peter in Gennady's proceeding were read; the objections to parts of the affidavits were made and ruled upon; the cross-examination of Maria (principally by counsel for Peter), Gennady (principally by counsel for Maria) and Peter (principally by counsel for Maria) took place; only one witness whose affidavit was read in Maria's case (Mr Paul Smolonogov) was briefly cross-examined; and, finally, each counsel made submissions to supplement the written submissions that had been filed and which remain with the court papers. The estimated duration of the hearing was two days, and both proceedings were concluded within that time.
It was necessary for each of Maria and Mr Smolonogov to give her, and his, evidence through a Community Relations Commission accredited Russian interpreter.
Background Facts
I begin by setting out the background facts that are uncontroversial.
The deceased died on 26 December 2010. He was then aged 90 years, having been born in December 1920.
The deceased was married first to Antonina. They were married for over 45 years. She predeceased the deceased, having died in November 1985. There were three children of their marriage, being Zena (who died as an infant before Peter was born), Gennady, who was born in December 1945, and Peter, who was born in June 1954.
The deceased and his family arrived in Australia, from Harbin, China, in November 1961. Before this, they had lived in various locations in China and Manchuria.
The deceased and Antonina purchased a property at Lidcombe, in about 1964, for £4,500. They borrowed about £4,000, which secured debt was fully repaid by March 1969. It was in this property that the deceased lived for the remainder of his life, and of which he was the sole registered proprietor at the date of his death. It was also the property into which Maria moved after her marriage to the deceased.
(The Lidcombe property is described as a four bedroom double brick single storey dwelling. The home is built on a large 746 square metre corner block. There is a combined kitchen and dining room with a separate lounge room. There is an internal laundry. There is an enclosed back verandah that leads to a large grassed backyard. The home has peeling paint and is in need of some general repairs.)
The deceased became an Australian citizen in October 1977.
The deceased married Valentina, in 1987. The marriage lasted for about 12 months. There were no children of their marriage. The marriage was dissolved by a divorce order made in about 1989. There is no evidence of any continued contact between them after that time.
At the date of his death, the deceased was married to Maria. They were married in May 1989. There were no children of their marriage. At the date of their marriage, Maria was aged 62 years and the deceased was aged 69 years.
Maria was born in the Ukraine and moved to Poland in 1946. She was married in Poland. Her first husband, Vladislav Banasiak, died shortly before she arrived in Australia in 1988. Initially, she came to Australia, from Poland, to visit her brother. She met the deceased at a social gathering and they were married the following year.
The deceased left a duly executed Will that he made on 31 December 1991, Probate in common form of which was granted by this court, to Peter on 8 March 2012.
By the Will, after the revocation of all former wills and other testamentary dispositions (Clause 1), the deceased provided for:
(a) A devise of the property that constituted the matrimonial home of Maria and the deceased at the date of death (the Lidcombe property), and the chattels in it, to the trustee, upon trust, to permit Maria and Gennady to live in the house and have use of the chattels in it, as long as each of them wished, provided that they paid, jointly, the rates and taxes levied on the property, the premiums of any insurance policies taken out by the trustee and kept it in good repair: Clause 3(a);
(b) So long as they lived in it and complied with the conditions outlined in the Will, the Lidcombe property was not to be sold without the consent of Maria and Gennady: Clause 3(b);
(c) In the event of a conflict arising between Maria and Gennady concerning their co-habitation, which could not be resolved on amicable terms, the Lidcombe property was to be sold. Thereupon, Maria was to receive one quarter of the proceeds of sale; Peter was to receive one-half of the remainder; and, as to the balance, Gennady was to receive the income for his lifetime and, after his death, the capital, as well as any income, was to be paid to such of the children of Gennady as survived the deceased and attained the age of 18 years and, if more than one, in equal shares. In the event that Gennady had no children who survived the deceased, the share of capital would pass to Peter on Gennady's death: Clause 3B.
(d) The bequest of the rest and residue, after payment of debts, funeral and testamentary expenses and all duties payable under the Will, except any mortgage, charge, lien or other instrument encumbering the property, as to one half, to Peter, for his own use and benefit absolutely and, as to the other half, to pay the income to Gennady for his life and, then, after his death, the capital, as well as any income, for such of the children of Gennady as survived the deceased and attained the age of 18 years and, if more than one, in equal shares. In the event that Gennady had no children who survived the deceased, the share of capital would pass to Peter on Gennady's death: Clause 3C.
It is to be noted that there is no power given to the trustee, Peter, under the Will, to advance capital to Gennady. Also, the evidence establishes that Gennady has no children. It follows that Peter will receive, on the death of Gennady, any amount of capital from the estate held in trust for the benefit of Gennady during his lifetime.
According to the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the property owned solely by the deceased at the date of his death, was disclosed as having an estimated (or known) gross value of $700,000. At the date of death, his estate was said to consist of the Lidcombe property ($700,000). No jointly held, or other, property, in which the deceased held an interest at the date of his death, was disclosed in the Inventory of Property. Liabilities, being funeral and headstone expenses ($8,600), were disclosed. (I shall continue to omit any reference to cents in the amounts to which I shall refer, which will explain what may appear to be minor mathematical errors.)
There was also a notation on the Inventory of Property in the following terms:
"Asset details are provisional as the deceased may have held $30,000 in cash in the Lidcombe property".
In an affidavit sworn on 2 May 2012, Peter identified, as an additional asset of the deceased at the date of death, cash in the house of $30,000. He also disclosed additional liabilities, being probate and legal costs ($4,534) and costs of transmission of the Lidcombe property ($520). At the hearing, however, it was accepted that no cash was found in the Lidcombe property following the death of the deceased.
The parties were able to agree that, at the date of hearing, the value of the Lidcombe property was between $950,000 and $1,100,000 and that it was the only significant property of the deceased. For the purposes of the hearing, they also agreed that the court should take its estimated value to be $950,000. The Lidcombe property remains unencumbered.
The parties were also able to agree that the Lidcombe property would have to be sold. All agreed that Maria and Gennady could not cohabit together in the Lidcombe property and that there was no prospect of such cohabitation taking place in the future. (Whilst there had been no conflict arising between Maria and Gennady concerning their co-habitation, each has made a claim under the Act.)
When the Lidcombe property is sold, there will be costs and expenses of sale. The parties agreed that estimated costs and expenses of sale, based upon the estimated agreed value, would be about $30,000. In addition, from the proceeds of sale, there will need to be paid costs and expenses of probate, and administration costs, of about $15,000. The parties agreed that the net proceeds of sale remaining would be about $905,000.
I raised with the parties the possibility that the Lidcombe property could sell for more, or for less, than the agreed estimated gross value, with the result that one or more of them might be detrimentally affected by its actual sale price if a lump sum order were made. I suggested that it would be prudent, in the event that either Plaintiff is successful, to provide her, or him, absolutely, or otherwise, with a percentage of the net proceeds of sale of the Lidcombe property. In this way, all of the beneficiaries would benefit if that property were sold for a greater price than had been estimated, and all would be detrimentally affected if it sold for less. There would also be certainty of price, costs and expenses.
After obtaining instructions, each of the parties stated, through her, and his, counsel, respectively, that any lump sum to be paid, whether absolutely or otherwise, should be calculated by reference to a percentage of the actual net proceeds of sale. I shall follow this course. However, I shall use the estimates to provide a guide to entitlements under the Will.
In the event that the Lidcombe property is sold, part of the family provision order sought by Maria relates to the cost of alternative accommodation. At the hearing, counsel for Maria submitted that, were a retirement unit purchased at St Joseph's Village, Auburn at a cost of $300,000 (to which accommodation option I shall return later in these reasons), there would be no stamp duty payable.
Similarly, in the event that the Lidcombe property is sold, part of the family provision order sought by Gennady relates to the cost of alternative accommodation. During submissions, as a result of the evidence given, counsel for Gennady accepted that Gennady, probably, would rent, rather than purchase, alternative accommodation, in which case no stamp duty will be payable.
I need not refer to notional estate at all in this matter. I also need not refer to the operation of the intestacy rules.
In calculating the estimated net value of the actual estate, finally available for distribution, the costs of the present proceedings should also be considered, since each Plaintiff, if successful, normally, will be entitled to an order that her, and his, costs and disbursements, calculated on the ordinary basis, respectively, 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.
Maria's solicitor, Mr D Cossalter, in an affidavit sworn on 15 July 2014, estimated Maria's costs and disbursements of the proceedings, including counsel's fees, calculated on the ordinary basis, to be $122,030 (inclusive of GST and upon the basis of a two day hearing). (In April 2014, he had sworn an affidavit deposing to costs and disbursements to be $101,786.)
Gennady's solicitor, Mr P A Wilkins, in an affidavit sworn on 15 April 2014, estimated Gennady's costs and disbursements of the proceedings, including counsel's fees, calculated on the ordinary basis, to be $36,500 (inclusive of GST and upon the basis of a two day hearing). (Gennady has paid $200 on account of disbursements.)
Peter's solicitor, Mr J L Poole, in two affidavits, one read in each proceeding, had estimated Peter's costs and disbursements of both proceedings, including counsel's fees, calculated on the indemnity basis, to be $70,270 (inclusive of GST and upon the basis of a two day hearing).
It follows that, if orders for costs are made in each matter, and if the costs estimates prove accurate (in total, $228,800), the net value of the deceased's actual estate, available for distribution, will be about $677,000.
(It should be noted, in this respect, that, at the beginning of the hearing, in discussion, the costs of the proceedings were calculated to be $250,800 and, therefore, it was accepted that the net value of the estate was about $650,000. This calculation, however, was based on a costs estimate, for Gennady, of $58,500. That figure, according to Mr Wilkins' affidavit, was obtained by adding, incorrectly, the disbursements incurred ($17,800) to the professional costs calculated on both the ordinary basis ($18,700) and the indemnity basis ($22,000). If only the ordinary professional costs are included in the addition, the costs estimate ought to have been $36,500. This error, which I confess was, in part, mine, does not affect the ultimate result in light of the agreement to which I have referred regarding the order for provision being calculated by reference to a percentage of the net proceeds of sale of the Lidcombe property.)
Based upon the estimate of $677,000, the entitlement under the Will of the deceased of Maria will be about $169,250; Peter will be entitled to about $338,500; and Gennady will be entitled to income from a capital sum of $169,250 (which, at 3 per cent per annum, would yield about $97 per week). Upon his death, the capital will pass to Peter.
That over $228,000 has been incurred in legal costs and disbursements of the two proceedings, with more than 53 per cent of those costs being costs incurred on behalf of Maria, is staggering. During submissions, Maria's counsel sought to justify the costs and disbursements upon the basis that more time than is usual was required to be spent on the matter because of Maria's lack of English and her inability to understand the concepts being put to her. Perhaps, the amount for costs also demonstrates the level of the intensity of feeling between family members. This level of feeling, in my view, has clouded the ability of the parties to see a practical, as well as a legal, solution to the proceedings (as I think will be demonstrated later in these reasons).
Even if these matters are taken into account, the estimate of Maria's costs is nonetheless a staggering figure for an application of this kind, especially where the value of the estate, while not small, was less than (and possibly significantly less than) $1,000,000 and where the claim of Maria was as a widow of a long marriage. The issues involved, and the estimated net value of the deceased's estate, cannot, in my view, justify that level of costs and disbursements. The level of costs generated in the present proceeding brings into sharp focus the benefit-cost ratio of prosecuting and defending claims in this court where an order for provision is likely to be made.
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.
At the hearing, the parties agreed that the only eligible persons are Maria, Gennady, Peter, and Valentina. (There had previously been a suggestion that Peter's two children might be eligible persons also, but there is no evidence that either had ever been wholly, or partly, dependent upon the deceased.)
Only Peter and Valentina have not commenced proceedings under the Act. However, Peter is a party to the proceedings and is a beneficiary named in the Will of the deceased. He has raised his competing claim, financial and moral, on the bounty of the deceased.
The Act (as will be seen) provides that, in determining an application for a family provision order, the court may disregard the interests of any other person by, or in respect of whom, an application for a family provision order may be made (other than a beneficiary of the deceased person's estate), but who has not made an application only if:
(a) notice of the application, and of the court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of court, or
(b) the court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.
In this case, it is necessary to determine whether service of the notice on Valentina is "unnecessary, unreasonable or impracticable" in the sense envisaged by s 61 of the Act in all of the circumstances.
Whilst I do not think that service of a notice on Valentina would be "unreasonable", I do think that it is "unnecessary" in the circumstances of this case. As I have stated, there is no suggestion that she had any contact with the deceased after the dissolution of their marriage. In this regard, the deceased was married to Maria for over 20 years before his death and it is unlikely that he maintained any contact with Valentina. Certainly, Maria gives no evidence of any such contact. Furthermore, the marriage of the deceased and Valentina was an extremely short one. I also bear in mind the size of the estate and the competing claimants on the bounty of the deceased.
In case I am wrong, I turn to the alternative basis. "Impracticable" is not defined in the Act. Something is said to be "impracticable" when it is incapable, as a practical matter, to do it, or when it is extremely inconvenient, or difficult, to do it, because, for example, of the associated costs. The word is not synonymous with the word "impossible". It directs attention to considerations of a practical, rather than a theoretical, nature arising out of the particular circumstances: Thornley v Heffernan (Supreme Court (NSW), McClelland J, 12 September 1995, unrep). One should evaluate the practicability of service in a commonsense way.
When one examines the circumstances of this particular case and answers the question whether, as a practical matter, service of the prescribed notice on Valentina can be achieved, since nothing more is known of her, I am satisfied that it is "impracticable" to serve a notice upon her.
In all the circumstances, I propose to disregard the interests of Valentina, as a person by, or in respect of whom, an application for a family provision order may be made but who has not made an application.
Evidence on the extension of time
When Maria commenced her proceedings, Gennady asked Peter about the deceased's Will. Peter had not previously told him about the terms of that Will. Initially, Peter's response was "I have to find the will". (No questions were asked of Peter about the truthfulness of this statement.)
Gennady did not see the deceased's Will until February 2013. He went to one solicitor who suggested that he should see his current solicitor, which he subsequently did. As stated, the proceedings were commenced in late May 2013.
There was no evidence that the prescribed notice of claim in respect of Maria's claim was served on Gennady following the commencement of proceedings by Maria. This, in my view, is a relevant consideration, although I note that Gennady otherwise appears to have become aware of the proceedings and the need for him to seek legal advice about his rights.
(I note that, after the conclusion of the hearing, on 11 August 2014, I received an affidavit sworn by Mr Poole concerning the issue of service upon Gennady. As no leave was obtained to file that affidavit after the hearing, and no evidence was provided regarding service thereof upon, or consent by, the other parties to the proceedings, to me reading the affidavit, I shall not refer to its contents.)
Whilst not wholly determinative, I note that neither Maria nor Peter suggested that there would be any prejudice suffered if the time for the making of Gennady's application were extended.
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 wording of the Act is similar to the wording of the Family Provision Act 1982 (NSW) ("the former Act"). However, it is necessary to remember the warning of Kirby P in Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100, at 76,304:
"Purposive construction of the Act
There is always a danger where a reformed Act borrows heavily upon ideas which previously existed in the common law or in an earlier statute, that lawyers will approach the construction of the Act affected by the previous law. Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 2 NSWLR 475, 478. That danger is but an illustration, in the specialised activity of law, of a universal phenomenon of psychology long established in relation to human perception generally. We tend to perceive what we expect. We expect that with which we are familiar.
There is a particular danger in the case of the Family Provision Act in construing its terms by reference to the law which developed around the Testators' Family Maintenance and Guardianship of Infants Act 1916. That Act was passed in earlier times to govern the entitlements of a testator's family, as narrowly defined. The definition by s 3(1) of that Act confined applications to those made by 'the widow, husband or children of such persons'. There was no mention in it of former spouses. Doubtless this was because, for the early part of this century, divorce was relatively infrequent and then based upon concepts of matrimonial fault which would make interference in the testamentary disposition of the deceased unlikely. When enacted, the statute was a radical interference in the power of testamentary disposition. That was a significant power over private property, the disturbance of which was regarded as highly exceptional."
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 (or the disposition on intestacy), to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.
Extension of time for the making of the application
Section 58(2) of the Act provides that an application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the court otherwise orders on sufficient cause being shown. (Consent is no longer referred to as it was in the former Act.)
Clearly, permitting the court to "otherwise order" was included in the legislation to avoid the section becoming an instrument of injustice. It also makes the decision to extend time a discretionary one.
Yet, "[T]he time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality": Verzar v Verzar [2012] NSWSC 1380, at [98]. It is "a substantive provision laid down in the Act itself and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules": Re Salmon, Deceased [1981] Ch 167, at 175.
Section 58(2) is in terms similar to s 16 of the former Act. However, the words "for the application not having been made within that period" are not included after the words "sufficient cause being shown".
In Moore (bht the NSW Trustee & Guardian) v Randall [2012] NSWSC 184, White J, at [39], wrote that the expression "sufficient cause" "means sufficient explanation or sufficient justification or excuse for the application not having been made within the prescribed period". That is to say, the sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time: Verzar v Verzar [2014] NSWCA 45, per Meagher JA, at [24].
In Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572, at [84] - [90], I set out the applicable legal principles relating to an application to extend the time. The decision was followed, by Nicholas J in Twomey v McDonald [2012] NSWSC 22, at [8], and by Ball J in Donaldson v Lawless [2013] NSWSC 861, at [27]. I maintain the views expressed in that decision.
It is not necessary to encumber these reasons with a repetition of the reasons in Thomas v Pickering; Byrne v Pickering. A judicial discretion must be exercised and all the relevant circumstances must be taken into account in order to assess the justice of the particular case under consideration. No one factor is necessarily determinative. As I said in Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris [2012] NSWSC 748, at [117]:
"[U]ltimately, justice is the paramount consideration in determining whether to extend the time for making an application ...".
During submissions, all counsel accepted that the court could otherwise order. Each counsel submitted that there was a satisfactory evidentiary basis for concluding that sufficient cause had been shown. I respectfully agree.
Eligibility and Inadequacy of Provision
The key provision is s 59 of the Act. The court must be satisfied, first, that each 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, Maria relies upon the category of eligibility referred to in s 57(1)(a) of the Act. There is no dispute that she was the wife of the deceased at the date of his death.
Relevantly, in this case, Gennady relies upon the category of eligibility referred to in s 57(1)(c) of the Act. There is no dispute that he is a child of the deceased.
In each case, the language of the relevant section is expressive of the person's status, as well as her, or his, relationship to the deceased. There is no age limit placed on an eligible person making an application.
Relevantly to this case, in the case of Maria, it is only if eligibility is found, and, in the case of Gennady, additionally, an order is made extending the time for the making of the application, that the court must determine whether adequate provision for the proper maintenance, education or advancement in life of each applicant has not been made by the Will of the deceased: (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".
Other than by reference to the provision made by the operation of the Will in relation to the estate of the deceased, 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 any 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 by the Will, on the one hand, and to the requirement for maintenance, education or 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 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.
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 Re Dennis (Deceased) [1981] 2 All ER 140, Browne-Wilkinson J, at 145, wrote:
"The court has, up to now, declined to define the exact meaning of the word 'maintenance' and I am certainly not going to depart from that approach. But in my judgment the word 'maintenance' connotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him. The provision that is to be made is to meet recurring expenses, being expenses of living of an income nature. This does not mean that the provision need be by way of income payments. The provision can be by way of lump sum, for example, to buy a house in which the applicant can be housed, thereby relieving him pro tanto of income expenditure. Nor am I suggesting that there may not be cases in which payment of existing debts may not be as appropriate as a maintenance payment; for example, to pay the debts of an applicant in order to enable him to continue to carry on a profit-making business or profession may well be for his maintenance."
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."
In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Murphy J wrote, at 505:
"Provision for advancement may, for example, extend to retraining or the gaining of a qualification which could advance and perhaps enable an applicant to maintain himself or herself."
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."
Their Lordships went on to state (at 478):
"The amount to be provided is not to be measured solely by the need of maintenance. It would be so if the Court were concerned merely with adequacy. But the Court has to consider what is proper maintenance, and therefore the property left by the testator has to be taken into consideration."
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 Goodman v Windeyer, Gibbs J wrote, 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 [2005] HCA 11; (2005) 221 CLR 191, 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.
His Honour added, in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]:
"The question of what level of maintenance or advancement in life is 'proper' depends on all of the circumstances of the case 'including the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty' (Singer v Berghouse (1994) 181 CLR 201 at 210)."
Until recently, it was unanimously thought that there are two stages of the determination. The first stage, provided for by s 59(1)(c), has been described as "the jurisdictional question": Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education or advancement in life of a particular applicant. The court does this by determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, for the applicant. If it is not so satisfied, then the court is precluded from making a family provision order. At this stage, the court has regard to, among other things, the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker, at 571-572; Singer v Berghouse, at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285, at [70].
Whether an applicant has a 'need' or 'needs' is also a relevant factor at the first stage of the enquiry. It is an elusive concept to define, yet, it is an element in determining whether "adequate" provision has been made for the "proper" maintenance, education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 (Tobias JA, with whom Beazley and Hodgson JJA agreed).
In Collins v McGain, Tobias JA said:
"42. Further, there can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focussed. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.
...
47. As I have observed, the issue of need is not confined to whether or not an eligible person has, at the date of hearing, a then need for financial assistance with respect to his maintenance etc. It is a broader concept. This is so because the question of needs must be addressed in the context of the statutory requirement of what is 'proper maintenance etc' of the eligible person. It is because of that context that, in the present case, the 'proper maintenance etc' of the appellant required consideration of a need to guard against the contingency to which I have referred."
In Devereaux-Warnes v Hall (No 3), at [81] - [84], Buss JA said, in respect of the first stage of the process:
"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer per Gaudron J at 227.
'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc. See Gorton v Parks (1989) 17 NSWLR 1 per Bryson J at 10-11.
The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs that cannot be met from his or her own resources on the other. See Hunter per Kirby P at 575.
Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."
"Need", of course, is a relative concept: de Angelis v de Angelis [2003] VSC 432, per Dodds-Streeton J, at [45]. It is different from "want". The latent difference between the words was stated by Lord Neuberger of Abbotsbury (now President of the Supreme Court of the United Kingdom), in the House of Lords decision, R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808, at [54]:
"'Need' is a more flexible word than it might first appear. 'In need of' plainly means more than merely 'want', but it falls far short of 'cannot survive without'."
In Boettcher v Driscoll [2014] SASC 86, David J, at [41], added:
"'Need' is not so synonymous with 'want' such that the two are interchangeable."
As Callinan and Heydon JJ emphasised in Vigolo v Bostin, the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum" or "by looking simply to the question whether the applicant has enough on which to survive or live comfortably". The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined.
Yet, in referring to the concept of "need", it should also be noted that the statutory formula makes no reference to "need", but rather to "adequate provision for the proper maintenance, education or advancement in life". No doubt, this has prompted White J to write, in 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, at [147], that "the need a claimant must demonstrate is a need for 'proper' maintenance, education and advancement in life", but that does not mean that "adequate provision for proper maintenance and advancement in life implies no more than provision for the necessities of life, irrespective of the size of the estate and the effect, if any, of an order for provision on others". I respectfully agree.
In the event that the court is satisfied that the power to make an order is enlivened (i.e. in this case it is satisfied that Maria and Gennady is each an eligible person, and in the case of Gennady, that an order extending the time for his application should be made, and, in relation to both, that adequate provision for her, and his, proper maintenance, education or advancement in life has not been made), then, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made.
The second stage of the process arises under s 59(2) and s 60(1)(b) of the Act. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse, at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.
I have dealt with the question that has been raised in other cases whether the two-stage approach identified in Singer v Berghouse continues to apply to the provisions of the Act in other cases, the most recent of which is Aubrey v Kain [2014] NSWSC 15. I remain of the view that the two-stage approach should continue to apply. I shall not repeat what I said in that case, which is not affected by the recent decision of the Court of Appeal in Phillips v James [2014] NSWCA 4, or its decision of Verzar v Verzar [2014].
(Since I delivered my reasons in Aubrey v Kain, Robb J has also considered the topic in Janette Susan Gardiner v Raymond James Gardiner as Administrator of the Estate of the Late Dulcie Eva Gardiner [2014] NSWSC 435. I respectfully adopt his Honour's reasoning, set out at [117] - [120], and [124], as to the persuasiveness of the reasoning of Barrett JA in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656. I also refer to what Bergin CJ in Eq has written in In the Estate of the late Anthony Marras [2014] NSWSC 915, at [15].)
Ultimately, as Allsop P said in Andrew v Andrew, at [6], "it may be an analytical question of little consequence" since the questions remain the same, namely, whether the court can make an order for provision (whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made) and, if so, whether it should (whether to make an order and, if so, the terms of that order).
Section 60 of the Act, at least in part, is new. It provides:
"(1) The court may have regard to the matters set out in subsection (2) for the purpose of determining:
(a) whether the person in whose favour the order is sought to be made (the 'applicant') is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the court:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."
It can be seen that s 60(2) enumerates 15 specific matters, described by Basten JA in Andrew v Andrew, at [37] as "a multifactorial list", and by Lindsay J in Verzar v Verzar [2012], at [123], as "a valuable prompt" to which the court may have regard, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order.
It was said by White J in Slack v Rogan; Palffy v Rogan, at [121], that s 60 "lists a wide range of matters" that the court "may have regard to", but these do not provide any tangible assistance in answering the question in any particular case whether the provision made in a will was less than adequate for an eligible applicant's "proper" maintenance, education or advancement in life.
In West v Mann [2013] NSWSC 1852, Kunc J, at [12], wrote:
"Section 60(2) provides a helpful checklist but it is no more than that. The Court is not obliged to take those matters into account. The extent to which it does (if at all) will depend upon the facts of each particular case.
Section 60(2)(p) confirms the breadth of matters the Court can take into account. Once enlivened, the Discretion is expressly fettered only by the requirement in s 59(2) that if an order is made, it must be such order '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'".
Beazley P, in Phillips v James, at [51], described s 60(2) as involving:
"... a statutory iteration of matters that had always been considered relevant in the determination of claims for provision by persons claiming an entitlement under a testator's will. However, as Basten JA observed in Andrew v Andrew, the factors identified in s 60(2) provide a more focussed direction to the Court as to relevant matters to which regard may be had. His Honour was of the view that the statutory list invites consideration of a broader range of factors than was previously the case. Whether or not that is so, the important matter is that the Court is required to have regard to the circumstances, including those specified in s 60(2), that it considers relevant in determining whether to make an order for family provision and the nature of any such order."
The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of such of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.
It does not say how the matters listed are to be used to determine the matters identified in s 60(1). Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical. For example, when considering eligibility under s 60(1)(a), many of the matters in s 60(2) will be largely, if not wholly, irrelevant.
A reference to some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary, whilst others do not. Importantly, also, many of the matters in sub-section (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).
Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.
Section 65(1) of the Act requires the family provision order to specify:
(a) the person or persons for whom provision is to be made, and
(b) the amount and nature of the provision, and
(c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and
(d) any conditions, restrictions or limitations imposed by the court.
The order for provision may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner the court thinks fit" (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).
Any family provision order under the Act takes effect, unless the court otherwise orders, in the case if the deceased made a will, in a codicil to the will (s 72(1) of the Act).
Section 66 of the Act sets out the consequential and ancillary orders that may be made.
Section 99(1) of the Act provides that the court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate in such manner as the court thinks fit.
Practice Note SC Eq 7, which applies to claims for a family provision order, currently provides, in Clause 24, that "[o]rders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less than $500,000". (Of course, this is only one basis upon which costs may be capped. See, for example, s 98 of the Civil Procedure Act 2005 (NSW). Also, see Baychek v Baychek [2010] NSWSC 987. Also see, Dion Giuseppi Sergi by next friend Aileen Solowiej v Sergi [2012] WASC 18, per E M Heenan J, at [50] - [52].
Other Applicable Legal Principles - Substantive Application
Accepting that no two cases will be exactly alike, there are some general principles that may be stated. Whilst most of these principles were stated in the context of the former Act, they are equally apt in a claim brought pursuant to the Act.
Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, that it is not appropriate to endeavour to achieve "an overall fair" disposition of the deceased's estate. It is not part of the court's function to achieve some kind of equity between the various claimants. The court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Nor is the purpose of the jurisdiction conferred by the Act to correct the hurt feelings, or sense of wrong, felt by an applicant. Rather, the court's role is of a specific type and goes no further than the making of "adequate" provision in all the circumstances for the "proper" maintenance, education and advancement in life of an applicant.
The court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation: Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, at 19 (Dixon CJ); McKenzie v Topp [2004] VSC 90, at [63].
Of that freedom, in Grey v Harrison, at 386, Callaway JA said:
"... It is one of the freedoms that shape our society, and an important human right, that a person should be free to dispose of his or her property as he or she thinks fit. Rights and freedoms must of course be exercised and enjoyed conformably with the rights and freedoms of others, but there is no equity, as it were, to interfere with a testator's dispositions unless he or she has abused that right. To do so is to assume a power to take properties from the intended object of the testator's bounty and give it to someone else. In conferring a discretion in the widest terms found in s 91, the legislature intended it to be exercised in a principled way. A breach of moral duty is the justification for curial intervention and simultaneously limits its legitimate extent."
In Vigolo v Bostin, Gleeson CJ pointed out that the relevant legislation did not confer new rights of succession and did not create legal rights of inheritance. Rather, his Honour explained
"It preserved freedom of testamentary disposition, but subjected that freedom to a new qualification".
In Goodsell v Wellington [2011] NSWSC 1232, I noted, at [108], that:
"Freedom of testamentary disposition remains a prominent feature of the Australian legal system. Its significance is both practical and symbolic and should not be underestimated."
As Pembroke J said in Wilcox v Wilcox [2012] NSWSC 1138, at [23]:
"The court does not simply ride roughshod over the testator's intentions. The court's power to make an award is limited. The purpose of the discretionary power under Section 59(1) is to redress circumstances where 'adequate provision' has not been made for the 'proper maintenance, education or advancement in life' of the claimant. The adjectives 'adequate' and 'proper' are words of circumspection."
Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales, at 19; Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep); Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.
As Allsop P said in Andrew v Andrew, at [16]:
"If I may respectfully paraphrase Sheller JA [in Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24 at 46F-47B], the Court in assessing the matter at s 59(1) and the order that should be made under s 59(1) and (2), should be guided and assisted by considering what provision, in accordance with prevailing community standards of what is right and appropriate, ought to be made. This, Sheller JA said ... involved speaking for the feeling and judgment of fair and reasonable members of the community. It is to be emphasised that s 59(1)(c) and s 59(2) refer to the time when the Court is considering [an application for a family provision order] and the facts then known to the Court. The evaluative assessment is to be undertaken assuming full knowledge and appreciation of all the circumstances of the case. This ... makes the notion of compliance by the testator with a moral duty (on what he or she knew) apt to distract from the statutory task of the Court."
How those community expectations or standards are determined cannot be explained other than by reference to the Act: Andrew v Andrew, at [36] (Basten JA). His Honour added, in Phillips v James, at [113]:
"As discussed by Allsop P in Andrew v Andrew [2012] NSWCA 308; 81 NSWLR 656 at [16], one can say little more as to the standards and values to be applied than that the court should be guided by its perception of 'prevailing community standards of what is right and appropriate'. Views will undoubtedly vary within the community as to the weight to be given to a testator's wishes as expressed in the will: Andrew v Andrew at [35]."
Thus, "there are difficulties for the Courts in making their own unaided assessment of current community attitudes in a complex and changing social environment": Williams v Aucutt [2000] 2 NZLR 479, at [44]. As was said by White J in Slack v Rogan; Palffy v Rogan at [125]:
"I know of no way of determining what the community would expect, or what its standards are, or values would be. I do not know, but suspect, that the expectations of individual members of the community would vary widely. It may be that the Act itself, at least in so far as it goes beyond allowing provision to be made in favour of spouses and minor or disabled children, runs counter to community expectations about freedom of testamentary disposition. As Basten JA said in Andrew v Andrew, the only guiding light, consistent with the rule of law, for the identification of community standards are those reflected in current legislation. No legislation other than the Succession Act itself is relevant to the present case. Attempts to identify particular community standards, for example, that a testator need not make provision for an able bodied son, or that a widow's claim is paramount, have been rejected. To say that the court itself is the spokesman for the fair and reasonable man or woman in the community is to acknowledge that in truth there is no ascertainable external community standard to guide the decision."
In all cases under the Act, what is adequate and proper provision is necessarily fact specific.
The Act is not a "Destitute Persons Act", and it is not necessary, therefore, that the applicant should be destitute to succeed in obtaining an order: In re Allardice; Allardice v Allardice (1910) 29 NZLR 959, at 966. The use of the word 'proper' requires consideration to be given to more than satisfying the basic needs of an applicant. The standard of living of an applicant during the lifetime of the deceased is relevant, but the fact that an applicant has lived frugally, or that she or he, has become accustomed to a life of relative penury, does not mean that the deceased's obligation under the Act is satisfied so long as the applicant can continue in that state: Pogorelic v Banovich [2007] WASC 45, [62]; Butcher v Craig [2009] WASC 164, at [21].
Nor is it the purpose of the Act to punish, or redress, past bad, or unfeeling parental behaviour, where that behaviour does not still impinge on the applicant's present financial situation. In other words, a claim under the Act does not encompass compensation, or reparations, to an applicant for the deceased as his, or her, parent, having failed in the legal, or moral, duty to be a good and responsible parent of the child: Re Bull [2006] VSC 113; Cameron v Cameron [2009] SASC 27, at [41].
All of the financial needs of an applicant have to be taken into account and considered by reference to the other factors referred to in the Act and in Singerv Berghouse. What is proper provision is not arrived at by adding up all of the identified financial needs: Hyland v Burbidge [2000] NSWSC 12, at [56]. Nor does it follow that if the court decides it is inappropriate to make a specific provision in respect of one identified head of claim that any identified financial need, even a contingent need, in relation to that claim becomes irrelevant to the final assessment: Mayfield v Lloyd-Williams, at [89].
The size of the estate is a significant consideration in determining an application for provision. In a reasonably small estate, as this one is, it is important to remember what Salmond J said in In re Allen (Deceased); Allen v Manchester [1922] NZLR 218, at 221:
"Applications under the Family Protection Act for further provision of maintenance are divisible into two classes. The first and by far the most numerous class consists of those cases in which, owing to the smallness of the estate and to the nature of the testamentary dispositions, the applicant is competing with other persons who have also a moral claim upon the testator. Any provision made by the Court in favour of the applicant must in this class of case be made at the expense of some other person or persons to whom the testator owed a moral duty of support. The estate is insufficient to meet in full the entirety of the moral claims upon it, in the sense that if the testator possessed more he would have been bound to do more for the welfare of his dependants. In such a case all that the Court can do is to see that the available means of the testator are justly divided between the persons who have moral claims upon him in due proportion to the relative urgency of those claims."
Maria's Substantive Claim - Principles
In relation to Maria's claim, being a claim by a widow of the deceased, the following principles are useful to remember.
In Luciano v Rosenblum (1985) 2 NSWLR 65, at 69-70, Powell J (as his Honour then was), wrote:
"It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of the testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies."
The Court of Appeal, in O'Loughlin v O'Loughlin [2003] NSWCA 99, approved the "broad general rule". However, the principle is not one of immutable application: Marshall v Carruthers [2002] NSWCA 47; Clifford v Mayr [2010] NSWCA 6, at [142]-[144].
The three elements identified by Powell J are not necessarily mutually independent. The court is not to approach the assessment of what is proper for an applicant by attempting precisely to replicate the way of life that the deceased and his, or her, spouse planned to have had he, or she, survived.
In Magill v Magill [2006] HCA 51; (2006) 226 CLR 551, Gleeson CJ, at 564 [24], said:
"The structure of marriage and the family is intended to sustain responsibility and obligation."
In Bladwell v Davis [2004] NSWCA 170, Bryson JA, who had reviewed the authorities stated, at [19]:
"In the application of the test in s 7, and of the exposition thereof in Singer v Berghouse by Mason CJ, Deane and McHugh JJ at 409-411 it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse, in full and with reference to the instant facts. Defeat of the opponents' claims does not necessarily follow from a demonstration, which the claimant can make, that all her needs with respect to income, home renovation, and provision for contingencies cannot be met if any provision is made for the opponents; indeed she could well demonstrate that even if the provisions of the will took effect without any modification, the provision for her is not adequate. That is not a demonstration that no claim by an eligible person can succeed; the claims and circumstances of the opponents also have to be weighed, and they too have their needs and merits."
Ipp JA added, at [2]:
"I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others."
Maria rejected the alternative suggested by Peter. She said, "I won't go there. I want to be living in a flat. I want to be on my own". She also stated that she had been to St Sergius to visit sick friends; believed that it was a facility which catered for the infirm; that Cabramatta was a long way from her friends and support network, and also from where she had lived for almost the whole of her life in Australia; as she does not drive, she was likely to lose these friends and support network; and, although there was a Russian Orthodox Church next door to St Sergius, it was not the Russian Orthodox Church that she regularly attended. She stated, genuinely I thought, "I grow sad just thinking about this."
However, Maria did not rule out the possibility of moving to an independent living unit in an aged care facility. She stated, in an affidavit sworn on 16 July 2014, that she had made enquiries into St Joseph's Village, a residential aged care facility, in Auburn. She stated that she would require the same amount by way of capital sum, plus an income of $157 per fortnight in maintenance fees.
During submissions, counsel for Maria stated that the amount she required by way of provision, in lieu of her entitlement under the Will of the deceased, would be $350,000 ($300,000 for accommodation plus $50,000 in the form of a capital fund). This equates to slightly more than 50 per cent of the net proceeds of sale of the Lidcombe property.
Gennady's income is derived solely from a Centrelink age pension (plus pension supplement and clean energy supplement). The pension is, ordinarily, about $827 per fortnight. Gennady gave evidence that, from 8 November 2013, his pension had decreased in order to account for an advance payment, made to him by Centrelink, of $1,170. He currently receives in the order of $737 per fortnight.
He says, and I accept, that he does not have a current earning capacity.
Gennady's only assets were said to be a motor vehicle ($2,500) and an electric bicycle ($300). His bank account statement, for the period ending 11 April 2014, revealed a balance of $87.
There was a similar balance disclosed in a number of previous bank statements. He says:
"I have not much in my bank account, because I take out the money in cash when the pension comes into the account. I usually have about $5 in my account the day before pension day".
Gennady does not own any real estate and does not currently pay rent for accommodation. Rather, he lives rent-free with a friend, Ms Lida Ribalkina. He assists around the house, for example, by doing general repairs, chopping firewood, picking up washing off the line and occasionally mowing the lawn. He also contributes to the payment of electricity bills and rates. However, he says that his contributions are not regular weekly payments. He says that when he has a "bit of free money I just help her out... to pay the bill because I'm using the electricity too". In any event, he says that his contribution, when made, only equates to about a third of the total amount due. He does not contribute to water bills.
He does his own grocery shopping and pays for his own mobile phone bill (about $70 per month).
He also gave evidence of recurring expenses for medications and medical appointments ($110 per month), pink slip and green slip costs (about $1,000 annually) and alcohol and cigarettes (about $230 per fortnight). His monthly expenditure was said to be approximately $1,378.
In July 2012, Gennady disclosed a credit card debt of about $6,500. However, Peter has assumed the liability for that debt and is now repaying the amount owed.
(There was a suggestion made, in submissions, by counsel for Maria, that Gennady may have some equity in Ms Ribalkina's home by virtue of some renovations that he completed when he first moved in. It is unnecessary to detail the nature of those renovations and the amount expended thereon as I am satisfied that Gennady does not have any such equity in that property.)
(It was also suggested that, perhaps, the relationship between Gennady and Ms Ribalkina was more than had been disclosed by Gennady. Having heard his evidence, I am satisfied that their relationship is one of sharing accommodation and some mutual support. However, I cannot, on the evidence, conclude that they are living in a de facto relationship.)
Gennady stated, in his affidavit, that he would require accommodation, in the form of the purchase of a unit. He states that he would also need to purchase whitegoods for the home, which items he estimates would cost about $10,000. If he rented, rather than purchased, accommodation, he estimates that the rent would be no less than $300 per week. Even a one-bedroom unit, he believes, would rent for $200 per week. He thinks that he would be entitled to rental assistance, which would mean that he would require at least $150 per week from another source.
In addition, he states that he needs a car ($25,000) and that he would like to go on a holiday to Europe or China ($15,000).
Gennady states that, if any part of the provision that was made for him out of the estate of the deceased, was left on his death, he would make a Will leaving it to Peter's children.
Peter earns $1,457 per month, gross, from his position as a local councillor. He previously worked as a consultant for various companies but says that, now, he has "given up on business" and is, in any event, "unable to find suitable outside employment". He also does some work on the "hobby farm" property at which he lives with his wife but says that he does "not receive a separate income from [his] farm work".
I am, nevertheless, satisfied that Peter retains some earning capacity.
Peter says that he owns property with a value of $39,000, comprising cattle ($10,000), farm equipment ($22,000), a motor vehicle ($5,000) and cash in a bank account ($2,000). He says that he intends to sell the cattle at market rate when they attain the right age.
In oral evidence, Peter said that he has liabilities, in the form of personal loans, in the order of $88,000. He also said, of his financial situation, "We're two payments behind on the mortgage. We are in some financial stress".
I am not entirely satisfied that the evidence supports Peter's assertion. He gave evidence, during cross-examination, that he and his wife have been servicing the mortgage on the farm property, by making repayments of about $3,000 per month, with "funds... accumulated from some borrowings and from sale of assets". He accepted that neither the source, nor the value, of those accumulated funds had been disclosed to the court for the purpose of these proceedings.
There was other evidence revealing the sale of real estate owned by his wife and the use of the proceeds of sale, at least partially, to repay some debts.
(e) if the applicant is cohabiting with another person-the financial circumstances of the other person
There is no evidence that Maria is cohabiting with any person.
There is, as earlier stated, evidence that Gennady is cohabiting with Ms Ribalkina. There was no evidence from her revealing her financial circumstances. However, Gennady gave evidence that Ms Ribalkina owns the house in which they live and that her income is derived solely from an age pension but that, otherwise, he is unaware of her financial situation.
Gennady says that he and Ms Ribalkina share household expenses, as outlined above, but otherwise keep their financial affairs separate. He says that, sometimes, she gives him her bankcard so that he can withdraw funds from her account, for her, at a bank or ATM. However, they maintain separate bank accounts.
I am satisfied that, but for Ms Ribalkina's decision not to charge Gennady any rent for living in her home, her financial circumstances are not relevant to the claim for provision being made by Gennady.
I should mention, also, the following evidence given by Gennady which is relevant to this issue and also to Gennady's "needs":
"Q. The house in which you live that is owned by Lida, is it?
A. Yes, owned by her.
Q. You say she told you last week that you would have to leave?
A. Yes. This time she told me seriously.
Q. You think it is serious?
A. Yes.
Q. What do you think you will do when you leave?
A. I don't know. If I am going to rent a flat or something that costs over $300 a week and that's going to be nearly half of my pension. I mean, it's going to be, say, $600 [per] fortnight and I am getting only $840 so it's going to leave me $240, $120 a week to survive.
Q. You understand that the Lidcombe house is now going to be sold?
A. Yes, I understand that.
Q. And that from the proceeds of sale you are entitled to interest on a quarter of the proceeds of sale. Do you understand that?
A. Yes.
Q. At the moment the lawyers agree that what might be left for you is about $160,000 on the present estimates that they have worked out?
A. Hm mm.
Q. On my calculations with interest at 3 per cent, that would give you about $90 extra a week?
A. I understand.
Q. If you had that additional income would that help you rent a place?
A. Well, that depends on the Centrelink, if they going to - yeah, [it will] probably help, probably help because they give me allowance for renting the place then.
Q. And would you be prepared to rent a home, a flat?
A. A flat, yes."
Peter lives with his wife, Helen. She owns the farm property, near Wingham, a town near Taree, on the mid north coast of New South Wales on which they live. The farm property is said to be valued at $600,000. It is subject to a mortgage debt, in Helen's name, of $279,000. Peter says that "[t]he farm is not a commercial enterprise" and that "[f]or the last two years and for this year ... the farm has not produced a net income but rather, net losses".
Peter says that Helen does not currently work. She earns a small income from the farm property but is, otherwise, "unable to work because of repetitive strain injuries". She received a compensation payment, in this regard, in 2009 of about $30,000.
As was the case with Peter, I do not think that the disclosure of Helen's financial circumstances is entirely accurate. I refer to banking documents produced on a notice to produce and tendered as Ex. DPE4 and Ex. DPE5, respectively. The documents refer to various accounts in Helen's name, but she did not swear an affidavit that was read, or otherwise give evidence, in the proceedings.
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated
Maria does experience some physical health problems. She says: "I am not a healthy woman and suffer from Diabetes, Weeping Eyes, high blood pressure, back pain and Arthritis in the legs".
Ms Ardinghi who attended upon Maria, upon the instruction of her solicitors, in July 2013, provided evidence of her then medical status. Ms Ardinghi referred to the following as "current reported symptoms":
"(a) Ongoing pain to her lower and mid back. She reported that her pain worsens with the rain.
(b) She reported that she is unable to walk and stand straight.
(c) Numbness to her right toe.
(d) Right sided sciatica.
(e) Decreased energy.
(f) Poor sleep patterns.
(g) Restricted physical capacity including lifting, carrying and pushing/pulling objects.
(h) Reduced physical tolerance.
(i) Loss of independence in activities of daily living."
Maria was said to "consult with Dr Norman Lum on an ongoing basis to update her prescriptions and monitor her Diabetes and high blood pressure". She takes a number of different medications.
Gennady has had several operations on his legs and has some difficulty walking. He uses a walking stick to assist him in this respect. He also had a heart operation, in 2001, in which a coronary stent was inserted. He sees a variety of doctors and specialists concerning liver problems, bowel problems and prostate concerns. He takes medications for blood pressure and cholesterol.
Peter suffers from "a ruptured Achilles tendon, Sleep Apnoea [and] an Hiatal Hernia".
(g) the age of the applicant when the application is being considered
Maria was born in December 1927 and is 86 years of age. The parties agreed that her life expectancy was between 6.8 and 7.15 years.
Gennady was born in December 1945 and is 68 years of age.
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant
Maria says that she and the deceased "jointly saved" and spent money on household items and family outings. She looked after the home and, when she was able, did gardening and other maintenance around the Lidcombe property. She says that the deceased did not assist with homemaking duties.
She, otherwise, did not contribute financially to the building up of the deceased's estate.
Maria did, however, make a significant contribution to the deceased's welfare, especially during the final years of his life particularly as his health deteriorated. She says: "I was solely responsible for the care and welfare of my husband" and "I was required at this stage to attend to his every need". She says that the deceased was not admitted to a nursing home when he became unwell because of her care. He was ultimately admitted to a Hospital as a result of events beyond Maria's control.
In this regard, Ms Ardinghi's report includes the following:
"[Maria] reported that in 1997 her husband's health began to severely deteriorate. She reported that he was suffering from a heart condition, kidney problems, bladder problems and difficulty with his lungs. She reported that at this stage she was attending to his every need, which included changing his nappy, showering and feeding him. She reported that on top of this she was responsible for all the domestic duties, gardening and outdoor maintenance...
Ms Epov stated that she continued performing these tasks until her fall in 2005. Following the fall, her health started to deteriorate and she was unable to manage the heavier aspects of the house duties and the care of the deceased. She stated that towards the end of the deceased's life, nursing care to assist with the personal care tasks of the deceased was arranged by one of the deceased's sons."
Gennady made several improvements to the Lidcombe property including replacing the ceilings, tiling, and erecting a timber fence around the property. As his son, it is likely that Gennady also made some contribution to the welfare of the deceased.
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate
Maria acknowledges that the deceased allowed her to live in the Lidcombe property throughout their marriage and that she has continued to live there since the deceased's death.
As noted, Gennady also lived in the Lidcombe property, at various times during his life. He has not lived there for some years.
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person
There is some evidence about testamentary intentions other than as disclosed in the Will of the deceased.
Gennady gave evidence that the deceased and he had discussed the deceased's Will and that the deceased had told him that he and Peter would each receive 40 per cent of the estate, with Maria receiving 20 per cent, or that she could live in the Lidcombe property, or that they would have to provide her with accommodation. If Gennady predeceased the deceased, his share was to go to his nephew, Nicholas.
Gennady also gave evidence as follows:
"I believe that the deceased may have made another Will several years ago in which the deceased left the estate to Maria and Peter's children. The executor was to be the children's mother, Leanne Kerin. I was told about the existence of this Will by both Peter and Maria. There is no trace of this Will, though I believe Peter Epov had it."
Peter gave evidence that the deceased said to him, on more than one occasion, that he did not wish to go into a nursing home, and that after he died, he "wanted to be sure that the Lidcombe property would be available for Gennady to stay in". Peter states that, on some of these occasions, Maria was present.
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so
The deceased, partially, maintained Maria partly before death and during their marriage. Of course, she had lived with him from the time of their marriage in the Lidcombe property.
The deceased did not maintain Gennady for many years prior to his death, although, I have earlier mentioned Gennady residing with the deceased at different times.
(l) whether any other person is liable to support the applicant
Apart from the Commonwealth government's responsibility to continue to provide each of Maria, and Gennady, with a pension, there is no other person with a liability to support her or him. (I have earlier referred to the pension Maria receives from the Polish government.)
(m) the character and conduct of the applicant before and after the date of the death of the deceased person
An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate and proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased.
In Collicoat v McMillan [1999] 3 VR 803, at 817, Ormiston J wrote in relation to the manner in which an applicant's behaviour towards the deceased is to be considered:
"... Ordinarily each of the persons who have a statutory right to make application are entitled to have their position considered by a testator but their behaviour (right or wrong) towards the testator may only provide a basis for measuring appropriately the testator's obligation to make provision for each of those applicants. Their sins are irrelevant except insofar as a testator might properly take exception to their behaviour."
Whilst it is unnecessary for me to detail all of the specific allegations made by the various parties, I will summarise the significant aspects thereof.
Peter gave some evidence about the relationship between Maria and the deceased. He alleged that the relationship between Maria and the deceased was not "affectionate or loving" but was "arranged ... to assist her to stay in Australia". He says that, later, their relationship involved ongoing arguments and violence.
Gennady did not give evidence that echoed Peter's sentiments. The extent of his evidence regarding Maria's character is a reference therein to her as a "strong" woman with whom he gets on "fairly well".
Maria denied the allegations made by Peter. She said that she and the deceased "enjoyed a loving relationship based on both mutual support and care". In reply, she gave evidence as follows: "[the deceased] and I had a close and enduring relationship, and I was loyal to him during his illness up to his death".
Mr Smolonogov gave evidence of his observations of "how deeply [the deceased] cared for Maria, and how deeply she cared for him".
I note, again, that the marriage endured for 21 years.
There is evidence of three handwritten notes in the Russian language (a translation of each of which was in evidence), which Maria says that the deceased gave to her a few months before he died. The first, which bears the date "7.2.10" states:
"and I want to thank you mria [sic] for your help but this is all yours and do not give anything away and if the matter goes to court show them this letter but if they offer you housing commission don't go you will lose everything listen to me one last time and you will win everything and don't show this letter until the court case but he will be grabbing for the icons don't give them to him but when the court case is over give them to the church you may give the big wooden cups and spoons that is all don't be silly listen to me the fool
K. Epov*
Forgive me and farewell
7.2.2010".
The second, which is undated, states:
"In my life the one person I blame is Peter."
The third, which also is undated, states:
"maria thank you for the last days I am composing a letter to you if you have sense you will find it but don't hide it show it to everyone so that you are not blamed but remember yourself how you washed me and where you told me to go but that person is long gone and you will burn me and my ashes will be like dust in your eyes but fools don't kill themselves
maria please don't hurt belka she will not live too long she will run away or waste away from boredom
maria
don't touch me so you will not be the one to blame".
These writings do not support the version of Maria's conduct asserted by Peter.
Maria and Peter both gave some evidence about the relationship between Gennady and the deceased. Maria said the relationship was "volatile" and Peter described it as "turbulent". Both said that this was a result of Gennady's alcoholism.
Mr Smolonogov gave evidence of a conversation with the deceased wherein the deceased said: "I cannot help Gennady, I wish I could as he drinks too much and he is with the wrong people. Gennady doesn't listen to me and we only get into arguments if I mention anything so now I don't anymore".
While this does reveal some degree of conflict between the deceased and Gennady, it also displays a continued concern for Gennady's wellbeing.
Gennady does not deny that he had problems with alcohol in the past. However, he says that he is now in control of his alcohol consumption after continued advice from his treating doctors.
(n) the conduct of any other person before and after the date of the death of the deceased person
Peter said that he had a very close relationship with the deceased. He also said that, when he was not living in the Lidcombe property, he would visit regularly (sometimes staying overnight) and frequently telephone.
Later in the deceased's life, Peter says that he would often "drop everything" to attend to the deceased's needs.
Peter said that he assisted the deceased, because of his poor English language skills, as an "interpreter, negotiator, facilitator and later advisor", in filling out forms, taking him to medical appointments and explaining the content of mail and other documents. He stated that he assisted with the management of the bills of the deceased. When his mother was alive and when she and the deceased were both working, he would prepare her, and his, annual tax return.
There were about 370 pages of copy telephone records (part of Ex. DPE 3), but no reference was made to any of these records at any time during the hearing. A perusal of what are described as "summarised spread sheets" for the years 2008 to 2010, which are included, reveals many telephone calls and visits by Peter to the deceased. These documents suggest that he spoke with, and visited, the deceased more often than Maria asserts
In this respect, Maria denied the extent of the relationship between the deceased and Peter. She said that there was little contact between Peter and the deceased during the period in which she and the deceased were married. She said that, when there was contact, there were many arguments between them.
There is some support, in the second of the three writings referred to, of the view of Peter's conduct expressed by Maria.
(o) any relevant Aboriginal or Torres Strait Islander customary law
This factor is not applicable.
(p) any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered
Gennady gives evidence that, in about 1977, when his mother was alive, she and the deceased assisted Peter by giving him $5,000 as a deposit to purchase the house next door to the Lidcombe property.
Determination
Being an "eligible person" is a necessary precondition to the court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. In this case, there is no dispute that each of Maria and Gennady is an eligible person within the meaning of that term in s 57(1) of the Act.
There is also no dispute that Maria commenced her proceedings within the time prescribed by the Act. Whilst Gennady did not, I am satisfied that sufficient cause has been shown to enable his claim for a family provision order to proceed. As stated, there was no dispute about this. An order extending the time for the making of his application, to the date on which his Summons was filed, should be made.
Having established eligibility and that the proceedings were commenced within time, or that the time for the making of Gennady's claim should be extended, the first question for determination is whether, at the time the court is considering the application, adequate provision for the proper maintenance or advancement in life, of Maria, and of Gennady, has not been made by the Will of the deceased. This question is one of objective fact to be determined as at the date of hearing. Although an objective fact, the determination nonetheless involves an evaluative judgment.
Whether such provision has not been made for each requires an assessment of her, and his, individual financial position, respectively, the size and nature of the deceased's estate, the relationships between each and the deceased and the deceased's relationship with Peter, a person who has a legitimate claim upon the deceased's bounty, and the circumstances and needs of Peter: see Tobin v Ezekiel at [70]; McCosker v McCosker at 571-572; Singer v Berghouse at 210; and Vigolo v Bostin at [16], [75], [112].
Having considered the matters I am required to consider, I am satisfied that the deceased did not make adequate provision for the proper maintenance and advancement in life for each of each of Maria and Gennady by his Will.
In coming to this conclusion, I also have taken into account Peter's legitimate claims upon the bounty of the deceased and the obligation and responsibility that the deceased had to provide for him.
It is clear that Maria, upon the sale of the Lidcombe property, will have some "needs". As stated above, "need" in the context of the Act is not determined by reference only to minimum standards of subsistence. Nor is it limited to whether the applicant has, at the date of hearing, an immediate need for financial assistance with respect to her maintenance. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies. The term is also used in the in the sense of what is necessary for the applicant's "proper maintenance, education and advancement in life": Akkerman v Ewins [2003] NSWCA 190, per Tobias JA, with whom Beazley and Hodgson JJA agreed.
Maria is, currently, incapable of providing accommodation for herself. It is clear that the estimated amount that equates to her entitlement under the Will of the deceased will be insufficient to provide for accommodation. In addition, she has a need for a modest capital amount to provide for exigencies of life. She does not need additional income.
In the case of Gennady, his need is also for a small capital sum as well as an entitlement to have the capital to which he is entitled under the Will, if necessary, for his maintenance and advancement in life. There was really little opposition by Peter, who is the remainder beneficiary, to this proposition.
The more difficult question then arises, namely what provision "ought to be made for the maintenance, education or advancement in life" of each of Maria and Gennady, having regard to the facts known to the court. This involves "an instinctive synthesis that takes into account all the relevant factors and gives them due weight": Grey v Harrison. It is not a scientific, or arithmetic, exercise. Any provision that is made should be made in lieu of her, and his, entitlement under the Will (except, in the case of Maria, the accommodation that has already been provided) and should be borne out of the net proceeds of sale of the Lidcombe property.
I do not accept the submission that Maria should receive sufficient out of the estate to purchase accommodation in an area with which she is unfamiliar and which will not enable her easily to maintain her friendships and support system. The word "proper" must be remembered.
However, nor do I consider that any entitlement of Maria out of the estate that will follow, when the Lidcombe property is sold, necessarily should be an absolute capital sum to be used, by her, for the purpose of enabling accommodation to be purchased.
Doing the best I can, I am of the view that, in lieu of her entitlement under the Will of the deceased, other than the entitlement in the Will, to remain living in the Lidcombe property until a date agreed to by the parties prior to its sale, Maria should receive an amount, by way of an absolute provision, which equates to 33.33 per cent of the net proceeds of sale of the Lidcombe property. She could use a part, or the whole, of the amount received to purchase accommodation. In addition, she should receive, by way of an interest free loan, out of Peter's share of the net proceeds of sale, an amount that equates to 16.67 per cent of the net proceeds of sale of the Lidcombe property. That amount should be repayable to Peter within 3 months of Maria's death, and if not so paid, interest thereon, calculated at the rate prescribed in the Probate and Administration Act 1898 (NSW), on unpaid legacies, should be paid, calculated from that date (3 months after her death) until the date of repayment. The amount loaned should be secured in a manner satisfactory to Peter, or, if there is no agreement, as ordered by the court.
Using the estimates previously identified, the amount that Maria would receive absolutely may be estimated to be $225,644. The amount she would receive, by way of secured loan, may be estimated to be $112,855. (Of course, these estimates may change when the actual sale price of the Lidcombe property is determined.)
Doing the best I can, I am of the view that, in addition to his entitlement under the Will of the deceased, Gennady should receive an amount out of the estate, by way of an absolute provision, which equates to 5 per cent of the net proceeds of sale of the Lidcombe property. His entitlement, otherwise, under the Will should not be increased, but Peter, as trustee, should be given a power to advance capital for Gennady's maintenance and advancement in life out of the 25 per cent share of the net proceeds of sale which is to be held for him for life. Under the Will, Gennady is entitled to the income. (The overall entitlement should be described as "in lieu of his entitlement under the Will of the deceased.)
Using the estimates previously identified, the amount that Gennady would receive absolutely may be estimated to be $33,850. The amount to continue to be held on trust for life may be estimated to be $169,250. (Of course, these estimates may change when the actual sale price of the Lidcombe property is determined.)
As stated, the trustee should have a discretionary power of advancement as to capital, but not as to the payment of the net income, which should be paid to Gennady at half yearly rests.
The balance of the net proceeds of sale, after the payment of the costs of the proceedings, which, unless any party wishes to submit otherwise, should be calculated on the usual basis, may be paid to Peter. He will, of course, be entitled to whatever of the share of capital held on trust for Gennady, is left on Gennady's death.
(I should mention that I raised with Gennady's and Peter's counsel whether someone other than Peter should be appointed by the court to administer the trust, because of the potential conflict of interest that could exist with Peter as the trustee and as the remainder beneficiary. They both stated that there was no need for a different trustee to be appointed as Peter has previously acted, and would continue to act, in Gennady's best interests.)
In calculating the net proceeds of the Lidcombe property, I have noted the parties' agreement on the categories of expenses referred to (but not, unless agreed, the quantum) to be paid out of the gross proceeds of sale. Peter, as the sole executor, should have control of the sale, although, as a matter of comity, he should advise the solicitors acting for each of Maria and Gennady, of what is being done in that regard. The Lidcombe property should be put on the market for sale as soon as reasonably possible, but no later than 3 months from the date of making orders, or such other time as the parties are able to agree in writing. Provided the amount to which each of Maria and Gennady is entitled is paid, within 7 days of completion of the sale of the Lidcombe property, no interest is payable on the amount to be paid. Otherwise, interest at the rate prescribed under s 84A(3) of the Probate and Administration Act is payable from that date. (Until a reasonable time of completion of the sale, Maria should be able to reside in the Lidcombe property.)
I am also prepared to make an order granting leave to any party to approach the court to make additional orders for the purpose of giving effect to the family provision orders to be made.
Finally, there should be an order included in the Short Minutes of Order that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 (NSW) (rule 31.16A and rule 33.10), and Practice Note No SC Gen 18 (Para 26) following the determination of the costs of the proceedings.
I direct the parties to deliver to my Associate, within 10 days, agreed Short Minutes of Order, in each matter, giving effect to these reasons or, if that is not possible, to provide competing versions. If possible, agreement should be reached on the costs orders to be made and, if it is at all possible, perhaps, agreement could be reached on the quantum of costs. This may avoid further disputes at a later time in determining the net proceeds of sale. However, in the event that agreement cannot be reached, the estimated costs of Maria and of Gennady should be used as a guide to determine the quantum of the net proceeds of sale. Adjustments may be made once the formal assessment process has been completed.
I shall stand the proceedings over for any argument as to costs to a convenient date no earlier than 10 days from today.
In the event that the parties are able to reach agreement on the terms of the Short Minutes of Order, in each matter, and the costs orders, I shall deal with the matter in Chambers without the need for a further appearance.
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Decision last updated: 14 August 2014
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