Gill v Smith
[2007] NSWSC 832
•1 August 2007
CITATION: Alison Jayne Gill and 2 Ors v Carolyn Smith [2007] NSWSC 832 HEARING DATE(S): 14, 19 and 20 June 2007
JUDGMENT DATE :
1 August 2007JUDGMENT OF: Associate Justice McLaughlin DECISION: 1. I order that each Plaintiff receive from the notional estate of the late Michael John Gill (“the Deceased”) a legacy in the sum of $100,000, each such legacy not to bear interest if paid on or before 1 September 2007, and if not so paid, to bear interest at the rates prescribed for unpaid legacies by the Wills, Probate and Administration Act 1898.; 2. I order that, to the extent of the totality of the foregoing legacies, the property situate at and known as 46 Lillihina Avenue, Cromer be designated as notional estate of the Deceased.; 3. I order that each of the aforesaid legacies be paid to the Public Trustee, to be held by him until each Plaintiff respectively attains the age of 18 years.; 4. I order that, in respect to each of the aforesaid legacies, the Public Trustee have a power of advancement in respect both to the corpus of such legacy and to the income thereon for the benefit each Plaintiff, until such Plaintiff attains the age of 18 years; 5. I reserve liberty to apply in respect to order 4 hereof.; 6. I order that the Defendant pay the costs of the Plaintiffs.; 7. I order that the maximum costs which the Plaintiffs may recover from the Defendant not exceed $40,000 and that such costs not include the costs of and incidental to following affidavits: affidavit of Judith Christine Gill sworn 10 June 2005; affidavit of Judith Christine Gill sworn 10 June 2006; affidavit of Wendy Lorraine Lambert sworn 19 June 2006; affidavit of Graeme Causon sworn 27 June 2006; affidavit of Nicola Estelle Causon sworn 29 June 2006.; 8. I direct the Registrar to transmit a copy of these reasons for judgment and orders herein to the Tutor for the Plaintiffs, Judith Christine Gill, 5 Mintwood Place, Molendinar 4214, Queensland; and to the Defendant, Carolyn Smith 46 Lillihina Avenue, Cromer 2099, New South Wales.; 9. The exhibits may be returned. CATCHWORDS: Succession. Family Provision. Claim by three infant children. Financial and material circumstances of Plaintiffs. Whether Plaintiffs have been left without adequate provision for their proper maintenance, education and advancement in life. Testimentary provisions of Deceased in favour of Plaintiffs. Deceased after making his will dealt with assets so that they passed to Defendant, and in consequence Plaintiffs received nothing. Notional estate. Prescribed transactions. Competing claim of Defendant. - Practice and Procedure. Costs. Excessive costs incurred by each party. Capping order. Costs inflated by affidavits irrelevant and objectionable in form. Usual costs orders in Family Provision claims. Present litigation in nature of adversarial proceedings. LEGISLATION CITED: Family Provision Act 1982
Uniform Civil Procedure Act 2005CASES CITED: Blore v Lang (1960) 104 CLR 124
Petrohilos v Hunter (1991) 25 NSWLR 343
Singer v Berghouse (1994) 181 CLR 201
Vigolo v Bostin (2005) 221 CLR 191
Re Sherborne Estate (No 2); Vanvalen v Neaves [2005] NSWSC 1003PARTIES: Alison Jayne Gill (First Plaintiff)
Kerryn Anne Gill (Second Plaintiff)
Steven John Gill (Third Plaintiff)
Carolyn Smith (Defendant)FILE NUMBER(S): SC 2107 of 2005 COUNSEL: Ms S. Sirtes (Plaintiffs)
Mr D. Liebhold (Defendant)SOLICITORS: DK Lawyers (Queensland) by their agents, Teece Hodgson & Ward (Plaintiffs)
Kemp Strang (Defendant)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
ASSOCIATE JUSTICE McLAUGHLIN
Wednesday, 1 August 2007
2107 of 2005 ALISON JAYNE GILL and ORS –v- CAROLYN SMTH
JUDGMENT
1 HIS HONOUR: These are proceedings under the Family Provision Act 1982.
2 By summons filed on 24 March 2005 Alison Jayne Gill, Kerryn Anne Gill and Steven John Gill, claim an order for provision for their maintenance, education and advancement in life out of the estate and/or the notional estate of their late father Michael John Gill (to whom I shall refer as “the Deceased”). The Plaintiffs, each of whom is an infant, bring the proceedings by their Tutor, Judith Christine Gill, who is their mother.
3 The Deceased died on 15 December 2004, aged 47. The Deceased left a will dated 4 September 2004. For reasons which will shortly emerge, the executors named in that will, Geoffrey Hodge and Andrew McLellan, neither sought nor obtained a grant of probate thereof.
4 On 7 October 2005 letters of administration, pursuant to section 41A of the Wills, Probate and Administration Act 1898, of the estate of the Deceased were granted to Judith Christine Gill, Tutor of the Plaintiffs, for the purposes only of an application being made under the Family Provision Act.
5 The Deceased had been married once only, to Judith Christine Gill, on 29 March 1986. Of that marriage were born three children, Alison Jayne (who was born on 10 October 1989 and is presently aged 17) and Kerryn Anne and Steven John (each of whom was born on 11 August 1994 and is presently aged 12). They are the Plaintiffs in the present proceedings.
6 The Deceased and his wife had separated on 14 November 1997, and proceedings in the Family Court of Australia were instituted on 10 June 1998. The Deceased and his wife were divorced on 2 April 2000.
7 The Deceased entered into a relationship with Carolyn Smith, the Defendant to the present proceedings, in 1996 and lived with her in a de facto relationship from October 1997 until his death seven years later.
8 To the extent that they were enabled to do so, despite the animosity of their mother towards their father’s new partner (and, it would seem, towards their father) and the animosity of the Defendant towards their mother, the Plaintiffs, who continued to reside with their mother, appear to have maintained a close and affectionate relationship with the Deceased after the separation of their parents.
9 In April 2003 the Deceased and the Defendant as tenants in common had acquired a house property situate at and known as 46 Lillihina Avenue, Cromer. The acquisition of that property was the last in a series of property transactions in which the Deceased and the Defendant had jointly engaged and to which each had contributed from assets owned respectively by him or her at the commencement of their relationship.
10 By his will the Deceased gave to the Defendant his interest in the Cromer property, including the furniture, furnishings and contents therein, as well as any motor vehicle owned by him. He gave the balance of his estate equally among his three children, to be paid to them upon each attaining the age of twenty-five. The will contained the following statement, as clause 6:
- I EXPRESS a wish that upon each of my children attaining the age of 25 years and receiving their share under this my will that such child apply the proceeds of such share towards the purchase of real estate property or capital investment.
11 The Deceased had been diagnosed with cancer in August 2004, shortly before he made his will. On 4 September 2004 (that being the same day upon which he executed his will) the title to the Cromer property was converted from tenancy in common to joint tenancy.
12 At the time when he executed his will on 4 September 2004 the Deceased had various superannuation entitlements. However, between the execution of his will and his death the Deceased entered into a number of transactions regarding those superannuation entitlements, the ultimate effect of which was that by the time of the Deceased’s death the Defendant had either received or had become entitled to receive the Deceased’s superannuation payments totalling almost $372,000. The Deceased also owned shares at the time of his will. He subsequently sold those shares, the proceeds of sale (in an amount of $19,215) being deposited in a joint account with the Defendant, to whom, upon the Deceased’s death, they passed by survivorship.
13 The practical consequence of, first, the Cromer property being held by the Deceased and the Defendant as joint tenants at the time of the Deceased’s death and the interest of the Deceased therein passing by survivorship to the Defendant, and of, second, the various inter vivos transactions effected by the Deceased regarding his superannuation entitlements and his shareholdings was that, for all practical purposes, there were no assets in the estate of the Deceased which would have justified the executors seeking a grant of probate of the will. Further, from a practical point of view, the Plaintiffs received nothing under the terms of the will.
14 It was recognised both by the Plaintiffs and by the Defendant that, if any order for provision is ultimately to be made in favour of the Plaintiffs, any such order can have effect only if the Plaintiffs are able to avail themselves of the concept of notional estate under Part II, Division 2 of the Family Provision Act.
15 In order to enable the Court to calculate the value of the estate or the notional estate which may be available for distribution, each party is required (pursuant to Practice Note SC Eq 1, paragraph 56) to file and serve an affidavit of the solicitor for that party setting forth an estimation of the costs of that party. That is because, in the usual claim under the Family Provision Act, the applicant, if successful, is entitled to an order that his or her costs be paid out of the estate, whilst the defendant (normally the executor) is entitled, irrespective to the outcome of the proceedings, to receive his or her costs out of the estate. The circumstances of the instant case, however, are such that, if the Plaintiffs be successful there is no practical significance in costs orders being made out of the notional estate of the Deceased, especially since the present litigation has been conducted as adversarial proceedings between the Plaintiffs and the Defendant.
16 In the instant case, it has been estimated that the costs of the Plaintiffs for a two day hearing will total $66,700. The costs of the Defendant for a two day hearing (as the present was originally expected to be) were estimated by her solicitor (by affidavit of 13 June 2007) to be $84,000. It was estimated by Counsel for the Defendant that for a hearing which went into a third day those costs would total about $104,000 (of which the defendant has already paid about $47,400). That is, the total costs of the proceedings are estimated to be almost $151,000 for a two day hearing, and well in excess of $171,00 for a three day hearing. I shall later in this judgment return to the matter of the costs of the proceedings.
17 This is essentially a simple case. The Deceased left three young children (who were aged eleven, ten and ten at the time of his death). Although he intended by his will that they should receive some benefit from his estate, his own conduct has deprived them of receiving any such benefit.
18 The essential matters which the Court must decide are, first, the needs of the Plaintiffs; and then the question of whether, in the circumstances of this case, it is appropriate to proceed to an application of the provisions of the Family Provision Act relating to notional estate.
19 Those essential issues are, in fact, recognised by the Joint Submissions provided by Counsel for the respective parties at the commencement of the hearing, pursuant to Practice Note SC Eq 1.
20 It is appropriate that, at the outset, I should refer, at least in summary, to certain aspects of the procedural history of this matter.
21 The matter came before me at call-over on 6 December 2006, when it was specially fixed for hearing to commence on Thursday, 14 June 2007, the estimated length of hearing being one day plus. At the call-over on 6 December 2006 each party was represented by the same Counsel who subsequently appeared for that party at the hearing.
22 To the time of the call-over no affidavit evidence had been filed on behalf of the Defendant. Accordingly, Counsel for the Defendant sought, and obtained, leave for the Defendant to file any affidavits on or before 13 December 2006. No affidavits were filed on behalf of the Defendant by that date or, indeed, by any other date before the hearing.
23 At the commencement of the hearing the Defendant sought to file in Court a considerable quantity of affidavit evidence. No explanation was offered on behalf of the Defendant as to why, pursuant to the leave granted to her more than six months earlier, her affidavits had not been filed on or before 13 December 2006. The filing of that evidence was opposed by the Plaintiffs. In the event, however, I granted to the Defendant leave to file those affidavits. One consequence of that leave was that at 3.26 pm on Thursday, 14 June 2007 the hearing was adjourned to Tuesday, 19 June 2007, when it occupied from 10 am to 4.14 pm, and then to Wednesday, 20 June, when it occupied from 10 am to 11.18 am.
24 Despite this being essentially a simple case, the hearing of which was originally estimated to occupy between one and two days, that simplicity, and the essential issues, were totally and absolutely obfuscated by and submerged in the poisonous relationship which has over many years obtained between the Tutor of the Plaintiffs, being the former wife of the Deceased, and the Defendant, being the de facto spouse of the Deceased. Six affidavits of the Tutor were filed on behalf of the Plaintiffs, those affidavits (together with annexures thereto) extending over a total of 72 pages.
25 Three affidavits of the Defendant were filed on her behalf, those affidavits (together with annexures thereto) extending over 42 pages.
26 Much of the affidavit evidence of the Tutor and of the Defendant and, indeed, much of the evidence set forth in other affidavits filed on behalf of the respective parties, related, not to the material circumstances of the Plaintiffs and to their present and future needs, or to matters in any way relevant to whether property held by the Defendant should be designated as notional estate of the Deceased. Much of the affidavit evidence concerned incidents during the lifetime of the Deceased (and even after his death), intended by the Tutor to show the Defendant in the worst light possible, and intended by the Defendant to show the Tutor in the worst light possible. Many of those incidents related to occasions when the Plaintiffs were on access visits to the Deceased, pursuant to orders of the Family Court of Australia.
27 Most of that material relating to such incidents was totally irrelevant to the present application of the Plaintiffs for an order for provision for their maintenance, education and advancement in life out of the estate and/the notional estate of their late father.
28 In addition to that lack of relevance, substantial parts of the affidavits of the Defendant were objected to by the Plaintiffs and, in consequence, either were not read or were rejected. Those objections were based largely on the form of the affidavits, which appear to have been prepared (I do not say drafted, or even settled) by persons lacking the faintest understanding, not only of the issues involved in the present proceedings, but also of the fundamental rules of evidence, especially in relation to hearsay evidence.
29 In consequence, although the hearing commenced at 10 am on Thursday, 14 June 2007 (the Court having reserved also the following day, Friday, 15 June), the entirety of that day (until 3.26 pm, when in consequence of the late filing of affidavits on behalf of the Defendant the hearing was adjourned to Tuesday, 19 June 2007) was occupied in objections to admissibility of affidavit evidence and argument and submissions regarding the late filing of affidavits.
30 I would here also observe that substantial parts of the affidavits of the Tutor suffered from the same defects as those of the Defendant, but were not objected to. Had they been, I would have rejected those parts also.
31 I propose, in due course, to make appropriate orders which will ensure that neither party has to bear the costs of the other party of a considerable part of the affidavit evidence which has been filed in this matter. If members of the legal profession choose to have their clients swear affidavits which, first, are largely inadmissible in form, and, second, not only do not address the issues which the Court must decide, but mainly deal with incidents which are totally irrelevant to the proceedings, the legal representatives of the parties should not receive financial benefits resulting from their incompetence.
32 For an essentially simple case (which should have occupied no more than two hearing days, but, in the event, extended into a third day), I consider costs totalling almost $151,000 for a two day hearing, and well in excess of $171,000 for a hearing which went into a third day, to be quite outrageous. Those costs have been unnecessarily inflated by the preparation of the affidavits to which I have referred. The solicitors for the respective parties have allowed this litigation, a claim by three infant children for provision out of the estate or notional estate of their late father, to be used as a vehicle by the Plaintiffs’ mother and by the Deceased’s de facto widow to ventilate the animosity which each of those women manifests towards the other, and as an opportunity to settle old scores between them. The legal representatives of the parties were under an obligation to ensure that the processes of the Court and the claim of the three infant Plaintiffs should not be misused for such purposes. Especially, it must be emphasised, the legal representatives of the parties, having thus misused the litigation, should not be allowed to profit from that misuse.
33 The Court has ample power to limit the amount of costs that may be recovered by one party from another (see Uniform Civil Procedure Act 2005, section 60; Uniform Civil Procedure Rules 2005, Rule 42.5; Re Sherborne Estate (No 2); Vanvalen v Neaves [2005] NSWSC 1003). I propose, therefore, that the totality of the costs and disbursements which either party can recover from the other party be limited to a total sum of $40,000. I consider that sum to be a generous amount for the costs and disbursements of each party if the present proceedings had been competently and efficiently conducted by the respective legal representatives of the parties. The effect of those orders will be that neither party will be entitled to recover any amount exceeding $40,000 from the other party.
34 (I would also here observe that section 99 of the Uniform Civil Procedure Act empowers the Court, in certain circumstances, to make an order which disallows the whole or any part of the costs of the proceedings as between the solicitor and the client.)
35 So far as can be elicited from the prolix and voluminous (and often irrelevant) affidavits of their mother, the financial and material circumstances of the Plaintiffs are as follows.
36 The Plaintiffs reside with their mother and are totally dependent upon her. They have no assets, other than clothing and personal possessions. The Plaintiffs and the Tutor reside in a house property situate at and known as 5 Mintwood Place, Molendinar, in Queensland. That property is unencumbered, and to it the Tutor ascribed a value of about $700,000. The Tutor previously owned an investment property at 4 Oakridge Place, Molendinar, which she recently sold for almost $372,000. That property was subject to a mortgage in an amount of $246,000. Upon the net proceeds of sale, in an amount of about $115,000, the Tutor will pay capital gains tax.
37 The Tutor also owns an investment property, being unit 13, 1 Pinnaroo Street, Santa Barbara (the location of which property was also in the evidence referred to as Sanctuary Shores). To that property the Tutor ascribed a value of $110,000. That property is subject to a mortgage, presently in an amount of $96,000. It is rented out by the Tutor for holiday lettings.
38 The Tutor, who is a teacher by profession, gave evidence of her income and her outgoings, of her assets and liabilities. The only details of those which are relevant to the claim of the Plaintiffs relate to the Plaintiffs’ expenses, which, according to the Tutor, total a little over $35,000 a year.
39 According to the Plaintiff, Alison has saved money from birthday gifts and pocket money, and from those savings has lent to the Tutor amounts totalling $2000, which have been used by the Tutor for the payment of household expenses and outgoings.
40 Alison formerly attended Emmanuel College, a private school on the Gold Coast. She has completed her schooling and is now, aged 17, pursuing a Bachelor of Arts combined with a Bachelor of Education degree at the Carseldine Campus of the Queensland University of Technology, which course she commenced this year. The distance between the Molendinar residence of the Plaintiffs and the university campus at which Alison is enrolled is about 150 kilometres. It is necessary for Alison to make that journey three days a week, to attend classes. To enable Alison to do so, the Tutor purchased for her use a 2002 Commodore wagon VX motor vehicle for $14,000. The Tutor pays the insurance and the registration of that vehicle, but Alison pays for petrol, which costs her about $120 a week.
41 Alison’s university fees are $4600 a year. She has purchased text books at a total cost of $250 for the first semester of 2007. Alison has been successful in obtaining a partial tuition scholarship, which contributes $2120 a year towards the cost of her tuition at the university. She has also received another scholarship, from a computer company, which was intended to provide her with a computer. However, as she already owned a computer, she was able to accept a cash sum of $225 in its place.
42 From an investment made by the Tutor in ASG (which I understand to be the Australian Scholarship Group, to which entity further reference will be made), Alison receives, for her university education, about $500 a semester, that being calculated on a total amount of $3000 to be paid over six semesters.
43 Depending upon changes in subjects and timetable, it may become necessary for Alison to attend university classes on four days a week.
44 Alison has attempted to find employment, to assist with her university expenses, including the cost of travel to classes. She has applied for various casual and part-time positions, but has thus far not been successful. On an irregular basis she does some child minding work, for which she is paid an hourly rate of $11 for up to ten hours a week.
45 Since the latter part of 2006 it has been necessary for Alison to wear spectacles all the time. The net cost of those spectacles, after a health benefit rebate, was $400.
46 Evidence was given by the Tutor, but not by Alison herself, concerning various health problems which she has encountered, especially attention deficit hypersensitivity disorder (ADHD), for which she was diagnosed at the age of three years, and for which she takes medication. She has also been prescribed anti-depressants.
47 Steven, who is presently aged 12, attends Emmanuel College, where he is now in grade 8. He appears to be doing very well academically. He suffers from asthma, for which he on occasion uses a puffer. Steven has also suffered from nose bleeds, which condition has required surgery. He has also suffered from problems with his ears. The Tutor gave evidence of Steven’s aspirations for tertiary education (especially in the field of computer animation), and the various courses available and the costs thereof.
48 Kerryn, who formerly also attended Emmanuel College, now attends Aquinas College, on the Gold Coast (where the Tutor teaches). She is attaining average academic results. According to the Tutor, Kerryn suffers from a learning disability known as visual perception learning, and is under the care and treatment of a paediatrician in this regard. She also attends an occupational therapist on a weekly basis. Kerryn has been diagnosed as suffering from ADHD, and takes medication for that condition. She also has been treated by an ear, nose and throat specialist, and takes medication for an allergy to dust. Kerryn also wears spectacles. Both Alison and Kerryn attend upon a podiatrist. Each of those Plaintiffs suffers a disability in her knees, requiring surgery (which Alison has already undergone).
49 The Tutor gave evidence concerning the medical expenses incurred by the Plaintiffs and the cost of school fees (totalling $10,000, at a concession rate for the year in which the Deceased died, but expected to be higher in 2006 and in subsequent years). It was the Tutor’s estimation that in 2006, when all three children would still be at school, their total school fees would be $14,152; from 2007 to 2009, when Kerryn and Steven would be in years 8, 9 and 10, their total school fees would be $10,788 a year; and from 2010 to 2011, when Kerryn and Steven would be in years 11 and 12, their total school fees would be $11,588. The Tutor said that those calculations did not include any increase in the current fees payable.
50 The Tutor gave evidence concerning other needs of the three children, including additional computers for Steven and Kerryn and the cost of replacement of those computers.
51 The Tutor has a family membership in an organisation called Queensland Association for Gifted and Talented Children Incorporated, Gold Coast Branch, at which Steven and Kerryn attend sessions about once a month. For that membership, there is an annual subscription fee, and the cost of each session is $13 per child. The Tutor also contributes to a scholarship fund for the children, known as the Australian Scholarship Group. She said that that fund was originally contributed to by the Deceased and herself when Alison was only three years of age, and that since then she has maintained that scholarship as best she can. The Australian Scholarship Group, in which in 2000 she enrolled Steven and Kerryn, pays money towards the ongoing education for the children once they reach a certain level. It is the Tutor’s understanding that for Steven and Kerryn the Scholarship Group will contribute towards the cost of their secondary and tertiary education, whilst for Alison the Group will only contribute towards Alison’s tertiary education. The contributions made by that Group, in an amount of about $2000 a year per child, are usually not used for the private education of the children, rather for their uniforms, books and extra-curricular activities.
52 It is appropriate, therefore, that I should set forth details of the financial and material circumstances of the Defendant.
53 The Cromer property was purchased by the Deceased and the Defendant in April 2003. That purchase was funded by direct contributions of $76,506 made by the Defendant, joint borrowings by the Deceased and the Defendant of $110,000 from the Commonwealth Bank, and the balance being paid from a joint AwardSaver account with the Commonwealth Bank (which were stated by the Defendant to have come mostly from the proceeds of sale of land which she and the Defendant had purchased in February 2002 at 7 St Andrew’s Close, Belrose, and which was sold shortly before the purchase of the Cromer property was settled). After settlement of the purchase of the Cromer property the Deceased and the Defendant contributed equally to the regular mortgage repayments, each for that purpose depositing $220 a fortnight in their joint Streamline account (formerly AwardSaver account). Those weekly contributions continued until shortly before the death of the Deceased. The mortgage loan was repaid on 20 December 2004 by the payment by the Defendant of $89,561 from her AwardSaver account, and the balance being paid from the joint Cash Management and Streamline accounts maintained by the Defendant and the Deceased.
54 According to the Defendant she has the following assets:
House property at 46 Lillihina Avenue, Cromer, to which an estimated value of $750,000 is ascribed
Lexus IS 250 motor vehicle, to which an estimated value of $45,000 is ascribed
Superannuation, 30 March 2007 $84,980
Streamline account, 31 May 2007 $11,458
MLC MasterKey account, 31 March 2007 $150,006
Account held by Defendant’s brother, estimated $130,256
Kemp Strang Trust account $26,059
Total $1,197,762
Credit cards, estimate $10,000She said that her liabilities were as follows:
Line of credit secured over the Cromer property,
31 May 2007 $34,797
Total $44,797
55 The Defendant’s affidavit of 5 May 2006 disclosed savings and moneys held on her behalf totalling in excess of $400,000. No adequate explanation was offered as to how that amount had fallen to about $318,000, as appears in her affidavit of 13 June 2007.
56 The Defendant is employed as a human resources manager, receiving an annual total income package of $160,000 plus 10 per cent superannuation, which gives her a net weekly income of $2,067. She also receives the use of a company motor car and a mobile telephone. She gave evidence of the details of her expenses and outgoings, totalling $2,157 a week. She said that the excess of expenditure over income was being funded from her savings account and the line of credit.
57 In regard to those expenses and outgoings, however, it should be appreciated that the most significant, in an amount of $577 a week, consists of a direct transfer to the Defendant’s own MLC MasterKey account. That is not an expense of the Defendant; it is merely the transfer of part of her income to another account which she maintains. It certainly cannot be characterised as an expenditure of the Defendant.
58 Evidence was given that the Defendant suffers from depression, for which she takes medication and receives counselling. Following the death of the Deceased the Defendant did not resume work for two months, and then only on a casual basis. That employment was subsequently terminated, and later an application by her for income protection insurance was declined. However, the Defendant has been employed in her present highly paid and responsible position since August 2005.
59 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiffs.
60 I have already referred to the considerable quantity of irrelevant material which was presented in the affidavit evidence of each party. In this regard it is appropriate that I should set forth the following salutary admonition of Windeyer J in the High Court of Australia in Blore v Lang (1960) 104 CLR 124 at 137,
- The jurisdiction under the Testator's Family Maintenance Act [the statutory predecessor to the Family Provision Act ] is to provide for deserving persons according to their requirements, not to reward past services. This is sometimes overlooked and evidence concerning the present and probable future requirements of the applicant is subordinated to or submerged in evidence of past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasized at the expense of evidence directed to the central issues in the case.
61 I have already referred to the apparent underlying motivation for much of that irrelevant evidence, which has had the effect of wasting the valuable and scarce resources of the Court and which, for a very simple case, has resulted in vastly inflated and unjustifiable costs being visited upon each party.
62 I have received a number of written submissions from Counsel for the respective parties. Those documents will be retained in the Court file. In the Joint Submissions to which I have already referred, the Defendant acknowledges that the Plaintiffs have a claim upon the bounty of the Deceased. However, the Defendant does not concede that the Plaintiffs have relevant need. I would in this regard observe that the statute does not confine an order for provision to the maintenance of an applicant, it also encompasses the order for provision being made for the applicant’s education and advancement in life. Thus the need of the Plaintiffs is not confined to their need for maintenance, but (especially in the case of infants) extends also to their need for education and advancement in life.
63 The fact that the Plaintiffs are totally dependent upon their mother for their present maintenance does not deprive them of an entitlement to look to the Deceased for provision for their future education and advancement in life. To the extent that the resistance by the Defendant to the Plaintiff’s claim is grounded upon a submission that the needs of the Plaintiffs are adequately being met by their mother, the Tutor, and that, in consequence, it is not appropriate for them to look to the estate or the notional estate of their late father, I reject that submission. (In this regard see Petrohilos v Hunter (1991) 25 NSWLR 343 at 346 per Hope A-JA (with whom Clarke and Sheller JJA agreed), concerning the dependence of young children on their mother as well as on their father.)
64 It will be appreciated that, had the Deceased in the three months before his death not entered into transactions which had the effect of depriving his estate of at least one half of the value of the Cromer property ($375,000), as well as of his superannuation entitlements (totalling almost $372,000) and the proceeds of his shareholding ($19,215), the effect of his testamentary dispositions would have been that (after the various gifts to the Defendant, including the Deceased’s interest in the Cromer property) the residue of his estate would have consisted of the foregoing amounts of superannuation and the proceeds of the sale of shares, totalling about $391,000. Under the terms of the Deceased’s will the Plaintiffs would have been entitled to that sum, each of the Plaintiffs thus receiving about $130,000 (or probably somewhat less, when the costs and expenses relating to the administration of the estate are taken into account).
65 The Plaintiffs could have had no complaint concerning the propriety of the testamentary provisions made in their favour, had the Deceased, after making those provisions, not deprived the estate of the assets which, presumably, at the time when he made those provisions he intended should constitute the residue of his estate.
66 Each Plaintiff, as a child of the Deceased, is an eligible person within paragraph (b) of the definition of that phrase contained in section 6 (1) of the Family Provision Act. As such, each Plaintiff has the standing to bring the present proceedings.
67 It will be appreciated that the Defendant, as the de facto widow of the Deceased is also an eligible person, being such within paragraph (a) of that definition. The Tutor of the Plaintiffs, as the former wife of the Deceased, is also an eligible person, being such within paragraph (c) of that definition. However, whilst acknowledging her status as an eligible person, the Tutor has expressly disclaimed any intention of herself making a claim for provision out of the estate of the deceased. She and the Deceased had entered into a property settlement, following the breakdown of their marriage, orders of the Family Court of Australia being made in that regard on 17 December 1999. To the extent that it was suggested by the Defendant that the existence of a property settlement between the Tutor and the Deceased is conclusive of financial arrangements between the Plaintiffs and the estate of their late father, I reject that suggestion, which is manifestly and self-evidently incorrect.
68 In carrying out the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208 –210 (the correctness of which test was affirmed by the High Court in Vigolo v Bostin (2005) 221 CLR 191) the Court must determine whether in consequence of the provisions of the will of a testator the applicant has been left without adequate provision for her or his proper maintenance.
69 As I have already observed, the Deceased, by his conduct in effecting a transfer of his interest as tenant in common of the Cromer property to himself and the Defendant as joint tenants, and in disposing as he did of his superannuation entitlements and the proceeds of sale of his shares, brought about a situation whereby there were no assets in his estate which could be the subject of his testamentary dispositions. In consequence, the Deceased deprived the Plaintiffs of any practical benefit from his estate, even though he had in his will expressed a desire as to the manner in which he hoped the Plaintiffs would use the benefits which he intended they should receive from his estate. It follows that each Plaintiff has been left without adequate provision for her or his proper maintenance, education or advancement in life.
70 In the main, the affidavit evidence on behalf of the Plaintiffs did not attempt any quantification of the claims of the Plaintiffs. Any financial quantification contained in the affidavits essentially addressed only the outgoings and expenses of the Tutor. No information was placed before the Court on behalf of Alison concerning her future career aspirations, or concerning the employment prospects and likely remuneration for a person holding the combined Bachelor of Arts and Bachelor of Education degrees, which Alison is currently pursuing.
71 Nevertheless, Alison is entitled to receive a benefit which will assist her in the cost of her education and associated expenses and outgoings during the period of her university course (the information provided on her behalf did not indicate the duration of the combined course), and to assist her, not only in the payment of university fees, but also in the payment for accommodation if she were to decide at some stage of her university career to live away from home. Further, she is entitled to receive from the estate a benefit which will give her a start in life. In my conclusion, Alison is entitled to provision in the sum of $100,000.
72 Some evidence was placed before the Court concerning the aspirations of Steven for his future education or career, but little regarding those of Kerryn.
73 It seems to me, however, that each of Steven and Kerryn should receive from the estate of their late father provision for his or her future educational needs, and for each of them to be provided with a sum which will give them a start in life. A legacy in an amount of $100,000 for each of Steven and Kerryn is, in my conclusion, appropriate.
74 Accordingly, it becomes necessary for the Plaintiffs, if they are to receive any benefit from the estate of the Deceased, to satisfy the Court that the present is an appropriate case in which the concept of notional estate should be applied.
75 The Plaintiffs, if otherwise entitled to an order for provision, must have resort to the concept of notional estate, and to the provisions of Part II, Division 2 of the Family Provision Act, in particular section 23. That section provides, relevantly,
- On an application in relation to a deceased person made by or on behalf of an eligible person, if the Court is satisfied-
- (a) that an order for provision ought to be made on the application; and
(b) that, at any time before death, the deceased person entered into a prescribed transaction-
- (i) which took effect within the period of 3 years before death and was entered into with the intention, wholly or in part, of denying or limiting, wholly or in part, provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person’s estate or otherwise;
(ii) which took effect within the period of 1 year before death, and was entered into at a time when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education and advancement in life of that or any other eligible person which was substantially greater than any moral obligation of the deceased person to enter into the prescribed transaction; or
(iii) which took effect or is to take effect on or after the death of the deceased person,
76 As I have already recorded, I am satisfied that an order for provision ought to be made on the application of the Plaintiffs. It is not essential that the Plaintiffs be able to rely upon the provisions of more than one of the foregoing subparagraphs. It is sufficient surely that they be able to invoke the provisions of at least one of the three.
77 I am satisfied that the Deceased, by the alteration in the title to his Cromer property, entered into a prescribed transaction which, in my conclusion, fell within each of the three subparagraphs of paragraph (b) in section 23, in that the conduct of the Deceased took place within the period of three years before his death, and was entered into with the intention of denying or limiting wholly or in part provision for the maintenance, education and advancement in life of each of his three infant children; further, that that conduct took effect within the period of one year before his death and was entered into at a time when the Deceased had a moral obligation to make adequate provision for the proper maintenance, education and advancement in life of each of his three infant children, and that moral obligation was substantially greater than any moral obligation of the Deceased to transfer his interest in the property to the Defendant. That the Deceased recognised that he had such a moral obligation towards his infant children is manifest in the statement of the Deceased contained in clause 6 of the will, which I have already set forth. I have no hesitation in concluding that that moral obligation of the Deceased to his three infant children was substantially greater than any moral obligation which he had to effect the transfer of the title to the joint tenancy of himself and the Defendant. Further, I am satisfied that the Deceased, by his failure to sever the joint tenancy in the period between the change in the title to the property on 4 September 2004 and his death three and a half months later, entered into a prescribed transaction which took effect upon the death of the Deceased.
78 It follows, therefore, that the Plaintiffs have established an entitlement to invoke the provisions of each of the three subparagraphs of paragraph (3) of section 23.
79 In addition, each of the transactions effected by the Deceased in the last two months preceding his death relating to his superannuation entitlements and the proceeds of sale of his shares comes within the foregoing subparagraphs (i) and (ii). The conclusions which I have just expressed concerning the Cromer property in respect to those subparagraphs have equal application to those transactions regarding the superannuation entitlements and the proceeds of sale of his shares.
80 For the Plaintiffs to succeed in obtaining an order for provision, it is necessary for an order to be made designating as notional estate of the Deceased property held by the Defendant. The exercise of the Court’s discretion to make such an order designating property as notional estate is, however, subject to sections 27 and 28 of the Act. Section 27 (1) precludes the Court from making such an order unless it has considered certain matters, being:
- (a) the importance of not interfering with reasonable expectations in relation to property;
(b) the substantial justice and merits involved in making or refusing to make the order; and
(c) any other matter which it considers relevant in the circumstances.
81 Section 27 (2) requires the Court, in determining what property should be designated as notional estate of a deceased person, to have regard to certain further matters, then set forth.
82 Section 28 of the Act deals with the powers and restrictions of the Court in designating property as notional estate, and, relevantly to the circumstances of the instant case, provides that the Court shall not make an order designating property as notional estate of the deceased person unless it is satisfied,
- (a) that the estate of the deceased person is insufficient to allow the making of provision that, in its opinion, should be made; or
(b) that, by reason of the existence of other eligible persons or the existence of special circumstances, provision should not be made wholly out of the estate.
83 It is quite clear, for the reasons I have already set forth, that the estate of the Deceased is insufficient to allow the making of provision that in my opinion should be made.
84 I have considered the various matters set forth in sections 27 and 28 of the Act, which impact upon the exercise of the Court’s discretion in making an order designating property as notional estate of the Deceased. I am satisfied that in the exercise of the Court’s discretion it is proper, to the extent of the provision to which I have held each Plaintiff to have established an entitlement, that an order designating the Cromer property as notional estate of the Deceased should be made.
85 Accordingly, I make the following orders:
1. I order that each Plaintiff receive from the notional estate of the late Michael John Gill (“the Deceased”) a legacy in the sum of $100,000, each such legacy not to bear interest if paid on or before 1 September 2007, and if not so paid, to bear interest at the rates prescribed for unpaid legacies by the Wills, Probate and Administration Act 1898.
2. I order that, to the extent of the totality of the foregoing legacies, the property situate at and known as 46 Lillihina Avenue, Cromer be designated as notional estate of the Deceased.
3. I order that each of the aforesaid legacies be paid to the Public Trustee, to be held by him until each Plaintiff respectively attains the age of 18 years.
4. I order that, in respect to each of the aforesaid legacies, the Public Trustee have a power of advancement in respect both to the corpus of such legacy and to the income thereon for the benefit each Plaintiff, until such Plaintiff attains the age of 18 years
5. I reserve liberty to apply in respect to order 4 hereof.
6. I order that the Defendant pay the costs of the Plaintiffs.
7. I order that the maximum costs which the Plaintiffs may recover from the Defendant not exceed $40,000 and that such costs not include the costs of and incidental to following affidavits:
- affidavit of Judith Christine Gill sworn 10 June 2005
affidavit of Judith Christine Gill sworn 10 June 2006
affidavit of Wendy Lorraine Lambert sworn 19 June 2006
affidavit of Graeme Causon sworn 27 June 2006
affidavit of Nicola Estelle Causon sworn 29 June 2006.
8. I direct the Registrar to transmit a copy of these reasons for judgment and orders herein to the Tutor for the Plaintiffs, Judith Christine Gill, 5 Mintwood Place, Molendinar 4214, Queensland; and to the Defendant, Carolyn Smith 46 Lillihina Avenue, Cromer 2099, New South Wales.
9. The exhibits may be returned.
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