Gwenda Jane Toth v Ronda Sedelia Graham

[2014] NSWSC 393

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Gwenda Jane Toth v Ronda Sedelia Graham [2014] NSWSC 393
Hearing dates:	11, 12 and 18 December 2013
Decision date:	03 April 2014
Jurisdiction:	Equity Division
Before:	Kunc J
Decision:	Order for provision made for three plaintiffs
Catchwords:	FAMILY PROVISION AND MAINTENANCE - Adult children - No issues of principle - Succession Act 2006, ss59, 60 COSTS - Offer of compromise - Use in family provision matters
Legislation Cited:	Succession Act 2006 (NSW) Uniform Civil Procedure Rules Part 42 r42.15A
Cases Cited:	Camernik v Reholc [2012] NSWSC 1537 Harkness v Harkness (No 2) [2012] NSWSC 35 Lillis v Lillis [2010] NSWSC 359 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Verzar v Verzar [2014] NSWCA 45 West v Mann [2013] NSWSC 1852
Category:	Principal judgment
Parties:	Gwenda Jane Toth (First Plaintiff) Raymond William John Mannix (Second Plaintiff) Jennifer Sue Hand (Third Plaintiff) Royston John Cecil Mannix (Fourth Plaintiff) William James Mannix (Fifth Plaintiff) Ronda Sedelia Graham (First Defendant) Donna Marie Tracy Mannix (Second Defendant) Estate of Heather Grace Charles
Representation:	Counsel: Mr R.W. Tregenza (Plaintiffs) Mr D.D. Stewart (Defendants) Solicitors: Bell Lawyers (Plaintiffs) Matthews Dooley & Gibson (Defendants)
File Number(s):	2012/281590
Publication restriction:	No

Judgment

Summary

1. The late Heather Grace Charles ("Mrs Charles") had eight children who survived into adulthood by her first marriage to Cecil Harold Mannix. Mr Mannix and her second husband, Mr Charles, both predeceased her. Mrs Charles died on 20 September 2011. By her will made on 30 November 2010 she left her entire estate to one of her daughters.

1. The parties to these proceedings are all but one of her adult children. Without disrespect, I shall refer to them by their first names. The plaintiffs are Gwenda, Raymond, Jennifer, Royston and William. Although originally named as a plaintiff, Gwenda does not press any claim against the estate. In the balance of this judgment a reference to "the plaintiffs" does not include Gwenda.

1. The defendants are Ronda and Donna. They are the joint executors and trustees appointed under Mrs Charles' will. It is Donna who has been left the whole of the estate.

1. The estate is small. It consists of a house at Blacktown (the "House") which Mrs Charles inherited from Mr Charles. The parties have agreed, for the purposes of these proceedings, that the House has a value of $440,000. There is also a bank account containing $321.20 and a car valued at approximately $4,000.

1. The summons for provision out of Mrs Charles' estate under s 59 of the Succession Act 2006 (NSW) (the "Act") was filed on 10 September 2012. I heard the proceedings on 11 and 12 December 2013. On 18 December 2013 I made these orders:

The Court:

1. Having found that each of the plaintiffs Jennifer Sue Hand, Royston John Cecil Mannix and William James Mannix is an eligible person, and that inadequate provision has been made for each of their proper maintenance or advancement in life, orders that provision be made for each of them from the estate of the late Heather Grace Charles by payment of:

(a) $20,000 to Jennifer Sue Hand;

(b) $70,000 to Royston John Cecil Mannix upon condition that from that amount he repays $10,000 which he owes to William James Mannix; and

(c) $60,000 to William James Mannix.

2. Dismisses the Summons insofar as it relates to Gwenda Jane Toth and Raymond William John Mannix.

3. Grants leave to the Second Defendant to reopen her case to read her affidavit sworn 13 December 2013.

4. Orders that the legal costs of and incidental to these proceedings of the plaintiffs referred to in order 1 above be paid out of the estate on the ordinary basis.

5. Orders that Raymond William John Mannix pay the defendants' legal costs of and incidental to the proceedings in relation to him on the ordinary basis up to and including 15 October 2013.

6 Orders that Raymond William John Mannix pay the defendants' legal costs of and incidental to these proceedings in relation to him on the indemnity basis on and from 16 October 2013.

7. Orders that the defendants' legal costs of and incidental to these proceedings be paid out of the estate on the indemnity basis assessed as a lump sum of $58,000.

8. Orders that the exhibits be returned to the parties' legal representatives upon publication of the Court's reasons to be held by them or the parties in accordance with Practice Note SC Gen 18.

1. These are the reasons for those orders.

The Act

1. Part 3.2 of the Act deals with family provision orders. Division 1 of that part identifies, in s 57, who are "eligible persons who may apply to the Court for a family provision order in respect of the estate of a deceased person". Section 58(2) requires an application for a family provision order to "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".

1. Division 2 of Part 3.2 of the Act deals with determination of applications for family provision orders. For the purposes of these proceedings, the relevant provisions are:

59(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:

(a) the person in whose favour the order is to be made is an eligible person, and ...

(c) at the time when the Court is considering the application, 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 by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.

59(2) The Court may 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.

...

60(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.

60(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,

...

(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,

...

(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 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,

...

(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.

1. In West v Mann [2013] NSWSC 1852 at [9]-[11] I explained the reasons for the approach I adopt to applications under the Act. That is how I will proceed in this case.

1. By reference to the language of the Act, the questions and issues which the Court must take into account are:

(1) Is the person who has applied to the Court for a "family provision order" (as defined in s 3 of the Act) an eligible person under s 57 of the Act? In accordance with s 60(1)(a), the Court may (not must) have regard to the matters set out in s 60(2) in determining whether that person is an eligible person. It is not readily apparent how many of those matters could be relevant to the issue of eligible person, but nothing turns on that observation.

(2)   If the answer to question (1) is "yes", has the application been filed in the Court's Registry not later than 12 months after the deceased's death (ss 58(2) and (3))?

(3)   If the answer to question (2) is "no", has the eligible person who has brought the application shown sufficient cause for the Court to order otherwise to extend the date for the filing of the application in the Court's Registry (ss 58(2) and (3))?

(4) If the answer to question (2) is "yes" or the Court has otherwise ordered under s 58(2), is the Court satisfied that the person in whose favour the order is to be made (the "applicant") is an eligible person (s 59(1)(a))? In reaching the requisite state of satisfaction the Court may (not must) have regard to the matters set out in s 60(2). As a theoretical matter this question admits of the possibility that "the person in whose favour the order is to be made" is not the person who has brought the application (in which case, the latter must also be an eligible person).

(5)   If the answer to question (4) is "yes", what provision has been made for the proper maintenance, education or advancement in life of the applicant by the deceased's will or by the operation of the intestacy laws (the "Provision")?

(6)   Is the Court satisfied, at the time when the Court is considering the application, that the Provision is not adequate for the proper maintenance, education or advancement in life of the applicant?

(7) If the answer to question (6) is "yes" (i.e. the Court is satisfied the Provision is not adequate for the specified purpose) then the Court's discretion conferred by the chapeau to s 59(1) to make a family provision order in favour of the applicant (the "Discretion") is enlivened.

(8) Once the Discretion is enlivened then, noting s 59(2), what provision, if any, does the Court think ought to be made for the proper maintenance, education or advancement in life of the applicant, having regard to the facts known to the Court at the time the order is made (the "Proposed Provision")? This is an evaluative judgment which arises from the word "ought" and requires examination of the applicant's needs. In making this judgment the Court may (not must) have regard to the matters set out in s 60(2) ("the nature of any such order": s 60(1)(b)).

(9) Having answered question (8), should the Court exercise the Discretion to make an order for the "Proposed Provision"? In deciding whether to exercise the Discretion to make such an order, the Court may (not must) have regard to the matters set out in s 60(2) ("whether to make a family provision order": s 60(1)(b)).

(10) 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.

(11) 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". The Discretion is otherwise unconfined, which means that in answering question (9) the Court is otherwise constrained only by the need to act judicially, that is to say "not arbitrarily, capriciously or so as to frustrate the legislative intent": Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ. The Court must act rationally and exercise the Discretion for the purpose for which it was conferred.

1. Having identified what I consider to be the correct approach under the Act to an application of this kind, I will first deal with issues common to all of the plaintiffs and then set out the circumstances of each of them and Donna as I found them to be at the date of the hearing (unless otherwise stated). Those circumstances were not in dispute.

Matters common to the plaintiffs

1. The matters set out in sub-paragraphs [10(1)-(5)] can be immediately and identically answered for each of the plaintiffs:

(1) As a child of Mrs Charles, each is an eligible person under s57 of the Act.

(2)   The summons was filed in time.

(3)   No provision has been made for the proper maintenance, education or advancement in life of any of the plaintiffs by Mrs Charles' will.

1. There was no dispute that each of the plaintiffs had a good relationship with Mrs Charles.

The estate

1. As stated in paragraph [4] above, the estate comprises little more than the House, which has an agreed value of $440,000. The parties were also in agreement that in order to meet the deceased's liabilities and the costs of administration of the estate, the House will have to be sold. The parties agreed that after the payment of various expenses, including the costs of sale of the House, and the payment to the parties of their costs and disbursements in these proceedings, the value of the "nett distributable estate" would be $317,223.20. Allowing for contingencies I find that $315,000 is the amount which, on the balance of probabilities, will be available out of which provision could be made for the plaintiffs.

Raymond

1. Raymond turned 60 in December 2013. He is married with two adult children. He is a qualified panel beater and spray painter. He was in continuous employment from 1973 until 2011, when he ceased work as a maintenance officer at the University of Sydney. His wife works and they live in Ballina, having purchased their first home there in 1985.

1. Raymond borrowed $25,000 from Mr & Mrs Charles in 1989 to purchase a pulley system for the panel shop he was then operating. He repaid that loan. At a time he no longer recalls, Mrs Charles also made him a gift of $5,000.

1. Raymond and his wife own their home and an investment property. After deducting their mortgage debt, their equity in those two properties is approximately $700,000. Raymond and his wife have other assets comprising cash at bank, superannuation and a motor vehicle with a total value of $74,000. Their income is derived from Raymond's wife's earnings and rental received from their investment property. Their total weekly income exceeds their outgoings (including mortgage repayments) by approximately $280.

1. Raymond gave evidence that he was suffering from a number of medical conditions including polyps which require regular colonoscopies, industrial deafness, three compressed fractures in his spine for which he is prescribed Panadeine Forte, back pain when he walks from degenerative changes in his spine, difficulties with his knees including the need for a left knee replacement and a rotator cuff injury to his left shoulder. He also gave evidence that he had a small stroke in 2013 with some resulting loss of memory.

1. Notwithstanding these health issues, he accepted that, for example, his shoulder injury did not prevent him from doing too much because he was able to put up with the pain. He also accepted that he would have continued to work as a maintenance officer at the University of Sydney if his contract had been renewed. He said that if he saw a job in the paper for something that interested him, such as a park ranger's position at Kyogle, he would try to apply for it. He would leave it up to the employer to say if he was fit and healthy enough to do the job.

1. Insofar as his claim on Mrs Charles' estate was concerned, Raymond submitted that he wished to reduce his mortgage (currently $178,000), undertake roof repairs ($12,705) and retiling of a bathroom ($15,000-$18,000), replacing an existing septic system at his home with an aerated waste water system ($22,600) and the replacement of the veranda at his home ($5,700). It became apparent from his cross-examination that this was more in the nature of a "wish list" than actual needs. For example, in relation to roof work it was more the case that some tiles and capping needed to be replaced which he was able to fund himself. His request was really for a complete roof restoration. Similarly, in the case of the shower, the fact that some tiles were cracked had become a request for a complete bathroom renovation. The need for some repairs to his existing sewerage system had become the installation of a brand new system. The proposed building work on the veranda in fact related to some repainting and the replacement of a rotted corner post.

1. It was ultimately submitted for Raymond that an appropriate provision from Mrs Charles' estate would be $20,000 or some other amount to be applied reduction of his mortgage.

Jennifer

1. Jennifer turned 52 in February 2014. She is married to Peter and they have three children aged 19, 18 and 14. She left school in year 9 and has been employed in various unskilled jobs. She is currently employed as a cleaner at Nepean Hospital for three days a week. Peter is employed by Baulkham Hills Council as a maintenance worker.

1. Jennifer and Peter own their own home, which is valued at $350,000 but is subject to a $210,000 mortgage. Jennifer has superannuation currently valued at $18,000 and Peter's superannuation is currently $98,000. They have cash, a motor vehicle and other personalty with a total value of $26,800 and other (non-mortgage) liabilities of $8,000. Their combined weekly earnings exceed their weekly outgoings (including mortgage repayments) by $114.

1. Jennifer has a number of health conditions including arthritis, a rotator cuff injury to her right shoulder, an injury to her left foot for which she may receive worker's compensation and other conditions. While they do not currently impede her capacity to earn an income, she is finding it increasingly difficult to work as a cleaner and is concerned that the time will come where she will be physically unable to do so.

1. Under cross-examination Jennifer confirmed that she had received a gift of $5,000 from Mrs Charles. Furthermore, she and Peter had borrowed up on their mortgage to pay for bathroom and kitchen renovations to their home, as well as to assist with the purchase of cars. While she and her husband were not currently having any difficulty in meeting their mortgage payments, she said that she was seeking provision to be able to reduce her mortgage, given that she was concerned about what would happen if she became unable to work.

1. It was ultimately put for Jennifer that she should receive an amount to enable her to reduce her mortgage. This was because there were real questions over her job security either through illness or redundancy. She had no particular qualifications and could find it very difficult to locate alternative employment. It was submitted that in a larger estate an appropriate provision would be $100,000-$120,000, but that in this case she should be enabled to reduce her mortgage by 25%, being $52,500.

Royston

1. Royston is 47 years old. He completed his School Certificate and left school about half way through year 11 at the age of 16. He has two adult children and two minor children. He is divorced from his wife. He received some money from the sale of his matrimonial home, but that money has now been expended.

1. Before moving into the House with Mr Charles, Mrs Charles owned a house in Castle Street, Blacktown (the "Castle St House"). When Mrs Charles sold the Castle St House to William (see paragraph [36] below) she gave $25,000 to Royston, which he applied to his then matrimonial home.

1. Over and above regularly assisting and visiting Mrs Charles, Royston helped William build the extension to the House which Mrs Charles created to provide accommodation for Donna and Donna's daughter. Royston also renovated the bathroom at the House. Mrs Charles paid for the materials for both jobs. Royston neither asked for nor received any payment for his work.

1. Royston underwent a right knee reconstruction in 1995 and had further surgery to his right knee in 2012. After that later surgery, he suffered an infection to his knee which resulted in a hospital stay of some six weeks. He underwent a total right knee replacement operation in April 2013. Since then he has undertaken a course of physiotherapy in order to strengthen his leg to enable it to be used normally. That result has not yet been achieved.

1. Royston was employed as a paint specialist and sales person for Dulux. However, due to his health problems he has not worked since June 2012 nor received wages since September 2012. His employment with Dulux was terminated in March 2013. Because of the problems with his right knee, he has been unable to seek alternative employment and remains unemployed. He receives Centrelink payments as his only form of income. After living with his daughter for a period of time, he rented a two bedroom unit. However, he was given notice to vacate that unit by December 2013.

1. Royston owns no real property. When Royston's own financial resources were exhausted, William lent him $10,000, the current balance of which comprises such cash as he has available. He has a car and a half-cabin boat valued at $10,000 and $4,000 respectively. His liabilities are a small Mastercard debt and the $10,000 loan to him from William. His only income is Centrelink payments which are consumed by his weekly rental payment. His other outgoings on essentials mean his outgoings exceed his income by approximately $320 per week. In other words, he is living from the capital comprising the loan from his brother.

1. It was submitted for Royston that an appropriate provision would be an amount for five years' rental assistance (assuming a weekly rental of $360), together with $10,000 to repay William. This meant that Royston was seeking a total provision of $70,000.

William

1. William is 42 years old. He attained his Higher School Certificate in 1988. After leaving school he held various jobs such as a removalist, a joiner and a carpenter. He undertook a TAFE course for carpentry and joinery for three years, but did not obtain a certificate because he failed several subjects in his last year. From September 2003 until August 2011 he was employed by Mitre 10 as a timber salesman. His employment was terminated and he received a settlement of between $9,000 and $10,000.

1. He was unemployed from August 2011 until November 2011, after which he obtained seasonal work as a Santa Claus. He injured his back in early 2012, but from March 2012 worked as a casual labourer. He currently works as a casual factory hand for a manufacturer of kitchens.

1. In about 2000 William purchased the Castle St House from Mrs Charles for $160,000. Mrs Charles told William at the time (and he accepted) that it was valued at $190,000, but she only required him to pay $160,000 because his share of the house on inheritance was about $30,000 with the rest of his brothers and sisters. William lived in the Castle St House with his then wife and family.

1. In 2000 or 2001 William undertook most of the building work for the extension to the House which Mrs Charles wanted in order to provide accommodation for Donna and Donna's daughter. Mrs Charles paid William $10,000 for the work.

1. William is now divorced. His children, now aged 20, 16 and 10 years old, live with their mother. He currently lives in a garage converted into a granny flat and is looking for permanent work as a forklift driver and storeman.

1. As part of his property settlement with his former wife, William received $83,000 from the proceeds of sale of the Castle St House. That has been depleted with the passage of time. He owns no real property. His current personalty comprises cash, superannuation, a car and other items with a total value of approximately $124,000. His outgoings, rent and other expenses are less than his income by an amount of approximately $110 per week.

1. William now needs to move into larger accommodation because his 16 year old son has come to live with him after difficulties with his mother. William gave evidence that he wishes to purchase a unit in the Blacktown area, but his only hope of doing so is to obtain permanent work and to preserve his savings as well as adding to them. It was submitted for William that he should receive provision from Mrs Charles' estate to supplement his savings to go towards paying for a unit. On the assumption that he was repaid the $10,000 which he loaned Royston, it was submitted that William needed a provision of $60,000 to make up the difference between his current assets available to be applied to the purchase of a unit (assuming he borrowed $200,000) and the cost of the unit. The parties agreed a suitable unit in Blacktown would cost approximately $320,000.

Donna

1. Donna is 48 years old. She left school at 16 after completing her School Certificate. Donna lived in the Castle St House even after her mother left to move into the House with Mr Charles. For some time Donna lived there with Royston and William. In 1992 Donna's only child, Cassie-Anne, was born. Cassie-Anne's father was a boyfriend of Donna's with whom she never cohabited.

1. Donna moved out of the Castle St House in 1995. In 1998 Donna married, but the marriage only lasted three months. Donna and Cassie-Anne moved into the House. Donna had sustained injuries in a car accident and was suffering from depression after a nervous breakdown. After a brief sojourn in another home, Donna and Cassie-Anne moved back into the House in January 2001, Mr Charles having died in the meantime. In October 2003 Donna and Cassie-Anne moved into the extension which Mrs Charles had caused to be built onto the House for them.

1. After moving back into the House, Donna was in and out of work. When she was not working she received Centrelink benefits. Nevertheless, from her income or benefits she would contribute towards the household expenses. In 2004 Donna was appointed as Mrs Charles' carer and received Centrelink benefits as such. As Mrs Charles' ability to care for herself diminished, Donna increased her level of care towards her mother accordingly.

1. On a couple of occasions Mrs Charles told Donna that she (Mrs Charles) intended to leave the majority of her estate to Donna. This was to enable Donna to get a house, with whatever being left (Mrs Charles said) being able to be divided between the other siblings.

1. Since 2008 Donna has been receiving treatment for numbness and tingling sensations in her fingers in both hands. She has also been diagnosed with carpal tunnel syndrome in both hands. She suffers from back pain and spasms in respect of which she takes pain killers. She also suffers from hip pain which she has had since a fall in 1991. She is also currently suffering from depression, the onset of which followed Mrs Charles' death.

1. In February 2012 Cassie-Anne was diagnosed with ovarian cancer and has since undergone major surgery and intensive chemotherapy. Donna took four months off work to care for Cassie-Anne full time. While now employed, Cassie-Anne's prognosis remains uncertain.

1. Since November 2011 Donna has been working as a cleaner. However, at the time of the hearing there was uncertainty as to whether her employer's major contract with Woolworths (where she cleaned) would be extended. Donna is currently living in the House and has the use of Mrs Charles' 2004 Ford Focus motor vehicle. Cassie-Anne and a girlfriend also live in the House and both of them pay board to Donna.

1. Setting aside her current interest in the House (agreed value $440,000), Donna has only a few hundred dollars in cash, her mother's old car which Donna received under the will and a very small amount of superannuation all totalling less than $10,000. Her current income (which includes $200 in weekly board from Cassie-Anne and her friend) exceeds her outgoings by only $11.00 per week noting that those outgoings include expenses for Cassie-Anne and her friend.

1. Donna's unchallenged evidence was that on her current income she could perhaps borrow up to $50,000 for a home and that the rental for an average house in Blacktown was from $400 to $450 per week. Donna deposed that she would be unable to afford such an amount.

Has adequate provision been made for each of the plaintiffs?

1. Having set out the circumstances of each of the plaintiffs and Donna, it is next necessary to consider what is sometimes referred to as the jurisdictional question. This is set out in sub-paragraph [10(6)] above, namely whether the Court is satisfied, at the time when the Court is considering the application, that the amount provided for each of the plaintiffs is not adequate for the proper maintenance, education or advancement in life of the particular plaintiff. If, in relation to any plaintiff, that question is answered "yes", then the Court's discretion to make a family provision order in favour of that plaintiff is enlivened.

1. In Verzar v Verzar [2014] NSWCA 45, Meagher JA (with whom Macfarlan and Barrett JJA agreed) summarised the legal principles governing this stage of the inquiry:

39. The primary judge concluded that Stephen's will did not make adequate provision for the respondent's proper maintenance, education and advancement in life. Whether such provision has been made requires an assessment of the applicant's financial position, the size and nature of the deceased's estate, the relationships between the applicant and the deceased and other persons who have legitimate claims upon his or her bounty and the circumstances and needs of those other persons: see Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 75 at [70] and McCosker v McCosker [1957] HCA 82; 97 CLR 566 at 571-572; Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 210; and Vigolo v Bostin [2005] HCA 11; 221 CLR 191 at [16], [75], [112]. Such an assessment is necessary because of the inter-relation between "adequate provision" and "proper maintenance". Whilst the inquiry as to what is "adequate" directs particular attention to the needs of the applicant, what is "proper" requires regard to all the circumstances of the case, and in particular the size and nature of the estate and the needs of the other beneficiaries or potential beneficiaries. As was observed by Sackville AJA in Foley v Ellis [2008] NSWCA 288 at [88], a court cannot consider the propriety and adequacy or inadequacy of any testamentary provision for an applicant in isolation from the resources and needs of the other claimants on the deceased's bounty.

40. There was no dispute that in a case such as the present, where the claimant has a child who is dependent on her for support and education, that circumstance must be taken into account when considering what is necessary and adequate for the claimant's proper maintenance, particularly where, as here, the testator has not made any significant separate provision by his will for that child. The relevant principle and authorities are referred to by White J in Mayfield v Lloyd-Williams [2004] NSWSC 419 at [86].

1. I have included paragraph [40] of Meagher JA's reasons because while Cassie-Anne is not dependant on Donna for her support and education in the way that a minor child might be, given Cassie-Anne's serious and not yet remitted medical condition, by analogy with the situation of a dependent minor, that circumstance should be taken into determining the adequacy of the provision or lack of provision for the various plaintiffs and Donna.

1. In addition to the passage from Verzar quoted in paragraph [51] above, I also respectfully adopt what Hallen J said in Camernik v Reholc [2012] NSWSC 1537 both as to the general approach to be adopted to applications for family provision and judicial observations concerning claims by adult children, the latter being particularly pertinent in the circumstances of this case:

154. Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education or 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 (NSWSC, Young J, 17 May 1996, unreported); Vigolo v Bostin at 199 and 204; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.

155. An important consideration is whether, in all the circumstances, the community expectation would be for greater benefaction to have been made for the proper or adequate provision of the person seeking provision. Gleeson CJ observed in Vigolo v Bostin, at 199, that the justification for interference with freedom of testation is to be found in the failure of a deceased to meet the obligations, which the community would expect in terms of maintenance, for those persons within the class of eligible persons. The process requires the court to "connect the general but value-laden language of the statute to the community standards".

156. 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."

157. In all cases under the Act, what is adequate and proper provision is necessarily fact specific. An inflexible approach cannot be taken in assessing the questions to be answered.

158 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 (1909) 29 NZLR 959 at 966.

159. In relation to a claim by an adult child, the following principles are useful to remember:

(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.

(b) It is impossible to describe in terms of universal application, the obligation, responsibility, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his, or her, children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801.

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

(d) If the applicant has an obligation to support others, such as a parent's obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant: Re Buckland Deceased [1966] VicRp 58; [1966] VR 404 at 411; Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 148; Goodman v Windeyer at 498, 505. But the Act does not permit orders to be made to provide for the support of third persons to whom the applicant, however reasonably, wishes to support, where there is no obligation to support such persons: Re Buckland Deceased at 411; Kleinig v Neal (No 2) [1981] 2 NSWLR 532 at 537; Mayfield v Lloyd-Williams, at [86].

(e) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2), at 545; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.

(f) The adult child's lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration: MacGregor v MacGregor [2003] WASC 169 (28 August 2003) at [181], [182]; Crossman v Riedel [2004] ACTSC 127 at [49]. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant: Marks v Marks [2003] WASCA 297 at [43]. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased: Christie v Manera [2006] WASC 287; Butcher v Craig [2009] WASC 164 at [17].

(g) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd at 149.

1. Applying these principles to this case, there is a clear distinction at the time of these proceedings between the circumstances of Jennifer, Royston, William and Donna on the one hand, and Raymond on the other hand. When the circumstances of each of them as outlined earlier in this judgment are weighed against each other and against the small size of the estate, the Court has no doubt that adequate provision has not been made in Mrs Charles' will for Jennifer, Royston and William.

1. The Court cannot reach the same conclusion in the case of Raymond. Insofar as "adequate provision" is concerned, Raymond's needs were few indeed. It could not be seriously suggested that they were beyond his and his wife's own means to meet, if they wished to do so. In relation to the question of "proper maintenance", the small size of the estate and the substantial needs of some of the other plaintiffs and Donna also does not permit the conclusion that Mrs Charles' will failed to make adequate provision for Raymond. In other words, in this case no provision for Raymond did not mean that adequate provision had not been made for him.

1. Therefore I will proceed on the basis that the jurisdiction to make provision under the Act for Jennifer, Royston and William has been engaged. Even if I were satisfied that the jurisdiction had been engaged in relation to Raymond, I would have declined to make an order for provision out of the estate for him for the same reasons that have led to my conclusion on the jurisdictional question. The small size of the estate, Raymond's considerably better asset and income position when compared to the other plaintiffs and Donna and the competing claims demonstrating real need on the part of those other plaintiffs and Donna would nevertheless have led me to decline to exercise any jurisdiction in favour of making a provision for Raymond.

1. The answer to the question posed in sub-paragraph [10(6)] above is "yes" in the case of Jennifer, Royston and William, and "no" in the case of Raymond.

Provision for the other plaintiffs - two general observations

1. The Court's discretion in determining the appropriate provision for each of the plaintiffs (other than Raymond) has been exercised by reference to two matters which have been applied to each.

1. First, particularly in the case of a small estate such as this, the evaluative judgment in the light of community standards which this part of the process under the Act invites necessarily requires significant weight to be given to Donna's claim upon Mrs Charles' bounty as having been her principal carer for a number of years, Donna's non-existent asset position (if the House is taken out of the equation) and her potentially uncertain employment circumstances. To this may be added both the statements of Mrs Charles' testamentary intentions being in favour of Donna (see paragraph [44] above) as well as the fact that Mrs Charles' will displays exactly that intention to ensure that Donna was well cared for. In the exercise of the Court's discretion, the matters to which I have referred in this paragraph support the conclusion that whatever provision is to be made for the plaintiffs (other than Raymond), the effect of those provisions should lead to the result that the largest part of the estate should still fall to Donna.

1. Second, in the case of each of the plaintiffs (other than Raymond) I have taken into account all of the matters in s 60(2) of the Act in paragraph [8] above as they relate to that plaintiff. Those matters are reflected in the narration of the circumstances of each of the plaintiffs and Donna set out above. I will not repeat them. In what follows I will refer to any additional or consequential matters that have influenced the amounts for provision that I have determined.

Provision for Jennifer

1. I accept the submission that was put on Jennifer's behalf that, in a larger estate, it would be an appropriate exercise of discretion to make some provision for a reduction in her and her husband's mortgage. However, in this case a provision to reduce the mortgage is not appropriate. This is because of the small size of the estate, the more substantial and pressing needs demonstrated by Donna and the other plaintiffs (other than Raymond) and Jennifer's own evidence that at the moment she and her husband were able to meet their mortgage repayments with some - albeit not a great deal - of their weekly income left over. An appropriate provision would be to allow for contingencies arising from the part time nature of her employment, the doubt over how long she may be able to continue as a cleaner and the possibilities of sickness or redundancy. I assess an appropriate provision in respect of those matters, particularly having regard to the small size of the estate and the competing claims, at $20,000.

1. For Jennifer the question in paragraph [10(8)] above is answered by a provision of $20,000. There is no reason why the question in paragraph [10(9)] above should be answered other than "yes".

Provision for Royston

1. On the basis of his circumstances as set out in paragraphs [27] to [32] above, the small size of the estate and the competing claims, the Court accepts the submission put on Royston's behalf that an appropriate provision should be calculated by providing rental assistance for five years (totalling $60,000) together with $10,000 to repay William.

1. For Royston the question in paragraph [10(8)] above is answered by a provision of $70,000 upon condition that from that amount Royston repays the $10,000 which he owes to William. There is no reason why the question in paragraph [10(9)] above should be answered other than "yes".

Provision for William

1. On the basis of his circumstances as set out in paragraphs [34] to [40] above, the small size of the estate and the competing claims, the Court accepts the submission put on William's behalf that an appropriate provision should be calculated by providing him with an amount which, with his other savings and taking account of his borrowing capacity, would enable him to purchase a two bedroom unit in Blacktown. There was agreement between the parties that the purchase price of such a unit would be approximately $320,000. I accept the calculations advanced by the plaintiffs' counsel that William needs an additional $60,000 capital.

1. For William the question in paragraph [10(8)] above is answered by a provision of $60,000. There is no reason why the question in paragraph [10(9)] above should be answered other than "yes".

Costs

1. At the time I made the orders set out in paragraph [5] above I heard argument as to costs. The parties were agreed as to the costs outcome in relation to all aspects of the case other than Raymond's claim.

1. On 15 October 2013 Ronda and Donna made an Offer of Compromise to each of the plaintiffs in accordance with the Uniform Civil Procedure Rules. Each of Jennifer, Royston and William have achieved greater provision than the offers made to them. However, the offer to Raymond ($5,000) was better than the ultimately unsuccessful result which he has achieved in these proceedings.

1. Counsel for the defendants submitted that UCPR Part 42 r 42.15A applied and that there was no reason for the Court to "otherwise order":

1) This rule applies if the offer is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim no less favourable to the defendant than the terms of the offer.

(2) Unless the court orders otherwise:

(a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and

(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis:

(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and

(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.

1. I accept that in the events which had happened UCPR Part 42r 42.15A applied as a result of Raymond's non-acceptance of the offer made to him and his failure in the proceedings.

1. Counsel for Raymond had two submissions as to why the Court should "otherwise order". First, he sought to cast some doubt over the bona fides of the offer by suggesting that had all the plaintiffs accepted their respective offers (totalling $40,000) the defendants could not have paid that amount. There was no evidence to support that submission and I reject it. In addition, the existence of the offers to the other plaintiffs is irrelevant.

1. Second, he submitted that there was a principle in family provision matters that costs orders should not be made against unsuccessful children, citing the decision of Hamilton AJ in Lillis v Lillis [2010] NSWSC 359. In that case his Honour (as here) had found against an adult son at the jurisdictional stage of the inquiry. That case does not support the submission that a principle of the kind advanced by counsel exists. While the facts of that case lead his Honour to conclude that there should be no order as to costs, he also acknowledged (at [23]) that "it is now more common than once it was for an unsuccessful plaintiff simply to be ordered to pay the defendant's costs of the proceedings".

1. Hallen J set out the authorities applicable to the question of costs in a case such as the present in Harkness v Harkness (No 2) [2012] NSWSC 35:

18. For the assistance of the parties and others reading this judgment, I repeat the principles stated previously which I consider relevant to the present case:

(a) In Singer v Berghouse [1993] HCA 35; (1993) 114 ALR 521, Gaudron J, said, at 522:

"Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the Act which, in s 33, makes special provision in that regard, costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant's financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate."

(b) Despite the above statement, which, of course, was written in the context of a security for costs application, and in respect of proceedings under the Family Provision Act , s 99 of the Succession Act provides a wide discretion in relation to costs ("in such manner as the Court thinks fit").

(c) The view of some practitioners advising a potential applicant contemplating a claim for a family provision order, that there is little risk, and probably much to be gained, in making a claim, however tenuous, because even if the claim fails the applicant will, very likely, get his, or her, costs out of the estate and that he, or she, will not be significantly out of pocket, and the legal practitioner will receive his, or her, costs and disbursements in any event, has been thoroughly discredited.

(d) Parties should not assume that this type of litigation can be pursued, safe in the belief that costs will be paid out of the estate: Carey v Robson (No 2) [2009] NSWSC 1199; Forsyth v Sinclair (No 2) [2010] VSCA 195. It is now much more common than it previously was for an unsuccessful applicant to be ordered to pay the defendant's costs of the proceedings ( Lillis v Lillis [2010] NSWSC 359 at [23]) and be disallowed his, or her, own costs.

(e) Where, as here, the issue is whether the unsuccessful applicant should bear the costs of the successful Defendant, s 98 of the Civil Procedure Act , and the rules quoted above, will apply, and, in the absence of some good reason to the contrary, there should be an order that the costs of the successful defendant be paid by the unsuccessful plaintiff: Moussa v Moussa [2006] NSWSC 509 at [5].

(f) An unsuccessful plaintiff will, usually, be ordered to pay costs where the claim was frivolous, vexatious, made with no reasonable prospects of success, or where she, or he, has been guilty of some improper conduct in the course of the proceedings: Re Sitch (No 2) [2005] VSC 383.

(g) In small estates particularly, the court should be careful not to foster the proposition that obstinacy and unreasonableness will not result in an order for costs: Dobb v Hacket (1993) 10 WAR 532, at 540.

(h) Proceedings for a family provision order involve elements of judgment and discretion beyond those at work in most inter partes litigation: Jvancich v Kennedy (No 2) [2004] NSWCA 397; Re Sherborne Estate (No 2); Vanvalen v Neaves [2005] NSWSC 1003.

(i) In exercising its discretion in relation to costs, the court will have regard to "the overall justice of the case": Jvancich v Kennedy (No 2) . The "overall justice of the case" is "not remote from costs following the event". However, the court may be more willing to depart from the general principle in proceedings for a family provision order than in other types of case: Moussa v Moussa; Carey v Robson (No 2); Bartkus v Bartkus [2010] NSWSC 889 at [24].

(j) As proceedings for a family provision order are essentially for maintenance, a court may properly decide to make no order for costs, even though it were otherwise justified, against an unsuccessful applicant, if it would adversely affect the financial position which had been taken into account in dismissing the application: Morse v Morse (No 2) [2003] TASSC 145; McDougall v Rogers; Estate of James Rogers [2006] NSWSC 484; McCusker v Rutter [2010] NSWCA 318 at [34].

(k) There are also other circumstances that may lead the court to order payment out of the estate of the costs of an unsuccessful Plaintiff. The court may allow an unsuccessful plaintiff costs out of the estate, if in all the circumstances the case was meritorious, reasonable or "borderline": McDougall v Rogers; Estate of James Rogers ; Re Bodman [1972] Qd R 281; Shearer v The Public Trustee (NSWSC, Young J, 21 April 1998, unreported).

19. Finally, what I said in Smith v Smith (No 2 ) at [77], is also applicable to the facts of the present case:

"I commend to parties involved in proceedings in which a family provision order is sought, that every effort, particularly in a relatively small estate, as this one is, to conduct negotiations frankly and openly, to try to resolve the proceedings, and if there are issues or concerns about an offer that has been made, to raise any issues at the first convenient opportunity with the offeror's solicitors, so that any ambiguities, or other concerns, can be resolved. The Court should be able to see that the parties have considered what is being offered in a sensible, practical, and commercial way."

1. Having regard to those principles, which I respectfully adopt, I am not satisfied that I should "otherwise order" for these reasons:

(1)   Raymond's case was not "borderline" or otherwise so meritorious that some order relieving Raymond of costs should be made. His circumstances were substantially better than any of the other plaintiffs and Donna and his claim was commensurately weaker.

(2)   Especially in cases involving smaller estates, where the Court nevertheless continues to see substantial costs being incurred by all parties, Hallen J's observation in paragraph [18(g)] quoted above has special force and I apply it here.

(3) The policy underlying the rules concerning offers of compromise - to encourage negotiation and the settlement of proceedings - applies equally to family provision litigation as it does to other cases before the Court. No special rules or "carve out" have been made for family provision litigation. The profession and litigants should be able to deploy offers of compromise in the expectation that, in the ordinary course, the result provided for by a provision such as UCPR Part 42r 42.15A will not be disturbed by the Court, even in family provision cases.

1. For these reasons I made orders 5 and 6 against Raymond set out in paragraph [5] above, giving effect to UCPR Part 42 r42.15A.

Amendments

04 April 2014 - Minor typos

Amended paragraphs: Paras 11 and 60

Decision last updated: 04 April 2014