Hedman v Frazer - [2013] NSWSC 1915

Supreme Court

New South Wales

Medium Neutral Citation: Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915
Hearing dates: 18, 19 November 2013
Decision date: 19 December 2013
Jurisdiction: Equity Division
Before: Hallen J
Decision:
Direct parties to bring in Short Minutes of Order reflecting these reasons. Stand over the proceedings to make orders and to hear any argument about the costs of the proceedings.

Catchwords: SUCCESSION - FAMILY PROVISION -One Plaintiff, a widow of the deceased, and the other Plaintiff a child of the deceased by a prior relationship - Each applies for a family provision order under Chapter 3 of the Succession Act 2006 - Whether adequate and proper provision not made in Will of the deceased for either Plaintiff and if so the nature and quantum of the provision to be made for her
Legislation Cited: Administration and Probate Act 1958 (Vic)
Civil Procedure Rules 2005
Family Provision Act 1982
Probate and Administration Act 1898
Property (Relationships) Act 1984
Succession Amendment (Family Provision) Act 2008
Succession Act 2006
Uniform Civil Procedure Rules 2005
Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice v Allardice, In re Allardice, (1910) 29 NZLR 959
Allen (Dec'd), In re; Allen v Manchester [1922] NZLR 218
Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Anslow v Journeaux [2009] VSC 250
Austin a Bankrupt, Re [1982] 2 NZLR 524
Bartlett v Coomber [2008] NSWCA 100
Belfield v Belfield [2012] NSWSCA 416; (2012) 83 NSWLR 189
Blore v Lang (1960) 104 CLR 124
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Butcher v Craig [2009] WASC 164
Christie v Manera [2006] WASC 287
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Crossman v Riedel [2004] ACTSC 127
de Angelis v de Angelis [2003] VSC 432
Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Flathaug v Weaver [2003] NZFLR 730
Foley v Ellis [2008] NSWSC 288
Franks v Franks [2013] NSWCA 60
Fung v Ye [2007] NSWCA 115
Gardiner v Gardiner (NSWSC, 28 May 1998, unreported)
Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Grey v Harrison [1997] 2 VR 359
Harrisson v Skinner [2013] NSWSC 736
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Hyland v Burbidge [2000] NSWSC 12
Kay v Archbold [2008] NSWSC 254
Keep v Bourke [2012] NSWCA 64
Kelly and Kelly (No.2) (1981) 7 Fam LR 762
Kembrey v Cuskelly [2008] NSWSC 262
Kleinig v Neal (No. 2) [1981] 2 NSWLR 532
Lloyd-Williams v Mayfield [2005] NSWCA 189
Macgregor v Macgregor [2003] WASC 169
Marks v Marks [2003] WASCA 297
Mayfield v Lloyd-Williams [2004] NSWSC 419
McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
McKenzie v Topp [2004] VSC 90
Mee and Ferguson [1986] FamCA 3; (1986) 84 FLR 179
Neale v Neale [2013] NSWSC 983
Oldereid v Chan [2013] NSWSC 434
Palaganio v Mankarios [2011] NSWSC 61
Peters v Salmon [2013] NSWSC 953
Ploder v Garcea (as executrix of the estate of the late Fiona Rita Garcea) [2013] NSWSC 1360
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
Richard v AXA Trustees Ltd [2000] VSC 341
RK v RK (Financial Resources: Trust Assets) [2011] EWHC 3910 (Fam); [2013] 1 FLR 329
Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100
Schmidt v Watkins [2002] VSC 273
Shearer v The Public Trustee (NSWSC, 23 March, 1998, unreported)
Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201
Slack v Rogan; Palffy v Rogan [2013] NSWSC 522
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stiles v Joseph (NSWSC, 16 December 1996, unreported)
Stott v Cook (1960) 33 ALJR 447
Szypica v O'Beirne [2013] NSWSC 297
Taylor v Farrugia [2009] NSWSC 801
Theoctistou v Theoctistou [2013] NSWSC 1487
Tobin v Ezekiel [2012] NSWCA 285
Verzar v Verzar [2012] NSWSC 1380
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)
West v Mann [2013] NSWSC 1852
White and Tulloch v White (1995) 19 Fam LR 696
Texts Cited: J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006)
Government Gazette No. 38 of 20 February 2009, page 1036
Category: Principal judgment
Parties: Lucie Elisabet Hedman
Georgia Robinson Egan
Andrew John Frazer
Representation: Counsel:
Mr L Ellison SC (Plaintiff in 2011/404713)
Mr R Wilson SC (Plaintiff in 2011/408805)
Mr M Willmott SC; Mr D Hand (Defendant)
Solicitors:
Malleys Lawyers (Plaintiff in 2011/404173)
Thorntons Lawyers (Plaintiff in 2011/408805)
Pigott Stinson Lawyers (Defendant)

File Number(s): 2011/404173; 2011/408805

Judgment

The Claims

HIS HONOUR: These reasons relate to two different proceedings, in each of which a family provision order pursuant to the Succession Act 2006 ("the Act"), and costs, are sought out of the estate of Russell Milton Robinson ("the deceased"). A family provision order is an order made by the Court in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life, of an eligible person. (There was a third proceeding, listed for hearing also, in which similar relief was sought in respect of the same estate, but it was resolved by orders made at the commencement of the hearing.)

With the agreement of the parties, I made an order that the matters be heard together, with the evidence in one being the evidence in the other. This was clearly necessary, and appropriate, as some of the evidence to be read was relevant to one, or more, of the proceedings. I shall refer, in the course of these reasons, to some of the evidence and to the orders that have been made in the settled proceeding.

The proceeding, first in time, was commenced by Nikita Khoury, a daughter of the deceased, by Summons filed on 13 September 2011. An amended Summons was filed on 4 October 2011, and a further amended Summons was filed on 2 December 2011. I refer to these proceedings as "Nikita's proceeding". This proceeding was settled and orders were made. Each of the Plaintiffs in the other two proceedings consented to the orders being made. I shall return to the nature of the orders later in these reasons.

The proceeding, second in time, was commenced by Lucie Elisabet Hedman, the widow of the deceased, by Summons filed on 15 December 2011. I shall refer to these proceedings as "Lucie's proceeding".

The proceeding, third in time, was commenced by Summons filed on 20 December 2011 by Elisabeth Mary Egan, as tutor for Georgia Robinson Egan. Elisabeth is the mother of Georgia and was a witness in the proceedings. As Georgia is now 19 years of age and is, therefore, no longer a person under a legal incapacity, an order was made that Elizabeth be removed as her tutor. I shall refer to these proceedings as "Georgia's proceeding".

The Defendant named in each of the three proceedings is Andrew John Frazer, a Chartered Accountant, who is one of the two executors (with Lucie) appointed in the Will of the deceased.

Without intending to convey undue familiarity, with no disrespect intended, and for convenience, I shall refer, hereafter, to the family members, and witnesses, after introduction, by her, or his, given name. I shall refer to the Defendant as "the Defendant".

The matters proceeded with the reading of the evidence filed in the three proceedings; then, the objections to a few parts of the affidavits were made and ruled upon; the cross-examination of each of the parties and one other witness, Sandra Jane Fynmore, then occurred; and, finally, submissions were made by senior counsel for each of Lucie, Georgia and the Defendant.

A number of witnesses were not cross-examined which reduced the duration of the hearing. The estimated duration of the hearing was three days, but the proceedings were concluded within two days.

Formal Matters

The following facts are uncontroversial.

The deceased died on 22 December 2010. He was then aged 58 years, having been born in January 1952.

The deceased was married to Wendy Stonestreet in November 1970. There were two children of their relationship, namely Nikita, and her sister, Melissa Robinson, who was born in 1971. Nikita was born in 1972. The deceased and Wendy separated in about 1973 and a divorce order was made in about November 1975. (Wendy married again in about 1977.)

The deceased was next in a relationship with Elisabeth, which relationship commenced in 1985 and continued until the birth of their daughter, Georgia, in 1994. They had met some years earlier when each was relatively young. Despite their separation, Elisabeth and the deceased remained close friends until his death.

Lucie was married in 1971 and divorced in 1976. There was one daughter of the marriage who was born in March 1971. Lucie was married again, between 1981 and 1983, although no details of this marriage are disclosed in her evidence.

Prior to her relationship with the deceased, Lucie lived in a de facto relationship with John Lane, a friend of the deceased. Their relationship ended in 1996. They reconciled, in 2000, for about 12 months. It was following the final termination of their relationship that Lucie and the deceased commenced their relationship.

The deceased married Lucie one week before his death. They had, however, been living in a de facto relationship from August 2002. Accordingly, their relationship was of 8.33 years duration. They became acquainted in 1983, although their relationship before the commencement of their de facto relationship was that of friends. (She and the deceased did not have any contact between 1984 and 1988. They had some contact after that time, but the contact was sporadic.)

The deceased left a Will that he made on 15 December 2010, Probate in common form of which was granted to the Defendant and Lucie on 21 February 2011, by this Court. By that Will, after the revocation of all former wills and other testamentary dispositions, the deceased, in summary, provided for:

(a) A legacy to Melissa "with whom I have had no contact since 1987", of $15,000: Clause 4.

(b) A legacy to Nikita (who was formerly known as Donna Marie Deeb) "with whom I had very limited contact during her childhood and with whom I had a dispute in 1997 and with whom I have had no contact since that time" of $15,000: Clause 5.

(c) A gift to Sandra Jane Fynmore of a portion of his shareholding in Kordus Pty Ltd ("Kordus"), "so that the aggregate of the shares held by her at my death and the shares provided by this bequest, represents 20% of the issued capital of Kordus Pty Limited at that time": Clause 6.

(d) A gift to his uncle, Allen Robinson, of his Jaguar vehicle: Clause 7.

(e) A gift to Georgia of his Peugeot vehicle: Clause 8.

(f) A legacy to his cousin, Julie Flynn Robinson, of $10,000: Clause 9.

(g) A direction to the trustees to set aside a sum of $80,000 to be invested, with the income to be used to pay the outgoings incurred by Elisabeth in respect of any home occupied by her during the period of 20 years following the deceased's death: Clause 13.

(h) The balance of the Will contained powers given to the Trustees of the estate in addition to the powers given to them by law: Clause 18; a charging clause: Clause 19; as well as directions regarding the allocation and burden of taxes: Clause 20.

I set out, verbatim, the provision made for Lucie in the Will:

"10. I DECLARE that my wife LUCIE ELISABET ROBINSON shall have the right to occupy my residence at ... Putney or any substituted residence for a period of 20 years from my death. In the event that during the period of my wife's right to occupy the home she chooses to relocate within Australia, I DIRECT my Trustees to purchase on behalf of my estate, for her occupation, a dwelling appropriate for her personal circumstances. The outgoings in respect of the residence or any substituted residence including rates, taxes, insurance, and maintenance and repairs shall be paid from my estate.

11. I DIRECT my Trustees to appropriate the sum of $150,000 as a fund to meet from the income derived from the investment of the fund the expenses referred to in clause 10 and the costs of administering the fund and;

(a) the powers of investment given to my Trustees under this will shall apply to the appropriated fund;

(b) the rest of my estate shall be exonerated from any liability to meet the expenses in clause 10;

(c) if the income from the appropriated fund is insufficient to meet the expenses my Trustees shall resort to the capital of the fund;

(d) any excess income from the appropriated fund shall be reinvested as part of the fund; and

(e) when the liability to pay expenses under clause 10 ceases the appropriated fund shall fall into and become part of my Residuary Estate.

12. IF my residence at ... Putney or any other substituted residence is sold and if any proceeds of sale remain after the purchase of a substituted residence in accordance with clause 10, I DIRECT that:

(a) one half of the proceeds shall become part of my Residuary Estate; and

(b) the remaining half shall be invested by my Trustees and the income paid to LUCIE ELISABET ROBINSON for her life and after her death the remaining half shall fall into and become part of my Residuary Estate."

I set out the provision made for Georgia in the Will verbatim:

"14. I GIVE my Residuary Estate to my Trustees to hold the same upon trust from my daughter GEORGIA MARY BRIDGET ISABELLA LAURA LOUISE MARJORIE NICOLA ROBINSON EGAN (Georgia Robinson Egan):

(a) as to the sum of $10,000 upon her attaining the age of 21 years; and

(b) as to the balance of my Residuary Estate upon her attaining the age of 30 years.

15. I DIRECT that my Trustees shall pay the reasonable fees and expenses associated directly with her education at government and equivalent colleges and universities.

16. Upon my daughter GEORGIA EGAN ROBINSON attaining the age of 25 years, my Trustees in their absolute discretion may at any time purchase in the name of the Trustees, a house, home unit, town house or other conventional form of home for her occupation."

It is also necessary to refer to Clause 18(b) and 18(f) of the deceased's Will which provides for a power to the trustees:

"18. My trustees have the following powers as well as those given by law:

...

(b) subject to the specific provisions in relation to the trusts created in my will, to apply the whole or any part of the income or capital of any share in my estate to which any beneficiary is presumptively or contingently entitled for ...her maintenance, education, benefit or advancement in life until such time as ... she obtains a vested interest...

...

(f) to allow LUCIE ELISABET ROBINSON and ELIZABETH EGAN or either of them to be employed in the childcare centre businesses owned by Kordus Pty Ltd on terms no less favourable than as at my death."

According to the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the property owned solely by the deceased at the date of his death, was disclosed as having an estimated (or known) gross value of $6,820,825. No liabilities were disclosed. The estate was said to consist of real estate at Putney ("the Putney property") ($3,150,000); real estate in Victoria ("the Carrum Downs property") ($1,450,000); shares in public companies ($5,583); shares in private companies being Kordus (2 fully paid ordinary shares) ($1,470,000); North Ryde Community Finance Ltd (71,000 fully paid ordinary shares) ($68,160); Reachcord Pty Limited (2 ordinary shares) (unknown value); Russrobin Pty Limited ("Russrobin") (2 ordinary shares) ($2); Russan Pty Limited ("Russan") (80 ordinary shares) ($80) (total value of shares is $1,538,242); a car (the Peugeot) ($2,000) (in fact registered in the name of Kordus); the proceeds of a superannuation fund ($100,000); personal effects ($25,000) and debts due to the estate from the Robinson Family Trust ($250,000 and $300,000). (I have omitted any reference to the cents and shall continue to do so. This may appear to result in minor mathematical miscalculations in the figures set out below.)

At the time of his death, the deceased held monies ($7,561) in a joint account in the Bendigo Bank with Lucie. The amount held in this account was transmitted to her following the death of the deceased.

In his affidavit sworn 25 October 2013, the Defendant stated that the estate then had a gross value of $6,043,636 and that it comprised the deceased's interest in the Putney property ($2,950,000), the deceased's interest in the Carrum Downs property (net value $532,746), shares in Kordus ($1,955,152), a loan to Russrobin ($524,860), North Ryde Community Bank Shares ($47,460), listed shares ($8,418) and personal effects ($25,000).

As mentioned, there were no liabilities of the deceased at the date of death disclosed in the Inventory of Property. There were, however, funeral expenses ($14,430). In addition, at the date of his death, there was a loan from the Bendigo Bank (the amount of which, as at 16 October 2013, was estimated to be $1,227,800) secured on the Putney property and from Russan (the amount of which, as at 16 October 2013, was estimated to be $940,500). There was also the deceased's liability for one half of the debt secured by mortgage on the Carrum Downs property (the total debt being about $1.62 million), which is now owed jointly by the estate and by Lucie (which debt has been taken into account in estimating the net value of the deceased's interest in the Carrum Downs property).

The Defendant has stated he will not seek commission from the estate, as he is entitled to charge his professional rate for work done in administering the estate.

The parties agreed that, at the date of hearing, the gross value of the estate, after the deduction of the mortgage debt and the Russan debt, was $3,875,336. They also agreed that, from the estate, there should be distributed or set aside:

(a) $500,000 to Nikita (being the balance of the agreed amount ($550,000) by way of provision that she is to receive out of the estate pursuant to the orders made) and her costs calculated on the ordinary basis (agreed to be $82,500);

(b) A legacy of $10,000 to Julie;

(d) An amount, pursuant to Clause 13 of the deceased's Will ($80,000) from which the amount of $7,249 will be payable to Elisabeth;

(e) An amount of $934, to Georgia, for education expenses;

(f) An amount of $29,127, to the Defendant, for additional professional fees in administering the estate; and

(g) The shares to which Sandra is entitled.

In the event that the Putney property is sold, and alternative accommodation is to be purchased by, or for, Lucie, the stamp duty payable, depending upon the purchase price, will range between $62,490 (if the purchase price is $1.4 million) and $78,990 (if the purchase price were $1.7 million).

At the date of his death, the deceased was an insured member in HESTA, the industry superannuation fund for health and community services. In September 2012, it held an account balance, in favour of the deceased, of approximately $142,338. At that time, the trustee wrote to Lucie and the Defendant, by their lawyers, advising that an application could be made for the payment of the deceased's death benefit.

Since then the account balance increased to about $224,000. The Trustee of HESTA determined that the death benefit payable should be divided equally between Lucie and Georgia. Each has recently received about $112,000, which amount forms part of her current assets. (The distribution of one half of the death benefit to each of Lucie and Georgia followed a review of the Trustee's previous decision. Notification was provided to each of them and to the Defendant by letter dated 19 September 2013.)

In calculating the value of the estate finally available for distribution, the costs of the present proceedings should also be considered, since each of Lucie and Georgia, if successful, normally, will be entitled to an order that her costs be paid out of the estate of the deceased, whilst the Defendant, as the executor representing the estate in the proceedings, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs be paid out of the estate.

Lucie's solicitor estimated Lucie's costs and disbursements of the proceedings, including senior counsel's fees, calculated on the ordinary basis, to be about $96,900 (inclusive of GST and upon the basis of a three day hearing). (In view of the fact that the matter was concluded in two days, the costs may be reduced, although the Court was not informed of the revised costs estimate.)

Lucie has paid $21,625 on account of her costs and disbursements. If a costs order in her favour is made, she may recover some, or all, of this amount. I shall bear this in mind in dealing with her financial resources.

Georgia's solicitor estimated Georgia's costs and disbursements of the proceedings, including senior counsel's fees, calculated on the ordinary basis, to be about $99,009 (inclusive of GST and upon the basis of a three day hearing). (In view of the fact that the matter was concluded in two days, the actual costs may be reduced, although the Court was not informed of the revised costs estimate.)

Nikita's solicitor and the legal representative of each of the other parties, agreed that Nikita's costs of the proceedings, calculated on the ordinary basis, were $82,500. By consent of all, an order was made that this amount should be paid out of the estate.

The Defendant's solicitor has estimated the Defendant's costs and disbursements of all three proceedings, including senior and junior counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a three day hearing), to be $175,443. Other associated costs and disbursements (in total, $28,063) bring the total amount of estimated costs and disbursements to $203,506, of which $95,443 has been paid out of the estate, leaving a balance of about $108,063 yet to be paid. (In view of the fact that the matter was concluded in two days, the actual costs may be reduced, although the Court was not informed of the revised costs estimate.)

That almost $500,000 has been incurred in legal costs and disbursements of the three proceedings is eye watering, but, perhaps, it demonstrates the level of the intensity of feeling within family members, particularly between Lucie and Georgia, and those associated with Georgia. This level of feeling, in my view, has clouded the ability of each to see a practical, rather than a legal, solution to their proceedings (as I think will be demonstrated later in these reasons).

The parties also agreed that the only eligible persons are Lucie, Georgia, Elisabeth, Melissa, Nikita, and Wendy. Only Elisabeth and Wendy have not commenced proceedings under the Act. I am satisfied that Elisabeth is aware of all of the proceedings as her affidavit was read (and until recently, she was Georgia's tutor).

I am also satisfied that Wendy has acknowledged receipt of the prescribed notice, as there is evidence that she contacted the solicitor with conduct of the proceedings on behalf of the Defendant in February 2013, indicating that she would like to make a claim against the estate for unpaid child care payments. However, the evidence also reveals that nothing further has been heard from her, or on her behalf, since then.

Other Agreed Matters

Melissa commenced proceedings by Summons filed 20 December 2011, seeking a family provision order, which proceedings were resolved at mediation on 11 March 2013. She received a lump sum of $100,000, inclusive of her costs, which was paid to her on 16 August 2013.

The amount paid to Melissa was funded from a franked dividend that Kordus declared.

The Defendant proposes, subject to the agreement of Lucie, as co-executor, that the balance of the amount payable to Nikita ($500,000) will be funded by declaring a dividend for one half of that amount, with the rest to be paid over 6 months, in instalments, by drawing down on the debt owed by Russrobin.

The deceased had owned the Putney property since 1997. He purchased it for about $1.3 million. Lucie moved into the Putney property at the commencement of their relationship in August 2002.

Georgia moved into the Putney property with the deceased and Lucie at the beginning of 2006. Prior to that time, she would usually spend alternative weekends with them. She left the Putney property, and returned to live with Elisabeth, shortly before the deceased died.

Lucie agreed that she and Georgia "never formed a close relationship". Georgia echoed this view.

In February 2008, the deceased and Lucie purchased the Carrum Downs property, as tenants in common in equal shares, for $2.6 million. Erected on the land is a single level, purpose-built, long day childcare centre. There is a lease of the Carrum Downs property, which commenced in February 2008, to Russrobin, for a term of 10 years with an option for another 10 years. Rental reviews are to be conducted annually with increases at 3% to 4% per annum. Outgoings, other than land tax, are the responsibility of the lessee, as is the payment of GST (on the provision of a valid tax invoice).

Lucie is entitled to receive an amount from the rental obtained on the Carrum Downs property. As at June 2013, the amount payable to her was approximately $45,000, but with the accrual of rent for the five months thereafter, to November, her entitlement has increased to approximately $100,000. (She would be liable to pay income tax on that amount calculated at the rate of 46%.) The Defendant said that there was "no bar to that being paid out".

The deceased's shareholding in Kordus is 66.67% (2 of 3) of the issued shares. Kordus owns and operates two different childcare centres in Camberwell and Glen Iris, Victoria. The estimated revenue generated from these two childcare centres is approximately $269,000 per month. Lucie is a director and the secretary of Kordus. On 18 March 2013, the Defendant was appointed as a director also.

Russrobin is also the trustee of the RMR Discretionary Trust, which was established by Deed dated 2 July 2007. The deceased was the appointor of the Trust. Lucie was appointed a director and the secretary of Russrobin on 21 December 2010. (Subsequently, in March 2013, the Defendant was appointed a director also, although there may be a dispute about the validity of this appointment.)

Russrobin owns and operates a different childcare centre conducted on the Carrum Downs property. It owns the assets and goodwill of that childcare business. As well, it holds 80% of the units of the Bentleigh Child Care Centre Unit Trust ("the Bentleigh Unit Trust"). The estimated revenue generated from this childcare centre is approximately $206,400 per month. It also holds some shares in North Ryde Community Finance, which operates a branch of the Bendigo Bank.

Following the death of the deceased, the principal discretionary objects (identified in the Deed as "the Nominated Beneficiaries") of the Trust are Lucie, Georgia and Elizabeth. There are various other discretionary objects associated with the Nominated Beneficiaries who are identified as "General Beneficiaries". Both classes fall within the definition of "Beneficiaries" in the Deed and it is amongst the "Beneficiaries" that the income and capital of the Trust Fund may be distributed. (Melissa and Nikita were excluded as beneficiaries.)

There is power given to the Trustee of the RMR Discretionary Trust, at any time, or times, before the Vesting Day, out of the capital or income, to pay, set aside, or lend (with or without security), an amount "to any Beneficiary for his, her, their or its own benefit or apply same to, or for the benefit of, any Beneficiary in any manner that the Trustee shall think fit".

As at 30 June 2013, the estimated value of the net realisable assets held in the Trust was approximately $1,286,588.

The distributions allocated to the loan account for each of the three principal discretionary objects from the Trust have been substantial. To Lucie, in the financial years ending 2010, 2011, 2012 and 2013, the allocated distributions total $472,379; to Georgia, in the financial years ending 2011, 2012 and 2013, the allocated distributions total $792,631; and to Elizabeth, in the financial years ending 2010, 2011, 2012 and 2013, the allocated distributions total $472,649.

However, after the payment of income tax on the respective distributions, already paid and to be paid, and after relevant expenses are set off against her respective loan account, the amount Lucie is entitled to receive is estimated to be about $165,000, whilst the amount Georgia is entitled to receive is about $250,000.

Russan is the trustee of the Bentleigh Unit Trust. Lucie is a director, with Sandra, of this Unit Trust. She was appointed in December 2010. (Subsequently, in March 2013, the Defendant was appointed a director also, although there may be a dispute about the validity of his appointment.)

The Bentleigh Unit Trust was established by Deed dated 26 May 2010. It comprises 100 units, 80 of which are owned by Russrobin as trustee for the RMR Discretionary Trust. Sanfyn Pty Limited, a company associated with Sandra, own the remaining 20 units.

Russan, as trustee, owns and operates another childcare centre in Bentleigh, Victoria. It owns the assets and goodwill of the business. The estimated revenue generated from this childcare centre is approximately $208,820 per month. (The net assets of the Bentleigh Unit Trust are reflected in the net asset position of the RMR Discretionary Trust.)

The Putney property has a site area of 828.3 square metres. The improvements on it comprise a three level, painted, part timber weatherboard, and part compressed fibre cement clad, residence, with a terracotta tiled roof, a painted timber weatherboard boatshed with a metal roof, a small lap pool, timber decks and a double car port. The residence has 4 bedrooms, one with an en suite bathroom, a separate bathroom, a combined lounge/dining, a kitchen, a laundry, and low height basement storage. There is a small boat ramp from the boatshed. The grounds have been landscaped. The property enjoys expansive water views.

Outgoings for the Putney property, which have been paid, total $64,306.

The value of the 20-year interest in the Putney property given to Lucie in the deceased's Will, as at the date of death, was $645,000.

The parties agreed that if the Putney property were sold, the costs and expenses of sale would be about $75,000, comprising agent's commission ($64,900) and conveyancing costs ($10,000). They also agreed that about $20,000 to $30,000 would be required to be spent on the Putney property to get it ready for sale.

The deceased appointed Lucie and the Defendant as his attorneys under a General Power of Attorney dated 31 August 2007. At the same time, he appointed Lucie as his guardian "if because of disability I am partially or totally incapable of managing my person".

The gift of the Jaguar vehicle to Allen, in Clause 7 of the Will, adeemed because the deceased made an inter vivos gift of it to Allen prior to his death.

The value of the Peugeot motorcar, which was to be transferred to Georgia under Clause 8 of the Will, had no real value. It was transferred to the mechanic who had been looking after it in order to satisfy outstanding accounts for which the deceased was liable and which, otherwise, would have been payable out of the estate.

Sandra is employed as the operational director of the four childcare centres conducted in Victoria. She is the sole director, secretary and shareholder of Sanfyn Pty Limited, which owns the balance of the units in the Bentleigh Unit Trust. (It owns these units as trustee for the Fynmore Family Trust.)

Sandra is the person who runs the child care centres with the assistance of staff. She receives a gross salary of about $200,000 per annum. She gives evidence of the contribution made by Lucie (to which evidence I shall return), but considers that Lucie does not have a good understanding or knowledge of the business. When Sandra receives her entitlement to shares in Kordus Pty Limited under the Will of the deceased, she is likely to reconsider Lucie's continuing employment, including terminating that employment. (Elisabeth, who is another shareholder in Kordus has expressed a similar view to Sandra. Together, they will own over 50% of the shares in Kordus.)

If Lucie's employment is terminated, the Defendant has seen accounts of Kordus that suggest she might have accrued entitlements to long service leave, holiday pay and sick pay, of about $10,000.

Sandra has known Georgia since Georgia was born. She regards her as a bright adult with a "a very colourful personality". She is aware of Georgia's desire to be involved in the childcare business and is prepared to assist Georgia in learning the financial side of the business. She considers that, with time, Georgia could become her second in command of the childcare businesses.

Georgia produced an academic transcript of her results in the Diploma of Marketing course for the academic year 2013. These results included one credit, two distinctions and four high distinctions.

Other Unassociated Proceedings

Prior to the current proceedings being heard, the estate came to be liable for legal costs incurred in substantial, and protracted, litigation in this Court and in the Federal Court, with Leonardus Geradus Smits (who was the deceased's former lawyer and with whom he had business dealings) and an associated company controlled by Mr Smits, namely Cyonara Snowfox Pty Limited. Ultimately those proceedings were settled in December 2012 and $350,000 was paid out of the estate. The terms of settlement also addressed the Supreme Court proceedings, which were dismissed as part of the agreement reached between the parties.

The legal costs involved in prosecuting the proceeding in the Supreme Court were $118,299. The costs of the proceeding in the Federal Court (including certain bankruptcy proceedings) were $358,990. Those costs have also been paid. In addition, the Defendant's professional fees for time spent conducting forensic accounting in the defence of the bankruptcy proceedings were $125,616. His professional fees for taxation services were $7,700. Those fees have also been paid.

The Statutory Scheme - The Act

Next, I shall discuss the statutory scheme that is relevant to the facts of the present case. Although I have set out most of what I state hereunder in other cases, in view of the importance of this case to the parties, I shall repeat the principles. It is equally important that they are able to follow the reasoning and for each to be satisfied that I have considered the evidence and the submissions in the application.

The former Act was repealed by s 5 of the Succession Amendment (Family Provision) Act 2008. A new Chapter 3 was added to the Act, which dealt with the topic of family provision from deceased estates. The long title of the Act describes that new Chapter as one to ensure that adequate provision is made for the members of the family of a deceased person, and certain other persons, from the estate of the deceased person. Importantly, this should not be taken to mean that the Act confers upon those persons a statutory entitlement to receive a certain portion of a deceased person's estate. Nor does it impose any limitation on the deceased's power of disposition by his, or her, Will. It is only if the statutory conditions are satisfied that the Court is empowered, under the Act, to alter the deceased's disposition of his, or her, estate, to produce a result that is consistent with the purpose of the Act. Even then, the Court's power to do so is discretionary.

The key provision is s 59 of the Act. The Court must be satisfied, first, that an applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). In New South Wales, there is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made.

Relevantly, in this case, Lucie relies upon the category of eligibility referred to in s 57(1)(a) of the Act. There is no dispute that she was the wife of the deceased at the date of his death, albeit that their marriage occurred about one week before. As stated, they were living in a de facto relationship for about 8.33 years before that.

Relevantly, in this case, Georgia relies upon the category of eligibility referred to in s 57(1)(c) of the Act. There is no dispute that she is a child of the deceased.

In each case, the language of the relevant section is expressive of the person's status, as well as her, relationship to the deceased. There is no age limit placed on an eligible person making an application.

It is only if eligibility is found, that the Court must determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is this mandatory legislative imperative that drives the ultimate result and it is only if the Court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). Only then may "the Court ... make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made".

Allsop P in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, commented, at 658 [6]:

"... the expression of the task in s 59 is subtly different from the previous legislation. A prohibition against making an order unless satisfied of circumstances of an evaluative character, is different in emphasis from a permission to make an order if satisfied of circumstances of an evaluative character... The exercise of power to make the order is conditioned on the Court being satisfied of certain things in s 59(1). The order that may be made is described in s 59(2). The two elements are described in s 60(1)(b) as 'whether to make [an] ... order and the nature of any ... order.' Section 60(2) provides a detailed body of considerations for the task in s 59."

Basten JA, at 662-3 [26], put the differences this way:

"As appears from the language of the relevant provisions set out at [66]-[67] below, the Succession Act differs from the Family Provision Act in three significant respects. First, although both conferred similar powers on the court, the conditions of their exercise differ. The Family Provision Act required that the court 'shall not make an order ... unless it is satisfied that' the provision made by the testator is 'inadequate': s 9(2). The Succession Act provides that the court 'may ... make a family provision order ... if the court is satisfied that' the testator has not made "adequate provision" for the applicant: s 59(1). The changes in language may have been intended to remove double negatives, but there is a resultant change in emphasis. The apparent effect is to widen the discretion vested in the court. That which could satisfy a court that the provision made is 'not adequate', for the purposes of the Succession Act, might not have been sufficient to remove the prohibition under the Family Provision Act, which operated in the absence of affirmative satisfaction that the provision was 'inadequate'. There may well be no bright line boundary between adequacy and inadequacy."

Barrett JA, at 677-8 [82] - [86], said:

"The court's task under the new legislation is in substance the same as that under the old. Three differences relevant to the kind of case under discussion may, however, be noted (I leave to one side as irrelevant to such cases the extension of the s 60(2) criteria to the question of 'eligible person' status); and two postulated differences may be rejected.

First, the Succession Act provisions direct attention, upon the initial inquiry into adequacy, to provision made by the deceased's will and the intestacy laws. The former legislation referred merely to provision 'out of the estate' but it was clear that the operation of the intestacy laws was to be taken into account in deciding what provision was available 'out of the estate': see, for example, Smilek v Public Trustee [2008] NSWCA 190.

Second, the Succession Act confines attention, upon that initial inquiry, to provision made by the will and the intestacy laws. There is no reference to provision made during the deceased's lifetime. In this respect, there is a departure from the Family Provision Act approach under which provision made in favour of the eligible person "either during the person's lifetime or out of the person's estate" was to be examined upon the initial inquiry into adequacy.

Attention may, however, still be given to provision made in favour of the applicant during the deceased's lifetime. That is now one of the factors to which regard may be had under s 60(1)(b) when the court is deciding whether to make a family provision order and the nature of the order: see s 60(2)(i). Under the Succession Act, therefore, provision made by the deceased while living thus has a continuing relevance with altered emphasis. Such provision is no longer something to be taken into account in deciding whether adequate provision has been made; but it may be taken into account in deciding whether an order should be made and the nature of the order.

The third difference to be noted is the Succession Act's more comprehensive catalogue of matters that may be taken into account in formulating an order for provision. Section 9(3) of the Family Provision Act empowered the court to 'take into consideration' matters there stated in 'determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person'. Section 60(1)(b) of the Succession Act allows the court to 'have regard to' the matters set out in s 60(2) 'for the purpose of determining ... whether to make a family provision order and the nature of any such order'. The Succession Act lists a greater number of such matters than did the Family Provision Act."

Other than by reference to the provision made in the Will of the deceased, or, if relevant, by the operation of the intestacy rules in relation to the estate of the deceased, or both, s 59(1)(c) of the Act leaves undefined the norm by which the Court must determine whether the provision, if any, is inadequate for the applicant's proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the Court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant.

In Grey v Harrison [1997] 2 VR 359, at 366-367, Callaway JA observed:

"There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight."

It was said in the Court of Appeal (by Basten JA) in Foley v Ellis [2008] NSWCA 288, at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment". Stevenson J recently described it as "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific": Szypica v O'Beirne [2013] NSWSC 297, at [40] (citing Manuel v Lane [2013] NSWCA 61 at [9] per Emmett JA, speaking in relation to s 20 of the Property (Relationships) Act 1984).

Under s 59(1)(c) of the Act, the time at which the Court gives its consideration to the question of inadequacy of provision is the time when the Court is considering the application.

"Provision" is not defined by the Act, but it was noted in Diver v Neal [2009] NSWCA 54; (2009) 2 ASTLR 89, at [34], that the term "covers the many forms of support and assistance which one individual can give to another. That support and assistance will vary over the course of the person's lifetime".

Neither is the word "maintenance", nor the phrase "advancement in life", defined in the Act.

The term "maintenance" usually refers to a provision for the supply of the necessaries of life. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, said, of the words "maintenance", "support" and "advancement":

"'Maintenance' may imply a continuity of a pre-existing state of affairs, or provision over and above a mere sufficiency of means upon which to live. 'Support' similarly may imply provision beyond bare need. The use of the two terms serves to amplify the powers conferred upon the court. And, furthermore, provision to secure or promote 'advancement' would ordinarily be provision beyond the necessities of life. It is not difficult to conceive of a case in which it appears that sufficient provision for support and maintenance has been made, but that in the circumstances, say, of a promise or an expectation reasonably held, further provision would be proper to enable a potential beneficiary to improve his or her prospects in life, or to undertake further education."

In Alexander v Jansson [2010] NSWCA 176, Brereton J (with whom Basten JA and Handley AJA agreed), at [18], stated:

"'Proper maintenance' is not limited to the bare sustenance of a claimant [cf Gorton v Parkes (sic) [1989] 17 NSWLR 1], but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility."

In J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006), at 542, the learned authors comment upon the difference between the concepts of maintenance and advancement:

"The essential difference between 'maintenance' and 'advancement' is that 'maintenance' denotes a periodical payment or a payment which could validly be made periodically, whereas 'advancement' denotes a definite unique outlay for a specific purpose. Recipients of maintenance must, practically speaking, be infants, but adults may be recipients of an advancement.

An advancement can never be made of a sum of money which the person to whom it is made can immediately pocket, but it must be made with a view to the establishment of that person in a business or profession, or otherwise in some definite way for that person's benefit, the whole essence of an advancement being the immediate payment of a tolerably large sum for an immediate benefit to one beneficiary."

In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Murphy J noted, at 505:

"Provision for advancement may, for example, extend to retraining or the gaining of a qualification which could advance and perhaps enable an applicant to maintain himself or herself."

In In the Estate of Puckridge, Deceased (1978) 20 SASR 72, at 77 King CJ said:

"The words 'advancement in life' have a wide meaning and application and there is nothing to confine the operation of the provision to an earlier period of life in the members of the family: Blore v Lang [(1960) 104 CLR 124] per Dixon C.J. at p. 128."

Master Macready (as his Honour then was) in Stiles v Joseph (NSWSC, 16 December 1996, unreported) said, at 14-16:

"Apart from the High Court's statement that the words 'advancement in life' have a wide meaning and application ... there is little (if any) case law on the meaning of 'advancement' in the context of family provision applications. Zelling J in In The Estate of Wardle (1979) 22 SASR 139 at 144, had the same problem. However, commonly in decisions in which the Applicant's 'advancement in life' has been in issue, the Court has looked only at the material or financial situation of the Applicant, and there is nothing to suggest that provision for the Applicant's 'advancement in life' means anything more than material or financial advancement. For example, in Kleinig v Neal (No 2) [1981] 2 NSWLR 532, Holland J, discusses the financial assistance which an applicant may need for his or her maintenance and advancement in life in the following terms:- If the court is to make a judgment as to what a wise and just testator ought to have done in all the circumstances of the case, it could not be right to ignore that the particular testator was a wealthy man in considering what he ought to have done for his widow or children in making provision for their maintenance, education or advancement in life. There are different levels of need for such things. In the case of maintenance and advancement in life they can range from bare subsistence up to anything short of sheer luxury. A desire to improve one's standard of living or a desire to fulfil one's ambition for a career or to make the fullest use of one's skills and abilities in a trade or business, if hindered or frustrated by the lack of financial means required for the fulfilment of such desire or ambition, presents a need for such assistance and it would seem to me that it is open to a court to say, in the case of a wealthy spouse or parent who could have but has failed to provide such financial assistance, that ... [the deceased] has failed to make adequate provision for the proper maintenance and advancement in life of the spouse or children who had such need. (at 541)

In Pilkington v Inland Revenue Commissioners [1964] AC 612, Viscount Radcliffe defined 'advancement', in the context of a trustee's powers, as 'any use of ... money which will improve the material situation of the beneficiary' (at 635), and this definition was cited with approval by Pennycuick J in Re Clore's Settlement Trust; Sainer v Clore [1966] 2 All ER 272 at 274...

In Certoma, The Law of Succession In New South Wales (2nd Ed) at 208, it is said:

'Although 'maintenance' does not mean mere subsistence, in the context of the New South Wales Act, it probably does not extend to substantial capital investments such as the purchase of a business, an income-producing property or a home for the Applicant because these forms of provision are more likely to be within the power of the Court under 'advancement in life'. Maintenance is rather concerned with the discharge of the recurrent costs of daily living and not generally with substantial capital benefit.'

The Queensland Law Reform Commission, in its Working Paper on Uniform Succession Laws: Family Provision (Working Paper 47, 1995) ... notes ... that:

'Whereas support, maintenance and education are words traditionally associated with the expenditure of income, advancement has been associated with the expenditure of capital, such as setting a person up in business or upon marriage.'"

In Mayfield v Lloyd-Williams [2004] NSWSC 419, White J, at [114] noted:

"In the context of the Act the expression 'advancement in life' is not confined to an advancement of an applicant in his or her younger years. It is phrase of wide import. (McCosker v McCosker (1957) 97 CLR 566 at 575) The phrase 'advancement in life' has expanded the concept used in the Victorian legislation which was considered in Re Buckland permitting provision to be made for the 'maintenance and support' of an eligible applicant. However Adam J emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate and still fall within the conception of maintenance and support."

In Bartlett v Coomber [2008] NSWCA 100, at [50], Mason P said:

"The concept of advancement in life goes beyond the need for education and maintenance. In a proper case it will extend to a capital payment designed to set a person up in business or upon marriage (McCosker v McCosker (1957) 97 CLR 566 at 575; Stiles v Joseph, (NSW Supreme Court, Macready M, 16 December 1996); Mayfield v Lloyd-Williams [2004] NSWSC 419)."

In McCoskerv McCosker [1957] HCA 82; (1957) 97 CLR 566 Dixon CJ and Williams J stated, at 575:

"(t)he presence of the words 'advancement in life' in the ... Act in addition to the words 'maintenance and education' is not unimportant. ... 'Advancement' is a word of wide import."

The word "adequate" connotes something different from the word "proper". "Adequate" is concerned with the quantum, whereas "proper" prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at 145 [72], [77].

These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:

"The use of the word 'proper' in this connection is of considerable importance. It connotes something different from the word 'adequate'. A small sum may be sufficient for the 'adequate' maintenance of a child, for instance, but, having regard to the child's station in life and the fortune of his father, it may be wholly insufficient for his 'proper' maintenance. So, too, a sum may be quite insufficient for the 'adequate' maintenance of a child and yet may be sufficient for his maintenance on a scale that is 'proper' in all the circumstances."

Dixon CJ and Williams J, in McCosker v McCosker, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word "proper", that:

"It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."

In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Gibbs J said, at 502:

"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."

In Vigolo v Bostin, at 228, Callinan and Heydon JJ said:

"[T]he use of the word 'proper' ... implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of the kind which was made here...The use of the word 'proper' means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called the 'station in life' of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."

Santow J pointed out in Gardiner v Gardiner (NSWSC, 28 May 1998, unreported), that "adequate" and "proper" are independent concepts. He said, at 12:

"'Adequate' relates to the needs of the applicant. It is determined by reference to events occurring up to the death of the deceased, but also encompassing what the deceased might reasonably have foreseen before death. 'Proper' depends upon all the circumstances of the case. These include the applicant's station in life, the wealth of the deceased, the means and proper claims of all applicants, the relative urgency of the various claims on the deceased's bounty, the applicant's conduct in relation to the deceased, the applicant's contribution to building up the deceased's estate, the existence of dependents upon the applicant, the effects of inflation, the applicant's age and sex, and whether the applicant is able-bodied ..."

In Palaganio v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person's maintenance, education or advancement in life is "proper" and the question of whether the provision made by the deceased was "adequate" for that person's maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.

His Honour further observed in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522, at [123]:

"The question of what level of maintenance or advancement in life is 'proper' depends on all of the circumstances of the case 'including the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty' (Singer v Berghouse (1994) 181 CLR 201 at 210)."

Until recently, it was unanimously thought that there are two stages of the determination. The first stage, provided for by s 59(1)(c), has been described as "the jurisdictional question": Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the Court will consider whether it can make an order for provision for the maintenance, education or advancement in life of a particular applicant. The Court does this by determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased and/or by operation of the intestacy rules, for the applicant. If it is not so satisfied, then the Court is precluded from making a family provision order. At this stage, the Court has regard to, among other things, the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased and the circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker at 571-572; Singer v Berghouse at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285, at [70].

Whether an applicant has a 'need' or 'needs' is also a relevant factor at the first stage of the enquiry. It is an elusive concept to define, yet, it is an element in determining whether "adequate" provision has been made for the "proper" maintenance, education and advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 (Tobias JA, with whom Beazley and Hodgson JJA agreed).

In Collins v McGain, Tobias JA said:

"42. Further, there can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly focussed. It must, in my view, take into account, depending upon the particular circumstances of the case, present and future needs including the need to guard against unforeseen contingencies.

...

47. As I have observed, the issue of need is not confined to whether or not an eligible person has, at the date of hearing, a then need for financial assistance with respect to his maintenance etc. It is a broader concept. This is so because the question of needs must be addressed in the context of the statutory requirement of what is 'proper maintenance etc' of the eligible person. It is because of that context that, in the present case, the 'proper maintenance etc' of the appellant required consideration of a need to guard against the contingency to which I have referred."

In Devereaux-Warnes v Hall (No 3), at [81] - [84], Buss JA said, in respect of the first stage of the process:

"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources: see Singer (at 227) per Gaudron J.

'Need' has also been used in the context of a value judgment or conclusion, namely, that the claimant is 'in need' of maintenance, etc, because inadequate provision has been made for his or her proper maintenance, etc: see Gorton v Parks (1989) 17 NSWLR 1 (at 10-11) per Bryson J.

The determination of whether the disposition of the deceased's estate was not such as to make adequate provision for the proper maintenance, etc, of the claimant will always, as a practical matter, involve an evaluation of the provision, if any, made for the claimant on the one hand, and the claimant's 'needs' that cannot be met from his or her own resources on the other: see Hunter (at 575) per Kirby P.

Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc: see Singer (at 227) per Gaudron J. Compare Gorton (at 6-11) per Bryson J; Collicoat v McMillan [1999] 3 VR 803 at [38], [47] per Ormiston J."

"Need", of course, is a relative concept: de Angelis v de Angelis [2003] VSC 432, per Dodds-Streeton J, at [45].

As Callinan and Heydon JJ emphasised in Vigolo v Bostin, the question of the adequacy of the provision made by the deceased "is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably": at 231 [122]. The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined.

In the event that the Court is satisfied that the power to make an order is enlivened (i.e. in this case it is satisfied that the applicant is an eligible person, and that adequate provision for the proper maintenance, education or advancement in life of the person has not been made), then the Court determines whether it should make an order and, if so, the nature of any such order, having regard to the facts known to the Court at the time the order is made.

The second stage of the process arises under s 59(2) and s 60(1)(b) of the Act. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse, at 211, affirmed that the decision made at the second stage involves an exercise of discretion in the accepted sense. The fact that the Court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour.

However, Basten JA, in Andrew v Andrew, said of the two stage process referred to:

"29 The combination of changes [to the legislation] requires that the court address the nature of the exercise being undertaken. Three potential consequences may be identified. First, there is a simplification of the structure of the process. There is no longer a two-stage process required. A degree of artificiality has thus been removed. The court should now ask what, taking all relevant factors into account, would have been adequate provision for the applicant. There is no first stage of determining whether the actual provision was "inadequate", followed by a discretionary exercise of determining what would be adequate and what should in fact be done.

...

41 As noted above, the language of the Succession Act is not consistent with the two-stage inquiry which was a common feature of earlier legislation: cf Singer v Berghouse at 208-209. In Keep v Bourke [2012] NSWCA 64 the Court appears to have assumed that the two-stage process continued to operate under the Succession Act: at [24]-[29]. However, the issue not having been directly addressed, there is no constraint on this Court now adopting a different approach. Nor does earlier High Court authority construing an earlier statutory scheme govern the approach to be adopted to materially different legislative provisions."

In Andrew v Andrew, Allsop P, at [6], said:

"Whether the process engaged in by the court in s 59 can still be described as 'two-staged' in the sense discussed in Singer v Berghouse (1994) 181 CLR 201 at 208-211 may be an analytical question of little consequence. The task involves an evaluative assessment and a choice as to consequence therefrom, appeal from which is governed by the principles concerning discretionary judgments: Singer v Berghouse at 211 and DAO v R [2011] NSWCCA 63; (2011) 81 NSWLR 568 at [93]."

Barrett JA disagreed with Basten JA, in Andrew v Andrew, saying:

"65 This is the second occasion on which this Court has been called upon to deal with a claim under s 59 of the Succession Act. In the earlier case, Keep v Bourke [2012] NSWCA 64, the Court proceeded on the basis that approaches taken under s 7 of the now superseded Family Provision Act 1982 remained relevant and applicable. That matter was explored in greater detail in the course of argument in the present case. For reasons I am about to state, I am of the opinion that the earlier approaches should continue to be followed in cases such as the present case and Keep v Bourke, that is, cases in which the applicant is a child of the deceased and no previous order for provision out of the estate has been made in favour of that applicant.

...

79 First, it is necessary, having regard to s 59(1)(c), for the court to be satisfied that, at the time when it 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'. Whereas the former s 9(2) provided that an order was not to be made unless the court was "satisfied" in the specified way, the present legislation permits the court to make an order if 'satisfied' in the specified way and, by necessary implication, precludes the making of an order if the court is not so 'satisfied'.

80 Second (and if the court is 'satisfied' in the specified way), the 'family provision order' that the court is empowered to make is, under s 59(2), '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'; and the court may, pursuant to s 60(1)(b), have regard to the matters specified in s 60(2) in deciding whether to make an order and the nature of the order.

81 Under s 59 and s 60, therefore, the task of the court, in a case of the kind under discussion, is:

(a) to determine the extent of the provision made for the maintenance, education and advancement in life of the applicant by the deceased's will or the intestacy laws;

(b) to form an opinion of the adequacy of that provision;

(c) if the opinion is one of inadequacy, to make an evaluative judgment as to what provision, if any, ought to be made out of the estate of the deceased person 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; and

(d) in making that evaluative judgment, to take into account, as discretionary factors, the matters in s 60(2).

...

94 As stated in Keep v Bourke, the structure and effect of the Succession Act provisions warrant continuing adherence to the two-stage approach indicated by the decisions of the High Court in Singer v Berghouse and Vigolo v Bostin."

In Franks v Franks [2013] NSWCA 60, Young AJA (with whom McColl JA and Sackville AJA agreed), at [17], referred to the primary Judge (Macready AsJ) having "cited the High Court's decision in Singer v Berghouse [supra] and adopted the two stage process required by that decision".

His Honour noted also, at [29], that the appellant (in one of the two appeals) "accepted that it was appropriate for the primary judge to follow the course laid down in Singer v Berghouse and that [the respondent] had surmounted the first hurdle of the two stage process referred to therein. Accordingly, he identified the key question as whether the primary Judge had erred in determining the quantum of the provision made for [the respondent] in lieu of that made under the deceased's will".

At [35], his Honour wrote:

"On an appeal against a decision concerning the application of the second limb of Singer v Berghouse, the Court is dealing with a discretionary judgment (see Singer v Berghouse (at 211) and Durham v Durham [2011] NSWCA 62 at [82]; 80 NSWLR 335 (at 352)). It follows that his Honour's decision is reviewable by this Court only in accordance with the principles established in House v The King [1936] HCA 40; 55 CLR 499."

Although the appeal was allowed, that was because the Court found, at [42], that:

"... in formulating the quantum of the provision he made for Brad, the primary judge did not take into account the disparity in the financial circumstances between Gregory and Brad. Accordingly, the primary Judge's decision as to quantum must be set aside."

Nothing in the judgment of the Court of Appeal in Franks v Franks suggests that the approach followed by the trial Judge, in adopting the two-stage process required by Singer v Berghouse, was wrong.

At first instance, there are a number of decisions to which reference should be made. In Verzar v Verzar [2012] NSWSC 1380, Lindsay J said:

"92 I refrain from characterisation of these elements of the case as 'stages' because that is terminology associated with the Family Provision Act 1982 (NSW) and Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 208-211. Since Andrew v Andrew [2012] NSWCA 308 (14 June 2012) per Allsop P at [5]-[6] and Basten JA at [27], [29] and [41] a single judge of the Court is bound, in my assessment, to regard the two-stage decision-making process identified in Singer v Berghouse, and confirmed by Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, as superseded by enactment of ss 59-60 of the Succession Act.

93 Although the provisions of ss 59(1)(c) and 59(2) might formerly have been treated, respectively, as re-embodiments of the first and second of the two-stages of decision-making identified in Singer v Berghouse, the test to be applied in Family Provision cases must be taken by me to have been modified."

(An appeal in Verzar v Verzar was heard in the Court of Appeal on 22 November 2013.)

Ball J, in Oldereid v Chan [2013] NSWSC 434, after referring to Andrew v Andrew, noted the different approaches being adopted by trial Judges. His Honour said:

"52 More recent decisions at first instance have differed on whether the decision in Andrew v Andrew requires the court to apply a two stage process or not. Lindsay J in Verzar v Verzar [2012] NSWSC 1380 thought that a single judge of the court is bound 'to regard the two-stage decision-making process identified in Singer v Berghouse ... as superseded by enactment of ss 59-60 of the Succession Act' (at [92]). Hallen J, on the other hand, has continued to apply the two stage test: see Goldsmith v Goldsmith [2012] NSWSC 1486 at [67]; Nowak v Beska [2013] NSWSC 166 at [113]. A third approach, adopted by Macready AsJ in Morgan v Bohm [2013] NSWSC 145 at [110], is to consider the case on both bases. There are, however, difficulties with that approach. If the two approaches involve real differences, then presumably there are cases where they will produce different results. What, then, is to be done applying both approaches? On the other hand, if the two approaches are bound to produce the same result, the dispute about which test should be applied has no significance.

53 In my opinion, there is clearly a tension between the decisions of the Court of Appeal in Keep v Bourke [2012] NSWCA 64 and Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 which only the Court of Appeal or High Court can resolve. In the meantime, the duty of a trial judge is to follow the later decision: see Ratcliffe v Watters (1969) 89 WN (NSW) Part 1 497 at 505 per Street J. In Andrew v Andrew, both Allsop P and Basten JA regarded the reformulation of the test in s 59 of the Succession Act as changing, perhaps only subtly, the threshold that must be satisfied before an order can be made. Basten JA regarded that change as also changing the way in which the court should approach the question. Allsop P regarded it as an analytical question of little consequence. However it is analysed, though, it is clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60. Whether those steps should be seen as separate stages that must be followed or as convenient steps in undertaking what is required by the legislation does not matter for present purposes."

It appears that Ball J was not referred to Franks v Franks.

More recently, Ball J in Peters v Salmon [2013] NSWSC 953, at [80], has referred to these decisions and to my own decision in Harrisson v Skinner [2013] NSWSC 736, at [62]-[79], and commented:

"There is much to be said for that conclusion [that the two-stage test should continue to be applied]. However, whatever the position, as I pointed out in my judgment in Oldereid v Chan [2013] NSWSC 434 at [53] it seems clear from the terms of s 59 that the court must ask itself the question whether it is satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made". If it is so satisfied, it must consider whether to make an order and, if so, the terms of that order. In undertaking each of those steps, it may have regard to the matters set out in s 60."

In Frisoli v Kourea [2013] NSWSC 1166, Slattery J at [139] said:

"Whether the two-step test operates with the same full vigour in the current legislation as it did in the Family Provision Act 1982 has been recently discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. Indeed in Andrew v Andrew [2012] NSWCA 308, especially at [26]-[29], and [41], the Court of Appeal has stated that the new language of the Succession Act is not consistent with the two stage inquiry which was a common feature of the earlier legislation. But such considerations are not determinative in this case, which is a clear one on the question of whether or not adequate provision has been made. It has not, for the reasons explained below. And even though the process may no longer be a two stage one, it still involves a similar range of relevant considerations."

In Ploder v Garcea (as executrix of the estate of the late Fiona Rita Garcea) [2013] NSWSC 1360, Sackar J, at [96], referred to a number of the decisions set out above, and said that he agreed with Allsop P (as his Honour then was), that "whether or not there had been a subtle change in approach is an analytical question of probably little consequence".

In Theoctistou v Theoctistou [2013] NSWSC 1487, Lindsay J wrote, at [62] - [63]:

"In approaching the tasks required by the text of the Succession Act, I am mindful that, in their submissions, both parties have drawn attention to the two-stage process discussed in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 209-210, as well as the observations about that process in Andrew v Andrew.

By analogy, the first stage corresponds with s 59 (1)(c) of the Succession Act, and the second with ss 59 (2) and 60 (1)(b): Charmock v Handley [2011] NSWSC 1408 at [46]-[50]."

In West v Mann [2013] NSWSC 1852,Kunc J wrote, at [11]:

"In this case the parties invited me to apply the terms of the Act. They did not suggest any different result would follow depending on whether a two stage or other approach was applied. What is clear is that experienced first instance judges have been unable to agree upon the effect of current appellate authority. For my own part, and with the greatest of respect, I will do no more than observe that there is a risk that the description or characterisation of the process can become an unnecessary distraction. To adapt what the Court of Appeal has observed in another context, whether the process is correctly described as "two stage", "one stage", "twin tasks" or otherwise is "not a substitute for applying the wording of the statute, construed as a whole and purposively, to the particular fact situation that arises for decision in a particular case": Sahab Holdings Pty Ltd v Registrar-General [2011] NSWCA 395 at [185] per Campbell JA and Tobias AJA; McColl JA agreeing."

Ultimately, as Allsop P said in Andrew v Andrew, at [6], "it may be an analytical question of little consequence" since the questions remain the same, namely, whether the Court can make an order for provision (whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made), and if so, whether it should (whether to make an order and, if so, the terms of that order).

Section 60 of the Act, at least in part, is new. It provides:

"(1) The court may have regard to the matters set out in subsection (2) for the purpose of determining:

(a) whether the person in whose favour the order is sought to be made (the 'applicant') is an eligible person, and

(b) whether to make a family provision order and the nature of any such order.

(2) The following matters may be considered by the court:

(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,

(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,

(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,

In January 2007, Lucie became more involved in the childcare business. She went down to Melbourne in February 2007 and commenced work as a director of Kordus. Kordus paid part of her rent whilst she was there as well as paying her a salary. She returned to Sydney in about August 2007 but went back until about June 2008.

When she was not in Melbourne, Lucie also carried out what she described as "normal domestic duties", such as cooking, some cleaning, shopping, laundry, liaising with tradesmen at the Putney property, organizing medical appointments, assisting in the deceased's business interests and "social networking". (She would also perform some of the domestic duties when she returned to Sydney on weekends.)

Helen Patricia Perrin, another witness who was not cross-examined, gives evidence of the care and support that Lucie provided to the deceased as his illnesses became more pronounced between 2008 and 2010. She says that Lucie "was there for him consistently and constantly and especially so in the palliative care phase of his illnesses". There is no reason to doubt this evidence.

Georgia was about 8 years old when the relationship of Lucie and the deceased commenced. Lucie, as part of the domestic duties that she undertook, would cook, clean, shop and do laundry for Georgia. When Georgia moved into the Putney property full time, in about February 2006, the assistance provided by Lucie increased.

During the years when Georgia lived with them, to which reference has been made, I accept that Lucie did what she could to assist the deceased to deal with the problems that he faced with a difficult teenage daughter.

I accept Lucie's evidence that she would assist in looking after Georgia, to the extent that this was required. I also accept Lucie's evidence about the domestic tasks she undertook.

Georgia admits that she did not do very much around the house whilst she lived in the Putney property. She says that this was because there was not much to do, the deceased having employed cleaners, gardeners and pool cleaners. However, this may simply be the view of a then teenager, who did not really observe all of the work of adults in a household.

As Georgia grew older, the deceased included her in the business, not in any meaningful way, but to provide her with some understanding of the nature of the childcare business.

Whilst Georgia did not make any contribution financially, or otherwise, to the acquisition, conservation and improvement of the businesses of the deceased, I am satisfied that, as the child with whom he had the closest relationship, she made a significant contribution to the welfare of the deceased. (Of course, there were periods when the relationship between parent and teenage child was strained.)

(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate

Lucie gives evidence of receiving the following provision, and the estimates value thereof, from the deceased during his lifetime:

Date
Amount
Description
2002-2010
$6,000
Health Insurance
Gap between medical and dental expenses
2005
$3,500
Gold bracelet
2005
$4,000
Laser surgery to eyes
2006
Qantas Frequent Flyer points
Return economy airfares to Finland
2006
$5,500
Shares in North Ryde Community Finance
2009
$300
Female's Gucci watch
2009
$5,000
Men's Cartier Tank watch
1 August 2010
$10,000
Engagement ring
15 December 2010
$2,500
Wedding ring
18 December 2010
$62,431
Repayment of mortgage secured over Fairlight property
18 December 2010
$5,137
Repayment of mortgage secured over Fairlight property
19 December 2010
$150,000
Repayment of mortgage secured over Fairlight property
20 December 2010
140,000 Qantas Frequent Flyer Points
25% of points transferred
20 December 2010
Returned money from Hawaii flights and $900 cash
Refund for airfares to Hawaii. $8,000 received in February 2011

I note that the Defendant says that Lucie also received a further payment of $50,000.00 in reduction of the loan secured over the Fairlight property, on 10 August 2010.

Lucie acknowledges having received a distribution from Russrobin of $150,000 in August 2013. She also acknowledged receipt of the amount of about $112,000, being part of the death benefit paid by HESTA.

Georgia says that she has not received any benefits from the estate of the deceased. She has, however, received distributions from the RMR Discretionary Trust. I have earlier referred to the amount of about $250,000 which is payable to her.

I have also referred to the amount of $112,000, which she has recently received as part of the death benefit paid by HESTA.

Finally, I should mention the income that Lucie received from Kordus, for some accounting duties, is said by Sandra to be far greater than the income which she should have received for the work that she performed.

(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person

There is no specific evidence of the testamentary intentions of the deceased other than in his last Will to which I have referred. However, the choice of Lucie, Georgia and Elisabeth, as principal discretionary objects, does suggest that the deceased wished to provide for each.

(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the court considers it relevant, the extent to which and the basis on which the deceased person did so

Lucie and Georgia was each being maintained, either directly or indirectly, by the deceased. I have referred to the actual distributions from the RMR Discretionary Trust and to the amount to which each is entitled (after deductions for payments made on behalf of each) since the date of death of the deceased.

(l) whether any other person is liable to support the applicant

There is, currently, no person with a liability to support Lucie.

There is, currently, no person with a liability to support Georgia.

(m) the character and conduct of the applicant before and after the date of the death of the deceased person

An evaluation of "character and conduct" may be necessary, not for the sake of criticism, but to enable consideration of what is "adequate" and "proper" in all the circumstances. Importantly, the Act does not limit the consideration of "conduct" to conduct towards the deceased. However, good conduct is not to be rewarded by a generous, but second-hand, legacy at the hands of the court: Blore v Lang (1960) 104 CLR 125, at 134.

I have dealt with the relationship of each of Lucie and Georgia and the deceased and the conduct of each towards the deceased earlier in these reasons.

There is no suggestion that there is any adverse conduct that should be taken into account. (I do not consider that any isolated, or occasional, disputes between the deceased and either Lucie, or Georgia, had the effect of disrupting the generally close relationship that each had with him, or that such disputes had the effect of constituting conduct which would disentitle, or reduce, the benefit of any order to which she might otherwise be entitled.)

The very fact that an applicant has been a dutiful and devoted spouse, or partner, or child, is one of the relevant circumstances of the case to be considered together with all the other circumstances in deciding whether proper maintenance has been provided: Hughes v National Trustees, Executors and Agency Company of Australasia Limited [1979] HCA 2; (1979) 143 CLR 134, at 497-498.

(n) the conduct of any other person before and after the date of the death of the deceased person

There is no other person whose conduct before or after the date of death of the deceased is relevant. (Had there been an issue regarding the entitlement of other beneficiaries to the provision made for her or him, I would have dealt with the conduct of Elisabeth, Sandra and Allen. I would also have referred to the conduct of Nikita and Melissa.)

(o) any relevant Aboriginal or Torres Strait Islander customary law

This is not relevant in the present case.

(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

There is no other matter that I consider relevant. (None of the parties relied upon any matter under this ground that was not otherwise considered under the other grounds.)

Determination

Being an "eligible person" is a necessary precondition to the Court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. In this case, there is no dispute that Lucie, as the widow of the deceased, and Georgia, as a child of the deceased, is each an eligible person within the meaning of s 57(1)(a) and s 57(1)(c) of the Act.

There is also no dispute that each commenced her proceedings within the time prescribed by the Act.

Having established eligibility and that the proceedings were commenced within time, the first question for determination, respectively, is whether, at the time the Court is considering the application, adequate provision for the proper maintenance or advancement in life, of Lucie, and adequate provision for the proper maintenance, education, or advancement in life, of Georgia, has not been made by the Will of the deceased.

I find that Lucie's claim on the bounty of the deceased is a reasonably strong one. I say "reasonably strong", and not "very strong", because her claim cannot be as strong as that of a widow who has been married to, or in a relationship with, a testator for longer than 8 years, or one whose efforts have made a significant contribution to the building up of the assets of the estate.

Here, Lucie's relationship with the deceased was about 8.33 years and a significant part of his estate had been built up prior to the commencement of their relationship. Even so, I accept that the fact of marriage carries a commitment, which must count.

It is then necessary to consider the provision made for Lucie in the Will of the deceased. The effect of Clause 10 is to provide a right of occupation in the Putney property, or "any substituted residence [to which] ... she chooses to relocate within Australia" for a period of 20 years from the death of the deceased. The substituted residence purchased is to be "a dwelling appropriate for [Lucie's] personal circumstances".

This means, of course, that Lucie can remain living in the Putney property if she wishes to, or should she choose a substituted residence, it will be necessary for the estate (which requires her and the Defendant) to purchase, on behalf of the estate, that substituted residence for her, in which residence she could then live for the remainder of the term of 20 years from the death of the deceased.

Furthermore, there is a fund available, of $150,000 from which the Putney property or the substituted residence is to be maintained. In this regard, the income from the fund, and then the capital, is to be used for rates, taxes, insurance, and maintenance and repairs.

It follows that this is not a case in which the provision made for a widow is a mere right of residence. To the contrary, the deceased appears to have considered "sickness, age, urgent supervening necessity or otherwise, with good reason", for Lucie to leave the Putney property. (He did not express it this way, but rather allowed her simply to choose a substituted residence.)

The parties seemed to agree that in order to purchase such substituted residence, it would be necessary to sell the Putney property and repay the mortgage debt secured on it. Assuming a sale price of about $2,950,000, the payment of expenses of sale, of about $100,000, the net proceeds of sale would be about $2.85 million. From this the mortgage debt of $1,277 million would be deducted, leaving net proceeds of sale of $1,573,000. Assuming stamp duty of about $73,000 (just for ease of calculation) is payable on the purchase of a substituted residence, the amount remaining would be about $1.5 million. That amount is within the range of purchase prices asked for properties that Lucie has inspected.

In addition, the adequacy of the provision made for Lucie must be considered in the context of all the circumstances, including the financial benefits conferred on her by the deceased during his lifetime, or otherwise arising out of their relationship. I have referred to the benefits she has received, or which she is entitled to receive, earlier.

The inadequacy of the provision that has been made for her in the Will, so it is submitted, lies in the fact that the provision of accommodation is limited to 20 years from the death of the deceased. Wherever she lives, she will then have to move. At the age of 81 years, it was submitted that this would impose too large a burden on her and one that should not be imposed upon a widow.

However, it should be remembered that if Lucie remains in the Putney property until then, it, or the substituted residence she has earlier chosen, will then be sold and one half of the proceeds of sale, is to be invested with the income paid to Lucie for her life.

By way of example, using current values, and assuming $1.5 million were spent to purchase that substituted residence, the income would be calculated on an amount of about $750,000. Even calculated at the rate of 4 per cent per annum, this would provide a gross income of $30,000 per annum. Since she is entitled to the income for the remainder of her life, there may be nothing to prevent the use of the one half of the proceeds of sale of the Putney property, or of the substituted residence, for the purpose of providing another substituted residence, provided any purchase of such alternative accommodation is in the name of the estate.

Thus, the deceased did not confine the provision made for Lucie to 20 years. He appears to have appreciated that the obligation to maintain her continued for the whole of her life. He moulded the provision to be made for her to take account of what might occur at a later time.

Of course, if the amount of income then received was insufficient, presumably she would have her other assets available to her that could be also used either to provide capital or for additional income. By the age of 81 years, assuming she survives to that age, Lucie, in any event, may have a need for alternative accommodation.

I have given Lucie's claim careful consideration. I have come to the view that the provision made for Lucie in the deceased's Will is not inadequate. However, the provision made for her is not "proper" in the circumstances, which include her relationship with Georgia, Sandra, Wendy, and to a lesser extent, the Defendant, and the inconveniences that would be caused by leaving such persons financially intertwined (save, perhaps, as lessors of the Carrum Downs property).

Turning then to s 59(2), namely the question what provision "ought to be made for the maintenance, education or advancement in life" of Lucie, having regard to the facts known to the Court, the real area of concern is how to deal with her claim, whilst bearing in mind the competing claim of Georgia (to which I shall turn). Any order should be no more than is necessary to make provision for her proper maintenance and advancement in life. Furthermore, I must take into account the right of the deceased to dispose of his property as he did in his Will, as well as the position of the other chosen objects of the testamentary bounty of the deceased.

The capacity of the widow, herself, to provide for her own needs must also be considered. In Re Crewe [1956] NZLR 315, at 323 (citing In re Allen; Allen v Manchester [1922] NZLR 218 at 222 per Salmond J), it was said:

"It may probably be said with truth that the proper maintenance which a testator owes to his widow in cases where there are no claims of other dependants is such maintenance as will enable her, taken in conjunction with her own means, to live with comfort and without pecuniary anxiety in such state of life as she was accustomed to in her husband's lifetime, or would have been so accustomed to if her husband had then done his duty to her."

I also remember that in Marinis v Jeweller [2000] NSWCA 282, the Court (comprising Mason P, Giles JA and Rolfe AJA), wrote, at [26]:

"... We would reject the appellant's submission that adequate provision by a deceased person requires the deceased to ensure that an eligible person must be provided for to such a level as would ensure that his or her available assets are not reduced in consequence of the death and that the eligible person should not be obliged to re-arrange or re-organise his or her available assets."

In reaching my conclusion on the propriety of the provision and on the quantum of provision to be made for Lucie, I bear in mind also what has been submitted, albeit in the context of the template advanced, in relation to her being prepared to disclaim any further interest in the RMR Discretionary Trust; that she is prepared to resign from the directorships of each of the companies in which the deceased held shares; and to resign from her employment with Kordus. (These are referred to in detail in Mr Willmott's supplementary submission.)

It is upon certain conditions to which I shall shortly refer, that Lucie should receive, in lieu of the provision made for her in the Will of the deceased, other than the provision that she has already received out of the deceased's estate, a lump sum of $1,200,000. In addition, the Defendant should do what he can (with Lucie pending her resignation as a director) to ensure that she is also paid the amount of the unpaid distributions and unpaid rent to each of which she is entitled (which I have estimated to be no less than $200,000).

The payments to which I have referred, in total, will result in her having available, absolutely, at least, $1.4 million. Taken with her own assets, she should have sufficient to purchase a substituted residence as she chooses. Even assuming that, with stamp duty, the cost of the substituted residence is $1.7 million, which requires a contribution from her own property of $300,000, she will have sufficient capital left otherwise, not only to provide for the exigencies of life, but also to provide a supplement to her income from the Carrum Downs property and the Fairlight property. Of course, she would own the property purchased absolutely.

In addition, Lucie should receive the Citroen motor vehicle that is owned by Kordus Pty Limited and any of the furniture and whitegoods situated at the Putney property that she wishes to retain.

Appropriate book entries disclosing the payment of the distribution out of the proceeds of sale of the Putney property, and the transfer of the car to Lucie, by Kordus should be made.

I note Clause 18(f) of the deceased's Will which gives power to the executors "to allow Lucie ... and Elisabeth ... or either of them to be employed in the childcare centre business owned by Kordus Pty Limited on terms no less favourable than as at my death". In my view, this Clause does not mean that the executors are under any duty to employ either on terms no less favourable than as at the deceased's death. The deceased, by giving them power to do so, must have considered that they might not do so.

In coming to the provision to be made for Lucie, I have borne in mind the duration of the whole of her relationship with the deceased, the provision made for her by the deceased during his lifetime, and the provision she has already received as a result of his death. In my view, that provision has been substantial. I have also considered her current financial circumstances (which, of course, she reached, at least partially, because of the provision to which I have referred).

I have also borne in mind the value of the 20 year interest in the Putney property (albeit that the deceased died almost 3 years ago) and the fact that she will receive a capital sum absolutely. (I have also noted the Defendant's submission that the value of Lucie's interest in one half of the proceeds of sale for the balance of her life, following the termination of the 20 year interest is about $212,000.)

The further advantage will be that Lucie's desire for an order that will result in, once and for all, for her being able to get on with her own life, without needing to have continued dealings with the estate (other than as the co-owner of the Carrum Downs property) is achieved. She will be able to live in any property that she purchases without having to move in 17 years, if that is what she wishes to do.

As to the other claim for provision by devising the Carrum Downs property to her, I do not think that she should receive it. The income that Lucie receives from rent (of Carrum Downs and Fairlight), alone, seems to be more than is necessary to meet her current outgoings. She has not calculated, or included in that total income, the income from her other reasonably large investments. In addition, she also has a large amount of capital available to her.

The effect of the provision for a lump sum, which Lucie will receive absolutely, will be to sever the financial interdependence of Lucie with the Defendant and others. To so do, I will place some conditions upon the receipt of the lump sum payment. If the conditions are complied with, it will also mean that the balance of the estate, after the payments to which reference has been made, will be held, principally, for the benefit of Georgia and her mother. It may be that Georgia could be appointed as substituted trustee to administer the deceased's estate.

Upon condition that Lucie:

(i) resigns from, or otherwise agrees to terminate, her employment with Kordus Pty Ltd, on a specified date to be agreed, or if not agreed as further ordered by the Court, (with her entitlements to holiday pay, long service leave etc. being paid to her simultaneously with her resignation or termination);

(ii) by that date, relinquishes and disclaims her entitlements to future distributions under the R M R Discretionary Trust;

(iii) by that date, transfers her right, title and interest in the one ordinary share in her name in the capital of Kordus Pty Ltd to the estate;

(iv) by that date, resigns as a director, and the secretary, of each of Kordus Pty Ltd, Russrobin Pty Ltd and Russan Pty Ltd;

(v) by that date, or such other date as the parties agree, or if not agreed, is ordered by the Court, retires as a trustee of the estate of the deceased,

Lucie should receive a lump sum of $1.2 million in lieu of the provision made for her in the Will of the deceased. She should also be paid the amount due to her as unpaid rent, any distributions from the RMR Trust to which she is entitled and her holiday pay and any other employment benefits to which she is entitled as an employee of Kordus.

In working out these conditions, I have borne in mind Lucie's desire to finalise, once and for all, her relationship with the estate and others associated with the estate. I have also considered Mr Ellison's point that no submissions were made on whether she should retire as a trustee of the deceased's estate. However, it seems to me that to allow her to continue as a trustee might simply result in further disputes between her and others in relation to the further administration of the estate.)

In the case of Georgia, as stated, she does not seek greater provision but wishes to reduce the period before which she gains control of the provision that has been made for her. In other words, she seeks to have the Court remove the contingency of her reaching the age of 30 years in relation to residue, and 25 years (in relation to the purchase of a home) and to make an order that she receive the capital now, or, in the alternative, at the age of 21 years.

I am satisfied that the provision made for her by the Will is adequate and proper. It seems to me that what is being sought by Georgia is simply a provision, or an outcome, which is thought to be more convenient for Georgia and one that she would prefer.

In my view, there is no ground for the Court to alter the nature of the provision, or when capital out of the estate is received, merely because it would be preferable for Georgia not to have to wait until she is 30 years of age. That was the age chosen by the deceased as the date on which she was to have control of the residue of the estate. The Court is in no better position to determine that the age of 19, 21, or another age less than 30, years, would be preferable for her to take control of the assets.

In relation to Georgia's desire to have accommodation purchased for her in the next few years, rather than at the age of 25, I note that, in any event, the Will enables this to be done if the Trustees are able to do so. I have earlier referred to Clause 18(b) of the deceased's Will.

Otherwise, Georgia is entitled to receive her education expenses and is likely to continue to receive distributions from the RMR Discretionary Trust. (It was accepted that she receives $400 per week from distributions that is used for rent.)

In addition, if the Putney property is sold and the mortgage debt is repaid, no longer will there be a need for mortgage repayments to be made, so that will further lessen the liabilities of the deceased which are being borne by the estate.

There is no reason why Georgia, if she wishes to, could not purchase alternative accommodation using the amount that she has received by way of death benefits from HESTA ($112,000) and to which she is entitled from the RMR Discretionary Trust (about $250,000), or some part of it, as a deposit on a home. She stated that she did not wish to purchase a home immediately.

The balance of the proceeds of sale of the Putney property, if any, may enable the amount to which she is entitled by way of distributions, or at least some of it, to be paid to her now. Appropriate book entries disclosing the payment of the distribution out of the proceeds of sale of the Putney property by Kordus, should be made.

My conclusion is strengthened if Lucie is no longer a beneficiary and/or a discretionary object of the RMR Discretionary Trust. Then, for example, the only principal discretionary objects will be Georgia and her mother, Elisabeth. Presumably, then, even larger distributions to each will be able to be made out of the Trust.

If Lucie does abide the conditions imposed, then, perhaps, Georgia could be appointed a trustee with the Defendant, and also as a director of each of the companies, in Lucie's place. In this way, Georgia could be involved, not only in the administration of the deceased's estate, with the Defendant, but also in the administration of the RMR Trust and the other childcare businesses. She would be able to learn more about the companies and the Trust in this way. Furthermore, the directors of Kordus could consider whether Georgia could be employed whilst she learns about the conduct of the childcare businesses, whilst at the same time earning a supplementary income. That, of course, will be the decision of Kordus.

In my view, the Will of the deceased makes adequate and proper provision for Georgia. It follows that Georgia's Summons should be dismissed.

I stand over the proceedings to a convenient date to the parties and to the Court for the making of orders in each matter. Unless any party wishes to argue to the contrary, I am of the view, presently, that Lucie's costs, and, even though her claim is to be dismissed, Georgia's costs, each calculated on the ordinary basis, and the costs of the Defendant in each matter, calculated on the indemnity basis, should be paid out of the estate of the deceased.

**********

Decision last updated: 07 January 2014

Medium Neutral Citation:	Hedman v Frazer; Egan v Frazer [2013] NSWSC 1915
Hearing dates:	18, 19 November 2013
Decision date:	19 December 2013
Jurisdiction:	Equity Division
Before:	Hallen J
Decision:	Direct parties to bring in Short Minutes of Order reflecting these reasons. Stand over the proceedings to make orders and to hear any argument about the costs of the proceedings.
Catchwords:	SUCCESSION - FAMILY PROVISION -One Plaintiff, a widow of the deceased, and the other Plaintiff a child of the deceased by a prior relationship - Each applies for a family provision order under Chapter 3 of the Succession Act 2006 - Whether adequate and proper provision not made in Will of the deceased for either Plaintiff and if so the nature and quantum of the provision to be made for her
Legislation Cited:	Administration and Probate Act 1958 (Vic) Civil Procedure Rules 2005 Family Provision Act 1982 Probate and Administration Act 1898 Property (Relationships) Act 1984 Succession Amendment (Family Provision) Act 2008 Succession Act 2006 Uniform Civil Procedure Rules 2005
Cases Cited:	Alexander v Jansson [2010] NSWCA 176 Allardice v Allardice, In re Allardice, (1910) 29 NZLR 959 Allen (Dec'd), In re; Allen v Manchester [1922] NZLR 218 Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 Anslow v Journeaux [2009] VSC 250 Austin a Bankrupt, Re [1982] 2 NZLR 524 Bartlett v Coomber [2008] NSWCA 100 Belfield v Belfield [2012] NSWSCA 416; (2012) 83 NSWLR 189 Blore v Lang (1960) 104 CLR 124 Bondelmonte v Blanckensee [1989] WAR 305 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 Buckland Deceased, Re [1966] VR 404 Butcher v Craig [2009] WASC 164 Christie v Manera [2006] WASC 287 Collins v McGain [2003] NSWCA 190 Cooper v Dungan (1976) 50 ALJR 539 Crossman v Riedel [2004] ACTSC 127 de Angelis v de Angelis [2003] VSC 432 Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127 Diver v Neal [2009] NSWCA 54 Flathaug v Weaver [2003] NZFLR 730 Foley v Ellis [2008] NSWSC 288 Franks v Franks [2013] NSWCA 60 Fung v Ye [2007] NSWCA 115 Gardiner v Gardiner (NSWSC, 28 May 1998, unreported) Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490 Gorton v Parks (1989) 17 NSWLR 1 Grey v Harrison [1997] 2 VR 359 Harrisson v Skinner [2013] NSWSC 736 Hawkins v Prestage (1989) 1 WAR 37 Hughes v National Trustees Executors and Agency Co. of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 Hyland v Burbidge [2000] NSWSC 12 Kay v Archbold [2008] NSWSC 254 Keep v Bourke [2012] NSWCA 64 Kelly and Kelly (No.2) (1981) 7 Fam LR 762 Kembrey v Cuskelly [2008] NSWSC 262 Kleinig v Neal (No. 2) [1981] 2 NSWLR 532 Lloyd-Williams v Mayfield [2005] NSWCA 189 Macgregor v Macgregor [2003] WASC 169 Marks v Marks [2003] WASCA 297 Mayfield v Lloyd-Williams [2004] NSWSC 419 McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566 McGrath v Eves [2005] NSWSC 1006 McKenzie v Topp [2004] VSC 90 Mee and Ferguson [1986] FamCA 3; (1986) 84 FLR 179 Neale v Neale [2013] NSWSC 983 Oldereid v Chan [2013] NSWSC 434 Palaganio v Mankarios [2011] NSWSC 61 Peters v Salmon [2013] NSWSC 953 Ploder v Garcea (as executrix of the estate of the late Fiona Rita Garcea) [2013] NSWSC 1360 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 Puckridge, Deceased, In the Estate of (1978) 20 SASR 72 Richard v AXA Trustees Ltd [2000] VSC 341 RK v RK (Financial Resources: Trust Assets) [2011] EWHC 3910 (Fam); [2013] 1 FLR 329 Samsley v Barnes [1990] NSWCA 161; (1991) DFC 95-100 Schmidt v Watkins [2002] VSC 273 Shearer v The Public Trustee (NSWSC, 23 March, 1998, unreported) Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 Slack v Rogan; Palffy v Rogan [2013] NSWSC 522 Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 Stiles v Joseph (NSWSC, 16 December 1996, unreported) Stott v Cook (1960) 33 ALJR 447 Szypica v O'Beirne [2013] NSWSC 297 Taylor v Farrugia [2009] NSWSC 801 Theoctistou v Theoctistou [2013] NSWSC 1487 Tobin v Ezekiel [2012] NSWCA 285 Verzar v Verzar [2012] NSWSC 1380 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 Walker v Walker (NSWSC, 17 May 1996, unreported) West v Mann [2013] NSWSC 1852 White and Tulloch v White (1995) 19 Fam LR 696
Texts Cited:	J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 7th ed, 2006) Government Gazette No. 38 of 20 February 2009, page 1036
Category:	Principal judgment
Parties:	Lucie Elisabet Hedman Georgia Robinson Egan Andrew John Frazer
Representation:	Counsel: Mr L Ellison SC (Plaintiff in 2011/404713) Mr R Wilson SC (Plaintiff in 2011/408805) Mr M Willmott SC; Mr D Hand (Defendant) Solicitors: Malleys Lawyers (Plaintiff in 2011/404173) Thorntons Lawyers (Plaintiff in 2011/408805) Pigott Stinson Lawyers (Defendant)
File Number(s):	2011/404173; 2011/408805

Date	Amount	Description
2002-2010	$6,000	Health Insurance Gap between medical and dental expenses
2005	$3,500	Gold bracelet
2005	$4,000	Laser surgery to eyes
2006	Qantas Frequent Flyer points	Return economy airfares to Finland
2006	$5,500	Shares in North Ryde Community Finance
2009	$300	Female's Gucci watch
2009	$5,000	Men's Cartier Tank watch
1 August 2010	$10,000	Engagement ring
15 December 2010	$2,500	Wedding ring
18 December 2010	$62,431	Repayment of mortgage secured over Fairlight property
18 December 2010	$5,137	Repayment of mortgage secured over Fairlight property
19 December 2010	$150,000	Repayment of mortgage secured over Fairlight property
20 December 2010	140,000 Qantas Frequent Flyer Points	25% of points transferred
20 December 2010	Returned money from Hawaii flights and $900 cash	Refund for airfares to Hawaii. $8,000 received in February 2011