In the Estate of the late Anthony Marras
[2014] NSWSC 915
•09 July 2014
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: In the Estate of the late Anthony Marras [2014] NSWSC 915 Hearing dates: 7, 8, 9, 12, 13, 14 and 15 May 2014 Decision date: 09 July 2014 Jurisdiction: Equity Division Before: Bergin CJ in Eq Decision: Proceedings 2011/340511: Ula Falanga and the Estate of the late Anthony Marras
Ula Falanga:
The Caveat lodged by Maria Marras on 4 November 2011 is no longer in force.
The claim for the grant of Letters of Administration brought by Ula Falanga is dismissed.
Ula Falanga is entitled to payment of $15,000.
Maria Marras:
The Cross Claim brought by Maria Marras is dismissed.
Effy Marras:
Effy Marras is entitled to 10% of the balance of the estate of the deceased, Anthony Marras together with the deceased's personal effects.
The Second Cross Claim brought by Effy Marras is otherwise dismissed.
Proceedings 2012/286004: George Marras v Ula Falanga & Anor
The plaintiff, George Marras, is entitled to 40% of the balance of the estate of the late Anthony Marras.
Proceedings 2012/258861 Helen Marras v Ula Falanga & Anor
The plaintiff, Helen Marras, is entitled to 35% of the balance of the estate of the late Anthony Marras.
Proceedings 2012/285583 Steven Marras v Ula Falanga & Anor
The plaintiff, Steven Marras, is entitled to 15% of the balance of the estate of the late Anthony Marras.
Catchwords: [SUCCESSION] - Deceased died intestate - application of Chapter 4 of the Succession Act 2006 - property settlement between deceased and ex-wife - claim by the deceased's ex-wife that she was in a de facto relationship with the deceased at the time of his death - property settlement between deceased and estranged wife -claim by the estranged widow to entitlements on intestacy under the Act - claims for provision under s 59 of the Act by ex-wife and three of the deceased's five children (issue from first marriage).
[EVIDENCE] - where two witnesses who had provided affidavits not called - applications to read affidavits - where one witness willing to give evidence by video-link from Greece - party relying on proposed evidence not willing to fund costs of video linkage process - where other witness not served with subpoena - no proper explanation - applications to read affidavits refused.Legislation Cited: Evidence (Audio and Audio Visual Links) Act 1998
Family Law Act 1975 (Cth)
Family Provision Act 1982
Probate and Administration Act 1898
Succession Act 2006Cases Cited: Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656
Aubrey v Kain [2014] NSWSC 15
Burke v Public Trustee (1997) 69 SASR 557
Churton v Christian (1988) 13 NSWLR 241
Collings v Vakas [2006] NSWSC 393
Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639
Dudic v Jakovljevic [2014] NSWSC 169
In the Estate of Bridges (deceased) (1975) 12 SASR 1
In the Estate of Brooks (deceased); Brooks v Public Trustee and Attorney-General for the State of South Australia (1979) 22 SASR 398
Josifovski v Velevski [2013] NSWSC 1103
Mann v Starkey [2008] NSWSC 263
Milewski v Holben [2014] NSWSC 388
Mulcahy v Weldon [2001] NSWSC 474
Peipi v Peipi (as Administrator of the Estate of the late Hilaney) (No 2) [2013] NSWSC 1566
Penfold v Perpetual Trustee [2002] NSWSC 648
Re Adams (deceased) [1967] VR 881
Re Russell [1970] QRWN 55
Singer v Berghouse (No 2) (1994) 181 CLR 201
Vigolo v Bostin (2005) 221 CLR 191
Wardy v Salier [2014] NSWSC 473
Worladge v Doddridge (1957) 97 CLR 1Category: Principal judgment Parties: Proceedings 2011/340511
Ula Falanga (Plaintiff/Cross-Defendant)
Maria Marras (1st Defendant/Cross-
Claimant)
Effy Marras (2nd Defendant/Second Cross-
Claimant)Proceedings 2012/286004
George Marras (Plaintiff)
Ula Falanga (1st Defendant)
Maria Marras (2nd Defendant)Proceedings 2012/258861
Proceedings 2012/285583
Helen Marras (Plaintiff)
Ula Falanga (1st Defendant)
Maria Marras (2nd Defendant)
Steven Marras (Plaintiff)
Ula Falanga (1st Defendant)
Maria Marras (2nd Defendant)
Betty Marras (3rd Defendant)Representation: Counsel:
Proceedings 2011/340511
J Priestley (Plaintiff)
F Santisi (1St Defendant)
C Mantziaris (2nd Defendant)Proceedings 2012/286004
A Rogers (Plaintiff)
J Priestley (1st Defendant)
F Santisi (2nd Defendant)Proceedings 2012/258861
A Scotting (Plaintiff)
J Priestley (1st Defendant)
F Santisi (2nd Defendant)Proceedings 2012/285583
A Lakeman (Plaintiff)
J Priestley (1st Defendant)
F Santisi (2nd Defendant)
Solicitors:
Proceedings 2011/340511
McVittie Legal (Plaintiff)
Denis Toyer (1st Defendant)
Schweizer Kobras Solicitors (2nd Defendant)Proceedings 2012/286004
Alexander Richards Lawyers (Plaintiff)
McVittie Legal (1st Defendant)
Denis Toyer (2nd Defendant)Proceedings 2012/258861
Proceedings 2012/285583
RBHM Commercial Lawyers (Plaintiff)
McVittie Legal (1st Defendant)
Denis Toyer Solicitors (2nd Defendant)
Koutzoumis Lawyers (Plaintiff)
McVittie Legal (1st Defendant)
Denis Toyer (2nd Defendant)
File Number(s): 2011/340511, 2012/286004, 2012/258861, 2012/285583 Publication restriction: Nil
Judgment
The Proceedings
These proceedings relate to the estate of the late Anthony Marras (the deceased) who died intestate on 14 September 2011. As there are competing claims by various members of the deceased's family with the same surname, I intend without any disrespect, to use the first names of the parties in these reasons.
Ula Falanga (Ula), the plaintiff in proceedings 2011/340511 (the Probate proceedings), is the eldest daughter of the deceased and Maria Marras (Maria), the first defendant in those proceedings. Maria was married to the deceased from 1958 to 1980 and claims that at the time of the deceased's death in 2011 she was in a de facto relationship with the deceased. Maria claims by way of Cross Claim in the Probate proceedings that the persons entitled to the deceased's estate under s 125 of the Succession Act 2006 (the Act) are herself and Effy Marras (Effy), the second defendant in the Probate proceedings and the deceased's second wife. Maria makes an alternative claim under s 59 of the Act for provision out of the deceased's estate. She claims she is eligible to make this claim because: (1) she was in a close personal relationship with the deceased; or (2) was wholly or partly dependent on the deceased and was a member of the same household; or (3) was his first wife; and (4) was in a de facto relationship with the deceased at the time of his death. She claims that she is in financial need for her maintenance and advancement in life.
Effy was married to the deceased between 1982 and 2008 when they separated. Although the Federal Magistrate's Court made final property orders in June 2010 (the 2010 Orders) under the Family Law Act 1975 (Cth), Effy and the deceased were never divorced. By Second Cross Claim in the Probate proceedings Effy claims her entitlement to the personal effects of the deceased, the statutory legacy calculated under s 106 of the Act and half the remainder (if any) of the estate. Effy makes an alternative claim that, if Maria is successful in establishing that she was in a de facto relationship with the deceased at the time of his death, she and Maria are entitled under s 123 of the Act to the whole of the deceased's estate in shares to be determined in accordance with s 125 of the Act.
The deceased and Maria had 5 children: Ula born on 26 July 1959 (now 54 years of age); Betty Marras (Betty) born on 21 May 1961 (now 53 years of age); George Marras (George) born on 2 June 1962 (now 52 years of age); Helen Marras (Helen) born on 27 April 1965 (now 49 years of age); and Steven Marras (Steven) born on 21 May 1979 (now 35 years of age). Ula is married to Mark Falanga. Betty is presently living in Greece. She is married (to Adonis) and has one daughter. George is married to Tracei and they have three children, Nathan aged 24, Bianca aged 23 and Jason aged 17. Helen was married to Spiro Kostas (Spiro) from 1996 to about 2009 or early 2010. They have three children, Alexander aged 17 and twins, Aristotle and Avangelina, aged 13. Steven is married to Louiza and they have a daughter, Helena aged 8.
Three of the deceased's children bring applications under s 59 of the Act for provision out of the estate: George in proceedings 2012/286004; Helen in proceedings 2012/258861; and Steven in proceedings 2012/285583 (the Provision proceedings). Ula (as the representative of the deceased's estate) and Maria are the first and second defendants respectively in each of the Provision proceedings.
The Probate proceedings and the Provision proceedings were heard together (with evidence in one being evidence in each of the others) on 7, 8, 9, 12, 13, 14 and 15 May 2014. Mr F Santisi, of counsel, appeared for Maria. Mr C Mantziaris, of counsel, appeared for Effy. Mr JJ Priestley, of counsel, appeared for Ula. Mr AG Rogers, of counsel, appeared for George. Mr AC Scotting, of counsel, appeared for Helen. Mr AR Lakeman, of counsel, appeared for Steven. Judgment was reserved on 15 May 2014.
Administration
The parties had previously considered the appointment of an independent person as administrator of the deceased's estate. This was in circumstances where the relationships within the family had fractured by reason of Maria's claim that she was in a de facto relationship with the deceased at the time of his death. However the parties agreed to Ula's appointment on an interim basis. An order was made on 28 November 2013 that "pending determination" of the Probate proceedings, Ula was appointed administrator of the personal estate and receiver of the real estate of the deceased with a limited grant for the purposes of calling in the deceased's real and personal property and holding the assets on trust pending an order of the court to distribute the assets; and paying the just debts and testamentary expenses of the deceased. An order was also made for Ula to be reimbursed for her fair and reasonable costs for the administration from the date of the orders.
At the commencement of the trial there were competing applications for Letters of Administration made by Ula, Maria and Effy. Effy's application was formally abandoned on the fifth day of the trial, 13 May 2014. Maria's application was formally withdrawn on the sixth day of the trial, 14 May 2014. Ula's application was withdrawn on 15 May 2014. The parties agreed to the appointment of Mr Gordon Salier as the administrator of the personal estate and receiver of the real estate of the deceased's estate. Consent Orders were made in Chambers on 28 May 2014 appointing Mr Salier. In the circumstances the pleadings have not been adjusted at this stage to add Mr Salier as the representative of the deceased's estate and to remove Ula from that role.
Remaining Claims
After the abandonment of these applications, and after Effy abandoned her alternative claim for provision under the Act (tr 566), the remaining claims are: Effy's claim to retain her entitlements under the intestacy provisions of the Act; Maria's claim that she was in a de facto relationship with the deceased at the time of his death and a claim of consequential entitlement under the intestacy provisions of the Act to a share of the deceased's estate; and if that claim fails, Maria's alternative claim under s 59 of the Act for provision out of the deceased's estate. There are then the Provision proceedings of George, Helen and Steven.
The Estate
The assets of the deceased's estate are a farm at Yorklea, New South Wales (the farm) valued at least at $395,000 and more likely at $450,000 (having regard to a contract price in 2011); a term deposit in the bank plus interest of approximately $1.1 million; $17,838.99 plus interest in a National Australia Bank account; motor vehicles valued at approximately $15,000, jewellery held by Effy valued at approximately $40,000 and equipment on the farm valued at approximately $6,000. Although there is evidence of a number of greyhounds that may be part of the deceased's estate, their value is presently unknown. There is also the question of the valuation of any household furniture, a caravan and prize monies that may be held by the Greyhound Racing Board. There is also the question of the equivalent Euro amount of $480,000 in a bank account in Greece to which further reference will be made later.
The precise value of the Estate has not been ascertained. However, it is not in issue that the value of the estate at the date of death, prior to some withdrawals by Helen, was approximately $1.5 million. If the moneys in the Greek bank account form part of the distributable estate, the value of the estate is approximately $2 million.
Intestacy
As the deceased died intestate, the intestacy provisions of Chapter 4 of the Act apply to his estate. Chapter 4 of the Act provides that in circumstances where the deceased is survived by one spouse and children not of that union, the surviving spouse is entitled to the deceased's personal effects, a statutory legacy (according to the formula in s 106 of the Act) and half the remainder, if any, of the estate: s 113. Although under s 115 of the Act the surviving spouse is entitled to elect to acquire estate property, subject to certain conditions, no such election has been made in this case.
If Effy is the only spouse, the statutory regime on intestacy would provide for the statutory legacy estimated to be between approximately $420,000 and $450,000, inclusive of interest, to go to Effy plus one half of the remainder of the estate ($525,000). The other half of the remainder ($525,000) would be divided equally between the five children giving them each approximately $105,000.
If more than one spouse survives the deceased, the surviving spouses share the whole of the estate in accordance with the regime under s 125 of the Act. Maria claims that this is the applicable provision because, as a de facto spouse, she is also to be regarded as a surviving spouse. There is no issue between the parties (other than Maria) that if Maria establishes that she was in a de facto relationship with the deceased at the time of his death then she and Effy share the whole of the deceased's estate subject to the Provision proceedings brought by George, Helen and Steven. Maria seeks to exclude Effy from any entitlement. If Maria does not succeed in her application, then Effy's entitlement under the Act is subject to not only the applications in the Provision proceedings by George, Helen and Steven but also the application for provision Maria makes under s 59 of the Act as a former spouse.
There has been some difference of opinion about the approach to be adopted by the Court in applications under s 59 of the Act compared to applications under the Family Provision Act 1982 (Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 per Basten JA at 663 [29]; and Hallen J's careful analysis in Aubrey v Kain [2014] NSWSC 15; and Dudic v Jakovljevic [2014] NSWSC 169). In hearing these applications judges at first instance are bound to adhere to the approach referred to in the decisions of the High Court in Singer v Berghouse (No 2) (1994) 181 CLR 201 and Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. In line with those cases the Court must determine whether the provision is inadequate for the applicant's proper maintenance, education and advancement in life and if so, whether any provision ought be made for the applicant. Although there may be some overlap in the matters to be considered in these determinations, the pre-requisite of a finding of inadequacy is pivotal to the restraint that Courts must exercise in refraining from rewriting wills or interfering with the intestacy regime beyond what is necessary to make adequate provision, paying due regard to the intentions of the testator or in this case, that of the Parliament.
The Court must be satisfied that an applicant is an eligible person to make the application: s 57(1) and s 59(1)(a) of the Act. In the present proceedings there is no issue that each of the applicant adult children are eligible under s 57(1)(c) to make their applications. There is also no issue that, if Maria fails to establish that she was in a de facto realtionship with the deceased at the time of his death, she is eligible to make an application for provision under s 57(1)(d) as a former wife of the deceased.
The matters to which the Court "may" have regard in s 60(2) of the Act are to be considered in determining whether to make a family provision order and the nature of any such order: s 60(1). The matters relevant in this case, as accepted by the parties include: the relationship between the applicants and the deceased and the duration of that relationship (s 60(2)(a)); the nature and extent of any obligations owed by the deceased to the applicants (s 60(2)(b)); the nature and extent of the deceased's estate (s 60(2)(c)); the financial resources and financial needs of the applicants (s 60(2)(d)); the financial circumstances of the person with whom any applicant is cohabiting (s 60(2)(e)); the applicants' ages (s 60(2)(g)); any contribution by the applicants to the acquisition, conservation and improvement of the estate of the deceased or the welfare of the deceased, for which adequate consideration was not received by the applicants (s 60(2)(h)); any provision made by the deceased for the applicants (s 60(2)(i)); any evidence of the testamentary intentions of the deceased (s 60(2)(j)); whether any applicant was being maintained wholly or partly by the deceased and the extent of that maintenance (s 60(2)(k)); the character and conduct of the applicants before and after the date of the death of the deceased (s 60(2)(m)); and any other matter the Court considers relevant (s 60(2)(p)).
Background
It is appropriate to refer generally to some of the family history and the background to the proceedings to place the competing claims in context.
The deceased was born in Greece on 23 February 1936. He emigrated to Australia and over the years successfully operated a number of tyre retread businesses. He would set up the business and then either sell it or go into partnership and then sell his share or buy out his business partner's share and sell the business at a later date. He operated a number of such businesses and appears to have amassed substantial assets over the years. The deceased developed a love of greyhounds and greyhound racing. He bred, trained and raced greyhounds from about 1976.
On one view of the evidence, the deceased's relationship with Effy appears to have been the catalyst for his separation from Maria in 1979 some months before Steven was born. When the deceased and Maria were divorced, Maria retained the family home in Lugarno and the deceased retained the tyre business.
After the deceased and Effy were married in 1982 they operated various tyre retread businesses together and it appears that Effy was also involved with the greyhound breeding and racing operation. They lived for some time in Narellan, in New South Wales and from 1986 to 1992 they lived in Greece. Whilst they were living in Greece they built a house in Akrata that has been referred to in the proceedings as "Marras House". This property was apparently registered in Effy's name from the outset. They also purchased a number of blocks of land in Akrata that were apparently registered in the deceased's name. From 1992 to 1993 they lived in Wetherill Park, NSW and from 1994 to 1998 they lived in Seven Hills, NSW. From late 1998 or early 1999 they lived for six months in Hobart, Tasmania. From 2000 to 2003 they lived at Sovereign Island in Queensland. In 2003 they moved to the farm, which from all accounts, is a substantial property with a homestead, swimming pool, kennels, sheds and a straight track for training the greyhounds. They remained living at the farm together until their separation in 2008. Effy left the farm and the deceased resided there until he departed for Greece in July 2011.
The proceedings between the deceased and Effy pursuant to s 79 of the Family Law Act 1975 (Cth) were heard in 2010. The deceased swore an affidavit in those proceedings on 3 May 2010 that included the following:
107. I have five adult children from a previous marriage. I also have eleven grandchildren whom I love dearly. I am especially close to my daughter Helen and Betty and my son George. Helen and George live in Sydney and my daughter Betty currently lives in Greece.
108. I would like to make sure that I have the capacity and ability to provide for each of my children and grandchildren during my life and afterwards.
Orders were made on 17 June 2010. Those orders required the deceased to transfer the blocks of land in Akrata in Greece to Effy. They required Effy to transfer her interest in the farm to the deceased. There were orders that the deceased was to have a 1999 Toyota Land Cruiser and for Effy to have a 1991 Mercedez Benz motor vehicle. At the time of these orders there was an amount of $884,986 in various bank accounts that was held on trust. The order required the amount of $531,882.56 to be paid to the deceased and the balance to be paid to Effy. There was an order that if either party refused or neglected to sign any document necessary to implement the orders within 14 days of a written request to do so then a Registrar of the Federal Magistrates Court was to be appointed to execute those documents.
The deceased and Effy both appealed from the orders in respect of the payment out of the trust fund. On appeal, the Full Court of the Family Court adjusted the order to allow for interest that had accrued on the sum invested to be divided as to 55% to the deceased and the balance to Effy. The judgment of the Full Court attributed value to each of the assets of the deceased and Effy: Marras House at $304,200 and the vacant land in Greece at $150,700. Out of a total pool of approximately $4 million, the division was $2.2 million to the deceased and $1.8 million to Effy.
On 8 July 2011 the deceased executed a General Power of Attorney in favour of Helen in the presence of a solicitor in Lismore before coming to Sydney just prior to travelling to Greece (Ex 2). Also on 8 July 2011 a contract for the sale of the farm for the price of $450,000 was executed by the purchaser (Ex UF1). It is not clear on the evidence whether that contract was exchanged. However it was certainly not completed.
The deceased travelled to Greece in July 2011. At about this time the deceased transferred approximately $480,000 to a bank account in Greece, the joint signatories of which appear to have been Betty and himself. Prior to his departure the deceased asked Helen to manage his investment in the Commonwealth Bank, in which he had a deposit of $1 million. He asked Helen to roll that investment over when it matured in September 2011.
The deceased died suddenly on 14 September 2011 whilst still in Greece.
It would appear that Betty has transferred the balance in the joint bank account into which the $480,000 was transferred to an account in Greece in her name and that of her husband, Adonis. Although there have been conversations between George and Betty and Ula and Betty in respect of the need to account to the estate for that money, Betty has not (as yet) agreed to do so.
After the deceased's death, Helen appears to have closed the Commonwealth Bank account and deposited the funds into the National Australia Bank (NAB). A cheque drawn on the account with the NAB in the amount of $55,000 payable to "Beauty on Buckland" dated 9 September 2011 was presented to the NAB on 16 September 2011. Two other cheques were presented to the NAB on that date, one to the Flight Centre Newtown for $9,865.50 dated 16 September 2011 and another payable to cash in the amount of $7,000 dated 16 September 2011 (Ex 3). Helen admitted to writing and signing the cheques made payable to the Flight Centre and the $7,000 cheque for cash. She admitted to using that money from the deceased's account for the purpose of travelling to Greece for his funeral.
The cheque payable to Beauty on Buckland (a beauty salon at which Helen was working and the business name of which Spiro was the registered owner up to 1 September 2011 (Ex S7)) in the amount of $55,000 is not straightforward. Helen claimed that the deceased signed the cheque before he left for Greece in July 2011. She said that she wrote out the details for the payee and the amount of the cheque. She claimed that she did not write the date "9/9/11" on the cheque. Her evidence was that when it was signed by the deceased in her presence he told her to make the cheque payable to Beauty on Buckland. She said she followed those instructions and gave the cheque to the deceased who gave it to Spiro in her presence. Helen claimed she asked the deceased, "why are you giving money to Spiro" and the deceased replied "that's between Spiro and me".
The relationship between the deceased and his children was complex. Indeed the deceased himself seems to have been a rather complex individual. He appears to have been prone to making promises and not following through with them. He also appears to have been rather difficult to get on with at times. Darren Anderson, who worked on the farm with the deceased for about six months in 2009 described him as someone who "hated pretty well everybody" (tr 306).
It appears that the deceased became estranged from Ula, after an argument when Ula was a young woman and still living at home. He required her to leave the home or as Ula put it, he "threw me out" (tr 267). Although Ula spoke to the deceased at Betty's wedding in Greece, there seems to have been no other communication between them for over 30 years. Although the deceased's relationships with Helen and George were strained after his marriage to Effy, they continued. The closeness of the deceased's relationships with his children waxed and waned over the years. In the Family Court proceedings in 2010 he claimed that his relationships with George, Betty and Helen were "especially close".
The deceased's relationship with Steven was not firmly established until Steven was 19, although he had some contact with him in earlier years, to which reference is made later. It ceased when Steven and Louiza's daughter was born in 2005. This was because they chose to name their daughter Helena after Louiza's mother rather than after Maria. Although the deceased had been divorced from Maria for over twenty years at that time, it appears he became angry with Steven for not following "Greek tradition" of naming his daughter after his mother, Maria.
Up until the time that she decided to make the claim that she was in a de facto relationship with the deceased at the time of his death, Maria's relationship with her children was close and supportive. However since then her relationships with Ula, George and Steven have soured. It appears there is still warmth in Betty's relationship with Maria. Maria and Helen remain very close and Helen is now registered as Maria's carer.
It is during the period from late 2008 until the deceased's death in September 2011 that Maria claims she was in a de facto relationship with the deceased. As the outcome of this claim has an impact on the relevant statutory regime in respect of the deceased's estate under the Act, it is appropriate to consider that claim before the other claims in the proceedings.
Maria's de facto claim
Maria relied on her 3 affidavits sworn on 7 March 2012, 1 August 2012 and 24 April 2014. Maria also relied upon Helen's affidavit sworn on 1 August 2012 and the affidavit of Christoforos Spiropoulos (Christo) sworn on 1 August 2012 (Ex MM5). Christo died before the trial.
Evidentiary matters
In support of Maria's claim that she was in a de facto relationship with the deceased, Mr Santisi sought to read two affidavits, one sworn by Betty in March 2012 (filed on 1 August 2012) and the other sworn by Spiro on 27 August 2012.
There was some debate pre-trial as to whether the other parties to the proceedings would agree to Betty giving evidence by video link from Greece pursuant to the Evidence (Audio and Audio Visual Links) Act 1998. That was originally opposed, thus requiring Betty to travel to Australia for the purpose of giving that evidence should her evidence be relied upon. However during the trial all other parties then agreed that they would not oppose Betty giving evidence by video link. After that indication was given Mr Santisi submitted that either the other parties to the proceedings should assist in funding the expense of the video linkage or alternatively an order should be made that the expense of the video linkage be paid by the estate. Those conditional orders were opposed.
Section 20C of the Evidence (Audio and Audio Visual Links) Act 1998 provides that the Court "may make such orders as it considers just for payment of expenses incurred in connection with taking the evidence" by video link.
Betty was a defendant to the Second Cross Claim brought by Effy. This included allegations in relation to the transfer of $480,000 to a bank account in Greece by the deceased in about July 2011, including that Betty was in control of the bank account after the deceased's death. Betty was not served with the process and at one stage it appeared that the resistance to her giving evidence by video link might have been to facilitate her being served with the process, should she return to the jurisdiction to give evidence.
Notwithstanding that the evidence in relation to the $480,000 might have been of some significance to each of the other parties, had they been able to cross-examine Betty about those transactions, it was Maria who sought to rely on Betty's evidence in support of her application that she was in a de facto relationship. Accordingly it was a matter for Maria as to whether she wished to make the witness available for cross-examination.
I indicated to Mr Santisi that I would not make an order that the other parties fund the expenses or costs of the video linkage for Betty to give evidence in all the circumstances. I also indicated that I would not make an order that the costs of the video linkage be paid by the estate. Those orders would await the outcome of the proceedings, in particular the claim by Maria that she was in a de facto relationship with the deceased at the time of his death. At the time of this indication I informed Mr Santisi that the video linkage could occur on 14 May 2014 should he wish to proceed to call Betty to give evidence (tr 554). No application was made to call Betty's evidence by video linkage after these rulings. In those circumstances Betty's affidavit was not allowed.
Maria also sought to read Spiro's affidavit in circumstances where Spiro was not available for cross-examination. In support of this application Mr Santisi called Peter Doukas, Maria's solicitor. Mr Doukas caused a subpoena to be issued directed to Spiro and gave evidence-in-chief that Spiro had a telephone conversation with him in which Spiro advised him that he did not want anything to do with the Marras family or the proceedings and did not wish to be involved. Mr Doukas also gave evidence-in-chief that Spiro said that he had not received the subpoena. In cross-examination it became clear that the subpoena was not served on Spiro. Rather Mr Doukas posted the subpoena to Spiro and did not obtain an order for substituted service.
In those circumstances the application to read Spiro's affidavit was refused.
Backgound to the claim
From the time of their separation in 1979 until 2008 Maria had no direct contact with the deceased. In August or September 2008 Helen advised Maria that Effy had left the deceased and that the deceased was unwell. She asked Maria to go and cook for the deceased and look after him because he was on his own. Maria advised Helen that she would only do so if the deceased invited her directly. At this time Maria was living in her home in Peakhurst, a suburb of Sydney, which she had purchased some years earlier for approximately $300,000 after selling her home in Lugarno.
The period late 2008 to late 2009
In October 2008 Maria received a telephone call from the deceased. She claimed the deceased asked her whether she could see herself "living with me again". She claimed that the deceased said he needed someone to talk to and someone to make him dinner and to keep the house clean. Maria claimed that she informed the deceased that she had her home in Sydney and had doctors' appointments that she had been waiting for and she needed to deal with a number of things before she could go to Yorklea to see him.
Although in her affidavit of 7 March 2012 Maria claimed that she travelled to Lismore (the convenient airport to Yorklea) in October 2008, this did not happen until 27 November 2008. Maria claimed that the first meeting with the deceased at the Lismore airport was an emotional occasion. They both cried and Maria claimed that in the ensuing weeks the deceased expressed regret for the way their marriage had ended. She claimed that the deceased said that he should never have left her and wished that he "could do things differently".
Although Maria claimed in her affidavit that she stayed with the deceased on this occasion for approximately two months, it is clear that she returned to Sydney for Christmas, having stayed with the deceased for approximately three weeks. Maria returned to the farm on 31 December 2008 and spent New Year's Eve and early January with the deceased. She then travelled to the Gold Coast with Helen and two of Helen's children for a holiday. Maria returned to Sydney on 25 January 2009.
Maria claimed she returned to Yorklea in about February. She returned to Sydney briefly in April and then went to Yorklea for Easter in April 2009 and stayed until mid-July 2009. It was during this visit that Maria injured her wrist for which she needed medical attention at Casino Hospital and later Lismore Hospital on 23, 26 and 27 May 2009. There is an issue about the length of this visit.
Maria claimed in her affidavit evidence that during these visits to the farm the deceased suggested to her that they should spend their final years together travelling to and from Greece. She claimed that the deceased suggested that they could live six months of the year in Greece and six months of the year in Australia. She also claimed that the deceased said that he wanted to "make up for lost time" and that he would find a house in Greece and they could also buy something in Queensland. Maria claimed that she said that this sounded wonderful but that she would rather live in Sydney where the children were living. She claimed that the deceased said that from what Helen had told him, her house (at Peakhurst) was too small and he would need a bigger bathroom. She also claimed that the deceased suggested that she should sell her house and that he would buy her a bigger house.
Maria's affidavit evidence was that in about April 2009 she listed her house at Peakhurst for sale with a real estate agent. Whilst she was at the farm in June 2009 the agent telephoned her and advised her that a purchaser had been found. Maria claimed that she informed the deceased of this call and that he said that she should sell the house and that they would buy a house together in Queensland. She claimed that she then instructed the agent to proceed with the sale of the Peakhurst house. That sale was settled on 10 September 2009 for $550,000.
Maria claimed in her affidavit evidence that between 17 July 2009 and late September 2009 she stayed in Sydney and packed all her furniture and belongings with the assistance of Spiro and her son, Steven.
After the sale of the house at Peakhurst, Maria stayed with Helen at her house in Newtown. She claimed that between September and December 2009 she lived at the farm with the deceased until she had to return to Sydney for a knee operation on about 20 December 2009. She claimed that she stayed in Sydney for approximately two months after her knee operation as she had to attend physiotherapy. She claimed that the deceased informed her that he would not be able to come to see her in Sydney at the time of her knee operation because he had to look after the greyhounds at the farm.
The period 2010 to July 2011
Maria claimed that by February 2010 she had recovered from her knee operation and that Spiro drove her to the farm. She claimed that during this visit the deceased informed her that he was waiting on a property settlement with Effy and that he could not do anything until the settlement with Effy was finalised. Maria also claimed that the deceased suggested that she should buy an apartment in Sydney so that they could live there when they were in Sydney. She claimed that the deceased asked her to make sure the apartment was on the ground floor so that he could get around easily. She claimed that she informed the deceased that she would buy something small with her money and then when the deceased was ready they could look for something else. She also claimed that on this occasion she stayed at the farm for approximately one month and Spiro drove up to collect her in March 2010 and brought her back to Sydney so that she could look for an apartment.
Maria found an apartment in Belmore. She claimed she had a conversation with the deceased in which she informed him that she had found a nice ground floor two bedroom apartment in Belmore that needed some work (painting, removal of the carpet and polishing the floorboards). She claimed that the deceased said:
I'd like to come and see it but I have the greyhounds and I have the court case with Effy and I need to stay at the farm. If you like it buy it and we can fix it. We can stay in the apartment when we are in Australia and I can buy a house for the both of us to live in when we are in Greece.
The purchase of the Belmore apartment was settled on 27 April 2010 for approximately $300,000. Spiro helped Maria move her furniture and other belongings into the apartment.
Maria claimed in her March 2012 affidavit that from about June 2010 until about May 2011 she lived at the farm for "approximately 4 to 6 weeks at a time". She claimed that Helen and/or Spiro drove her to Yorklea and then came up to drive her back to Sydney. She claimed that she stayed in Sydney for a few weeks to see her children and grandchildren and attend medical appointments when necessary and then she would be driven back to the farm. She claimed that on many occasions at the farm, the deceased and she talked about buying a house in Greece and a house in Queensland.
In her later affidavit sworn on 1 August 2012 Maria said that she was "often at the farm" during school holidays when Helen and her children were present. In her affidavit of 24 April 2014 Maria's evidence changed. She claimed that when she would go to the farm she would "usually stay many months at a time" unless she had to come to Sydney for medical appointments. She also claimed in this affidavit that Helen drove her to the farm on "many occasions". There was no mention in this affidavit of Spiro driving her to the farm.
In May 2011 Maria travelled to Greece with Ula to visit her daughter, Betty. She stayed in Greece for approximately 5 weeks. Ula stayed for 2 of those 5 weeks and then returned to Australia. Maria claimed that just prior to going to Greece the deceased said to her:
Go to Greece and see if you like living there. Spend some time with Betty and when I organise some of my affairs here we can live in Greece, six months there and six months in Australia. I will go to Greece and look for a house for us in Limnos as soon as I am able to leave the farm.
Maria returned from her trip to Greece in late June 2011. She claimed she had a telephone conversation with the deceased in which he informed her that he had found someone to look after the farm and that he would be travelling to Greece in a couple of weeks. The deceased also informed her that he had found someone who was interested in buying the farm and he thought that it would be sold before he left for Greece. She claimed that she said to the deceased that she liked Greece and that her long time friend lived near Betty's house. She claimed that she informed the deceased that she had a lot of family in Greece but that Australia was where her grandchildren were. She claimed that the deceased said that he was coming down to Helen's house soon so that he would see her in Sydney and they would talk about it further.
In July 2011 the deceased came to Sydney and stayed with Helen for a couple of days prior to departing for Greece. Maria claimed that the deceased rang her and told her that he was very tired from his drive to Sydney and that he thought he would rest at Helen's house that evening and see her the following day. She claimed that the deceased said that he only had a couple of days before he left for Greece and he needed to rest before the flight.
Maria claimed that the following day she visited the deceased at Helen's house. She claimed that at this time they had a conversation in which the deceased said that he was going to look for a property for them when he went to Limnos in Greece. She claimed that the deceased asked her to promise him that she would always be with him until they died. She said that she responded by saying "yes, of course I will be with you".
The following day Maria telephoned Helen's house shortly before the deceased left for the airport. She claimed she wished the deceased a safe trip and explained that she could not go to the airport because she was not feeling well. She claimed that the deceased said that this was "OK" and that he would see her when he got back. She said that the deceased said "look after yourself".
Maria claimed that shortly after the deceased's arrival in Greece in July 2011 she received a telephone call from the deceased while she was at Helen's house in Newtown. The deceased advised her that he was in Limnos and that she was going to like it there because it was very beautiful. She claimed she wished the deceased a good time and said she would see him on his return. That was the last time Maria spoke with the deceased before he died suddenly in September 2011.
Consideration of Maria's de facto claim
Maria's claim that she was in a de facto relationship with the deceased is based in the main on her claimed visitations to the farm to spend time with the deceased between November 2008 and May 2011. There is no suggestion that the deceased ever visited Maria in Sydney during this period or at all after they were divorced in 1980.
There is no issue that Maria visited the farm between 27 November 2008 and 21 December 2008. It is also accepted that she returned to the farm on 31 December 2008 and after a holiday on the Gold Coast in January 2009 with Helen and her children she returned to Sydney on 25 January 2009. There is an issue in respect of the time frame of the visit to the farm during which Maria injured her wrist in May 2009 and after which she returned to Sydney in July 2009.
There is also a real issue in respect of any further visits to the farm after July 2009. The claims made by Maria in her affidavit of 7 March 2012 in respect of her visits after July 2009 were as follows:
Between late September 2009 and December 2009 she lived at the farm until she returned to Sydney for her knee operation in December 2009 (pars [26]-[27]);
In about February 2010, after she recovered from her knee operation, Spiro drove her back to the farm and came to collect her in March 2010 (pars [29]-[30]); and
From about June 2010 until May 2011 she "lived at the farm for approximately 4 to 6 weeks at a time", and Helen and/or Spiro drove her to the farm and then back to Sydney (par [33]).
These claims need to be viewed in the context of Maria's later evidence in her affidavit sworn on 24 April 2014 that she usually stayed "many months" at the farm and that it was Helen who drove her to and from the farm.
The challenge to Maria's claims in respect of her visits to the farm included evidence of withdrawals from her bank accounts between 2008 and 2011 and also her telephone records at the Belmore property from April 2010 to July 2011. Over the years Maria has had a number of accounts with the Commonwealth Bank of Australia (the Bank). These include a Pensioner Security Account; a Personal Savings Account; a NetBank Saver account; a Viridian Line of Credit; a Streamline Unlimited Account; a Complete Access Account; and a Fixed Rate Personal Loan (Ex 1).
Maria had a card that was linked to her Pensioner Security Account for the withdrawal of cash. It is probable that this card was also used to access or draw down cash from the Viridian Line of Credit. Maria's initial evidence was that she "always" used to leave the card with Helen and Spiro when she went to the farm so that they could pay for the expenses for her apartment in Belmore (purchased in April 2010) whilst she was away (tr 38-39).
Maria accepted that she took the card with her when she returned to the farm in late December 2008 and then went to the Gold Coast with Helen and her children for a holiday in January 2009 (tr 41-42). However Maria then said that she "usually" left the card in Sydney (tr 42). In later evidence she said that she "sometimes" left the card in Sydney when she went to the farm (tr 45). She said that she had only one card between November 2008 and May 2011. She then received an additional card when she went on her holiday to Greece in May/June 2011 (tr 39). The Bank records relating to her Pensioner Security Account during the period from 2008 to 2011 indicate that withdrawals were made in the suburbs of Sydney, in Casino and Lismore and also in Queensland.
Between July 2008 and September 2009 the loan on the Viridian Line of Credit Account increased from a debt of $950 to $147,263.81.
The Pensioner Security Account includes withdrawals at the Riverwood Legion and Community Club on 2, 3, 6, 20, 23, 24, 25 and 26 February 2009. On a number of these days there were multiple withdrawals, in particular on 2 February 2009 there were five withdrawals amounting to $1,000. Maria was cross-examined about the multiple withdrawals on 2 February 2009 as follows (tr 47-48):
Q. And if I can ask you to look at page 20 of the folder. You will see there, there are entries on 2 February where you take out a total of $1,000?
A. I was not going there to gamble, I was just going there to kill the time for, from loneliness. But when I wanted to assist my daughter, my younger daughter, with money and I didn't want anybody else to know I was taking money and I was giving it to her because she went and she had, she went to bankrupt.
Q. So you agree then that those entries showing those withdrawals were withdrawals made by you?
A. No.
Q. Didn't you just tell the Court that you were going there because you were lonely and you were taking the money to help your daughter?
A. Yeah. Yes, yes.
Q. So if that's the case you were physically there at Riverwood Legion and Community Club using the card in the automatic teller machine?
A. Sometime. Not always. Sometimes. Because, as I've said, I've given the card. I was just going there to kill some time, from loneliness.
From 20 February 2009 to 27 February 2009 there were withdrawals or draw downs on the Viridian Line of Credit Account totalling $18,000: $3,000 on 20 February; $7,000 on 23 February; two withdrawals of $1,000 on 24 February; two withdrawals of $1,000 on 25 February; $1,000 on 26 February; and three withdrawals of $1,000 on 27 February.
Maria's evidence was that she had only one card linked to her Pensioner Security Account. I am satisfied that Maria was in the habit of going to the Riverwood Legion and Community Club during this period. I am satisfied that she made the withdrawals at the Club, as recorded in the Pensioner Security Account, and the draw downs recorded in the Viridian Line of Credit Account.
April to July 2009
The first period in respect of which there is an issue regarding Maria's claims that she visited the deceased at the farm is the period April 2009 to July 2009. There is no issue that Maria was at the farm from about mid May to mid July 2009. The Bank records, in particular the Pensioner Security Account for the period 18 March 2009 to 16 June 2009 show multiple withdrawals from the account at the Riverwood Legion and Community Club between 23 March and 15 May 2009. There were no withdrawals in Sydney after 15 May 2009 until 20 July 2009. The withdrawals between 28 May 2009 and 17 July 2009 are at various outlets in Casino and Lismore. From 20 July 2009 to August 2009 there are numerous withdrawals once again at the Riverwood Legion and Community Club and the Illawarra Catholic Club and no withdrawals in the Lismore/Casino area.
I am satisfied that the period during which Maria visited the farm in mid 2009 was not from April to July 2009 but from mid May 2009 until 17 July 2009.
September 2009 to December 2009
The next period during which Maria claimed that she was at the farm in the latter part of 2009 was between late September and just prior to 20 December 2009 when she returned to Sydney for her knee operation. The Pensioner Security Account for the period 17 September 2009 to 16 December 2009 shows numerous withdrawals in the Sydney region. The Peakhurst property was sold in mid September 2009 and Maria was living with Helen in Newtown until she purchased the property in Belmore in April 2010.
The Pensioner Security Account includes withdrawals from Franklins in Newtown on 17 September 2009, 5 October 2009, 19 November 2009, 14 and 15 December 2009. It also includes withdrawals in Marrickville at Woolworths on 5 October 2009; at Eastgardens on 19 October 2009; at Revesby on 22 October 2009; at Coles in Broadway on 29 October 2009 and 13 November 2009; at Harris Farm Markets at Broadway on 29 October 2009 and 13 November 2009; at Kmart at Eastgardens on 2 November 2009; at the Greater Union theatre on 2 November 2009; and at a hairdresser in Waterloo on 18 November 2009. There are similar withdrawals from mid-December to the end of December 2009. There are no transactions on the account out of the Sydney area during this period.
I am satisfied that Maria was in Sydney living with Helen during the period September 2009 to December 2009 and was not living at or visiting the farm as claimed.
February 2010
The next period during which Maria claimed to have been at the farm was in the month of February 2010 and into March 2010. The Pensioner Security Account shows withdrawals from Coles Broadway on 1 February 2010 and 4 February 2010; from Franklins in Newtown on 15 February 2010; at a jewellery shop in Campsie on 18 February 2010; at 7-Eleven in Newtown on 1 March 2010; and at the Cypress Community Club in Stanmore on 9 March 2010. There are no transactions out of the Sydney region during this period.
The only times during this period when there are no transactions on this account in the Sydney region are between 4 and 15 February 2010 and 18 February and 1 March 2010. It is possible that Maria may have gone to the farm for a short period in those windows of opportunity but on balance I am of the view that her claim that she was at the farm from about February to March 2010 is not made out.
June 2010 to May 2011
As referred to above Maria claimed that she lived at the farm between June 2010 until May 2011 for "approximately 4 to 6 weeks at a time". Maria expanded in her affidavit of 24 April 2014 to a claim that she would "usually stay many months at a time" at the farm.
The NetBank Saver Account shows a credit of $404,354.24 on 16 September 2009 at the time that the Peakhurst property was sold. The bank records also show the settlement of the Viridian Line of Credit on 10 September 2009 of $147,941.91. On 27 April 2010 there was a deposit of $371,348.19 into a Streamline Unlimited Account with a payment out of $303,025.37 on the same day. That was the settlement amount for the purchase of the Belmore property. That then left a credit in the Streamline Unlimited Account as at 27 April 2010 of $63,323.82.
The activity on the Streamline Unlimited Account includes debits of $1,000 and $2,000 throughout the period 3 May to 12 July 2010. By 16 July 2010 the account had been reduced to $27.47. The withdrawals from this account are quite extraordinary. For instance in the period 3 May to 10 May 2010 withdrawals totalling $13,000 were made. On 3 May $3,000; on 4 May $1,000; on 5 May $2,000; on 6 May $2,000; on 7 May $2,000; and on 10 May $3,000. Sometimes there were two withdrawals on one day. For instance on 3 May there was a withdrawal of $1,000 and then another one of $2,000. On 6 May there were two withdrawals of $1,000. On 7 May there were two withdrawals of $1,000. The account then shows some credits, being $2,000 on 11 May; 13 May; 20 May and 24 May. In addition a deposit of $1,000 on 17 May. These credits were interspersed with other withdrawals of $4,000 on 11 and 12 May and $1,000 on 14 May; 17 May; 18 May; 19 May; 20 May and 24 May 2010. There is a withdrawal of $2,000 on 21 May. There are then three withdrawals of $1,000 on 26 May and a further withdrawal on that day of $1,500. Similarly on 27 May there are two withdrawals of $1,000 and one withdrawal of $1,500. There are further withdrawals of $1,000 on 28 May and 31 May.
The Pensioner Security Account for the period May 2010 shows that on the days of those large withdrawals there were also withdrawals from the Pensioner Security Account at the Kingsgrove RSL Club. Those withdrawals were on 3 May; 4 May; 5 May, 6 May; 7 May; 10 May; 12 May; 14 May; 19 May; 27 May; 28 May and continuing into June 2010.
The Pensioner Security Account for the period April 2010 to May 2011 records withdrawals (sometimes numerous on the same day) at the Kingsgrove RSL Club (or once in September 2010 at Star City Casino and the Bulldogs Club in Belmore; and in March and April 2011 at Campsie RSL). The dates of those withdrawals are as follows (the numerals in parentheses refer to the multiple withdrawals on that particular date (Ex I):
April 2010
7(x3), 9, 16, 19(x3), 22(x2), 23(x3), 28(x3)
May 2010
3(x3), 4(x2), 5(x3), 6(x2), 7(x2), 10, 12, 14, 19, 27(x2), 28(x2)
June 2010
1(x2), 2, 7(x2), 11, 14(x2), 16, 21(x2), 22(x3), 25(3), 29(x2), 30
July 2010
2(x2), 5(x2), 7, 8, 9, 12(x4), 15(x2), 19(x2), 22(x3)
August 2010
10, 19, 23(x2), 25(x2)
September 2010
6(x3), 8, 13(x2), 20(x4)
October 2010
1(x2), 14(x4), 19(x2), 22(x3)
November 2010
11, 19, 22(x5), 26(x3), 29(x2)
December 2010
9(x2), 17
January 2011
9(x2), 11(x3), 20
February 2011
7(2), 8(x3), 9, 22(x3)
March 2011
3(x2), 16(x3), 17(x5), 31
April 2011
14(x2), 28(x2)
On 16 May 2011 there was a withdrawal in Athens.
The Bank records also show that when Maria returned from Greece there were similar withdrawals from the Campsie RSL and the Kingsgrove RSL on the Pensioner Security Account. Although there were withdrawals during the period May 2008 to July 2009 in Casino and Lismore there are no such recorded transactions at any time after July 2009. An analysis of the Bank records demonstrate that if Maria was using her bank card, and I find that she was, there were no entries outside of Sydney during the period July 2009 to May 2011.
The phone records of calls from the Belmore property indicate that many telephone calls were made from her premises in Belmore on a daily basis throughout the period June 2010 to July 2011. Many of the phone calls that were made were to Steven and Christo. There were also phone calls to Spiro and Helen and on occasions to Betty.
I am not satisfied that Maria made any visits to the farm after July 2009.
Other matters
Maria resisted suggestions made to her in cross-examination that she withdrew the monies from the various accounts to gamble at the clubs that she attended. She admitted spending quite a deal of time in the various clubs. She said that she did so because she was very lonely. She also resisted suggestions that she was playing the poker machines. She suggested rather that she would buy raffle tickets.
The evidence given by Ula includes a conversation with Maria when Ula opened one of the bank account statements with the numerous withdrawals of $1,000 or $2,000. Ula's evidence was that when she confronted Maria with the bank statement, Maria said that she had a "gambling problem". Steven also gave evidence of his time as a young boy when Maria would go to the local club and he would be left in the reception or foyer area whilst she went into the gaming rooms. Ula also gave evidence of Maria playing the poker machines whilst they were in Greece. When Maria went to the Gold Coast in January 2009 with Helen there are a number of withdrawals from Jupiter's Casino in the Bank records.
The pattern of withdrawals between the Viridian Line of Credit and the Pensioner Security Account lead to the irresistible conclusion that Maria was using the card to withdraw the amounts. It is highly probable that she was using the money for gambling on the poker machines.
Ula gave evidence that Christo was living in the flat at Belmore with Maria. In August and September 2010 when Betty returned to Australia with her daughter for some weeks they celebrated at the local club over dinner. Present at the dinner were Christo and Maria, Betty and her daughter and Ula and her husband, Mark. Ula also gave evidence of the Christmas lunch at her home in December 2009 at which Christo and his son were present with Maria.
Ula also gave evidence about her trip to Greece with Maria in May 2011. She said that at no time did Maria speak about the deceased. In the two weeks that she was staying with Maria in Greece Ula heard Maria telephone Christo on a daily basis. Ula returned to Australia after two weeks and Maria stayed on for a further three weeks. Ula received a telephone call from Maria complaining that she wished to come back to Australia as she did not like staying in Greece. Ula made the changes to Maria's ticket so that she could return to Australia earlier than planned.
Helen gave evidence that from time to time she used Maria's bank card with her permission. She claimed that in early September 2009 Maria handed her the card and said "whenever you need money for groceries or anything else I want you to use my card". However Helen did not give any detail of the times at which she used the card or the amounts that she paid or the purpose for which the card was used.
I am satisfied that Maria was in the habit of attending the local club to play the poker machines. I am also satisfied that she had a conversation with Ula in which she admitted to having a "gambling problem".
Ula also claimed that Maria informed her that she had hoped that the deceased would help her with the debt that had been secured over the Peakhurst house. I accept that this conversation occurred. I am satisfied that Maria was hoping that the deceased would help her financially so that she could pay off the debt that she had incurred through her gambling. However when that did not occur Maria had to sell the Peakhurst house to pay off the debt that she had incurred with the Bank.
Although it has been claimed that Maria was in a de facto relationship with Christo, it is not necessary to determine this claim. It is clear that Christos and Maria were companions and that he probably spent a great deal of time with her both in Belmore and elsewhere.
The real question is the true nature and length of Maria's relationship with the deceased from 2008 to 2011.
Apart from the Bank records supporting a finding that Maria's claims about the trips to the farm after mid 2009 should be rejected, there is also the fact that the deceased did not go and see Maria at her apartment in Belmore in July 2011 or at all. It would be expected that if the deceased wished to live with Maria in Sydney in the Belmore apartment, he would at least have gone to look at the apartment. He did not do this. Although Maria tried to explain this away on the basis that the deceased said he was tired and needed to rest before his long flight to Greece, the distance between Newtown and Belmore is relatively short and it would not have taken the deceased very long to travel from Newtown.
The fact that Maria and the deceased travelled separately to Greece when, according to Maria there was a joint decision made to live in a particular part of Greece for six months of the year, is also a factor to be considered in determining this aspect of Maria's claim. Maria received only one telephone call from the deceased after he arrived in Greece and that was a call that he made to Helen's house in July 2011 soon after arriving in Greece.
There was some evidence in respect of a luncheon that Maria claimed she attended with Helen and the deceased the day before he left for Greece in July 2011. Helen claimed that the luncheon was somewhere in Brighton-le-Sands. In cross-examination Maria seemed to suggest that she could see the Harbour Bridge from the place at which the luncheon occurred, possibly somewhere in Pyrmont. Ultimately, for the reasons stated below, it does not matter whether this luncheon occurred as claimed by Maria.
I am satisfied that the Peakhurst property was not sold as part of a plan for the deceased and Maria to be together in a bigger home but because it was necessary to clear the debt of approximately $147,000 that had been accrued on the Viridian Line of Credit. Notwithstanding the suggestion that the deceased had said that the Peakhurst property was too small, an even smaller residence was purchased in Belmore. Maria sought to explain the purchase of a smaller residence on the basis that she had to await the outcome of the deceased's case with Effy in the Family Court. However the fact that the deceased did not visit the Belmore property is another factor weighed with all the matters referred to above that convinces me that the purchase of the Belmore property was not part of a plan for the deceased and Maria to live together. There are of course the additional matters of the deceased transferring $480,000 to Greece and maintaining the $1 million in the Commonwealth Bank account to be rolled over, rather than assisting Maria with securing a larger property in Sydney, or for that matter Queensland.
Another matter for consideration is that when Maria had her knee operation in late 2009, there was no effort made by the deceased to visit her in hospital or whilst she was recuperating in Sydney. Maria sought to explain this away on the basis that the deceased claimed that he could not leave the farm. Be that as it may, there is no other evidence of any communication during this period in which the deceased expressed his concern for Maria.
I am satisfied that during the period late November 2008 to July 2009 Maria visited the deceased at the farm for approximately three and a half months on visits of: 3 weeks from 27 November 2008 to just before Christmas 2008; for approximately 2 weeks over New Year into January 2009; and for 2 months from mid-May 2009 to mid-July 2009. I am satisfied that in that three and a half months Maria cooked for the deceased except for the time when she was prevented from doing so because of her wrist injury.
When Maria went to the farm to see the deceased, there is no doubt that she was in financial difficulties with the debt that she had run up by reason of her gambling at the various clubs. At that time the debt was approximately $91,000 but increased to approximately $145,000 by July 2009. I am satisfied that Maria was hoping that the deceased would assist her financially at that stage. I am also satisfied that when this did not work out Maria was forced to sell the Peakhurst property to discharge the debt owed to the Bank and to find alternative accommodation at a cheaper price. I accept the evidence given by Steven that after her injury in mid-2009 and her return to Sydney, Maria informed him that she hated the deceased and regarded him as disgusting. I also accept Steven's evidence that Maria said that she never wanted to see the deceased again.
I am satisfied that Maria was not in a de facto relationship with the deceased. I am also satisfied that Maria was not in a close personal relationship with the deceased; nor was she wholly dependent on the deceased or a member of the same household.
Maria's claim that she was in a de facto relationship with the deceased from late 2008 to the date of his death in 2011 is dismissed.
Effy's position
The dismissal of Maria's claim that she was in a de facto relationship with the deceased means that Effy is the only surviving spouse of the deceased. Although there was some inter partes correspondence prior to the hearing indicating Effy's position, Effy formally abandoned her claim for a grant of letters of administration (tr 556) and also abandoned her claim for provision under the Act (tr 566). Effy's position at the conclusion of the trial was that as she is the only surviving spouse, she is entitled to the distribution of the deceased's estate as provided for in Chapter 4 of the Act, subject to the claims in the Provision proceedings.
Effy accepted that Helen and George are in circumstances of personal hardship and that they may be able to demonstrate that the provision made under the rules of intestacy is inadequate for them. However Effy maintains that Helen should nevertheless account for unauthorised distributions to herself from the deceased's bank account. It was submitted that Steven has not demonstrated that the provision for him under the Act is inadequate.
In In the Estate of Bridges (deceased) (1975) 12 SASR 1, Bray CJ (with whom Wells and Jacobs JJ agreed), after noting that the legislatures in other jurisdictions regarded the devolution upon intestacy as being the fairest and most reasonable, said at 5-6:
In the case of an intestacy, as much as in the case of a will, it seems to me that Parliament has indicated its intention that the scheme of things set up by a testator in his will, or by the law of the State in the event of intestacy, shall be interfered with so far as is necessary to make adequate provision for the proper maintenance, education and advancement of the claimants specified in the Act, but no further. It is true that when the persons entitled on intestacy are the surviving spouse and legitimate children of the deceased as opposed to collateral relations the speculation that the deceased may have intended to die intestate may have more cogency, but nevertheless I repeat that I think the correct approach is as I have said. I think that Parliament no more intended to grant an unlimited liberty to recast dispositions resulting from the law of intestacy on moral grounds than it did to give a similar liberty to recast dispositions made by will.
Mr Mantziaris made a number of submissions in respect of the extent to which the Court may interfere with the statutory intestacy regime in accommodating the claims in the Provision proceedings with which I should deal.
It was submitted that the distribution of the deceased's estate under the Act will be to Effy and to all the children, to the exclusion of Maria: ss 113, 106 and 127(2)(b). It was contended that Effy takes the deceased's personal effects, the statutory legacy calculated under s 106 of the Act, and half of the remainder of the estate with a preferential right to purchase any property of the estate; each of the children taking five equal shares of the other half of the remainder of the estate after the spousal entitlement is met under s 113.
It was submitted that s 113 of the Act is just one of the mechanisms that the legislature has used to protect the interests of a surviving spouse. Where there is one spouse and the issue are all issue of that spouse the whole of the estate goes to the spouse: s 112. Where there are two or more spouses and issue who are all issue of one or more of the spouses the whole of the estate goes to the spouses to the exclusion of the children: s 123. It was submitted that it was also notable that the formula in s 106 in respect of the statutory legacy provides an adjustment based on the Consumer Price Index (CPI) and also makes interest payable after one year at a rate which is 2% higher than the last relevant cash rate published by the Reserve Bank of Australia. It was submitted that the previous applicable provisions in the Probate and Administration Act 1898 contained similar protections for the surviving spouse.
At the outset of his final submissions Mr Mantziaris contended that the statutory regime on intestacy provides a very definite intention to preserve the real value of what he referred to as the "minimum irreducible portion of the estate for the surviving spouse" (tr 681). It was submitted that if the Court is to make orders for provision under s 59 of the Act for any of the applicants then it should not do so by interfering with that so called "irreducible minimum" (tr 683). Mr Mantziaris submitted that the intention of s 113 of the Act is that the statutory legacy (the irreducible minimum) is protected from the Court's interference, where the value of the estate exceeds the statutory legacy (tr 685). However in submissions in reply Mr Mantziaris clarified his position. He said that he did not suggest there was an "absolute prohibition on going into the statutory legacy" (tr 706).
Section 113 of Act provides:
If an intestate leaves a spouse and any issue who are not issue of the spouse, the spouse is entitled to:
(a) the intestate's personal effects, and
(b) a statutory legacy, and
(c) one-half of the remainder (if any) of the intestate estate.
The statutory legacy is the CPI adjusted legacy determined in accordance with the formula in s 106(2) of the Act. The parties agreed that this calculation results in an amount between approximately $420,000 and $450,000 including interest.
It was submitted that it is notable that there is no case where, in an estate of greater value than the statutory legacy, family provision orders have been made from the statutory legacy or the personal effects. However attention was drawn to what was referred to as "associated cases" that demonstrate the strength of the principle that Parliament intended that the surviving spouse obtain the so-called "irreducible minimum" entitlement.
The first case relied upon in this regard was Peipi v Peipi (as Administrator of the Estate of the late Hilaney) (No 2) [2013] NSWSC 1566. This was a case involving a small estate of a deceased who died intestate. One of the applicants was found to be in a de facto relationship with the deceased. The whole of the estate would have gone to her because after the personal effects and the statutory legacy there was no remainder. Slattery J made orders for provision for the daughter of the deceased reducing the surviving spouse's entitlement.
The second case relied upon in this regard was Josifovski v Velevski [2013] NSWSC 1103. In this case the surviving spouse had murdered the intestate. Although the entitlement was available to the spouse it was lost under the forfeiture rule: at [36]-[40]. This case is relied upon to suggest that but for the "supervening legal rule of forfeiture" the irreducible minimum would have been available to the spouse.
Mr Mantziaris also relied upon Dudic v Jakovljevic [2014] NSWSC 169. This was a case in which the deceased died intestate leaving a widow, and a daughter. Under s 113 of the Act the widow was entitled to the whole of the deceased's estate because the size of the estate was such that there was no remainder after the personal effects and the legacy went to her. Mr Mantziaris relied upon the statement by Hallen J at [207] that in considering the daughter's application for provision under s 59(2) of the Act he had "to take into account, and give weight to, the obligation owed to Mica as his wife and the rules of intestacy that provide, because of the size of the estate, that the deceased's whole estate passes to her". I do not regard this statement as supportive of the proposition that the statutory legacy is a minimum that can only be reduced if the value of the estate is less then the statutory legacy. Hallen J's reference to the size of the estate was made because there was nothing left after the payment of the legacy to the widow. Notwithstanding that situation his Honour found that a lump sum should be paid to the daughter thus reducing the so-called irreducible minimum.
I am of the view that Mr Mantziaris' submissions in this regard should be rejected. The intestacy provisions of the Act may be viewed as though the deceased had made a will whereby he directed that his estate should be distributed as on intestacy. The fact that such distribution is statutory does not assume any particular importance: Re Russell [1970] QRWN 55 at 56. Just as there is no basis for cocooning any aspect of a testator's proposed distribution of the estate under a will as an irreducible minimum, if the Court reaches the view that it is necessary to interfere with the distribution to ensure adequate provision is made, there is no basis for cocooning any particular part of the distribution under the statutory provisions on intestacy.
I am not satisfied that a reasonable reading of the Act leads to the conclusion that a Court may not interfere with the statutory legacy of a surviving spouse, if in all the circumstances the provision under the rules of intestacy in respect of the children of the deceased is inadequate. The Court is able to interfere with the statutory regime, including the statutory legacy, in so far as it is "necessary to make adequate provision" to any applicant under s 59 of the Act: In the Estate of Bridges (deceased) at 5-6. Whether such interference is justified will depend upon the circumstances of the particular case.
Effy received a distribution of the matrimonial property pursuant to the orders of the Family Court in 2010, as adjusted on appeal in 2011. She accepted in cross-examination by Mr Lakeman on Steven's behalf, that the assets she received pursuant to the orders of the Family Court were to last her indefinitely into the future and that she was keen to protect them to give her an income in later years (tr 447). It is not clear why there were no orders dissolving the marriage. Although Effy gave some evidence of the deceased taunting her by withholding his consent to a divorce, she made no application to the Family Court for such an order. However Effy gave the following evidence in cross-examination by Mr Rogers on George's behalf (tr 461):
Q. When you left Tony Marras in 2008 it was your intention never to return to him, is that correct?
A. Yes, it was.
Q. And that never changed up until his death in 2011, is that right?
A. Correct.
In Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 Kirby P referred to "the policy of the law to promote finality of settlements of property disputes by orders made in the Family Court" and stated that, where such orders had been made, orders for provision under the Family Provision Act "in the case of a former spouse should be exceptional" (at 651). His Honour also said at 651:
There is no doubt that in most cases, the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Confronted by the news that he or she had been excluded from the will of the former spouse, the response would, in the overwhelming majority of cases, be: "Our marriage was dissolved. We settled our financial affairs. We can each start a new life. That was the whole point of the Family Court proceedings".
Effy is not a former spouse. However it was contended by the other parties to the proceedings that she is in a different position to the spouse who has not received a share of the matrimonial property by either a property settlement or orders of the Family Court. Mr Mantziaris resisted this contention and submitted that it misconceives the nature of the orders under s 79 of the Family Law Act and the different purpose of those proceedings to these proceedings. These proceedings relate to the deceased's assets whereas the Family Law proceedings related to the division of the joint property of the marriage. In the former Effy wishes to receive a distribution from the deceased's estate. In the latter each party to the marriage made claims for property to which they were entitled out of the joint property. It was submitted that Effy is in no different position from the spouse of an intestate who holds all her assets in her own name during her marriage or holds all property as a tenant in common with her husband in defined shares. It was submitted that the June 2010 Orders simply put Effy in the position of that hypothetical spouse. It was submitted that the 2010 Orders do not disentitle or erode Effy's entitlement to her husband's deceased estate under the Act.
It must be made clear that Effy is not making an application for provision under s 59 of the Act. As I said this claim was expressly abandoned on the sixth day of the trial (tr 566), although in 2013 Effy's lawyers had notified the other parties that this claim would not be pressed at trial. Effy's position is that it is for the other parties to show inadequacy of provision under the Act and for the Court to determine whether in all the circumstances her entitlement should be reduced to accommodate any provision to be made to the applicants for provision. Although such a determination involves the consideration of the matters referred to in s 59 and s 60 of the Act in respect of the applicants' cases for provision, it is not necessary to have regard to those matters in considering Effy's position. However it is necessary to consider Effy's position generally in determining whether, and if so to what extent, the Court might interfere with her statutory entitlement.
Effy's affidavit evidence included a claim that her liabilities ($398,594.06) are $36,038.27 more than her assets ($362,555.79). She claimed that her assets are: (1) a 50% interest in a property at Broadbeach in Queensland valued at $352,378; (2) savings in the ANZ Bank of $4,877.79; (3) a Toyota motor vehicle valued at $1,500; and (4) household furniture and fixtures values at $3,800. She claimed her liabilities are: (1) the mortgage in respect of the Broadbeach property of $295,244.06; (2) Legal fees owing as at 6 May 2014 of $100,000; and (3) an ANZ Visa card debt of $3,350.
In the Family Court Marras House was valued at $304,243 and the land in Akrata was valued at $150,700. Effy claimed her liabilities in Greece were $5,653.62 being: $3,669.12 for outgoings for Marras House; $1,323 for property taxes; and $661.50 for house insurance.
Effy claimed that her average monthly personal expenditure was $5,930; being $1,435 for rent, telephone and electricity; $460 for vehicle expenses and fuel; $2,950 for food and beverages, medical and pharmaceuticals and $1,085 for pet food and veterinary costs.
Effy described the Broadbeach property as a commercial property. She said that she purchased it with her sister and her brother-in-law on 15 August 2011 for $1 million. The property is rented for $11,986.15 per month.
In cross-examination Effy said that there were two loans taken out to purchase the property: one for $650,000 secured against the Broadbeach property and the other for $170,000 secured against Effy's home at Paradise Point in Queensland. The $650,000 loan was in the name of the three owners of the property, Effy, her sister and brother-in-law. The loan for $170,000 was in Effy's name. Effy sold her house and paid off the $170,000 loan and a part of the $650,000 loan to reduce it to $297,950. Effy gave the following evidence in cross-examination (tr 416-418):
Q. So that if you've paid $350,000, you would only be responsible for a mortgage amount of $150,000?
A. No, sir. My sister has never been to Australia. My sister has been here once when she was a young girl, seventeen years old, but after that she's never been here. I bought the property with my assets and I pay all the outgoings and the mortgage by myself. That is only that I don't have children and I want the money I worked for to go to my family.
Q. I am a bit confused, madam. So when you took out the mortgage of $650,000?
A. Yes.
Q. Is that what you're telling me that you went 50/50 in that mortgage with your sister?
A. Yes.
Q. So the way you look at it is that in addition to contributing the $350,000 in cash.
A. Yes.
Q. -- you also contributed --
A. No not just the $650,000 the full amount, the $820,000. Am I confusing you? Can I explain again?
It was submitted that Helen received regular financial support from the deceased during the course of his life and that she was particularly dependent on that support during the period of her bankruptcy. It was also submitted that Helen's financial position has deteriorated rapidly and significantly since the time of the deceased's death. Her position has continued to become more untenable as a result of the complete break down of her relationship with Spiro.
The children attend the Newtown Performing Arts High School. They attend regular private dance classes as part of their education to qualify them to remain at the school. There is evidence that the children require orthodontic work, in one instance quite urgently.
It was submitted that Helen's conduct demonstrated a loving and close relationship with the deceased. She always stayed in regular contact with him and saw him often, even if that involved arranging family holidays at the Gold Coast to accommodate Effy's request that she not attend the farm. It was also submitted that Helen was active in supporting the needs of her father following his separation from Effy involving her travelling regularly from Sydney to the farm and attending to his errands. This also included arranging for Spiro to spend three months with the deceased. It was submitted that Helen and her children were particularly close to the deceased and were a source of comfort and family support to him in the period immediately before his death. These are all appropriate matters to be taken into account in determining Helen's claim.
It was submitted that the most pressing need for Helen is a provision that would assist her to clear her debts in order to restore her credit rating and to provide a capital contribution towards purchasing secure accommodation that would be suitable to the needs of at least the youngest children, herself and Maria.
Having regard to the findings that I have made in respect of Maria's de facto relationship claim, it is necessary to consider the claims made by Helen that she "often took" Maria "to the farm so that she could be with the deceased". Although there are no specific dates in respect of this claim, I am satisfied that there were no such trips after July 2009 and I am satisfied that Helen knew that they did not happen.
However Helen has three young children and will need to work to assist them with the provision of housing (in particular for the twins) for some years to come. Her financial position is such that even with the funds that she took from the deceased's NAB account (inappropriately) after his death, she is finding it difficult to make ends meet to care for her own family and her mother.
I am satisfied that the provision made for Helen is not adequate for her proper maintenance and advancement in life.
George's Provision Claim
George was born on 2 June 1962 and is now 52. He presently resides at Picnic Point in New South Wales in a house that is owned by Ula and her husband, Mark. He is married to Tracei and they have three children, Nathan (aged 24 who is engaged), Bianca (aged 23) and Jason (aged 17). At the moment all the children reside with their parents at Picnic Point. Nathan works full time in George's business, Rollenso Wheels Pty Ltd (Rollenso). He also works part time in the evenings with his fiancée as a cleaner and operates an eBay store retailing the wheels that George sells wholesale. Bianca is employed in a cake decorating business and Jason is in year 12 at High School.
George completed year 10 at Peakhurst High School and has worked in the tyre or wheel business for almost the entire period from 1979 to date. In 1981, when George was about 18 or 19 years of age, the deceased was operating a business known as Valcan Tyres and Re-Treads at Moorebank. The deceased asked George to come and work in the business as a sales representative. In 1985 the deceased sold the business and, although George claims the deceased promised to pay him $100,000, he received only $40,000. From 1991 until 1993 George operated his own business known as George's River Tyres. In 1993 George and the deceased went into a business together known as Tip Top Tyres. George claimed that the deceased convinced him to sell or give away George's River Tyres because it was only a small business. George and the deceased ran the Tip Top Tyres business together until 1994 when the deceased wanted to make Effy a partner. This caused a rift between George and the deceased and they were estranged until 2008. George continued to work in various tyre businesses until 1997. Between 1997 and 1999 he worked as a self-employed truck driver.
In 2000 George went into a wholesale wheel distribution business operated by Rollenso with Ula's husband, Mark. The wheels are imported from a supplier in Thailand. Although Ula claimed that she and her husband gave whatever interest they had in Rollenso Wheels to George, it is apparent that Ula's husband Mark is still a shareholder in the business. The business is operated from a leased warehouse at Prestons in New South Wales and has five employees, Tracei, George, their son Nathan, and two part time delivery drivers. However in the last few years Tracei has had to reduce the hours of her work because of a serious illness. I accept George's evidence that Tracie provided all the necessary administrative support for the business and that he had little involvement with the accounting aspects of the operation of the business (tr 333).
After the deceased and Effy separated in 2008, and at Helen's instigation, George visited the farm in 2009 and 2010. George said that this rapprochement was emotional for both of them. He visited the farm on about seven occasions until mid 2010 when tempers flared and they became estranged once again. George claimed that most members of the family are "hot tempered" and they all had their "dramas" with the deceased (tr 347-348). This seems to be an accurate description of the family dynamics.
George gave evidence that he shared the deceased's love of greyhounds. In July 2008 the deceased gave one greyhound to George and sold him another. One of them was subsequently named "Smiley George" and the other "Narni". Narni is no longer alive. George agreed that he had received approximately $21,000 in prize money from Smiley George but that he has only personally received half of that as the other half goes to the trainer Mr Cuneo, who manages the farm. George holds a licence to race greyhounds but not to breed or train them. His evidence was that some greyhounds are worth $100,000 and some are worth nothing. It all depends upon their performance. There is no evidence of the value of the greyhound Smiley George.
Prior to 2012 George and his family lived at a property in Hinchinbrook that was subject to a mortgage. The loan repayments were $638 per week. George had borrowed money from Ula and was repaying her at the rate of $600 per week. The Hinchinbrook property was sold in September 2012 for $480,000 and the net proceeds after paying off the mortgage were put into Rollenso. The rental payments for the Picnic Point property are $600 per week. Ula claimed that a commercial rental would be $650.
In each of the tax years ending 2011 and 2012 George's personal income tax return declared income of $15,000 as managing director of Rollenso. In the same years Tracei declared income of approximately $15,000 as the secretary of the company. George claimed that his monthly expenditure was $7,810 for rent, utilities, food, insurance, school fees, credit cards, petrol and "other essentials". His statement of assets and liabilities show a net liability of $21,000.
The financial statements for Rollenso for the period 2010 to 2013 show losses in 2010 ($32,885) and 2011 ($8,601); a profit in the year 2012 of $18,883 and a loss in 2013 ($7,689) (Ex GM 1). The shareholders loans are recorded as $280,622 for 2010; $191,310 for 2011; $142,779 for 2012 and $60,890 for 2013.
Both George and Tracei were cross-examined as to the capacity to pay nearly $8,000 in monthly expenses on declared income between them of $30,000. Tracei's evidence was that not all of the cash income from the business is banked, although it is all accounted for in the company's books. Tracei uses cash from the business to pay for household expenses by way of draw downs from the loans that were put into the business. Nathan and Bianca pay $150 and $100 respectively as board each week.
Tracei also gave evidence that George takes $500 per week in cash from the business and that she draws down $1,000 per week from the loan to Rollenso to pay her expenses.
George no longer owns any real estate and claimed that he would never be able to afford to purchase a house for his wife and his children. It was submitted that George and Tracei are living on the capital they invested in Rollenso. The large draw-downs on the shareholder's loans support this submission.
Without wishing to intrude into her privacy, it is appropriate to simply record that Tracei was diagnosed with cancer in 2007 and has had numerous operations. In February 2013 she underwent a further operation and has had further procedures and treatment in 2014. George's health has been affected by Tracei's illness. He is currently on medication for Type 2 Diabetes and very high blood pressure. There is also some evidence of a psychological impact in recent times. I accept that Tracei's illness has had a serious impact on the whole family. It is clear that Tracei has been an enormous support for George both emotionally, over their 27 years of marriage, and in the business since 2000. Tracei was a most impressive witness who appears to be coping admirably with her illness.
George worked with the deceased over the years until Effy became involved in the business. It is apparent that, although the deceased was at times difficult to deal with, their relationship was supportive of each other both in the familial setting and in the commercial operation of the business. I am satisfied that George did his best to be supportive of his father after he separated from Effy and in particular during the Family Court proceedings. The affidavit sworn by the deceased just 16 months before his death made express reference to the closeness of his relationship with George and his desire to make provision for him. In respect of the estrangement after mid-2010, George said that he felt that each of them were waiting for the other to make a phone call. This stand-off remained until the deceased's death in September 2011.
George and Tracei's two eldest children are now old enough to be making their own way in the world. Nathan is clearly supportive of his parents, emotionally and financially (providing $23,000 in loans over the last couple of years). However he is engaged to be married and will have to provide for himself and his wife. George and Tracei's youngest child is still dependent upon them. Although Ula claimed in her oral evidence that she was no longer willing to continue the financial support for George, I believe that on reflection that position may soften. Even so, George needs to establish some financial independence to care for himself and his family in difficult financial times and ensure that he is able to care for and support Tracei at this difficult time.
I am satisfied that the provision for George is not adequate for his proper maintenance and advancement in life
Steven's Provision Claim
Steven was born on 21 May 1979. At that time the only other child living with Maria was Helen, then aged 14. Steven saw little of the deceased because Maria would not allow the deceased to visit Steven at the home and was not approving of Steven visiting the deceased. Helen and George would take him to visit the deceased at his factory. Steven's memory is that he met the deceased for the first time when he was five, when Helen took him to see him. He claimed that the deceased informed him that he wanted to get to know him but that Maria would not let him see him.
Although he gave no evidence about it, it is clear that Steven travelled to Greece with Helen when he was 12 to visit the deceased and Effy. Steven lost contact with the deceased between the ages of about 14 and 19. Steven completed Year 10 at De La Salle College in Kingsgrove in 1995. He then started an apprenticeship as a fitter machinist at Bankstown TAFE.
Steven met his wife to be, Louiza Toumazis, in about 1998/1999 when he was 19 and living at Peakhurst with Maria. Steven and Louiza were married on 22 September 2001. Steven invited the deceased to his wedding. However the deceased did not attend the wedding because Maria would be present. Although the deceased offered to pay for his honeymoon, that did not occur. In 2001 Steven and Louiza purchased a townhouse at Revesby from Ula for $320,000 at a discount of about $20,000. Steven and Louiza's daughter, Helena, is now aged 8 years and they hope to have more children.
Between 2001 and 2005 Steven visited the deceased regularly and their relationship appears to have been relatively happy during this period. Steven would visit the deceased and Effy with Louiza and they would cook and dine together and discuss business and their future plans. Steven claimed the deceased discussed "his boys" (himself and George) and his desire to go into business with them. Steven claimed that they talked regularly on the telephone, and that the deceased gave him $4,500 to buy a bed, side tables and a mattress so he and Effy could visit them at Revesby.
Steven and the deceased had a falling out in 2005 when Helena was born. The deceased swore at Steven when he informed him of Helena's name and told him not to call again. Steven said he was "gutted" by the conversation. It was the last contact Steven had with the deceased. He did not try to re-establish contact with the deceased because the deceased had warned him not to call him again.
Between 1996 and 2010 Steven worked at Alukram Engineering Pty Ltd (a company owned by Ula and Mark Falanga) at first as a fitter machinist and then in a supervisory role. In 2007 Alukram Engineering was acquired by Transpacific Industries Group. In December 2009 Steven resigned from Transpacific and started his own business, Stelou Hydraulics Pty Ltd (Stelou), in February 2010 with Louiza. They are joint directors and shareholders. Stelou provides services for hydraulic breakdowns and performs ad-hoc manufacturing and hose fittings. Steven used his long service leave payout from Transpacific of about $12,000 and a loan of $28,000 to establish the business. Steven claims that at this stage the business is struggling.
Louiza has worked for AMP since 1996. She is currently the General Manager, Finance, at AMP Capital. Her salary package, made up of base salary and an incentive payment, is about $200,000 per annum before tax.
In 2011 Steven and Louiza purchased a property at Lugarno for $1.15 million. It is a large property and has storage and garage space allowing Steven to run the Stelou business from home. The Revesby townhouse was sold for $490,000 and the Lugarno property is subject to a mortgage of about $850,000. Louiza pays about $5,000 per month towards the mortgage. The Lugarno property is said to be worth $1.5 million.
It is not possible to make an accurate assessment of Steven's present financial position because neither he nor Stelou have filed tax returns for a number of years. Louiza said that the accountant had not yet prepared the 2012 or 2013 accounts. Steven claimed that his personal (non-business) assets consist of a jointly owned 2006 Honda Accord motor vehicle valued at $12,000. He claimed that his liabilities are a personal loan of $70,000 (apparently from Ula); a GE Credit Card ($2,500); a Citibank credit card held jointly ($9,000); and the Lugarno mortgage ($850,000). There appears to be a liability for a personal loan from Esanda for $12,353.21 and Stelou appears to have liabilities to the Australian Taxation Office for $54,396.81 (in relation to BAS statements) and $9,525.93 in relation to superannuation payments.
Steven's superannuation entitlements appear to be $29,622.54 with AMP and $3,093.57 with Colonial First State. Louiza has approximately $188,000 in a superannuation account with AMP. She also owns shares worth approximately $15,000 before tax.
Stelou's draft financial statements show income of about $175,512 in 2011, compared with $35,905 in 2010. There are operating losses of about $16,491 and $8,970 in 2010 and 2011 respectively. Steven relies on the unpredictable nature of his business income in support of his application. He has a young daughter and claims he is in ill health and overweight.
Steven and Louiza are clearly very dependent upon her income to continue to meet the mortgage payments of $5,000 per month (mainly interest repayments). It would appear that some part of these payments should be tax deductible by reason of the operation of Stelou's business from the premises. However it is not at all clear how this is to be brought to account because of the failure to lodge the returns.
Applicants for provision under s 59 of the Act must make full and frank disclosure of their financial circumstances: Mann v Starkey [2008] NSWSC 263 at [25]. There should be "at least in broad outline" provision of "the whole picture" concerning the applicants' financial situation: Collings v Vakas [2006] NSWSC 393 at [67].
Steven gave evidence (which I accept) that he leaves all the bookkeeping and accounting matters relating to the business to Louiza, who is an accountant. Louiza accepted that this is her role and that she is responsible for the delay in preparation of the financial statements for Stelou. However she sought to explain the delay (rather than excuse it) by reference to her demanding full time employment with AMP.
Steven is reliant upon Louiza's salary to meet the very large monthly mortgage repayments. Should the hope of having more children come to fruition, Steven and Louiza will probably find it very difficult to keep up those mortgage payments on their family home as they are presently structured, unless of course Stelou's financial position improves. There is no way of predicting whether that will occur on the evidence in this case. It may be that they will have to relocate if that occurs.
Notwithstanding the unsatisfactory nature of the evidence in Steven's case, I am satisfied that the provision made for him is not adequate for his proper maintenance and advancement in life.
The Money in Greece
It is not in issue that the deceased transferred $480,000 to a bank account in Greece at some time just prior to his departure for Greece in July 2011. Ula gave evidence of a conversation in which Betty informed her that she had removed the funds from the joint account and put 300,000 Euros in a joint account held by herself and her husband. Ula claimed that Betty informed her that she had kept 50,000 Euros to pay off her credit cards and live more comfortably. Ula said she asked Betty whether she would be willing to consider including the funds in the deceased's estate, as it was "really his money" and that it would be distributed amongst the five siblings. Ula suggested to Betty that if she kept the money it might bring division in the family. Ula claimed that Betty said that she was "scared to let go" of the money because Helen had made constant calls to her about the administration of the deceased's estate that were apparently less than amicable.
Part 3.3 of the Act empowers the Court to make orders designating property as notional estate that could have formed part of the deceased's estate, had the deceased exercised a power to deal with the property before death.
Section 80 provides:
80 Notional estate order may be made where estate affected by relevant property transaction
(1) The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies.
Note: The kinds of transactions that constitute relevant property transactions are set out in sections 75 and 76.
(2) This section applies to the following relevant property transactions:
(a) a transaction that took effect within 3 years before the date of the death of the deceased person and was entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order,
(b) a transaction that took effect within one year before the date of the death of the deceased person and was entered into when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction,
(c) a transaction that took effect or is to take effect on or after the deceased person's death.
(3) Property may be designated as notional estate by a notional estate order under this section if it is property that is held by, or on trust for:
(a) a person by whom property became held (whether or not as trustee) as the result of a relevant property transaction, or
(b) the object of a trust for which property became held on trust as the result of a relevant property transaction,
whether or not the property was the subject of the relevant property transaction.
Section 75 provides relevantly as follows:
75 Transactions that are relevant property transactions
(1) A person enters into a relevant property transaction if the person does, directly or indirectly, or does not do, any act that (immediately or at some later time) results in property being:
(a) held by another person (whether or not as trustee), or
(b) subject to a trust,
and full valuable consideration is not given to the person for doing or not doing the act.
Section 76 provides relevantly as follows:
76 Examples of relevant property transactions
(1) The circumstances set out in subsection (2), subject to full valuable consideration not being given, constitute the basis of a relevant property transaction for the purposes of section 75.
(2) The circumstances are as follows:
...
(c) if a person holds an interest in property in which another interest is held by another person (whether or not as trustee) or is subject to a trust, and the person is entitled to exercise a power to extinguish the other interest in the property and the power is not exercised before the person ceases (because of death or the occurrence of any other event) to be so entitled with the result that the other interest in the property continues to be so held or subject to the trust,
...
(3) Nothing in this section prevents any other act or omission from constituting the basis of a relevant property transaction for the purposes of section 75.
(4) For the purposes of this Chapter, in the circumstances described in subsection (2) (b), a person is not given full or any valuable consideration for not severing an interest in property held as a joint tenant merely because, by not severing that interest, the person retains, until his or her death, the benefit of the right of survivorship in respect of that property.
The matters to be taken into account in considering whether to make an order determining property as notional estate include the matters in s 87 of the Act, which are: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the orders; and (c) any other matter the Court considers relevant in the circumstances.
On one view of things the deceased held an interest in the money in the Greek bank account in which Betty held an interest (probably as trustee) and the deceased failed to exercise the power to extinguish Betty's interest prior to his death. On the deceased's death the property "became held" by Betty as provided in s 80(3) of the Act: see the detailed analysis in Wardy v Salier [2014] NSWSC 473 at [88]-[144]. Thus it may be said that the deceased entered into a property transaction of the kind referred to in s 76(2)(c) of the Act.
There is no evidence (apart form the hearsay evidence given by Ula) as to whether the account to which the deceased transferred the funds was held in a corporate or personal name or names or whether the account could be operated by only one signatory or required more signatories. There is no evidence from which it could be determined with any precision what amount remained in the account at the time of the deceased's death. It is not clear how Betty was able to transfer the funds or some of the funds to another account (if that is what occurred). There is some evidence that Betty claimed in conversations with her siblings that the deceased gifted the money to her for the purpose of purchasing an apartment for her daughter. However, if this were so there would probably have been no need for the deceased to be a signatory on the account.
Although in each of the Provision proceedings an order is sought for provision "out of the estate and/or notional estate", none of the claimants identified with any precision any property that should be the subject of an order designating it as notional estate.
Effy's Second Cross Claim, which joined Betty as a defendant, included the alternative claim for an order under s 59 of the Act. The pleading and particulars in support of that claim for provision "out of the Estate and/or notional estate" of the deceased included the contention that the deceased left personal property in Greece being the sum of approximately AUD$481,000 in an account held in the National Bank of Greece (par 3) and a claim that Betty had authority and control over the bank account (par 15). Two matters of significance in respect of this claim are: (1) Betty was not served with the process; and (2) as indicated above, Effy abandoned this claim and thus these parts of the pleading.
In the circumstances I do not intend to make an order designating any property as notional estate. The independent administrator of the deceased's estate may, if so minded when more is known about the details of the transactions, make an application in respect of that property.
Costs
Although there are yet to be submissions in respect of the costs of the proceedings, it is appropriate at this stage to say something about the costs that have been incurred by the parties. The costs incurred as advised on the last day of the hearing total $932,223 as follows: Effy $162,855; Maria $175,000; Ula $168,460; Steven $141,942; Helen $141,942 and George $142,024.
It is inappropriate to say anything at this stage about what proportion of those costs are recoverable in these proceedings and/or what proportion of costs might be paid out of the estate. However it is reasonable to conclude that at least some of those costs might be paid out of the estate.
Conclusions
Having concluded that each of George, Helen and Steven have had inadequate provision under the Act, it is now necessary to decide whether orders for provision should be made adjusting their entitlement. I am satisfied that such orders should be made.
George has no assets that will enable him to purchase a family home for himself and Tracei and their youngest child. It is clear that he and Tracei are dependent upon utilising the capital they injected into the business and the generosity of George's sister Ula and her husband Mark to maintain their present lifestyle. On the one hand it is important for the Rollenso Wheels business to prosper, yet on the other it has been important that the shareholder funds in the business have been available to support George and Tracei in recent times. Clearly George will need to support Tracei through her illness. Tracei's inability to work in the business will also have an impact on the operation and costs of the business.
Helen has no real assets that would enable her to purchase a family home or to obtain finance to start a business. I am satisfied that notwithstanding Helen's claims otherwise, she is quite capable of working. However, this capacity will need to accommodate caring for the twins. The twins (and to a lesser extent Alexander) will need to be supported for some years to come.
Helen's position needs to be considered in the light of the inappropriate distribution to herself from the NAB account after the deceased's death in September 2011.
Steven's position is more positive than that of George and Helen. He has $650,000 equity in his home with a small amount of superannuation. Louiza's position is very positive with a very good salary (approximately $200,000) and a large amount of money in her superannuation account ($188,000), although Louiza' income is used to meet the very heavy burden of the mortgage repayments.
I am satisfied that any entitlement Betty had to share in the deceased's estate has been lost by reason of her conduct in removing whatever amount was in the bank in Greece and refusing to account to the estate for moneys (if any) that are left in any bank account or otherwise.
Ula has had the unenviable task of administering the deceased's estate on an interim basis until Mr Salier was appointed on 28 May 2014. She has also been the representative of the deceased's estate in the Provision proceedings. Ula is clearly very comfortable financially and has been very generous to her siblings over the years. Mr Priestley indicated that but for an amount of $35,000 Ula is content to have her entitlement under the Act made available to the successful claimants for orders for provision. The calculation of this amount was made after taking into account possible orders that costs be made payable out of the estate and various orders for provision. Having regard to the conclusions I have reached below and the uncertainties in relation to the total value of the estate, I am satisfied that an amount of $15,000 should be paid to Ula to satisfy her entitlements under the intestacy provisions of the Act. Although Ula withdrew her claim for the grant of Letters of Administration, it is appropriate to finalise this claim by an order for dismissal.
I am satisfied that Effy is reasonably comfortable financially. She has no dependents and a surplus of approximately $36,000 per annum after paying her living expenses in Australia. I am satisfied that her entitlement under the Act should be adjusted to enable provision to be made for the deceased's children. However I am satisfied that Effy is entitled to retain the deceased's personal effects, notwithstanding Ula's claim for some of them.
Mr Lakeman and Mr Priestley submitted that one approach to provision for each of the applicants in the Provision proceedings would be to allocate a percentage of the estate after costs. It was submitted that this would accommodate the prospect of the administrator being able to gather in the moneys the deceased transferred to Greece. I am satisfied that these submissions have force.
I am satisfied that George should have 40% of the balance of the estate; where the balance of the estate is that which remains after payment of the administrator's costs and the other costs of the administration of the estate, the amount of $15,000 to be paid to Ula and the costs of the proceedings that may be ordered to be paid out of the estate. I am satisfied that Helen should have 35% of the balance of the estate. I am satisfied that Steven should have 15% of the balance of the estate. The residuum (10%) remains as Effy's entitlement together with the deceased's personal effects.
Orders
In Proceedings 2011/340511 the following orders will be made when the parties bring in Short Minutes or Order:
In respect of the claims made by Ula Falanga
The Caveat lodged by Maria Marras on 4 November 2011 is no longer in force. The claim for the grant of Letters of Administration brought by Ula Falanga is dismissed. Ula Falanga is entitled to payment of $15,000.
In respect of the claims made by Maria Marras:
The Cross Claim brought by Maria Marras is dismissed.
In respect of Effy Marras:
Effy Marras is entitled to 10% of the balance of the estate of the deceased, Anthony Marras.
The Second Cross Claim brought by Effy Marras is otherwise dismissed.
In Proceedings 2012/286004 the following order will be made when the parties bring in Short Minutes or Order:
The plaintiff, George Marras, is entitled to 40% of the balance of the estate of the late Anthony Marras.
In Proceedings 2012/258861 the following order will be made when the parties bring in Short Minutes or Order:
The plaintiff, Helen Marras, is entitled to 35% of the balance of the estate of the late Anthony Marras.
In Proceedings 2012/285583 the following order will be made when the parties bring in Short Minutes or Order:
The plaintiff, Steven Marras, is entitled to 15% of the balance of the estate of the late Anthony Marras.
In each of the proceedings, I will hear the parties' submissions on the orders for costs on a date to be fixed. I list the matters for directions on 23 July 2014 at 9.45am for the making of Orders in the Short Minutes of Order to be prepared by the parties and for directions in relation to the submissions on costs.
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Amendments
10 July 2014 - added hearing dates
Amended paragraphs: Hearing date
Decision last updated: 10 July 2014
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