Karbowiak v Mitolo

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
KARBOWIAK & ORS v MITOLO & ANOR
[2023] SASC 168
Judgment of the Honourable Justice Stanley
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SEPARATE DECISION OR DETERMINATION OF QUESTIONS AND CONSOLIDATION OF PROCEEDINGS - SEPARATE DECISION OR DETERMINATION - GENERALLY
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - GENERALLY
Maurizio Mimmo Mitolo (the deceased) died intestate on 18 December 2019.
By originating application, the first applicant seeks a declaration that she was the domestic partner of the deceased pursuant to s 11B of the Family Relationships Act 1975 (SA). She and her son, the second applicant, each seek an order for provision pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA).
The second respondent, the mother of the deceased, in her personal capacity, by interlocutory application seeks an order that the first applicant’s claim for a declaration under the Family Relationships Act 1975 (SA) be heard as a separate trial. The first and second applicants oppose the making of the order for a separate trial.
By interlocutory application, the third applicant, the deceased’s brother, applied to be joined to the originating application on the basis he also sought an order for provision from the deceased’s estate. The Court made an order joining him to the application, in circumstances where the other applicants submit that occurred without either hearing argument or the consent of the other applicants.
The first and second applicants, by interlocutory application, ask the Court to make an order for summary judgment dismissing the third applicant’s claim or an order the claim be summarily dismissed. The third applicant opposes that application.
The Court heard both interlocutory applications together.
Held:
1. The first applicant’s claim for a declaration under the Family Relationships Act 1975 (SA) should be dealt with as a separate trial.
2. An order is made for summary judgment dismissing the third applicant’s claim for provision from the deceased’s estate pursuant to the Inheritance (Family Provision) Act 1972 (SA).
Administration and Probate Act 1919 (SA) s 72G; Family Relationships Act 1975 (SA) ss 11B and 14; Inheritance (Family Provision) Act 1972 (SA) ss 6(j) and 7; Uniform Civil Rules 2020 (SA) rr 143 and 144, referred to.
Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369; Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117; Illman v Sterrey & Ors [2023] SASC 50; In Re Anderson (1975) 11 SASR 276; Mann v Starkey [2008] NSWSC 263; Re Janson; Gash v Ruzicka [2020] VSC 449; SA Water Corporation v United Water International Pty Ltd [2009] SASC 383; Tallglen v Pay TV Pty Ltd (1996) 22 ACSR 130; Tepko Pty Ltd v Water Board (2001)206 CLR 1, considered.

KARBOWIAK & ORS v MITOLO & ANOR
[2023] SASC 168
Civil
STANLEY J:
Introduction

Maurizio Mimmo Mitolo died intestate on 18 December 2019 (the deceased).
By originating application the first applicant seeks a declaration that she was the domestic partner of the deceased pursuant to s 11B of the Family Relationships Act 1975 (SA) (FRA Act) and an order for provision pursuant to s 7 of the Inheritance (Family Provision) Act 1972 (SA) (IFP Act).
The second applicant, the son of the first applicant, seeks an order for provision in his own right pursuant to s 7 of the IFP Act.
At his death the deceased was not otherwise survived by another spouse or biological child. Accordingly, but for the applicants’ claims, the second respondent, the deceased’s mother, is entitled to his estate on intestacy pursuant to s 72G of the Administration and Probate Act 1919 (SA) (AP Act).
By interlocutory application,[1] the third applicant, the deceased’s brother, Paul Mitolo, applied to be joined to the originating application on the basis he also sought an order for provision from the deceased’s estate pursuant to s 7 of the IFP Act. The Court made an order joining him to the application, in circumstances where the other applicants submit that occurred without either hearing argument or the consent of the other applicants.[2]
[1] FDN 10.
[2] FDN 14.
The first and second applicants, by interlocutory application, ask the Court to make an order for summary judgment dismissing the third applicant’s claim or an order the claim be summarily dismissed.[3]
[3] FDN 18.
The third applicant, Paul Mitolo, opposes that application.
The second respondent, the mother of the deceased, in her personal capacity, seeks an order that the first applicant’s claim for a declaration under the FRA be heard as a separate trial.[4] The first and second applicants oppose the making of the order for a separate trial.
[4] FDN 30.
The Court heard both interlocutory applications together. It is convenient first to address FDN 30.
FDN 30
The second respondent submits that pursuant of s 14 of the FRA this Court should order a separate trial of the issue whether the first applicant is entitled to a declaration that she was the deceased’s domestic partner at the date of his death or at some earlier unspecified date within the meaning of s 11B of the FRA.
Section 14 provides:
(1) Where—
(a) a person desires to institute proceedings in a court; and
(b) it is necessary for the purposes of those proceedings to establish under this Act that a certain relationship exists,
he may commence the proceedings in the usual way, but he must endorse on the process by which the proceedings are instituted a statement to the effect that he seeks a declaration under this Act of a specified relationship.
(2) In any such proceedings, there shall be, unless a court otherwise determines, a separate trial of any issues arising under this Act.
The second respondent submits that s 14(2) creates a statutory rebuttable presumption in favour of a separate trial of the declaration sought by the first applicant. She submits that the first applicant carries the onus of satisfying the Court that it should dispense with a separate trial of the application for the declaration pursuant to s 11B of the FRA. The second respondent submits she has not done so.
The first and second applicants oppose an order for a separate trial. They submit that given that a separate trial is the default position pursuant to s 14(2), it is a matter for any party seeking a single trial to apply at an appropriate time. In this case they submit that it is premature to do so at this time. Further, and in any event, they submit there are reasonable factors that weigh against ordering a separate trial in this case. They submit that the second respondent, by seeking a separate trial, seeks to circumvent the usual procedures of the Court designed to ensure a fair and just outcome by depriving them of the ability to know the true value of the deceased’s estate.
They submit that the general rule is that all issues should be dealt with in a single trial.[5] The general rule is the starting point for the exercise of a discretion to order a separate trial.[6]
[5] Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369 at [92]-[93]; Tepko Pty Ltd v Water Board (2001) 206 CLR 1, 55; Tallglen v Pay TV Pty Ltd (1996) 22 ACSR 130, 142.
[6] SA Water Corporation v United Water International Pty Ltd [2009] SASC 383 at [46].
The first and second applicants contend that, while s 14(2) reverses the general rule, whether an order pursuant to s 14(2) should be made depends on the nature of the facts and issues before the Court in a particular proceeding under the FRA. They contend that s 14(2) creates no presumption as to the proper course that proceedings brought using the procedure in s 14(1) should take. The rationale against separate trials remains the same. In deciding whether separate trials should be ordered the Court should consider the same factors that inform the general rule. They are:
(i)whether the resolution of the separate issue will have the effect of resolving the entirety of the litigious controversy or of substantially narrowing the field of the litigious controversy;
(ii)whether the resolution of the separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation; and
(iii)whether there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of the witnesses.
As against those factors, the first and second applicants submit that separate trials are not appropriate where there are intertwined issues of fact or law between the separated issue and the other issues such that a determination of the separate issue will not have a substantial effect upon the width of the field of litigious controversy or the prospect of settlement on the balance of the litigation; or there is a commonality of witnesses and issues of credit as between the separate issue and the other issues in the case which will, or may, necessitate a ruling on the credit of one or more of the common witnesses, thus precluding the same judicial officer from again dealing with the matters going to the credit of the common witnesses; or there is a possibility that resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the Court, and undesirable fragmentation of the proceedings.
They submit that the only difference made by s 14(2) to the application of the general rule is that the starting point in the exercise of any discretion is that there be a separate trial. As there has not yet been an order made pursuant to s 14(2), as things stand, there will be a separate trial. Procedurally the usual step would be for the party that opposes an order for a separate trial to bring an application that an order for separate trials should not be made. In these circumstances the first and second applicants invite the Court to find that FDN 30 has been brought to pre-empt consideration of whether to order a separate trial at the proper time. The application is premature.
I do not accept the first and second applicants’ submissions.
As a matter of construction, s 14(2) creates a statutory presumption that there will be a separate trial where the facts relevant to the jurisdictional issue prescribed by the terms of s 14(1) are established. The creation of the statutory presumption in favour of a separate trial is grounded in the phrase “unless a court otherwise determines”. The creation of the presumption shifts the onus to the party opposing the order for a separate trial to satisfy the Court why an order for a separate trial should not be made.
The purpose of the creation of the statutory presumption lies in the importance of the jurisdictional fact required to be proved for other purposes, such as, who is the proper administrator on intestacy; who should take distribution of the estate; and who is eligible to bring a claim under the IFP Act. It is clear that the purpose of providing for a separate trial of the jurisdictional fact, in advance of the determination of such claims, is to ensure that the jurisdictional fact is determined in advance of a second trial addressing those rights and entitlements which depend on proof of the jurisdictional fact. This is not only a matter of fairness but ensures that estates are not burdened with the costs and delays of having to deal with claims that should never have been instituted because the applicant is unable to prove the existence of the jurisdictional fact.
Accordingly, unless the first and second applicants can persuade the Court that the factors in favour of a separate trial are outweighed by the factors against a separate trial, a separate trial should be ordered.
The first and second applicants rely on four matters that contraindicate the making of an order pursuant to s 14(2).
First, the trial of the separate issue would only finally determine the proceeding, insofar as the first and second applicants are concerned, if it were found that the first applicant had never been the domestic partner of the deceased. It is only then that the second applicant’s right to claim provision from the deceased’s estate pursuant to the IFP Act would be precluded. But even if that occurred there is a real prospect of an appeal and therefore a multiplicity of proceedings. Second, unless the Court found that the first applicant had never been the domestic partner of the deceased the litigious dispute would neither be resolved nor substantially narrowed. Third, in evaluating whether the first applicant was the domestic partner of the deceased, there will need to be a careful examination of the factual matters regarding the relationship over a long period of time since 1999, when the first applicant says she first met the deceased. This will also involve an examination of the factual matters regarding the relationship between the second applicant and the deceased, who says he was around four years old when he first met the deceased. The same matters will need to be considered in assessing any claim for provision from the deceased’s estate in the context of his moral duties. Accordingly, there will be considerable overlap between the evidence and the findings of fact required between the trial on the declaration and the trial on the IFP Act claims. Fourth, in considering the relationship between the deceased and the first and second applicants for the purposes of the declaration, the Court will be required to assess their credibility and reliability. The same assessment will be required in respect of other witnesses such as the third applicant, the second respondent and other friends and family. This is a matter where it is very likely that credit and reliability will be in serious dispute. On a second trial to determine any entitlements pursuant to the IFP Act, those witnesses are likely to give evidence again requiring the Court to again assess their credit and reliability.
In my view these factors either will not arise or will be outweighed by those factors that weigh in favour of ordering a separate trial.
If there is no separate declaration trial and the declaration application is heard together with the IFP claims trial, the proceedings will be very complex. The IFP claims trial will require detailed consideration of the assets of the estate and their value. Those assets include eight or nine parcels of land and seven parcels of shares in various private companies connected with the Mitolo family. The value of these assets has the potential to be substantial and appears the subject of serious dispute. The true value of the estate may only be properly assessed upon a forensic accounting analysis and valuations of all real property. It will also require formal business valuations. The size of the estate is complicated by an allegation that the deceased had significant liabilities at the date of his death including as a guarantor for various loan facilities as well as liabilities under mortgages and other loans to the deceased. It is also alleged there are a number of contingent liabilities comprising a combination of equipment and finance agreements, overdraft accounts, loan accounts, trade finance accounts and bank guarantees. The administrator’s solicitors assert that there is significant cross-collateralisation of contingent liabilities of the business, both across individuals and corporate entities within the Mitolo group. There will also be an issue as to whether the estate has any liability under guarantees in favour of Westpac by way of security for loans to the Mitolo group. It is likely that the terms of those guarantees will be in issue. It is likely that further detailed investigations as to the financial position of the deceased estate will be required.
Investigation and resolution of the IFP claims trial will almost inevitably involve further interlocutory applications and disputes. It is likely the costs and delays involved will be substantial. Those costs will probably be wasted if the matter is an internal issue between the members of the Mitolo family not involving the first and second applicants. A substantial costs burden, not to mention personal anxieties, may well fall on the estate and second respondent for no good reason. Substantial legal and accounting investigations, applications for discovery from third parties, forensic accounting, the valuation of a number of corporate entities, negotiations with multiple parties being the lending institutions, principal debtors and co-guarantors, to resolve disputed questions of guarantees and issues in equity such as contribution and subrogation are likely to produce applications to the Court for advice and/or the construction of documents underpinning the lending facilities.
While there would be some limited overlap in the evidence required for the FRA declaration trial and the IFP claims trial, if they were both run together, much evidence relevant to the IFP claims trial will have no relevance to the FRA declaration trial. Those matters are:
(i)all evidence about the assets of the estate;
(ii)all evidence about the liabilities of the estate;
(iii)all evidence about the first applicant after 18 December 2019, including all matters relating to the future needs of the first applicant;
(iv)whether the first applicant was left without adequate provision;
(v)if so, what further provision should be ordered for the first applicant;
(vi)all evidence about the second applicant;
(vii)whether the second applicant was left without adequate provision;
(viii)if so, what further provision should be ordered for the second applicant;
(ix)all evidence about the third applicant; and
(x)all evidence about the second respondent, her relationship with the deceased, her personal circumstances and future care needs.
If there is not a separate trial and the application for the FRA declaration is dismissed, the vast bulk of the costs incurred pre-trial and at trial which is associated with the gathering and the adducing of this evidence will be entirely wasted. Further, the resolution of the FRA declaration would be delayed by the substantial amount of time it will take to investigate and prepare for trial on these matters. Whether this is a year or years, the delay will be lengthy.
If the first applicant is successful in obtaining the FRA declaration at date of death then she is entitled to the entire estate on an intestacy and her IFP claim falls away as, in effect, will the second applicant’s IFP claim. In those circumstances, the evidence on her IFP claim which goes beyond relationship evidence, and all of the evidence on the second applicant’s IFP claim, will have been needlessly adduced and extensive cross-examination and the adducing of contradictory evidence will be wasted.
Further, if the first applicant is unsuccessful in obtaining the FRA declaration, the claims of the first and second applicants again fall away as they have no standing to make a claim under the IFP Act. In these circumstances, all the evidence on the first applicant’s IFP claim which goes beyond relationship evidence, and all of the evidence on the second applicant’s IFP claim, will have been wastefully adduced and will have been the subject of wasteful cross-examination and contradictory evidence.

In the circumstances I am satisfied that a separate FRA declaration trial will determine who takes on intestacy; will determine who is the proper administrator; will determine what IFP claims are maintainable, if any; will determine who is the proper contradictor of whatever IFP claims remain; will likely cause the settlement of whatever IFP claims remain, will likely avoid the need for the IFP claims trial at all; will avoid substantial costs being wasted; and will avoid delaying the determination of the FRA declaration application.
I accept the submission of the second respondent that, even were it not the statutory direction that the FRA declaration trial be determined separately, the facts of this application compel the conclusion that should occur here for reasons of utility, economy, fairness and expedition.
In the circumstances I am satisfied that the presumption in s 14(2) has not been rebutted. The FRA proceedings should be dealt with as a separate trial. I will hear the parties further as to any resulting orders and the question of costs.
FDN 18
By interlocutory application the first and second applicants have sought orders that the IFP claim made by the third applicant should be summarily dismissed or there should be an order for summary judgment. The application has been brought pursuant to UCR 143 and 144. At issue is whether the third applicant’s claim pursuant to s 7 of the IFP Act has no reasonable basis.[7]
[7] Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117, 131-135.
In the course of the hearing of the interlocutory application the first and second applicants refined the basis of the application for an order for summary judgment against the third applicant to two substantive matters. I understood the first and second applicants to submit that these matters were jurisdictional.
The first arises from the terms of s 6(j) of the IFP Act. It provides for the persons who are, in respect of the estate of the deceased person, entitled to claim the benefit of the IFP Act. Those persons include a brother or sister of the deceased who satisfies the Court that he or she cared for, or contributed to the maintenance of the deceased person during his lifetime.
In Illman v Sterrey & Ors[8] Judge Dart held that s 6(j) requires something beyond conduct that is to be ordinarily expected in the relationship between two caring siblings.
[8] [2023] SASC 50 at [35].
The first and second applicants submit that the evidence does not establish conduct beyond that which would ordinarily be expected in a relationship between two caring brothers. Effectively the evidence is they were in business together and that companies they owned or controlled distributed money to the deceased. They submit this does not satisfy the test imposed by s 6(j).
Further, the first and second applicants submit that even if the third applicant was an eligible applicant, that is only the first step in a claim under the IFP Act. The third applicant must satisfy the Court the deceased was under a moral duty to provide for him from his estate. They contend that the deceased did not have a moral duty to make provision for the third applicant. As Judge Dart held in Illman v Sterrey & Ors,[9] the mere fact of a sibling relationship does not establish an obligation to provide for that sibling. They submit there is no reason why the deceased would have thought it necessary to make provision for his brother.
[9] [2023] SASC 50 at [40].
Second, the Court’s jurisdiction to make an order for family provision is only invoked where the applicant demonstrates his or her need through evidence of his or her financial circumstances.[10] He must satisfy the Court that he has been left without adequate provision for his proper maintenance, education and advancement in life. The onus is on the applicant to prove need in order to establish an entitlement for provision from the deceased’s estate. Despite the fact that “need” is relative, a moral claim alone is not sufficient to warrant an order for further provision.[11]
[10] Re Janson; Gash v Ruzicka [2020] VSC 449 at [37].
[11] In Re Anderson (1975) 11 SASR 276, 283.
In order to establish the question of need as a matter of jurisdiction it is necessary that an applicant for provision make a full and frank disclosure of his or her financial and material circumstances.[12] Failure to do so may result in dismissal of the application.[13] The applicant must be able to persuade the Court that it has been presented, at least in broad outline, with the whole picture concerning the applicant’s financial and material circumstances.
[12] Mann v Starkey [2008] NSWSC 263 at [25] and the authorities cited therein.
[13] De Groot, Family Provisions in Australia, 6^th ed 2021 para [7.2] and the authorities cited therein.
The first and second applicants submit that the third applicant’s supporting affidavit[14] is generally silent as to these circumstances. They submit he has failed to put on evidence that, taken at its highest, discloses a relevant need. In the absence of evidence of need for provision from the deceased’s estate, they submit that the third applicant has not disclosed a reasonably arguable case that the deceased failed in his duty to make provision for him.
[14] FDN 11.
They submit that the evidence, such as it is, is insufficient to found a claim for family provision. In the absence of evidence of some feature of the relationship of the two brothers that would meet the test in s 6(j), and establish a moral duty on the part of the deceased to make provision for his brother, and establish that he is in financial need, the third applicant’s claim is untenable and hopeless.
The third applicant essentially has two responses to these submissions. First, he submits that the application for summary judgment is premature. It is a matter for trial whether the third applicant can demonstrate a relevant financial need and there are many procedural steps still to be undertaken pre-trial in which he will have the opportunity to put on evidence of his financial need. He relies upon a concession made by the first and second applicants in the course of argument that the requirement to demonstrate “need” can be satisfied even if the third applicant’s financial position as disclosed proves that he is wealthy. That is enough for the matter to proceed to trial. The authorities relied on by the first and second applicants are concerned with the need to adduce evidence at trial rather than at this stage of the proceedings. When the matter comes to trial the third applicant will be giving evidence concerning his “need”. Second, the third applicant submits that it is not open to the other applicants to complain that the third applicant has not yet put evidence on to establish his “need” when in the same breath they contend that the application for a separate trial is premature because there is so much more to be done before the Court is in a position to know and understand whether it is appropriate for the Court to order separate trials.
I do not accept the third applicant’s submission.
The point of an application for summary judgment is to protect a party from the worry, burden and expense of defending a claim that has no reasonable prospects of success. In order to invoke the Court’s jurisdiction for provision out of a deceased’s estate it is necessary to demonstrate that there exists evidence of “need”. A party should not be left in a position where an applicant for joinder, having put on evidence that is insufficient to even mount an arguable case of “need”, seeks to resist an order for summary judgment on the basis that at some indeterminate time in the future he will put on further evidence that will establish an arguable case of “need”. The first and second applicants should not be left dangling in that unsatisfactory position.
In my view, as a general rule, a sibling is not under a moral duty to make provision for a brother or sister. However, that rule is not absolute. There may exist circumstances in a particular case that creates a moral duty. In this case the evidence of the third applicant, taken at its highest, does disclose a reasonably arguable case that he contributed to the maintenance of the deceased during his lifetime. It does not disclose evidence that the deceased was under a moral duty to provide for his brother. Evidence that companies within the Mitolo group, owned or controlled by the third applicant and his brother, distributed money to the deceased from time to time, is not sufficient to prove the existence of a moral duty on the part of the deceased to make provision for his brother. The evidence on its face does not disclose why the deceased would have thought it necessary to make provision for the third applicant.[15] It is arguable however that this might amount to evidence of the third applicant contributing to the maintenance of the deceased during his lifetime. Evidence of distribution of allegedly unearned money arguably could be sufficient to satisfy the statutory test of eligibility to bring a claim under the IFP Act. However, and more significantly, there is an absence of evidence of need. The third applicant has failed to make a full and frank disclosure of his financial and material circumstances. For these reasons I am persuaded that the evidence, taken at its highest, does not establish a reasonable basis for finding that the Court has jurisdiction to award the third applicant provision pursuant to s 7.
[15] Illman v Sterrey & Ors [2023] SASC 50 at [40].
Finally, I note that the first and second applicant submit that the Court should grant summary judgment because the third applicant’s claim is an abuse of process. Having reached the conclusion that judgment should be entered dismissing the third applicant’s claim, it is unnecessary to decide the question of whether that claim amounts to an abuse of process.
In my view the third applicant has not put on evidence sufficient to establish a reasonable basis for prosecuting his claim on the issues of the existence of moral duty and need. The evidence he relies on, taken at its highest, arguably does satisfy the statutory test in s 6(j). However it does not prove the existence of a moral duty on the part of the deceased to provide for the third applicant and does not prove that he is in need. The third applicant may be able to do so. But he has not done so yet. In the meantime I am satisfied that the first and second applicants are entitled to the relief they seek by way of summary judgment. The third applicant has not put on evidence that establishes the Court has jurisdiction to award him provision. If the third applicant is in a position later to put on evidence of his care for, or contribution to the maintenance of the deceased during his lifetime, and the existence of a moral duty on the part of the deceased to provide for him, and evidence of “need”, he can do so and renew an application for joinder. Plainly if an application is made the Court will have to consider its merits at that time on the evidence before it.
But in the meantime I would make an order for summary judgment dismissing the third applicant’s claim for provision from the deceased’s estate pursuant to the IFP Act.
I will hear the parties as to costs.

[2023] SASC 168

28 November 2023