Kastrounis v Foundouradakis - [2012] NSWSC 264

Supreme Court

New South Wales

Medium Neutral Citation: Kastrounis v Foundouradakis [2012] NSWSC 264
Hearing dates: 22, 23 February 2012
Decision date: 22 March 2012
Jurisdiction: Equity Division
Before: Hallen AsJ
Decision:
(a) Having found that each Plaintiff is an eligible person, and that the provision made for him and her in the Will of the deceased is inadequate, the first Plaintiff is to receive, in addition to that provision, a lump sum of $65,000 and the second Plaintiff is to receive, in addition to that provision, a lump sum of $35,000.
(b) No interest is to be paid on either lump sum if it is paid within 28 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) Probate and Administration Act 1898, on unpaid legacies, is to be paid from that date until the date of payment.
(c) The parties are to endeavour to reach agreement on the burden of costs of the proceedings, failing which the matter will be listed for further submissions.
(d) Having found that the deceased's estate is insufficient for the making of the family provision order in the case of each Plaintiff, and for any order as to costs, that the Court is of the opinion should be made, the court will make a designating order designating property as notional estate for the purposes of the family provision orders to be made and, if necessary, for the purposes of an order for the Plaintiffs' costs of proceedings.
(e) The burden of the provision to be made for each of the Plaintiffs and of the Plaintiffs' costs, as well as the property of each of the Defendants to be designated as notional estate, to be the subject of agreement between the Defendants, or if no agreement can be reached, to be the subject of further submissions.
(f) Direct the parties to bring in short minutes of order to reflect the reasons and the proposed orders.

Catchwords: SUCCESSION - FAMILY PROVISION - NOTIONAL ESTATE - Two Plaintiffs, a son and a daughter of the deceased, seek a family provision order out of the estate or notional estate of the deceased under the Succession Act 2006 - Each Plaintiff received a modest legacy out of the estate in the Will - Virtually no actual estate left thereafter - The Defendants are grandchildren of the deceased to whom the deceased's real property was transferred a few months prior to her death - Consideration identified in contract for sale not paid by them - Other consideration provided - Whether full valuable consideration given - Property subsequently sold by Defendants - Whether provision should be made for each Plaintiff and, if so, the nature of the provision to be made - Whether proceeds of sale, or other property of the Defendants, or any of them, or any other property should be designated as notional estate
Legislation Cited: Family Provision Act 1982
Practice Note SC Eq 7
Property (Relationships) Act 1984
Succession Act 2006
Succession Amendment (Family Provision) Act 2008
Cases Cited: Alexander v Jansson [2010] NSWCA 176
Allardice v Allardice, In re Allardice, (1909) 29 NZLR 959
Attorney-General v Earl of Sandwich [1922] 2 KB 500
Barns v Barns [2003] HCA 9 [2005] SydLawRw 12; (2005) 27(2)
Bartlett v Coomber [2008] NSWCA 100
Blore v Lang [1960] HCA 73; (1960) 104 CLR 124
Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Buckland Deceased, Re [1966] VR 404
Butcher v Craig [2009] WASC 164
Cetojevic v Cetojevic [2007] NSWCA 33
Christie v Manera [2006] WASC 287
Collicoat v McMillan [1999] 3 VR 803
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Crossman v Riedel [2004] ACTSC 127
Cunliffe v Goodman [1950] 2 KB 237
Day v Perisher Blue Pty Ltd [2005] NSWCA 110; (2005) 62 NSWLR 731
Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Ebert v Ebert [2008] NSWSC 1206
Foley v Ellis [2008] NSWCA 288
Gardiner v Gardiner (NSWSC, 28 May 1998, unreported)
Galt v Compagnon (NSWSC, 24 February, 1998)
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Hawkins v Prestage (1989) 1 WAR 37
Hildebrandt v Soncini [2007] NSWSC 1227
Hinde & Hinde [2008] FamCA 24
Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134
Jelley v Iliffe [1980] EWCA Civ 4; [1981] 2 All ER 29
John v John [2010] NSWSC 937
Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422
Kay v Archbold [2008] NSWSC 254
Kembrey v Cuskelly [2008] NSWSC 262
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
McCosker v McCosker (1957) 97 CLR 566
McGrath v Eves [2005] NSWSC 1006
MacGregor v MacGregor [2003] WASC 169 (28 August 2003)
Marks v Marks [2003] WASCA 297
Marriott, Re, dec'd [1968] VR 260
Mayfield v Lloyd-Williams [2004] NSWSC 419
Ogburn v Ogburn; Ogburn v Ogburn [2012] NSWSC 79
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9
Puckridge, Deceased, In the Estate of (1978) 20 SASR 72
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Smith v Woodward (NSWSC, 9 September 1994, unreported)
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Stiles v Joseph (NSWSC, 16 December 1996, unreported)
Stott v Cook (1960) 33 ALJR 447
Taylor v Farrugia [2009] NSWSC 801
Tramantana v Harborne; Clarke v Harborne; Midson v Harborne [2011] NSWSC 1129
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Vaysbakh v Vaysbakh [2007] NSWSC 1223
Wade v Harding (1987) 11 NSWLR 551
Walker v Walker (NSWSC, 17 May 1996, unreported)
Wilkinson (deceased), Re; Neale v Newell [1978] 1 All ER 221
Wilson v Wright (NSWSC, 25 February 1992, unreported)
Texts Cited: Rosalind Croucher in "Contracts to Leave Property by Will and Family Provision"
New South Wales Law Reform Commission Report 110 (2005) - Uniform Succession Laws: Family Provision
Category: Principal judgment
Parties: Merkoury Kastrounis (first Plaintiff)
Maria De Chellis (second Plaintiff)
Anna Foundouradakis (first Defendant)
Connie Kerameas (second Defendant)
Irene Miglis (third Defendant)
Representation: Counsel:
Mr J Armfield; Mr G Smith (Plaintiffs)
Mr J Mitchell (Defendants)
Solicitors:
Russo & Partners (Plaintiffs)
Econ Legal Pty Limited (Defendants)

File Number(s): 2010/294303

Judgment

HIS HONOUR: Merkoury (a.k.a. Max) Kastrounis, the son, and Maria De Chellis, the daughter, of Erini Kastrounis ("the deceased"), each applies for a family provision order under Chapter 3 of the Succession Act 2006 ("the Act"). The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 ("the former Act"), which was repealed, effective from 1 March 2009. A family provision order is an order made by the court, under Chapter 3, in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life of an eligible person.

The Plaintiffs commenced the proceedings, by one originating Summons, filed on 3 September 2010, that is, within the time prescribed by s 58(2) of the Act (not later than 12 months after the date of the death of the deceased). The Defendants named in the Summons are three of the grandchildren of the deceased, namely Anna Foundouradakis, Connie Kerameas and Irene Miglis, the daughters of the deceased's daughter, Jasmine Kastrouni.

Because provision is sought out of the notional estate of the deceased (as well as actual estate), the Plaintiffs seek an order designating a property situated at Brighton-Le-Sands ("the Brighton-Le-Sands property"), or the proceeds of sale of that property, or other property of the Defendants, as notional estate of the deceased. I shall return to the basis of the claim later in these reasons.

Without any undue familiarity, or disrespect intended, and for convenience, I shall refer to the parties either by the role each plays in the proceedings or by his, or her, first name. I shall refer to other family members, after introduction, by her, or his, first name.

Formal Matters

The following facts are uncontroversial.

The deceased died on 14 September 2009. She was then aged 88 years, having been born in February 1921. She married her husband, Nikitas, in the early 1940's and remained married to him until his death in August 2005.

The deceased left a Will that she made on 19 June 2009, in which she appointed the Defendants as executors and trustees. They obtained a grant of Probate of the deceased's Will, from this Court, on 7 June 2011.

The deceased's Will provided for a pecuniary legacy of $10,000 for each of the deceased's children, Max, Jasmine (called Jesma in the Will) and Maria. The rest and residue was to be held on trust, to be divided and distributed equally between two of the Defendants, namely Anna and Irene.

Each of the pecuniary legatees has been paid.

In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's actual estate, at the date of death, was disclosed as having an estimated, or known, gross value of $51,530. No liabilities were disclosed. The estate was said to consist of money on deposit in various bank accounts. (I have omitted any reference to the cents and shall continue to do so.)

Debts, funeral and testamentary expenses of the estate at the date of death total $14,561. These debts were paid before the amounts disclosed in the Inventory of Property were calculated. The parties agree that they may be omitted from the calculations that follow for that reason.

After the payment of probate costs ($211) and the distribution of the legacies ($30,000), the value of the deceased's actual estate was estimated to be $21,319. The interest that has accrued on this amount, since death, is $3,059. Accordingly, the value of the actual estate, at the date of hearing, is estimated to be $24,378.

For this reason, no doubt, the Plaintiffs seek an order designating the Brighton-Le-Sands property, or the proceeds of sale thereof, or other property of each of the Defendants, as notional estate.

In May 1998, the deceased and Nikitas had purchased, as joint tenants, the Brighton-Le-Sands property, for $252,000. It was a semi-detached brick cottage, with two bedrooms, the main bedroom with a glassed front verandah, a bathroom, dining room, kitchen, small sunroom, small laundry, external covered porch at the rear of the property and a small yard.

The deceased and Nikitas moved to Brighton-Le-Sands to be closer to Irene and Anna, the two people who, then, had the time available to assist with their medical, and other, needs.

The deceased's solicitor, from about 2002, was James Jordan. He commenced practice in 1992 and has worked as a solicitor since that time. He is the Deputy Chairman of St Basil's Aged Care, an organisation that runs aged care facilities in different parts of Sydney. He has had extensive experience in the preparation of wills and in dealing with elderly clients. He remained the deceased's solicitor for about 7 years prior to her death.

Following the death of Nikitas in August 2005, Mr Jordan, in November 2006, filed a Notice of Death in respect of the Brighton-Le-Sands property. After its registration, the Brighton-Le-Sands property was registered in the name of the deceased alone.

On 30 March 2009, the deceased instructed Mr Jordan, to cause the Brighton-Le-Sands property to be transferred to Anna, Connie and Irene as tenants in common in equal shares.

Prior to the meeting with Mr Jordan, the deceased, with Anna and Irene, had attended, on 11 March 2009, a Centrelink office. A typewritten record of interview obtained from that office, reveals the deceased informed the Centrelink officer who conducted the interview, that, "she intends to transfer the title of her home to her three granddaughters and remain living in the home" and that "[H]er name will not be on the title". The deceased received advice from the Centrelink officer regarding the implications of taking this step, so far as it related to receipt of her pension. A copy of the typewritten record of interview formed part of the evidence relied upon by the Defendants. The deceased had provided it to Mr Jordan.

A valuation, dated 19 May 2009, disclosed that the value of the Brighton-Le- Sands property, for stamp duty purposes, was then $500,000.

The deceased and Anna, Connie and Irene, entered into a Contract for Sale in June 2009. The purchase price disclosed on the Contract was $500,000. The Contract and Transfer was stamped in July 2009 and the Transfer was registered in August 2009. Anna, Connie and Irene paid the stamp duty of $17,990. However, none of the purchase price was paid to the deceased.

Anna, Connie and Irene sold the Brighton-Le-Sands property in about May 2010, for $549,000. The costs and expenses of sale were $8,950, whilst legal costs of sale were $1,100. There was no capital gains tax payable on the proceeds of sale. Thus, the net proceeds of sale amounted to about $538,950. (The share of each of the Defendants was, therefore, about $179,650.)

Using the above estimates, at the hearing, the parties agreed that the estimated value of the actual, and the total amount of property that may be designated as the notional, estate of the deceased (subject to the payment of the costs of the proceedings), is about $563,328.

In calculating the value of the actual and notional estate of the deceased, finally available for distribution, the costs of the present proceedings should also be considered, since the Plaintiffs, if successful, normally, will be entitled to an order that their costs, calculated on the ordinary basis, be paid out of that estate, whilst the Defendants, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs, calculated on the indemnity basis, be paid out of that estate.

The Plaintiffs' costs of the proceedings, calculated on the indemnity basis, have been estimated to be in the order of $65,767 (inclusive of GST and upon the basis of a three day hearing). The costs and disbursements of the Plaintiffs, including counsel's fees, calculated on the ordinary basis, are estimated, by the Plaintiffs' solicitor, to be $56,000.

The Defendants' costs and disbursements of the present proceedings, including counsel's fees, calculated on the indemnity basis (inclusive of GST and upon the basis of a three day hearing), have been estimated to be about $67,658.

For the purposes of the hearing, I shall determine the case upon the basis that the estimated net distributable actual estate, and what may be designated as notional estate, will be about $439,670, after the payment of costs, if costs are ordered to be paid, and if the costs estimates prove accurate.

Of course, depending upon the result, the costs and disbursements, if payable out of the estate, or notional estate, will be able to be formally assessed, unless otherwise agreed by the parties. They agreed that reasons for judgment should be published, after which the issue of costs could be argued, if no agreement was reached.

The persons described as eligible persons, within the meaning of the Act, are the Plaintiffs and their sister, Jasmine. A prescribed notice has not been served upon them, or upon each of the grandchildren of the deceased as persons beneficially entitled to share the net distributable residuary estate of the deceased: Practice Note SC Eq 7, paragraph 7. However, Jasmine has sworn an affidavit that has been read in the proceedings. There is no suggestion that any of the grandchildren of the deceased is an eligible person under the Act.

Only the Plaintiffs have commenced proceedings. Each of the Defendants has given evidence about her financial and material circumstances and advanced a case that she is a competing claimant, financially and otherwise, upon the bounty of the deceased.

Background Facts

I set out the additional facts, which will not be dealt with later, that I am satisfied are either not in dispute, or which, in my view, have been established by the evidence.

(a)The deceased's husband, Nikitas, and Jasmine, arrived in Australia, from Greece, in 1960. The deceased and the Plaintiffs followed the other family members in about 1961.

(b)Jasmine was married, in February 1963, to Michael Kastrouni. They are the parents of Anna, Connie and Irene. Connie was born in February 1964 and is currently aged 48 years. Irene was born in October 1967 and is currently aged 44 years. Anna was born in June 1969 and is currently aged 42 years. I shall return to the financial and material circumstances of each later in these reasons.

(c)Upon her marriage, the deceased and Nikitas gave her a house, which they owned, in Rhodes, Greece. In turn, Jasmine gave to each of Max and Maria, an amount of $25,000. (The total amount given to them was said by Nikitas to be more than the value of the Rhodes house.)

(d)At, or about, the time of Jasmine's marriage, the deceased, Nikitas, Jasmine, and her husband, Michael, together bought a property at Clyde, New South Wales. Nikitas provided the deposit, whilst Jasmine and Michael paid the stamp duty, legal expenses and other transactional costs of the purchase. The deceased and Nikitas paid one half of the repayments due under the mortgage and Jasmine and Michael paid the other half. Other household expenses were paid in the same proportions. All contributed to the cleaning, cooking and maintenance of the house.

(There is a dispute whether Max provided assistance to Nikitas to repair and renovate that property.)

(e)In about 1971, Nikitas, Max and Michael purchased a fish shop in Narrabeen. Nikitas provided the deposit. Nikitas, Max, Michael and Jasmine worked in the fish shop. During the course of running the business, a dispute between Max and Jasmine erupted, as a result of which, Max left the business.

(f)In about 1973 or 1974, the Clyde property was sold. The deceased and Nikitas then purchased a property in Auburn, where they lived together until 1998, when they purchased the Brighton-Le-Sands property. It was necessary to repair and renovate this property and Nikitas received assistance from various people, including Jasmine, Michael and their children.

(g)Between 1998 and 2000, Irene and her then husband, Lucas Miglis, lived with the deceased and Nikitas in the Brighton-Le-Sands property. During this period, Lucas and Irene paid all of the utility bills and a majority of the food expenses.

(h)In May 2002, the deceased executed a General Power of Attorney in favour of Anna and Irene. It was an enduring Power of Attorney. It was registered in July 2002.

(i)After the death of Nikitas, the deceased continued to live, at least for part of the time, in the Brighton-Le-Sands property, until a few days before her death. During some of that time, she used Irene's home, at Carss Park, as a base, from which she visited, or stayed with, other family members. (The length of the times spent with Max is in issue.) At other times, Irene lived with her in the Brighton-Le Sands property. In all, the deceased lived with Irene for over three years. I shall return to this topic later in these reasons.

(j)Whilst the deceased lived with Irene and Lucas at their home, she had no expenses for food and board. She had her own room.

(k)The deceased was in poor health in the last year or so of her life. Her health deteriorated considerably in 2009, at which time she had serious heart problems. It appears that in May 2009, she was diagnosed with "end stage CCF", which, I understand, means end stage congestive cardiac failure. In June 2009, she presented with left sided chest tightness radiating to her neck and jaw. She was also diagnosed with aortic (valve) deficiency and she had an ulcer of the lower leg. She required palliative care. It is clear from medical records that she did not, then, have long to live.

(l)At the time of the deceased signing the Contract, pursuant to which the Brighton-Le-Sands property was transferred to the Defendants, she had the following conversation, in the Greek language, with Mr Jordan (who gave the following evidence):

"I said:"This is the Contract that you wanted me to prepare. You understand that you are transferring your house to your three granddaughters, Anna, Connie and Irene?"

She replied:"Yes I understand that."

I said:"I know that you have instructed me to do this but I need to ask you some questions. Do you understand what the transfer means?"

She replied:"I know that they can throw me in the street if they want. But they won't."

I said:"You know that you are not getting any money for the transfer of the house to your granddaughters?"

She replied:"That's alright. The girls will feed me and look after me. They have been doing it for years anyway."

(m)The following special conditions appeared in the Contract:

"The Vendors and Purchasers agree that the consideration listed on the face of the Contract is the market valuation for stamp duty purposes.

The Vendor will not require the Purchasers to pay any consideration to the Vendor for the transfer in gratitude for and acknowledgement of the purchasers' (sic) taking care of the Vendor's welfare since the death of the Vendor's husband.

The Purchasers hereby agree that they will allow the Vendor to reside within the property for the whole of her lifetime for no consideration and the Purchasers further agree that they will pay for all outgoings, utilities and maintenance for the property during the occupation of the property by the Vendor.

This clause shall not merge upon completion."

(n)Irene has used her share of the proceeds of sale of the Brighton-Le-Sands property to reduce, by $65,000 to $70,000, the debt secured by mortgage on her Carss Park property; to pay legal expenses of these proceedings ($40,000); to assist in purchasing a car for each of her children (in total, about $20,000) and the balance, to renovate the Carss Park property.

(o)Anna has retained about $90,000 of her share of the proceeds of sale in a term deposit (said to be "for her children"), which is held in her and her husband's names. She has spent the balance in reducing the debt secured by mortgage on their home, to pay off other debts, and for her and her family's living expenses.

(p)Connie has retained, from her share of the proceeds of sale between $160,000 and $170,000. She has used the balance to pay family expenses.

(q)By letter dated 24 March 2010, the Plaintiffs' solicitors advised the Defendants' solicitors of the Plaintiffs' intention to commence proceedings under the Act. By letter dated 27 May 2010, the Defendants' solicitors wrote to the Plaintiffs' solicitors acknowledging that the Plaintiffs "intend to file a Summons for provision out of the estate".

(r)At the time of the sale of the Brighton-Le-Sands property by the Defendants (May 2010) and at the time when each of them received, and subsequently, spent all, or part, of her share of the proceeds of sale, she knew that a claim for a family provision order was to be made by each of the Plaintiffs.

The Statutory Scheme - The Act

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

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

The key provision is s 59 of the Act. The court must be satisfied, first, that each applicant is an eligible person within the meaning of s 57(1) (s 59(1)(a)). In New South Wales, it is a multi-category based eligibility system, rather than one with a general category of eligibility (as it is, for example, in Victoria). There are six categories of persons by, or on whose behalf, an application may be made. Relevantly, one category is "a child of the deceased" (s 57(1)(c) of the Act). Clearly, that language is expressive of the person's status, as well as his, or her, relationship to the deceased. There is no age limit placed on a child making an application.

The court, if satisfied of an applicant's eligibility, must, in this case, then determine whether adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both (s 59(1)(c)). It is only if the court is satisfied of the inadequacy of provision, that consideration is given to whether to make a family provision order (s 59(2)). It may take into consideration, then, the matters referred to in s 60(2) of the Act. In this way, the court carries out a two-stage process.

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

It was said in the Court of Appeal (per Basten JA) in Foley v Ellis [2008] NSWCA 288 at [3], that the state of satisfaction "depends upon a multi-faceted evaluative judgment". In Kay v Archbold [2008] NSWSC 254, at [126], White J said that the assessment of what provision is proper involved "an intuitive assessment".

Under s 59(1)(c) of the Act, the time at which the court gives its consideration to the question is the time when the court is considering the application. Under s 59(2), the Court has regard to the facts known to the court at the time the order is made.

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

Neither is the word 'maintenance', or the phrase 'advancement in life', defined in the Act. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at 228-229, said, of the words 'maintenance', 'support' and 'advancement':

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word 'proper', that:

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

In Goodman v Windeyer (1980) 144 CLR 490, Gibbs J said at 502:

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

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

"[T]he use of the word "proper"...implies something beyond mere dollars and cents. Its use, it seems to us, invites consideration of all the relevant surrounding circumstances and would entitle a court to have regard to a promise of a kind which was made here...The use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the "station in life" of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future."

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

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

The first stage of the process provided for by s 59(1)(c) has been described as "the jurisdictional question": Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 at 208-209. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant.

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

Tobias JA said, at [42]:

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

...

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

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

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

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

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

Although the existence or absence of 'needs' which the claimant cannot meet from his or her own resources will always be highly relevant and, often, decisive, the statutory formulation, and therefore the issue in every case, is whether the disposition of the deceased's estate was not such as to make adequate provision for his or her proper maintenance, etc. See Singer per Gaudron J at 227. Compare Gorton per Bryson J at 6-11; Collicoat v McMillan [1999] 3 VR 803 per Ormiston J at 816 [38], 820 [47]."

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

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

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

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

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

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

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

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

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

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

(d)the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,

(e)if the applicant is cohabiting with another person-the financial circumstances of the other person,

(f)any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,

(g)the age of the applicant when the application is being considered,

(h)any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,

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

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

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

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

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

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

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

(p)any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered."

It can be seen that s 60(2) enumerates 15 specific matters which the court may take into account, together with "any other matter the court considers relevant", for the purposes of determining eligibility, whether to make a family provision order, and, if so, the nature of any such order. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.

Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical. For example, when considering eligibility under sub-s (1)(a), many of the matters in sub-s (2) will be largely, if not wholly, irrelevant.

There is no definition in the Act of "financial resources" (which term is referred to in s 60(2)(d). However, there is a definition of that term in the Property (Relationships) Act 1984, which I consider helpful:

""financial resources" ... includes:

(a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,

(b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties...,

(c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and

(d) any other valuable benefit."

Of course, sub-s (2)(d) refers also to "earning capacity", which means no more than the capacity to find employment to earn or derive income.

Furthermore, consideration of some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and of other eligible persons as well as of the beneficiaries named in the deceased's will, whilst others do not. Importantly, also, many of the matters in sub-s (2), of themselves, are incapable of providing an answer to the questions posed in s 60(1).

Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on "the discretionary question", namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased's death, or subsequently.

This does not mean, however, that some of the matters referred to in s 60(2) will not be relevant to the jurisdictional question to be determined at the first stage. I am comforted in reaching this conclusion by the following comments made in Singer v Berghouse (at 209-210):

"... The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant."

And by the comments of Callinan and Heydon JJ in Vigolo v Bostin (at (230-231)):

"We do not therefore think that the questions which the court has to answer in assessing a claim under the Act necessarily always divide neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."

Section 61 of the Act permits the court to disregard the interests of any other person by, or in respect of whom, an application for a family provision order may be made (other than a beneficiary of the deceased person's estate), but who has not made an application. However, the court may disregard any such interests only if:

(a)notice of the application, and of the court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of court, or

(b)the court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.

Section 65(1) of the Act requires the family provision order to specify:

(a)the person or persons for whom provision is to be made, and

(b)the amount and nature of the provision, and

(c)the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided, and

(d)any conditions, restrictions or limitations imposed by the court.

The order for provision out of the estate or notional estate of a deceased person may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or "in any other manner the court thinks fit" (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).

The order may be made, relevantly, in this case, in relation to the estate or notional estate of the deceased. As the deceased died leaving a Will, her estate includes all property that would, on a grant of probate of the Will, vest in the executor of the Will (s 63 of the Act).

Any family provision order under the Act will take effect, unless the court otherwise orders, as if the provision was made in a codicil to the will of the deceased, or in the case of intestacy, as in a will of the deceased (s 72(1) of the Act).

Section 66 of the Act sets out the consequential and ancillary orders that may be made.

The court, also, may, at the time of distribution of an estate that is insufficient to give effect to a family provision order, make such orders concerning the abatement, or adjustment, of distributions from the estate, as between the person in whose favour the family provision order is made and the other beneficiaries of the estate as it considers to be just and equitable among the persons affected (s 72(2) of the Act).

Section 99 of the Act provides that the Court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit.

Pursuant to paragraph 24 of Practice Note SC Eq 7, orders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less than $500,000.

Notional Estate

The notional estate provisions of the Act are dealt with in Part 3.3 of the Act. However, in s 3 of the Act, "notional estate" of a deceased person is defined as meaning "property designated by a notional estate order as notional estate of the deceased person". "Notional estate order" means "an order made by the Court under Chapter 3 designating property specified in the order as notional estate of a deceased person".

It has been said, in respect of the notional estate provisions in the former Act, that an applicant for provision "may now apply in the same proceedings for orders for relief and designating property as "notional estate" thereby compelling the "disponee" of a "prescribed transaction" to provide money or property for the purpose of making financial provision for the applicant": Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422 at 441. (Although the terminology in the Act is different, the same principle applies under the Act.)

Rosalind Croucher in "Contracts to Leave Property by Will and Family Provision" after Barns v Barns [2003] HCA 9 [2005] SydLawRw 12; (2005) 27(2) Sydney Law Review 263 has commented on the notional estate provisions of the former Act:

"The introduction of the notional estate provisions brought to the forefront the distinction of 'estate versus notional estate' that had been implicit in the decisions on the legislation prior to the introduction of the Family Provision Act 1982 (NSW). It made explicit in the legislation that 'estate' and 'notional estate' were different. Things subject to contracts (like mutual wills) were not within the definition of 'estate'. To bring such property within the legislation required now the application of the complex procedures and definitions of 'notional estate'. This requires a particular kind of transaction, an absence of relevant consideration, a defined time frame in which the transaction took effect and a range of other matters to be considered before property can be designated as notional estate and made the subject of an order for family provision under the Act."

In New South Wales Law Reform Commission Report 110 (2005) - Uniform Succession Laws: Family Provision, at paragraph 3.1, "notional estate orders" are described as "orders issued by the Court which are intended to make available for family provision orders assets that are no longer part of the estate of a deceased person because they have been distributed either before or after the deceased's death (either with or without the intention of defeating applications for family provision)".

In Galt v Compagnon (NSWSC, 24 February, 1998, unreported) Einstein J, at 21, said that notional estate was "a complex concept" but shortly described it as "property which would have become part of the deceased's estate, had it not been dealt with, or had it been dealt with, by the deceased in a particular way, and in particular circumstances, prior to his, or her, death".

Section 63(5), relevantly, provides that a family provision order may be made in relation to property that is not part of the estate of a deceased person if it is designated as notional estate of the deceased person by an order under Part 3.3 of the Act.

Importantly, the power to make a notional estate order does not arise unless the Court is satisfied that (a) the deceased person left no estate, or (b) the deceased person's estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, or (c) provision should not be made wholly out of the deceased person's estate because there are other persons entitled to apply for family provision orders or because there are special circumstances (s 88).

Furthermore, the Court must not designate as notional estate, property that exceeds what is necessary, in the Court's opinion, to allow the provision that should be made, or, if the Court makes an order that costs be paid from the notional estate under s 99, to allow costs to be paid as ordered, or both (s 89(2)).

Section 74 of the Act provides that "relevant property transaction" means a transaction, or circumstance, affecting property and described in s 75 or s 76. "Property" includes "any valuable benefit".

Section 75 of the Act provides:

"(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.

(2) The fact that a person has entered into a relevant property transaction affecting property does not prevent the person from being taken to have entered into another relevant property transaction if the person subsequently does, or does not do, an act affecting the same property the subject of the first transaction.

(3) The making of a will by a person, or the omission of a person to make a will, does not constitute an act or omission for the purposes of subsection (1), except in so far as it constitutes a failure to exercise a power of appointment or disposition in relation to property that is not in the person's estate."

Section 76 of the Act then provides a description of some, but not all, of the circumstances that constitute the basis of a relevant property transaction for the purposes of s 75. Any such circumstance is "subject to full valuable consideration not being given". Importantly, a distinction must be drawn between "valuable consideration" and "full valuable consideration": see, for example, s 76(4) of the Act.

Important, also, is the omission of the words "in money or moneys worth" after "full valuable consideration" which had appeared in s 22 of the former Act. Furthermore, the phrase "is not given" rather than "is not received" is also significant.

The expression "subject to full valuable consideration not being given", in my view, has the effect of imposing a requirement, wholly separate from the result, which is property being held by another person or subject to a trust.

One such circumstance identified in s 76(2)(f)), is if the deceased enters into a contract (full valuable consideration not having been given) disposing of property out of his, or her, estate, whether or not the disposition is to take effect before, on or after, her, or his, death, or under her, or his, will, or otherwise.

The test whether the consideration given is full valuable consideration or not is not set out in the Act. The expression has been said "to connote some elasticity": Re Marriott, decd [1968] VR 260 at 269.

The meaning of the expression has been the subject of discussion in a number of cases under the former Act and other legislation, which were referred to by Young J (as his Honour then was) in Wade v Harding (1987) 11 NSWLR 551 at 554-555. His Honour concluded that in determining whether full valuable consideration was given for an act, or omission, for the purpose of s 22 of the former Act, it was legitimate to look to the nature of the transaction and consider whether what was given is a fair equivalent for what is received.

His Honour referred to Attorney-General v Earl of Sandwich [1922] 2 KB 500, in which Lord Sterndale, MR said, at 517:

"Hamilton, J, in the case to which I have referred [Attorney-General v Boden, [1912] 1 KB 539, at 561], states that the way to answer this question is not necessarily to estimate the value of the thing granted and the consideration, and ascertain whether they exactly agree, but to look at the nature of the transaction and consider whether what is given is a fair equivalent for what is received. I think this is correct, and, looked at in that way, I think what the defendant received was a fair equivalent for what he gave, and that he received full consideration, according to the terms of the section."

Scrutton, LJ, at 520, also accepted this as a proper test.

Although Wade v Harding was overruled in Cetojevic v Cetojevic [2007] NSWCA 33, the way in which the expression was described by his Honour was not the subject of disapproval in the Court of Appeal.

Respectfully, I adopt these views as to the meaning of that expression. I accept that "full valuable consideration" means such valuable consideration as amounts to, approximates, or is broadly commensurate with, or is a fair equivalent of, the value of that for which it is given.

Whether full valuable consideration is given is a question of fact and involves no exercise of discretion. In my view, the court should determine the question applying a commonsense approach and "avoiding finely balanced mathematical computations involving the value of normal exchanges of support in the domestic sense": Jelley v Iliffe [1980] EWCA Civ 4; [1981] 2 All ER 29.

Yet, as said earlier, the omission of the words "in money or moneys worth" raises the question whether, in the appropriate circumstances, personal services by way of care and attention, which are motivated by love and affection, moving to the deceased, can, as a matter of law, count as full valuable consideration given to her or him, under the Act.

However, assuming that it does, balancing the value of imponderables, such as companionship and other personal services, on which the court has somehow to put a financial value, against the consideration that is shown in a contract in which the deceased disposes of her, or his, property, is likely to be a hard task. No doubt, for this reason, the value of the property the subject of the contract and the full valuable consideration given for it do not have to exactly agree. As was said in Re Wilkinson (deceased); Neale v Newell [1978] 1 All ER 221 at 224:

"It is not very easy, when one is dealing with the question of what is full valuable consideration, to measure in purely financial terms the sort of things which the applicant was doing for the deceased and the sort of thing which the applicant represented to the deceased, namely a companion, someone to talk to and maybe to argue with, someone to be about in the house so that she was not all alone. Somehow, it seems to me, I have to measure those matters in order to see whether, fairly looked at, they were a full valuable requital or return for that which the applicant received from the deceased.

The evidence as to the latter matter is quite plain, that is the whole of the household expenses, the provision of the accommodation and rates, everything of that sort as well as the grocery bills and the other items which went to make up the domestic regime were wholly and exclusively, outside the ambit of purely personal expenditure of the applicant, paid for by the deceased. So on the one hand one has the measure on the receiving side of what has to be considered as to whether it is or is not a full valuable consideration for the other. I do not, of course, know the standard at which these ladies lived; I cannot put any precise amount of money on that provision. It was, however, a full provision; the whole of the household was run at the expense of the deceased.

Returning to that, during the period which I think is the relevant one, for reasons which I indicated earlier in this judgment, namely the years immediately before the deceased's death, that is to say the years after 1973 at least, what the applicant did was a share of the light housework and cooking with the deceased; I take that to mean an equal share. She also helped the deceased to dress herself, and was available as a companion, in the sense of being about so that her sister was not lonely and, if there was anything in it (I doubt whether there was very much), suffered the disadvantage of being for one reason or another, I do not know the reason, disturbed in the night. I have to decide, as I understand it, whether if one puts a financial value on those items, in my judgment irrespective of whether there is or is not contractual obligation to provide those services or suffer those detriments, one finds a full valuable requital for the board and lodging which the applicant was provided with wholly and exclusively at the expense of the deceased. With considerable uncertainty I express the conclusion that that was not a full valuable consideration."

The onus of establishing that full valuable consideration was not given, it seems to me, lies on the party asserting that proposition. Where, however, that party establishes a prima facie case of inadequacy of the valuable consideration given, the evidential burden will pass to the other party to establish that there was, indeed, consideration given, and the extent of that consideration.

Where, for example, as here, the Transfer of the Brighton-Le-Sands property disclosed a monetary consideration (the purchase price), but it is common ground that no part of that monetary consideration was paid by the Defendants to the deceased at the time, an evidential onus passes to them to demonstrate that there was full valuable consideration given to her.

In determining the answer to the question, I am inclined to the view that when the relevant transaction involves a contract for the disposition of the deceased's property, the first inquiry must always be, what is the actual value of that property? The second question is whether the monetary consideration, if any, identified in the contract, is commensurate with that value. The next question is what consideration is given by the other party or parties to the deceased? The final question is whether the consideration given amounts to full valuable consideration?

Where the monetary consideration identified in the contract the subject of the relevant property transaction is the actual value of the property being disposed of by the deceased, but all of that consideration is not given to the deceased, there may be some difficulty in establishing that "full valuable consideration" has been given, even if other consideration, in money or moneys worth, is provided by the person, or persons, to whom, or for the benefit of whom, the contract is made, or by any other person. In those circumstances, the monetary value of the other consideration given to the deceased should be the subject of evidence.

Section 77(1) provides that for the purposes of Chapter 3 of the Act, a relevant property transaction is taken to have effect when the property concerned becomes held by another person, or subject to a trust, or as otherwise provided by the section. Sub-section (4) provides that a relevant property transaction that involves any kind of contract for which valuable consideration, though not full valuable consideration, is given for the deceased to enter into the transaction is taken to be entered into, and take effect, when the contract is entered into.

Section 78 of the Act provides:

"(1) The Court may make an order designating property as notional estate only:

(a) for the purposes of a family provision order to be made under Part 3.2, or

(b) for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate of a deceased person be paid from the notional estate of the deceased person.

(2) The Court must not make an order under subsection (1) (b) for the purposes of an order that the whole or part of an applicant's costs be paid from the notional estate of the deceased person unless the Court makes or has made a family provision order in favour of the applicant."

Section 80(1) provides that 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.

Section 80(2) provides for the section to apply 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.

It is not essential that the applicant be able to rely upon the provisions of more than one of the subparagraphs identified. It is sufficient if he or she is able to establish the matters in any of them.

Section 80(2)(a) requires the relevant property transaction to be entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order. Interestingly, the section does not identify whose intention it is, but it must be the deceased's intention that is to be proved: Hildebrandt v Soncini [2007] NSWSC 1227 at [21] - [28].

In Hinde & Hinde and Anor [2008] FamCA 24, Carmody J, in another context, said:

"The ordinary natural meaning of the word "intends" is to mean, to have in mind. Relevant definitions in the Shorter Oxford English Dictionary show that what is involved is the directing of the mind, having a purposeful design. Intention is not the same as motive or desire. A person may do something fully intending to do it without desiring it at all. Euthanasia is an example. A motive is having a reason to do or not to do something. It is a subjective state of mind which can not be conclusively established as a fact except perhaps by truthful admission."

However, more than mere contemplation by the deceased is necessary. In Cunliffe v Goodman [1950] 2 KB 237, a decision of the English Court of Appeal, Asquith L.J., again, in another context, considered, in some detail, the meaning of the term "intention". His Lordship said at 253:

"An 'intention', to my mind, connotes a state of affairs which the party 'intending' - I will call him X. - does more than merely contemplate. It connotes a state of affairs which, on the contrary, he decides, so far as in him lies, to bring about, and which, in point of possibility, he has a reasonable prospect of being able to bring about, by his own act of volition. X. cannot, with any due regard to the English language, be said to 'intend' that it shall be a fine day to-morrow. At most he can hope or desire or pray that it will. Nor, short of this, can X. be said to 'intend' a particular result if its occurrence, though it may be not wholly uninfluenced by X's will, is dependent on so many other influences, accidents, and cross currents of circumstance that not merely is it likely not to be achieved at all, but, if it is achieved, X's volition will have been no more than a minor agency collaborating with, or not thwarted by, the factors which predominately determine its occurrence."

Whether the deceased has the necessary intention is a question of fact to be decided upon consideration of all the circumstances. One might expect there to be some language, written or oral, used, or adopted, by the deceased, from which the court is able to find, as a fact, the necessary intention prior to, or at, the time of, the relevant property transaction.

It is the intention with which the transaction was entered into, rather than the effect of that transaction, which is important. If that intention cannot be established, that the effect of the transaction is to wholly or partly, deny, or limit, provision, does not matter. It is not enough that the relevant property transaction has that particular result. In other words, what the subsection requires is not cause and effect, but intention and effect: Wilson v Wright (NSWSC, 25 February 1992, unreported), per Windeyer J.

Section 80(2)(b), requires a comparison of "the moral obligation to make adequate provision, by will, for any eligible person ("a person who is entitled to apply for a family provision order") with "the moral obligation of the deceased to enter into the relevant property transaction", without full valuable consideration having been given. The latter expression focus upon moral obligation surrounding the particular transaction in question.

The expression "moral obligation" is no more than a simple and convenient way of referring to the obligation resting upon a deceased to make a wise and just assessment of the interests of any person who is able to ask to be taken into account in determining what adequate provision for proper maintenance, education and advancement in life, should have been made for him or her: Collicoat v McMillan [1999] 3 VR 803.

With this in mind, it is difficult to read the words "the moral obligation of the deceased to enter into the property transaction" literally. In determining whether this element is satisfied, the moral obligation of the deceased owed to any eligible person must be compared with the moral obligation to enter the transaction for the benefit of the party, or parties, to whom the property of the deceased is disposed by the relevant property transaction, and who does, or who do, not give full valuable consideration. If there was, then, a substantially greater moral obligation for the deceased to preserve the estate for the benefit of any eligible person to whom the deceased had a moral obligation to make adequate provision for his, or her, proper maintenance, education or advancement in life, than to arrange his, or her, affairs with the result that the property would be disposed of out of his, or her, estate, the sub-section would be satisfied.

Unlike s 80 (2)(a), the deceased's intention is irrelevant in making this assessment: Ebert v Ebert; Ebert v Ebert [2008] NSWSC 1206 at 133.

The court's decision must be made having regard to the circumstances at the time of entry into the transaction, since, in its terms, s 80(2)(b) requires an assessment of any competing moral obligation "when" the deceased entered into the transaction.

The word "substantially" is one of indefinite meaning and lacks precision. The word is quantitatively imprecise, but it must be given its natural meaning, which I take to mean real and not trivial, minimal, imaginary, ephemeral, or nominal.

However, by adding the word "substantially...", the section requires the relevant moral obligation to any eligible person to be of real substance, compared with the moral obligation to enter the relevant property transaction.

Using the facts of this case, I must consider, since each of the Plaintiffs, is a child of the deceased, whether the deceased, in about June 2009, had a moral obligation to make adequate provision for his, and her proper maintenance, education and advancement in life, which was substantially greater than her moral obligation to transfer the Brighton-Le-Sands property to the Defendants, in circumstances where she had made a Will in which she had provided for that property to pass to them as tenants in common in equal shares.

It is not necessary to discuss s 80(2)(c) of the Act.

Section 80(3) provides, so far as is relevant:

"(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) ...

whether or not the property was the subject of the relevant property transaction."

Section 83 of the Act relevantly provides that the Court must not, merely because a relevant property transaction has been entered into, make an order under s 80, unless the Court is satisfied that the relevant property transaction, or the holding of property resulting from the relevant property transaction, directly or indirectly disadvantaged the estate of the principal party to the transaction or a person entitled to apply for a family provision order from the estate or, if the deceased person was not the principal party to the transaction, the deceased person (whether before, on or after death).

The effect of a notional estate order is that "a person's rights are extinguished to the extent that they are affected by a notional estate order" (s 84).

The Court's power to make a notional estate order is also circumscribed by other sections. Section 87 provides:

"The Court must not make a notional estate order unless it has considered the following:

(a) the importance of not interfering with reasonable expectations in relation to property,

(b) the substantial justice and merits involved in making or refusing to make the order,

(c) any other matter it considers relevant in the circumstances."

In John v John [2010] NSWSC 937 at [118] - [120], Ward J said:

"[118] What amounts to "reasonable expectations in relation to property" was considered in Petschelt v Petschelt [2002] NSWSC 706, at [68], by McLaughlin M (as the Associate Justice then was), who said:

That phrase does not, however, indicate the person by whom those reasonable expectations are held. Clearly the Court must consider the reasonable expectations of the First Defendant in relation to property. By the same token, however, the Court should also consider the reasonable expectations of the Deceased herself in relation to property, and also, possibly, the reasonable expectations of the Plaintiff.

[119] In D'Albora v D'Albora [1999] NSWSC 468, at [53], Macready M (as the Associate Justice then was) gave examples of the circumstances which might give rise to reasonable expectations for the purposes of this section:

Under s 27(1)(a) the Court has to consider the importance of not interfering with the reasonable expectations in relation to the property. Such reasonable expectations may well occur in a number of circumstances. For example, a beneficiary who receives a property may have spent money on the property or worked on the property ... Another common area where one often sees in this matter is where there is a promise in relation to the property and the acting by an intended beneficiary on the fact of that promise.

Assets

Value

Total

House (jointly owned)

$150,000 (half share)

Bank account

$ 70

Household items and jewellery

$ 500

Shares/trusts

Nil

Superannuation

Nil

$150,570

Liabilities

Nil

$0

Net

$150,570

Earlier, I have found that Maria receives a disability pension of more than $840 per month. In my view, she receives, with her husband, more than the amount that she estimates as their and her monthly expenditure ($960) to be. There is, in my view, no shortfall of income over expenditure.

Maria states that she requires a fund to maintain and repair her and her husband's home to "make it more habitable and comfortable to accommodate her" ($40,000); funds to replace household goods ($4,000) and their car ($25,000); funds for a new home heating system ($8,000); funds to pay for dental work ($4,000) and an annual amount of $5,000 to enable their home to be heated; and a fund for "emergencies". She provides no quotations for any of the estimates to provide for these needs.

Anna

Anna is a joint owner, with her husband, of a home residence situated at Connells Point ($780,000). The amount currently owed and secured by the mortgage is $443,000.

She lives with her husband and two children who are aged 16 years and 7 years respectively.

Her children do not contribute to household expenses. Furthermore, naturally, Anna and her husband pay for all of their children's living and educational expenses.

Anna's husband owns a painting services business. They each derive an income from that business. Anna's income is estimated to be $49,484 per annum. Her husband's income was about the same. Their expenditure is estimated to be about $60,000 per annum. There is no evidence of the value, if any, of the painting business.

Anna has a credit card debt of $6,000.

Anna has a car that is leased under her husband's name.

Anna's assets and liabilities are:

Asset

Value

Total

House (half share)

$390,000

Home contents (half share)

$ 10,000

Term deposit (half share)

$ 45,000

Superannuation

$ 17,943

$462,943

Liabilities

Mortgage (half share)

$221,500

Credit card debt

$ 6,000

$227,500

Net

$235,443

Connie

Connie is the joint owner with her husband of a residence situated at Balgowlah Heights. It currently has a debt secured by mortgage, which mortgage is registered on title. The amount which is currently owed is either $22,000 or $30,000.

She lives with her husband and three children, only one of whom is under the age of 18 years.

Her children do not contribute to household expenses. Her sons are currently studying at tertiary and secondary levels. Connie and her husband pay for all their children's day-to-day living and educational expenses.

She has a credit card debt of $6,000.

She has a half share interest with her husband operating a sandwich shop located in Balgowlah Heights NSW. She and her husband pay $2,100 per month in rent for the sandwich shop. There is no evidence of the value of the sandwich shop.

Connie's assets and liabilities are outlined as follows:

Asset

Value

Total

House (jointly owned)

$750,000 (half share)

Investment Account

$ 10,801 (half share)

Superannuation
(joint account)

$217,175 (half share

$977,976

Liabilities

Credit card

$ 6,000

Mortgage

$11,000 (half share)

$ 17,000

Net

$960,976

Connie outlines her annual expenditure as follows:

Income

Value

Total

Yearly income from sandwich shop

$79,724

$79,724

Household expenses

Food

Car maintenance/petrol

Rates, water electricity

$50,000

University fees

$ 9,000

School fees

$20,000

$79,000/Yr

Net

$ 724

Her husband receives a similar income from the business.

Irene

Irene is divorced and does not receive maintenance from her former husband.

She is the sole registered proprietor of her home at Carss Park that is currently subject to a mortgage debt.

She lives with her two children, who are aged 20 and 19 respectively.

Her children do not contribute to the household expenses. Irene pays for all of her children's day to day living and educational expenses.

She has a credit card debt of $6,000.

Irene's assets and liabilities are outlined as follows:

Asset

Value

Total

House

$465,000

Home contents

$ 15,000

Superannuation

$ 15,282

Car

$ 36,000

$531,282

Liabilities

Mortgage

$170,021

Credit card debt

$ 6,000

$176,021

Net

$355,261

Irene's annual income is $26,000. She spends all that she earns.

(e)if the applicant is cohabiting with another person - the financial circumstances of the other person

Max lives in the Guildford property. Even though he is separated from Maroulla, she continues to pay monies towards the mortgage debt and assists him in respect of expenses he is unable to meet. She has stated that she does not intend to resume cohabitation with him. She sets out her financial position as follows:

Assets

Value

Total

House (jointly owned)

$225,000 (half share)

Bank account

$ 200

Household items and jewellery

$ 1,500

Motor vehicle

$ 200

Superannuation

$160,000

$386,900

Liabilities

Mortgage (approx)

$ 43,000

Credit card

$ 35,000

$ 78,000

Net

$308,900

Maroulla has an annual income of $45,000.

Maria lives with her husband in Italy. He is aged 71 years and is retired. He is in reasonable health considering his age. He has money in the bank, household items and a car. He also receives a pension of about $450 per month.

Maria sets out his financial position as follows:

Assets

Value

Total

House (jointly owned)

$150,000 (half share)

Bank account

$ 16,000

Household items and jewellery

$ 500

Motor vehicle

$ 500

Superannuation

Nil

$167,000

Liabilities

Nil

$0

Net

$167,000

(f)any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated

A medical report from Max's treating Consultant Psychiatrist, discloses that between 2001 and 2007, Max would attend upon him fortnightly or monthly intervals. He has suffered and still suffers with anxiety, depression and hypertension. He suffers panic attacks. He takes anti-depressant medication. He requires continuing monitoring by his general practitioner.

In 2006, Max had a triple by-pass.

Maria gives scant evidence about any physical, intellectual or mental disability from which she suffers. She says that from the age of 17, she started to have panic attacks and was subsequently diagnosed with depression. From that time, she has been on medication. She says that she has high blood pressure. (No medical evidence to support any of these conditions were provided by Maria.)

Maria has not been able to work since moving to Italy with her husband in 1981 or 1982. She has, for many years, received a disability pension.

(g)the age of the applicant when the application is being considered

Max is currently 65 years of age having been born in September 1946.

Maria is currently 60 years of age having been born in April 1951.

(h)any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant

Max says that he worked from the age of 11 years, and from then until the age of 23, he provided all of his income to his parents to help support the family.

Max says that he assisted Nikitas to renovate the home at Auburn for which he received no consideration. The work included renovating the internal part of the home, the kitchen, the bathroom, painting, and also doing some work on the external area. He may have assisted Nikitas, although I think it is likely that other family members did as well. It will be appreciated that in relation to this property, any contribution was made many years before the deceased's death.

He says that after Nikitas suffered a heart attack in about 1986, he would take the deceased and Nikitas to medical appointments. Following Nikitas breaking his hip in 1998, Max says that he would mow the lawns and do whatever else was necessary. He continued to take the deceased and Nikitas to medical appointments. This continued, even after they moved to the Brighton-Le-Sands property.

I have dealt with the events of 2006 and 2007 and accept that the deceased, on occasions, stayed with Max and his family at Guildford. I am satisfied that, during this time, he made some contribution to the deceased's welfare, although there is no doubt that the major contribution, in this regard, for many years, was made by one or more of the Defendants.

Maria does not give very much evidence about the contributions, if any, that she made. She says that she assisted in the cleaning of the house at Clyde and that she paid board of $10 per week out of her weekly income of $30. It will be remembered that for about 27 or 28 years prior to the death of the deceased, she had been living in Italy.

I reject the Defendants' submission that Maria withheld, without proper justification her support and love from the deceased in her declining years and otherwise did not honour the deceased. The contact between them was not face-to-face, but Maria lived in Italy. When she was informed that the deceased was unwell, she returned to Australia immediately. She explains that she could not afford to return again, for the deceased's funeral.

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

I have referred to the provision made for Max and Maria from the deceased's estate.

Max gives no evidence of any provision made for him during the deceased's lifetime.

Maria says that, on occasions, she would receive gifts of small amounts of money from the deceased. In all, she estimates that she received about $400 from the deceased.

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

Mr Jordan referred to three different occasions when he discussed, and prepared a will for the deceased. The first occasion was in about May 2002, when she attended his office, with Nikitas, and they spoke to him in the Greek language. One, or the other, of the deceased or Nikitas, said to him that they did not wish to give any of the house to their children, "as they can all look after themselves because they all have money and our grandchildren spend more time with us anyway. They look after us now". The grandchildren for whom provision was to be made were identified and others were specifically excluded "as they don't contact us or spend any time with us. Even the ones in Italy could ring, but they don't".

Mr Jordan prepared a Will that was executed by the deceased on 23 May 2002. In the 2002 Will, the sole beneficiary was Nikitas, but in the event that he did not survive the deceased, the whole of the estate was left to Connie, Irene, Anna, and two great-grandsons, Nikitas and George, on attaining the age of 18 years. (Nikitas, who was born in 1971, and George who was born in 1974, is each a child of Max.)

The second occasion to which Mr Jordan refers, occurred in November 2007. The deceased informed the solicitor that she wished to change the 2002 Will. She said that she now wished to excise her husband as a beneficiary, and leave $10,000 to each of her children, "as I have some money in the bank". She then said:

"... I want to give the three girls, Irene, Anna and Connie my house because they have been caring for me but I want to give Irene and Anna any leftover money because they have been looking after me and running around with me to the doctors. I know Connie would have done more if she could but she's working at the shop but she rings me and comes when she can. Nobody else rings me and nobody else comes to look after me so take the other grandchildren out as well."

Mr Jordan prepared a Will in accordance with the deceased's instructions. She executed that Will on 10 December 2007. In that Will, the rest and residue was left to Irene and Anna in equal shares.

The third occasion was in June 2009 when she asked Mr Jordan to prepare another Will. That is the Will Probate of which was granted.

Mr Jordan stated in his affidavit that "[S]ince 2002, Mrs Kastrounis has been consistent in her instructions to me not to bequest any part of her family home to her children".

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

This matter relates to past assumption of responsibility to maintain, not future, or promised, maintenance. There is no suggestion that the deceased was maintaining either Max, or Maria, wholly or partly, before her death. Each was financially independent of the deceased for many years before her death.

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

There is no person with any liability to support Max or Maria. Max is separated from his wife, but she does provide financial assistance for him when required.

Maria lives with her husband and he has an obligation, if not a liability, to support her. In any event, he pays any shortfall of income over expenditure.

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

The Act does not limit the consideration of "conduct" to conduct towards the deceased. I have earlier referred to the conduct of Max and Maria.

There is no other aspect of his, and her, character that I consider relevant.

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

I am satisfied that the conduct of the Defendants demonstrated, overall, an extremely close and loving relationship with the deceased. The conduct of each was exemplary, as the deceased, herself acknowledged to the solicitor. There is no dispute that together, they were the primary carers of the deceased, at least from 2005, following the death of Nikitas.

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

This is not relevant in the present case.

(p)any other matter the court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered

The other matter that I consider relevant, in relation to Maria is that her son was given a business in which Maria's husband had been working, although he was responsible for the liabilities of that business and her daughter was given a home formerly owned by Maria's parents-in-law.

Determination

Claims for a family provision order present particular difficulties where the estate and/or what may be designated as notional estate is relatively small. Any provision made by the Court in favour of the applicant must, in this class of case, be made at the expense of the beneficiary, or recipient of property, who has had to defend the claims.

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

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

Thus, I must first consider, whether, at the present time, adequate provision for the proper maintenance, education, or advancement in life, of each has not been made, during the lifetime of the deceased or by her Will. This must be determined, so it would appear, before the question whether property should be designated as notional estate since the Court may make such an order only for the purposes of a family provision order to be made under Part 3.2 of the Act, or for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate be paid from the notional estate of the deceased.

Yet, as has been recently pointed out by Ball J in Ogburn v Ogburn; Ogburn v Ogburn [2012] NSWSC 79 at [66]:

"...it is not possible to divorce the question whether a notional estate order should be made from the question whether a family provision order should be made. A court can only make a notional estate order if and to the extent the order is necessary to satisfy a family provision order. However, one of the matters the court needs to take into account in deciding whether a family provision order should be made is the size of the deceased's estate, including the size of the potential notional estate."

There was only extremely modest provision in the deceased's Will, for each of the Plaintiffs. However, this does not, automatically, mean that he, or she, will have satisfied the jurisdictional threshold. Judged by quantum and looked at through the prism of his, and her, financial and material circumstances, adequate provision for his, and her, proper maintenance or advancement in life was not made by the Will of the deceased, or by the operation of the intestacy rules, in relation to the estate of the deceased, or both.

Whilst an additional lump sum, by way of advancement in life, in other circumstances, would be appropriate, that is not all that I am required to consider at the first stage. Taking into account all of the matters that I am required to consider at the first stage, including what I have found to be the financial position of each of Max and Maria, the size and nature of the estate (including property that may be designated as notional estate), the relationship between each Plaintiff and the deceased, and the relationship between the deceased and the other persons who have a legitimate (and in this sense competing) claim upon her bounty (the Defendants), I am satisfied that each of the Plaintiffs has satisfied the jurisdictional threshold.

In the case of each Plaintiff, his and her financial position is such that he, and she, does not have any amount available as a buffer for exigencies of life. Each lacks any reserves to meet demands, particularly of ill health, as he, and she, grows older.

It is only with the financial assistance of Maroulla that Max is able to meet his outgoings.

'Need' in the context of the Act is not determined by reference only to minimum standards of subsistence.

In the case of Maria, she does have the assistance of her husband. However, he is some years older than she is. Whilst I have found that their current income is sufficient to meet their outgoings, the possibility exists that there will be, in the future, currency fluctuations, which may alter that position.

Notional Estate

In this case, relevantly, the court's power to make a notional estate order will only arise if I am satisfied that the deceased's actual estate is insufficient for the making of the family provision order, or any order as to costs, that should be made. Clearly that is the position in this case.

Even then, I must not designate as notional estate, property that exceeds what is necessary to allow the provision that should be made, or, if I make an order that costs be paid from the notional estate under s 99, to allow costs to be paid as ordered, or both.

Next, I must consider whether there was a relevant property transaction, and, if so, the value and nature of any property which is the subject of the relevant property transaction.

As a result of the Contract for the sale of the Brighton-Le-Sands property and the registration of the Transfer of that property, the Defendants were registered as tenants-in-common in equal shares. Prior to the Contract being entered into, the consideration stated in the Contract was determined by independent valuation (albeit for stamp duty purposes).

The Plaintiffs submitted that since the deceased, upon the transfer of the Brighton-Le-Sands property to the Defendants, did not receive the consideration set out on the face of the Contract for Sale ($500,000), there is a relevant property transaction for which there was not full valuable consideration given. The only amount that the Defendants paid was the stamp duty ($17,790).

However, the solicitor's conversation with the deceased reveals that the deceased acknowledged, and the Contract specifically provided, that the Defendants were not to give her any of the purchase price for the transfer to them of the Brighton-Le-Sands property. She expected them "to feed me and look after me" as they had done for years. In addition, whilst she would no longer be the registered proprietor, she would be entitled to remain in occupation, relieved from any obligation to paying outgoings, utilities and maintenance. The promises made by the Defendants as well as the payment of the stamp duty must also be regarded as part of the valuable consideration provided by them: Vaysbakh v Vaysbakh [2007] NSWSC 1223 at [86] - [87].

But, I have earlier noted that the words "in money or money's worth", appearing in the former Act after the term "full valuable consideration", have been omitted from the Act. Possibly, this is because the balancing of imponderables such as companionship and other services to be provided, on which the court has, somehow, to put a financial value, against the consideration identified in the contract is a difficult task.

In this case, in any event, there is no evidence of the value of such imponderables that were to be provided by the Defendants. Natural love and affection on its own would not suffice. Nor is there evidence of, for example, what it would cost to feed and house the deceased and what the outgoings to be paid were likely to be.

Importantly, the Act requires "full valuable consideration" and not just "valuable consideration". The word "full" must be given meaning and effect. The valuable consideration given must be, therefore, approximately equivalent to the value of the property that is disposed of by the deceased.

In this regard, I must also bear in mind the medical records, which reveal that the deceased was not likely to live very long. Thus, the financial, and other, obligations of the Defendants would cease within a relatively short period of time. I have earlier stated that she needed palliative care and that it appeared she did not have very long to live. (I do not accept the Defendants' submission that "[A]lthough the deceased's health was deteriorating, it was not known how much longer she would live".)

In all the circumstances, it is unlikely, that the value of housing and feeding the deceased, as well as paying for all outgoings, utilities and maintenance, for the Brighton-Le-Sands property during her occupation would amount to, approximate, be broadly commensurate with about $500,000.

Because no part of the monetary consideration identified in the Contract was given by the Defendants to the deceased, and because the value stated therein appears to have been the value of the Brighton-Le-Sands property at the relevant time, and because of the matters stated above, I am of the view, in this case, that "full valuable consideration" was not given for the relevant property transaction.

(Even if one were to include the Defendants' care of the deceased's welfare following her husband's death (which is past consideration), I am not satisfied that "full valuable consideration" was given by them to the deceased for her entering into the relevant property transaction which resulted in the Defendants' ownership of the Brighton-Le-Sands property.)

Counsel for the Plaintiffs faintly suggested that s 80(2)(a) of the Act might apply, but the evidence of Mr Jordan, which I accept, made clear that he had no discussion with the deceased about any claim for provision that might be made by either of the Plaintiffs or by any other eligible person. Furthermore, there are no documents of any kind recording an intention, then held by the deceased, to enter the transaction to wholly or partly, or deny or limit provision being made out of the estate for the maintenance, education or advancement in life of any person who was entitled to apply for a family provision order.

Nor can I draw an inference that the deceased had such an intention because other evidence, given by Mr Jordan, satisfies me that the intention of the deceased was to reward the Defendants, not to deny, or limit, any claim that any eligible person might have.

In those circumstances, the requisite intention of the deceased is not established and s 80(2)(a) does not apply.

I turn then to s 80(2)(b) of the Act. The transfer of the Brighton-Le-Sands property to the Defendants took effect within one year before the date of the death of the deceased.

I must next consider whether it was a transaction that was entered into when the deceased "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" (in this case, relevantly, either of the Plaintiffs) "which was substantially greater than any moral obligation of the deceased ... to enter into the transaction".

In my view, the deceased, in June 2009, did have a moral obligation to make adequate provision, by will, for the proper maintenance and advancement in life of each of the Plaintiffs and of Jasmine. She, herself, realised this, by making each of them a pecuniary legatee in her Will, which she then made.

That obligation was substantially greater in circumstances where she had made a Will in which she provided for a devise of the Brighton-Le-Sands property to the Defendants absolutely, which meant that they would have distributed to them that property on her death, subject to any claims made for provision out of the deceased's estate.

There was no relevant reason advanced, other than to reward the Defendants, for the deceased entering into the Contract with, and then subsequently transferring the property to, the Defendants. Their position would not have been materially different had they received the Brighton-Le-Sands property following the deceased's death. This is so, particularly because of the contractual right granted to the deceased to live there as long as she wished.

I have considered whether a reason was as provided for in the special condition in the Contract, or in what the deceased had said to Mr Jordan. However, I am more than satisfied that even if the deceased had not transferred the Brighton-Le-Sands property to, the Defendants then, the Defendants would have continued, as they had done since 2005, to look after, and care for, her.

It follows, in my view, that s 80(2)(b) of the Act has been satisfied.

I have little doubt that Anna, Connie, and Irene, is each a person whose "reasonable expectations" should be considered since, in the events that happened, each is a person who received the deceased's benefaction by transfer to her of an interest in the Brighton-Le-Sands property.

No doubt, they expected to inherit the Brighton-Le-Sands property. However, there was no evidence that they expected to receive that property before the death of the deceased. The earliest such an expectation could have been held by each was when she attended, with the deceased, at the Centrelink office. If any of them had such an expectation prior to that time, the reasons for doing so was not explained in the evidence. Even then it was possible for the deceased to change her mind.

At the time the Defendants sold the Brighton-Le-Sands property, they were well aware of a claim for provision to be made by each of the Plaintiffs. Whether each Defendant, then, had an expectation that she would be able to retain the whole of her share of the proceeds of sale was not explored in the evidence. If she did, such an expectation, considering the financial and material circumstances of each of the Plaintiffs, could not have been a reasonable one.

In this regard, I do not accept the Defendants' submission that to make an order would "substantially impoverish Irene" who has spent her share of the proceeds of sale of the Brighton-Le-Sand's property. At the time she did so, she knew that a claim by each Plaintiff was to be made. To spend her share of the proceeds of sale was a risk that she was prepared to take. Of course, she has had the benefit of having reduced her mortgage in the meantime.

Nor do I accept the submission that to make provision "would also affect Anna's provision for the education of her children". In my view, they do not have any claim on the deceased's estate and whilst I must, of course, consider that Anna's competing claim is a substantial one, there is no evidence that reducing the share of the proceeds of sale that she retains, will actually prevent her children from obtaining the same education that each would otherwise receive.

Whilst it has been submitted that "Connie would also suffer from" the making of an order, no specific submission on how that would occur (other than by reducing the amount that she has retained) has been advanced.

The "expectations" of each of the Plaintiffs was not explored. There was no evidence that the deceased had said anything to either to give rise to any expectation that could reasonably be held by him or her.

I am also satisfied that the substantial justice and merits require the Court to make a designating order. In this regard, the Act is not one that "punishes".

In this case, it is difficult to see what disadvantage there is to the estate in the deceased having entered into the Contract and transferred the Brighton-Le-Sands property to the Defendants. There was sufficient money in the actual estate to pay the pecuniary legacies in the Will and also to satisfy the debts, funeral and testamentary expenses (other than costs of the proceedings). There remained a small amount in residue. Of course, the value of the deceased's actual estate was significantly reduced by the relevant property transaction, but I do not think that the estate has been disadvantaged in those circumstances.

However, s 83(1)(a), alternatively, requires me to be satisfied that each of the Plaintiffs, as a person entitled to apply for a family provision order from the estate, in my view, has been disadvantaged. I am so satisfied since the actual estate was reduced significantly by the Brighton-Le-Sands property no longer being property of the deceased thereby reducing the value of the actual estate and thereby preventing the deceased from being able to make greater provision for them, with the result that he and she must seek an order designating property as notional estate from which to satisfy a family provision order and any order for costs.

I have earlier had regard to the subject of the relevant property transaction, the value and nature of any consideration given by the Defendants in the relevant property transaction and the changes in the value of property the subject of the relevant property transaction.

Having considered all of the matters, I am satisfied that property should be designated as notional estate of a deceased person. I shall allow the parties, particularly the Defendants, to further discuss between themselves what property is to be so designated before any order is made. If they are unable to reach agreement, further submissions may be made by both parties.

I turn now to the second stage, namely the nature of the order that should be made in the case of Max and Maria.

In relation to Max, I am of the opinion that he should receive provision by way of a lump sum, in addition to the provision that he has already received, which would enable him to pay off his share of the debt secured by mortgage if he chooses to, and which will yield, thereafter, a modest sum to provide for exigencies of life. In my opinion, he should receive a lump sum legacy of $65,000. If he uses part of it to pay off his share of the mortgage debt, he will have increased income available. There will remain a small capital sum for exigencies, which may also provide a small income. Alternatively, the whole of the lump sum, if properly invested, and until used, will provide him with additional income.

In relation to Maria, I am of the opinion that she should receive, in addition to the amount that she has already received, provision by way of a lump sum of $35,000. This will provide her with a capital sum for exigencies of life and, until used, an additional small income.

No interest should be payable if the amount in each case is paid within 28 days of the making of final orders.

Because there were no submissions on how the burden of the provision made should be borne and the nature of the designating orders that should be made to satisfy the provision and costs, and because of s 92 of the Act, I direct the parties to bring in short minutes to reflect the reasons for judgment. Any short minutes should include an order that the Court Book, the exhibits and subpoenaed material may be returned forthwith; with any exhibits returned to be retained intact by the party, or person who produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

I would commend to the parties that, if possible, agreement should be reached on the amount of the Plaintiffs' costs and then the Defendants may be able to agree on how the total amount of the provision and the costs of the Plaintiffs can be borne between them.

If the parties are unable to agree on any of these matters, I shall hear submissions, including whether a lump sum costs order for the Plaintiffs should be made.

Any orders should include one that provides for the Court Book, the exhibits and subpoenaed material to be returned; with any exhibits returned to be retained intact by the party, or person who produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

I stand the proceedings over to a mutually convenient date.

**********

Decision last updated: 22 March 2012

Medium Neutral Citation:	Kastrounis v Foundouradakis [2012] NSWSC 264
Hearing dates:	22, 23 February 2012
Decision date:	22 March 2012
Jurisdiction:	Equity Division
Before:	Hallen AsJ
Decision:	(a) Having found that each Plaintiff is an eligible person, and that the provision made for him and her in the Will of the deceased is inadequate, the first Plaintiff is to receive, in addition to that provision, a lump sum of $65,000 and the second Plaintiff is to receive, in addition to that provision, a lump sum of $35,000. (b) No interest is to be paid on either lump sum if it is paid within 28 days of the making of these orders; otherwise, interest calculated at the rate prescribed by s 84A(3) Probate and Administration Act 1898, on unpaid legacies, is to be paid from that date until the date of payment. (c) The parties are to endeavour to reach agreement on the burden of costs of the proceedings, failing which the matter will be listed for further submissions. (d) Having found that the deceased's estate is insufficient for the making of the family provision order in the case of each Plaintiff, and for any order as to costs, that the Court is of the opinion should be made, the court will make a designating order designating property as notional estate for the purposes of the family provision orders to be made and, if necessary, for the purposes of an order for the Plaintiffs' costs of proceedings. (e) The burden of the provision to be made for each of the Plaintiffs and of the Plaintiffs' costs, as well as the property of each of the Defendants to be designated as notional estate, to be the subject of agreement between the Defendants, or if no agreement can be reached, to be the subject of further submissions. (f) Direct the parties to bring in short minutes of order to reflect the reasons and the proposed orders.
Catchwords:	SUCCESSION - FAMILY PROVISION - NOTIONAL ESTATE - Two Plaintiffs, a son and a daughter of the deceased, seek a family provision order out of the estate or notional estate of the deceased under the Succession Act 2006 - Each Plaintiff received a modest legacy out of the estate in the Will - Virtually no actual estate left thereafter - The Defendants are grandchildren of the deceased to whom the deceased's real property was transferred a few months prior to her death - Consideration identified in contract for sale not paid by them - Other consideration provided - Whether full valuable consideration given - Property subsequently sold by Defendants - Whether provision should be made for each Plaintiff and, if so, the nature of the provision to be made - Whether proceeds of sale, or other property of the Defendants, or any of them, or any other property should be designated as notional estate
Legislation Cited:	Family Provision Act 1982 Practice Note SC Eq 7 Property (Relationships) Act 1984 Succession Act 2006 Succession Amendment (Family Provision) Act 2008
Cases Cited:	Alexander v Jansson [2010] NSWCA 176 Allardice v Allardice, In re Allardice, (1909) 29 NZLR 959 Attorney-General v Earl of Sandwich [1922] 2 KB 500 Barns v Barns [2003] HCA 9 [2005] SydLawRw 12; (2005) 27(2) Bartlett v Coomber [2008] NSWCA 100 Blore v Lang [1960] HCA 73; (1960) 104 CLR 124 Bondelmonte v Blanckensee [1989] WAR 305 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 Buckland Deceased, Re [1966] VR 404 Butcher v Craig [2009] WASC 164 Cetojevic v Cetojevic [2007] NSWCA 33 Christie v Manera [2006] WASC 287 Collicoat v McMillan [1999] 3 VR 803 Collins v McGain [2003] NSWCA 190 Cooper v Dungan (1976) 50 ALJR 539 Crossman v Riedel [2004] ACTSC 127 Cunliffe v Goodman [1950] 2 KB 237 Day v Perisher Blue Pty Ltd [2005] NSWCA 110; (2005) 62 NSWLR 731 Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 Diver v Neal [2009] NSWCA 54 Ebert v Ebert [2008] NSWSC 1206 Foley v Ellis [2008] NSWCA 288 Gardiner v Gardiner (NSWSC, 28 May 1998, unreported) Galt v Compagnon (NSWSC, 24 February, 1998) Goodman v Windeyer (1980) 144 CLR 490 Gorton v Parks (1989) 17 NSWLR 1 Hawkins v Prestage (1989) 1 WAR 37 Hildebrandt v Soncini [2007] NSWSC 1227 Hinde & Hinde [2008] FamCA 24 Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134 Jelley v Iliffe [1980] EWCA Civ 4; [1981] 2 All ER 29 John v John [2010] NSWSC 937 Kavalee v Burbidge; Hyland v Burbidge (1998) 43 NSWLR 422 Kay v Archbold [2008] NSWSC 254 Kembrey v Cuskelly [2008] NSWSC 262 Kleinig v Neal (No 2) [1981] 2 NSWLR 532 McCosker v McCosker (1957) 97 CLR 566 McGrath v Eves [2005] NSWSC 1006 MacGregor v MacGregor [2003] WASC 169 (28 August 2003) Marks v Marks [2003] WASCA 297 Marriott, Re, dec'd [1968] VR 260 Mayfield v Lloyd-Williams [2004] NSWSC 419 Ogburn v Ogburn; Ogburn v Ogburn [2012] NSWSC 79 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9 Puckridge, Deceased, In the Estate of (1978) 20 SASR 72 Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201 Smith v Woodward (NSWSC, 9 September 1994, unreported) Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 Stiles v Joseph (NSWSC, 16 December 1996, unreported) Stott v Cook (1960) 33 ALJR 447 Taylor v Farrugia [2009] NSWSC 801 Tramantana v Harborne; Clarke v Harborne; Midson v Harborne [2011] NSWSC 1129 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 Vaysbakh v Vaysbakh [2007] NSWSC 1223 Wade v Harding (1987) 11 NSWLR 551 Walker v Walker (NSWSC, 17 May 1996, unreported) Wilkinson (deceased), Re; Neale v Newell [1978] 1 All ER 221 Wilson v Wright (NSWSC, 25 February 1992, unreported)
Texts Cited:	Rosalind Croucher in "Contracts to Leave Property by Will and Family Provision" New South Wales Law Reform Commission Report 110 (2005) - Uniform Succession Laws: Family Provision
Category:	Principal judgment
Parties:	Merkoury Kastrounis (first Plaintiff) Maria De Chellis (second Plaintiff) Anna Foundouradakis (first Defendant) Connie Kerameas (second Defendant) Irene Miglis (third Defendant)
Representation:	Counsel: Mr J Armfield; Mr G Smith (Plaintiffs) Mr J Mitchell (Defendants) Solicitors: Russo & Partners (Plaintiffs) Econ Legal Pty Limited (Defendants)
File Number(s):	2010/294303

Assets	Value	Total
House (jointly owned)	$150,000 (half share)
Bank account	$ 70
Household items and jewellery	$ 500
Shares/trusts	Nil
Superannuation	Nil
$150,570
Liabilities
Nil	$0
Net	$150,570

Asset	Value	Total
House (half share)	$390,000
Home contents (half share)	$ 10,000
Term deposit (half share)	$ 45,000
Superannuation	$ 17,943	$462,943
Liabilities
Mortgage (half share)	$221,500
Credit card debt	$ 6,000
$227,500
Net	$235,443

Income	Value	Total
Yearly income from sandwich shop	$79,724
$79,724
Household expenses
Food
Car maintenance/petrol
Rates, water electricity	$50,000
University fees	$ 9,000
School fees	$20,000
$79,000/Yr
Net	$ 724