Kensey (bht NSW Trustee and Guardian) v Thomas - [2011] NSWSC 1434

Supreme Court

New South Wales

Medium Neutral Citation: Kensey (bht NSW Trustee & Guardian) v Thomas [2011] NSWSC 1434
Hearing dates: 23 & 24 November 2011
Decision date: 16 December 2011
Jurisdiction: Equity Division
Before: Hallen AsJ
Decision:
1. Having found that the Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, order that the Plaintiff receive, in addition to the devise of the home unit at Penshurst, but in lieu of the other provision by way of legacy and share of residue made for her in the Will of the deceased, a lump sum of $500,000.
2. Order that the lump sum should be paid within 28 days, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment.
3. Order that the Plaintiff's costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, be paid out of the estate of the deceased.
4. Order that the Court Book, the exhibits and subpoenaed material may be returned forthwith; any exhibits returned must 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.
5. Grant leave to the Defendants to re-list the matter solely on the aspect of obtaining orders to adjust the interests affected by the making of the family provision order in favour of the Plaintiff.

Catchwords: Proceedings commenced by the NSW Trustee & Guardian, the tutor of the Plaintiff, a disabled person, in which a claim for a family provision order, under the Succession Act 2006 was sought - Only issue is whether adequate provision for proper maintenance education or advancement in life made in the Will of the deceased for the Plaintiff - Competing claims of beneficiaries none of whom or which is an eligible person
Legislation Cited: Family Provision Act 1982
Succession Act 2006
Probate and Administration Act 1898
Succession Amendment (Family Provision) Act 2008
Cases Cited: Bondelmonte v Blanckensee [1989] WAR 305
Bosch v Perpetual Trustee Co Ltd [1938] AC 463
Chan v Tsui [2005] NSWSC 82
Collins v McGain [2003] NSWCA 190
Cooper v Dungan (1976) 50 ALJR 539
Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127
Diver v Neal [2009] NSWCA 54
Foley v Ellis [2008] NSWCA 288
Goodman v Windeyer (1980) 144 CLR 490
Gorton v Parks (1989) 17 NSWLR 1
Hawkins v Prestage (1989) 1 WAR 37
Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134
Kay v Archbold [2008] NSWSC 254
Kleinig v Neal (No 2) [1981] 2 NSWLR 532
McCosker v McCosker (1957) 97 CLR 566
Mayfield v Lloyd-Williams [2004] NSWSC 419
Neil v Jacovou [2011] NSWSC 87
Palaganio v Mankarios [2011] NSWSC 61
Permanent Trustee Company v Fraser (1995) 36 NSWLR 24
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
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59
Taylor v Farrugia [2009] NSWSC 801
Tchadovitch v Tchadovitch [2010] NSWCA 316
Thom v The Public Trustee (NSWSC, 2 April, 1992, unreported)
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker (NSWSC, 17 May 1996, unreported)
Texts Cited: Australian Life Tables 2006-2008 issued by the Australian Bureau of Statistics
Category: Principal judgment
Parties: Erika Helene Kensey (by her Tutor NSW Trustee & Guardian) (Plaintiff)
William Beach Thomas (first Defendant)
John William Hanna (second Defendant)
Representation: Counsel:
Mr R Wilson (Plaintiff)
Mr D Jenkins (Defendants)
Solicitors:
Zucker Legal (Plaintiff)
Thomas & Company (Defendants)

File Number(s): 2011/18471

JUDGMENT

The Applications

HIS HONOUR: These reasons relate to proceedings commenced by the NSW Trustee & Guardian, who is the tutor of Erika Helene Kensey, in which a claim for a family provision order for the Plaintiff, under Chapter 3 of the Succession Act 2006 ("the Act"), is made. (On 18 October 2010, the Mental Health Tribunal had made an order that the Plaintiff's financial affairs be subject to management and the NSW Trustee & Guardian was appointed.)

The Act applies in respect of the estate of a person who died on, or after, 1 March 2009. It 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 deceased, whose estate is the subject of the claims, is Daniel Kensey ("the deceased"). The Plaintiff is the only living child of the deceased.

The Summons was filed, on behalf of the Plaintiff, on 19 January 2011, that is, within the time prescribed by the Act (within 12 months of the deceased's death). The Defendants named in the proceedings are William Beach Thomas and John William Hanna, the executors named in the deceased's Will. Each is a solicitor practising in New South Wales.

There is no question, in the present case, of any provision being sought by the Plaintiff out of notional estate of the deceased.

The matter proceeded on the affidavits, with no cross-examination of any witness. All of the facts upon which the Court's decision should be reached were agreed. Counsel for each party provided detailed written submissions and spoke to them. The written submissions will remain with the papers.

The parties and their legal representatives are to be commended for the manner in which the proceedings were conducted in a busy family provision list during which the case was heard.

Background Facts

The deceased died on 23 January 2010.

The deceased was married to the mother of the Plaintiff. She died in 2008. There was one other child of the marriage, who died in about 1997. The Plaintiff now has no immediate family.

The deceased left a Will that he made on 17 January 2010, Probate of which was granted by the Supreme Court of New South Wales, to the Defendants on 21 April 2010.

The deceased's Will provided for the Plaintiff:

(i) a legacy of $150,000;

(ii) such items of the deceased's articles of personal, or domestic, use or ornament, as well as original paintings, such of the contents of the deceased's safe deposit box and such household chattels as the Plaintiff selected within three months of the death of the deceased;

(iii) the deceased's home unit at Penshurst (in which the Plaintiff has lived and continues to live); and

(iv) one third of the residuary estate (as to the balance, see later).

The deceased's Will also provided:

(a) a bequest to Paulette Julianna Mohacsi, of the original painting by Ida Benczur;

(b) a bequest, to "my dear friend", Catherine Simon, of all, or such, of the original paintings (other than the original painting by Ida Benczur) in the deceased's home, as she selected within three months after the date of death;

(d) a legacy of $150,000 to the deceased's niece, Susan Dawn Newport;

(e) a legacy of $100,000 to The New South Wales Cancer Council;

(f) a legacy of $100,000 to The National Heart Foundation of Australia (NSW Division);

(g) a legacy of $25,000 to the deceased's former secretary, Lesley Williams;

(h) a legacy of $50,000 to "my dear friend", Catherine Simon, in recognition of the care and affection she had shown to the deceased and to his late wife over many years;

(i) a legacy of $100,000 to the deceased's wife's cousin, Otto Kreitlein;

(j) a legacy of 10,000 Euros to the deceased's brother, Gabor Kokenyesy; and

(k) a legacy of 10,000 Euros to the deceased's brother, Peter Kokenyesy;

(l) a bequest of the residue of articles of personal or domestic use or ornament (including the deceased's and his wife's jewellery), the residue of the original paintings in the deceased's home, the residue of the contents of the deceased's safe deposit box and the residue of his household chattels, equally to Peter Kensey and to Susan Dawn Newport;

(m) a bequest of the balance of the residuary estate to be divided equally between Peter Kensey and Susan Newport.

In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate document, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, gross value of $1,746,228. No liabilities were disclosed. The estate was said to consist of real property at Kyle Bay ($910,000), the home unit at Penshurst ($260,000), money held on deposit ($210,255), moneys on hand ($35), personal and household effects ($17,995), contents of the safe deposit box ($7,500), shares ($6,760), other investments ($333,192) and debt due to the estate ($491). (I have omitted a reference to the cents and shall continue to do so.)

In their affidavit sworn on 24 November 2011, the Defendants state that the net distributable estate currently available consists of cash ($1,101,589), amount held in solicitor's trust account ($71,120), AXA investment ($136,308), shares ($6,500) and contents of safe deposit box ($7,500).

The Defendants also disclosed, in their affidavit, that the home unit at Penshurst had been transmitted to the Plaintiff; $40,000 had been distributed to Peter Kensey; $25,000 had been distributed to Susan Newport; articles of personal, or domestic use, or ornament, and household chattels, had been distributed to Peter Kensey and Susan Newport; and that the original paintings had been distributed to Paulette Mohacsi and to Catherine Simon, all in accordance with the terms of the deceased's Will.

There is no suggestion that the distributions should be designated as notional estate, it being accepted that there is sufficient left in the balance of the estate to satisfy any additional provision made for the Plaintiff.

In calculating the value of the deceased's estate, finally available for distribution, the costs of the present proceedings should also be considered, since the Plaintiff, if successful, normally, will be entitled to an order that the costs be paid out of the estate, whilst the Defendants, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs be paid out of the estate.

The Plaintiff's costs and disbursements of the proceedings, including counsel's fees, calculated on the ordinary basis, have been estimated to be $51,000 (inclusive of GST and upon the basis of a one day hearing).

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 one day hearing), have been paid in part ($40,181). The balance of the costs to be paid at the conclusion of the proceedings will be $17,500.

(Because the case could not be completed within one day, due to other matters in the list, a short period on the second day was necessary. In all, the hearing lasted about three hours.)

The parties agreed that, for the purposes of the hearing, and assuming the estimates of costs prove accurate, and the usual order for costs is made, the value of the estimated net distributable estate will be in the order of $1,254,517. The total of the balance of the legacies to be paid is $786,500, leaving residue of about $468,017, with the result that each of the three residuary beneficiaries, including the Plaintiff, will receive about $156,005. (It follows that under the terms of the Will, the Plaintiff would receive about $306,000.)

The only person described as an eligible person, within the meaning of the Act, is the Plaintiff. A number of the beneficiaries, however, including the charities, have filed an affidavit in the proceedings setting out his, her, or its, financial and material circumstances. I shall refer to these affidavits later in the proceedings.

In the circumstances, I am satisfied that no prescribed notice of the proceedings need be served upon any person.

The Statutory Scheme - The Act

In view of the way in which the proceedings were conducted, I shall set out, in less detail than I have in other cases, the statutory scheme and the relevant principles. There was no dispute about the scheme of the Act, or the relevant applicable principles.

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 person'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 a deceased person's disposition 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 Substantive Provisions of the Act

The key provision is s 59 of the Act. The court must be satisfied, first, that the applicant is an eligible person within the meaning of s 57(1). There are six categories of persons by, or on whose behalf, an application may be made. One category is "a child of the deceased" (s 57(1)(c)).

The Court, if satisfied of the Plaintiff's eligibility, must 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 the applicant's proper maintenance, education or 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 or 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 or 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".

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.

"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 are the terms 'maintenance' and 'advancement in life' defined in the Act. However, in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, Callinan and Heydon JJ, at [115], 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 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."

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

"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."

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

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

Dixon CJ and Williams J, in McCosker v McCosker (1957) 97 CLR 566 at 571 - 572, said of the word 'proper', that:

"The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trustee Co (Ltd ) the word "proper" in this collocation of words is of considerable importance. 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 [114], 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."

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

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' 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 or advancement in life of the applicant in all of the circumstances: Collins v McGain [2003] NSWCA 190 at [42] (Tobias JA, with whom Beazley and Hodgson JJA agreed).

Tobias JA said:

"42. Further, there can be no question that, at least as part of the first stage of the process, the question of whether the eligible person has a relevant need of maintenance etc is a proper enquiry. This is so as the proper level of maintenance etc appropriate for an eligible person in all the circumstances clearly calls for a consideration of his or her needs. However, the question of needs must not be too narrowly 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-Warnes v Hall [No 3] at [81] - [84], Buss JA said, in respect of the first stage of the process:

"The term 'need' has been used to refer to the claimant's inability to satisfy his or her financial requirements from his or her own resources. See Singer 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 (No 2) , 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.

The discretion should be exercised carefully and conservatively according to community perceptions of the provision that would be made by a wise and just testatrix: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 146. The standards of the wise and just testator, or testatrix, of today, not of an era ago, are pertinent to that assessment: Permanent Trustee Company v Fraser (1995) 36 NSWLR 24 at [31].

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 hierarchy as between the various factors. The weight to be attached to each of them is likely to differ depending upon the individual circumstances of the particular case. Nor is there a mandatory command to take into account any of the matters enumerated. None of the matters differentiate in their application between classes of eligible person or types of relationship. 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.

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, 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 be irrelevant to the jurisdictional question to be determined at the first stage.

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;

(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 may be made, relevantly, in this case, in relation to the estate of the deceased.

The order for provision out of the 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).

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.

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.

Applicable Legal Principles

In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these were enunciated in the context of the previous legislation, they are equally apt in a claim under the Act such as this one.

Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, in relation to the former Act, that it is not appropriate, to endeavour to achieve a 'fair' disposition of the deceased's estate. It is not part of the Court's function to achieve some kind of equity between the various claimants. The Court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity. Rather, the Court's role is of a specific type and goes no further than the making of 'adequate' provision in all the circumstances for the 'proper' maintenance, education and advancement in life of an applicant.

In Cooper v Dungan (1976) 50 ALJR 539, Stephen J, at 542, reminded the Court to be vigilant in guarding "against a natural tendency to reform the deceased's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant".

The Court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair.

Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 at 19; Walker v Walker ( NSWSC, 17 May 1996, unreported); Vigolo v Bostin at [11]; Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.

In relation to a claim by an adult child, the following principles, in my view, are relevant:

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

(b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child.

(c) Generally, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. Likewise, where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia [ 2009] NSWSC 801 .

(d) There is no need for an adult child to show some special need or some special claim: McCosker v McCosker ; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45.

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

I make it clear that I do not intend what I have described as "applicable legal principles" to be elevated into rules of law. Nor do I wish to suggest that the jurisdiction should be unduly confined. I identify them merely as providing useful assistance in considering the statutory provisions, the terms of which must remain firmly in mind.

Method of Determination of any Capital Sum to be provided

In the light of the medical condition of the Plaintiff, to which I shall refer later in these reasons, there was no dispute, in this case, that she should have sufficient provision to enable her needs to be met. It was also agreed that her need for accommodation is currently satisfied by her ownership and occupation of the Penshurst home unit.

The real issue related to the capital sum, if any, to allow the Plaintiff to live comfortably and, if any capital sum were awarded, how the burden of the capital sum should be borne.

Another subject of debate in the method of calculation related to whether any part of any capital sum provided should remain upon her death or whether all of it, capital and income, should be required to be used during her lifetime.

Each counsel provided detailed mathematical calculations, to which I shall refer in a little more detail later in these reasons. Each did not dispute the calculations advanced by the other. Importantly, there was no suggestion, that the calculations provided by the Defendants' counsel (and which I accepted as an aide memoire) appeared to be mathematically incorrect. Each used life tables to support the calculations of the provision that ought be made for the Plaintiff.

In the case of the Defendants, the calculations were used in support of the submission that no additional provision was required to be made for the Plaintiff out of the estate of the deceased because the present amount provided to her under the deceased's Will, taken with her entitlement to a disability pension, would still leave a significant amount remaining on her death. I shall return to these calculations later in the reasons.

Each counsel accepted, however, that in Tchadovitch v Tchadovitch [2010] NSWCA 316, Campbell JA (Allsop P agreeing at [1]-[5] and Young JA agreeing at [94]) had said:

"[55] Depending on the evidence and submissions made in a particular case, it can be part of the task for a judge fixing the quantum of a Family Provision Act award to make a judgment about whether, and if so to what extent, any discount table is of assistance in assessing the proper provision for the eligible person. At least until such time as a court has the benefit of argument that seeks to narrow the range of discount tables that might be used for that purpose, there is no reason of principle why the 3% tables should be treated as the bottom of the range of discount tables that are considered. In Todorovic , in the different economic conditions that then prevailed, Stephen and Murphy JJ were of the view that a nil discount should be applied in calculations of common law damages, and Mason J would have preferred to use the 2% tables, but agreed with use of the 3% tables for the sake of comity. Likewise it is part of the judge's task to decide (if asked) whether, and if so to what extent, any actuarial calculations that are tailored to the individual circumstances of that claimant are helpful. In my view, there is no principle requiring that the 3% discount table always be used.

[56] There is a world of difference between it perhaps sometimes being appropriate to calculate a lump sum for the purposes of the Family Provision Act by using the 3% discount tables, and it always being required as a matter of principle. Just as the nature and quantum of the provision that is made for an applicant under the Family Provision Act involves an exercise of judicial discretion, that is exercised in the light of the facts of the particular case and the evidence and submissions in the particular case, so the choice of the appropriate methodology to use in arriving at the quantum is a matter of judicial discretion, that is likewise exercised in the light of the facts of the particular case and the evidence and submissions in the particular case. In my view the Appellant's submission that adoption of the 3% discount tables as a common approach "will not affect or diminish the exercise of a judge's discretion when determining what provision is, in any case, adequate for the proper maintenance of an applicant" is wrong. In the present case it was within the scope of the discretion open to him for the judge to have regard (as he did) to the 3% tables, as one factor taken into account, but also within the scope of his discretion to award a sum different to that obtained from the use of the 3% tables.

[57] There is another reason, more closely tied to the circumstances of the present case, why the judge made no error in failing to award the sum obtained from the 3% discount tables. The expert evidence in the present case proceeded on a different basis to that which Todorovic had decided was appropriate for the purpose of assessing lump sums in personal injuries litigation. In the present case, the experts had made assumptions about what the rate of increase of wages and prices would be, (matters said by two judges in Todorovic at 420 to be " unverifiable surmise and inadmissible ") and had made calculations of the effect of income tax that were specific to the position of the Respondent. Those calculations were admitted without objection. In those circumstances, fundamental reasons why the majority in Todorovic had favoured the use of the 3% tables were absent.

...

[73] I would not want my finding that it was within the discretion of the trial judge in the present case to take into account the expert evidence, to be taken as encouragement for parties in Family Provision Act cases to provide expert evidence of the type that was provided here. Presumably it would be of little assistance in many such cases because the assets were insufficient to meet all claims. In the present case, a sufficient reason why the judge was justified in taking it into account was that both parties conducted the case on the basis that such evidence was appropriate for him to consider.

[74] There is no issue before us concerning the admissibility of such reports, but such an issue might arise in future cases. It might arise at the level of whether the assumptions were adequately established, or at the level of whether a ground for exclusion under section 135 Evidence Act 1995 was made out. Alternatively, if admitted, a question might arise about whether cross-examination should be limited. There are some other matters of potential concern besides admissibility. One is that, many testators manage to write wills that make proper provision for their family without calling on an actuary or accountant to help them do so. When the Act enables the Court to make proper provision for eligible people when a testator has failed to do so, it is far from clear that the Court ought to do so using a type of factual material that a testator is unlikely to have used. Another is that it would be a matter of concern if the costs of Family Provision Act cases were increased through regular use of such reports. The effect of these matters can be left for future decision."

I should also refer to Slattery J's observations in Neil v Jacovou [2011] NSWSC 87 at [170], which I find particularly relevant in the present case:

"There was a degree of false precision in the mathematical forward planning of both Julie and Charli's future lives to enable the actuarial calculations of future expenses. This is not surprising. The Court of Appeal recently cautioned about the limits of usefulness of such material: Tchadovitch v Tchadovitch [2010] NSWCA 316 and pointed out features of the use of such evidence: at [74], there are insurmountable difficulties in making an accurate calculation of the amount that will make proper provision for certain needs of a person for the rest of their life; at [71] particularly where the applicant has decades to live actuarial calculations could not be anything more than a check or guide; at [75], it can be part of the task of the judge fixing a Family Provision Act award to make a judgment about whether and if so to what extent that a discount table is of assistance in assessing what is proper provision; at [56], the choice of the appropriate methodology to use in arriving at the quantum of the provision is a matter of judicial discretion exercised in light of the facts, evidence and submissions in the particular case; at [68], it may be appropriate to use the actuarial calculations as a check on the methodology followed; and at [73] the Court may not give any further analysis or explanation of such evidence than to say that it was taken into account."

I should note that the evidence is that the NSW Trustee & Guardian website suggests that the annual return to clients for five years to June 30 2011 averages 5.31 per cent. The one-year return is 4.5 per cent.

I do not propose to treat the Plaintiff's claim for a family provision order as if it were a personal injury claim. I shall take into account the calculations, as well as what has been submitted on behalf of each of the parties. I shall also bear in mind the Plaintiff's "needs" which have been the subject of evidence. Ultimately, however, as was said by White J in Kay v Archbold [2008] NSWSC 254, at [126], the assessment of what provision is proper involves "an intuitive assessment".

Pension Entitlement

Because the Plaintiff is, and has been, receiving a pension for many years, it is necessary to briefly consider the relevance of that receipt in a claim for a family provision order.

In this case, the pension that the Plaintiff receives is both assets dependant and income dependant. There is no dispute that the Plaintiff will lose the full pension if her assets are $186,750 in addition to her home. The reduction is $1.50 per fortnight for every $1,000 over that amount. When her assets (in addition to her home) are $686,000, she will lose the whole pension. If she qualifies under the assets test, she must still qualify under the income test. The full pension reduces after an income of $150 per fortnight. The rate of reduction is $0.50 in the dollar over that amount. The pension entitlement is lost completely if her income is $1,647 per fortnight.

In Taylor v Farrugia at [59], Brereton J said:

"The Court's attitude to the eligibility for means tested pension benefits of eligible persons and beneficiaries varies, depending on the circumstances of the case. Ordinarily, a testator makes a will and provides for those who have a claim on the testator without regard to the claimant's eligibility for a pension. However, in a small estate where there are competing claims, a testator, and this Court on an application under the Act, may take into account the eligibility of a claimant for a pension as a means of deciding how such limited benefits as are available from the estate should be shared between claimants, and how those benefits might be structured. But this qualification to the principle that the burden of support should be borne in the first instance by an estate rather than by social security arises mainly, if not exclusively in smaller estates [ Parker v Public Trustee (1988) NSWSC, Young J, 31 May 1998; Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J, unreported); King v Foster (Court of Appeal, 7 December 1995, unreported) King v White [1992] 2 VR 417, 424; Shah v Perpetual Trustee Company [1981] 7 Fam LR 97 100; Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151; Chan v Tsui [2005] NSWSC 82]."

An earlier authority, with which I respectfully agree, is Thom v The Public Trustee (NSWSC, 2 April, 1992, unreported), in which the learned Master said:

"It seems to me that it would be totally unrealistic for the Court to approach the moral obligation of the deceased to make provision for ... by disregarding the fact that for a period of 20 years before the deceased's death, ... was in receipt of a pension from the State, and the fact that, to the extent of that pension, the deceased was relieved of the necessity to support... from his own funds. That being so, I do not see how, upon the death of the deceased, the moral obligation upon the deceased to make provision for ... by will, could be approached without recognising the fact that ... would be entitled to continue to receive such a pension."

The availability of a pension to the Plaintiff ought not be regarded as a substitute for the obligation on the deceased to make adequate provision for her. Yet, it is not necessary to make an order that would operate primarily in relief of the taxpayer. In my view, it not being submitted to the contrary, the availability of the disability pension, and associated social benefits, is a circumstance to which the Court should have regard in light of the size of this estate.

I have also read Chan v Tsui [2005] NSWSC 82, a decision of Master Macready (as his Honour then was). His Honour, in that case, referred to the authorities then existing. The views that I have expressed in the last paragraph do not differ from his Honour's in that case.

Additional Facts

I next set out the additional facts that are, or may be, relevant to the determination of the Plaintiff's case. I do so by reference to s 60 (2) of the Act. Where necessary, I shall also consider the competing claim of each beneficiary, remembering, of course, that none is an eligible person within the meaning of the Act.

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

As stated, the Plaintiff is the daughter of the deceased. As at the date of his death, she was his closest living relative. He had no other children at the date of his death. Their relationship existed throughout the deceased's lifetime.

The Plaintiff's relationship with the deceased was a supportive one throughout her life. Apparently, she lived with her parents until about the late 1970s, at which time she moved out of their home. She lived with them, again, for about 12 months in the mid-1990s. There is a suggestion that the Plaintiff may not have seen the deceased as often as he would have wished, although this may have been whilst the Plaintiff's mother was alive.

There is also some evidence that the deceased requested the second Defendant, Mr Hanna, not to inform the Plaintiff of the deceased's imminent death until after he had died, and then to do so, in writing. The reasons for providing these instructions are not disclosed in the evidence.

(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

There is no definition of either "obligations" or "responsibilities" in the Act. The word, in each case, may mean no more than the moral duty of the deceased to make adequate provision for the proper maintenance, education and advancement in life of the applicant. There is such an obligation or responsibility in the case of a child.

Leaving aside any obligation, or responsibility, arising as a result of their relationship as parent and child, the deceased did not have any legal, or financial, obligation to the Plaintiff imposed upon him by statute or common law.

There was no obligation, or responsibility, to any other beneficiary named in the Will of the deceased.

(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

I have dealt with this earlier in this judgment.

On any view, on the basis of the agreement of the parties, the deceased's estate is a reasonably large one.

(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

The Plaintiff's financial and material circumstances, excluding the provision made for her in the Will of the deceased, is as follows:

(a) Her financial manager (and tutor) holds $2,454.

(b) She receives $19,468 per annum, by way of Centrelink income (which equates to $748 per fortnight).

(c) She has resided, for some years, and continues to reside, in the Penshurst home unit, which is a two-bedroom ground floor home unit. It is described as being extremely neat and tidy, although sparsely furnished and decorated. One of the bedrooms is used for storage. The Plaintiff regards the unit as suitable for her needs and does not wish to move. She is the beneficial owner of the home unit.

(d) She has superannuation with a preserved benefit of about $27,000.

(e) There is evidence that the Plaintiff prefers to enjoy a meagre lifestyle. She does not have any particular desire to "purchase big ticket items" (although this may be the product of her mental state).

(f) The Plaintiff is keen to carry out some renovations on the Penshurst home unit, should funds be available, such as replacing windows and curtains, renovating the bathroom to include an internal laundry with a washing machine, replacing the bedroom and living room furniture and changing the carpet to non-slip vinyl flooring.

(g) The current outgoings on the Penshurst home unit, including council rates, strata levies, and insurances amount to $3,278 per annum or $63 per week. (Her council rates will double to $1,476 per annum, in the event that she loses the pension.)

(h) She is likely to require, in the future, a customised lounge, and wheelchairs, a customised mattress, a shower chair, and a walking frame to ensure her comfort and safety. More than one of each may be required over her lifetime. An estimate of about $15,000 for the purchase, replacement and maintenance costs of these items, has been estimated.

(i) The Plaintiff has a Masters degree in Psychology and has worked in various positions of paid employment over many years, including as a student counsellor at the University of New South Wales. She no longer has any interest in seeking employment, but retains an interest in her field, seeking an allowance to enable her to purchase subscriptions to associated journals and periodicals. (She has, in fact, been unable to work, since about 1997.) (It was accepted that "there appears to be no reasonable prospect of the Plaintiff returning to any paid employment in the foreseeable future".)

(j) The Plaintiff has stated that she prefers her own company and has no current desire to travel or take holidays. She says that she has travelled previously and simply now wishes to be settled.

(k) The Plaintiff's disability adviser, who was not cross-examined, states that "her current and future needs identified" are as follows:

(i) An allowance of $300 per week to comfortably afford personal shopping, good quality food, health products and other natural therapies and transport.

(ii) An annual amount of $2,000 set aside for any incidental medical expenses such as hearing aids, spectacles, pharmaceutical needs, out of pocket medical specialist and allied health visits.

(iii) An allowance of $2,000, annually, to allow the Plaintiff to afford annual subscriptions to professional journals relating to her interest in psychology and education.

(iv) An allowance of $2,000, annually, for clothing.

(v) An amount of $5,000 to allow the Plaintiff to purchase new bedroom furniture.

(vi) An amount of $5,000 for the replacement of living room furniture.

(vii) An amount of $20,000 for bathroom renovations to include laundry facilities and a new washing machine.

(viii) It is possible that the Plaintiff, at a later stage in her life, will become unable to use public transport. She may then require an amount of $2,000, annually, to be made available for half fare taxi rides under the Taxi Transport Subsidy Scheme.

(ix) Given that the Plaintiff has already had a stroke and may develop other medical problems as she ages, she is likely to experience deterioration in her mobility and increased care needs in future years. If equipment is required while living in the community the Plaintiff may be eligible under the Program of Appliances for Disabled People (PADP Scheme) but waiting times for PADP equipment are quite lengthy (they can be up to 2 years) and it is not always advisable to rely on equipment being provided via the PADP Scheme. It is recommended that funds be retained for equipment purchases such as customized lounge and wheelchairs, customized bed, mattresses etc. to ensure comfort when frail or aged. $15,000 is estimated for purchase, maintenance and replacement costs. (Although many required pieces of equipment are provided freely to residents of Aged Care Facilities under the Commonwealth Government's Specified Care and Equipment Policy, customised equipment is not provided free of cost.)

(x) The Plaintiff may also require a comfort and function assessment conducted by a physiotherapist or occupational therapist to assess her needs for appropriate medical equipment every 2-3 years. Such assessments may cost up to $1,000.

The parties agreed that $45,000 is the amount the Plaintiff requires to satisfy the needs referred to above. They also agreed that a weekly income of $494 per week, or about $25,758 per annum, to meet her reasonable weekly expenses, taking into account the recurring expenses, was required.

The Plaintiff's counsel submitted that in lieu of the provision made for the pecuniary legacy and one-third of residue, the Plaintiff should receive a capital sum of $621,540.

The Defendants' counsel submitted that the amount that the Plaintiff receives under the deceased's Will (about $306,000) was adequate. His calculations reveal that, with a part payment of the disability pension, and assuming weekly expenditure of $494, an amount of about $209,000 of capital would remain after 34 years. Very detailed calculations to justify this submission were provided.

However, the detailed calculations, whilst based on deducting the amount of $45,000 (thereby reducing the capital sum available to about $265,000), did not allow for any other deductions of capital, except by way of the supplement to income that would be required, taking into account the pension entitlement. (The estimated rate of return on the investment of capital was 5.31 per cent per annum. The payment of income tax was allowed for in these calculations.)

Whilst the calculations may be mathematically accurate, I am not satisfied that the assumptions upon which they are based are realistic, taking into account the evidence about the needs now, and in the future of the Plaintiff.

It is also necessary to consider the financial resources (including earning capacity) and financial needs, both present and future, of each of the pecuniary beneficiaries.

(i) Peter Kensey discloses that he and his wife have the following assets and liabilities:

Assets

(a)

Matrimonial home (owned by wife):

$1,750,000

(b)

Investment unit (jointly owned):

$ 270,000

(c)

Superannuation:

$ 11,000

(d)

Car:

$ 25,000

(e)

Car (wife):

$ 10,000

(f)

Personal effects:

$ 100,000

Liabilities

(a)

Mortgage - Personal:

$ 900,000

(b)

Mortgage - Investment unit:

$ 230,000

(c)

Mortgage - Business:

$ 200,000

(d)

Business overdraft:

$ 50,000

(e)

Car lease:

$ 20,000

(f)

Tax liability (est):

$ 200,000

(g)

Credit cards:

$ 50,000

(ii) Susan Newport discloses her assets and liabilities as follows:

Assets

(a)

Matrimonial home (jointly owned):

$1,950,000

(b)

Two cars (approx):

$ 140,000

(c)

Superannuation (as at 30 June 2010):

$ 353,355

(d)

Investment property (jointly owned):

$ 565,000

Liabilities

(a)

Mortgage:

$ 382,000

(b)

Car loan:

$ 99,000

(c)

Mortgage on investment property (approx):

$ 382,000

(It is difficult to know whether there are, in fact, two mortgage debts of $382,000, or whether one mortgage debt is secured over both properties. It may very well be the latter, since she discloses loan repayments of $36,000 per annum.)

Susan Newport's gross annual income in the 2010 financial year was $61,848, whilst her husband's was $84,951. Their annual expenditure, in 2012, is estimated to be $116,520. (She and her husband have two dependant children.)

(iii) The New South Wales Cancer Council - Whilst the Chief Executive Officer, Andrew Graham Penman, swore an affidavit, which dealt with the services and support the Council provides and the funding that it provided in 2010, he did not divulge the assets and liabilities, or the annual income, of the Council.

He did state that the Council is not funded by the government, but by the generosity of the community, its principal sources of funding being bequests, donations and memorial gifts.

(iv) The National Heart Foundation of Australia - Whilst the Chief Executive Officer, Tony Thirwell, swore an affidavit, which dealt with the services and support the Foundation provides, and its principal activities, he did not divulge the assets and liabilities, or the annual income, of the Foundation. He did state that the Foundation relies upon the generosity of the community, its principal sources of funding being bequests and donations.

(v) Mrs Lesley Williams and her husband are both retired. She is currently receiving a disability support pension. Her husband receives an aged pension. She and her husband own their own home at Greenwell Point. She and her husband have no savings. Following the death of her son, in April 2011, she has been looking after her 14-year-old grandson.

(vi) Otto Kreitlein and his wife own their home in Germany. They also have savings of approximately 30,000. He receives a monthly pension of 1122. His wife receives a monthly pension of 123.

(vii) Gabor Kokenyesy lives in an apartment in a nursing home in Hungary. He pays the costs of the apartment and full board of AU$645 per month (approx). He is required to donate money to medical research for Parkinsons Disease and spends money on medication. He has no savings. He has no unsettled debts.

(viii) Peter Kokenyesy lives in an apartment owned by his son in a town known as Kaposvar in Hungary. He pays the costs and maintenance costs of the apartment. He has a weekend house at Lake Balaton, a resort town in Hungary. The value of the house is approximately AU $2,600. He has savings (the result of the sale of an apartment) of about AU $13,000, which is deposited in a bank. He has no unsettled debts.

(ix) Catherine Simon has not sworn an affidavit disclosing her financial resources (including earning capacity) and financial needs, both present and future.

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

The Plaintiff is not co-habiting with any other person. She lives alone. She has never been married and has no children.

(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

The Plaintiff has had a long history of mental illness. She has had six admissions with schizophrenia since 1997. In April 2010, she was admitted to the Mental Health Unit of the St George Hospital. She stated that she was anxious to return home to look after her elderly father who was unwell.

She was scheduled by a community psychiatrist in October 2010, due to delusions about her financial situation. She believed the deceased's estate had a value of $55 million. She wants nothing to do with mental health services, believing that there is nothing wrong with her.

She is socially isolated. She is, apparently, unable to weigh up professional advice that she is given. She does not believe that she needs assistance to manage her financial affairs. She has poor insight and judgment.

Experts believe that she may be vulnerable to financial exploitation.

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

The Plaintiff was born in January 1959 and is presently aged 52 years. It was agreed that she had a life expectancy of 33.3 years according to the Australian Life Tables 2006-2008 issued by the Australian Bureau of Statistics.

(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

"Contributions" are not defined in the Act. However, as stated in the sub-section, what may be considered includes financial and non-financial contributions, including to the welfare of the deceased. There is no suggestion of any contributions made by the Plaintiff.

(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

There is no evidence of the deceased having made any specific provision, for the Plaintiff, during his lifetime.

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

While this sub-section permits the court to accept evidence of the reasons for the provision, or lack of provision, it does not compel the court to attribute any particular weight to that evidence, or to accept the deceased's statement as establishing the truth of what is asserted.

In this case, the deceased signed a Statutory Declaration on 17 January 2010. Relevantly, after identifying the provision made for the Plaintiff in his Will, the deceased stated:

"...

3. I have made that provision with a view to ensuring that Erika has a home in which to live comfortably and a fund to have resource to. In making such provision, I have attempted to provide her with security in relation to her long-term accommodation and financial needs. In that regard:

(a) Erika was diagnosed many years ago as suffering from schizophrenia. She has needed to take medication to control this condition and from time to time has been under the care of the Mental Health Care Unit at Hurstville pursuant to court orders requiring her to take medication for her schizophrenia. When such orders are made, they last for 6 months and enable medication to be forcibly administered to Erika if she does not take it voluntarily.

(b) Erika has never married. She lives on her own. She does not work and has for many years received a disability support pension.

(c) In my observation over many years, Erika can be obsessive and compulsive when dealing with money, over-generous in giving her money to others and can be taken advantage of because of her generosity. She also finds it difficult to save and retain money.

(d) Erika rented the Penshurst Property for several years and appeared to be very happy living there. In those circumstances, I purchased that property as a home for her.

(e) I am aware that the provision I have made for Erika could result in a reduction of the amount she receives by way of disability support pension, but believe that a fund to have recourse to would be of assistance to her."

The intention of the deceased, as disclosed, is to ensure that the Plaintiff has a home in which to live comfortably and a fund to which she may have recourse.

(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

There is some evidence that the deceased provided some occasional financial support for the Plaintiff before his death.

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

Apart from the Commonwealth government's responsibility to continue to provide the Plaintiff with a disability support pension, there is no other person with a liability to support the Plaintiff.

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

There was not very much evidence on this topic other than in respect of matters already dealt with. There is no suggestion of any conduct that would disentitle the Plaintiff to provision out of the deceased's estate.

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

Catherine Simon is described in the deceased's Will as a "dear friend". She was a family friend of the deceased and his wife from about 1961. They attended her wedding in 1963. From the late 1960s until the mid-1980s, they kept in touch by telephone and usually met twice per year. Following the birth of her son in 1985, she had more contact with the deceased and his wife. They attended the christening of her son, all his birthdays and other celebrations. Ms Simon saw little of the deceased during 2007, as her husband was very ill; however, she spoke to the deceased regularly on the telephone. From about March 2008, she visited the deceased several times per week and drove him to medical appointments and helped him with his shopping and did his banking and paid his bills.

Peter Kensey is the nephew of the deceased. Until the mid-1990s, his main contact with the deceased was at family gatherings, about three or four times per year. Upon the death of his father and mother in 1995 and 1996, respectively, he began to see more of the deceased and his wife. They became closer. Upon the death of the deceased's wife, Mr Kensey visited the deceased's home on a weekly basis and spoke to him by telephone between visits. He visited the deceased two or three times a week while he was in hospital, until his death.

Susan Dawn Newport is the niece of the deceased. She had a close relationship with the deceased and his wife. She spoke to them on the telephone on a weekly basis and visited them every couple of weeks. After the deceased's wife died, she would speak to the deceased on the telephone twice per week and visited him once per week. She was with the deceased when he died.

The deceased and his wife made a number of donations to The New South Wales Cancer Council between 1998 and 2009, totalling $1,830. There is no evidence of any other connection with the deceased.

There is no evidence of any relationship between the deceased and the National Heart Foundation of Australia (NSW Division).

Lesley Williams is the former secretary of the deceased. She worked for him from 1972 until 1987 when the deceased retired and sold his business. She also managed his business when the deceased and his wife went overseas until the time the deceased retired. She and her husband became good friends of the deceased and his wife, and went out together at least every second month. After the deceased retired, she remained in contact with the deceased and his wife, speaking with one or both on the telephone and meeting with them from time to time at a mutually convenient location. When the deceased's wife became ill, Mrs Williams and her husband came to Sydney on several occasions to visit her and they flew from Queensland to Sydney to attend her funeral. When the deceased became ill, she visited him on a number of occasions and spoke to him on the telephone on a weekly basis.

Otto Kreitlein is a cousin of the deceased's late wife. He was very close to the deceased's wife throughout their lives. He says that they were like sister and brother and that they shared many childhood events. He also shared a close relationship with the deceased for a period of about 60 years up until the deceased died. They would visit each other's country and stay in each other's homes. They would take turns in telephoning each other once a month. They would contact each other on birthdays. Since the death of the deceased's wife, he and the deceased would speak more frequently.

Gabor Kokenyesy is the brother of the deceased. He lives in Hungary. He and the deceased kept in contact by way of letters and telephone calls and they celebrated in the births of children and successes in their private lives. The deceased invited him and his wife to visit him in Australia in 1992. They came and stayed for four weeks with the deceased, his wife and their brother George. The deceased visited Hungary on three occasions since he moved to Australia. He states that their fraternal relations were good and intensive given their geographical locations.

Peter Kokenyesy is the brother of the deceased. He, too, lives in Hungary. He and the deceased kept in contact by way of letters and telephone calls and they celebrated in the births of children and successes in their private lives. The deceased visited Hungary on three occasions since he moved to Australia. He states that their fraternal relations were good and intensive given their geographical locations.

(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

I note that charities receive pecuniary legacies totalling $200,000. In regard to these gifts, I remember the statement of Gleeson CJ in Vigolo v Bostin at [13]:

"[13] Similarly, when courts came to address the discretionary question of making fit provision, they had to consider the interests of those upon whom the burden of an order might fall. In making decisions, courts have had regard to competing claims upon a testator (or, later, a person who died intestate). It would now be regarded as self-evident that a court would be readier to disturb a testamentary provision in favour of a beneficiary, such as a charity, with whom a testator had no connection than a provision in favour of dependent relatives. Why is this so? The answer, again, lies in concepts of moral obligation."

Determination

Being an "eligible person" is a necessary precondition to the court being empowered to make an order for the maintenance, education or advancement in life of the eligible person. There was no dispute, in this case, that the Plaintiff is an eligible person under s 57(1)(c) of the Act.

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

In determining the answer at the first stage of the two-stage process, I must consider the provision made for the Plaintiff, as well as the totality of her relationship with the deceased, the age and capacities of the other beneficiaries, the claim of each on the bounty of the deceased, and the size of the estate.

In my view, the person with the most significant claim upon the bounty of the deceased is the Plaintiff. None of the other beneficiaries is an eligible person or closer in blood relationship to the deceased. In addition, none appears to have any medical condition that affects his, or her, capacity to work (although I accept that some have retired from the work force). In the case of the charities, neither has a moral claim upon the bounty of the deceased.

In my view, the provision made for the Plaintiff in the Will of the deceased is inadequate. Considering the costs and expenses of providing what are undisputed "needs", now and in the future, and taking into account exigencies of life, it cannot be said that an amount in the order of $306,000 is adequate and proper in all the circumstances. (I have based this amount on the legacy of $150,000 provided to her in the Will and the estimated value of one-third of residue (said to be about $156,000).)

The fact that the Plaintiff might be able to survive on the income that is provided from this capital sum, when it is added to the income from her disability pension, as well as being able to access the capital if required, is of little significance when one considers the duty that was owed by the deceased to the Plaintiff. She is the only living child of the deceased and a person, clearly, who now, and in the future, is incapable of providing for herself, either by way of earning income or obtaining capital.

I then turn to the second stage and consider whether an order should be made, and if so, the nature of the order to be made. There is no doubt, in my view, that an order should be made in favour of the Plaintiff. The estate is of sufficient size to enable an additional capital sum to be provided which will not only provide an income but also capital if it is required.

The more difficult question is the nature and size of the order for additional provision that ought to be made. The Defendants did not suggest that the sum ought to be provided in a discretionary trust, with the trustee (the tutor) having discretion to advance capital and income. Presumably, this submission was not made because of the relative ages of the Plaintiff and some of the other beneficiaries.

I am of the view that the Plaintiff, in lieu of the provision made for her in Clause 3.1(a) and Clause 4.2 of the Will of the deceased, should receive a lump sum of $500,000. After using $45,000, which is the sum required to satisfy her immediate financial needs, an amount of $455,000 will remain. That sum would provide an income of about $24,000 per annum gross, which, together with a part disability pension, if paid, should be sufficient to meet her income needs. If not paid, or where otherwise necessary, resort may be had to capital. In such a case, capital is unlikely to be reduced significantly to supplement the income.

The lump sum should be paid within 28 days, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment.

If the calculations of the counsel for the Defendants are accurate (based upon the Plaintiff receiving an additional amount of $200,000), the Plaintiff will not receive any part of her disability pension for about five years. Accordingly, during this period, there will be a reduction of the capital sum, since it is unlikely that sufficient income will be generated (calculated at the rate of 5.31 per cent per annum) to meet her annual needs.

Again, if the calculations of the Defendants' counsel are accurate, some capital will be able to be spent, as well, on what might be described as the luxuries of life. That will be for the financial manager of the Plaintiff to determine. No doubt, the words of the deceased referred to in the Statutory Declaration that I have quoted above, will be remembered.

Having specified the amount and the nature of the provision to be made for the Plaintiff, as well as the manner in which the provision is to be provided, it is next necessary to consider the part, or parts, of the estate that should bear the burden of the provision.

I have, in exercising my discretion on this aspect, borne in mind the relative claims of each of the beneficiaries, the entitlement that each receives under the Will of the deceased, and where disclosed his, her or its, financial circumstances. In addition, whilst there is no doubt that each of the charities is a worthy one, its contact with the deceased, in the case of one was non-existent, and in the case of the other was minimal. I have not required the pecuniary legatees who receive $25,000 or less to bear any share of the burden of the provision in light of the modest legacy provided to each.

I have endeavoured to adjust the interests of the beneficiaries to be just and equitable to all persons affected by the order: s 66(2) of the Act.

Using the amounts referred to earlier by way of a guide, the estate should be distributed as follows:

(a) a legacy of $500,000 for the Plaintiff;

(b) a legacy of $100,000 for the deceased's nephew, Peter Kensey;

(d) a legacy of $50,000 for The New South Wales Cancer Council;

(e) a legacy of $50,000 for The National Heart Foundation of Australia (NSW Division);

(f) a legacy of $25,000 for Lesley Williams;

(g) a legacy of $45,000 for Catherine Simon;

(h) a legacy of $85,000 to Otto Kreitlein;

(i) a legacy of EU 10,000 (about AU$14,000) to the deceased's brother, Gabor Kokenyesy;

(j) a legacy of EU 10 ,000 (AUD$14,000) to the deceased's brother, Peter Kokenyesy; and

(k) the residue of the estate, after payment of debts, funeral and testamentary expenses, divid ed equally between Peter Kensey and Susan Newport.

(I shall leave it to the Defendants to adjust the amounts already received by Peter Kensey and Susan Newport. I shall also leave it to the Defendants to have the matter re-listed if necessary on this aspect.)

The total amount of the pecuniary legacies will amount to $983,000. Taken from the estimated net value of the estate ($1,254,517), the residue will be $271,517, meaning that each of Peter Kensey and Susan Newport will receive an additional amount of $135,758. (I bear in mind the distributions that have already been made to each.)

Having found that the Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, I:

(a) Order that the Plaintiff receive, in addition to the devise of the home unit at Penshurst, but in lieu of the other provision by way of legacy and share of residue made for her in the Will of the deceased, a lump sum of $500,000.

(b) Order that the lump sum should be paid within 28 days, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment.

(c) Order that the Plaintiff's costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, be paid out of the estate of the deceased.

(d) Order that the Court Book, the exhibits and subpoenaed material may be returned forthwith; any exhibits returned must 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.

(e) Grant leave to the Defendants to re-list the matter solely on the aspect of obtaining orders to adjust the interests affected by the making of the family provision order in favour of the Plaintiff.

**********

Decision last updated: 19 December 2011

Medium Neutral Citation:	Kensey (bht NSW Trustee & Guardian) v Thomas [2011] NSWSC 1434
Hearing dates:	23 & 24 November 2011
Decision date:	16 December 2011
Jurisdiction:	Equity Division
Before:	Hallen AsJ
Decision:	1. Having found that the Plaintiff is an eligible person and that the provision made for her in the Will of the deceased is inadequate, order that the Plaintiff receive, in addition to the devise of the home unit at Penshurst, but in lieu of the other provision by way of legacy and share of residue made for her in the Will of the deceased, a lump sum of $500,000. 2. Order that the lump sum should be paid within 28 days, failing which, interest on any amount not so paid, should be paid at the rate prescribed for the purposes of s 84A(3) of the Probate and Administration Act 1898, as the rate of interest on legacies, calculated from that date until the date of payment. 3. Order that the Plaintiff's costs, calculated on the ordinary basis, and the Defendants' costs, calculated on the indemnity basis, be paid out of the estate of the deceased. 4. Order that the Court Book, the exhibits and subpoenaed material may be returned forthwith; any exhibits returned must 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. 5. Grant leave to the Defendants to re-list the matter solely on the aspect of obtaining orders to adjust the interests affected by the making of the family provision order in favour of the Plaintiff.
Catchwords:	Proceedings commenced by the NSW Trustee & Guardian, the tutor of the Plaintiff, a disabled person, in which a claim for a family provision order, under the Succession Act 2006 was sought - Only issue is whether adequate provision for proper maintenance education or advancement in life made in the Will of the deceased for the Plaintiff - Competing claims of beneficiaries none of whom or which is an eligible person
Legislation Cited:	Family Provision Act 1982 Succession Act 2006 Probate and Administration Act 1898 Succession Amendment (Family Provision) Act 2008
Cases Cited:	Bondelmonte v Blanckensee [1989] WAR 305 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 Chan v Tsui [2005] NSWSC 82 Collins v McGain [2003] NSWCA 190 Cooper v Dungan (1976) 50 ALJR 539 Devereaux-Warnes v Hall [No 3] [2007] WASCA 235; (2007) 35 WAR 127 Diver v Neal [2009] NSWCA 54 Foley v Ellis [2008] NSWCA 288 Goodman v Windeyer (1980) 144 CLR 490 Gorton v Parks (1989) 17 NSWLR 1 Hawkins v Prestage (1989) 1 WAR 37 Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 Kay v Archbold [2008] NSWSC 254 Kleinig v Neal (No 2) [1981] 2 NSWLR 532 McCosker v McCosker (1957) 97 CLR 566 Mayfield v Lloyd-Williams [2004] NSWSC 419 Neil v Jacovou [2011] NSWSC 87 Palaganio v Mankarios [2011] NSWSC 61 Permanent Trustee Company v Fraser (1995) 36 NSWLR 24 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 Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 Taylor v Farrugia [2009] NSWSC 801 Tchadovitch v Tchadovitch [2010] NSWCA 316 Thom v The Public Trustee (NSWSC, 2 April, 1992, unreported) Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 Walker v Walker (NSWSC, 17 May 1996, unreported)
Texts Cited:	Australian Life Tables 2006-2008 issued by the Australian Bureau of Statistics
Category:	Principal judgment
Parties:	Erika Helene Kensey (by her Tutor NSW Trustee & Guardian) (Plaintiff) William Beach Thomas (first Defendant) John William Hanna (second Defendant)
Representation:	Counsel: Mr R Wilson (Plaintiff) Mr D Jenkins (Defendants) Solicitors: Zucker Legal (Plaintiff) Thomas & Company (Defendants)
File Number(s):	2011/18471

Assets
(a)	Matrimonial home (owned by wife):	$1,750,000
(b)	Investment unit (jointly owned):	$ 270,000
(c)	Superannuation:	$ 11,000
(d)	Car:	$ 25,000
(e)	Car (wife):	$ 10,000
(f)	Personal effects:	$ 100,000

Liabilities
(a)	Mortgage - Personal:	$ 900,000
(b)	Mortgage - Investment unit:	$ 230,000
(c)	Mortgage - Business:	$ 200,000
(d)	Business overdraft:	$ 50,000
(e)	Car lease:	$ 20,000
(f)	Tax liability (est):	$ 200,000
(g)	Credit cards:	$ 50,000

Assets
(a)	Matrimonial home (jointly owned):	$1,950,000
(b)	Two cars (approx):	$ 140,000
(c)	Superannuation (as at 30 June 2010):	$ 353,355
(d)	Investment property (jointly owned):	$ 565,000

Liabilities
(a)	Mortgage:	$ 382,000
(b)	Car loan:	$ 99,000
(c)	Mortgage on investment property (approx):	$ 382,000