KOCINI v KAMBANAROS
[2022] SASC 25
•18 March 2022
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KOCINI v KAMBANAROS
[2022] SASC 25
Judgment of Judge Dart a Master of the Supreme Court
SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - GENERALLY - CIRCUMSTANCES TO BE CONSIDERED
Applicant a daughter of the deceased - deceased left two wills - one will dealt with assets in Greece - the other will dealt with Australian assets - applicant left an equal share with her three siblings of the Greek assets - in Australia all of the assets went to a brother of the applicant - was the applicant left without adequate provision - applicant comfortably off financially - the jurisdictional question not satisfied by the applicant.
Held: Application dismissed.
Inheritance (Family Provision) Act 1972 (SA) s 7, referred to.
Banks v Goodfellow (1870) 5 LR QB 549; Bosch v Perpetual Trustee Co Ltd [1938] AC 463; Bowyer v Wood (2007) 99 SASR 190; C Convenience Stores Pty Ltd v Wayville Plaza Retirement Pty Ltd & Ors [2012] SASC 14; Coates v National Trustees Executors and Agency Company Limited and Another (1956) 95 CLR 494; Collicoat v McMillan (1999] 3 VR 803; Delaney v Jones [2008] NSWSC 229; Hynard v Gavros [2014] SASC 42; Re Allen (deceased) [1922] NZLR 218; Re Greene’s Estate (1930) 25 Tas. L.R. 15; Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin and Others (2008) 221 CLR 191; White v Barron and Another (1979) 144 CLR 431; Worladge and Another v Doddridge and Others (1957) 97 CLR 1, considered.
KOCINI v KAMBANAROS
This matter involves a claim made pursuant to the Inheritance (Family Provision) Act 1972 (“the Act”) in respect of the deceased estate of Ms Nafsika Kambanaros. The claim is dismissed.
Background
The applicant is a 70 year-old married woman. She is one of five children of the deceased. One of her siblings died as a young child. The deceased died on 19 April 2017. She, and all of her children, were born in Greece. The family emigrated to Australia when the applicant and her siblings were young children. Their father died in 1981.
The deceased left two wills. One will dealt with assets in Greece and the other with assets in South Australia. The deceased was the owner of quite a few parcels of land in Greece. In the Greek will she has tried to treat each of her four surviving children equally. She did this by making both individual gifts of land and joint gifts of land to her children.
So far as joint gifts are concerned, the applicant received an equal share with her three siblings in the following:
1. A stone house at Pyrgos.
2. A block of land (four acres) at Niaria, Pyrgos.
3. A block of land (five acres) at Siafia-Koufopetra Elaicohri.
The respondent gave evidence about the value of those three blocks of land. The applicant did not call any evidence in opposition to that valuation. I accept the evidence of the respondent. Jointly the three parcels of land were said to be worth approximately €486,332. A quarter share of that is €121,583. At the time of trial, the quarter share was said to have a value of approximately AUD$193,000.
Separately, the deceased gave two parcels of land to the applicant outright. The first was at Gontinia and is about 2,045m2 in size. The second is at Kato Aloni and about 1,276m2. It appears that nearly all of the land mentioned above is planted to olives. The land is in the region of Messenia, in the south-west of Greece. It is a renowned olive-growing area.
The value of the two pieces of land gifted outright to the applicant is hotly in dispute. Two valuers gave evidence on video-link from Greece about the value of the land. Their valuations differ significantly. For reasons that will be discussed below, I do not regard it as necessary for the resolution of this matter to determine the precise value of the two portions of land.
The complaint of the applicant is that she was left nothing in the Australian will. She regards this as unfair. She submitted to the Court that she should receive a 25% interest in the Australian assets. The principal asset is a house at Buller Street, Prospect, valued at about $630,000. The house at Prospect was left to her brother, the respondent.
The legal issue
The application is based on statute. The first such Act in South Australia was passed in 1918.[1] The provisions in the present Act are worded almost identically to the original Act. In Hynard v Gavros[2] I set out the relevant principles for determining a claim such as this. They are as follows:[3]
[1] Testator’s Family Maintenance Act No 1327 of 1918.
[2] [2014] SASC 42.
[3] Hynard v Gavros [2014] SASC 42 at [29]-[34].
The plaintiff’s application is made pursuant to s 7 of the Act. That section provides as follows:
7—Spouse and persons entitled may obtain order for maintenance etc out of estate of deceased person
(1)Where—
(a)a person has died domiciled in the State or owning real or personal property in the State; and
(b)by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
(2)Notice of an application under subsection (1) of this section shall be served by the applicant on the administrator of the estate of the deceased person, and on such other persons as the Court may direct.
(3)The Court may refuse to make an order in favour of any person on the ground that his character or conduct is such as, in the opinion of the Court, to disentitle him to the benefit of this Act, or for any other reason that the Court thinks sufficient.
(4)The Court may, in making any order under this Act, impose such conditions, restrictions and limitations as it thinks fit.
(5)If, in respect of an application under subsection (1) of this section, it appears to the Court that the matter would be more appropriately determined by proceedings outside the State, the Court may (without limiting the powers conferred on it by the preceding provisions of this section) refuse to make an order under this section or adjourn the hearing of the application for such period as the Court thinks fit.
(6)In making the order the Court may, if it thinks fit, order that the provision shall consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments.
There is now more than 100 years of authority in relation to family provisions matters. The principles to be applied in determining a claim are well‑established and beyond any reasonable dispute. They may be stated as follows:
1.The statute requires the Court to carry out a two-staged process. The first stage requires a determination of whether the applicant has been left without adequate provision. If that is decided in the affirmative, the Court is then required to determine what would be an appropriate provision.[4]
[4] Singer v Berghouse (1994) 181 CLR 201 at 208.
2.The legislation is remedial in character and is to be construed to give the most complete remedy which the phraseology will permit.[5]
[5] Worladge and Another v Doddridge and Others (1957) 97 CLR 1 at 9.
3.The words “adequate” and “proper” are relative. The word “proper” connotes something different from the word “adequate”. It connotes an ethical position as to what allowance should be made. Adequate provision for proper maintenance is not limited to providing what is sufficient for basic subsistence.[6]
[6] Bowyer v Wood (2007) 99 SASR 190 at 201.
4.The time for considering whether the applicant has been left without adequate provision is the date of the death of the testator.[7]
[7] Coates v National Trustees Executors and Agency Company Limited and Another (1956) 95 CLR 494.
5.Consideration of moral claims and moral duty are useful as a guide to the meaning of the statute and they connect the general value-laden language of the statute to community standards which give it practical meaning.[8]
[8] Vigolo v Bostin and Others (2008) 221 CLR 191 at 204.
6.The provision which the Court may properly make is that which a just and wise testator would have thought it his or her moral duty to make had he or she been fully aware of all the relevant circumstances.[9]
At first blush it might be thought that s 7(1) of the Act is setting out an economic test by which it is determined whether an applicant has adequate provision for her proper maintenance, education or advancement in life. Early on there was some support for treating the provision as simply being an economic provision concerned with whether sufficient provision for the reasonable maintenance and support of an applicant had been provided.[10]
However, ultimately it is the moral or ethical approach that has been accepted as the correct approach. That approach is made necessary by the use of the word “proper” in the statute. In Bosch v Perpetual Trustee Co Ltd[11] the Privy Council made clear that an economic approach to the interpretation of the section was not the correct approach. It found that a judgment as to the maintenance which is “proper” for a particular applicant in the circumstances of a case is necessarily a judgment as to what maintenance the applicant ought to have in the circumstances and not what he or she needs.[12]
The moral approach was approved by the High Court in Worladge and Another v Doddridge and Others[13] where Kitto J said:
What is proper is to be tested by reference to the provision which in all the circumstances of a case satisfies but does not exceed the requirements of moral justice in regard to those particular purposes. [14]
The purposes, of course, were provision for the proper maintenance, education and advancement in life.
What the Court has to determine is what the moral duty of the testator was at the time of her death. In determining whether or not an applicant has been left without proper provision it is necessary to have regard, to some extent, to what a proper provision would be. As Mason J said in White v Barron and Another[15] it is slightly artificial to say that the first test has to be determined before the second test, because the two tasks which face a judge are similar.
[9] Re Allen (deceased) [1922] NZLR 218 at 220.
[10] Re Greene’s Estate (1930) 25 Tas. L.R. 15.
[11] [1938] AC 463.
[12] Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478.
[13] (1957) 97 CLR 1.
[14] Worladge and Another v Doddridge and Others (1957) 97 CLR 1 at 18.
[15] (1979) 144 CLR 431 at 443.
There is, of course, a tension between the provisions of the Act and the idea of testamentary freedom. The classic statement, in relation to testamentary freedom, is that of Cockburn CJ in Banks v Goodfellow where his Honour said: [16]
Yet it is clear that, though the law leaves to the owner of property absolute freedom in this ultimate disposal of that of which he is enabled to dispose, a moral responsibility of no ordinary importance attaches to the exercise of the right thus given. … The English law leaves everything to the unfettered discretion of the testator, on the assumption that, though in some instances, caprice or passion, or the power of new ties, or artful contrivance, or sinister influence, may lead to the neglect of claims that ought to be attended to, yet, the instincts, affections, and common sentiments of mankind may be safely trusted to secure, on the whole, a better disposition of the property of the dead, and one more accurately adjusted to the requirements of each particular case, than could be obtained through a distribution prescribed by the stereotyped and inflexible rules of the general law.[17]
[16] (1870) 5 LR QB 549 at 563.
[17] (1870) 5 LR QB 549, 563-565.
It should be remembered that, at the time those words were expressed by Cockburn CJ, married women were not lawfully entitled to own property. Upon marriage their property vested in their husband. The idea of unrestricted testamentary freedom was, in any event, a 19th Century construct. Over a period of at least 700 years there existed the common law of dower. That provided a widow with a priority right over her husband’s property upon his death. The right was a life interest in one third of the husband’s property. That right, generally speaking, prevailed over any purported testamentary disposition by a husband. During the 19th Century the right was abolished by statute.[18]
[18] In South Australia the relevant legislation was the Real Property Act 1852.
There is a definition of “dower” in Osborn’s Concise Law Dictionary,[19] which is as follows:
That portion of lands or tenements which the wife hath for term of her life of the lands or tenements of her husband after his decease, for the sustenance of herself and the nurture and education of her children (Coke). Where a man was seised of land for an estate of inheritance (otherwise than as joint tenant), and died leaving a widow, she was entitled to hold the third part of such land and tenements as were her husband’s at any time during the coverture, as tenant in dower for the term of her life.
[19] 7th Edition Sweet & Maxwell 1983.
Family provision-style legislation started in New Zealand in 1900. It was introduced to protect the rights of widows and children. The legislation does not, in reality, have a significant effect on testamentary freedom in this State. In a given year there are in excess of 7,000 grants of probate made by the Court. On average there are about 120 family provision claims instituted in the Court each year. It can be seen that less than 2% of the wills admitted to probate are subject to any challenge. Looked at it the other way, more than 98% of deceased estates are unaffected by the operation of the Act.
A summary of the above might suggest that, after a 50 year or so experiment with unrestricted testamentary freedom, law makers decided that that was not providing the community with desirable outcomes. The family provision legislation permits the Court to make orders ensuring that widows and children are appropriately provided for out of deceased estates. The legislation seeks to ensure a similar outcome to that which was provided by the common law of dower. It does so in a way that allows the Court to vary the outcome to suit particular circumstances, rather than by a fixed formula. Ultimately, it is primarily to protect women and children by ensuring that they are adequately provided for. The majority of claims in this Court are by widows and/or children.
It is also to be remembered that the family provision legislation is not intended to deal with notions of fairness, nor is there a requirement to treat the children of a testator equally. The respondent referred the Court to the decision of Delaney v Jones where Windeyer J said: [20]
The jurisdiction which this Court exercises in determining what order to make is not a jurisdiction whereby the court substitutes its view for what is fair for the view of the testator as to how he wishes to dispose of his assets. If it were done on the basis of fairness, then one might think that each child of the deceased should get one third of his estate, but that is not the basis on which the court operates in a society where freedom of testation is right which the community values. What the court can do in making orders for provision is to make whatever provision ought to be made, having regard to the relationship of the applicant with the deceased person, the extent of the applicant's assets, the extent of the deceased's assets, and bearing in mind the other legitimate claims upon the bounty of the deceased.
[20] [2008] NSWSC 229 at [24].
The contention of the applicant is that the Australian assets should be distributed equally.
The valuation of the Greek land
A lot of time and effort at trial went in to disputing the value of the two parcels of land gifted outright to the applicant. Each party retained a valuer in Greece. The respondent retained Mr Stefanos, who is a Civil Engineer. It seems that Civil Engineers, who are members of a Greek Technical Chamber of Commerce, commonly undertake valuations. The applicant’s valuer was Ms Dika Agapitidou. She is a partner at Athens Economics. That firm undertakes valuations as part of its ordinary business.
The land at Gontinia is located about 140 metres from the sea. It is land-locked in the sense that it has no direct access to a public road. Access is via a right-of-way. It is planted with 57 olive trees. There was some disputed evidence about the right-of-way, but it seems to be accessible all year round by vehicle. A difficulty with the land is that, pursuant to local planning law, it is not possible to construct a residential building on the land. The respondent’s valuer ascribed a value of €124,583 to that land. That was a composite valuation based on a land valuation of about €82,000, with the balance being a value of the olive trees. It is apparent that in Greece one method of valuation relies on giving a value to productive olive trees. The applicant’s valuer acknowledged that is done, but suggested that valuing the land and then giving a separate valuation for the olive trees amounts to double-counting.
The applicant’s valuer valued the land at €20,000. That was based on a value of €10 per square metre. It also involves some rounding-down calculations. The result appears slightly inconsistent with some parts of the valuation report which suggests that land in the area is worth between €15 to €60 per square metre. The applicant’s valuer accepted that, if it was possible to build a residential dwelling on the land, its value would be much greater. The land is bordered by five neighbouring properties. Apparently, if any one of those neighbours purchased the land, it would be possible to build a residential property.
The land at Kato Aloni also has olive trees. It has frontage to a road and there is no dispute that it is possible to build a residential building on the property. The respondent’s valuer assesses the value of the property at approximately €66,500. The applicant’s valuer assesses it at approximately €51,000.
The respondent’s valuer therefore has the two parcels of land valued at €191,000 and the applicant’s valuer at €86,500.
The applicant’s valuation in relation to both properties involves a considerable amount of rounding-down. Every rounding exercise was down and, therefore, reducing the value. It is not clear why that is the correct approach.
The Court of course does not need to accept any of the valuation evidence.[21] It is a difficult matter because the Court does not have a feel for the value of property in Greece.
[21] C Convenience Stores Pty Ltd v Wayville Plaza Retirement Pty Ltd & Ors [2012] SASC 14 where White J came to his own view about value, after he heard evidence from three valuers.
Adopting a conservative approach, I am satisfied that the two parcels of land gifted to the applicant by her mother would be valued at least €100,000. The total value of the land in Greece gifted to the applicant in the Greek will is therefore worth about €222,000. At the time of the trial, that equated to approximately $350,000. For the purpose of resolving the jurisdictional question, it does not much matter if that is the value of the land or if it is worth much more.
The financial position of the applicant
Before a discretion arises allowing the Court to vary the terms of the will, an applicant must satisfy the jurisdictional question set out in the Act. That is, she must establish, to the Court’s satisfaction, that she has been left without adequate provision for her proper maintenance, education and advancement in life. To determine that question, it is necessary to undertake a consideration of the applicant’s financial position.
In matters such as this much time and effort goes in to comparing the financial position of the applicant with other family members who have received a bequest under a will. That is more directly related to the second question, what is an appropriate provision, than the jurisdictional question itself.
It appears that the applicant and her husband are reasonably comfortable in a financial sense. The applicant’s position is as follows:
1.Together with her husband, she is the registered proprietor of a property at Enfield, which at the time of trial had a Valuer-General’s valuation of $465,000. It is unencumbered and is her family home.
2.She is the registered proprietor of property at 26 Muriel Drive, Pooraka, which is an unencumbered investment property. The Valuer-General’s valuation was $300,000.
3.
She is the registered proprietor of property at 109 Pratt
Avenue, Pooraka, which is an unencumbered investment property. The Valuer-General’s valuation was $305,000.
4.She is the joint registered proprietor with her son of a property at 27 Park Terrace, Enfield, which has a Valuer-General’s valuation of $400,000 and, at the time of trial, a mortgage of about $7000.
5.She is the registered proprietor of land at 27A Park Terrace, Enfield, which is unencumbered and has a Valuer-General’s valuation of $380,000.
In relation to the two properties at Park Terrace, there is a dispute about ownership. The properties were acquired as vacant land and the land was subdivided. The applicant financed the construction of a dwelling on each allotment. She asserts that she holds both properties on trust for her son. No deed of trust was produced. Her son was not called to give evidence. It remains an assertion.
The issue is to some extent a double-edged sword in any event. The fact that the applicant was in a financial position to fund the construction of two dwellings, even if for her son, is indicative of her strong financial position. It should have been a simple matter to establish the circumstances of the trust. At the very least her son could have given evidence about it. I am not prepared to find that the properties are held on trust.
In summary, the applicant is the registered proprietor, either jointly or solely, of land valued by the Valuer-General at $1,850,000. I expect the market value of the land would exceed $2,200,000. To this should be added the land in Greece, valued at $350,000 gifted in the will.
Separately, the applicant and her husband have a number of bank accounts. Notably, as at the time of trial, there was a bank account in the name of her husband with a credit balance of about $135,000. They also own a taxi cab licence valued at approximately $50,000. The taxi cab licence produces a return of approximately $200 per week. The joint income of the applicant and her husband in the financial year ending 2020 was approximately $55,000.
Consideration
The test provided for in the legislation is not simply economic. Nonetheless, it does involve a consideration of the financial position of the applicant and, to some extent, other family members. The test has become, what would a wise and just testator think was her obligation in respect of the applicant, having regard to all the circumstances of the case. That includes the testator’s understanding of the financial position of the applicant and of the family history. Given that testamentary freedom is an important consideration, it is only appropriate to intervene where there has been a failure in relation to the moral duty and then, only to the extent necessary to rectify that failure.
I note in that regard the comments of Ormiston J in Collicoat v McMillan:[22]
Those who are capable of supporting themselves comfortably, and are likely to be able to do so for the rest of their lives, will find it difficult to show any breach of moral obligation to make adequate provision for proper maintenance and support.
[22] (1999] 3 VR 803 at [47].
I regard the quote as applicable to the facts of this matter. The applicant appears well-positioned to be able to support herself comfortably, and there is no reason to suspect that will not continue into the future.
In the Greek will she was treated equally with her siblings by her mother and received land valued at approximately $350,000. It is also worth noting that, when her father died in 1981, she received a one quarter interest in a property at Prospect which belonged to her father. In 2015 she sold that interest to the respondent and received $110,000. Those funds were applied toward the construction of the properties at Park Terrace Enfield. The fact that the applicant thinks it is not fair that she did not share equally in the Australian estate is not to the point.
I am not satisfied that there was any failure by the deceased to make adequate provision for the applicant. The claim is dismissed.
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