Kostopoulos v Dellis

Case [2023] SASC 78

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

KOSTOPOULOS v DELLIS & ANOR

[2023] SASC 78

Judgment of Auxiliary Judge Costello a Master of the Supreme Court  

SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - GENERALLY - PRINCIPLES OF EXERCISE OF DISCRETION

Application for provision - applicant and second respondent are children of the deceased - applicant received legacy of $20,000 with the residue being left to the second respondent - net value of estate approximately $400,000 - in her will the deceased recorded her disapproval of the applicant's former lifestyle as an escort worker - applicant 62 years old, impecunious and over her life a victim of physical, sexual and financial abuse - consideration of whether applicant's conduct disentitling - second respondent was the main carer for the deceased and her husband in their latter years - second respondent a 60 year old pensioner with limited means - in his capacity as executor, the second respondent breached an undertaking given under oath not to use monies set aside for the applicant, used estate monies for unauthorised purposes and intermingled trust and estate monies - exact value of the estate thereby rendered uncertain - consideration of the respective entitlements of the parties.

Held:

1. The applicant is to receive 40% of the estate.

2. The second respondent is to receive 60% of the estate.

Inheritance (Family Provision) Act 1972 (SA); Aged and Infirm Persons' Property Act 1940 (SA), referred to.
Illman v Sterrey & Ors [2023] SASC 50; Scott & Anor v Scott & Anor [2021] SASC 96; Bramwell v Bramwell & Ors [2022] SASC 12; Hughes v National Trustees, Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134, considered.

KOSTOPOULOS v DELLIS & ANOR
[2023] SASC 78

CIVIL

  1. This is an application pursuant to the Inheritance (Family Provision) Act 1972 (“the Act”). Mary Kostopoulos (“the applicant”) seeks provision to be made out of the estate of her mother, Efstathia Dellis (“the deceased”), for her maintenance and advancement in life.

  2. Vasilios Dellis (“the second respondent”), the applicant’s brother, is the executor of the will and a beneficiary in the estate. In his capacity as a beneficiary he opposes the application.

    Background

  3. The deceased left a will dated 28 September 2015 (“the will”). She died on 26 August 2021. Probate of the will was granted on 19 October 2021. By her will the deceased made a specific bequest of $20,000 to the applicant and left the residue to the second respondent.

  4. In Clause 8 of the will the deceased set out the reasons as to why she left only $20,000 to the applicant and the residue to the second respondent. Clause 8 reads:

    8.I wish it noted that I make the dispositions above noting the difficulties I have experienced in my relations with my daughter and her family for well over twenty years. In that time she and her family have been careless of any responsibility to me and my spouse and she has undertaken…

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Kostopoulos v Dellis [2023] SASC 78
Case
[2023] SASC 78
Decision Date

CaseChat Overview and Summary

The case of Kostopoulos v Dellis involves the applicant, a daughter contesting the provisions of her deceased mother's will. The deceased left a specific bequest of $20,000 to the applicant and the residue to the second respondent, her brother, who is also the executor of the will. The applicant's claim for further provision from the estate is opposed by the second respondent. The court is tasked with determining the true value of the estate, the disposition of specific monies held in a Westpac account, whether the applicant has been left without adequate provision, the relevance of the deceased's reasons outlined in Clause 8 of the will, and the appropriate level of provision for the applicant.

The legal issues the court had to resolve include determining the net value of the estate, the disposition of certain funds held in a Westpac account, whether the applicant was left without adequate provision for her maintenance, the impact of Clause 8 on the applicant's claim, and the appropriate amount to be awarded to the applicant. The court also had to consider the balance between the statutory scheme allowing the court to award further provision and the deceased's freedom of testation.

The court found that the applicant, despite her difficult past, had been left without adequate provision for her maintenance. It was noted that the applicant's circumstances, including her age, disability, lack of savings, and reliance on the pension, warranted a significant award from the estate. The court also recognised the second respondent's role as a source of love, care, and support to the deceased, meriting a substantial portion of the estate. The court decided to distribute the estate in a 40/60 split, awarding 40% to the applicant and 60% to the second respondent, while acknowledging the potential necessity of selling the properties to achieve this distribution. The court emphasised the importance of avoiding any tendency to reform the will and ensuring that the provision made is adequate and appropriate in all the circumstances.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Vasilios Dellis (“the second respondent”), the applicant’s brother, is the executor of the will and a beneficiary in the estate. In his capacity as a beneficiary he opposes the application.Background The deceased left a will dated 28 September 2015 (“the will”). She died on 26 August 2021. Probate of the will was granted on 19 October 2021. By her will the deceased made a specific bequest of $20,000 to the applicant and left the residue to the second respondent. In Clause 8 of the will the deceased set out the reasons as to why she left only $20,000 to the applicant and the residue to the second respondent. Clause 8 reads:8.I wish it noted that I make the dispositions above noting the difficulties I have experienced in my relations with my daughter and her family for well over twenty years. In that time she and her family have been careless of any responsibility to me and my spouse and she has undertaken and been engaged in a life and in activities which I will not detail in this document, but which are absolutely unacceptable and repugnant to us both, and I cannot in all of the circumstances make a larger bequest. My son and his family however, have never stinted in any way in giving to [me] and my spouse all the physical, personal and financial support they were able to give. The reference, by the deceased in this Clause, to the applicant’s life and activities is largely, if not exclusively, a reference to the applicant’s work as an escort and to her and her partner’s use of illicit drugs. I will have more to say about this issue later in these reasons. In his initial affidavit,[1] in his capacity as executor, the first respondent deposed to the Statement of Assets and Liabilities as disclosing a net estate of $426,713.45 which was generally comprised as follows:Assets Within South Australia[1] Exhibit R1. In a subsequent affidavit[2] the second respondent deposed to the fact that the monies in Westpac Account 291970, namely the sum of $33,052.36, did not form part of the estate and should be removed from the assets, such that the value of the estate was in fact $395,569.41. The basis, upon which these monies initially were said to form part of the estate and later were agreed to be excised from the estate, was the subject of both evidence and argument. After the completion of final submissions, the parties reached their agreed position with respect to these monies, in relation to which I was asked to make and made the following orders:[2] Exhibit R5.By consent, the Court:1. Declares that that the funds held by the deceased at her death in Westpac Account 291970 (“the Account”) being the sum of $33,052.36 were held by the respondent under a separate trust to the deceased estate and do not form part of the deceased estate. 2. Declares that the applicant and second respondent are entitled to the funds held in the Account in equal shares. 3. Releases the [first] respondent from the undertaking[3] provided by him on 22 February 2022 with such release limited to order 4 herein. [3] Exhibit R1 paragraph 8.4. Declares that the release from the undertaking provided in order 3 herein is limited to the divestment of the sum of $20,000. 5. Orders that the [first] respondent is to do all things necessary to instruct his solicitors to transfer the sum of $20,000 (“Payment Sum”) currently held in the trust account of Lynch Myer Lawyers to the trust account of Camatta Lempens Lawyers as the solicitors of the Applicant. 6. Orders that the transfer of the Payment sum referred to in order 4 herein be made within seven (7) days of the date of this order. 7. Declares that, from the Payment sum: a. the sum of $16,526.18 is paid to the Applicant in satisfaction of the applicant’s beneficial interest in the funds held in the Account at the date of death of the deceased; b. the balance of $3,473.82 is paid as a partial interim distribution of the legacy payable to Applicant pursuant to clause 6(b)(ii) of the deceased’s last will in time dated 28 September 2015. 8. Orders that there be no order as to the costs of orders 4 and 5 of the Amended Originating Process filed 20 April 2023 [FDN24].Size of the Estate

Evidence

Evidence Before The Court

The parties prepared a schedule which set out particular pieces of evidence, to which objection was taken, in various numbered paragraphs, in the sundry affidavits tendered in the trial, together with an Objection Code in accordance with UCR 154.2. Apart from certain specific pieces of evidence, the admissibility of which I ruled on in the course of the trial, I determined to receive the balance of the evidence, to which objection was taken, “de bene esse” and if ultimately admitted to give appropriate weight to that evidence in the context of all the other evidence in the trial.[4][4] See UCR 254.14.The evidence at trial In support of her claim the applicant filed two affidavits[5] of her own, together with an affidavit[6] sworn by a Ms Vander Sman, the centre co-ordinator at the Adelaide Day Centre for Homeless Persons Inc (“the Centre”).[5] Exhibits A2 and A3.[6] Exhibit A1.The Applicant In her first affidavit[7] the applicant said that she had been married and had two children, both of whom are now in their early to mid-thirties. [7] Exhibit A2. In about 2004 her marriage ended and she began living in a women’s shelter. At that time she commenced a relationship with a man who introduced her to drugs and encouraged her to work as an escort. This man and others were abusive to her, kept from her the money she earned and supplied her with drugs. This lifestyle continued until around 2015 when she says that she ceased using drugs and working as an escort. Thereafter, she moved back to her parents’ house and commenced to help each of them with various household duties until their deaths in 2018 and 2021 respectively. She stated that after moving back in with her parents her relationship with her mother improved. In terms of her needs, she is 62 years of age and in receipt of a Disability Support Pension of approximately $970 per fortnight. She has no savings or other assets and only a small amount of furniture and household effects. In her second affidavit sworn in December 2022,[8] she gave further details of her early life, work as an escort, her relationship with her parents after returning home in 2015, and her current commitments in terms of her lifestyle. She also responded to some of the allegations made by the second respondent in his various affidavits.[8] Exhibit A3. She said that as a very young person she was in receipt of unemployment benefits, some of which her parents took from her to assist them to pay off their mortgage. She said that her brother was in trouble with the law as a teenager. In contrast to her situation where she received no financial assistance from her parents, she said that, from the time of his marriage, her parents had given him various sums of money not only for general living but also to purchase a business and renovate a home. She said that after moving back in with her parents in 2015, the combination of her parents’ ages and health difficulties meant that she was regularly involved in caring for them, shopping and helping with paying bills etc.

Decision

Reasons for decision

Although his conduct in dealing with the estate fell well short of that which is to be expected of a responsible executor, he has clearly been a source of love, care and support to the deceased for many years. He too is deserving of an award representing a significant portion of the estate.Conclusion As I said earlier, it is not possible to determine the exact value of the estate. As such, it is appropriate to apportion the estate between the applicant and the second respondent by allocating to each a proportion of the estate based on a percentage. I recognise that by so doing, the property in which each of them would prefer to reside, will probably have to be sold. Sadly, the relatively small amount of the estate means that such a prospect may be largely unavoidable. It may also mean that the applicant could be forced onto the street. However if the proceeds from her proportion of the estate are appropriately managed this outcome may be able to be mitigated in various ways or even avoided altogether. In so saying, I bear in mind the potential (uncertain as it is) for her to secure at least temporary accommodation with her ex-husband. Finally, even though, as I have said, the applicant’s circumstances dictate an award to her representing a significant proportion of the estate, I need also to be mindful of and guard against the “natural tendency to reform” the will. I am satisfied that further provision should be made for the applicant out of the deceased estate. In lieu of the bequest of the sum of $20,000.00 to the applicant, the estate should be divided by distributing an amount equal to 40% of the estate to the applicant and 60% to the second respondent. I will hear the parties on any other orders I should make consequent upon these reasons.

Ratio Decidendi

Legal Principle Established

I also adopt the observations of Judge Dart (in Scott & Anor v Scott & Anor[18]) in relation to aspects of the assessment task where his Honour said:[18] [2021] SASC 96 at [13]-[14].… it is also necessary to have regard to the conflict between the statutory scheme allowing the Court to award further provision by way of an amendment to the will of the deceased and the entitlement of a person to freely make a testamentary distribution as they see fit. There is an obvious and unavoidable tension. In Andrew v Andrew Hallen AsJ said: In addition to the above matters, there are some general principles that are relevant to the facts of this case. Whilst most of these principles were given in the context of the former Act, they are equally apt in a claim 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 role 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 testator'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, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation (Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, per Dixon CJ at 19); McKenzie v Topp [2004] VSC 90 at [63]. Freedom of testamentary disposition remains a prominent feature of the Australian legal system.The task before the Court is limited to the making of an adequate provision for claimant who satisfies the jurisdiction requirement. No interfering with the terms of the will beyond that is authorised by the Act.[footnotes omitted]Consideration Against this factual and statutory background, the following issues arise for consideration and determination:(i)The true value of the estate.(ii)The treatment and disposition of the monies originally deposited in Westpac Account 291970.(iii)Whether the applicant been left without adequate provision?(iv)Whether the applicant’s conduct been such as to disentitle her from being able to prosecute her claim?(v)The relevance and treatment of Clause 8 of the will.(vi)What amount (if anything) would represent an appropriate level of provision?The true value of the estate