Kozlowski v Kozlowski
[2013] SASC 57
•24 April 2013
SUPREME COURT OF SOUTH AUSTRALIA
(Summary Jurisdiction: Civil)
KOZLOWSKI v KOZLOWSKI
[2013] SASC 57
Judgment of The Honourable Justice Peek
24 April 2013
SUCCESSION - FAMILY PROVISION
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - PRINCIPLES UPON WHICH RELIEF GRANTED - APPLICATION OF CHILDREN - ADULT SONS
Claim for family provision on an intestacy - estate consisted of a house allegedly purchased by the deceased for the sole use and benefit of his son, the plaintiff - the house was registered in the deceased's name only - the plaintiff brought proceedings against his sister, the first defendant, and his mother, the second defendant, claiming entitlement to the whole of that property - the application was resisted by the second defendant only.
Whether the deceased purchased the house for the sole use and benefit of the plaintiff - whether the plaintiff made out a moral claim to the house - whether the plaintiff adequately provided for by the rules of intestacy - whether the Court should exercise its discretion to make an order for provision in favour of the plaintiff - whether the application should be summarily dismissed due to the small size of the estate.
Held: the plaintiff established a moral claim to the house - it had been a source of pride to the deceased to purchase a house for the plaintiff and thus provide security for him - the house was registered in the name of the deceased only to protect the plaintiff in the event of a relationship break-up - the deceased had arranged for the other members of his family to have access to properties during his lifetime - accordingly, the rules of intestacy made inadequate provision for the plaintiff - the Court should exercise its discretion to make an order for provision - the plaintiff had not engaged in any disentitling conduct - while the estate is small, an effective order for provision can be made on the basis that the other claimants have already been adequately provided for.
SUCCESSION - FAMILY PROVISION AND MAINTENANCE - CIRCUMSTANCES PRECLUDING RELIEF
The second defendant led evidence of a vague agreement between the plaintiff and the first defendant - if successful in his claim for provision, it was loosely agreed that the plaintiff would make a temporary loan to the first defendant.
Whether the Court should refuse to make an order for provision given the existence of this agreement.
Held: the agreement was for a temporary loan and not a gift - it had arisen after the death of the deceased - it did not present a bar to the making of an order for provision for the plaintiff.
Inheritance (Family Provision) Act 1972 ss 7, 9(8); Supreme Court Civil Rules 2006 Rule 312(12); Administration and Probate Act 1919 ss 72G, 72H, referred to.
Singer v Berghouse (1994) 181 CLR 201; Vigolo v Boston (2005) 221 CLR 191; Ellis v Leeder (1951) 82 CLR 645; Re Buckland (deceased) [1966] VR 404; Mayfield v Lloyd-Williams [2004] NSWSC 419; Kleinig v Neal (No 2) [1981] 2 NSWLR 532, applied.
Re Coventry (deceased) [1979] 3 All ER 815, distinguished.
Alcock v Cooper [2010] SASC 167; Re Allen (deceased); Allen v Manchester [1922] NZLR 218; McCosker v McCosker (1957) 97 CLR 566; Bosch v Perpetual Trustee Co Ltd [1938] AC 463, discussed.
Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494; Savic v Kim [2010] NSWSC 1401; Bowyer v Wood (2007) 99 SASR 190; Re McCaffrey (deceased); Hay v Elder's Trustee and Executor Co Ltd (1982) 29 SASR 582, considered.
KOZLOWSKI v KOZLOWSKI
[2013] SASC 57Civil
PEEK J. Application under Inheritance (Family Provision) Act 1972.
Introduction
The plaintiff, Mr Stefan Kozlowski (SK), is the son of the late Mr Marian Kozlowski (the deceased) who died intestate on 22 March 2003. He applies for provision to be made out of the estate of the deceased for the plaintiff’s education, maintenance, and advancement in life.
SK’s application is resisted by the former wife of the deceased, Mrs Maria Kozlowski, the second defendant (MK). The first defendant, Ms Julie Kozlowski (JK), is the daughter of the deceased and SK’s younger sister. She appeared unrepresented at trial, and was joined to the action solely because she is the Administrator of the estate, having been granted Letters of Administration by this Court on 25 January 2012. The first defendant makes no independent claim for provision, and indeed, supports SK’s application.
Background
The deceased and MK were married on 27 February 1971. On 7 July 1971, SK was born. JK was born on 30 May 1975. The family lived together for several years, but sometime between 1982 and 1984, MK and the deceased separated. SK went to live with his mother. It is suggested that the deceased was violent towards MK, and that she ceased cohabitation with him for that reason. Despite this, the marriage was never formally dissolved, and MK would regularly care for the deceased, including paying all his bills, buying him clothing, and bringing him home-cooked meals.[1]
[1] T54, 65 (cross-examination); exhibit SD6, [5.2], [5.5].
In or around 1986, the deceased was involved in a serious motor vehicle accident.[2] Care was rendered by MK on an “around the clock” basis for about 7 months.[3] The deceased eventually received a sizeable lump sum in settlement of his claim for compensation (although the details of this were not furnished to the Court).
[2] Exhibits P3, [10]; FD1, [7]; SD6, [5.5].
[3] Exhibit SD6, [5.5].
The purchase of the Mendez Street house
On 27 April 1995, the deceased purchased a house at 21 Mendez Street, Paralowie (the Mendez Street house) for $91,990 using the settlement moneys.[4] The house was registered in the deceased’s name only. SK had left home at age 18 or 19 (between 1989 and 1990), and he then moved into the Mendez Street house at the invitation of the deceased. Part of the foundation of SK’s claim for provision is that this property was purchased by the deceased for his sole use and benefit.
[4] Exhibits P3, [10]; SD6, [10]; FD1, [8].
Over the ensuing ten years, SK carried out a number of improvements to the Mendez Street house. The most significant of these consisted of installing:
·ducted evaporative air-conditioning, at a cost of $2,716;[5]
·roller shutters, at a cost of $3,794;[6]
·a wall heater/gas furnace, at a cost of $1,540;[7] and
·a carport, roller door, and a shed, at a cost of $2,958.[8]
[5] Exhibit P3, [12], [28], p 30.
[6] Exhibit P3, [12], [28], p 34.
[7] Exhibit P3, [12], [28], p 32.
[8] Exhibit P3, [12], [28].
An alarm system, skylight, and pergola were also installed. Other aesthetic improvements were made to the premises and financed by SK, including renovations to the backyard.
In 1996, SK married his wife, Mrs Pamela Kozlowski, and on 23 March 2002, their daughter Maykala Kozlowski was born, followed by their son Dylan Kozlowski on 12 April 2004.
Other investments in property by the deceased
Sometime between 1971 and 2002, three properties were acquired by the deceased and MK as joint tenants at:
·6 Hooper Street, Paralowie (the Hooper Street house);
·23 Sansom Street, Woodville North (the Sansom Street house); and
·11 Penola Street, Kilkenny (the Penola Street house).
The Sansom Street house was the former matrimonial home.
From 1996, JK commenced to live in the Hooper Street house. She thereafter provided some level of assistance to the deceased between 1997 and his death,[9] including in assisting him being diagnosed with schizophrenia in 1999 or 2000. During this period, the deceased was residing in the Penola Street house and MK in the Sansom Street house.
[9] Exhibit FD1, [10].
In 2002, arrangements were made to purchase a property for the benefit of JK at 3A Farr Street, Woodville North (the Farr Street house). The agreement was that MK could reside in the property during her lifetime and then it would pass to JK upon her death.[10] The property ultimately cost $356,797, with the deceased paying $240,680.98, MK paying $74,319.02, and JK taking out a mortgage for $41,797. On 12 December 2002, JK became the registered proprietor of that property.[11] From that date, MK began residing at those premises, and was continuing to do so as at the date of trial.
[10] This agreement was later disputed by JK and MK commenced proceedings in the District Court to establish her claim to reside in the property. On 24 June 2011, Judge Stretton delivered a judgment finding that this agreement existed, and on 7 July 2011 made a declaration that MK is entitled to reside at the Farr Street house for the remainder of her life: See Kozlowski v Kozlowski [2011] SADC 89; exhibit P4, p 15.
[11] Exhibit P5, p 8.
The deceased’s passing
On 22 March 2003, the deceased passed away unexpectedly from a heart attack. He left no Will. As at the date of trial, the deceased’s estate comprised:[12]
The Mendez Street house $275,000.00
Furniture and personal effects
at the Penola Street house $500.00
Funeral Expenses $(9,698.10)
Administration costs $(10,385.80)
[12] Exhibit FD1, [4].
Procedural history
This case has had a somewhat unusual procedural history. SK’s pleadings, as set out in the statement of claim filed on 23 July 2012 and the second statement of claim filed on 18 December 2012, sought declaratory relief, with the application for provision under the Inheritance (Family Provision) Act 1972 being an alternative should the primary claim fail. SK sought to establish that he was entitled to the Mendez Street house pursuant to a constructive trust which had arisen by virtue of the deceased’s statements about his intentions to him and the funds SK had expended on improving the house.
The matter was originally to proceed as a summary determination before a Supreme Court Master pursuant to Rule 312(12), Supreme Court Civil Rules 2006. On 12 March 2013, the Master determined that he did not have jurisdiction to grant such declaratory relief, and the parties were notified that the hearing date for the summary trial on 4 April 2013 would be vacated if that part of the claim was pursued.
By a letter of 19 March 2013, SK’s solicitor advised that SK would not be pursuing his claim for declaratory relief, and would instead rely solely on his application for provision.
From 21 March 2013 until 4 April 2013, unsuccessful attempts were made to have the matter referred to conciliation. On 2 April 2013 the matter was called on before me, and counsel for SK indicated that SK would not press his claim for declaratory relief at trial.
The trial on 4 April 2013 proceeded with each of the witnesses being cross-examined on their affidavits with a view to minimising the costs of the matter, and I was only addressed on SK’s application for provision under the Inheritance (Family Provision) Act 1972.
Applications under the Inheritance (Family Provision) Act 1972
Section 7, Inheritance (Family Provision) Act 1972 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.
In the well known judgment in Re Allen (deceased); Allen v Manchester, Salmond J divided applications under comparable provisions in New Zealand into two classes:[13]
Applications under the ... Act ... are divisible into two classes. The first ... consists of those cases in which, owing to the smallness of the estate and to the nature of the testamentary dispositions, the applicant is competing with other persons who have also a moral claim upon the testator ... The second class of case is that in which, owing to the largeness of the estate or the nature of the testamentary dispositions, the applicant for relief is complaining not of the unjust distribution of an inadequate fund among dependants all of whom had a moral claim upon the testator, but of the failure of the testator to make out of the abundance of his resources a provision sufficient for the proper maintenance of the claimant. In such a case ... the function of this Court is not, as in the first class of case, that of distributing an insufficient fund, so far as it will go, among the various dependants in accordance with their relative needs and deserts. It has the more difficult function of determining the absolute scope and limit of the moral duty of a wealthy husband or father to make testamentary provision for the maintenance of his widow and children. In the first class of case the Court has to judge between the competing claims of different dependants; in the second class of case it has to judge between the claims of a dependant to be maintained by the testator and the claim of the testator himself to do as he pleases with his own.
[13] [1922] NZLR 218, 221-222.
The nature of the inquiry required by analogous provisions in New South Wales was outlined by Mason CJ, Deane and McHugh JJ in Singer v Berghouse:[14]
[14] (1994) 181 CLR 201, 208-210. See also Goodman v Windeyer (1980) 144 CLR 490, 502 (Gibbs J).
It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the ‘jurisdictional question’. That description means no more than that the court’s power to make an order in favour of an applicant under s 7 is conditioned upon the court being satisfied of the state of affairs predicated in s 9(2)(a).
…
In Australia, it has been accepted that the correct approach to be taken by a court invested with jurisdiction under legislation of which the Act is an example was that stated by Salmond J in In re Allen; Allen v Manchester. In that case his Honour said:
The provision which the Court may properly make in default of testamentary provision is that which a just and wise father would have thought it his moral duty to make in the interests of his widow and children had he been fully aware of all the relevant circumstances.
For our part, we doubt that this statement provides useful assistance in elucidating the statutory provisions. Indeed, references to ‘moral duty’ or ‘moral obligation’ may well be understood as amounting to a gloss on the statutory language.
The first question is, was the provision (if any) made for the applicant ‘inadequate for [his or her] proper maintenance, education and advancement in life’? The difference between ‘adequate’ and ‘proper’ and the interrelationship which exists between ‘adequate provision’ and ‘proper maintenance’ etc were explained in Bosch v Perpetual Trustee Co Ltd. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator’s arrangements to pay creditors.
(Emphasis added; footnotes omitted)
This statement was recently reaffirmed by the High Court in Vigolo v Boston.[15] However, several members of the Court took a more favourable view of the place of considerations of “moral duty” and “moral obligation” in the first stage of the inquiry. Thus, Gleeson CJ indicated that:[16]
[25]In explaining the purpose of testator’s family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text. They connect the general but value-laden language of the statute to the community standards which give it practical meaning. In some respects, those standards change and develop over time. There is no reason to deny to them the description ‘moral’. As McLachlin J pointed out in the Supreme Court of Canada, that is the way in which courts have traditionally described them. Attempts to misapply judicial authority, whatever form they take, can be identified and resisted. There is no occasion to reject the insights contained in such authority.
[Footnotes omitted]
[15] (2005) 221 CLR 191, 197 [5] (Gleeson CJ), 212 [56] (Gummow and Hayne JJ), 227 [112] (Callinan and Heydon JJ). See also Pizmolas v Pizmolas (2010) 108 SASR 153, 158 [28] (Gray J).
[16] Vigolo v Boston (2005) 221 CLR 191, 204-205.
These comments were echoed by Callinan and Heydon JJ, who stated:[17]
[17] Vigolo v Boston (2005) 221 CLR 191, 228-231.
[113]We would not be reluctant, at least in some cases, to use the expressions ‘moral duty’ and ‘moral obligation’, and to apply the concepts underlying them, which include the idea of ‘moral claims’. It seems to us that there are several material indications in the Act that moral considerations may be relevant. But before we refer to those indications we should make it clear that a moral claim cannot be a claim founded upon considerations not contemplated by the Act. Nor can it be a claim based simply upon the fact of a preference shown by a testator in his will for another or others, although there may be cases in which disparities in dispositions may be relevant.
…
[115]The next of the indications is the expression, in comprehensive language, of the sorts of provision that the court may order, that is, provision by way of maintenance, support, education or 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. Significantly, and not inappropriately, one of the forms in which the appellant sought to put his case here was as a claim for advancement. That the idea of a ‘moral claim’ may have been introduced as an aid to judicial deliberation before it was enacted that claims could be made upon intestate estates, does not, in our opinion render it less relevant or useful now that such claims may be made. In principle, there is no reason why effect should not be given to a moral claim upon the estate of an intestate estate in the same way as it would have been, had the deceased left a duly attested will.
…
[121]For many years therefore several justices of this Court have found it convenient and generally useful to resort to the concepts of a moral duty and a moral claim in deciding both whether, and how much provision should be made to a claimant under the Act. In our respectful opinion they have not been wrong to do so. These are not concepts alien to, or in any way outside, the language of s 6 of the Act.
[122]We do not therefore think that the questions which the Court has to answer in assessing a claim under the Act necessarily always divide neatly into two. Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors. [Footnotes omitted]
Only Gummow and Hayne JJ expressed significant reservations about the use of such terms; in referring to the comments of Mason CJ, Deane and McHugh JJ in Singer v Berghouse[18] reproduced above their Honours stated: [19]
[70]It is apparent that their Honours were not using the term ‘gloss’ in its milder sense of an epexegetical comment or explanation. Rather, they were using it in the same sense as Williams J had done in Coates, that is to say, of a paraphrase which is apt to mislead. [Footnote omitted]
[18] (1994) 181 CLR 201, 209.
[19] Vigolo v Boston (2005) 221 CLR 191, 217.
The words “adequate” and “proper” have also caused differences of opinion in the courts. In Bosch v Perpetual Trustee Co Ltd, the Judicial Committee of the Privy Council held that:[20]
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. A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for his “adequate” maintenance. Nevertheless, such sum cannot be described as not providing for his “proper” maintenance, taking into consideration “all the circumstances of the case” as the subsection requires shall be done.
[20] [1938] AC 463, 476.
In McCosker v McCosker, Dixon CJ and Williams J observed:[21]
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 in life must be considered in the light of all 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. [Footnotes omitted]
[21] (1957) 97 CLR 566, 571-572.
It is clear that the Court’s power on an application for family provision to adjust testamentary dispositions, or dispositions as on intestacy, is not unlimited. As Bray CJ stated in Re Estate of Bridges:[22]
In the case of an intestacy, as much as in the case of a will, it seems to me that Parliament has indicated its intention that the scheme of things set up by a testator in his will, or by the law of the State in the event of intestacy, shall be interfered with so far as is necessary to make adequate provision for the proper maintenance, education and advancement of the claimants specified in the Act, but no further. It is true that when the persons entitled on intestacy are the surviving spouse and legitimate children of the deceased as opposed to collateral relations the speculation that the deceased may have intended to die intestate may have more cogency, but nevertheless I repeat that I think the correct approach is as I have said. I think that Parliament no more intended to grant an unlimited liberty to recast dispositions resulting from the law of intestacy on moral grounds than it did to give a similar liberty to recast dispositions made by will. (Emphasis added)
[22] (1975) 12 SASR 1, 5-6. See also Leyden v McVeigh [2009].
Accordingly, the application by SK must fall to be determined by the two stage inquiry identified above. It was agreed between the parties that SK’s claim should be approached on the basis that it falls into the first of the two classes of applications identified by Salmond J in Re Allen (deceased); Allen v Manchester.[23]
[23] [1922] NZLR 218, 221-222.
Has adequate provision been made for SK?
SK, as the son of the deceased, is a person entitled to make a claim for family provision under the Inheritance (Family Provision) Act 1972.[24] In determining his claim, it is necessary to examine what he would receive according to the rules of intestacy.[25]
[24] Inheritance (Family Provision) Act 1972 s 6(c).
[25] Re Estate of Bridges (1975) 12 SASR 1, 5-6.
As at the date of the deceased’s death, the relevant provisions of the Administration and Probate Act 1919 provided:
Distribution of intestate estate
72GSubject to this Part, an intestate estate shall be distributed according to the following rules:
(a) where the intestate is survived by a spouse and by no issue—the spouse is entitled to the whole of the intestate estate;
(b) where the intestate is survived by a spouse and by issue—
(i) the spouse is entitled—
(A)if the value of the intestate estate does not exceed $10 000, to the whole of the intestate estate; or
(B)if the value of the intestate estate exceeds $10 000, to the sum of $10 000 and to one-half of the balance of the intestate estate; and
(ii)the issue of the intestate is entitled to the balance (if any) of the intestate estate;
…
72H
(1) where an intestate is survived by a spouse, the spouse is entitled to any personal chattels of the intestate.
…
It was agreed that SK stood to receive just under $60,000 ($58,729.03 on the figures provided in exhibit FD1) pursuant to the rules of intestacy.
The deceased’s promise concerning the Mendez Street house
SK’s central argument was that a provision of $60,000 was inadequate for his proper maintenance, education, and advancement in life given that he had been promised the Mendez Street house by the deceased during his lifetime. It was contended that this promise gave rise to a moral obligation on the deceased to make proper provision for SK in his will.
In his affidavit of 8 February 2013, exhibit P3, SK stated that his father had specifically told him, before and after the purchase of the house, that it was to be for his sole use and benefit, despite it being registered in the sole name of the deceased. In cross-examination on this topic, the SK gave the following evidence:[26]
[26] T18-22.
HIS HONOUR
QCan I just ask you, just going back to para 10 that’s before you still, you say that at the time that your father purchased the property he told you it was to be for your sole benefit. Can you just tell me a little bit more about that conversation, you know, the actual words that he used and how he explained the situation?
AHe often asked me where I was staying at the time, because I was living by myself, renting. He wasn’t happy with that.
Q Did he say why he wasn’t happy with that?
ABecause he said ‘I’ve got the funds to be able to look after you and your future and your future family and why are you doing this’? So, because I left the family home and I wanted to live my life, learn, stand on my own two feet.
QRight. And how did this conversation come about, which you refer to at para 10 - when you say the deceased told me that it was to be for my sole benefit Can you remember what the context was, where the two of you were when that was said, and so forth?
A When he originally said it I thought he was joking.
Q Why did you think he was joking?
A I wasn’t - I didn’t think it would be serious.
Q Whereabouts were the two of you when he originally said it?
A At his premises, 11 Penola Street, Kilkenny.
Q And I think you’ve already told counsel that no-one else was there, is that right?
A No-one else was there, no.
Q And how long was that conversation, roughly?
AI was there for a visit, so it could have been over an hour, it could have been over two.
QSo, doing the best you can, can you now tell me the words that he used. Sort of what’s your mental picture, your mental memory of what he actually said?
A Translated to English?
Q Well, yes, in English, yes.
AHe said he wishes to secure my future so that I and my family do not have to struggle with mortgages, with debts, like my wife and I have done.
QNow, I think you told me a moment ago, and you may have been speaking loosely, I don’t know, but you said initially you thought he was joking?
A As an initial reaction of mine, yes.
QDid you and he have further conversation as to whether he was serious or whether he was joking?
A Yes.
Q And what was that conversation?
A I just kept asking him ‘Are you serious?’
Q What did he say?
A He said ‘Of course’.
QNow, at para 10 - paraphrase all of that by saying ‘The deceased told me that it was to be for my sole benefit’. Did you have the conversation just on that one occasion that we’ve been talking about, or was there further conversations after that on that same topic?
A That topic went for two years, maybe.
Q Why did it keep going for two years, maybe?
A That, I don’t know.
Q How did it keep going for two years?
AI would visit constantly, he would mention it and I would say to keep him happy, no problems, that’s fine. Back in -
Q But when you say he would mention it, what do you mean he would say?
A Says ‘Why haven’t I bought you a house yet’.
Q He would say why hadn’t he bought you a house yet?
A Yes.
Q So you’re talking about something he intended to do in the future at some stage?
A Yes.
QNow perhaps you’ve misunderstood and I’m sorry to be so lengthy. At para 10 to which you’ve been referred in your affidavit, do you see there that you depose ‘At the time he purchased the property’?
A Yes, he also said that then too.
QSo you’re telling me that at some time before the purchase there was a series of conversations over a period of two years, as to his intention to purchase the property for you?
A Yes.
Q Is that right?
A That’s correct.
Q I don’t want to put words into your mouth.
A No, that’s correct.
QThen at the time that he actually did purchase the property, he had a particular conversation with you about that did he?
A Yes.
Q What did he say on that occasion when he actually did purchase it?
AIt was after the purchase and settlement, at which I then took him to the house this is what you have bought, and he said ‘Lovely look after it, it’s yours’.
Q Were there any other conversations after that time about that general topic?
A No.
This evidence was corroborated by the affidavit of JK of 3 April 2013, admitted as exhibit FD1. The amended paragraph [9], and the following paragraph [10], of that document relevantly provides:
9When Maria Kozlowski and I began communicating in early 1996 Maria Kozlowski informed me that a property had been bought solely for Stefan Kozlowski’s benefit by Marian Kozlowski. Maria Kozlowski confirmed to me that the 21 Mendez Street Paralowie property was placed into Marian Kozlowski [sic] name. The reason the Mendez property was placed into Marian Kozlowski’s name was to protect Stefan Kozlowski from losing half the value of the property in the event of any relationship breakdowns.
10… During the times I visited Marian Kozlowski frequently spoke of happiness of being able to secure his son Stefan Kozlowski’s future with the property.
In cross-examination by counsel for SK, JK gave further evidence of this conversation with her mother:[27]
[27] T74.
Q Was there more than one conversation about it?
A It was several times, but I cannot recall the dates.
QAnd she definitely told you that the property at Mendez Street had been solely for Stefan’s benefit?
A Yes.
Q - by your father?
A Yes.
QAnd that it had been placed in your late father’s name and the reason for that was to protect him against the possibility of losing the value or half the value of the property in the event of a marital breakdown?
AYes, because the family had several assets now and my mother said that to me to - sorry, Maria Kozlowski said that to me to protect Stefan from losing anything in a marital breakdown.
Q And was that said on more than one occasion?
A Yes.
QAnd you are in no doubt that insofar as your father was concerned and to your mother’s knowledge the property was bought for Stefan?
A Yes.
JK was later pressed about her statements in paragraph [10] of exhibit FD1 (reproduced above) in cross-examination by counsel for the second defendant:[28]
[28] T79-80.
QYou then go on to say that your father spoke frequently of his happiness in being able to secure his son Stefan’s future with property, and the property being I’m assuming the Mendez Street property?
A Yes.
Q What did you understand he meant by that, were they his exact words?
AHe spoke in Polish obviously and I needed to you know, understand what he was saying. But he wanted my brother to be secure because he - with the property that was bought for him, because he didn’t want my brother and his family - my brother at that time because he was single, to struggle and then family, he had a family. Financially struggle.
Q Sorry, can you say that again.
AI’m sorry. My father wanted to look after my brother’s welfare and make sure he was financially secure.
Q Those were his exact words, he didn’t mention the house specifically?
AHe did mention the house yes, he told me that the house was bought for him at Mendez Street, Paralowie was bought for him.
Q So how did he raise that topic, did he just tell you that one day, or -
AMy father Marian Kozlowski tended to say things a lot, he repeated things a lot, so he says to me on a number of occasions.
Q So just out of the blue he would say -
AHe would not just out of the blue, we obviously - I was looking after him, so I would attend him and we would have conversations, and it was mentioned.
HIS HONOUR
Q It would appear to give him some pleasure to discuss that?
AYes, yes it did. He was a very isolated man in his home due to the hit and run car accident. So he would enjoy speaking to me when I’d visit.
JK was adamant that the Mendez Street house was purchased for her brother. She indicated that she did not seek to make her own claim for provision against the estate, and supported her brother’s application for provision. In effect, she indicated that she would abide by the event and put forward no positive claim or defence resisting SK’s application.
In her evidence, MK denied the evidence of both of her children. In her affidavit of 28 March 2013, which was received as exhibit SD6, MK denied that the Mendez Street house was purchased exclusively for SK.[29] When pressed about these denials by counsel for SK, MK stated:[30]
[29] Exhibit SD6, [10].
[30] T50.
Q The position is that the house -
A But it was in the -
Q- the house at Farr Street was bought for Julie and the house at Mendez Street was bought for Stefan?
A No, definitely not.
QAs we established earlier you were living apart at the time Mendez Street was bought?
A Hmm-mm.
QYour son and the deceased had a number of discussions about it you’ve heard in court?
A I don’t believe there were discussions at all.
MK also gave evidence that she never told JK that the Mendez Street house had been purchased for SK:[31]
[31] T57-59 (cross-examination).
QNow did you - you had some discussions with Julie when you’re there again re-communicating in early 1996?
A Communicating as what?
Q Establishing relations with each other?
AWell, she came to me and said she was sorry and she said she was living on crumpets and in a unit off Salisbury Highway and I forgave her and let her move into Hooper Street.
QAnd you had told Julie, didn’t you, in early ‘96 that the property at Mendez Street had been bought solely for Stefan’s benefit?
A No, I did not.
Q You deny saying that?
A I deny saying that. I never talked to Julie about that subject ever.
QSo if Julie says that, you say that Julie is not telling the truth. Is that your evidence?
A Yes.
QDid you say to her that the reason the Mendez property was placed in your late husband’s name, was to protect Stefan from losing half the value of the property if he had a relationship breakdown?
A No, no I did not.
Q You deny saying that?
A I deny saying that wholeheartedly.
Q If Julie says that, you -
A She’s lying.
Q You say she’s not telling -
A No.
MK again denied these matters when cross-examined by the first defendant:[32]
[32] T63-64.
QDo you recall us speaking and you confirming to me that the property was bought for Stefan Kozlowski’s benefit solely?
A No I deny we ever spoke on that subject.
QSo you also deny that telling me, confirming to me that the reason the Mendez property was placed into Marian Kozlowski’s name was to protect Stefan from losing half the value in a relationship breakdown?
A I deny it completely yes, deny that completely.
…
QDo you recall saying to me that you were afraid that Stefan was going to find a gold digger?
A No. I never said anything like that.
Assessment of the evidence
The most important contested issue was whether the deceased made oral representations to SK that the Mendez Street house was purchased for his sole use and benefit. The three parties to this application were the only witnesses to give evidence at trial.
I prefer the evidence of SK and JK over that of MK. Both SK and JK were impressive witnesses and performed well under cross-examination. Obviously, SK had an interest to serve, but he did not appear to exaggerate or unduly promote his position. I was particularly impressed with JK. She was adamant that she knew the deceased had stated that the house was for SK and that MK had admitted to her that that was so. I thought that she was genuinely offended that MK was deliberately lying about these matters. I believe JK’s evidence about that and also that she abstained from making a claim herself given that she knew what the deceased’s true wishes were and wanted to abide by them.
I thought that MK was an unimpressive witness. I positively disbelieved a number of her answers. I reject her evidence that the deceased had not indicated that he wished SK to have the house and also her denial of admitting as much to JK. I prefer the evidence of SK and JK to that of MK where their evidence conflicts.
Conclusions regarding the deceased’s statements
I find that the evidence of SK and JK as to statements made by the deceased that the Mendez Street property was purchased for the sole benefit of SK were indeed made by the deceased and that MK admitted as much to JK. I find that it was a great source of pride to the deceased that he was able to buy the Mendez Street house for his son, thereby securing his future to some degree. I find that the Mendez Street house was registered in the name of the deceased to prevent any partner of SK from making a claim to it.
These conclusions are supported by the fact that a house was provided for JK during the deceased’s lifetime. MK[33] and JK[34] both gave evidence that the Farr Street house had been purchased for JK to provide her with some security. As MK stated in cross-examination by counsel for SK:[35]
Q I understand. The property was going to be registered in Julie’s name, is that right?
A Yes, yes.
Q So why were you putting in $74,000 of your money?
ABecause I wanted Julie to have a secure future because of - and the way my son is very violent and I thought this would be her nest egg that she would have something that if something were to happen to me she wouldn’t have to fight over - the Farr Street property will be hers.
Q So the $74,000 that you put in was in effect a gift from you to Julie?
A Yes.
[33] T49 (cross-examination).
[34] T74 (cross-examination).
[35] T49.
In addition, it was common ground that the Hooper Street, Sansom Street, and Penola Street houses had been purchased by the deceased and MK as joint tenants, and that these properties had passed to MK by virtue of the doctrine of survivorship. It was never denied that the deceased was aware of the legal significance of electing to purchase property as joint tenants rather than tenants in common.[36] The purchase of the Farr Street house was also made by the deceased, MK, and JK on the express understanding that MK would be able to live there for the duration of her life. Of this, MK stated:[37]
[36] Exhibit SD6, [10.2].
[37] T44 (cross-examination).
HIS HONOUR
…
QI will just ask you one other thing about it being a comfortable house. Of the four houses we have talked about, that is to say you have got the other three and then you have got Farr Street to live in anyway?
A Yes.
Q Is Farr Street the most comfortable of the four?
A Yes.
CROSS-EXAMINATION
Q Why is that?
A Just it was my dream home.
I consider that the deceased had a positive plan to provide each of the members of his family with a house. His statements to SK were entirely consistent with the action the deceased had taken in relation to the other members of his family. Further, the attribution to him of the statement that the house was registered in his name for the purpose of avoiding any claim to it by a partner of SK appears to me to be true. It is not inconsistent with the deceased having been left by his own wife some years earlier but I think it mainly reflected a prudent attitude held by the deceased.
I consider it unremarkable that the deceased did not commit these matters to writing in a Will. The facts are that the deceased died of an unexpected heart attack in circumstances where, at least in his mind, he had already arranged that each of his family members had one or more of the properties and, on my findings, that all knew what those arrangements were. It is likely that he thought that the matter was settled and, like so many before him, put off the making of a Will one day too many.
I find that SK has established that it was the intention of the deceased that the Mendez Street property should go to him and that such was known to each of the other family members. Accordingly, I find that SK has made out a moral claim for the Mendez Street house.
SK’s circumstances
I turn now to consider whether adequate provision was made for SK’s proper maintenance, education, and advancement in life, according to the rules of intestacy, taking into account his established moral claim to the Mendez Street house. The question of the adequacy of an existing provision must be addressed as at the date of the deceased’s death, namely, 22 March 2003.[38]
[38] Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494, 508 (Dixon CJ).
As identified above, SK would stand to receive around $58,729.03 by virtue of the operation of the Administration and Probate Act 1919.
SK gave evidence that as at the date of his father’s death he was (and continues to be) a man of limited means with a family to support (at that stage only his daughter), and consequently, this provision is inadequate. SK’s assets and their estimated values, as extracted from exhibit P3, are as follows:
Assets
Motor vehicle $1,500
Tools $500
Furniture $2,500
Trailer $300
Motor bike $2,000
Superannuation $175,000
Joint savings with Pamela Kozlowski $15,000
$196,800
Assets belonging to Pamela Kozlowski
Motor vehicle $6,000
Superannuation $7,500
$13,500
Total $210,300
SK works for Southern Star Windows and earns $40,000 to $41,000 per year. His wife works for Elsa Cleaning Services, and has an income of approximately $15,000 per year.
Other claimants on the estate
SK’s circumstances must be assessed against those of the other potential claimants (as distinct from applicants for provision) on the deceased’s estate: the first and second defendants.
The evidence presented at trial revealed that MK is well provided for financially. By virtue of the doctrine of survivorship she has acquired three properties (free of any encumbrances) which were previously held by her and the deceased as joint tenants. Those properties and their current values are as follows:
·the Hooper Street house, which is currently valued at $300,000;[39]
·the Sansom Street house, which is currently valued at $330,000;[40] and
·the Penola Street house, which is currently valued at $345,000.[41]
[39] Exhibit P3, p 23.
[40] Exhibit P3, p 25.
[41] Exhibit P3, p 21.
MK indicated that two of the properties are currently tenanted and producing a rental income of $220 and $240 per week, respectively. The Sansom Street house is apparently in poor repair, having been untenanted for ten years, and significant work is required to put it into a tenantable condition.[42] MK receives an additional $150 per month for delivering the local Messenger newspaper.
[42] Exhibit SD6, [34].
MK stated that she is 66 years of age, and in poor health, having suffered kidney and bowel cancer;[43] she finds it difficult to constantly maintain each of the properties which are tenanted.[44] However, she conceded in cross-examination that there is no reason why she cannot sell each of the properties.[45] Furthermore, as discussed above, MK also has the right to live in the Farr Street house, her “dream home”, for the duration of her life. Under the rules of intestacy, MK stands to inherit $137,958.05 (including $500 worth of the deceased’s personal effects).[46]
[43] T56.
[44] Exhibit SD6, [33]-[34].
[45] T56 (cross-examination).
[46] Administration and Probate Act 1919 ss 72G, 72H.
JK currently lives with her partner of four and a half years at 9 Vanessa Drive, Burton. Her partner owns that property, subject to a mortgage which he is able to service from his work as a butcher. JK has a young daughter and is currently unemployed. As indicated above, she is the registered proprietor of the Farr Street house, subject to a small mortgage which requires repayments of just over $149 per fortnight. While this property is subject to the agreement whereby her mother is entitled to reside in the house for the duration of her life, JK will be entitled to possession of it when her mother dies. JK stands to inherit the same amount as her brother would under the rules of intestacy.[47]
[47] Administration and Probate Act 1919 s 72G.
SK’s relationship with the deceased
There was some evidence given by MK that SK rarely visited the deceased and did not maintain a good relationship with him.[48] MK also asserted that the deceased was in fact scared of SK as he had been violent towards MK and JK.[49] JK, while accepting that she suffered some kind of abuse by her brother which occurred many years ago, denied that she has ever been afraid of him.[50]
[48] Exhibit SD6, [23].
[49] Exhibit SD6, [22], [25]; T52-54, 57 (cross-examination).
[50] T86-88 (cross-examination).
I have indicated that I prefer the evidence of SK and JK to that of their mother where they conflict, and I reject the assertion that the deceased was afraid of SK because he was violent towards his other family members. I note that a suggestion that SK and the deceased had a relationship which was strained, to use a neutral term, is not necessarily inconsistent with the other evidence in the case. The deceased suffered from schizophrenia from around 1999 (and it may be some years before that), had been violent towards MK,[51] and was conceded to be hard to relate to or connect with at times.[52] I do not find that this in anyway impairs SK’s application for provision from the deceased’s estate.
[51] Exhibits SD6, [24]; P3, [27].
[52] Exhibit P4, [23].
Disentitling conduct
There was mention by the second defendant that she had discovered SK growing hydroponic cannabis at the Mendez Street house on one occasion after he moved into the premises.[53] SK denied that he had anything to do with the cultivation of cannabis, explaining that the equipment was erected by a friend of his in a room he had permitted that friend to use;[54] he had discovered the setup when he received his first power bill, and ejected his friend and told him to remove the equipment.[55] There is no reason for me to reject his explanation. What is clear is that the incident, whatever its details, occurred just after SK moved into the house in 1995 or 1996, and there was no suggestion of repeated incidents. No evidence was given that the deceased knew of this incident or of his reaction to it if he did. The whole allegation was put in a very vague manner, and I do not regard that disentitling conduct has been established.
[53] Exhibit SD6, [21]; T51-52 (cross-examination).
[54] Exhibit P4, [20].
[55] Exhibit P4, [20].
MK asserted that SK was on occasions violent towards his sister and her.[56] These assertions were denied by SK[57] and JK[58] and I prefer SK’s and JK’s evidence to that of MK where it conflicts. I reject the second defendant’s allegations of such violence.
[56] Exhibit SD6, [22.2]; T45, 49-50, 66-67.
[57] Exhibit P4, [22].
[58] T73.
I find that SK has not engaged in any conduct which could be regarded as disentitling him from a provision by the deceased.
The size of the estate
Counsel for the second defendant submitted that SK’s claim should be dismissed as there is a general policy of the Courts to discourage claims for family provision where the estate is small. Reference was made to comments by De Groot and Nickel in Family Provision in Australia.[59] Reliance was also placed on the following statement of Goff LJ in Re Coventry (deceased):[60]
Applications in small estates should be discouraged, because the costs tend to become wholly disproportionate to the end in view, although, of course that does not mean that an application cannot be made in a small estate nor that when made it should not be duly considered on its merits.
[59] De Groot and Nickel, Family Provision in Australia (LexisNexis, 4th ed, 2012) [3.7].
[60] [1979] 3 All ER 815, 820.
In Ellis v Leeder, Dixon, Williams and Kitto JJ added a qualification to this principle:[61]
If the court thinks that a claim is justified it should seek ways to give effect to it. It should only refuse such a claim where it is clear that it is impossible to make an effective order.
[61] (1951) 82 CLR 645, 651.
In Alcock v Cooper, Lunn J considered the operation of this rule in the context of summary proceedings pursuant to Rule 312, Supreme Court Civil Rules 2006:[62]
[39]… However, this does not mean that such claims do not have to be dealt with according to their merits. It does not appear there is any equivalent in England of 6R312(12) and (12A). The small size of an estate may well be mainly relevant to the question of costs.[63]
[62] [2010] SASC 167.
[63] De Groot “Family Provision Australia” Second Edition 27–29.
I consider that the second defendant’s submission over-states the position. The present case is not such as to warrant summary dismissal. I find that the deceased, as a wise and just testator, in respect of SK’s circumstances as they existed at the date of the deceased’s death, was morally obliged to make provision for the maintenance and advancement of SK, in terms of giving him the Mendez Street house.
Each of the other claimants on the estate has been provided for adequately by the deceased during his lifetime, and in fact made no claim for provision in these proceedings.[64] As such, the estate of the deceased, whilst of a relatively small size (but, I add, not as small as the estates to which this rule is normally applied), is not so small as to prevent an effective order for provision being made. The way property has been distributed during the life of deceased indicates that some kind of provision has already been made for MK and JK. Accordingly, an order can effectively be made that the benefit of Mendez Street be given to SK.
[64] Savic v Kim [2010] NSWSC 1401 [170] (Hallen AsJ).
The order for provision
Having come to the conclusion that SK has established a very strong moral claim for provision, it falls to be determined whether the Court should exercise its discretion to grant an order for provision, and, if so, what the terms of that order should be.
I have found that SK has established that the Mendez Street house was promised to him by the deceased during his lifetime. This is reinforced by a consideration of the evidence of SK’s needs and those of his mother and his sister. I note that since the death of the deceased, SK has purchased a house at 21 Traverse Avenue, Salisbury North for $250,000 in order to remove his family from some unsavoury behaviour which was taking place in the vicinity of the Mendez Street house. Consequently, he has now assumed a mortgage liability of $242,000. Taking into account the property holdings of the other claimants on the estate, which were put into place by the deceased during his lifetime, I find the Court should exercise its discretion to make an order for provision in favour of SK.
It was conceded by SK at trial that such an order would have to be in terms of the proceeds of the sale of the Mendez Street house to allow for the deduction of the costs of the administration and funeral costs from the estate. As such, the only just order here can be that SK is entitled to those proceeds. I turn then to consider whether there is any reason why this order should not be made.
Section 7(3), Inheritance (Family Provision) Act 1972 sets out the circumstances where the Court may refuse an order for provision:
(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.
Disentitling conduct
Counsel for the second defendant submitted that SK should be disentitled from an order for provision on the basis that there exists an agreement between SK and his sister that, should he be successful in obtaining an order for provision, SK will loan JK around $70,000 to pay her legal expenses and other debts. It was said that the Court only has the power to make provision for an applicant who has applied to it; by making an order for provision to SK the Court would be indirectly making an order for provision in relation to his sister too, given the existence of the agreement.
In Re Buckland (deceased), Adam J considered what use could be made of evidence that the applicant for provision there had voluntarily assumed the burden of financially supporting her mother:[65]
Among the circumstances which Mr Hulme, who appeared for the plaintiff, submitted that I should take into consideration in determining what provision was proper for the testator to make for the maintenance and support of his client, was the circumstances that she was the sole support of her mother-the first wife of the testator-and in fact was supporting her with some liberality out of her resources. The testator made no provision by his will for the plaintiff’s mother, and it appears that apart from the generosity of the plaintiff she is now without means of support. The reasons for the testator making no provision at all for her have not emerged in the evidence. Under the testators’s family maintenance legislation in Victoria, there is provision for a former wife claiming maintenance out of the estate, but subject to certain conditions which presumably are not fulfilled in this case. In any case, the plaintiff’s mother has not made any such application. Although one cannot but feel sympathy with the plaintiff in accepting the burden of making financial provision for her mother, I consider that the fact that she is doing so cannot properly enter into my consideration of what was adequate provision for the proper maintenance and support of the plaintiff herself. No authority has been cited to me suggesting this is so, and it would seem that to allow this circumstance to affect the matter would involve the making of provision out of the estate, albeit indirectly, for the maintenance of the testator’s former wife under guise of providing maintenance for his child. It is the obligation of the testator towards his child for the maintenance which is in issue in these proceedings, and nothing else. This conclusion does not, of course, mean that the circumstances of a daughter of the testator being burdened with providing for and maintaining her own infant children would be an irrelevant consideration. But the obligation of a parent to provide for his or her own infant children is one thing; the burden voluntarily assumed of an adult child providing for her mother is quite another. In any case, it appears from the evidence that it was only after the testator’s death that the plaintiff undertook the obligation of providing for her mother, and as the position as at the date of the testator’s death is what is material is determining whether he had fulfilled his statutory obligation to make adequate provision by his will for proper maintenance of his child, it seems clear that the extent of that obligation cannot in this case be affected by this particular circumstance.
(Emphasis added)
[65] [1966] VR 404, 411-412. See also Anderson v Teboneras [1990] VR 527, 534 (Ormiston J).
Holland J made similar observations of a comparable situation in Kleinig v Neal (No 2):[66]
It was submitted for the defendants that the mother’s potential dependency upon the plaintiff was not relevant to a consideration of his claim on his father’s estate. The defendants objected to the admissibility of evidence that was tendered on this matter. As it seemed to me that actual and potential burdens on the financial resources of an applicant existing at the date of death, including those for which there was only a moral and not a legal responsibility, could be material circumstances in considering an applicant's claim, I admitted the evidence that was tendered. As the mother herself can have no claim to provision for her maintenance out of the deceased’s estate, any financial dependence of the mother upon an applicant son could not, I think, be used to increase the amount that would otherwise be ordered to be paid to the son if his claim was successful; but I see no reason why the court should not have the benefit of knowing all of the family circumstances in which a claimant finds himself in assessing whether the claimant has a need for provision for his own maintenance, education and advancement in life. (Emphasis added)
[66] [1981] 2 NSWLR 532, 537.
More recently, in Mayfield v Lloyd-Williams, White J made the following remarks:[67]
[85]The plaintiff said that if she obtained a provision under the Family Provision Act, 1982 (NSW) she would use the money to: pay out or reduce the family’s indebtedness to the National Australia Bank; upgrade infrastructure on Oakleigh, such as the fences, dams and farm equipment; perhaps employ a farm labourer; purchase a new car for herself and her husband; and generally use the money to make life a little easier for her and her husband as they grow older. Evidence was led as to the need for extensive improvements to the farm and as to some of the costs of those improvements.
[86]One of the constraints upon the provision which the Court can order which is apposite to this case is that the provision must be for the maintenance, education or advancement in life of the applicant. (Family Provision Act, 1982, s 7). If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. (Re Buckland Deceased [1966] VR 404 at 412; Hughes v National Trustees Executors and Agency Co of Australasia Pty Ltd [1979] HCA 2; (1979) 143 CLR 134 at 147; Goodman v Windeyer (1980) 144 CLR 490 at 498, 505). But section 7 does not permit orders to be made to provide for the support of third persons whom the applicant, however reasonably, wishes to support. (Re Buckland Deceased at 412; Kleinig v Neal [1981] 2 NSWLR 532 at 537.)
[87]It is understandable that the plaintiff should wish to obtain a provision which would primarily benefit the Oakleigh partnership and only indirectly benefit her. She has devoted her life to her family and the farm. However I cannot assess what is required for her proper maintenance and advancement in life in this way. That is not to say that there will be any constraint on how she can use the provision which I will order. If she wishes to give or lend the money to other members of her family that will be a matter for her. However I must assess what is proper provision by reference to her need for proper maintenance and advancement in life, not the needs of the Oakleigh partnership or her husband and children. (Emphasis added)
[67] [2004] NSWSC 419.
None of these cases advance the second defendant’s submission. As in Re Buckland (deceased),[68] the agreement between SK and JK has only emerged since the death of their father, and accordingly cannot be relevant to a determination of SK’s application. Furthermore, while these cases, and particularly the remarks of Holland J in Kleinig v Neal (No 2)[69] and White J in Mayfield v Lloyd-Williams,[70] indicate that the Court cannot use the evidence of the agreement between SK and JK to increase any order for provision that might be made in his favour, they do not present an absolute bar to an order for provision being made where such an intention to use the provision to provide for another has been evinced by the applicant.
[68] [1966] VR 404, 411-412 (Adam J).
[69] [1981] 2 NSWLR 532, 537.
[70] [2004] NSWSC 419 [85]-[87].
I reject the second defendant’s submission. I conclude that an order for provision should be made in favour of SK for the proceeds of the sale of the Mendez Street house on the basis of his needs and moral claim alone, ignoring any arrangement he may wish to make with his sister. In the words of White J in Mayfield v Lloyd-Williams,[71] if SK wishes to loan money to the first defendant, this will be a matter for him but I do not take any account of it in assessing the order for provision which should be made in respect of him.
[71] [2004] NSWSC 419 [87].
At any rate, the agreement was far from clear or definite. Neither SK nor JK could identify its precise terms, and it was expressed as a vague promise to assist if the circumstances were right. There is no certainty that the agreement will ever materialise and no certainty as to what its precise terms will be if it does.
Accordingly, I would order that the provision be made to SK for the balance of the proceeds of the sale of the Mendez Street house after deduction of the funeral expenses and the costs of the administration. I would also order that the rest of the estate be dealt with according to the rules of intestacy, such that the personal effects of the deceased situated at the Penola Street house go to the second defendant.[72]
[72] Administration and Probate Act 1919 s 72H.
Costs of the application
The Court’s power with respect to costs orders appears in s 9(8), Inheritance (Family Provision) Act 1972:
(8)The Court may make such order as to the costs of any proceeding under this Act as it considers just.
The Court has a discretion to make whatever costs orders it considers just.[73] The general rule of practice has evolved that where an application is successful the Court will order that the parties’ costs be paid from the estate.[74]
[73] Bowyer v Wood (2007) 99 SASR 190, 208 (Debelle J).
[74] Re McCaffrey (deceased); Hay v Elder’s Trustee and Executor Co Ltd (1982) 29 SASR 582, 592 (Cox J); Ellis v Leeder (1951) 82 CLR 645, 656 (Dixon, Williams and Kitto JJ); Bowyer v Wood (2007) 99 SASR 190, 208-209 [65] (Debelle J).
However, in the present case it may well be just that I make a different order here since the “usual” order would operate to deprive SK of much the deceased’s estate out of which provision is to be made for him. Further, it is apparent that this trial would not have been necessary but for the attitude of MK. I have now positively rejected her evidence in circumstances which, may suggest that I should not make an order that the estate pay her costs.
However, I will hear the parties as to the costs orders to be made.
Orders
For all of the reasons above, I propose to make the following orders:
1The plaintiff’s application for provision under s 7, Inheritance (Family Provision) Act 1972 is granted;
2That the property situated at 21 Mendez Street, Paralowie in the State of South Australia be sold;
3That the funeral expenses and costs of the administration be paid from the proceeds of the sale of the property situated at 21 Mendez Street, Paralowie in the State of South Australia;
4That the balance of the proceeds of the sale of the property situated at 21 Mendez Street, Paralowie in the State of South Australia be paid to the plaintiff; and
5That the personal effects of the deceased situated at 11 Penola Street, Kilkenny in the State of South Australia be given to the second defendant according to the rules of intestacy.[75]
[75] Administration and Probate Act 1919 s 72H.
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