Litovkinas v Koderitsch

[2001] NSWSC 290

CITATION:	LITOVKINAS v KODERITSCH [2001] NSWSC 290 revised - 19/04/2001
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 2554/2000
HEARING DATE(S):	25, 26 March 2001
JUDGMENT DATE:	27 March 2001
PARTIES :	EUGENE LITOVKINAS v JOHN MARTIN KODERITSCH (ESTATE OF ETHEL KODERITSCH)
JUDGMENT OF:	Master Macready at 1

COUNSEL :	J.E. Armfield for plaintiff C.M. Simpson for defendant
SOLICITORS:	Antonys Lawyers for plaintiff Djekovic Hearne & Walker for defendant
CATCHWORDS:	Trust. Resulting trust. Whether in the circumstances presumption rebutted by evidence of intention. Held it was rebutted. - Family Provision. Claim by de facto partner of 22 years. Question of whether a Crispt order is appropriate. Held not appropriate.
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201 Goloski v Goloski, (unreported 5 October 1993 Luciano v Rosenblum (1985) 2NSWLR 65 Elliott v Elliott Court of Appeal 24 April 1986.
DECISION:	Paragraph 61 and 69

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

TUESDAY, 27 MARCH 2001

2554/00 - EUGENE LITOVKINAS v JOHN MARTIN KODERITSCH AS EXECUTOR OF THE ESTATE OF ETHEL KODERITSCH

JUDGMENT

1   MASTER: The plaintiff in this case seeks a declaration that the defendant holds one half interest in the property 13 Wood Street, Randwick, upon a resulting trust for himself. The property was in the name of the plaintiff and the late Ethel Koderitsch as tenants in common in equal shares. The late Ethel Koderitsch, who died on 16 May 1998, aged 76 years and the plaintiff had lived together in a de facto relationship for some 22 years.

2   The defendant is the son of the deceased. Under the deceased's will, which was made on 4 July 1979, the defendant was appointed executor and after a bequest of jewellery the residue was, by cl 4 of the will, given to the defendant absolutely. The will went on to provide in cl 5 as follows:-

"5.UPON MY DEATH my co-tenant in common EUGENE LITOVKINAS shall be entitled to remain living in the home unit at 5/9-11 Waltham Street, Coogee rent free until his death or until such time as he wishes to sell the subject home unit. In consideration Mr Litovkinas will grant me a similar right should he predecease me."

3   The plaintiff had made a similar will on the same date but the residuary beneficiaries were his nephews.

4 The plaintiff, in the event that his claim for a declaration of trust failed, sought in the alternative an extension of time to make application under s 16 of the Family Provision Act and made a claim under s 7 of the Act.

5   The estate is a small one comprising a half share in 13 Wood Street, Randwick, which half share has a value of $230,000. There is cash after provision for costs of administration amounting to $1,250 of $12,359.91. The defendant's costs to date are $18,650 and the plaintiff's $27,753.50.

6   A Judge of the Court has referred the whole of the claims in this matter to a Master for hearing. It is useful if I do set out the chronology so far as relevant to the matter.

7   The deceased was born in 1922 and the plaintiff in 1924. They met in 1975. The plaintiff was then living at Sefton and he used to come to stay with the deceased in her rented unit at Kings Cross.

8   On 23 June 1976 the deceased ceased employment with Evercraft Manufacturing Pty Limited. In that year the plaintiff sold the Sefton property and purchased 2/59 Tebbutt Street, Leichhardt. The deceased moved in with the plaintiff one month thereafter.

9   On 12 July 1977 the plaintiff purchased the unit 5/9-11 Waltham Street, Coogee, for $30,500 in his name. The solicitor for the plaintiff was a Mr Nicholas Eddy.

10   It was on 4 July 1979 that the deceased and the plaintiff executed their two wills to which I have referred.

11   On 6 February 1980 the plaintiff transferred a one half interest as tenant in common in unit 5/9-11 Waltham Street to the deceased for an expressed consideration of $27,500. The solicitor for the plaintiff was Mr Nicholas Eddy and the solicitor for the plaintiff and the deceased as purchasers was Mr K.J. Wherry.

12   On 8 October 1987 the plaintiff purchased Lot 79 Creals Court, Currumbin Waters, Queensland, for a sum which does not appear in the evidence and apparently the purchase was in his name. That was sold in February 1989 for an unspecified sum.

13   On 5 May 1989 the plaintiff purchased unit 4/158 Beach Street, Coogee, for $167,000. The solicitor for the plaintiff was Mr Steven Prassas of Comino, Prassas and Clark.

14   On 11 September 1989 the plaintiff transferred a one half interest as tenant in common in that property to the deceased for $1. The solicitor acting for all the parties was Mr Prassas and stamp duty of $1,412.50 was paid by the plaintiff in respect of that transfer. The parties had, of course, moved in to reside in Beach Street as soon as it was purchased.

15   On 20 September 1989 there was a sale of the jointly owned property at Waltham Street, Coogee and no doubt the plaintiff received the proceeds.

16   In mid-1990 the plaintiff alleges that there were certain conversations between him and the deceased about ownership and I will return to those later.

17   In November 1990 a property 95A Avoca Street, Randwick, was purchased by the plaintiff and the deceased as joint tenants. This they moved into as their new residence. At this time one sees that there are, in fact, two properties in their joint names.

18   A short time later, indeed, on 10 December 1990, the deceased transferred her half interest in the Beach Street property to the plaintiff for a consideration of $1. The solicitor acting for both parties was Mrs Hilderbrand and stamp duty of $1,290 was paid by the plaintiff.

19   In 1992 there were some visits by solicitor Mrs Hilderbrand to the Avoca Street property and in February of that year she drew some wills which apparently were never executed.

20   On 15 April 1993 the plaintiff sold the Beach Street, Coogee, property. On 24 June 1993 13 Wood Street, Randwick, was purchased for $250,000 in the joint names of the plaintiff and the deceased as tenants in common. That was with the assistance of a $50,000 advance from the CBA to the plaintiff secured by mortgage to both the deceased and the plaintiff over 95A Avoca Street, Randwick. Mrs Hilderbrand acted for the plaintiff and the deceased.

21   On 11 September 1993 the jointly owned property at 95A Avoca Street, Randwick, was sold for $210,000. The proceeds were paid to the plaintiff and $51,353.63 was paid to the CBA Bank to discharge liability for the bridging finance.

22   On 16 May 1998 the deceased died at age 76. The plaintiff was then 74.

23   In March 1999 the plaintiff instructed Antonys Lawyers in relation to an application for probate/administration of the estate of the deceased.

24   On 24 January 2000 there was a conversation between the solicitor Ms Mary Antony and Mr John Koderitsch, son of the deceased and a consent to administration being granted to the plaintiff was forwarded to the son for him to sign. Ms Antony then proceeded with the preparation of an application for Letters of Administration. The consent to that administration was signed by the son of the deceased on 14 February 2000. That application, no doubt, would have proceeded except for the fact that on 23 February 2000 the son handed to Ms Antony a copy of the will of the deceased dated 4 July 1979.

25   On 26 May 2000 the summons was filed, and a grant was made to the defendant in respect of the will of 4 July 1979 on 6 July 2000.

26   It is apparent from what I have recited and the clear evidence before me was that the funds for the last purchase all came from the plaintiff. They consisted of the cash from the sale of his property and also the bridging finance loan. The sale of the second property enabled the parties to pay out the bridging finance loan.

27 It is true that in normal circumstances there would be a resulting trust as there is no presumption of advancement in respect of de facto couples. (See Calverley v Green (1984) 155 CLR 242.) However, the resulting trust is only a presumption and is easily rebutted. This was referred to by Upjohn LJ in Vandervell v Inland Revenue Commissioners (1967) 2 AC 291 at 312 in these terms:-

"But if, as in this case (a common form share transfer), the document is silent, then there is said to arise a resulting trust in favour of A. But this is only a presumption and is easily rebutted. All the relevant facts and circumstances can be considered in order to ascertain A's intentions with a view to rebutting this presumption.

As Lindley LJ said in Standing v Bowring ((1885) 31 Ch.D 282, 289, CA):

'Trusts are neither created nor implied by law to defeat the intentions of donors or settlors; they are created or implied or are held to result in favour of donors or settlors in order to carry out and give effect to their true intentions, expressed or implied.'

The law was well stated by Mellish LJ in Fowkes v Pascoe ((1875) 10 Ch.App 343, 352, CA):

'Now, the Master of the Rolls appears to have thought that because the presumption that it was a trust and not a gift must prevail if there was no evidence to rebut the presumption, therefore when there was evidence to rebut the presumption he ought not to consider the probability or improbability of the circumstances of the case, and whether the presumption was really true or not, but ought to decide the case on the ground that the evidence of Pascoe and his wife taken alone was not satisfactory. But, in my opinion, when there is once evidence to rebut the presumption, the court is put in the same position as a jury would be, and then we cannot give such influence to the presumption in point of law as to disregard the circumstances of the investment, and to say that neither the circumstances nor the evidence are sufficient to rebut the presumption.'


James LJ in the same case also pointed out in effect that it was really a jury matter, on the basis, I may add, of weighing the evidence on the balance of probabilities.

A very good example of this is to be found in the case of In re Cuteis' Trusts ((1872) LR 14 Eq 217) where Bacon V-C without any direct evidence as to the intention of the settlor, drew a common-sense deduction as to what he must have intended. In reality the so-called presumption of a resulting trust is no more than a long stop to provide the answer when the relevant facts and circumstances fail to yield a solution."

28   The factors which have to be taken into account on this question include the following:-

(a) The parties, in what were similar wills in 1979, recognised that each had ownership in part of the property. The very existence of the provisions and the use of the words "rent free" make this clear.

(b) The wills were followed seven months after their execution by a transfer of title to recognise the situation referred to in the two wills.

(c) The deceased ceased work in 1976, having been employed for about nine years as a trousers machinist. Although there was reference in the evidence to redundancy, no amount was mentioned and it is unlikely that she received much. It is more likely she would have probably received some long service leave in those days. It is therefore unlikely that the consideration of $27,500 referred to for the transfer to her of the one half interest in the property was, in fact, provided by the deceased. The plaintiff, in fact, denies that the funds were provided.

I do note that a lower rate of duty, when there is a consideration, is payable and separate solicitors for the vendor and the purchaser is usually the common device to avoid the inquiries of the Stamp Duties Office in this regard. In my view I think it unlikely, particularly given the fact that the deceased never worked after 1976, that she did pay a consideration and that the plaintiff is correct.

This is also supported by the fact that the plaintiff himself continued to work until 1987, when he retired.

(d) The only conversation which is alleged in relation to the question of intention is that set out in para 15 of the plaintiff's affidavit. Para 15 is in these terms:-

"15. In or about mid 1990 before purchasing the property at 95A Avoca Street Randwick I had a conversation with the deceased to the following effect:-
EK: 'What would happen to me if something happened to you because I don't own anything?'

EL: 'If it worries you, I will put the next house into both of our names so at least you will have somewhere to live for the rest of your life if anything happens and then the house it can go to my heirs.'

We never discussed what would happen if my de facto predeceased me."

29 This was certainly not the time when the conversation occurred. This is demonstrated by the terms of the conversation as at the time alleged the property was, in fact, already in joint names. In particular, one should note the last few words of the plaintiff's response. He refers to the property going to “his heirs”. This was a view that was repeated by the plaintiff on a number of occasions in his evidence. I found the plaintiff an unsatisfactory witness. Firstly in his affidavit evidence simply said that he could not remember any of the transfers to joint names. Secondly, he agreed that the transfers contained his signatures and he did not dispute their validity. Thirdly, on occasions when he was prompted to remember back to some of the matters, he managed to remember them. Fourthly, he was argumentative and avoided answering questions against his interests. I would be prepared to accept his uncontested assertions about that conversation. Probably a conversation did take place but it certainly was not then and I am not satisfied it was in those terms. One always has to be careful. As was said in The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9 at p 20:-

"The difficulty is that the Court itself can never be certain that it knows all the circumstances. More often than not, one may be sure that the Court knows few of them. Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told, but a testator is dead and cannot tell his or her views."

(f) There is a regulatory with which the residence has always been put in joint names. When this resulted in another home also being in two names, a transfer was made back to the plaintiff to give him sole ownership of that home but leaving the existing joint ownership in the residence.

30   I am satisfied in all the circumstances that the plaintiff intended that the deceased have a one half share in the property at 13 Wood Street, Randwick, to be held by her beneficially. Therefore, the plaintiff's claim in para 1 fails.

31 It is now necessary to turn to the claim under the Family Provision Act. The application is out of time and accordingly it is necessary for the Court under s 16 of the Family Provision Act to allow an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211, the following was said:-

"It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time."

32   His Honour Young J has in several cases dealt with the principles governing applications to extend time under this Act. In Massie v Laundry (unreported 7 February 1986) he indicated that the factors which one looks at include the following:-

(a) Is the reason for making a late claim sufficient?
(b) Will the beneficiaries under the will be unacceptably prejudiced if the time were extended?
(c) Has there been any unconscionable conduct on either side which would enter the equation?

33   He also accepts apparently a view which was expressed by his Honour Needham J in Fancett v Ware (3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail.

34   In Phillips v Quinton (unreported 31 March 1988) Powell J, when considering the matter at the substantive hearing, leant to the view that a plaintiff seeking an extension of time under the Testators Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (unreported 8 September 1989).

35   In De Winter v Johnston, a decision of the Court of Appeal on 23 August 1995, his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at p 23:-

"In such a case, so it seems to me no extension of time ought to be granted unless it be established (inter alia) that the application for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief."

36   His Honour Sheller JA considered that it was only necessary to show that the application was not bound to fail. His Honour Cole J seems to have adopted the parties' approach of looking at the strength of the plaintiff's case.

37   No objection is taken by the defendant to the extension of time if the Court itself is satisfied. In this case there is a good explanation. The plaintiff did not even know of the existence of the will until after the time it expired. There is no prejudice to the defendant, nor is there any unconscionable conduct. Therefore, subject to the plaintiff being likely to succeed, the result is I would be prepared to extend time.

38 In applications under the Family Provision Act, the High Court has recently in Singer v Berghouse (1994) 181 CLR 201 set out the two-stage approach that a Court must take. At p 209 it said the following:-

"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 Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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."

39   I return to the plaintiff's situation. He is aged 76. He is single with no dependants. He has a life expectancy of 8.78 years on the ordinary tables. He has a half share in the house which is worth $230,000. He has cash of $120,000 and he owns a 1993 Honda car worth $5,000. He has some furniture in the house. His income substantially consists of a pension of $732.30 per month. His expenses total $1,211.66 per month.

40   It is clear, having regard to his past financial situation, that he is living on capital. Between 1993 and the present time he has expended $41,000 and I would expect that his usage in respect of capital would probably continue given that he has a car and wishes to continue to use it.

41   The plaintiff himself is in good health. He seems fit and well and he is certainly a long way off ever having to consider going into a convalescent home. He makes it perfectly plain in his evidence that this is the last thing he wants to do.

42   So far as the relationship between the plaintiff and the deceased is concerned, it was of some 22 or 23 years and there was nothing in the evidence to suggest that it was not a happy one for both of them.

43   An important matter in this case is the question of contributions to the estate of the deceased. Here, of course, the contributions were as a result of funds made available by the plaintiff.

44   It is necessary that I have regard to the situation of others having a claim on the deceased's bounty. In this case there is only one, namely, her son. He is 51. He is currently living in a de facto relationship but does not have any dependants. When he left school at the age of 15 he trained as a wool classer and he spent most of his life travelling about the country in respect of that occupation. He has been unemployed for some six years now and is still on unemployment benefits. He did, in fact, marry in 1972 and had a child who was born in 1977. That child is no longer dependant. He and his wife separated in 1982 and subsequently divorced. So far as his financial position is concerned, he has nothing apart from some clothing and household appliances. He has no liabilities apart from the potential liability for costs of these proceedings. His income is $400 per fortnight. He rents accommodation at $220 per fortnight and no doubt just exists on the amount left over and any amount that his de facto partner might also receive.

45   His health is fair except for the fact that he has lost, I think, six or eight teeth in an accident recently and cannot afford to the dental work to have those repaired. That indicates the level at which he has to live in his circumstances. So far as the relationship between himself and the deceased is concerned, there was an argument about eight years before the death of the deceased. This occurred when the defendant was seeking to borrow some money from the plaintiff and the deceased. The plaintiff made it clear that he was not welcome in the house and apparently the deceased also agreed at that time. However, the evidence is that the defendant, and I am prepared to accept this, did make contact with the deceased several times a year at the club to which he used to go.

46   The defendant was perfectly frank about his relationship with the deceased. He described it himself in his own words and volunteered in the witness box that the relationship was not close. He referred to the fact that he had been put in a home as a child by his mother for 10 years and, as he says, it is hard to understand how you could have a close relationship after something like that.

47   There were, of course, no contribution by the defendant to the build-up of the assets of the deceased.

48   The defendant in these proceedings seeks to maintain the provisions of the will with a more generous form of order in favour of the plaintiff. He is quite content for there to be provision in respect of the half share, that there be provision for a change in dwelling in the event that it is necessary to purchase nursing home accommodation. The plaintiff, however, seeks to have the whole of the house outright.

49 In the 1970s and 1980s there are a number of decisions of single Judges of this Court where they have held that a life interest with particular attributes were appropriate. (See, for instance, Crisp v Burns Philp Trustee Co Ltd, Holland J 18 December 1979; Banks v Hourigan, Waddell CJ in Eq, 2 March 1989; Cameron v Hills, Needham J, 26 October 1989.) This perhaps is reflected in matters mentioned by the High Court in White v Barron (1979-1980) 144 CLR 431 where at p 444 the Court said:-

"A capital provision should only be awarded to a widow when it appears that this is the fairest means of securing her proper maintenance. However, the provision of a large capital sum for a widow who is not young may, in the event of her early death, result in a substantial benefit to her relatives, contrary to the wishes of the testator, when a benefit of another kind would have afforded an adequate safeguard to her personally, without leaving her in a position in which she could benefit her relatives from the proceeds of the legacy."

50 A change in the High Court's attitude to the provision for widows, no doubt in response to changes in community expectations, is illustrated by the fact that in this case it disapproved of observations made in Warlodge v Doddridge (1957) 97 CLR 1, that as a general rule an order for provision in favour of a widow should be confined to widowhood. Stephen J in White v Barron at pp 438-440 went to some length to point out that the jurisdiction was one which should not be unduly confined by judge-made rules of purportedly general application.

51   By the late 1980s other Judges in this Division were taking a slightly different view. For instance, in Court v Hunt, 14 September 1987, unreported, Young J said:-

"Old age is a growing problem in our community and judges who sit in Family Provision Act applications get experience, as well as their own experience in the community, as to what happens when people reach the age when they can no longer look after themselves and one judges the evidence in these sort of proceedings against that background knowledge."

52   His Honour then went on to talk about the assumptions one could make about the fact that frequently people, once they pass 55, have to change their accommodation and locate themselves either in retirement villages or nursing homes which have different requirements for capital contribution.

53   After talking about the evidence necessary, his Honour went on to say:-

"In many cases these days a life estate will not be sufficient because it does not cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital. Sometimes it is possible for a court to alter a life estate to a more flexible non-capital provision, such as was done by Holland J in Crisp v Burns Philp Trustee Co Ltd, 18 December 1979, unreported, but noted in Mason & Handler Probate Service at page 13206. Other times the proper provision is for a fee simple gift, realising that this property will be sold and will be turned over into the appropriate property to maintain the widow for the rest of her life. Care also has to be given by those administering the plaintiff's property to ensure that there is sufficient income being raised after tax that will provide for maintenance levies and the other payments that have to be made by the widow."

54   More recently the Court of Appeal on a number of occasions has referred to this problem. In Golosky & Anor v Golosky, 5 October 1998, unreported, the Court summarised the proper provision for widows (and thus the plaintiff in these proceedings) in the following terms:-

"In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:

(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron & Anor , above, 458; Hunter , above, 576.

(b) The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher , Court of Appeal, unreported, 26 April 1985; (1985) NSWJB 81.

(c) Consideration of other cases must be conducted with circumspection because of the inescapable details of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70.

(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA.

(e) Considering what is 'proper' and by inference what is 'improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop (deceased) (1987) 8 NSWLR 679 (SC); Churton v Christian & Ors (1988) 13 NSWLR 241 (CA) 252."

55   In talking of the need to provide a house and a sum for contingencies the President is clearly referring to passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott, unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased.

56 In Permanent Trustee v Fraser 36 NSWLR 24 at p 47, Sheller JA had the following to say:-

"Once it is accepted that adequate provision for her proper maintenance and advancement in life required secure accommodation for life as well as a capital sum to meet exigencies, this need is not met by giving her only a life interest in the home unit. Commonly people in the community need to move from their own home into a unit in a retirement village and then into nursing accommodation and then into total care accommodation. See Young J in Christie v Christie. The need can be met if the respondent is given the home unit absolutely. She then has a greater flexibility as well as greater security."

57   In Salmon v Blackford, 18 February 1997, the Court of Appeal was dealing with a case where the trial Judge had given a fee simple to the deceased widow. Sheller JA said:-

"The principal point according to Mr Gibb was that his Honour failed to take into account that by reason of the widow's advanced years and the probability that her adopted son would be the natural object of her bounty, the effect of the order made was likely to be that the adopted son, whom the deceased had no intention to benefit, would be the beneficiary of half the estate. I have great difficulty in seeing how a submission of this sort has any weight in the circumstances of this case.

The matter that this Court must consider is whether the order that his Honour made was in such terms that one could only come to the conclusion that in some way his discretion must have miscarried. It is well established that proper provision is not to be measured solely by the need for maintenance. It should, in the case of this respondent and in the circumstances of this case, free her mind from any reasonable fear of any insufficiency as her age increases and her health and strength fails. I may say in this regard that her life expectancy, according to the tables, was something over eleven years at the time of the hearing. If one comes to the conclusion that for her proper maintenance an order such as the present is appropriate, it seems to me to matter not at all that she has an adopted son of an earlier marriage and that he may be the ultimate beneficiary of her bounty."

58   This seems to indicate a different approach to that referred to by the High Court in White v Barron.

59   In the present case there are a number of factors to be taken into account:-

(1) The plaintiff is in good health, appears fit and well and has a life expectancy of nearly nine years.
(2) The plaintiff has limited means and a large part of his savings of $120,000 will be used for living expenses over those nine years.
(3) He already owns one half outright in any event. The other half being subject to restrictions certainly curtails the flexibility of his already existing full ownership of a half share.
(4) He was the one who provided all the funds for the assets in the estate. I recognise, as I have made clear, that he intended the deceased to own her share.
Nevertheless, it is an important point as no one else has contributed to the estate.
(5) The parlous situation of the deceased's son is also important. However, he did not contribute and the relationship was not a close one. If the estate were larger, there is no doubt some funds would go a long way to relieving the meagre and difficult existence which he seems to have in living on Social Security, which he had done for the last six years.

60   I am satisfied that it is appropriate that the plaintiff have the whole of the estate. In practical terms that means the whole of the residuary estate.

61   The orders I make are:-

(1) I extend time for making this application up to the date of filing the summons herein.
(2) In lieu of cl 4 and the first cl 5 of the deceased's will, the plaintiff receive the whole of the residue of the estate of the deceased.

62   I will hear submissions on costs. I will indicate the prima facie views that I have so that counsel can address. They are:-

(i) I order that the defendant's costs be paid out of the estate of the deceased and to the extent that there is not sufficient in residue, order the plaintiff to bear the balance of such costs.

(ii) Make no order for the plaintiff's costs with the intent that he should bear his own.

63   Are there any submissions?

(Mr Armfield submitted that the plaintiff should have his costs out of the estate and to the extent that there is a deficiency, that the defendant should pay the plaintiff's costs.

The defendant supported the Master's preliminary view on costs and opposed the plaintiff's application.)

64   MASTER: I have heard submissions as to costs. The plaintiff seeks an order that the plaintiff's costs be paid out of the estate of the deceased and to the extent that the estate is not sufficient without obtaining the legacy or the bequest of residue, that the balance of those costs be paid by the defendant.

65   The defendant, for his part, seeks to support the preliminary view which I expressed at the conclusion of my reasons for judgment. The expression of that view has encouraged the development of the debate and there are a number of things to be said about the matter.

66   The first, of course, is that normally the party who is successful has a prima facie right to receive an order for costs in their favour. Another guide in matters of this nature is that it is also normally the duty of a defendant to uphold the will of the deceased and as a corollary of that to be able to receive his costs out of the estate of the deceased. On a practical level there are a number of different things that, perhaps, ought to be considered and may be put aside. One of these is that the plaintiff himself was the author of the difficult situation which he faced after the death of the deceased. He was the one who made the arrangements for the deceased to have the ownership and clearly that was contemplated, on my findings, by the deceased herself. There is, thus, nothing that can be levelled against the deceased to indicate that she in any way caused or brought about this problem in respect of costs. It is also the clear fact that the defendant himself has no funds to pay any costs order if they are ordered against him. This, I would think, is an irrelevant factor.

67   The other matter is that the plaintiff well knew the nature of the estate of the deceased and well knew that there were little funds left in the estate of the deceased. He himself had been contemplating an application for Letters of Administration. It would have to be perfectly apparent to him that the defendant, however, was a person of no substance once the defendant's affidavit was filed. He therefore continued well knowing the risk that he was not likely to recover costs.

68   The other thing that has to be borne in mind is that, in fact, the plaintiff was unsuccessful on one major part of the case advanced. That part was the question of whether there was a resulting trust. Although the additional costs involved in this part are not substantial in terms of preparation the hearing was mainly occupied with that part of the case. Accordingly, one has a plaintiff who is successful only as to part of the case. That is, I think, an important factor.

69   The defendant admittedly is in the position of a trustee but he also has an interest in that he was the residuary beneficiary who stood to lose and so it is common in these cases that litigation tends to take on more of an inter party dispute. In an ordinary situation one would normally find that the executor's costs would have some priority over the costs of the plaintiff, all other things being equal. In the circumstances, I think, given the fact that it is, in fact, inter parties litigation and that the defendant has ultimately been unsuccessful, the appropriate order is that the plaintiff should have three-quarters of his costs payable out of the estate of the deceased and I so order. That is on a party and party basis.

70   I make no other order to the intent that the defendant pay his own costs and not be entitled to be indemnified out of the estate.

71   The exhibits may be returned.

oOo

Last Modified: 04/20/2001