Lodin v Lodin

[2017] NSWSC 10

Supreme Court

New South Wales

Medium Neutral Citation:	Lodin v Lodin; Estate of Dr Mohammad Masoud Lodin [2017] NSWSC 10
Hearing dates:	31 May, 1 and 2 June 2016
Date of orders:	25 January 2017
Decision date:	25 January 2017
Jurisdiction:	Equity - Family Provision List
Before:	Brereton J
Decision:	Plaintiff to receive legacy of $750,000 from estate of deceased.
Catchwords:	SUCCESSION – Family Provision – application by former wife – where relationship arose in course of professional doctor/patient relationship – cohabitation of 18 months – application made 25 years after separation and 23 years after final matrimonial financial settlement – where applicant had care responsibility for 6 year old child until 21 – where applicant embarked on course of hostile action against deceased – where applicant’s earning capacity subsequently affected by motor vehicle accident – where deceased prospered financially – where deceased dies intestate with daughter only beneficiary of $5 million estate – whether factors warranting application – held, enduring impact of relationship on applicant, applicant’s indirect contribution to deceased’s estate, size of estate and absence of competing claim provide factors warranting – proper provision would enable acquisition of reasonably appropriate home, living expenses for life expectancy, and small fund for contingencies
Legislation Cited:	(CTH) Family Law Act 1975, s 44, s 79, s 79A, s 81 (NSW) Family Provision Act 1982, s 31 (NSW) Succession Act 2006, s 57(1)(d), s 59(1)(b), s 59(3), s 59(4), s 60, s 61, s 95 (NSW) Probate and Administration Act 1898, s 84A
Cases Cited:	Andrew v Andrew (2012) 81 NSWLR 656 Burke v Burke [2015] NSWCA 195 Churton v Christian (1988) 13 NSWLR 241 Dawes & Dawes (1990) FLC ¶92-108 Dijkhuijs v Barclay (1988) 13 NSWLR 639 Ferraro & Ferraro (1993) FLC ¶92-335 Fulop Deceased, Re (1987) 8 NSWLR 679 Hastings v Hastings [2010] NSWCA 197 Holcombe v Holcombe [1993] NSWCA 137. Marras, In the Estate of the late Anthony [2014] NSWSC 915 O'Shaughnessy v Mantle (1986) 7 NSWLR 142 Singer v Berghouse (No 2) (1994) 181 CLR 201 Smith v Smith (1986) 161 CLR 217 Stewart v McDougall (NSWSC, Young J, 19 November 1987, unreported) Vigolo v Bostin (2005) 221 CLR 191 Wentworth v Wentworth (SCNSW, Bryson J, 14 June 1991, BC9101896)
Category:	Principal judgment
Parties:	Magdalena Lodin (plaintiff) Rebecca Lodin (defendant)
Representation:	Counsel: P W Bates (plaintiff) L Ellison SC w P Carr (defendant)   Solicitors: James Antonenas (plaintiff) Craddock Murray Neumann (defendant)
File Number(s):	2015/169992

Judgment

1. The late Dr Mohammad Masoud Lodin died between 9 and 12 June 2014, aged 65 years. Letters of administration of his intestate estate were granted on 19 November 2014 to his daughter the defendant Rebecca Lodin, born 8 February 1986, to whom the whole of his substantial estate of more than $5 million net devolves upon intestacy. By summons filed on 9 June 2015, his former wife the plaintiff Magdalena Lodin – Rebecca’s mother – whom he had married on 19 September 1988, and divorced on 29 December 1995, having separated more than 25 years ago on 5 April 1990 after a cohabitation of only about 18 months – seeks provision out of the deceased’s intestate estate.

Relationship history

2. The deceased was born on 1 February 1949 in Afghanistan, where he graduated from medical school. He apparently had a number of siblings – two sisters who may live in California and a brother who may live in France – but there is no evidence of any contact between him and them. He migrated to Australia in 1975, and established a medical practice; by 1985, he was conducting a practice in Bangor.

3. The plaintiff was born on 7 October 1954 in Poland, and is thus now 62 years of age. She came to Australia, with her parents and siblings, in 1960. They all returned to Poland in 1970, but the plaintiff returned to Australia, alone and permanently, in 1978.

4. Between 1978 and 1984 she was in a relationship with one David Melov, of which relationship a daughter Alana was born on 5 September 1979. She and Mr Melov were married, in Brisbane, on 6 October 1979, and they moved to Sydney in November of that year. In 1984, they built and then moved into a home in Bangor.

5. In May 1984, the plaintiff consulted the deceased, as a medical practitioner. Between June and December 1984, she and the deceased commenced playing squash together, and she began making social visits to him at his Bangor surgery. In October 1984, the plaintiff and Mr Melov separated under the one roof, and by December 1984 the relationship between her and the deceased had become sexual. The defendant Rebecca, the child of the plaintiff and the deceased, was born on 8 February 1986. In April 1986, Mr Melov left the home in which he and the plaintiff had cohabited. The plaintiff and Mr Melov were divorced on 5 June 1988.

6. The plaintiff and the deceased married, and commenced to cohabit, on 1 September 1988, whereupon the plaintiff, with Alana and Rebecca, moved into 36 Yates Road, Bangor, which the deceased had purchased in August 1985 and which by the time of the marriage the deceased owned unencumbered. It was her second marriage, and his first. The deceased supported the family financially, and paid all the outgoings; but the plaintiff was in receipt of $50 per week child maintenance for Alana from Mr Melov. As a result of a financial settlement between her and Mr Melov concluded in November 1988, the plaintiff received two-thirds of the net proceeds of the sale of their former matrimonial home, amounting to $80,000, which she used to purchase, and erect a kit home on, 188 Matron Porter Drive, Mollymook, in the joint names of herself and Alana.

7. On 5 April 1990, the plaintiff and the deceased separated under the one roof, after a period of cohabitation of only 18 months. From then until November 1990, the deceased paid maintenance for Rebecca in the sum of $100 per week. Thereafter until 22 April 1992, he paid child maintenance of $60 per week, in addition to all Rebecca’s school fees and some other expenses. On 6 January 1991, the deceased vacated Yates Road, leaving the plaintiff, Alana and Rebecca in occupation, where they remained rent free until they departed in January 1993 following the outcome of the Family Court proceedings referred to below. The plaintiff and the deceased had lived under the same roof for 28 months.

The matrimonial financial settlement

8. By application filed in the Family Court of Australia on 28 April 1992, the deceased applied for orders by way of adjustment and settlement of property interests, including that he pay the plaintiff $50,000 (later reduced, by amendment, to $38,208, to take account of a sum of $11,792 appropriated by the Child Support Agency – as a result of misleading information provided by the plaintiff – and paid by it to the plaintiff from the deceased’s tax refund, notwithstanding that the deceased had in fact been paying child support for Rebecca). The plaintiff cross-applied, on 24 June 1992, for an order that he pay her $150,000. The case was heard by Rourke J on 3 and 4 December 1992, and judgment was given on 8 December 1992. His Honour found that the pool of property amounted to $436,000, comprising Yates Road ($317,500), Mollymook ($90,000), a Toyota Camry ($9,500), a Toyota Celica ($6,000), the plaintiff’s savings ($10,000) and the deceased’s savings ($3,000). Adopting an asset-by-asset approach to the evaluation of contributions in a short marriage, his Honour found that neither had contributed to the property of the other; that they had contributed equally to the acquisition of the Camry; and that their contributions to the welfare of the family were equal. His Honour considered the s 75(2) factors, in the (CTH) Family Law Act 1975, to be the dominant consideration. In this respect, his Honour observed that neither party had any health impairment. Noting that the deceased had a markedly superior income of $1,200 per week as a qualified professional medical practitioner, while the plaintiff was a full-time university student who in the past had earned income as a medical receptionist and an interpreter, his Honour predicted that following completion of her visual arts course at the University of Western Sydney the plaintiff would secure some form of employment, but observed that her ability to earn income was severely restricted by her continued responsibility for two young children, one of them a child of the marriage, and that by comparison with the deceased she was in a markedly inferior economic situation. His Honour also took into account her eligibility for Austudy, and continuing social welfare payments, and the deceased’s commitment to provide ongoing support for his parents, who lived in the United States and were in poor health.

9. His Honour made orders that the deceased pay the plaintiff $55,000 and transfer the Camry to her, that the plaintiff vacate Yates Road upon payment of the settlement sum, and that the plaintiff have sole custody of Rebecca, with the deceased to have reasonable access. The plaintiff thus retained Mollymook (worth $90,000) and her savings ($10,000), and received a lump sum of $55,000 and a motor vehicle worth $9,500. This totalled $164,500, and (on a global approach) represented about 38% of the pool. The s 75(2) adjustment (of $59,750, when allowance is made for half the car) represented about 14% of the pool.

10. In a supplementary judgment given on 10 December 1992, his Honour dismissed the deceased’s application for costs. In the course of that judgment, his Honour observed that in one of his financial statements the deceased had under-stated his income by about $10,000, but not deliberately; it will be necessary to return to this point.

11. The plaintiff appealed, and in a judgment delivered on 8 June 1993, the Full Court of the Family Court (Fogarty, Strauss and Smithers JJ) dismissed her appeal. In short, the Court agreed with the trial judge that the plaintiff had made no contribution to Yates Road, while the deceased had made no contribution to Mollymook, and held that it was legitimate for the trial judge to have found that the parties had made equal contributions to the welfare of the family, and that it was open to the trial judge to conclude that the deceased had and would continue to support his parents. The Court noted and rejected arguments that the trial judge had given excessive weight to the plaintiff’s prospects of gaining employment, and insufficient weight to the deceased’s future earning capacity, concluding that the trial judge had adequately considered the s 75(2) factors, and that while his decision was towards the lower end of the potential range, it was not outside the proper exercise of the wide discretion conferred by (CTH) Family Law Act 1975, s 79.

After the property settlement

12. Consequent upon the orders of Rourke J, on or about 8 February 1993 – the defendant’s seventh birthday – the plaintiff and her daughters vacated Yates Road, and moved to Mollymook. The deceased resumed occupation of Yates Road, where he appears to have resided for the remainder of his life.

13. On 8 June 1993, following the dismissal of her appeal, the plaintiff telephoned the deceased and said to him, “If you don’t give me an additional $60,000 I will destroy your life and make a complaint to the NSW Health Department Complaints Unit about you”.

14. On 17 June 1993, the plaintiff made a complaint against the deceased to the Complaints Unit, alleging that he had engaged in an inappropriate sexual relationship with her while she was his patient. The complaint was heard by a professional standards committee on 12 and 13 July 1994. The deceased was found guilty of unsatisfactory professional conduct, reprimanded, and ordered to undertake a course in ethics.

15. From June 1993, the plaintiff denied the deceased access to Rebecca. In October 1993, the deceased commenced proceedings in the Family Court in respect of access to Rebecca. He eventually abandoned those proceedings, which were struck out with costs. It appears from Rebecca’s evidence that some contact continued.

16. On 10 September 1993, upon information provided by the plaintiff that the deceased possessed firearms and had been threatening to kidnap Rebecca, a complaint was made by police for the issue of a summons for an apprehended domestic violence order against him, allegedly to protect the plaintiff, Alana and Rebecca. Police attended Camden Hospital, where the deceased had worked for eleven years, to serve him with the summons. He described this as “the most embarrassing moment in his life” and “deeply humiliating”, and as a result resigned from the hospital. The proceedings were dismissed, after a hearing, in the Local Court at Milton on 12 May 1994.

17. In December 1994, the deceased was interviewed by police in relation to allegations of mistreatment, including sexual abuse, of Rebecca, following the plaintiff making a statement to police. No further action was taken.

18. On 31 August 1993, the plaintiff commenced proceedings in the Common Law Division of this court for an extension of time in which to sue the deceased for damages for breach of professional duty as her medical practitioner, by engaging in an inappropriate relationship with her. On 2 November 1993, these proceedings were stood over generally. On 7 June 1995, the deceased applied to have them dismissed for want of prosecution. Negotiations for their settlement continued until 30 April 1998, when the plaintiff eventually discontinued the proceedings on terms that each party bear its own costs.

19. After residing in Mollymook for about a year, in early 1994 – when Alana and Rebecca commenced to attend Kincoppal at Rose Bay – the plaintiff and her daughters moved to a rented flat in Rose Bay, where they remained until 1996. In 1996, they moved to rented premises in Vaucluse, where they remained for a year. From 1997 until 1999, they lived in rented premises in Watsons Bay.

20. The deceased applied for a divorce on 26 July 1995. A decree nisi of divorce was granted on 27 November 1995 and became absolute on 29 December 1995.

21. In 1996, the deceased underwent treatment for cancer of the bowel, and was receiving chemotherapy and radiotherapy in 1997 and 1998. In March 1997, his solicitors advised him that it might be prudent to put his affairs in order, and that his family law counsel was concerned to avoid the plaintiff making any further claim. Counsel were instructed, advice provided and in April 1998 a will was drafted which would have left his estate to the defendant and set out reasons for making no provision for the plaintiff. However, despite being pressed by his solicitors, the deceased never executed that, or any other, will.

22. The deceased was punctilious in compliance with his child support obligations, which were substantial. He was assessed to pay $7,491 in 1992/93, and $12,130 in 1993/94; his application for review of that assessment was dismissed on 26 July 1993. On 7 May 1996, the plaintiff applied for the annual rate to be increased, which resulted in an assessment of $13,000 per annum. One of the grounds was that Rebecca was being educated at Kincoppal, a private school. On 8 July 1998, the plaintiff applied for a further departure assessment, which was declined with the payments being maintained at $13,000 per annum. However, from 1998, Rebecca was in receipt of a bursary of a 40% discount on her school fees, which the plaintiff did not disclose to the deceased or the Child Support Agency.

23. The plaintiff was involved in a motor vehicle accident in 1997, which caused neck spasms and back pain for several months.

24. On 21 May 1999, the plaintiff completed the sale of Mollymook for $86,500, and on 1 July 1999 she completed the purchase (in the names of herself and Mr Melov as joint tenants) of 473/83-93 Dalmeny Avenue, Rosebery, for $295,000, of which she provided $60,000, and the balance was borrowed from Westpac. It seems that Mr Melov – who after all was Alana’s father – lent his name to the transaction to assist in obtaining finance, and that he also provided some financial support. On 1 November 2002, pursuant to consent orders made in the Family Court, Mr Melov transferred his interest in Rosebery to the plaintiff.

25. On 21 July 2000, the plaintiff was involved in a second motor vehicle accident. She sustained a whiplash injury resulting in protruding discs, headaches, neck pain and spasms, and back pain radiating to the leg. She could barely walk for several months, and underwent chiropractic treatment. Her reduced level of activity resulted in a significant weight gain and diabetes. She made a claim for compensation, which was settled in December 2006 for $72,500 plus costs of $35,000. Following this accident, she received a disability support pension.

26. Following completion of her secondary education in 2003, Rebecca commenced a Bachelor of Science degree at the University of Sydney in 2004, which she completed at the end of 2006. At the plaintiff’s request, the deceased agreed to pay child maintenance of $350 per week, indexed at 4%, until Rebecca completed her tertiary education, and consent orders were made in the Family Court to that effect, with which the deceased fully complied. In about 2004, the deceased at Rebecca’s request provided $28,000 for the purchase of a car, which Rebecca undertook to repay when she was in receipt of a sufficient income.

27. On 7 March 2007, the plaintiff wrote to the deceased with a request that he pay her (spouse) maintenance. He did not agree to this, and she never filed application for maintenance for herself – which would in any event have been long out of time, though an extension of time under (CTH) Family Law Act 1975, s 44, would not have been impossible.

28. On 27 March 2008, the plaintiff was involved in a third motor vehicle accident, in respect of which she made another claim for compensation, which was settled in November 2011 for $90,000.

29. The plaintiff completed the sale of Rosebery in October 2008, and on 16 June 2009, completed the purchase of 13 Cornfield Parade, Fisherman’s Paradise, for $230,000.

30. In the period 2008-2009, the plaintiff wrote to the deceased that unless he paid Rebecca’s university fees, she “would make what was left” of his “wretched life not worth living”, that she did not know why he had “wasted” his “energy tormenting us over the years”, and that “if you make me feel guilty in any way because I [have] written to you – you will most certainly feel the wrath of Allah! directed towards yourself”. She says that she was upset when she wrote this letter, and did not mean it, and that she shortly thereafter sent him a further letter in which she apologised, that she did not mean the part about the wrath of Allah, and that despite everything in the past – they had both done and said things that should not have been done and said – she had no ill-will towards him and would always be there for him.

31. The plaintiff attended the deceased’s funeral.

The estate

32. For the purposes of these proceedings, it suffices to record that the estate was sworn for the application for letters of administration at $5,417,952, the net distributable estate exceeds $5 million, and under the rules of intestacy the defendant is the sole beneficiary. The only eligible person other than the plaintiff and the defendant is Alana, who has been served with the requisite notice and has not made any claim; accordingly, the Court is at liberty to disregard her interests. [1]

    1. (NSW) Succession Act, s 61.

The plaintiff

33. Between 1992 and 2001 the plaintiff received a sole parent pension. Between 1992 and 1995 she also received an Austudy supplement, while she completed her visual arts degree in 1994 and 1995. Over the next year or so she completed some computer, desktop publishing and business courses. In 1997, she worked fulltime for Aristocrat Leisure Industries as an administrative assistant and earned approximately $350-$380 per week. Having completed a Diploma of Reflexology in 1998, she was a casual on-call reflexologist during 1999 and 2000. Since 2002 she has subsisted on a disability pension, as a result of injuries received in the 2000 motor vehicle accident. She has not been in full-time employment since 1997, although between 2004 and 2007 she worked 2 hours per day, 3 days per week as a receptionist in a medical practice. There is no realistic prospect of her resuming remunerative employment.

33. On 31 July 2015, the plaintiff sold Fisherman’s Paradise for $340,000. The sale was completed in September 2015. After discharging the mortgage of $45,000 and paying costs, she received about $285,000, out of which she purchased a motor vehicle for $30,000. She retains from the proceeds $253,000 as cash on deposit. She also has shares in the Commonwealth Bank worth $40,000; a 2015 Jeep Patriot motor vehicle worth $30,000. She has superannuation of only about $300, and a HECS debt of $11,855.

34. She currently resides in a one-bedroom unit in Katoomba, which she rents for $269 per week. The disability support pension, of approximately $20,000 per annum, is her main current source of income; in addition she receives interest on her deposit. She estimates her expenses (presumably including the rent) to be about $30,000 per annum (which is about $600 per week).

35. She remains diabetic, and has chronic pain and restrictions from her spinal injuries suffered in the 2000 motor vehicle accident. She is taking Endronax for depression, Janumet for diabetes, Tapentadol for diabetic neuropathic pain, Fenofibrate to control cholesterol level, Panadeine Forte for spinal pain and headaches, magnesium for muscle cramps, Femoston for hormone replacement therapy, vitamin D for a deficiency, and Metformin for diabetes. She requires surgery for a bunion on her left foot (estimated $10,000), and for spinal stenosis in her lower spine (estimated $10,000 to $20,000). She also requires some dental work ($6,000). She has also been advised to purchase exercise equipment ($5,000).

36. She lives alone, and is not in any relationship. She has fraught relationships. She is estranged from the defendant, who does not speak with or see her, and she has a limited relationship with Alana. She visits Alana and her daughter – the plaintiff’s granddaughter – Poppy, in Vaucluse, about once or twice per month, and stays with them for a weekend, but Alana finds that the relationship becomes “toxic” if she stays longer than one night, and so does not permit it.

37. The plaintiff wishes to purchase a residence in the Blue Mountains area.

The defendant

39. The only beneficiary of the estate – and in circumstances where Alana, having been given notice of the claim, has not brought any claim, the only person whose competing interests need to be taken into account – is the defendant.

40. Although she resided with the deceased until he left Bangor in 1991, for almost all her childhood the defendant resided with and was in the care of the plaintiff. From when they returned from Mollymook to Sydney in 1994, she had contact with the deceased about monthly, until she commenced high school (which would have been in or about 1998). Thereafter she had contact with the deceased perhaps between two and four times annually until she was between 13 and 15, and thereafter contact ceased. She now attributes this – and other acts of hostility by her towards the deceased – in part to the influence of her mother the plaintiff. Until she attained about 20 years of age, she sometimes sent him letters or presents on Father’s Day, his birthday or Christmas, but ceased this because there was no response.

41. The defendant says that she does not recall much of her relationship with her mother when she was at primary school, “other than she was my primary carer and did not neglect me”. She says that as a teenager, she had heated arguments with the plaintiff about socialising, independence, money and household chores, which continued while she was at university. It must be observed that the issues about which she says she argued with her mother, at school and at university, are entirely typical of those that adolescents and young adults have with their parents.

42. As has been mentioned, the defendant was educated at Kincoppal, where she was awarded a bursary during her secondary schooling, and then at the University of Sydney, where she completed her Bachelor of Science degree in 2008.

43. The defendant left her mother’s home in 2007, and since then has resided independently with her partner Jeffrey. In 2009, she made it known to the plaintiff, who was temporarily residing with them while looking for alternative accommodation following the sale of Rosebery, that she had outstayed her welcome. Since then, they have had minimal contact, and that has only been when, contrary to the defendant’s wishes and requests, the plaintiff has endeavoured to contact her.

44. In early 2014, the defendant received a letter from the deceased seeking confirmation of her address, so that he could send her something. She replied in March 2014, and in May 2014 she received from him two letters, apologising for having missed her birthdays for many years, and in which he proposed to send her $5,000. She replied, including that she would like to hear more about what he was doing, and that “of course I will forgive you [for missing her birthdays] – I understand things were a lot harder when I was younger”. However, within a few days she was notified of his death. At the time of his death, the defendant and the deceased had not seen each other for 13 years. The defendant did not attend his funeral – she says because she did not wish to see her mother.

45. Since graduating, the defendant has been employed in a number of responsible professional roles. She is currently employed full-time as a research and development engineer on a salary of $1,436 per week gross. Her partner Jeffrey is employed fulltime as a chemical metrologist on a salary of $1,392 per week gross. They have combined assets (shares, motor vehicles and superannuation) worth about $200,000, and no liabilities. She will inherit the deceased’s substantial estate.

Family provision

46. Applications such as these for provision out of the estate of a deceased person have been described by the High Court of Australia (in the context of the (NSW) Family Provision Act 1982) in Singer v Berghouse(No 2) [2] as involving a two stage approach. The first requires the determination of the jurisdictional fact of whether the applicant has been left with inadequate provision for his or her proper maintenance, education and advancement in life, and the second – which arises only if the first is resolved affirmatively – involves the discretionary assessment of what provision ought to be made out of the estate for the applicant. However, as the High Court explained, similar considerations inform both stages of the process:[3]

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, et cetera, 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.

2. (1994) 181 CLR 201.

3. (1994) 181 CLR 201 at 210.

47. Although there have been suggestions that subtle changes in the language now used in (NSW) Succession Act 2006, s 59, may have affected this,[4] the prevalent view is that no change to the conventional two-stage approach is warranted. As Bergin CJ in Eq observed in In the Estate of the late Anthony Marras:[5]

15 There has been some difference of opinion about the approach to be adopted by the Court in applications under s 59 of the Act compared to applications under the Family Provision Act 1982 (Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656 per Basten JA at 663 [29]; and Hallen J's careful analysis in Aubrey v Kain [2014] NSWSC 15; and Dudic v Jakovljevic [2014] NSWSC 169). In hearing these applications judges at first instance are bound to adhere to the approach referred to in the decisions of the High Court in Singer v Berghouse (No 2) (1994) 181 CLR 201 and Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. In line with those cases the Court must determine whether the provision is inadequate for the applicant's proper maintenance, education and advancement in life and if so, whether any provision ought be made for the applicant. Although there may be some overlap in the matters to be considered in these determinations, the pre-requisite of a finding of inadequacy is pivotal to the restraint that courts must exercise in refraining from rewriting wills or interfering with the intestacy regime beyond what is necessary to make adequate provision, paying due regard to the intentions of the testator or in this case, that of the Parliament.

4. Andrew v Andrew (2012) 81 NSWLR 656.

5. [2014] NSWSC 915.

48. That said, because the considerations relevant to both stages overlap in this way, consideration of a family provision application does not always divide neatly into the two questions, as Callinan and Heydon JJ pointed out in Vigolo v Bostin. [6] Nonetheless, in an application under the Act, the Court must consider, first, whether the plaintiff is an eligible person; secondly, whether the plaintiff has been left with inadequate provision for his or her proper maintenance, education and advancement in life; and thirdly, if so, what (if any) provision or further provision ought to be made out of the estate for those purposes. The relevant principles and considerations were summarised by McLelland CJ in Eq, in Re Fulop Deceased:[7]

In making these determinations, the following principles apply: First, the Court should not interfere with the dispositions in the will except to the extent necessary to make adequate provision for the plaintiff’s proper maintenance, education and advancement in life. Secondly, the expression ‘proper’ in this context connotes a standard appropriate to all the circumstances in the case, and thirdly, the Court may take into consideration any matter (whether existing or occurring before or after the death of the deceased which it considers relevant in the circumstances, including (a) the nature and quality of the relationship between the plaintiff and the deceased, (b) the character and conduct of the plaintiff, (c) the nature and extent of the plaintiff’s present and reasonably anticipated future needs, (d) the size and nature of the estate of the deceased, (e) the nature and relative strength of the claims to testamentary recognition by the deceased of those taking benefits under the will of the deceased (or where applicable under the laws relating to intestacy), and (f) any contribution, financial or otherwise, direct or indirect, by the plaintiff to the property or welfare of the deceased.

6. (2005) 221 CLR 191 at 231.

7. (1987) 8 NSWLR 679 at 680.

49. It is important also to bear in mind the principle articulated by Young J, as he then was, in Stewart v McDougall, [8] in explaining that the Court’s role is limited to making adequate provision for an eligible person’s proper maintenance and advancement:

It is important to state what the Family Provisions Act permits a Court to do and what it does not permit a Court to do. The Act recognises that Australians have freedom to leave their property by their will as they wish with one exception. The exception is that a person must fulfil any moral duty to make proper and adequate provision for those whom the community would expect such provision to be made before they can leave money as they wish. Thus, in these cases, one does not ask if the will is fair, one does not ask if the testatrix divided her property equal, one does not as a judge ask how would I have made a will had I been the testatrix. What must be asked is did the testatrix fail in her moral duty to those who have a claim on her. Even if the Court comes to the view that the question should be answered in the affirmative, the Court still does not remake the will, but only alters it to the extent adequate provision is made for the eligible person in respect of whom the testatrix failed in her moral duty.

8. NSWSC, Young J, 19 November 1987, unreported.

50. As a divorced former spouse of the deceased, the plaintiff is an “eligible person” only under category (d) of the definition of that term. [9] Thus the court must first determine whether, in its opinion, “having regard to all of the circumstances of the case (whether past or present), there are factors which warrant the making of the application”. [10] The plaintiff is plainly in circumstances of need. The estate is ample to provide for her, without significant adverse effect on the position of the beneficiary Rebecca. The critical issue in this case is whether there are “factors which warrant” the making of the plaintiff’s application.

    9. (NSW) Succession Act 2006, s 57(1)(d).

    10. (NSW) Succession Act 2006, s 59(1)(b).

Factors warranting

51. The accepted test is that factors which warrant the making of an application by a person who is eligible only under category (d), (e) or (f) of the definition of that term in s 57(1), are such factors which, when added to the facts which render the applicant an eligible person, give him or her status of a person who would generally be regarded as a natural object of testamentary recognition by the deceased. [11]

    11. Re Fulop deceased; Fulop v Public Trustee (1987) 8 NSWLR 679 at 681E (McLelland J); Churton v Christian (1988) 13 NSWLR 241 at 242G-243A, 244F, 252A-E.

52. In connection with a former spouse, the existence of a final matrimonial financial settlement under (CTH) Family Law Act 1975 will usually pose a significant obstacle to overcoming that hurdle, because typically it would be thought that the purpose of such a settlement (whether by agreement or by order) is to enable each party to embark on a new life afresh, untrammelled by further obligations to the other. [12] But this is not invariably so – unless there has been an approved release of rights to apply for a family provision order, under Succession Act, s 95. [13]

    12. Dijkhuijs v Barclay (1988) 13 NSWLR 639 at 651G.

    13. Or its predecessor, (NSW) Family Provision Act 1982, s 31.

53. In O'Shaughnessy v Mantle, [14] Young J provided a non-exhaustive list of circumstances which may give rise to a moral duty upon a testator to provide for a former spouse. His Honour first identified four classes of case which “would clearly be ones where there would be factors warranting the court considering the application”, namely (1) where there has been a divorce but a spouse has died before financial matters have been resolved by the Family Court; (2) where the husband and wife have not finally settled all their property dealings at the time of the divorce; (3) where maintenance was being paid to the ex-spouse as at the date of the deceased's death and the orders for maintenance were inadequate to provide for the ex-spouse after death of the paying spouse; and (4) where despite the divorce there was some dependency on the deceased as at the date of death, such as where some years after the divorce the present plaintiff fell grievously ill and because of a residue of affection the now deceased spouse provided moneys for medical treatment or living expenses. His Honour then referred to a “fifth class of case”, analogous to those under the Testator's Family Maintenance and Guardianship of Infants Act concerning persons who had separated but a divorce had not become absolute, in which it was consistently held that what a spouse was entitled to under the Testator's Family Maintenance and Guardianship of Infants Act could not be concluded merely by considering whether the plaintiff would have been entitled in the spouse's lifetime to an order for maintenance. Observing that those cases would probably be followed under the Family ProvisionAct where the applicant was a widow or widower as opposed to being a former spouse, his Honour said that – apart from one type of case – it was difficult to see how there were any “special circumstances” involved in such cases which would warrant an application by a former spouse where there had been an order of the Family Court in respect of property, because (CTH) Family Law Act, s 81, was aimed at finally breaking all financial relations between the parties. However, as to the “one type of case”, his Honour continued:[15]

The one type of case in this category where there may be some special factor involved, is where there is a very small estate and whilst the parties are alive it was only possible to give a pittance to the claiming spouse because the other spouse needed funds to maintain his own life but that now one spouse is dead, the barrier to giving the other spouse the whole of the family property has vanished. However, I merely raise these matters and leave this fifth class case for decision if a case comes to the Court raising those particular problems.

Clearly on the other side of the line is a case where there has been a determination between the spouses on a final basis by a competent court, and the orders of the court or the agreement between the parties sanctioned by the court have been performed and there has been no material change in circumstances other than the death of one of the parties. Somewhere between this type of case and the other five classes of case which I have discussed, the line must be drawn in respect of applications by ex-spouses – just where, may be able to be determined with more precision after there have been a larger number of cases before the court.

14. (1986) 7 NSWLR 142 at 147–8.

15. (1986) 7 NSWLR 142 at 149.

54. Like the earlier classes, this fifth class is another example of a case in which the moral obligations arising out of marriage have not been fully discharged by the matrimonial financial settlement – in such a case, because the available resources were then insufficient to do so.

55. In Holcombe v Holcombe,[16] the Court of Appeal held (in the context of an application by a former wife) that the status of a person who would be regarded as a "natural object of testamentary recognition" is determined by circumstances in which a moral duty may arise between the testator and alleged eligible claimant. Gleeson CJ described the O'Shaughnessy list as providing a useful but not exhaustive indication of when that might be so:

The circumstances in which there may be a moral duty upon a testator, who is survived by a widow, to make provision for a former wife, are considered by Young J in O'Shaughnessy v Mantle (1986) 7 NSWLR 142 at 147-148. The circumstances of human relationships are infinitely various and the list given by Young J is not exhaustive, but it is a useful indication of the type of case in which an application by an ex-wife might succeed.

16. [1993] NSWCA 137.

56. Then, in Dijkhuijs v Barclay,[17] the Court of Appeal held that the “factors which warrant the making of an application” by a former spouse within s 9(1) will vary in accordance with the circumstances of the case; and that such cases should not be limited to pre-conceived classes or categories, or be determined by “special factors”. Kirby P, with whom Hope JA agreed, said that the “public policy” in finality of financial dealings by property settlements ordered by the Family Court of Australia must be read in conjunction with the competing public policy expressed by Parliament in the Family Provision Act: [18]

There is no doubt that in most cases, the achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Confronted by the news that he or she had been excluded from the will of the former spouse, the response would, in the overwhelming majority of cases, be: “Our marriage was dissolved. We settled our financial affairs. We can each start a new life. That was the whole point of the Family Court proceedings.” To this extent, I agree with what Young J has written in O'Shaughnessy and in this case.

However, that public policy, important though it is, must adapt itself to the new provisions of the Act, with its reforming inclusion of a specific entitlement of a former spouse to claim. That provision contemplates that there will be cases where such a claim will succeed, notwithstanding the public policy referred to by his Honour. As Young J acknowledged, the facts of each relationship are unique. The circumstances which may give rise to a claim for provision will vary in accordance with the circumstances of the case. Where the statute is expressed in such broad terms, there are dangers in attempting to limit the cases which may “warrant the making of the application” under s 9(1) of the Act to preconceived classes or categories. This danger exists even where the categories are described as non-exclusive “guidelines”. The “public policy” in finality of financial dealings by property settlements ordered by the Family Court must likewise now be read in conjunction with the competing public policy expressed by Parliament in the Act. This public policy could not be clearer. It is that, in certain circumstances and subject to certain procedures, former spouses may, notwithstanding such Family Court orders, seek orders for provision under the Act. A construction of the Act which impeded the achievement of this competing public policy would impermissibly afford primacy to the policy of finality which must henceforth compete “in all the circumstances of the case” with the claim by an ex-spouse for provision under the Act.

17. (1988) 13 NSWLR 639.

18. Dijkhuijs at 651F-652C; 655D.

57. Applying that to the case at hand, his Honour proceeded to explain that the “clean break” principle was not paramount, and that an ex-wife of a long marriage finding herself in the predicament of insufficient financial resources was the kind of circumstance which could be considered to be a factor warranting the making of an application for provision:[19]

It is clear that his Honour affirmed the “guidelines” contained in his decision in O'Shaughnessy. But to the extent that the categories listed in O'Shaughnessy purport to harness the discretion stated in the wide terms of s 9(1) of the Act, I consider that they impede rather than help the performance of the task assigned to the Court by Parliament: cf Norbis v Norbis (1986) 161 CLR 513 at 519. In his proper attention to the public policy of finality reflected in the Family Law Act (Cth), s 81, Young J appears to have given insufficient attention to the competing public policy exhibited (relevantly) by the inclusion of former spouses amongst “eligible persons” under the Family Provision Act. It is this which led him to his conclusion that, save for the special cases mentioned in O'Shaughnessy “almost always” the Court would give effect to the public policy of “a clean break”. Having regard to the provision of s 9(1)(c) in the Family Provision Act, I consider that the paramountcy assigned by his Honour to the policy of “a clean break” is not justified. Specifically, because of the instruction to have “regard to all of the circumstances of the case”, I do not believe that s 9(1) and the procedure there envisaged justifies such paramountcy.

The same observation may be made in relation to the suggested competition, in this case, between the public interest of “ending once and for all financial relations between the formerly married persons” and “sentimental factors” involving the appellant as an ex-wife of a long marriage “finding herself with insufficient financial resources”. That predicament, far from being a “sentimental factor” is precisely the kind of circumstance which the High Court contemplated in Smith as a justification for the co-existence of the Federal and State Acts. Likewise, it is clearly one of the circumstances which could be considered to be a factor to warrant the making of an application for provision.

Nor is it true to say that the “law gives her one opportunity to get provision”. There is power in the Family Court to review orders made for the disposition of matrimonial property, although that power is very severely limited by the terms of the Family Law Act 1975 (Cth), s 79A. More relevantly, the law now gives a former spouse, in the terms of the Act, a further opportunity to secure “provision” which did not formerly exist but which exists now, subject to passing through the gateway of the procedure laid down in s 9(1) of the Act and running the gauntlet provided by the terms of s 33(2), as to costs. In this sense, it is not correct to say that the appellant was “affixed with what happened in the Family Court”. Nor do the terms of s 9(1) or s 33(2) warrant the conclusion that “it is only if there are some very special factors that she can have a second bite”. There is no mention in s 9 of “special” factors, let alone “very special” factors. If I thought these words were surplusage to a paraphrase of the subsection, I should happily disregard them. But the whole thrust of Young J's approach, particularly when read with O'Shaughnessy, is to add to the burden of the plaintiff in the position of the appellant a load which s 9(1) of the Act does not impose. The source of this excess burden is the disproportionate weight which his Honour assigns to the public policy in the finality of orders of the Family Court concerning the disposition of property of a dissolved marriage. After the valid enactment of the Family Provision Act, such orders are now final, contingently upon the possibility of an application under that Act. Where such an application is made there must be a first determination as s 9(1) contemplates. But that determination requires regard to be had to “all the circumstances of the case (whether past or present)”.

19. (1988) 13 NSWLR 639 at 652G-653G.

58. Hope JA agreed with Kirby P, and in particular with his reasons in relation to the position which arises where there have been proceedings in the Family Court and orders have been made on the subject of property or maintenance, and disagreed with the views expressed by Young J in O'Shaughnessy “on what his Honour described as non-exhaustive guidelines”. [20]

    20. (1988) 13 NSWLR 639 at 655D.

59. Mahoney JA said:[21]

Thus, a plaintiff may be a former spouse who, on dissolution of the marriage, received what on any view she was entitled to have and there may have been no further relationship between them so that none of the factors in s 9(3)(a) to s 9(3)(c), are of relevance. But, at the deceased's death, she may have a financial need. In such circumstances, the fact that the plaintiff has established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s 9(3)(d), the deceased had a duty to her which involved that he should have provided for her financial need. This will be so a fortiori where the basis for the eligibility of the plaintiff is alleged to be within par (d) of the definition of “eligible person”.

21. (1988) 13 NSWLR 639 at 657G-658A.

60. His Honour referred to three aspects of the approach adopted by Young J at first instance: first, the adoption of O'Shaughnessy and its list of factors which might warrant an application by a former spouse; secondly, that although there were qualifications and exceptions to it, apart from the special cases mentioned in O'Shaughnessy, where there had been a final matrimonial property settlement, then almost always a court exercising family provision jurisdiction would give effect to the public policy that there has been a “clean break” following which both husband and wife can go their own ways, and that the death of a husband a short time after the matrimonial property settlement, having remarried another lady who, after a short marriage, inherits a large amount of money, does not amount to “factors warranting”; and thirdly, that “the only possible special factors in this case are that there was a large windfall between the date of determination in the Family Court and the date of death”. Having observed that Young J had given great weight to the “clean break” policy, including in stating that “it is only if there are some very special factors that she can have a second bite and I do not consider that there are sufficient special factors here, apart from the question of windfall”, Mahoney JA held that that was too stringent a test:[22]

As I have said, the eligibility question under s 9(1) involves the determination of whether “there are factors which warrant the making of the application” and those factors relate, in the sense to which I have referred, to the question whether, in the end, the deceased owed to the plaintiff a duty which he did not discharge. It is, with respect, to narrow that question too far to conclude that there can be no such “factors” in the kind of Family Court case to which his Honour referred, unless there be “some very special factors”. In particular, I am not satisfied that, granted an order in the Family Court of the kind to which his Honour referred, it is wrong, “very special factors apart”, to consider the financial position of the former spouse. Her financial position may be relevant in a wider class of case.

22. (1988) 13 NSWLR 639 at 659B-660A.

61. Thus while the existence of a final matrimonial financial settlement is an important factor, it is not conclusive. What emerges from the cases to which reference has been made is that there will be factors warranting the making of a claim by a divorced former spouse, even where there has been a matrimonial property settlement, if at the date of the hearing of the family provision application there remained an undischarged moral obligation to the applicant.

62. This is an area in which there is wider than ordinary scope for differences of opinion between reasonable minds, and it could not be said that there was a clear single “community standard” as to when one divorced spouse will be regarded as having an undischarged obligation to the other. [23] The O'Shaughnessy list merely provides some examples of where that is likely to be so. Ultimately, each class of case in that list is an illustration of circumstances in which it can be said that the moral obligations arising out of the marriage have not been fully discharged by the matrimonial financial settlement.

    23. Cf, in the context of able-bodied adult children, Hastings v Hastings [2010] NSWCA 197 at [20] (Basten JA); Burke v Burke [2015] NSWCA 195 at [104]-[105] (Ward JA).

63. In Smith v Smith,[24] in holding that the combination of (CTH) Family Law Act, s 79 (which provides for the alteration and settlement of property interests, including in some circumstances against the estate of a deceased spouse) and s 81 (which commands the court, so far as practicable, to make orders which will finally determine the financial relationships and avoid further proceedings between the parties to the marriage), was insufficient to sustain an implication that Parliament intended to cover exclusively the making of claims by a former spouse for a family provision order against the estate of a deceased spouse, Mason, Brennan and Deane JJ referred to “persuasive reasons” for the preservation of a party’s entitlement to make an application for a family provision order, notwithstanding a final matrimonial financial settlement – including the possibility of a substantial subsequent change in the parties’ circumstances (emphasis added):[25]

There are differences in the nature of the claims arising under the two Acts and in the criteria by which they are to be determined, and there is the possibility that the circumstances of the parties might change substantially between the date of a determination under s 79 and the death of a party. These are all factors which favour the preservation of the entitlement under State legislation.

24. (1986) 161 CLR 217 at 245; see also Dijkhuijs v Barclay (1988) 13 NSWLR 639 at 652 (Kirby P).

25. (1986) 161 CLR 217 at 245.

64. The decision of the Court of Appeal in Dijkhuijs effectively rejected the proposition a post-matrimonial settlement change in the circumstances of one or both parties could not provide circumstances warranting the making of a family provision application. The potential for changes in the fortunes of ex-spouses to preserve or resurrect moral obligations of the relevant kind between them is also illustrated by the following observations of Kay J, as a member of the Full Court of the Family Court, in Farmer v Bramley:[26]

    26. Farmer v Bramley (2000) 27 Fam LR 316; (2000) FLC ¶93-060; [2000] FamCA 1615.

[74] While no doubt there are members of our community who would find it difficult to understand why an ex-spouse should share in the post separation good fortune of the other ex-spouse not all would agree. On the ABC TV's Australian Story — “Daydream Believer” a man who had recently become very rich ($137m) was asked what he was spending his fortune on. After describing several luxury investments and the acquisition of homes for his children he said:

“And what else have I spent my money on, oh my ex wife I gave her something because I felt that she helped me get going in the early years when we used to live on minced meat and scrambled eggs.” (website: The concept of an ex-spouse sharing in the changes of fortune of their former betrothed is not entirely alien or repugnant to the law. In Gilles Desjardins v Madeleine Ducharme (unreported, No 500-09-008619-991, 30 March 2000) the Quebec Cour D'Appel, cor Jean-Louis Baudouin, Rene Dussault and Jacques Chamberlain JJCA, unanimously rejected an appeal from the judgment of Leger J of the Cour Superieure du District de Montreal wherein his Honour had allowed an estranged wife, some 9 years after separation, to share in a $5m lottery win of her ex-husband. Her then existing spousal maintenance order for $1000 per month was converted to a $350,000 lump sum award.

[78] In response to a submission that after acquired gains should be ignored in such circumstances, Baudouin CJA said:

[28] Admittedly, the appellant's substantial gain was not acquired during the marriage. The fact nevertheless remains that, in law, this is unimportant as it is neither a partition under a marriage settlement nor a distribution of a family inheritance. More often than not, the courts have to deal with the reverse situation, where one of the parties, after suffering a reverse of fortune, declares himself unable to continue to pay alimony. The courts then review the situation according to criteria which are well-known by now and, if need be, revise the alimony downwards. The same must apply in the opposite case. It is not therefore, as the appellant argues, a kind of life sentence, after a nine-year separation, or a sharing of a lottery win but, much more prosaically, in light of this new element which is the appellant's capacity to give back to the respondent a lifestyle comparable or similar to the one which she enjoyed during the marriage, a question of setting a reasonable lump sum.

[29] No-one could liken this to a rigorous actuarial calculation which would work out to the nearest penny the amount to be granted. The enormous divergences between the expert reports that have been filed are eloquent proof of this. The trial judge worked it out taking into account the evidence before him but giving little weight to the two expert reports.

[30] For my part, I cannot find fault with his calculation or with the factors he took into account. The lump sum will enable the respondent to find suitable (certainly not sumptuous) accommodation, have a decent car for her travels (as she does not live in a large city where she could use public transport) and buy some furniture. [Translation from the French text]

65. A similar notion is recognised in the family provision legislation itself, in that a further family provision order may be sought by and made in favour of an eligible person in whose favour such an order has been previously made, if in the meantime there has been a substantial detrimental change in the applicant’s circumstances. [27]

    27. (NSW) Succession Act 2006, s 59(3)(a).

66. That is not to say that a mere change in circumstances will necessarily suffice: the judgment as to whether there are circumstances warranting must have regard to “all the circumstances of the case (whether past or present)”. [28]

    28. (NSW) Succession Act 2006, s 59(1)(b); and see Dijkhuijs v Barclay (1988) 13 NSWLR 639 at 653F.

Fraud or non-disclosure in the matrimonial settlement?

67. The plaintiff contended that the deceased was guilty of fraud, suppression of evidence and/or non-disclosure, in understating his income in the Family Court proceedings. I accept that a miscarriage of justice resulting from one of the vitiating factors - fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance – of the kind referred to in (CTH) Family Law Act 1975, s 79A(1)(a), is capable of amounting to circumstances warranting the making of a family provision application by an ex-spouse. That is because, if the outcome in the Family Court was a miscarriage of justice, it would not have wholly discharged the moral obligations arising from the marriage. In addition, there is some analogy with the circumstances in which the Succession Act itself contemplates that there can be a “second bite of the cherry”, by way of a second application for a family provision order after an earlier application has succeeded or has been refused – namely significant non-disclosure of estate property the disclosure of which would have resulted in a different outcome. [29]

    29. (NSW) Succession Act 2006, s 59(3)(b), (4).

68. In his verified statement of financial circumstances of 28 April 1992, the deceased disclosed that for the financial year ended 30 June 1991 his income comprised salary or wages (before tax) from employment as a doctor by Camden Hospital of $57,200, and overtime of $5,200 – a total of $62,400; and that his then current weekly income was $1,100 salary and wages and $100 overtime, a total of $1,200. [30] In an updating affidavit sworn on 21 October 1992, he deposed that he was also employed at Bowral Hospital, but otherwise did not make any different statement of his income.

    30. His 1991 tax return in fact revealed income (from Bowral Hospital and SWSAHS) totalling $68,500, a loss from private practice of $11,155, generating total income of $57,970, less deductions of $10,644, resulting in a taxable income of $47,326.

69. It appears, from his cross-examination before Rourke J on 3 December 1992, that the deceased made an amended statement of financial circumstances on 2 December 1992, in which he disclosed that his income for the financial year ended 30 June 1992 from all sources was $62,400 – the same amount he had previously disclosed for FY1991. He was cross-examined from a statement apparently produced by his accountants which referred to taxable income for FY1992 of $72,802. [31] He accepted that his accountants’ statement was accurate, and said that the figure in his statement of financial circumstances had been his best estimate. Rourke J ultimately found that he had under-disclosed his FY1992 income by $10,000, but unintentionally so.

    31. This corresponds precisely with his 1992 tax return, which was apparently lodged on 4 December 1992.

70. It follows that although, in the principal judgment, his Honour referred to $1,200 per week (which appears to have been taken from the statement of financial circumstances), Rourke J was aware that the deceased earned income of $72,000 per annum – equivalent to $1,384 per week – in FY1992.

71. Before me, the plaintiff submitted that the deceased was guilty of fraud, or at least suppression of evidence by way of material non-disclosure, in respect of his current weekly income, as his FY1993 income tax return established that he earned gross income of $133,922 during FY1993 – equivalent to $2,588 weekly – which was approximately twice the amount disclosed before Rourke J. [32] The plaintiff submitted that:

    32. His taxable income (after deductions) appears to have been $126,046.

1. The deceased’s taxable income for FY1993 was $126,046;

2. There were 23 calendar weeks from 1 July to 2 December 1992, and another 29 from 3 December to 30 June 1993;

3. If, conformably with Rourke J’s finding, the deceased was earning only $1,200 per week for the 23 weeks up to the hearing (totalling $27,600), then he must have earned at least $88,446 over the next 29 weeks, an average of $3,049 per week;

4. However (according to what he told Dr Robbie in an interview on 29 March 1994) he reduced his workload in March 1993, when he left Camden Hospital, where he had worked between 54 and 60 hours per week at $25 per hour, equivalent to $1,425 per week;

5. It is impossible that he could only have been earning $1,200 per week until after the hearing in December 1992, given his total taxable income for the year and his reduced workload from March 1993;

6. Had Dr Lodin’s true income been known, the plaintiff would have received twice the property settlement she received (an additional $55,000), and a “penalty” for non-disclosure of a further 5 to 10% of the additional $55,000, say $5,000, bringing the additional award to $60,000, 24 years ago, which with interest would now be in the order of $172,800.

72. The defendant submitted that there was no reason for supposing that the increase in his income was not exclusively attributable to the period after December 1992.

73. In connection with the deceased’s child support review application in 1993, a Child Support Review Officer contacted his employers and ascertained that his taxable income for FY1993 – which was in excess of $100,000 - significantly exceeded his FY1992 income, because he was working extremely long hours at Bowral Hospital while another medical officer was absent on maternity leave, and also worked significant hours at Camden Hospital, but would not be working the same hours in FY1994. In fact, in FY1994, his income fell to $69,149 – in the range which Rourke J had assumed.

74. There is difficulty in accepting the contention that the deceased ceased work at Camden Hospital as early as March 1993, which is founded on a statement attributed to him by Dr Robbie in a March 1994 interview, given the evidence that he resigned following service of the ADVO summons, which was sometime after September 1993. That said, there is still force in the submission that it is unlikely that the episode of increased income is wholly attributable to the period after the hearing in December 1992. In other words, it is probable that by December 1992 the deceased was earning substantially more than $1,300 per week – probably twice that amount – and this was not disclosed to the Family Court or to the plaintiff.

75. However, I do not accept that the result of its disclosure would have been as the plaintiff suggests. What is important in an assessment of the s 75(2) factors is not so much actual weekly income at the moment of the hearing, but earning capacity on a sustainable basis. The FY1993 spike in the deceased’s income in FY1993 was a temporary one, attributable to exceptional circumstances, which were not likely to be (and in fact were not) sustained, namely additional workload to cover for a colleague who was absent on maternity leave; as has been noted, in FY1994 his taxable income reverted to previous levels, at $69,149. Rourke J took into account the disparity in the earning capacities of the parties, which ultimately resulted in the adjustment in her favour of $55,000 - representing, as I have said, an adjustment of nearly 15% of the pool which was, by 1992 standards, a large adjustment for the s 75(2) factors. That was based on evidence that the deceased’s earning capacity was in the order of $1,200 to $1,384 per week, and that was a fair indication of his sustainable earning capacity, as borne out by his FY1994 income of about $1,350 per week.

76. I am therefore unpersuaded that the family law proceedings involved any such miscarriage of justice by reason of fraud, suppression of evidence, or non-disclosure as would have founded an application under Family Law Act, s 79A(1)(a). Moreover, the plaintiff has known since she received notification of the outcome of child support review in July 1993 that the deceased’s income for FY1993 exceeded $100,000, but made no timely application under s 79A while the deceased was alive, and this would provide powerful discretionary grounds for declining relief under s 79A. Accordingly, I am unpersuaded that factors warranting the making of the plaintiff’s claim are furnished by any fraud or non-disclosure in connection with the deceased’s financial disclosure in the matrimonial proceedings.

Atonement?

77. The plaintiff next submitted that it was the deceased’s testamentary obligation to atone for his professional misconduct in engaging in an improper sexual relationship with the plaintiff, and that - by way of regret and remorse for the psychiatric injury his conduct caused her - this should be reflected in a legacy of $1 million.

78. So expressed, this is a novel concept. While the relationship was undoubtedly professionally improper, it was consensual, and the plaintiff pursued Dr Lodin at least as much as he her. Then, after the marriage breakdown, she instigated professional disciplinary proceedings against him, in respect of which he has been disciplined; common law proceedings for damages, which were ultimately settled by discontinuance; and ADVO proceedings, which were dismissed. It is difficult to see how any obligation to “atone” could survive that.

79. However, that is not to deny that the deceased may not have been exonerated, by the matrimonial financial settlement, from all moral obligation to make testamentary provision for the plaintiff. This is not an easy case, and I confess that judicial minds may differ on it. There are undoubtedly factors which tell against the view that the plaintiff would be regarded as a person who would be regarded as a natural object of testamentary recognition by the deceased. The relationship between the parties ended nigh on a quarter of a century ago. There has been a final matrimonial financial settlement, in which the disparity of earning capacity, and the plaintiff’s ongoing care responsibility for the defendant, were taken into account, which would ordinarily be regarded as providing a “clean break” with no ongoing obligations except in respect of child support, and the deceased punctiliously performed his child support obligations. The plaintiff’s attitude to the deceased since the end of their relationship has been one of relentless hostility, and she carried into effect as best she could her stated aim of making his life a misery, pursuing him and his resources in every way she could – through reviews of child support, professional discipline, and actions for damages. Even if she followed up the “wrath of Allah” letter with the apology to which she referred, [33] it could hardly expunge the years of her relentless persecution of the deceased.

    33. Which I assume, without accepting: there is no other evidence of any such letter – it was not found among his papers where the “wrath of Allah” letter was found; and it seems utterly inconsistent with the plaintiff’s manifested hostility towards the deceased over decades.

80. However, those considerations are in my judgment outweighed by others.

81. First, there is some, albeit dated evidence, that the marriage and its breakdown had an unusually enduring impact on the plaintiff. Dr Robertson, in a report dated 9 August 1993, expressed the opinion that she was then:

… suffering from a chronic depressive state (Dysthymic Disorder, DSM-III-R). If her history is accepted (and it appeared to me to be internally consistent and believable), the main precipitating and perpetuating factors in her depressive state were the circumstances of her relationship to Dr Lodin, and of the subsequent marriage to him; and the events and circumstances which have followed the break-up of her marriage to him.

82. Dr Quadrio, in a report of 6 July 1994, expressed the opinion that the relationship was not a genuine marriage, and that:

The trauma experienced by Ms Lodin is thus much more complex and qualitatively different from the trauma of a normal marriage breakdown since it represents a betrayal and exploitation by a person in a fiduciary relationship.

83. According to Dr Quadrio (emphasis added):

I have assessed a number of women who have been sexually exploited in the context of a fiduciary relationship, chiefly with medical therapists or psychotherapists or clergy. Once the woman realizes that the experience has been an exploitation of her vulnerability and that the therapist does not truly love her, she feels humiliated, betrayed and enraged. She may turn this rage upon herself and relapse into profound self-hatred. That process leads inevitably into depression, feelings of worthlessness and hopelessness, depression and suicidality. Rehabilitation is particularly problematic and in this case will be even more so because Ms Lodin has a child of the relationship, a child who is distinctively non-anglo in appearance and who will be a constant reminder of what has happened and with whom. Naturally this child will require ongoing care from Ms Lodin for many years to come. …

My prognosis for this woman and her children is very guarded at this time and I cannot be confident that she will make an adequate rehabilitation. Certainly she, and possibly her daughters as well, will require expert counselling to cope with the trauma of the second marriage, the reality that there is a child of that relationship and that Ms Lodin must raise both children alone.

84. While the defendant rightly submits that there was no psychiatric evidence of any currency, and the reports to which I have referred date from 1994 and speak only of the plaintiff’s condition at that time and not now, they provide some support for the view that the relationship, marriage and its sequelae had unusual and long-lasting consequences for the plaintiff. The plaintiff’s conduct towards the deceased from 1993 onwards, her fraught relationships with others, including her daughters, and her daughters’ attitudes towards her, all manifest aspects of what Dr Quadrio explained in the passage quoted above.

85. Secondly, as the plaintiff submitted, Rourke J’s prediction of the plaintiff’s prospects, reasonable enough as it was when it was made, was not borne out by events, to her detriment. She expended her payment of $55,000, as to $10,000 on the costs of the common law division proceedings against the deceased; as to $7,000 on the costs of the family law proceedings; as to $8,000 on the costs of the family court appeal; and as to $15,000 on the purchase of furniture, removal costs, and living expenses including rent, school fees, uniforms and books, retaining $10,000 or so for contingencies. While, as his Honour had assumed would be the case, she continued to have care responsibility for the defendant, in other significant respects she fared worse than his Honour had predicted. Although she did not then have any obvious health impediment, she bore the psychological scars of the relationship, to which Dr Robertson and Dr Quadrio referred, and her health deteriorated, including through three motor vehicle accidents in 1997, 2000 and 2008. While his Honour acknowledged that her earning capacity would be severely restricted by her care responsibility for Alana and the defendant, he anticipated that she would complete her university studies and secure some form of employment, her care responsibility for Rebecca constrained her ability to do so until about 2000 when Rebecca was in year 9, whereupon a motor vehicle accident effectively prevented her from obtaining regular remunerative employment thereafter.

86. Thirdly, while the plaintiff struggled, the deceased prospered. Untrammelled by responsibility for a wife or a child, he accumulated assets which by his death exceeded in value more than 10-fold those at the time of the matrimonial settlement. His ability to do this was facilitated by the plaintiff’s assumption of responsibility for the care of the defendant (who was then not quite 6 years of age) until she became independent at the age of 21, for whom she provided accommodation, food, care, supervision, transport, guidance and support. I do not overlook that the circumstance that she would do so was taken into account by Rourke J, nor that the deceased was punctilious in his payment of child support. Nonetheless, the plaintiff bore the physical, emotional, financial and practical constraints imposed by care responsibility for the defendant, for 15 years, and the deceased did not. Support of Rebecca (and Alana) during this period resulted in her incurring relatively significant – in her circumstances, not the deceased’s – credit card debt of $25,000, which she ultimately repaid by increasing her mortgage. The deceased’s compliance with his child support obligations does not detract from the proposition that by assuming (and thus relieving him of) the obligation to care for Rebecca, she freed him to practice his profession, generate income and accumulate the property which ultimately became his estate, and thereby made an indirect contribution to the acquisition, conservation and improvement of the estate of the deceased, within Succession Act, s 60(2)(h), in the sense explained by the Full Family Court in Ferraro & Ferraro (speaking of Family Law Act, s 79(4)(c), which refers to contributions to the welfare of the family including as a homemaker, and s 79(4)(b) which relevantly refers to indirect contributions to the acquisition, conservation and improvement of property):[34]

The facts are that the husband, particularly in the latter years, devoted his full time and attention to his business activities and thus the wife was left with virtually the sole responsibility for the children and the home. That latter circumstance is significant not only in relation to the evaluation to the wife’s homemaker contributions under para (c) but is important under para (b) because it freed the husband from those responsibilities in order to pursue without interruption his business activities.

34. (1993) FLC ¶92-335 at 79,568-9; see also Dawes & Dawes (1990) FLC ¶92-108 at 77,729.

87. Finally, the deceased’s estate comprises ample resources to make adequate provision for the plaintiff, and still to provide a most substantial endowment for the defendant – the daughter who the plaintiff raised. And there is something unbecoming about an arrangement under which the plaintiff is left in circumstances of considerable need, reliant on a social security pension, while the daughter whom she raised inherits in excess of $5 million.

88. Thus one feature of the case is that the relationship, marriage and its breakdown has had a serious impact on the rest of the plaintiff’s life. That is not to say that her current circumstances are entirely attributable to her relationship with the deceased, their marriage and its fallout; to the contrary, it is plain that other events, including her failed first marriage, and her motor vehicles accidents, have also contributed. As the defendant emphasised, in connection with her claim for compensation arising out of the 2000 motor vehicle accident she made a statement which suggested that until that accident she was in good health, fit and well-adjusted. Her proven conduct towards the deceased during that period and since tends to suggest otherwise. But in any event, the motor vehicle accident deprived her of the opportunity of establishing herself in regular remunerative employment, just when Rebecca was attaining an age when it was realistic for the plaintiff to aspire to do so. Thus her relationship with the deceased, and its sequelae, have contributed significantly to her current circumstances.

89. Another feature of the case is that the plaintiff has, since the matrimonial settlement, made an ongoing indirect contribution to the deceased’s estate, within Succession Act, s 60(2)(h), through her care responsibility for Rebecca. From the extent to which the deceased’s estate has been enhanced since the matrimonial settlement, it can now be seen that, although the prospect of her ongoing care responsibility for Rebecca was taken into account by Rourke J as a s 75(2) factor, her extensive indirect post-separation contribution to the deceased’s estate warrants recognition beyond that which it was afforded in the matrimonial settlement.

90. In my judgment, the combination of the unusual and enduring impact of the relationship and marriage on the plaintiff, her care responsibility for the defendant for 15 years after the matrimonial property settlement and associated indirect contribution to the deceased’s estate, the respective post-divorce deterioration in her circumstances and great improvement in those of the deceased, the relative paucity of the matrimonial estate at the time of the property settlement compared to the amplitude of resources now available, and her current circumstances of need which are in part attributable to her relationship and marriage with the deceased, and where the only other claim on his testamentary bounty is that of the defendant for whom ample will remain after making proper provision for the plaintiff, amount to circumstances which made the plaintiff, at the time of the deceased’s death, a person who ought to have been an object of testamentary recognition by him, and thus constitute circumstances warranting the making of her claim.

91. And this is so, notwithstanding her provision of misleading information to the Child Support Agency in 1992, her post-divorce persecution of the deceased (which must indeed have made his life a misery), and her non-disclosure of Rebecca’s bursary. In this respect, there are similarities to the circumstances described by Bryson J in Wentworth v Wentworth: [35]

I do not regard a state of estrangement or even hostility as necessarily bringing an end to any moral duty to make provision for an eligible person, whether wife, son, daughter or other. …

It is necessary to draw deeply on reserves of toleration and patience before becoming prepared to make any provision at all for a daughter who wrote to her father, in the year before he died, "You destroyed my mother doing it, and you have destroyed me. You are a disgrace to the human race, utterly amoral, and totally corrupt. You always have been" and "How about one moral, honest act in your life, in expurgation of a lifetime of corruption and lies" and other enormities. If the plaintiff had any real control over her conduct and her engagement in argument and conflict, this behaviour would have extinguished the testator's duty to make provision for her. But she cannot stop herself. The plaintiff's propensity for involvement in conflict and litigation has elements of a disability, an incapacity for successfully grappling with life, and the plaintiff's claim is in the special class of claims by adult sons and daughters who are in some way disabled and in need of favourable parental treatment.

35. Wentworth v Wentworth (NSWSC, Bryson J, 14 June 1991, BC9101896) at 125-7.

92. A similar “disability” can be seen in the present plaintiff’s attitude and conduct towards the deceased since their separation; her persecution of him through multiple proceedings in diverse forums; and her propensity for conflict with others, most particularly manifested in her difficult relationships with both her daughters.

93. In circumstances where no provision was made for her, those same matters which constitute factors warranting the making of her claim, also lead to the conclusion that the plaintiff has been left with inadequate provision for her proper maintenance and advancement in life.

What order should be made?

94. As has been noted, the plaintiff says that she wants to remain living in the Blue Mountains, where she currently lives, although she has no prior connection with that region. She tendered some advertisements of properties in Leura and Katoomba, in the range $650,000 to $750,000. These are two to three bedroom cottages, at least the higher end of which is, in the plaintiff’s current circumstances, in excess of her reasonable needs. The property she sold in 2015 at Fisherman’s Point on the South Coast – an area with which she does have an affinity – sold for $340,000. She has accumulated savings of $250,000 from the proceeds of its sale which can be applied to purchase of a replacement. In my view, provision should be made for her to acquire a home – in a less expensive part of the Blue Mountains, or elsewhere – for $550,000, which after application of her savings will require a further $300,000.

94. She estimated that her expenses are about $30,000 annually, or $600 per week, including rent of $269 per week. With the purchase of a home, she would no longer have the rental expense, though she would have additional rates and outgoings; I assess her reasonable post-purchase expenses at $450 per week. Again, upon the purchase of a home, she would no longer have the interest income on her savings, and given the resources available, I do not consider that the public purse should be considered primarily responsible for her support. Aged 62, the plaintiff’s life expectancy is 24 years. The capital sum required to produce $450 per week for 24 years on the 3% tables is $399,316 ($450 x 887.37).

95. A further $50,000 will cover her requirements for medical treatment (about $25,000) and provide a small fund for contingencies.

96. In my view, therefore, proper provision for the plaintiff is a legacy of $750,000. That will leave in excess of $4,250,000 for the defendant, and represents less than 15% of the estate.

Conclusion

98. My conclusions may be summarised as follows:

99. The unusual and enduring impact of the relationship and marriage with the deceased on the plaintiff, and its contribution to her current circumstances of need; the respective post-divorce deterioration in her circumstances, and great improvement in those of the deceased; the impact of her care responsibility for the defendant, for 15 years after the matrimonial property settlement, on her earning capacity, and her corresponding indirect contribution to the deceased’s estate; and the relative paucity of the matrimonial estate at the time of the property settlement, compared to the amplitude of resources now available; all in circumstances where the only other claim on the deceased’s testamentary bounty was that of the defendant, for whom ample estate will remain after making proper provision for the plaintiff; together amount to circumstances which made the plaintiff, at the time of the deceased’s death, a person who ought to have been an object of his testamentary recognition, and thus constitute circumstances warranting the making of her claim.

100. In circumstances where no provision was made for her, those same matters which constitute factors warranting the making of her claim, also lead to the conclusion that the plaintiff has been left with inadequate provision for her proper maintenance and advancement in life.

101. Given the available resources, proper provision for the plaintiff would enable her to acquire a reasonably appropriate home (say $550,000, for which she already has accumulated savings of $250,000), provision for her reasonable living expenses for life ($400,000), and a small fund of $50,000 for contingencies. The resultant legacy of $750,000 will leave in excess of $4,250,000 for the defendant, and represents less than 15% of the estate.

102. The Court orders that:

1. by way of provision from the estate of the deceased, the plaintiff receive a lump sum legacy of $750,000, such legacy not to bear interest if paid within 28 days of this order but otherwise to bear interest (to the extent that it remains unpaid) from the date of this order at the rate prescribed for interest on unpaid legacies under (NSW) Probate and Administration Act 1898, s 84A.

2. the plaintiff’s costs on the ordinary basis and the defendant’s costs on the indemnity basis be paid or retained as the case may be out of the estate.

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Endnotes

Decision last updated: 25 January 2017