Mangraviti v Jackson

[1999] NSWSC 804

CITATION:	Mangraviti v Jackson [1999] NSWSC 804
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	3431/96
HEARING DATE(S):	25 and 26 February 1999
JUDGMENT DATE:	6 August 1999
PARTIES :	John Lawrence Mangraviti (P) John Norman Stevens Jackson (D)
JUDGMENT OF:	Master McLaughlin

COUNSEL :	Mr. P. O'Loughlin (P) Mr. J. Van Aalst (D)
SOLICITORS:	Phillip J. Rowland (P) Mallesons Stephen Jaques (D)
CATCHWORDS:	Family Provision; Claim by adult son against estate of his mother; Plainitff worked without pay in the family business, and received no benefit under the will of his father; No other eligible persons; Plaintiff owns or controls assets totalling almost $8 million, of which the cash proportion is relatively small; Plainitff and his wife maintain a modest lifestyle; Absence of any need; Failure to satisfy first stage in two-stage process described in Singer v Berghouse; Purpose of family provision legislation: Blore v Lang
ACTS CITED:	Family Provision Act 1982 Testator's Family Maintenance and Guardianship of Infants Act 1916
CASES CITED:	Wentworth v Wentworth (1995) 37 NSWLR 703 Bosch v Perpetual Trustee Co Ltd [1938] AC 476 Field v Inglis (Master Macready, 6 February 1995) Blore v Lang (1960) 104 CLR 124 Singer v Berghouse (1994) 181 CLR 201
DECISION:	1. I order that the summons be dismissed 2. I order that the plaintiff pay the costs of the defendant, such costs to be on the party and party basis 3. I order that the difference between the costs of the defendant on the indemnity basis and the foregoing costs recovered by the defendant from the plaintiff be paid to the defendant out of the estate of the late Anna Mangraviti ("the deceased") 4. The exhibits may be returned.

SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Friday, 6 August 1999

3431 of 1996 JOHN LAWRENCE MANGRAVITI -v- JOHN NORMAN STEVENS JACKSON - ESTATE OF THE LATE ANNA MANGRAVITI

JUDGMENT

1    MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 20 September 1996 the plaintiff, John Lawrence Mangraviti, claims an order for provision for his maintenance, education and advancement in life out of the estate of his late mother Anna Mangraviti (to whom I shall refer as “the deceased”). 3 The deceased died on 31 May 1995, aged 94. 4 Probate in solemn form of the will of the deceased dated 7 February 1979 was on 17 April 1997 granted to John Norman Stevens Jackson, the surviving executor named in such will (who is the defendant to the present proceedings). That probate was granted pursuant to an order made on 15 April 1997 in proceedings 112966 of 1995 in the Probate Division, in which proceedings the present defendant was the plaintiff and cross-defendant, and the present plaintiff was the defendant and cross-claimant. 5 The plaintiff is the youngest of the three children of the deceased and her husband Giovanni Mangraviti, who had married in Italy in 1918 and had settled in Australia in about 1921. The eldest child, Norman Joseph (born on 31 July 1922) died on 8 February 1986; the middle child Joseph James (born on 26 January 1924) died on 15 May 1991; the third child, John Lawrence, the plaintiff, was born on 29 August 1925, and is presently aged 73. 6 The only provision made for the plaintiff in that will is contained in clause 4, which provides,

I GIVE AND BEQUEATH unto my three sons in equal shares all such moneys that I may hold to my credit in any Trading Bank or Savings Bank Account or in any Building Society Account that I may conduct with any such Bank or Building Society in the Commonwealth of Australia as at the date of my death.

7    By clause 5 the deceased gave the residue of her estate to her son Norman, provided that, if (as in the event happened) he should predecease her, then she gave the residue of her estate as to one half for her son Joseph and as to the other half for her grandchildren in equal shares as tenants in common. 8    Since Joseph also predeceased his mother, the practical effect of clause 4 is that one half of the estate of the deceased passes to the estate of Joseph, and the other half is divided equally among the eight grandchildren of the deceased (being the three children of Joseph and the five children of the plaintiff), all of whom are adults. 9    The present assets of the estate consist of:

House property at 559 Sydney Road, Seaforth, having an estimated value of $1,075,000;
Land known as Lot D, Ross Street, Seaforth, having an estimated value of $591,250;
Moneys in various accounts with Westpac Banking Corporation, totalling about $39,400;
Term deposit with Westpac Banking Corporation, $400,000;
Jewellery (having an estimated value of $22,454);
Moneys held in solicitor’s trust account ($25,900).

10    The estimated total value of the present assets of the estate is a little over $2,154,000. From that sum must be deducted the costs of the defendant of the present proceedings, in an estimated amount of $50,000, and also (in the event that he be successful) the costs of the plaintiff, in an estimated amount of $30,000. 11    It was agreed between the parties that, under the provisions of clause 4 of the will, the plaintiff will receive from the estate of his mother about $20,000. 12    Clause 13 of the will is in the following terms,

I HAVE CONSIDERED the provisions I have made herein for each of my sons. I am satisfied that my son JOHN LAWRENCE MANGRAVITI in my lifetime has been adequately provided for and that he is of independent means and enjoys with my son JOSEPH JAMES MANGRAVITI adequate income from personal exertion and property investment. Although my son NORMAN JOSEPH MANGRAVITI is a Medical Practitioner in my considered opinion the condition of his health is such that he is unable to adequately carry on his profession and I have provided for him therefore accordingly but in so doing I have exercised my love and affection equally for each and every members [ sic ] of my family.

13    The plaintiff in his affidavit evidence set forth what might be described as the family history of his parents, his brothers and himself. As has already been recorded, the deceased and her husband (who had originally emigrated to Australia as a boy in 1913, but had subsequently returned to Italy in 1918 to perform his military service, and had met and married the deceased) settled in Australia in about 1921. They became Australian citizens about six years later. 14    It would appear that shortly after arriving in Australia the plaintiff’s father (to whom I shall refer as Giovanni) conducted a greengrocery business from premises at 370 Pacific Highway, Crows Nest. That was a family business in which Giovanni, the deceased, and at least Joseph and John participated. (According to the plaintiff, Norman, who graduated in medicine from the University of Sydney in the mid-1940s, did not assist in the family business whilst he was at school or at university.) However, from his early teens the plaintiff helped his father and mother in the family business. The plaintiff attended the Marist Brothers College at North Sydney, which was located reasonably close to the family business. After school the plaintiff worked each day in the business until the family repaired home for their evening meal. 15    After leaving school at the age of fifteen the plaintiff worked full-time in the family business for the next three years. That work, according to the plaintiff, was long, hard, and labour intensive. The plaintiff was not paid any wages for his work in the family business. However, he received pocket money from his father. When the plaintiff commenced working in the business full-time he raised with his father the question of receiving a wage, and his father responded, “If you want money for your use, you just ask me. What you do for me you do for yourself, and what’s mine is yours”. These sentiments were repeated by Giovanni to the plaintiff on many occasions, and it was the understanding of the plaintiff that eventually, upon the death of his parents, their assets would be shared equally between himself and his two brothers. 16    In about 1943 (when he was aged about 18) the plaintiff obtained an apprenticeship in the engineering trade. He was thenceforward in full-time employment, attending a technical college course in the evening, and continuing to work in the family business on weekends and when he was not in his employment or attending his trade course. The plaintiff still did not receive any pay for the work which he did in the family business. 17    In about 1947 Giovanni had acquired as the family home a house property at 2 Ross Street, Seaforth. At about the same time Giovanni also purchased the adjoining property, known as Lot B, Ross Street, Seaforth (which latter property constitutes one of the assets in the estate of the deceased). 18    Whilst serving his apprenticeship the plaintiff, in addition to assisting in the family business, also used the skills which he had acquired in his apprenticeship in servicing and maintaining the vehicles (both those used in the business and those for private use) owned by his father. As the plaintiff pointed out in his affidavit evidence, since that activity took place during wartime, motor mechanics were usually difficult to find, and when they were available they were unreliable. 19    In his last employed position, with Precision Metal Stampings, the plaintiff attained the position of tool room foreman. 20    In about 1954 the plaintiff commenced in full-time business for himself. He did, however, continue to help in the family business after work and at weekends. Even after his marriage on 11 January 1956 the plaintiff continued to maintain the house at 2 Ross Street, Seaforth, in which his parents were then residing. 21    At that time Joseph was still working full-time in the family business (in the capacity, according to the plaintiff, of “a partner”). Norman was practising as a general medical practitioner from various locations on the Northern Beaches. 22    Giovanni died on 1 January 1969. Probate of Giovanni’s will dated 6 November 1968 was granted to the plaintiff (being one of the executors named therein, the other executor having renounced Probate). By that will Giovanni released and forgave any debts owing to him by any of his sons. He gave the residue of his estate on trust to pay the income to his wife Anna and to his son Norman and to the survivor of them, and thereafter to his grandchildren in equal shares as tenants in common. 23    In the early 1960s the premises at 304 Pacific Highway, Crows Nest, from which the family business was conducted were purchased by Norman, Joseph and the plaintiff. The business itself was sold in 1965, but the premises were retained by the three brothers for about twenty years thereafter. 24    The plaintiff in his affidavit evidence set forth details concerning the various real property transactions in which his father was involved. 25    After the death of Giovanni, the deceased and Norman (who was unmarried) lived together in the house property at 2 Ross Street, Seaforth, until Norman’s death on 8 February 1986. During that time Norman attended to all the financial affairs of his mother. 26    It was not disputed that the plaintiff had a long, regular and affectionate relationship with his mother and with Norman. When Norman died the deceased was aged about 85. 27    After the death of Norman (perhaps, even before it) there appears to have been a falling out between the plaintiff on the one hand and his brother Joseph and Joseph’s family on the other. The deceased was not able to live alone. After residing for a short period with the plaintiff, and a considerably longer period with Joseph, the deceased in early 1988 became a resident at the Alexander Nursing Home (later known as Natalda Nursing Home). From then until her death more than seven years later the plaintiff visited her at least twice a week. His wife and his children also visited her. 28    Details of the assets of the plaintiff and of various companies under his control are set forth in his affidavit sworn 28 July 1997. The plaintiff was cross-examined concerning those assets and concerning the practical effect of his control of a number of companies. 29    The plaintiff and his wife Maria Mangraviti jointly own their residence at 82 Seaforth Crescent, Seaforth, which is unencumbered, and which has an estimated value of $1.25 million. Mangraviti Investments Pty Limited, in which the plaintiff has a controlling interest, owns a number of items of real estate. It is unnecessary for me to set forth all the details of the assets of the plaintiff either owned directly by him or owned by companies which he controls. Suffice it to say, however, that those assets have a total value of almost $8 million. 30    The plaintiff is 73 years of age. He and his wife reside in the house property at 82 Seaforth Crescent, Seaforth. The plaintiff said in his evidence that he and his wife entertain very little, live modestly, frugally and carefully. They do not waste money and expend little on clothes. It is much to the credit of the plaintiff that through his own efforts and hard work and his considerable business acumen he has under his control assets worth almost $8 million. 31    During the course of his cross-examination the plaintiff agreed that he had no financial needs, that he was financially independent, that his wife was secure, just as he was secure, and their children also. 32    The plaintiff said, in answer to a question concerning his needs, “I have not come to this Court today under the guise of need. I have come to the Court as a matter of honour”. In the same answer he referred to his conversations with his father about being paid a wage and continued,

Now, I would take that to understand that whatever assets were accrued for my parents, whatever, that we would share in that, and that wasn’t the case. That’s why I’m here today, for no other reason.

33    The plaintiff agreed that the reason why he had made the present application was that he felt “some hurt” “because your mother failed to recognise in her will some moral obligation which you perceive she ought to have had to mention you in her will as a beneficiary to be paid money’”. The plaintiff said that the provision made for him by clause 4 of the will (which would give to him about $20,000) would not “cover the efforts I put in for my parents. It just wouldn’t cover it”. In answer to the question,

Is it the position that you are here today before this Court to seek recompense for what you perceive you have done for your parents during their lifetime?

34    The plaintiff replied,

I did it --- I didn’t perceive it but I do agree to why I am here at this Court.

35 The plaintiff stated that there was no reason, other than the foregoing reasons, why he had made the present application. He was asked questions concerning the statement of the deceased in clause 13 of her will. He agreed that the statement that “he is of independent means” was accurate at the date of the will, remained accurate to the present time, and will remain accurate for the foreseeable future. 36 The plaintiff as a son of the deceased is an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such, he has the standing to bring the present proceedings. Indeed, the plaintiff is the only eligible person in relation to the deceased. None of the residuary beneficiaries, being the grandchildren of the deceased, is an eligible person. 37    No evidence was placed before the Court concerning the financial and material circumstances of any of the grandchildren or concerning the beneficiaries in Joseph’s estate (apart from some information given by the plaintiff under cross-examination concerning the occupations of his two unmarried children, Margaret and Anthony, and the shareholding of his children in Mangraviti Investments Pty Limited). Accordingly, the Court, when considering any competing claims upon the bounty of the deceased, is entitled to infer that the financial and material circumstances of the grandchildren (or of any of them) or of the beneficiaries of Joseph are not such as would have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the plaintiff might otherwise have established. 38    It was submitted on behalf of the plaintiff that whilst he has substantial assets, the cash proportion of those assets is modest. The plaintiff and his wife subsist by drawing capital, by way of repayment of moneys lent to Mangraviti Investments Pty Limited, such moneys being fully expended by the plaintiff and his wife on current living expenses. 39    It was submitted on behalf of the plaintiff that clause 13 of the will manifested a misconception in the mind of the deceased as to the benefits which had, in fact, been conferred on the plaintiff during the lifetime of the deceased, to the extent that that statement asserted that adequate provision had been made for the plaintiff during his lifetime. Further, that it was clear that the deceased herself had not personally conferred any benefits upon the plaintiff during her lifetime. It was submitted that an examination of the will itself reveals an internal inconsistency, when the provisions of clause 13 are compared with the gifts actually made, since, under the terms of clause 4 the plaintiff will receive an amount of only about $20,000. 40    The first stage in the two-stage process described by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208-209 (per Mason CJ, Deane and McHugh JJ) requires a determination of whether the provision (if any) made for the plaintiff was “inadequate for [his or her] proper maintenance, education, and advancement in life”. Their Honours referred to the explanation of the difference between “adequate” and “proper” and the inter-relationship which exists between “adequate provision” and “proper maintenance” etc in Bosch v Perpetual Trustee Co Ltd [1938] AC 476 (see, also, Wentworth v Wentworth (1995) 37 NSWLR 703 at 737 per Cole JA). Their Honours continued,

The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

41    The plaintiff sought to obtain some comfort from the unreported decision of Master Macready in Field v Inglis (6 February 1995). Although there are certain similarities between the facts in that case and the facts in the instant case, there are significant differences of fact between Field and the instant case. In Field the plaintiff (who had substantial assets, in excess of $2 million) had a gross income which was about $35,000 less than her total outgoings. The Master held that her income was not sufficient to meet her outgoings, and that at least for the year preceding the hearing, she had required to sell her assets and in part live on capital. 42    In the instant case there is no suggestion that the income of the plaintiff (let alone the income from the companies under his control) is insufficient to meet his needs and requirements. The fact that the plaintiff and his wife maintain themselves very modestly on an income comprised of drawings from companies under the control of the plaintiff in an amount of about $500 a week is a result of the choice of the plaintiff himself. If he so chose, his income could be many times that figure. It is only because the plaintiff has chosen to put back into his various companies the income generated by those companies that he and his wife live on what can only be described as an extremely modest income compared to the income which they would be more than justified in receiving. 43    The plaintiff has not pointed to any specific need, or to a desire to acquire property or alter his lifestyle which is in any way thwarted by financial constraints. 44    The plaintiff has frankly acknowledged that his sole purpose in making his present claim is as a matter of honour, since (probably with some justification) he feels that he has been deprived of the wages and financial benefits to which he was entitled in helping his parents (in particular, his father) to build up their family business and to acquire the assets which now comprise the estate of the deceased. The evidence discloses that the plaintiff was a devoted and dutiful son to each of his parents. 45    In this regard, however, it is salutary to bear in mind the following admonition of Windeyer J in Blore v Lang (1960) 104 CLR 124 at 137, concerning the statutory predecessor of the Family Provision Act, being the Testator’s Family Maintenance and Guardianship of Infants Act 1916,

The jurisdiction under the Testator’s Family Maintenance Act is to provide for deserving persons according to their requirements, not to reward past services. This is sometimes overlooked and evidence concerning the present and probable future requirements of the applicant is subordinated to or submerged in evidence of past services to the testator. Allegations and denials concerning episodes in the past are then likely to become emphasised at the expense of evidence directed to the central issues in the case.

46    To an extent that is what has happened in the instant case. The Court is not assisted by evidence concerning a dispute (which appears to have culminated in a physical confrontation), which then led to criminal proceedings, between the plaintiff and his nephew Michael (a son of Joseph and a grandson of the deceased). 47    In all the circumstances of this case, and, in particular, in the context of the financial assets of the plaintiff and the absence of any need, I am not satisfied that the plaintiff has established the first stage of the two-stage process described by the High Court of Australia in Singer v Berghouse. That conclusion is of itself sufficient to determine the present proceedings. It is unnecessary for the Court to proceed to a consideration to the second stage in that two-stage process. 48    Accordingly, I propose to dismiss the summons. 49    However, in doing so, I should record that there is no basis for the suggestion originally made on behalf of the defendant that the plaintiff had a collateral purpose in bringing the present proceedings, such suggested collateral purpose being to deprive the deceased’s grandson Michael Mangraviti of his benefit in the estate of his grandmother. Indeed, in response to a query made by me at the conclusion of submissions, Counsel for the defendant very properly said that the defendant, in the light of the evidence, would have difficulty in now maintaining the submission that the plaintiff instituted the proceedings for a collateral purpose, such purpose being to deprive at least one of the beneficiaries of his interest in the estate. Further, it should also be recorded, that it was specifically stated on behalf of the defendant that the defendant does not assert any conduct on the part of the plaintiff disentitling him from the benefit of any order for provision an entitlement to which he might otherwise have established. 50    I make the following orders:

1. I order that the summons be dismissed.
2. I order that the plaintiff pay the costs of the defendant, such costs to be on the party and party basis.
3. I order that the difference between the costs of the defendant on the indemnity basis and the foregoing costs recovered by the defendant from the plaintiff be paid to the defendant out of the estate of the late Anna Mangraviti (“the deceased”).
4. The exhibits may be returned.

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Last Modified: 08/06/1999