Mann v Starkey
[2008] NSWSC 263
•28 March 2008
CITATION: Mann v Starkey [2008] NSWSC 263 HEARING DATE(S): 13/03/08, 25/03/08
JUDGMENT DATE :
28 March 2008JURISDICTION: Equity JUDGMENT OF: White J DECISION: 1. Order that the summons be dismissed; 2. order that the plaintiff pay the defendant’s costs; 3. exhibits may be returned after 28 days CATCHWORDS: SUCCESSION - Family provision and maintenance - whether testator made adequate provision for applicant - unsatisfactory evidence of applicant's financial circumstances. LEGISLATION CITED: Family Provision Act 1982 (NSW)
Guardianship Act 1987 (NSW)CATEGORY: Principal judgment CASES CITED: Fraser v Venables (Supreme Court of New South Wales, McLaughlin M, 30 September 1998, unreported); BC9805011
Draper v Nixon [1999] NSWSC 629
Bennett v Bennett [2001] NSWSC 987
Ernst v Ryf [2001] NSWSC 1167
Van Ooyen v O’Driscoll [2002] NSWSC 445
Zaleski v Patterson [2005] NSWSC 54
Troy v Slede [2005] NSWSC 1080
Wheatley v Wheatley [2006] NSWCA 262
Briginshaw v Briginshaw (1938) 60 CLR 336
Singer v Berghouse (1994) 181 CLR 201
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9PARTIES: Ian Graeme Mann v Elizabeth Gayle Starkey FILE NUMBER(S): SC 1364/07 COUNSEL: Plaintiff: P J Livingstone
Defendant: K OttesenSOLICITORS: Plaintiff: Lane & Lane
Defendant: David Jackson & Associates
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
FPA RUNNING LIST
WHITE J
Friday, 28 March 2008
1364/07 Ian Graeme Mann v Elizabeth Gayle Starkey
JUDGMENT
1 HIS HONOUR: This is an application under s 7 of the Family Provision Act 1982 (NSW) for an order for provision in favour of the plaintiff out of the estate or notional estate of the late Eric Alexander Mann.
2 Eric Alexander Mann died on 22 February 2006 aged 97. He was survived by two children. The plaintiff, his son, is now aged 70. His daughter, the defendant, is aged 61. The deceased was very close to his daughter’s son, Mr Christopher Starkey. The deceased made his last will on 11 August 2005. He divided his estate between his daughter (the defendant), as to a 65 percent share; his grandson (Christopher Starkey), as to a 17.5 percent share; and to his son (the plaintiff), as to a 17.5 percent share. The deceased lived in his own house until 15 March 2005, that is, until he was 96. He then moved to hostel care and his Dover Heights property was sold. After the sale the deceased gave his grandson, Christopher Starkey, $500,000 from the proceeds.
3 On Mr Mann’s death, his assets amounted to $1,524,886. He had no liabilities and the funeral expenses had been prepaid or were paid by the War Veterans’ Association and the Maroubra Junction RSL Sub-Branch (Mr Mann had served in the Middle East and New Guinea during the Second World War).
4 The deceased had made two earlier wills on 30 March 2005 and 31 May 2005. In his will of 30 March 2005 he left 55 percent of his estate to the defendant, 5 percent to Christopher Starkey and 40 percent to the plaintiff. In his will of 31 May 2005, he gave the defendant 60 percent of his estate, Christopher Starkey 25 percent of the estate, and the plaintiff 15 percent of the estate. In his will of 31 May 2005, and in his final will of 11 August 2005, the deceased explained the reasons for his gifts to his daughter and his grandson as being in recognition of their support and assistance. He made no such statement in relation to his gift to the plaintiff.
5 Mr Jackson, solicitor, prepared the wills on Mr Mann’s instructions. Mr Jackson gave evidence which I accept that when he attended on Mr Mann at his residence for the purpose of signing the will of 31 May 2005, a conversation to the following effect took place:
“DJ: ‘Mr Mann, what is Ian’s personal situation?’
EM: ‘I recently spoke to Ian. I don’t know where he lives and his sister doesn’t know. The only contact number I have is his mobile telephone number.’
DJ: ‘You don’t know where he currently lives?’
EM: ‘He originally lived in Killara. I believe he has moved to Artarmon and he is not divorced but I believe he is separated.’
DJ: ‘You appreciate that Ian can challenge your Will on the basis of inadequate provision being made for him.’
EM: ‘Yes, but even at the reduced percentage he will still receive $300,000.00’
EM: ‘As I explained to you on the telephone, Elizabeth and Christopher have been of great support to me in the move from my house to here and I want to help them as best I can.’”DJ: ‘Is there any particular reason why you are dividing the estate in this manner?’
6 On 9 August 2005, Mr Mann told Mr Jackson that he wanted to change his will and leave 65 percent of his estate to his daughter and the balance to be split equally between his grandson and the plaintiff. When Mr Jackson attended on Mr Mann on the signing of the new will, Mr Jackson told him: “I have previously explained to you that Ian as your son is likely to be unhappy with the provisions whereby he only receives 17.5% of the estate.” Mr Mann said “Yes, knowing Ian I would imagine that would be the case.” Mr Jackson asked “Do you know what Ian’s financial circumstances are and where he lives?” Mr Mann said “No, the only way I can contact him is on a mobile phone and I do not know what he has. I have little or no contact with him. Ian has two sons. I have seen one of his children once in recent years – the youngest son twice in recent years.”
7 Mr Jackson told Mr Mann that he was concerned the plaintiff might make a claim against the estate on the basis that he had been inadequately provided for. Mr Mann said “Yes I’m aware of that. You have explained that to me before. I still want to sign the Will as changed.”
8 On 19 October 2006, the defendant made a partial distribution of the estate. $550,000 was distributed as follows:
“ The Plaintiff: $96,250.00
Christopher Alistair Starkey: $96,250. ”Myself, the Defendant: $357,500
Of the $96,250 paid to the plaintiff, $11,119.16 was retained by his solicitors in respect of outstanding accounts for legal fees and $10,000 was retained in trust on account of costs and counsel’s fees for the contemplated litigation. He received $75,130.84.
9 In his affidavit sworn on 25 January 2007 in support of his application for provision, the plaintiff described his occupation as being that of a “business broker”. He deposed that he had been employed as a stockbroker with JB Were between 1961 and 1968. No further evidence was given as to his occupation after 1968. In cross-examination, he said that he had been a director of a number of companies involved in some form of investment or financial consulting. He also gave oral evidence that from 1968 to 1996 he worked as a stockbroker with four different firms. He said that after 1996, he worked on his own. He said that he had a share in a company called Aymkone Pty Ltd which was a registered stockbroker dealing in fixed interest, currency and derivatives, which he sold in 1996. He said that thereafter he worked individually as a corporate adviser out of the offices of a Mr Hartigan who was a qualified accountant and investment banker. None of this information was disclosed in his affidavits.
Plaintiff’s Financial Circumstances
10 As the plaintiff had foreshadowed a claim on the estate, the executor’s solicitors, David Jackson & Associates, wrote to the plaintiff’s solicitors, Lane & Lane, asking for information as to the plaintiff’s “financial and material circumstances”. They sought the production of numerous documents and also asked what was the nature of the plaintiff’s work. Lane & Lane had advised on 5 July 2006 that it was not possible accurately to estimate the plaintiff’s income as it “fluctuates from year to year depending on the number of transactions that are settled during the year.” On 26 September 2006, Lane & Lane advised that they were instructed to reply that the plaintiff was “a business consultant who earns commissions from time to time on the introduction of commercial transactions to enterprises or individuals represented by him.”
11 In his first affidavit sworn on 25 January 2007, the plaintiff described his financial circumstances as follows:
“ 20. Of my intended legacy of $262,500.00 from my father’s estate, I have received a partial distribution of $96,259.00.
(1) 1980 Mercedes 280S, worth approximately $4,000.0021. I have minimal other assets consisting of the following property:
(2) Household effects worth $2,000.00 - $3,000
(3) $2,755.30 in my bank account.
- 22. My weekly outgoings are as follows:
(1) Rent $265.00
(2) Fares $ 17.50
(3) Food $150.00
(4) Entertainment $100.00
(5) Motor vehicle expenses $ 50.00
(6) Telephone $ 25.00
(7) Electricity $ 10.00
Total $627.50
- 23. My taxable income to the year ended 30 June 2006 was $17,516.00. ”
12 On 23 March 2007, the defendant’s solicitors served a notice to produce. The notice required production of the documents requested in their letter of 13 September 2006 together with other documents relating to assets disclosed in the plaintiff’s affidavit. The documents to be produced included documents evidencing ownership of shares in any company for the past two years and statements and cheque butts for any bank account in the plaintiff’s name. It also sought any documents evidencing the plaintiff’s appointment as a director of a company.
13 On 14 May 2007, the plaintiff swore a second affidavit in which he deposed:
“ As to paragraph 21 of my previous Affidavit I say that, since swearing that affidavit, I have located 3 share certificates for shares and options owned by me as follows:-
(i) 384 ordinary shares in Working Systems Solutions Ltd @ $0.07 cents per share - $26.88.
(ii) 10,000 fully paid ordinary shares in Eagle Eye Metals Limited @ 22 cents per share - $2,200.00
(iii) 10,000.00 options in Eagle Eye Metals Limited @ 7 cents per option - $700.00
(iv) 1 share in Mann Securities Pty Limited, a company formed in February 2007 on the advice of my accountant for income tax reasons – nil value. ”
14 Company searches show that the plaintiff was a director of a company called Acquist Listed Investments Ltd. However, an application for the voluntary deregistration of that company had been lodged and it has subsequently been deregistered. He was also the sole director and secretary of Australasian Development Equities Pty Ltd. A later company search reveals that the plaintiff owns half of the issued shares in that company and is one of two directors. According to the company search, the other director is Sayah Rafick, although the plaintiff in evidence said that a Richard Beaumont had become a director. He said that this company had never traded.
15 The notice to produce was re-served on 13 August 2007. In their covering letter, the defendant’s solicitors complained that there were outstanding documents which had not been produced and that there was no satisfactory explanation for the non-production. The defendant’s solicitors said that no bank statements had been produced in relation to the partial distribution from the estate. They requested that if the money had been paid into any “relevant account” that the plaintiff produce the statement for the account. They noted that no income tax returns had been produced. They said that if the money from the partial distribution from the estate had been invested in the plaintiff’s name, the plaintiff should produce the records of the investment. They also asked for the production of documents in relation to fees and commissions received by the plaintiff from a number of entities referred to in the ANZ Bank statements.
16 On 15 January 2008, the defendant’s solicitors further complained that the plaintiff had not given true and full disclosure of his “financial and material circumstances”. In response to the notices to produce, the plaintiff had produced bank statements of Mann Securities Pty Ltd (“Mann Securities”) with the ANZ Bank for an account called the V2 Plus account. Statements for the period from 30 April to 31 May 2007 were missing. No statements were produced for the period after 30 June 2007. That company had another account with the ANZ Bank for which no bank statements were produced. The notice to produce did not call for the production of bank statements for accounts of Mann Securities, or any other company, unless the plaintiff had a loan account with that company. Nonetheless, such documents were material to a proper understanding of the plaintiff’s financial circumstances given that he was the sole shareholder and director of the company, and it carried on the business he had formerly carried on.
17 Although the plaintiff deposed that in the 2006 financial year he had a taxable income of $17,516, no tax returns were produced. He said that his accountant had not yet prepared tax returns sought by the notice to produce. The notice to produce had sought tax returns for the 2005 and 2006 financial years. The plaintiff said that the figure for his income in the 2006 financial year was a calculation he made from his records. He gave no evidence as to his income in earlier or later years.
18 Prior to the incorporation of Mann Securities, the plaintiff carried on business as a stockbroker in his own name. Mann Securities was incorporated on 13 December 2006. The business which the plaintiff formerly carried on in his own name has, since January 2007, been carried on by Mann Securities. On 16 January 2007, the plaintiff signed an application for Mann Securities for it to register for GST. He then estimated that the company’s annual turnover would be between $50,000 and $99,999. That estimate was based on projects on which the plaintiff was working at the time, and was the anticipated fees it would receive if those projects were successful.
19 On 22 January 2007, the plaintiff deposited $50,000 into the V2 Plus account of Mann Securities with the ANZ Bank.
20 The plaintiff received $75,130.84 from the interim distribution of the estate. The balance was retained by his solicitors. The plaintiff did not disclose where the funds were deposited. He said that the $50,000 deposited to the account of Mann Securities on 22 January 2007 was part of the distribution. He said that he thought he probably paid the distribution into his cheque account. He said that part of the funds he received were used to pay debts to creditors in Queensland and New South Wales. Although he did not produce all of his bank statements for his cheque account, it is clear that the $75,130.84 received on or about 25 October 2006 was not kept in his cheque account. He did not produce bank statements for the period from 22 June 2006 until 21 November 2006, but the opening balance as at 22 November 2006 was $1,965.55. There were no subsequent deposits into his cheque account up to 22 January 2007, when he deposited $50,000 to the account of Mann Securities. The plaintiff must have had another account or accounts, or the moneys must have been held by someone else on his behalf. The plaintiff said he was uncertain where the money from the estate went to, and from where the $50,000 deposited on 22 January 2007 came.
21 This evidence was not satisfactory. When added to the meagre details as to the plaintiff’s income, it raises a concern that the plaintiff has not been wholly frank in disclosing his financial position.
22 There were other unsatisfactory aspects of the plaintiff’s evidence as to his means. The notice to produce required the production of documents and records relating to the earning of commissions as a business consultant for the preceding two years. He produced a number of invoices dated at various dates in 2006 and 2007. They related to his activities in raising capital either by placement of shares, or by raising loan capital, or in organising stockbroker presentations. Invoices rendered from February 2007 were rendered in the name of Mann Securities. Other invoices were rendered in his personal name. He did not produce all of the invoices rendered. Some invoices were obtained by the defendant on subpoena to Allegiance Mining NL. These were invoices rendered in April, May and June 2006 for a total in excess of $42,000.
23 Bank statements produced by the plaintiff for his personal cheque account showed receipts of three payments in 2005 and 2006 from a company called “Eagle Eye” for which no corresponding tax invoices had been produced by him. Presumably this was because he had not kept a copy of the invoices.
24 No attempt was made by the plaintiff in his affidavit to describe his sources of income or how his calculation of his 2006 taxable income was made up. He left it to the defendant to give notices to produce documents relating to his financial position, but the documents he produced were not complete. The plaintiff ought not to have sought to put the defendant in the position of having to attempt to verify his bare assertions as to his assets and income. The defendant was in no position to know what were the plaintiff’s means. It was clear from correspondence between the parties’ solicitors before proceedings were instituted that the defendant expected the plaintiff to provide full and frank information as to his financial position and earnings. Instead, the plaintiff contented himself with a bare statement of his assets and a bare statement of his taxable income in the 2006 financial year with no corroborative material.
25 It has often been said that an applicant for provision must make a full and frank disclosure of his or her “financial and material circumstances” (e.g. Fraser v Venables (Supreme Court of New South Wales, McLaughlin M, 30 September 1998, unreported); BC9805011; Draper v Nixon [1999] NSWSC 629 at [35]; Bennett v Bennett [2001] NSWSC 987 at [23]; Ernst v Ryf [2001] NSWSC 1167 at [37]; Van Ooyen v O’Driscoll [2002] NSWSC 445 at [55], [56]; Zaleski v Patterson [2005] NSWSC 54 at [42]; Troy v Slede [2005] NSWSC 1080 at [20]; Wheatley v Wheatley [2006] NSWCA 262 at [26]). The defendant’s solicitors in correspondence stressed to the plaintiff’s solicitors that the plaintiff had such an obligation, even going to the length of citing the abovementioned and other authorities for that proposition. They complained of the plaintiff’s failure to produce bank statements, tax invoices and to explain how he had dealt with the distribution from the estate. They also complained that whilst it appeared that there had been substantial withdrawals from both his personal cheque account and from the V2 Plus account of Mann Securities, the plaintiff had given no explanation and produced no documents to show how the withdrawals had been applied. The plaintiff’s personal cheque account with the ANZ Bank showed that there had been withdrawals totalling at least $57,463 during the period from 22 February 2006 to July 2007. The V2 Plus account of Mann Securities showed withdrawals of about $44,000 between 22 January 2007 and 1 July 2007.
26 In oral evidence, the plaintiff gave evidence in general terms of moneys having been spent on expenses, repayment of debts, payment of rent in advance, and (as to about $16,000), on the costs of an overseas trip. In the way the evidence came out, there was no opportunity for the defendant to test this explanation.
27 The plaintiff did produce cheque butts for his personal account. They were not fully completed. One cheque dated 31 May 2006 was for $7,438 made out to “Eleanora CC”. In an affidavit sworn on 24 January 2008, the plaintiff’s solicitor expressed the opinion that this apparently related to golf club fees. That is a reasonable inference. The plaintiff did not give any evidence to the contrary. He gave no evidence about it at all. There is something incongruous in a person on an aged pension with the minimal assets and income deposed to by the plaintiff in his affidavits incurring such an expense.
28 The plaintiff gave no explanation as to how he came to be in the financial position which he described of having assets valued at less than $10,000 apart from the legacy he had received from his father’s estate, notwithstanding that he had worked as a stockbroker from the 1960s to the 1990s. He was cross-examined about the sale of his family home in 2002. He and his wife owned a house at Killara which was sold for $1,950,000. He said in cross-examination that $980,000 of the proceeds of sale were used to discharge a mortgage over the property and that the balance of the moneys was distributed 80 percent to his wife and 20 percent to himself as part of a property settlement with his wife. He did not volunteer in his affidavits any information about that transaction or about any such settlement.
29 Counsel for the plaintiff submitted that as the plaintiff had given sworn evidence as to his assets and income and as none of his evidence about those matters were shown to be untrue, it ought to be accepted. However, the plaintiff needs to bring me to a state of persuasion or reasonable satisfaction, on the balance of probabilities, that his financial position is as he describes it and hence that he has financial needs (Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362 per Dixon J). I do not consider that the Court has been given the full picture. The particular matters of concern are:
(a) the plaintiff’s inability to account for the whereabouts of the distribution he received from the estate in October 2006, giving rise to the inference that he has an account or accounts with a financial institution which have not been disclosed, or that a third person has held moneys on his behalf and may still do so;
(b) the absence of any financial statements or other evidence as to the income derived by Mann Securities since its commencement of business in January 2007, notwithstanding that the plaintiff is the sole shareholder and director of the company;
(c) the absence of evidence as to the plaintiff’s income for any financial year other than 2006;
(d) the lack of detail as to how the plaintiff calculated his taxable income for the 2006 financial year and the absence of any corroboration of that estimate;
(e) the non-production of any income tax returns and the lack of explanation as to why no income tax returns had been prepared for at least the 2005 and 2006 financial years;
(f) the absence of explanation as to why the plaintiff apparently incurred an expense of over $7,000 for golf fees payable to the Eleanora Country Club if his financial position were as depicted in his affidavits;
(g) the lack of evidence as to the plaintiff’s occupation after 1968; and
Having regard to the above matters I am not persuaded on the balance of probabilities that the plaintiff’s financial position is as he depicts it.(h) the lack of explanation as to why the plaintiff finds himself in the precarious financial position which he described in his affidavit.
Relationships between the Deceased and his Family
30 The plaintiff deposed that he assisted his father in the hardware business carried on by his father. This was during the years 1952 to 1963. The plaintiff also said that he visited his father “virtually every weekend for about 3 hours each visit” and assisted him in his gardening and shopping for many years before his death. He hosted a ninetieth birthday party for the deceased. He said that he assisted his father after his father suffered from falls and cared for him during these times.
31 Whilst I accept that from time to time the plaintiff visited his father and did some gardening and shopping for him, and from time to time assisted him after he had suffered from falls, I do not accept that there was much contact between them. The deceased did not know where the plaintiff lived. Their relationship was a distant one. By contrast, the deceased had a close relationship with his daughter and with her son.
32 The deceased retired in 1979. In 1981, the defendant separated from her then husband and lived with her two children in Coogee. The relationship between the deceased and his grandson was always close. The deceased gave Christopher Starkey pocket money from an early age. The defendant and her husband were separated in 1981 when Christopher Starkey was 7. Christopher Starkey deposed that thereafter, his grandfather became a father figure to him. For example, having placed his name down on the waiting list for members to join the Sydney Cricket Ground, he paid annual memberships for his grandson. He watched his grandson play sport each week.
33 The deceased had given a power of attorney to the plaintiff in 1977. However, in 1990, he gave an enduring power of attorney to the defendant. In 1990, the deceased lent the defendant the necessary moneys for her to purchase the unit she was then renting when it came on the market. The loan was interest-free. In July 1990, the defendant’s daughter was killed by a drunk driver. The deceased provided emotional support to his daughter during this time. In 1998, he appointed his daughter as an enduring guardian pursuant to s 6 of the Guardianship Act 1987 (NSW).
34 From the late 1990s, the deceased’s health deteriorated. As the deceased recognised in his will, both the defendant and her son provided close support and assistance. It is unnecessary to go into the detail which is fully described in the affidavits of the defendant and Christopher Starkey. I accept their evidence as to the support and assistance they provided to the deceased.
35 In comparison to the defendant and her son, the plaintiff had a much slighter involvement with his father. In particular, I prefer the evidence of the defendant and Christopher Starkey as to the extent to which they, rather than the plaintiff, provided assistance to the deceased in the latter years of his life when he was living at home but suffered from falls.
36 The deceased provided financial support during his life to the defendant by way of an interest-free loan. It was not clear from the defendant’s evidence how much of the loan was repaid and how much was forgiven. At some time, which is not clear in the evidence, the deceased forgave the balance of the loan.
37 The deceased insisted on giving Christopher Starkey $500,000 from the sale of the Dover Heights house. He said that he was providing the money so that Christopher Starkey could buy a unit in the eastern suburbs. With the approval of his grandfather, Christopher Starkey deferred buying a unit in the hope that the market would improve from his perspective.
Alleged Discreditable Conduct
38 The defendant and Christopher Starkey gave evidence of the deceased having told them that he had lent money to the plaintiff which the plaintiff had misused to go on trips and to pay for private schooling for his sons. They also gave evidence of the deceased having told them that he had been informed that the plaintiff had taken money from the deceased and from other clients.
39 The plaintiff denied these allegations. The defendant did not seek to prove the truth of the statements. The plaintiff gave evidence that he had invested moneys on behalf of his father and that one of his father’s investments in a company associated with a Mr Malcolm Stenning was unsuccessful. However, there is no evidence that the plaintiff acted in any discreditable way in connection with any investments he made for the deceased or in respect of any advice he gave the deceased.
40 Nor does it appear that the gift made by the deceased in his will in favour of the plaintiff was affected by any feeling of disgruntlement in relation to financial dealings between the plaintiff and the deceased. The evidence given by the defendant and Christopher Starkey as to statements made by the deceased concerning his financial dealings with the plaintiff neither advanced the plaintiff’s claim for provision, nor reduced the merits of that claim.
Defendant’s Financial Position
41 Up to 13 July 2007, the defendant was employed as a senior human resources officer at the University of Sydney. She was made redundant on 13 July 2007 and is no longer in employment. She deposed that she has no current income as she has not accessed her superannuation and cannot do so until there is a final distribution of the estate. She is 61 years old and the prospects of suitable employment are not high. She has various medical problems. As at 2 May 2007, her assets comprised a unit in Randwick valued at about $500,000, a motor vehicle valued at $16,700, various household items valued at $15,000, and cash of $500. She also established a further superannuation fund into which she paid the partial distribution from the estate she received in October 2006. Her distribution in October 2006 was $357,500. As at January 2008, her superannuation totals approximately $525,000. She has expenses of about $1,137 per fortnight. Subject to any order for provision made in favour of the plaintiff and to the deduction of legal costs from the estate, she would be entitled to a further distribution from the estate of approximately $661,000. Hence, in the absence of an order for provision in favour of the plaintiff (and subject to legal costs to be deducted from the estate which might or might not be recovered from the plaintiff if an order for costs were made against him), if she receives her full inheritance she would have superannuation and further cash sums totalling approximately $1,186,000 in addition to the Randwick unit.
Financial Position of Christopher Starkey.
42 Christopher Starkey invested $77,500 from the partial distribution he received from the estate in the purchase of Telstra shares. As at May 2007, he had $311,000 on deposit, being the balance of the $500,000 he received from his grandfather from the sale of the Dover Heights property. He lent $100,000 of that gift to his father to enable his father to purchase a property and is due to receive that loan back with interest. He does not own a house or a unit. He is currently renting a unit at Zetland. He left school at the end of Year 11. He commenced a degree in applied science at Southern Cross University at Lismore but failed to finish the degree. He is 34 years old. He intends to start his own graphic design business and to undertake a course in graphic design. At the moment he is unemployed. About nine years ago, he contracted Epstein Barr virus which caused chronic fatigue and has affected his ability to work and study.
Plaintiff’s Financial Needs
43 The plaintiff deposed that if he was successful in his application he would try to purchase a small home unit or invest the sum strategically as a form of retirement fund to enable him to survive financially during his retirement. He said he could purchase such a unit for about $400,000. He also wishes to buy a replacement second-hand Mercedes car for about $40,000 and to undertake an overseas trip about once every three years. The plaintiff suffered a dissected aortic aneurism in 2002 which has caused him to reduce his workload. Nonetheless, he intends to continue his current business for some years as he enjoys the work.
44 The plaintiff currently receives an aged pension. As at July 2007 he was receiving $634.90 per fortnight by way of pension in addition to any income derived through Mann Securities or other sources.
Was the Provision in the Deceased’s Will Inadequate for the Plaintiff’s Proper Maintenance and Advancement in Life?
45 Sections 7 and 9 of the Family Provision Act lay down a two-stage process for determining applications for provision by eligible persons. The Court may not make an order for provision in favour of an eligible applicant unless it is satisfied that the provision made in favour of the applicant by the deceased during his lifetime or out of his estate is, at the time the Court is determining whether or not to make such an order, inadequate for the applicant’s proper maintenance, education and advancement in life (s 9(2)). In Singer v Berghouse (1994) 181 CLR 201, Mason CJ, Deane and McHugh JJ described the process as follows (at 209-210):
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. ”“ The first question is, was the provision (if any) made for the applicant ‘inadequate for [his or her] proper maintenance, education and advancement in life? The difference between ‘adequate’ and ‘proper’ and the interrelationship which exists between ‘adequate provision’ and ‘proper maintenance’ etc. were explained in Bosch v Perpetual Trustee Co Ltd [1938] AC 476 . 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.
46 Whilst the Court will usually be obliged to interfere with the provision made for the eligible applicant by the testator if it is satisfied that inadequate provision was made for the applicant’s “proper” maintenance, education and advancement in life, respect must be given to the testator’s wishes in recognition that in most cases the testator will have a much better knowledge of all of the circumstances than will the Court (Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20). Had there been adequate evidence as to the plaintiff’s financial circumstances, the force of this last consideration would have been diminished because the deceased told his solicitor that he did not know what the plaintiff’s financial circumstances were. If the plaintiff’s financial circumstances as deposed to in his affidavits were known to the deceased, the deceased might have made greater provision for the plaintiff in his will.
47 It is not to the point that in an earlier will, the deceased had made a substantially greater provision for the plaintiff. Evidently he reconsidered that provision not once but twice before settling on a provision of 17.5 percent of his estate. In any event, the adequacy of that provision is to be assessed by circumstances that exist now.
48 For the reasons I have given, I am not persuaded that the plaintiff’s financial circumstances are as he has deposed. Without reasonable satisfaction of the plaintiff’s financial circumstances, it is not possible to say that the provision made for the plaintiff in the deceased’s will of 17.5 percent of the estate, being a sum of in excess of $266,000, is inadequate for the plaintiff’s proper maintenance and advancement in life. In assessing what is “adequate” and what is “proper” regard must be had to the very close relationship which the deceased had with his daughter and grandson and the much more distant relationship he had with the plaintiff. He evidently wished to provide security for the defendant and considered that his grandson needed substantial financial support. Those wishes should be respected.
49 For these reasons, I am not persuaded that the provision made for the plaintiff in the deceased’s will was inadequate for the plaintiff’s proper maintenance and advancement in life. Accordingly I order that the summons be dismissed. I order that the plaintiff pay the defendant’s costs. Exhibits may be returned after 28 days.
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