Menzies v Perta; Perta v Perta
[2021] VCC 941
•20 July 2021
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| Family Property List |
Case No. CI-20-01163
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Estate of Michele Perta (also known as Michael Perta), deceased
BETWEEN:
| Barbara ANN Menzies | Plaintiff |
| v | |
| Nicolino Perta (who is sued in his capacity as Executor of the Will and Estate of the above-named deceased) | Defendant |
-and-
Case No. CI-20-01429
| Rose Marie Perta | Plaintiff |
| v | |
| Nicolino Perta (who is sued in his capacity as Executor of the Will and Estate of the above-named deceased) | Defendant |
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JUDGE: | HER HONOUR JUDGE TRAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 June 2021 | |
DATE OF JUDGMENT: | 20 July 2021 | |
CASE MAY BE CITED AS: | Menzies v Perta; Perta v Perta | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 941 | |
REASONS FOR JUDGMENT
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Subject:TESTATOR’S FAMILY MAINTENANCE
Catchwords: Family provision – application for provision by de facto spouse and daughter – no appearance by defendant executor – whether adequate provision for proper maintenance and support – where de facto spouse of over 20 years – where daughter on disability pension with significant health issues
Legislation Cited: Administration and Probate Act 1958; County Court Civil Procedure Rules 2018, r 63A.07; Civil Procedure Act 2010, s65C(2)(c)
Cases Cited:Singer v Berghouse (1994) 181 CLR 201; Bosch & Anor v Perpetual Trustee Company (Limited) & Ors [1938] AC 463; Anslow v Journeaux [2009] VSC 250; Re Papaioannou; Papaioannou v Kronemann [2019] VSC 844; Thompson v Thompson [2015] VSC 706; Re Flavel; Application by Lipshut [2018] VSC 228; Re Beddoe; Downes v Cottam [1893] 1 Ch 547
Judgment: Family provision orders granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff Barbara Menzies | Ms E Konstantinou | Perry Weston Lawyers |
| For the Plaintiff Rose Perta | Mr M J Latham | Collards Solicitors |
| For the Defendant | No appearance | - |
HER HONOUR:
1In separate proceedings which were listed to be heard together, Ms Barbara Menzies (“Barbara”) and Ms Rose Perta (“Rose”) each applied for a family provision order out of the estate of Mr Michele Perta (“Michael”).
2Michael died on 2 September 2019 aged eighty-two years old. At the time of his death, Michael was living in a de facto relationship with Barbara and was the father of Rose. The deceased also had a second child, Mr Nicolino Perta (“the defendant”), who is the executor of Michael’s estate and the defendant in both proceedings.
3The main asset of Michael’s estate was a house in Northcote which was Barbara and Michael’s home at the date of Michael’s death (“the Northcote house”). The Northcote house sold at auction on 16 November 2019 for $1,152,000. It appears from the Inventory of Assets filed as part of the defendant’s application for Probate that Michael also had $72,653.86 in bank accounts at the time of his death.
4In his will, Michael left a sum of $50,000 to Barbara. He left the balance of the estate, after payment of costs and expenses, to the defendant. He left nothing to his daughter, Rose.
5The defendant has not entered a notice of appearance in this proceeding and did not appear at the trial.
Issues to be determined
6The determination of an application for a family provision order is a two-stage process.[1] First, the Court must be satisfied that the threshold requirements for the making of a family provision order under s91(2) of the Administration and Probate Act 1958 (“the Act”) are met. In the present case,[2] this requires the Court to be satisfied that:
(a) the claimant is an “eligible person”;[3]
(b) at the time of death, Michael had a moral duty to provide for the claimant’s proper maintenance and support;[4] and
(c) the distribution of Michael’s estate fails to make adequate provision for the proper maintenance and support of the claimant.[5]
[1] Singer v Berghouse (1994) 181 CLR 201 at 209-210.
[2]Neither claimant relies upon paragraphs (h) to (k) of the definition of “eligible person”, so s91(2)(b) does not apply.
[3] Section 91(2)(a) of the Act. The term “eligible person” is defined in s90 of the Act.
[4] Section 91(2)(c) of the Act.
[5] Section 91(2)(d) of the Act.
7Barbara claimed to be an eligible person as the domestic partner of Michael at the time of his death within the meaning of paragraph (a) of the definition of “eligible person” in s90 of the Act.
8Rose’s primary submission was that she was a child of Michael with a disability within the meaning of paragraph (b) of the definition of “eligible person” in s90 of the Act. Alternatively, she claimed to be a child “not referred to in paragraph (b) or (c)” within the meaning of paragraph (f) of the definition of “eligible person” in s90 of the Act.
9If satisfied that there is power to make a family provision order, the Court must then determine whether to grant a family provision order and, if so, the amount of any such provision, taking into account:
(a) the degree to which, at the time of death, Michael had a moral duty to provide for the eligible person;[6] and
(b) the degree to which the distribution of Michael’s estate fails to make adequate provision for the proper maintenance and support of the eligible person.[7]
[6] Section 91(4)(a) of the Act.
[7] Section 91(4)(b) of the Act.
10If Rose is an eligible person under paragraph (f), rather than paragraph (b), then by virtue of s91(4)(c) of the Act, the Court must also take into account the degree to which she is not capable, by reasonable means, of providing adequately for her own proper maintenance and support.
11Both the first and second stage require consideration of the extent to which the provision made is “adequate” for the “proper” maintenance and support of the claimant. The use in the Act of these two interrelated terms imports a requirement that the Court balance the needs of the claimant; their capacity to provide for themselves through other means; the nature and extent of the moral duty owed to them by the deceased; the size of the estate, and the circumstances of other potential objects of Michael’s benefaction. As explained by Lord Romer in Bosch v Perpetual Trustee Company (Limited),[8] an amount may be adequate for the maintenance of a child but not adequate for the proper maintenance of the particular claimant in question, having regard to the immense fortune of their deceased father. Conversely, an amount which is insufficient for the adequate maintenance of a child may nevertheless be all that is proper, having regard to the limited means of their deceased father and the existence of others to whom a moral duty to provide is owed. In performing this balancing exercise, the Court must be astute to the fact that it can do no more than is necessary for the claimant’s proper maintenance and support.[9]
[8] [1938] AC 463 at 476 per Lord Romer.
[9] Section 91(5)(a) of the Act.
12Section 91A of the Act provides further for the matters to be considered in making a family provision order. Section 91A(1) requires the Court, in making a family provision order, to have regard to Michael’s will; any evidence of Michael’s reasons for making the dispositions in Michael’s will and any other evidence of Michael’s intentions in relation to providing for eligible persons.[10] Section 91A(2) of the Act lists a number of other matters to which the Court may have regard in making a family provision order, including:
[10] Section 91A(1) of the Act.
(a) any family or other relationship between Michael and the claimant, including the nature and length of the relationship;
(b) any obligations or responsibilities of Michael to the claimant, any other eligible person or beneficiary of the estate;
(c) the size and nature of the estate;
(d) the financial resources (including earning capacity) and financial needs of the claimant, any other eligible person or beneficiary of the estate at the time of the hearing and for the foreseeable future;
(e) any physical, mental or intellectual disability of any eligible person or beneficiary of the estate;
(f) the age of the claimant;
(g) any contribution of the eligible person to building up the estate or the welfare of Michael or Michael’s family;
(h) any benefits previously given by Michael to the claimant, any other eligible person or any beneficiary;
(i) whether the eligible person was being wholly or partly maintained by Michael before Michael’s death and the extent to which, and basis on which, Michael had done so;
(j) the liability of any other person to maintain the eligible person;
(k) the character and conduct of the eligible person or any other person;
(l) the effects a family provision order would have on the amounts received from Michael’s estate by other beneficiaries; and
(m) any other matter the Court considers relevant.
Relevant circumstances
13Three affidavits sworn by Barbara and two affidavits sworn by Rose were tendered in evidence.[11] Neither Barbara nor Rose were cross-examined. Accordingly, I make the following findings based on the uncontradicted evidence of Barbara and Rose.
[11]Affidavits of Barbara Ann Menzies sworn 17 March 2020, 18 March 2021 and 10 June 2021; affidavits of Rose Marie Perta sworn 6 April 2021 and 11 June 2021
Relationship between Michael and Barbara
14Barbara met Michael in 1995 at the RSL at Northcote. She moved into the Northcote house at Michael’s request in 1996. She lived with him as his domestic partner from 1996 until his death on 2 September 2019. They shared a bedroom until about one year prior to his death, when she moved into the spare room due to his ill health.
15At the time Barbara moved into the Northcote house, she was aged forty-four years old and was working as a presser in a dry-cleaning shop. The deceased was aged fifty-nine years old and was on a disability pension. He subsequently moved onto an aged pension.
16Barbara did the domestic tasks such as washing, cooking, cleaning, gardening and maintaining the home. They had a loving and caring relationship and enjoyed doing things together such as attending the RSL and family functions. Barbara continued to work as a presser until she retired on 8 December 2016. They were a loving couple who had a healthy sex life until this was prevented by his ill health. Barbara cared for him in the final stages of his life, including washing and dressing him and maintaining a camera monitor in his bedroom so that if he needed her during the night she could wake up and attend him.
17Michael paid for bills such as council rates, water rates, insurance, gas, electricity and car registration. Barbara paid for all food, clothing and petrol, as well as entertainment expenses, including the cost of meals out. The cost of improvements on the Northcote house were shared equally between Barbara and Michael. This included the cost of painting the dining room and kitchen; a new bathroom; new tiles in the dining room, and new tiles in the kitchen.
18Probate was granted to the defendant by the Supreme Court on 21 October 2019, some seven weeks after Michael died. The defendant organised the rental of a one-bedroom unit for Barbara in Kingsbury. She moved out of the Northcote house and into this unit on 30 October 2019, she says, under “pressure” from the defendant. The sum of $1,410 was paid to the real estate agent and two further sums were paid into her bank account by the defendant, one of $3,590 and one of $45,000, amounting to a total sum of $50,000 (the amount of the legacy to Barbara in Michael’s will).
Relationship between Michael and Rose
19Rose left the family home and moved to Adelaide with her mother when she was about ten years old. The marriage between her mother and father was not a happy one and Rose believed that her mother was subjected to family violence over many years.
20Rose was allowed to return to Melbourne to visit her father when she was thirteen years old. Michael attempted to prevent her leaving and struck her across the face. She was able to alert the neighbours, who helped her arrange a flight back to her mother in Adelaide.
21Despite this incident, Rose still cared for her father and stayed in contact with him by telephone. She often told him she loved him and he referred to her as his little girl. She returned to visit him in Melbourne as she grew older. Although he asked her to live with him, he did not again attempt to prevent her leaving. Sometimes he did become angry and aggressive over the phone; however, Rose was of the view that her father was an alcoholic and that this explained his behaviour.
22Once she became an adult, Rose travelled to visit her father in Melbourne about once every couple of years and kept in contact with him by telephone. She had a difficult relationship with Barbara. Rose states that there were occasions when Barbara yelled at both her and her father[12] and that this made Rose feel uncomfortable around her.
[12] Barbara, in her affidavit evidence, denies yelling at Michael but does not deny yelling at Rose.
23Rose spoke with Michael by telephone in about September 2017. He was upset and argued her mother should never have left him. Rose said that her mother had left because of the domestic violence she endured. Michael became upset and said “don’t fucking ring me” repeatedly, then hung up. Rose did not speak to her father again until August 2018, when her father rang her. On this occasion, he denied swearing at her in the last conversation.
24Rose had not been told by Barbara or the defendant that her father had been taken to hospital. She found out from a family friend. She spoke to a nurse by phone, on 31 August 2019, who told her that Michael had a lower back fracture. She then spoke to the defendant, who told her that Michael was not well and had broken his back, then abruptly ended the conversation. Around two hours later, she received a text message from the defendant which said:
“dad is not good so don’t call him and do not go and see him ok don’t want him up set or bab”
(sic)
25Rose replied with a text message which said (among other things):
“I can see My Father when I want,stop been a bully,as if you care for barbara,you & your partner ran her down & you HATE her,your words nick. … It’s none of your business to interfere when it comes to me & My Father.”
(sic)
26The defendant then replied:
“Fuck you and stay out of our fucken life’s.”
(sic)
27In the context of this text message exchange, Rose did not visit her father as she was concerned it would cause a fight amongst her family. She said that had she known her father was dying she would have insisted on seeing him. Rose was told by a family friend her father had died. She was overwhelmed, collapsing and striking her head at the sink. She was taken by ambulance to hospital.
Personal and financial circumstances of Barbara
28Barbara is currently sixty-eight years old. She has several health conditions, including carpal tunnel syndrome; chronic obstructive pulmonary disease; subacromial bursitis and supraspinatus tendinitis. She has also been consulting a psychologist since Michael’s death.
29Barbara has been retired since 8 December 2016. At the time of trial, Barbara received a government pension of $1,093.50 per fortnight. She gave evidence of having three bank accounts:
(a) the first had a balance of $1,490.19 as at 31 December 2020;
(b) the second had a balance of $64,556.10 as at 2 February 2021; and
(c) the third had a balance of $6,087.91 as at 29 December 2020.
30In addition, she had an investment of $73,389.23 with First Choice and her solicitors were holding $20,000 in trust on account of her anticipated legal fees.
31Barbara claimed to receive “very little interest” on her investments but provided no further details.
32Barbara continues to live in the one-bedroom unit in Kingsbury, for which she pays $470 rent per fortnight.
33Her current expenses total $882 per fortnight, including $470 per fortnight for rent. It is apparent that she lives a simple and frugal lifestyle.
Personal and financial circumstances of Rose
34Rose is currently fifty-seven years old. She has experienced financial difficulties for many years, including being forced to sell her home in 2008 when she could no longer meet the repayments on her loan, and going through periods of homelessness. In 2019, she returned to Melbourne to live with her mother and care for her. She has been approved for government housing but does not know when or if a premises will be made available to her.
35Rose is currently on a disability support pension and suffers from many medical conditions including depression, anxiety, osteoarthritis and degenerative disc disease of the cervical spine. She takes Endone twice per day to manage her pain (among other medication).
36Rose receives approximately $952 per fortnight for the disability pension plus an additional $264 per fortnight as a carer’s payment (total: $1,216 per fortnight). She has approximately $41,788.48 in her bank account as at 8 June 2021 and no superannuation. She pays $150 per fortnight to her mother to cover the cost of groceries and utilities. Her other expenses (on a fortnightly basis) are:
(a) approximately $42 per fortnight for car insurance; and
(b) approximately $33 per fortnight for pet expenses.
Are the jurisdictional requirements met with respect to Barbara?
37I am satisfied that Barbara lived as a couple with Michael on a genuine domestic basis continuously from 1996 to the date of Michael’s death on 2 September 2019. Accordingly, I am satisfied that Barbara was the domestic partner of Michael at the time of his death within the meaning of paragraph (a) of the definition of “eligible person” in s90 of the Act.
38I am also satisfied that Michael owed a moral duty to Barbara as his domestic partner of over twenty years, particularly given her financial and personal contributions to the relationship and their home over the years.
39Finally, I am satisfied that Michael failed to make adequate provision for Barbara’s proper maintenance and support in his will. It is well recognised that, as a general rule, a deceased has a moral duty to provide their spouse with the security of a home, sufficient income to live independently and a nest egg to guard against contingencies.[13] Of course the extent of any provision required will depend on the relevant facts of the particular case. However, in the present case, Barbara was a de facto spouse who had co-habited with Michael in a loving and committed relationship for over twenty years. At the time of Michael’s death, the Northcote house, which he owned unencumbered, had been their shared home since 1996. Over the years, Barbara had contributed to the maintenance of this home, both directly (in the form of contributions to renovations) and indirectly (in performing domestic tasks and in making financial contributions to their shared expenses). Barbara is now retired and living on the aged pension, but for many years was the only employed person in the household. The Northcote house provided a substantial asset pool from which to provide for Barbara’s needs. There is no evidence of any need on the part of the defendant which would override Barbara’s need for maintenance and support (particularly the security of a home to live in and a fund to protect against vicissitudes).[14] Provision of only $50,000, which was approximately 5 per cent of the likely value of Michael’s estate at the time of death and provided the equivalent of less than five years’ rent on her one-bedroom unit, is plainly not adequate provision for Barbara’s proper maintenance and support in the circumstances.
[13]Anslow v Journeaux [2009] VSC 250 at paragraph [41]; Re Papaioannou; Papaioannou v Kronemann [2019] VSC 844 at paragraph [18]; Thompson v Thompson [2015] VSC 706 at paragraphs [61] and [63]
[14] Re Papaioannou; Papaioannou v Kronemann (ibid) at paragraphs [18] and [21].
Are the jurisdictional requirements met with respect to Rose?
40I am satisfied on the evidence tendered, including the letter from her general practitioner dated 11 June 2021; letters from her psychologist dated 11 November 2019 and 9 January 2020, and Rose’s own evidence in paragraphs 23-25 of her affidavit sworn 6 April 2021, that Rose is a child of Michael with a disability within the meaning of paragraph (b) of the definition of “eligible person” in s90 of the Act.
41If I am wrong in that finding, Rose would nevertheless be an eligible person as a child not referred to in paragraph (b) or (c) within the meaning of paragraph (f) of the definition of “eligible person” in s90 of the Act.
42I am satisfied that Michael owed a moral duty to Rose as her father and in light of her significant medical conditions and past history of financial difficulties and homelessness. Although the relationship does not appear to have been a particularly close one, there was ongoing contact between them and some acknowledgment of that moral duty by Michael in the making of gifts of money in 2016 ($500) and 2017 ($2,000).
43I am also satisfied that Michael failed to make adequate and proper provision for Rose in his will. I have particular regard to the size of the estate; the failure to make any provision at all for a daughter who had significant financial and health issues, and the absence of any evidence that the primary beneficiary of the estate (the defendant) had any particular financial need.
What family provision order (if any) should be made for Barbara?
44Michael’s estate comprised the Northcote home, which was sold for $1,152,000, plus cash assets of approximately $72,000 (total: $1,224,000). There is no direct evidence of the estate’s expenses. However, allowing for costs of sale, funeral expenses and estate expenses of $50,000, would leave a net estate of $1,174,000. If one deducts the existing legacy of $50,000 to Barbara, this leaves a net amount of approximately $1,124,000.
45Barbara submitted that she should be provided with $450,000 to purchase a one-bedroom unit, plus a nest egg of $150,000 (in addition to the legacy of $50,000) to provide for future contingencies (total $600,000). It was submitted that although Barbara lived a modest life and was currently meeting her expenses from her pension, she required the security of owning her own home to provide her with housing security plus a reserve to meet the likelihood that her medical and other care expenses would increase as she aged.
46I have regard (as I am required to do) to Michael’s testamentary intentions as expressed in his will. He has, through that will, expressed the desire to leave the bulk of his estate to the defendant, although he acknowledges the moral duty to Barbara in the form of the legacy of $50,000. The amount of this legacy is plainly inadequate to fulfil this moral duty and provide adequately for the proper maintenance and support of his de facto spouse of more than twenty years.
47I accept that adequate and proper provision for the maintenance and support of Barbara in the circumstances requires that she be provided with sufficient to purchase a one-bedroom unit in her local area and a nest egg for future vicissitudes of life. It is more appropriate that she be provided with a capital sum to purchase a residence than a life interest. A life interest might have been appropriate if Barbara sought to stay in the Northcote home, which formed the bulk of the estate. However, the Northcote home has now been sold and Barbara seeks to purchase much more modest accommodation than the Northcote home. A property purchased outright will give her the flexibility to meet her future needs. It will also reduce the potential for future disputes between herself and the defendant or Rose.
48A difficulty in this case is the lack of evidence as to the cost of purchasing a suitable unit for Barbara. At the hearing, counsel for Barbara sought $450,000 for the purchase of a unit. In her affidavit evidence, Barbara said that units in the Epping or Bundoora area are on the market for approximately $300,000 to $350,000. In addition, recent searches of realestate.com for Epping and Lalor were tendered in evidence at trial. The searches for Lalor provided the sold price for various units (all under $400,000). However, the searches for Epping were for properties on the market and provided the “agent price guide” only. There is no evidence of the price of units actually sold in the area or evidence from a valuer or real estate agent as to the likely price of purchasing a suitable unit.
49On the other hand, no objection was made to the tender of this evidence. Both Rose and Barbara agreed that $350,000 was the minimum required to purchase a modest one-bedroom unit in a suitable area of Melbourne. Given the size of the estate and, in particular, the value of the home she shared with Michael, adequate provision for Barbara’s proper maintenance and support does not require her to purchase the very cheapest one-bedroom unit in Epping. There are also stamp duty, conveyancing and moving costs to consider. In all the circumstances (including the size of the estate), I am satisfied that it is reasonable to allow $400,000 for Barbara to purchase a suitable property in which to live.
50I also accept that Barbara ought to be given a substantial nest egg to protect against the vicissitudes of life. She is elderly and has no adult children who might be expected to contribute to her care in her old age. Although she is currently meeting her modest expenses from her pension, there is a significant risk at her age that she will face future medical and care expenses beyond her means. In the context of the size of the estate, I am satisfied that adequate provision for her proper maintenance and support requires that she be given a further amount of $150,000.
51In conclusion, I am satisfied that adequate provision for Barbara’s proper maintenance and support requires that a family provision order in the amount of $550,000 be made for Barbara (in addition to the existing $50,000 legacy). I note that this would leave an amount of approximately $574,000 to be divided between Rose and the defendant. For the reasons which follow, I am satisfied that this leaves sufficient to provide adequate provision for the proper maintenance and support of Rose and also pays due regard to Michael’s testamentary intentions.
What family provision order (if any) should be made for Rose?
52Rose submitted that a family provision order of $550,000 should be made in her favour. This was said to be sufficient for Rose to purchase a unit or make a substantial deposit on a property plus a nest egg for vicissitudes.
53It was accepted by counsel for Rose that Barbara, as the de facto spouse, had the paramount claim. However, given the size of the estate, it was submitted that there was sufficient to accommodate the claims of both Barbara and Rose.
54It was submitted that Rose was in dire need, both financially and in terms of her health. She was disabled and suffering from degenerative illness and depression and anxiety. She was unable to work and relied upon the disability support pension. She had experienced periods of homelessness. She currently has no home to live in and depended for accommodation on her informal arrangement continuing with her mother. She was fifty-seven years of age and so younger than Barbara, with more expected years of life. Her relationship with her father may not have been close, but it was not distant or estranged and the quality of their relationship must be viewed in the context of the “long shadow of domestic violence”. It was submitted that the strength of the relationship should not be a disentitling factor in the context of Rose’s very real need due to her current and anticipated ill-health; poor financial position, and lack of reserves to meet her needs.
55It was submitted that the defendant had no established need. Although it was accepted that the Court was required to take into account Michael’s testamentary intentions, as expressed in his will, it was submitted that those intentions should be given “negligible weight” in circumstances where the reasons for leaving the bulk of his estate to the defendant were unknown and Michael had not acted as a wise and just testator.
56I accept that Rose has very significant needs due to her multiple health conditions and economic and housing insecurity. I also accept that it is reasonable to assume that she will live until she is eighty years old, a period of twenty-three years, and remain incapable of earning any income throughout that period.
57On the other hand, I am mindful that Rose is an adult daughter who (whilst not estranged) did not have a particularly close relationship with her father. Rose also has available to her the ongoing support of her mother. Rose did not provide any evidence that the support of her mother is tenuous (aside from a reference in her affidavit sworn 11 June 2021 to having difficulties living with her mother in January 2020)[15] or that her mother lacked assets to provide her with further support in the future. With the support of her mother, Rose is currently making ends meet on the disability support pension, although she has very little capacity to provide for contingencies (including the withdrawal of her mother’s support). As I have found that Rose is a child with a disability within the meaning of paragraph (b) of the definition of eligible person in s90 of the Act, I am not required by s91(4)(c) to take into account the degree to which Rose is not capable, by reasonable means, of providing adequately for her proper maintenance and support. However, I may still take this factor into account and do so.
[15]See also letter from Ms Andrea Costa dated 9 January 2020, exhibit RP-7 to the affidavit of Rose Perta sworn 11 June 2021.
58Due respect must also be accorded to Michael’s wishes to leave the bulk of his estate to his son, the defendant, with whom he had a closer relationship than his relationship with Rose.
59In all the circumstances, I am not satisfied that adequate provision for Rose’s proper maintenance and support requires that she be provided both sufficient to purchase a unit and a substantial nest egg. However, particularly given the size of the estate, the lack of demonstrated need by the defendant and Rose’s health and financial situation, I am satisfied that it is necessary that a significant sum be provided for her proper maintenance and support.
60A sum of $400,000 will provide Rose with a significant nest egg. Rose may choose to retain this sum as a safety net to guard against future housing insecurity or increased medical expenses; to utilise this amount to supplement her pension over the next 23 years; or to purchase a property now.
Costs
61Both Rose and Barbara submitted that the defendant should be ordered to pay the costs of the proceeding personally and that I should fix those costs in my judgment. It was submitted that the defendant, as executor, was under a duty to respond to Barbara and Rose’s claims and assess the evidence in an objective and impartial manner. The defendant had failed entirely to engage in the process, despite being provided with ample notice of the proceeding and the necessity to appear.
62Rose sought a total sum of $22,159.80, inclusive of counsel’s fees of $8,800 and other disbursements of $2,177.80. Barbara sought a total sum of $34,865.38, inclusive of counsel’s fees of $13,695 and other disbursements of $765.38.
63In Re Flavel; Application by Lipshut,[16] McMillan J stated:
“… it is incumbent on … [the executor of the estate] to assess the evidence in an impartial and objective manner, act properly and reasonably in conducting the litigation and, if appropriate, compromise the proceeding. … .”
[16] [2018] VSC 228 at paragraph [35].
64I am satisfied on the affidavits tendered in evidence that the defendant has been given ample notice of these proceedings and the necessity to appear if he wishes to defend them. Despite this, not only has the defendant failed to comply with his duty as an executor to act properly and reasonable, he has failed entirely to appear or to conduct the defence of the proceeding at all. This has necessitated a trial of the proceeding and rendered a compromise impossible.
65It is appropriate in these circumstances to require that the defendant pay the costs of the proceeding without indemnification from the estate. By failing to appear in this proceeding, in disregard of his duties as executor, the defendant has acted unreasonably and lost his entitlement to indemnity out of the estate.[17]
[17] See Re Beddoe; Downes v Cottam [1893] 1 Ch 547 at 558 per Lindley LJ and at 562 per Bowen LJ.
66The Court has a discretion to make a gross sum costs order fixing costs under Rule 63A.07 of the County Court Civil Procedure Rules 2018.[18] It is appropriate to do so in the present case, particularly given the defendant’s failure to engage in the process and the fact that the Court is in a good position to assess the reasonableness of the costs given the limited interlocutory steps which have taken place. I accept that the costs of both Rose and Barbara are reasonable in the circumstances.
[18] See also s65C(2)(c) of the Civil Procedure Act 2010 (Vic).
67Accordingly, I will order that the defendant personally pay:
(a) Rose’s costs of the proceeding, on a standard basis, fixed in the sum of $22,159.80; and
(b) Barbara’s costs of the proceeding, on a standard basis, fixed in the sum of $34,865.38.
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Certificate
I certify that these 17 pages are a true copy of the reasons for decision of her Honour Judge Tran, delivered on 20 July 2021.
Dated: 20 July 2021
Susan Thomas
Associate to her Honour Judge Tran
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