Moller v Allen

[2006] NSWSC 39

CITATION:	Moller v Allen [2006] NSWSC 39
HEARING DATE(S):	17 August 2005 (written submissions to 23 August 2005)
JUDGMENT DATE :	10 February 2006
JURISDICTION:	Equity
JUDGMENT OF:	Associate Justice McLaughlin at 1
DECISION:	1. I stand the proceedings over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes to reflect my conclusions herein, and, if desired by either party, for submissions as to costs.
CATCHWORDS:	Succession. - Family Provision. - Claim by adult daughter. - Financial and material circumstances of Plaintiff. - Asserted needs of Plaintiff. - Whether Plaintiff has been left without adequate provision for her proper maintenance. - Competing claim of Defendant. - Equality in testamentary provisions made in favour of Plaintiff and of Defendant. - Benefits and advances made by Deceased during her lifetime to Plaintiff and to Defendant. - Estate not sufficient to meet any order for provision. - Whether advances to Defendant constitute prescribed transactions. - Whether an order for provision should be made out of notional estate of Deceased.
LEGISLATION CITED:	Family Provision Act 1982 Wills, Probate and Administration Act 1898
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201 Vigolo v Bostin (2005) 79 ALJR 731
PARTIES:	Robyn Patricia Moller (Plaintiff) Gayle Lesley Allen (Defendant)
FILE NUMBER(S):	SC 4817 of 2004
COUNSEL:	S. Mason (Plaintiff) C. Harris (Defendant)
SOLICITORS:	Turnbull Hill Lawyers (Plaintiff) Tonkin Drysdale Partners (Defendant)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

FRIDAY, 10 FEBRUARY 2006

4817/04 ROBYN PATRICIA MOLLER v GAYLE LESLEY ALLEN

JUDGMENT

1 HIS HONOUR: These are proceedings under the Family Provision Act 1982.

2 By summons filed on 31 August 2004 Robyn Patricia Moller claims an order for provision for her maintenance, education and advancement in life out of the estate and/or notional estate of her late mother, Joyce Edith Moller (to whom I shall refer as “the Deceased”).

3 The Deceased died on 26 October 2003, aged 75. She left a will dated 2 August 2003. By that will the Deceased appointed as executors her two daughters, being the Plaintiff and Gayle Lesley Allen (who is the Defendant to the present proceedings), made gifts of certain specific chattels, gave monetary legacies to her two grandsons, and gave various shares, her personal possessions and moneys in a bank account to be shared equally between her two daughters, the Plaintiff and the Defendant.

4 No probate of that will has ever been granted. However, on 23 February 2005 letters of administration of the estate of the Deceased were granted to the Plaintiff, pursuant to section 41A of the Wills, Probate and Administration Act 1898, for the purposes only of an application being made by the Plaintiff under the Family Provision Act.

5 The assets of the Deceased at the time of her death consisted of:

IAG shares $2,348

Woolworths shares $8,912

Motor car $500

Bank account with ANZ bank $16,302

Total $28,062

6 From the foregoing amount each of the Plaintiff and the Defendant has received a distribution in the sum of $5,840. Those sums, which represented the balance remaining in the Deceased’s bank account after payment of funeral expenses, were distributed in February 2004. Thus the present assets remaining in the estate have a value of only about $11,760.

7 It will be appreciated that in calculating the value of the estate presently available for distribution the costs of the present proceedings must be taken into consideration, since the Plaintiff, if successful, would normally be entitled to an order for her costs out of the estate, whilst the Defendant, in seeking to uphold the testamentary provisions of the Deceased, would normally, irrespective of the outcome of the proceedings, be entitled to receive her costs out of the estate. The instant case, however, has taken on more of the character of adversarial proceedings. It is estimated that the costs of the Plaintiff will total about $25,300, whilst those of the Defendant will total about $27,600. The costs of each party alone exceed the amount remaining in the estate.

8 The Plaintiff and the Defendant are the only children of the Deceased. The Plaintiff, who was born on 23 November 1959, is presently aged 46, whilst the Defendant, who was born on 11 June 1957, is presently aged 48.

9 The Plaintiff is an unmarried mother, having one child, James, who is presently 10 years of age (having been born on 24 May 1995). James suffers from a medical problem relative to certain food. He is sensitised to eggs and peanuts, and is at some risk of a severe anaphylactic reaction should he eat those foods. Should he be in contact with even traces of those foods he is likely to have a local reaction.

10 The Plaintiff, who said that she had a close and loving relationship with the Deceased for all her life, resided with the Deceased on and off for most of her adult life. She said that they were in contact with each other at least weekly until the time of the Deceased’s death.

11 When the Plaintiff was aged in her early 20s she and the Deceased rented the house which the Plaintiff presently owns at 8 Colin Street, Berkeley Vale. When the owner decided to sell that residence in 1985 for $50,000 the Deceased was not able to borrow that (or, apparently, any) sum, because she had been bankrupt (from 1976 to 1978). Accordingly, the property was purchased in the name of the Plaintiff, who was employed by the ANZ Bank at that time and who took out a staff bank loan through that bank at a reduced interest rate. The Deceased made the mortgage payments and the Plaintiff paid rent of $100 a week to the Deceased for residing in the property, as well as paying expenses. The Deceased also owned a property at Wentworth Falls in the Blue Mountains, which she sold in 1986 for $50,000, and she used the proceeds of such sale to pay out the loan on the Berkeley Vale property two years later, in 1988. At that stage the Plaintiff was no longer living in the Berkeley Vale property, having moved into rented accommodation elsewhere.

12 In 1989 the Plaintiff purchased an investment property in Maitland. About three years later, in 1992 or 1993, the Plaintiff resumed residence in the Berkeley Vale property, where she has remained to the present time. At the time when the Plaintiff returned to Berkeley Vale the Deceased was in employment at the King’s School at Parramatta, but returned to spend each weekend at Berkeley Vale. The Deceased retired from her employment in 1997, and resumed occupation in the Berkeley Vale property with the Plaintiff.

13 In 1997, a granny flat was constructed at the Berkeley Vale property. The arrangements between the Plaintiff and the Deceased concerning the construction of that granny flat and their consequent respective interests in and rights concerning the Berkeley Vale property were formalised by a written agreement made between them on 15 October 1997 (annexure “B” to the affidavit of the Defendant, sworn 11 August 2005).

14 That granny flat is attached to the principal residence upon the property, although there is no internal access between the two. The construction of the granny flat was funded by a borrowing of $50,000 by the Plaintiff from the ANZ Bank, secured by mortgage. The Plaintiff made all the repayments upon that mortgage.

15 At that time the Deceased, according to the Plaintiff, requested the Plaintiff no longer to pay to her any rent for her occupancy of the Berkeley Vale property, saying, “Don’t pay rent anymore. Your repayments on the loan will replace the rent”. The Plaintiff then borrowed a further $20,000 (presumably, also secured by mortgage) for the purpose of constructing a garage on the property, renewing the flooring throughout the house, and purchasing curtains.

16 It was the Plaintiff’s evidence that she and the Deceased whilst living together shared all expenses, including all household outgoings, such as telephone, electricity, council rates and water rates.

17 According to the Plaintiff, the Deceased became ill in December 2001, and was subsequently diagnosed as having bowel cancer. She underwent surgery in March 2002, and later underwent chemotherapy.

18 It was the Plaintiff’s evidence that from December 2001 the Deceased was dependent upon her. According to the Plaintiff, throughout that period the Deceased frequently resided with the Plaintiff in the house itself rather than within the granny flat. The Plaintiff did all the cooking and all the cleaning, and attended to the Deceased. Although still in employment at the time (with the St George Bank) the Plaintiff took the Deceased to most of her medical and hospital appointments, and collected her prescriptions and medications.

19 It was the Plaintiff’s evidence that in about late 2002 or early 2003 the Deceased expressed an intention to move from residing with the Plaintiff at Berkeley Vale to residing with the Defendant at the latter’s rural estate near Bulahdelah. At that time, according to the Plaintiff, the Deceased requested that the Plaintiff sell her investment property at Maitland and with the proceeds pay out the interest of the Deceased in the Berkeley Vale property. Although the Plaintiff placed the Maitland property on the market in early 2003, it did not sell. Nevertheless, the Plaintiff borrowed $65,000 from the ANZ bank and gave that money to the Deceased as a part-payment for the Deceased’s interest in the house. Ultimately the Plaintiff’s Maitland property sold for $164,000, of which sum the Plaintiff gave to the Deceased $145,000. At that time there was outstanding upon the mortgage over the Berkeley Vale property an amount of $45,000. According to the Plaintiff the bank valuation of the property at that time was $300,000. From the proceeds of sale of the Maitland property the Plaintiff used $10,000 to reduce the mortgage on the Berkeley Vale property. It was the Plaintiff’s evidence that at the time of those various transactions the Deceased said to her, “The rest of the $300,000 is made up by the increase in value of the property because of the contributions you have made”.

20 In May 2003 the Deceased removed from the Plaintiff’s residence at Berkeley Vale to the Defendant’s residence near Bulahdelah. For some time before that the relationship between the Deceased and the Plaintiff had been punctuated by arguments and disputes concerning essentially their respective financial contributions towards the acquisition of the Berkeley Vale property. It was clearly the desire of the Deceased that the Defendant should receive from her a benefit equivalent to the benefit which the Deceased considered that the Plaintiff had been receiving in regard to the acquisition of and her occupancy of the Berkeley Vale property.

21 According to the Plaintiff, from the time when the Deceased removed to Bulahdelah, the Plaintiff and her son travelled from Berkeley Vale to the Defendant’s residence every weekend for the ensuring three months. There the Plaintiff assisted in caring for the Deceased. In July 2003 the Plaintiff took long service leave from her employment with the ANZ Bank, and thereafter until the Deceased’s death, she visited the Deceased four or five days a week to assist in her care. The Plaintiff said that she took her son out of school for about six or seven weeks during that period, so that she would be able to care for the Deceased.

22 There was an altercation between the Plaintiff and the Defendant in September 2003 at the Defendant’s residence, as a result of which the Plaintiff departed that residence, and did not visit the Deceased for about two weeks. Upon receiving word that the Deceased had been admitted to hospital about two weeks after the foregoing altercation the Plaintiff visited the Deceased in hospital, remaining with her each weekend until the death of the Deceased on 26 October 2003.

23 The Plaintiff’s current assets consist of:

House property situate at and known as 8 Colin Street, Berkeley Vale, having an estimated value of $340,000
Nissan Pulsar, 1992 motor car, having an estimated value of $4,000
Dragon Direct savings account, $3,000
Bank account, St George bank, having no present credit balance
Personal property, furniture and clothes, having an estimated value of $25,000
Superannuation entitlement from ANZ bank, $9,000
Superannuation entitlement from St George bank, $13,000
NRMA shares, $5,000
St George Bank shares, $8,000
Total $407,000.

24 The investment property in Maitland which the Plaintiff had purchased in 1989 was sold by her in mid-2003. Throughout the period of her ownership the Plaintiff received rent from tenants of that property. As a result of the sale of her Maitland property the Plaintiff incurred liability for capital gains tax of $12,000. In order to pay that tax in May 2004 the Plaintiff sold 587 shares in St George Bank, retaining 400 shares in that company.

25 The liabilities of the Plaintiff consist of the mortgage debts on the Berkeley Vale property, presently in amounts totalling about $88,000, and a Visa card indebtedness currently in an amount of $2,300.

26 The Plaintiff since April of this year has been in part-time employment with Wombat Fashions, working generally for six hours a week, for which she receives at least $126 net a week. The Plaintiff receives a supporting parent’s pension of $328 a fortnight, and child support from James’s father, in an amount of $600 a month. The Plaintiff rents out the granny flat at the Berkeley Vale property, currently receiving rent of $80 a week. Her total income from all sources is $2080 a month.

27 According to the Plaintiff, her current living expenses and outgoings total between $2,135 and $2,235 a month – that is, between $534 and $559 a week. The Plaintiff’s outgoings include repayments on the first mortgage in an amount of $350 a month and repayments on the second mortgage in an amount of $450 a month. Upon the sale of the Plaintiff’s Maitland property in June 2003 she paid about $8,000 in reduction of the second mortgage. After receiving $5,840 from the estate of the Deceased in February 2004 (the Defendant receiving a like amount at that time) the Plaintiff paid the sum of $5,000 in reduction of the second mortgage. It will be appreciated that there is a shortfall of from $55 to $155 a month between the Plaintiff’s income and her expenditure. The Plaintiff relies upon her Visa card and the savings in her Dragon Direct account to meet that shortfall.

28 The Defendant also is a single parent, having one child, Mitchell, who is presently 22 years of age. The Defendant conducts a farming enterprise upon a rural estate known as Forest Lodge at Boolambyte, near Bulahdelah. There she receives paying visitors, up to 30 at a time, who are enabled to observe and participate in a working farm. The Defendant also said that she had a close and loving relationship with the Deceased throughout her life.

29 According to the Defendant, her assets consist of:

Business and residence at Forest Lodge, having an estimated value of $850,000

Holden Rodeo utility, having an estimated value of $15,000

Personal property, furniture and clothes, having an estimated total value of $30,000

NRMA shares, having an estimated value of $1,000

Account with St George bank (held on behalf of Mitchell Allen), having an estimated value of $7,000

30 The Defendant’s liabilities consist of:

Business loan, in an estimated amount of $270,000

Car loan, in an estimated amount of $18,000

Mastercard liability, in an estimated amount of $1,500

Total $289,500.

31 However, it emerged under cross-examination that the Defendant had omitted to include in her lists of assets moneys held in two bank accounts (totalling at least $6220) and a further motor vehicle, being a Commodore motor car (said to be of no commercial value), as well as an interest bearing deposit in an amount of $7,220.

32 The Defendant’s income from her business for the last two financial years has been $84,947 and $62,198 respectively. The Defendant’s business and living expenses are estimated by her to total $6,500 a month. According to the Defendant, her income is very unreliable and her current outgoings exceed her income.

33 Towards the end of her life the Deceased made advances to the Defendant totalling $180,000. It would appear that those advances came from the moneys paid by the Plaintiff to the Deceased in 2003 at about the time when the Deceased removed from the Plaintiff’s residence to the Defendant’s residence. In this regard there was admitted into evidence an undated statement signed by the Deceased, and witnessed (being annexure “B” to the affidavit of the Plaintiff, sworn 5 August 2004). That statement gives both the address at Berkeley Vale and the address at Bulahdelah, and continues,

This is to state – should the occasion arise that I have no interest in the property, 8 Colin Street Berkeley Vale. This being the sole property of Robyn Patricia Moller.
I made a loan of $180,000 to Gayle Lesley Moller in two instalments of $120,000 and $60,000, [illegible] this year.
This is to assist Gayle with her business. If should anything happen to me then the money to be made over to Gayle to compensate loss of business she has incurred whilst nursing me during my illness.

34 The foregoing statement by the Deceased is admissible pursuant to section 32 of the Family Provision Act.

35 It should be observed that, whilst the statement of the Deceased refers to “a loan of $180,000”, nevertheless it was the Plaintiff’s evidence that when, after the death of the Deceased, she became aware of the foregoing advances to the Defendant, the Defendant said concerning that money, “It’s gone. Mum gave it to me”. In her oral evidence the Defendant characterised these advances as a gift, although the financial statements of her business and her income tax returns characterise them as a loan. According to the Plaintiff, the Deceased also paid for a tractor for the Defendant and for a new lining to the swimming pool at the Defendant’s Bulahdelah property.

36 There were placed in evidence various statements and communications between the Deceased and her solicitor and communications by the Deceased addressed to the Plaintiff and to the Defendant. Those statements of the Deceased are admissible in evidence pursuant to section 32 of the Family Provision Act.

37 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff.

38 I have had the benefit of receiving written outlines of submissions and chronologies from Counsel for the respective parties. Those documents will be retained in the Court file.

39 The Plaintiff as a child 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, she has the standing to bring the present proceedings. It will be appreciated that the Defendant similarly is an eligible person in relation to the Deceased. No other person is asserted by either party to be an eligible person in relation to the Deceased.

40 It will be appreciated that the assets of the estate totalled a little over $28,000, and that of that amount each of the Plaintiff and the Defendant has received the sum of $5,840. The assets remaining in the estate after payment of funeral expenses of $6,500 presently consist of shares in Woolworths, to a value of about $9,000, and shares in IAG, to a value of about $2,300. As I have already observed, those assets, together with dividends earned upon those shares since the death of the Deceased, are not sufficient to meet the costs of the proceedings.

41 It is submitted on behalf of the Plaintiff that the advances made by the Deceased to the Defendant totalling $180,000 constitute prescribed transactions by the Deceased, and that those advances in the hands of the Defendant are notional estate of the Deceased which may be the subject of any order for provision in favour of the Plaintiff.

42 It will be appreciated however, that it is not necessary for the Court to proceed to a consideration of whether or not there have been prescribed transactions or whether or not property held by the Defendant should be designated as notional estate of the Deceased unless the Plaintiff has first established an entitlement to an order for provision out of the estate of the Deceased.

43 In performing the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208-210 the Court must first consider whether, in consequence of the testamentary dispositions of the Deceased, the Plaintiff has been left without adequate provision for her proper maintenance. (See, also, Vigolo v Bostin (2005) 79 ALJR 731, in which the High Court affirmed the correctness of the foregoing test in Singer v Berghouse.) As the High Court observed, at 209-210 (per Mason CJ, Deane and McHugh JJ), in making that determination the Court must have regard, amongst other things, to the relationship between the Deceased and other persons who have legitimate claims upon her bounty.

44 In the instant case it has been submitted on behalf of the Plaintiff that the following matters are relevant to a decision on whether the Plaintiff has been left without adequate provision for her proper maintenance:

· The various matters of the nature referred to in section 9 (3) in the Act regarding contributions made by the Plaintiff to the acquisition, conservation and improvement of the Berkeley Vale property, and, in particular, the fact that the Plaintiff, by allowing the Berkeley Vale to be acquired in her name, enabled the Deceased to acquire the security of a home;

· The conduct of the Plaintiff in caring for the Deceased, whilst they were residing together, and when the Deceased moved into the granny flat;

· The fact that the Plaintiff’s living expenses exceed her income;

· The Plaintiff’s inability to meet her expenses each month in consequence of her mortgage repayments;

· The Plaintiff’s mortgage obligations are a consequence of the fact that the Plaintiff complied with the wishes of the Deceased in realising the cash payment which the Plaintiff made to the Deceased at the latter’s request;

· The Plaintiff is a single parent of a dependent son, aged 10, who suffers from a medical problem relative to certain foods;

· The Plaintiff has other debts, being her Visa card indebtedness, which she has been using in order to meet the monthly shortfall in her financial situation;

· The Plaintiff’s motor vehicle is about thirteen years old, and requires considerable expenditure on repairs. In the light of the medical condition of the Plaintiff’s son it is submitted on her behalf that an efficient and reliable motor vehicle is essential to her;

· The Berkeley Vale property is in need of significant repairs;

· The Plaintiff seeks a capital sum in meeting the educational expenses of her son.

45 It should be recognised, however, that the Plaintiff did not personally pay any part of the purchase price of the Berkeley Vale property. Neither did she make any of the mortgage repayments, all of which were paid by the Deceased. The Plaintiff’s contribution to the acquisition of the Berkeley Vale property was the obtaining of the mortgage from her employer, at somewhat more favourable terms than would have been available to an ordinary member of the public; and her contributions, in varying amounts, towards rent and outgoings. Those latter contributions would have been paid by the Plaintiff if she had been living independently. Indeed, she would have probably paid considerably more for accommodation rented from someone other than her mother. The benefit which the Deceased received from the Plaintiff being the registered proprietor and arranging the terms of a favourable mortgage were, at least in general, offset by the benefits which the Plaintiff herself received from the domestic arrangements between herself and her mother.

46 It is apparent that, even though currently she is in part-time employment, the Plaintiff’s outgoings and expenses exceed her income. To this extent she finds herself in a position where she has been left without adequate provision for her proper maintenance.

47 It is appropriate, therefore, that the Court should proceed to a consideration of the second stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse and, consider the nature of any order for provision to which the Plaintiff might otherwise establish an entitlement.

48 The Plaintiff seeks from the estate a legacy in a sum sufficient to enable her to discharge her mortgage ($88,000) and her Visa card indebtedness ($2,300), as well as to refurbish and effect repairs to the Berkeley Vale residence (for which she has obtained quotations totalling $6,178), and to purchase a replacement motor vehicle (costing about $30,000), as well as to assist her in meeting the educational expenses of her son.

49 In regard to the Plaintiff’s present circumstances the Defendant submits that I should not accept her as a truthful witness, for a number of reasons including the following:

· The Plaintiff exaggerated the payment of rent to her mother, and conceded under cross-examination that she was required to pay only whatever she was able to pay, and that the amounts fluctuated accordingly;

· In her affidavit evidence the Plaintiff said that she was receiving only $450 a month by way of child support from the father of James, whilst she conceded under cross-examination that she was receiving from him $150 a week (that is, at least $600 a month). The Plaintiff’s attempted explanation for this significant discrepancy of at least $150 a month was that her affidavits identified the amount which the father of James was required to pay, rather than the amount which he was actually paying;

· The income from the Plaintiff’s part-time employment emerged, under cross-examination, to fluctuate from week to week, sometimes being as high as $350 a week;

· The Plaintiff was able to offer no rational explanation as to how, in the financial circumstances which she alleged, she had been able to reduce the amount owing on the mortgage on her residence from $105,000 in August 2004 to $88,000 in August 2005;

· The use to which the Plaintiff put the proceeds of sale of shares in St George Bank was the subject of inconsistencies between her affidavit evidence (the proceeds going to reduction of the mortgage) and her oral evidence (the proceeds being used to pay a tax debt).

50 It cannot be emphasised too strongly that it is incumbent upon an applicant for provision to set forth as fully and as frankly as possible all available information concerning the applicant’s financial and material circumstances.

51 Whilst I am in agreement with the submissions on behalf of the Defendant concerning the lack of frankness by the Plaintiff in disclosing to the Court in her affidavit evidence full details of her present financial and material circumstances, nevertheless, in the light of the oral evidence which was given by the Plaintiff under cross-examination, it would appear that the Court has, at least in general terms, a reasonably accurate depiction of the present situation of the Plaintiff.

52 Much evidence was given by each of the parties concerning their respective involvements in caring for the Deceased during her last illness. It should be appreciated, however, that an order for provision is not made as a reward for good conduct on the part of an applicant. Neither is such an order withheld as punishment for perceived bad conduct by the applicant.

53 It clearly emerged from the various oral and written statements by the Deceased and the communications between herself and her solicitor that the Deceased was desirous of exercising equality between her two daughters. Essentially it is the case for the Plaintiff that the Deceased did not achieve such intended equality.

54 Although it was the aim of the Deceased to achieve equality in the benefits which she provided during her lifetime to her two daughters, nevertheless, the attainment of such equality is not of itself the overriding principle which determines whether or not an order for provision should be made in favour of the Plaintiff. As I have already observed, the principle to be applied is that enunciated by the High Court of Australia in Singer v Berghouse.

55 Much was made on behalf of the Plaintiff concerning the appropriate characterisation of the advances totalling $180,000 provided by the Deceased to the Defendant. Whilst the undated statement signed by the Deceased (annexure “B” to the affidavit of the Plaintiff sworn 5 August 2004) refers to “a loan of $180,000” made by the Deceased to the Defendant, it is quite clear from the last sentence in that statement (“If anything should happen to me then the money to be made over to Gayle to compensate loss of business she has incurred whilst nursing me during my illness”) that the Deceased intended that, upon her death, those advances should be treated as an absolute gift to the Defendant. The question of whether or not during the Deceased’s lifetime she may have been able to recover the amounts of those advances from the Defendant does not now arise. The fact that the financial statements of the Defendant’s business and her income tax returns characterise those advances as a loan does not seem to me to be determinative of whether or not those advances form an asset in the estate of the Deceased. I am satisfied that they do not.

56 However, the Plaintiff submits that the making of those advances by the Deceased constituted prescribed transactions, with the consequence that those moneys in the hands of the Defendant now form notional estate of the Deceased which is available to meet any order for provision which might be made in favour of the Plaintiff.

57 In this regard it will be appreciated that the actual estate of the Deceased, both before the partial distribution made (presumably by agreement between them) to each of the Plaintiff and the Defendant, and after that partial distribution, is not sufficient to meet the costs of the proceedings, let alone any order for provision which might ultimately be made in favour of the Plaintiff. Accordingly, any such order could be of effect only if it were made in respect to the notional estate of the Deceased.

58 The evidence did not reveal with precision how the Defendant had dealt with those advances totalling $180,000. The additional assets of the Defendant which emerged in cross-examination (having a total value of less than $14,000) do not explain what happened to the amount of $180,000.

59 If that sum has been used, as apparently the Deceased intended it to be used by the Defendant, in the business activities of the Defendant, then it would appropriately be included in the asset described by the Defendant as her business and residence at Forest Lodge, to which an estimated value of $850,000 is ascribed.

60 As I have already observed, the claim of the Plaintiff must be approached in the light of any competing claim upon the testamentary bounty of the Deceased. The only such competing claim is that of the Defendant.

61 If the Plaintiff were enabled to extinguish her mortgage debt of $88,000 and to pay off her Visa card indebtedness, her outgoings would be reduced by at least $800 a month. Such a reduction would have a significant effect upon her financial situation, and would totally extinguish the shortfall which presently confronts her. It would probably also enable her to acquire, at least by way of some form of hire purchase or leasing arrangement, a new motor vehicle, and effect urgent repairs to her residence. Even if the Plaintiff were enabled to effect a significant reduction in the mortgage debt, without totalling extinguishing it, that reduction would have a material effect upon the shortfall between her income and her outgoings.

62 The Court, in arriving at a decision in this case, must bear in mind that any additional benefit which the Plaintiff might receive, by way of an order designating property in the hands of the Defendant as notional estate of the Deceased, will have the practical effect of thereby reducing the current assets of the Defendant. It is a fair description of the Defendant’s business that it is not very successful financially. In making an order for provision in favour of the Plaintiff on account of the Plaintiff being left without adequate provision for her proper maintenance, the Court must ensure that it does not bring about a situation where the Defendant herself is then left without adequate provision for her proper maintenance.

63 In all the circumstances, I am satisfied that the Plaintiff has established an entitlement to an order for provision in her favour in an amount of $50,000. Such an amount will enable her to pay off her Visa card indebtedness and to significantly reduce the amount (presently $88,000) owing on mortgage over the Berkeley Vale property, with the consequence that there will no longer be a shortfall between the Plaintiff’s income and her outgoings.

64 It therefore becomes necessary to proceed to a consideration of whether the Deceased entered into a prescribed transaction in respect to the advances of $180,000 which she made to the Defendant, and, if so, whether an order should be made designating property in the hands of the Defendant as notional estate of the Deceased which can meet the provision to which I am satisfied the Plaintiff has established an entitlement.

65 If those advances be treated (as I consider they should, in the light of the undated statement signed by the Deceased concerning those advances) as a loan forgiven by the Deceased upon her death, then the advances constitute a prescribed transaction under paragraph (b) (iii) of section 23 of the Act.

66 If, however, those advances be treated as a gift by the Deceased made during her lifetime at the time when those moneys were paid to the Defendant, then, since those advances were made within the period of one year before the death of the Deceased, it is necessary that the Court be satisfied, in the terms of section 23 (b) (ii) of the Family Provision Act, that at the time when they were made the Deceased had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education, and advancement in life of the Plaintiff which was substantially greater than any moral obligation of the Deceased to enter into the prescribed transaction.

67 In either circumstance the Court is required by section 27 (1), before making an order designating the advances (or any part thereof) as notional estate of the Deceased, to consider, amongst other matters,

(a) the importance of not interfering with reasonable expectations in relation to property;

(b) the substantial justice and merits involved in making or refusing to make the order.

68 I have already referred to the competing claim of the Defendant, in the light of which the claim of the Plaintiff to an order for provision must be approached. The Plaintiff under cross-examination accepted that at least $100,000 should be paid to the Defendant to match the benefits which the Plaintiff had received during the lifetime of the Deceased. Accordingly, if (contrary to the view which I have already expressed) the advances did not take effect upon the death of the Deceased, but took place during her lifetime, the Court must be satisfied that at the time when she advanced $180,000 to the Defendant, the Deceased had a moral obligation to make adequate provision for the proper maintenance, education and advancement in life of the Plaintiff which was substantially greater than the moral obligation to the Deceased to advance $180,000 to the Defendant. The advances totalling $180,000 appear to be substantially greater than the benefits which had already been received by the Plaintiff. It follows from the views which I have already expressed concerning the appropriateness of additional provision being made for the Plaintiff in the sum of $50,000 that I consider that the Deceased had a moral obligation to make provision for the Plaintiff of the nature described in section 23 (b) (ii). In either circumstance (paragraph (b) (ii) or (b) (iii)) the discretion of the Court contemplated by section 23 is activated.

69 The reasonable expectations of the Defendant were that she should receive an amount which would, in general terms, give to her equality with the benefits which the Plaintiff had already received from the Deceased. Further, the substantial justice and merits require the making of an order designating notional estate rather than refusing to make such an order.

70 I am satisfied, therefore, that, for the reasons which I have already expressed concerning the need of the Plaintiff for additional provision out of the estate of the Deceased, and in the light of the competing claim of the Defendant, that the Plaintiff, in addition to the benefits to which she is entitled under the will of the Deceased, should receive a legacy of $50,000 out of the notional estate of the Deceased and that, for such purpose, assets in the hands of the Defendant representing the foregoing advances should, to the extent of $50,000, be designated as notional estate of the Deceased.

71 Since the Defendant may well have some preference as to which asset or assets held by her should be designated notional estate of the Deceased, I propose to stand this matter over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes to reflect my foregoing conclusions (which should also provide for a date after which interest upon the legacy, if unpaid, should run). On that occasion the parties may, if they wish, make submissions as to costs. It will be appreciated, however, that the amount of the legacy which I consider the Plaintiff should receive is considerably less than the amount which the Plaintiff was claiming.

72 Accordingly, I make the following order:

1. I stand the proceedings over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes to reflect my conclusions herein, and, if desired by either party, for submissions as to costs.