Nicholas v Nicholas

[2006] NSWSC 1244

CITATION:	Nicholas v Nicholas [2006] NSWSC 1244
HEARING DATE(S):	3 and 4 July 2006
JUDGMENT DATE :	22 November 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Associate Justice McLaughlin at 1
DECISION:	1. I stand the 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, and, if desired, for argument as to costs.
CATCHWORDS:	Succession. Family Provision. Claims by three adult children. Deceased and his wife were estranged at the time of his death. Deceased died before agreement with wife could be implemented. Entirety of estate passed to widow by survivorship. Notional estate. Prescribed transaction. Competing claim of estranged widow. Relatively short relationship and marriage.
LEGISLATION CITED:	Family Law Act 1975 Family Provision Act 1982
CASES CITED:	Blore v Lang (1960) 104 CLR 124 Singer v Berghouse (1994) 181 CLR 201 Vigolo v Bostin (2005) 221 CLR 191
PARTIES:	Alana Kim Nicholas (First Plaintiff) Karley Sherie Nicholas (Second Plaintiff) Tony Alan Nicholas (Third Plaintiff) Shareena Mae Nicholas (Defendant)
FILE NUMBER(S):	SC 6526 of 2004
COUNSEL:	J. Trebeck (Plaintiffs) J. O'Connor (Defendant)
SOLICITORS:	Kernans (Plaintiffs) Nash Allen Williams & Wotton (Defendant)

- 23 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Wednesday, 22 November 2006

6526 of 2004 - ALANA KIM NICHOLAS and ORS –v- SHAREENA MAE NICHOLAS

JUDGMENT

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

2 By summons filed on 2 December 2004 Alana Kim Nicholas, Karley Sherie Nicholas and Tony Alan Nicholas each claims an order provision for her or his maintenance, education or advancement in life out of the estate or notional estate, or both, of their late father Gary Alan Nicholas (to whom I shall refer as “the Deceased”).

3 The Deceased died, aged 47 on 27 September 2003, as a result of a boating accident on Tuggerah Lakes. He left a will dated 24 July 2001. No probate has been granted of that will, for reasons which will shortly emerge. Letters of Administration pursuant to section 41A of the Wills, Probate and Administration Act 1898 were on 31 March 2006 granted to the Plaintiffs, for the purpose of bringing the present proceedings.

4 The deceased had been married twice. Of his first marriage, to Mrs Kerrie Nicholas, were born three children, being the three Plaintiffs (to whom I shall, for convenience, and without intending any disrespect, refer by their respective first given names). Alana was born on 5 January 1979 and is presently aged 27. Karley was born on 29 February 1980 and is presently aged 26. Tony was born on 14 November 1982 and is presently aged 24.

5 Mrs Kerrie Nicholas died aged 40, on 15 January 1996, when the Plaintiffs were aged respectively, 17, 15 and 13.

6 After the death of his first wife the Deceased increased his consumption of alcohol. He also made a number of visits to the Philippines. The Deceased informed his children that a woman with whom he had had sexual intercourse in the Philippines had given birth to a son, Gary Jayson Lapitan, on 15 January 1997. Although the Deceased apparently expressed a degree of uncertainty as to whether he was the father of that child, nevertheless, he allowed his name to appear on the Certificate of Live Birth (Exhibit 1A) as being the father of Gary Lapitan.

7 It would appear that the Deceased visited the child on a number of occasions when he was in the Philippines and attended his christening. He took Tony to meet that child on the occasion in July 2003 when the Deceased and Tony together went on a trip to the Philippines.

8 Despite doubts which the Deceased may have expressed concerning the paternity of Gary Lapitan, nevertheless the registration of that child’s birth disclosing the Deceased to be the father clearly supports the status of Gary Lapitan as an eligible person, being a child of the Deceased. That status has not been disputed by the Defendant. Any possible claim by Gary Lapitan, who is now aged nine, has been compromised by the payment to him by the Defendant, on behalf of the estate of the Deceased, in the sum of $40,000.

9 The hearing has proceeded upon the basis that the only eligible persons in relation to the Deceased are the three Plaintiffs, the Defendant and Gary Lapitan. It should be observed, however, that the Defendant’s two children, Czarina Torres (known as Nina) and Joel Torres, came to Australia in March 2002 (when they were aged respectively 10 and almost 7) and resided with their mother and the Deceased from then until the Defendant and the Deceased separated in May 2003. Although those two children of the Defendant were throughout that period members of the same household of which the Deceased was a member, the evidence is silent as to whether they were partly dependent upon the Deceased. If so, they would be eligible persons within paragraph (d) of the definition of that phrase contained in section 6(1) of the Act.

10 The Defendant, however, has not suggested that her children are eligible persons in relation to the Deceased. Neither has such a suggestion been made by the Plaintiffs.

11 I shall, accordingly, proceed upon the basis that the only eligible persons in relation to the Deceased are the three Plaintiffs, the Defendant and Gary Lapitan.

12 The Defendant, whom the Deceased had met in the Philippines, arrived in Australia in March 1997, having been sponsored by the Deceased. She and the Deceased had met earlier in that year. The Deceased and the Defendant then resided together in a de facto relationship, at the residence of the Deceased at 27 Stewart Street, Killcare, which had been the family home of the Deceased, his first wife and their three children.

13 At the end of 1996, as her HSC examinations were approaching, Alana, accompanied by Karley, left the family home and moved into residence with a family of old friends who lived very close nearby. Tony remained in the family home with his father. Despite the fact that Alana and Karley had moved out of the family home, nevertheless the Deceased and his children retained close contact over the next few years, their relationship being regular, normal and appropriate.

14 After the Defendant moved into residence with the Deceased Tony continued to remain in the family home with his father. Subsequently, in early 2000, Alana moved back into the family home.

15 It was the evidence of the Plaintiffs that each had been informed by the Deceased in late 1999 that he and the Defendant had separated and that the Defendant had removed from his residence, and later that the Deceased and the Defendant subsequently reconciled in early 2000. The Defendant did not dispute her physical absence from the matrimonial home for a period of about six weeks in late 1999 or early 2000. However, she denied that she and the Deceased had separated, and explained her absence from the family home by saying that she had gone on a visit to the Philippines to see her own kinsfolk.

16 In May 2000 the Deceased sold the Killcare property for $257,000 and purchased for $177,000 a residence at 36 Moola Road, Buff Point. That property (“the Moola Road property”) was purchased in the name of the Deceased alone. The Deceased and the Defendant entered into residence in the Moola Road property, Alana and Tony at that stage moving into rented accommodation.

17 The Defendant and the Deceased married on 3 June 2000 at the Moola Road residence. All three Plaintiffs were present at that ceremony, and, indeed, Tony was his father’s best man at the wedding.

18 Although the Moola Road property had been purchased by the Deceased in his own name alone, on 16 June 2000, shortly after their marriage, the title to that property was transferred into the names of the Deceased and the Defendant as joint tenants.

19 Several months later, on 29 September 2000, the Deceased and the Defendant purchased as joint tenants a house property at 10 Cox Close, Buff Point (“the Cox Close property”) for a price of $136,000. That purchase was secured by a mortgage over the Moola Road property.

20 On 4 December 2000 the Defendant and the Deceased purchased as joint tenants an investment property at 158 Manoa Road, Budgewoi for $120,000, that purchase being secured by a mortgage of $130,000 over the Cox Close property.

21 The Plaintiffs did not dispute that throughout the period of their marriage the Defendant was a good wife to the Deceased, attending to all aspects of domestic and household responsibilities for him.

22 However, problems arose in the marriage of the Defendant and the Deceased, which problems ultimately resulted in a separation in May 2003. On 25 September 2003 the Defendant and the Deceased signed terms of settlement under the Family Law Act 1975, setting forth the agreement reached by them concerning the disposition of various items of property. However, before orders could be made in accordance with those terms of settlement the Deceased had died, only two days later, on 27 September 2003, in a boating accident on Tuggerah Lake.

23 In substance, the effect of the terms of settlement was that the Defendant would receive the Manoa Road property (having an agreed value of $270,000, and being subject to a mortgage of $125,000); the Moola Road property and the Cox Close property were to be transferred into the sole name of the Deceased, who would be responsible for the property loans in respect to those properties, totalling about $233,000. Notation B to the terms of settlement recorded that the Deceased brought into the marriage about $250,000 and that the Defendant had no significant assets at the time of the marriage.

24 On 24 July 2000 the Deceased executed his last will, by which he appointed the Defendant as sole executor and sole beneficiary. Since the only significant assets of the Deceased at the time of his death were his interests in the three pieces of real estate (the Moola Road property, the Cox Close property and the Manoa Road property), and since each of those interests passed to the Defendant by survivorship, the Defendant has made no application for probate, and does not intend to make any such application.

25 It is appropriate that I should here set forth details of the financial and material circumstances of each of the Plaintiffs.

26 Alana, who at the time of the institution of the proceedings, was engaged to be married, had by the time of the trial married her fiancé. Alana is employed by Suncorp as a technical advisor for workers’ compensation claims. She receives a net income of about $44,000 a year, whilst her husband, who is employed as an accountant by Guardian Partners, receives a net income of about $40,000 a year. Alana and her husband own the following assets:

House property situate at 137b Trafalgar Avenue, Umina, having a present estimated value of between $310,000 and $340,000

Joint account with St. George Bank, $25,000

1996 Hyundai Excel motor car, having an estimated value of $25,000 (owned by Alana)

2004 Kia Rio motor car (owned by husband) having an estimated value of $6,000

Shares in Suncorp, $1,875 (owned by Alana)

Furniture, having an estimated value of $2,000.

27 The only liability of Alana and her husband is a home loan with the St. George Bank, which is secured by mortgage over their house property. That loan is currently in an amount of $235,000, which they are repaying at the rate of $518 a week.

28 Alana provided details of the combined expenditure of herself and her husband, totalling about $1,400 a week.

29 After their purchase of the house property at Umina Alana and her husband had renovations effected on that house in about 2002. According to her affidavit those renovations cost about $40,000. However, it emerged from Alana’s oral evidence that essentially those renovations were performed by the Deceased, who also provided Alana with about $1,000 towards those home renovations.

30 Karley is currently employed as a receptionist at the Ski Rider Resort in New South Wales, on a six months winter contract, receiving $560 net a week. She had previously been working in a temporary capacity in customer service at the Gosford Office of WorkCover for three months. Karley has little by the way of assets, her only significant asset being a 1995 Honda Civic motor car, having an estimated value of $5,000. In addition, she maintains two bank accounts, having at the time of the trial a total credit balance of $915. Karley’s only liability is a personal loan from the Commonwealth Bank in an amount of $8,000. Karley is not engaged to be married and is not living in a relationship.

31 Karley provided details of her weekly expenditure, in amounts totalling $538 (which includes $118 a week for her accommodation at the Ski Rider Resort).

32 Karley expressed the intention to use any money which she might receive from the estate of the Deceased for the purpose of a deposit upon the purchase of a house in which she would reside on the Central Coast.

33 Tony is employed as a cabinet maker by Timber Trade Supplies at West Gosford, where he receives a salary of $556 net a week. His only significant asset is a 2000 Toyota Hiace motor vehicle, having an estimated value of $5,000. He has a balance of $8,200 in an account with the St. George Bank. Tony’s only liability is a personal loan from Certegy Finance, in an amount of $3,100 at the time of the trial.

34 Tony is presently living with his fiancée, a young lady aged 19, who is employed as a receptionist/personal assistant. It is their intention, at some stage, to marry and to have children together. It is Tony’s ambition ultimately to be self-employed as a cabinet maker, rather than to be employed by someone else (as is his present situation).

35 Tony provided details of his expenditure, in amounts totalling $653 a week.

36 At the time of his death the Deceased held a superannuation entitlement under the Albany International Superannuation Plan (apparently in consequence of his employment by Albany International). That superannuation entitlement was, upon the death of the Deceased, determined by the trustee of the superannuation scheme, ING Custodians Pty Limited. The trustee determined that the benefit to which the Deceased had been entitled should be paid as to one third among the three Plaintiffs, as to one third to the Defendant and as to one third to Gary Jayson Lapitan. It would appear that the totality of the foregoing benefit was in an amount of about $237,450. Each of the three Plaintiffs received, in consequence of that determination, the sum of $26,383 on 7 January 2005. As I understand it, the Defendant at the same time received the sum of $79,149. Gary Jayson Lapitan received an identical amount, payment being directed to his mother, Ledesma Lapitan, who appears to be his legal guardian. The major part of the foregoing payment to the Defendant is retained in the trust account of her solicitors, presently in an amount of $74,862.

37 From the amount of $26,383 received by each Plaintiff, each has allowed their solicitor to retain a substantial part of that sum in his trust account.

38 Not only was the Defendant the sole beneficiary named in the will of the Deceased, but, in consequence of the only three significant assets of the Deceased each passing to the Defendant by survivorship, the Defendant must be treated as the person solely entitled to a beneficial interest in the estate of the Deceased. I do not overlook the terms of the proposed settlement between the Deceased and the Defendant, a settlement effect whereto could not be given, by reason of the untimely death of the Deceased two days later. Nevertheless, it should be recognised that the Defendant had been the wife of the Deceased for a period of more than three years, and that the Defendant was still married to the Deceased at the time of his death. Further, that the Defendant and the Deceased had been living together as de facto partners (albeit with a physical separation of about six weeks) for more than two years preceding their marriage.

39 Accordingly, the claims of the Plaintiffs must be approached in the light of the competing claim of the Defendant upon the estate of the Deceased.

40 The Defendant was born in the Philippines on 16 March 1968, and is presently aged 38.

41 At the time when she met the Deceased (which, according to the Defendant, was in early 1997, in a restaurant in the Philippines) the Defendant was residing with her foster mother in Balibago, Angeles City, Pampanga Province, in the Philippines. The Deceased had come to the Philippines on that occasion in order to attend the christening of his son Gary Jayson Lapitan.

42 The Defendant has two children from a previous relationship, being Czarina Torres (known as Nina), who was born on 13 January 1992 and is presently aged 14, and Joel Torres, who was born on 17 April 1995 and is presently aged 11.

43 At the time when she met the Deceased the Defendant was engaged in casual employment. Shortly after their meeting the Defendant and the Deceased formed a close relationship, and, at the behest of the Deceased, the Defendant came to Australia. The Deceased organised all the formalities for that trip and paid the Defendant’s airfares. According to the Defendant, she arrived in Australia on 27 March 1997, her children remaining in the Philippines with the Defendant’s foster mother. According to the Defendant, upon her arrival she stayed in Sydney for a month, because the Deceased had not informed his children of her existence. She said that in May 1997 she moved into residence with the Deceased and Tony in the Deceased’s property at Killcare. Shortly after her arrival on the Central Coast the Defendant obtained employment, and thereafter contributed to the household expenses.

44 The Defendant’s children joined her in Australia in March 2002, and remain in this country under a permanent residence visa. The Deceased sponsored those children for their residence in Australia, and they resided with their mother and the Deceased until the Defendant and the Deceased separated in March 2003.

45 Since shortly after her arrival in Australia the Defendant has been in regular employment, although at times that employment has only been on a part-time basis.

46 After the death of the Deceased the Defendant sold each of the three properties which had passed to her by survivorship. The Cox Close property was sold for $257,500. After discharge of the mortgage debt of $88,300, the gross proceeds of sale of that property were $169,200.

47 The Moola Road property was sold for $405,000. After discharge of the mortgage debt of $165,225, the gross proceeds of sale were $239,775.

48 In addition, the Manoa Road property was sold for $262,500, the gross proceeds of sale (after repayment of the mortgage debt of $99,613) being $162,886.

49 The Defendant was cross-examined concerning the disposition of the gross proceeds of sale of the various properties. Her evidence concerning how she expended those moneys (totalling, for Cox Close and Moola Road, almost $409,000) left much to be desired. It would appear that she purchased various items (such as a computer and a Honda motor bike) for her children, as well as purchasing other household items, and paying off an amount of $10,000 from her credit card account. In addition, she paid legal costs, and she compromised any possible claim by Gary Lapitan (in the sum of $40,000).

50 Various significant and substantial withdrawals from the account opened by the Defendant on 19 October 2000 in her own name of Shareena Mae Nicholas, and to which the name Maria Fe Jobson was later added as an account holder, were not in my view satisfactorily explained the Defendant. Further, there was a strong suggestion that Mrs Maria Fe Jobson was, in fact, an alias used by the Defendant herself.

51 I consider that the Defendant has been far from forthcoming in providing to the Court a full and complete picture of her financial and material circumstances. It must be appreciated that if, as is the case, she wishes to rely upon those circumstances as constituting a competing claim to the claims of the Plaintiffs, then there is an obligation upon the Defendant to place before the Court as fully and as frankly as possible full details of those circumstances. I am not satisfied that the Defendant has fulfilled that obligation.

52 Subsequent to the death of the Deceased, the Defendant on 13 June 2004 married in Queensland one Andrew Ronald McNamara.

53 On 20 January 2005, the Defendant, under the name Shareena Mae McNamara, became the registered proprietor of a house property situate at and known 15 Grevillea Drive, Redridge in Queensland. That property was purchased for $237,000 and was unencumbered. That purchase was funded from the proceeds of sale of the Moola Road property (which had been sold only a week earlier, on 14 January 2005). However, about seven months later (that is, apparently in about August 2005) the Defendant gave a first mortgage over the Grevillea Drive property to the National Australia Bank, in order to secure a loan of $100,000. It would appear that that sum has been totally expended by the Defendant on such things as an unsuccessful business venture (a lawn mowing business) and overseas travel. According to the Defendant, she paid an amount of $16,549 by way of Capital Gains Tax in respect to the Manoa Road property, which sum she said was raised by way of borrowings from friends. The Defendant also said that she had sold the Ford motor vehicle which had been owned by the Deceased at the time of his death, for which she thought that she received about $10,000. However, she could not remember the name of the purchaser of that motor vehicle, the purchaser’s address, or whether she had given a receipt for the proceeds of that sale.

54 All in all, I regarded the evidence of the Defendant concerning her various financial transactions since the death of the Deceased and concerning her present financial circumstances to be far from satisfactory or complete.

55 The Defendant and her two children currently reside in the Grevillea Drive property, which has a present estimated value of between $240,000 and $250,000. The Defendant still owes a mortgage debt of $100,000 in respect to that property.

56 The Defendant is presently employed in Queensland on a casual basis, picking tomatoes. That is seasonal work, in which she is engaged for about 20 hours a week, or sometimes a greater period. She is paid at the rate of $13.40 an hour. In her affidavit evidence the Defendant stated that she worked six days a week, from 7am to 6pm, when work was available and the weather permitting.

57 The Defendant and Mr. McNamara separated in July 2005. It is unclear from the Defendant’s evidence whether they are still married. According to the Defendant, she does not know the present whereabouts of Mr. McNamara. She has had no property settlement with him, and she stated that she has no intention to enter into such a settlement. It would appear, however, that Mr. McNamara has lodged two caveats against the Grevillea Drive property, the latter of which appears still to remain in operation.

58 It should here be observed that it was not until the Defendant was cross-examined that the existence of Mr. McNamara or the fact that the Defendant had been married to him from 13 June 2004 (and had been living with him for some months before that date) and had remained living with him until they separated more than a year later, was disclosed to the Court. The affidavit of the Defendant sworn on 8 June 2005, which set forth in some detail the relationship between the Defendant and the Deceased, as well as the Defendant’s financial and material circumstances at the time of that affidavit, made no mention of the Defendant’s subsequent marriage.

59 According to that affidavit, the Defendant’s assets were as follows;

Real estate $237,000

Nissan motor vehicle $20,000

Bank account $1,000

Household contents $10,000

Superannuation – Westpac $4,000

Superannuation – STA $1,000

Total $273,000

Liabilities

National Australia Bank – personal loan $10,000

Ford Credit – car loan $19,000

Citibank – Visa $7,000

ANZ Bank – Visa $4,000

Capital Gains Tax on Manoa Road $16,064

Capital Gains on Cox Close unknown

60 It will be observed that there was no reference in the foregoing affidavit evidence to the mortgage debt of $100,000 over the Grevillea Drive property, or to the manner by which Defendant is paying off that mortgage debt. Neither did it refer to the benefit which the Defendant has received from the Deceased’s superannuation entitlement.

61 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claims of the three Plaintiffs.

62 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the Plaintiffs. Those documents will be retained in the Court file.

63 Each 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, each Plaintiff has the standing to bring the present proceedings.

64 It will be appreciated that the Defendant, as the widow of the Deceased, is also an eligible person in relation to the Deceased, being such within paragraph (a) of the foregoing definition. (I have already observed that the hearing has proceeded upon the basis that the only other eligible person in relation to the Deceased is his son Gary Jayson Lapitan, any possible claim by whom has been compromised by payment of the sum of $40,000.)

65 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, each or one or some of the Plaintiffs have been left without adequate provision for their proper maintenance. (See, also, Vigolo v Bostin (2005) 221 CLR 191, which affirmed the correctness of the foregoing test in Singer v Berghouse.)

66 There was a considerable quantity of evidence given, especially in cross-examination, concerning the relationship between the Defendant and the Deceased (in particular, concerning various alleged acts of physical violence and abuse asserted by the Defendant to have been perpetrated against her by the Deceased, but which were denied by the Plaintiffs, especially by Karley and Tony, each of whom for various periods resided with the Defendant and the Deceased), concerning various journeys made by the Defendant between Australia and the Philippines and concerning the immigration status of the Defendant, this latter arising out of contact by Alana with the Immigration Department in October 2003, some months after the death of the Deceased. None of the matters which emerged from that evidence alter the fact that the Defendant and the Deceased resided together from some time in 1997 until May 2003, and the fact that they were married on 3 June 2000 and remained married until the death of the Deceased. When the marriage came to an end the Deceased recognised that he had obligations to his wife, those obligations being satisfied, by agreement of the Deceased and the Defendant in the terms of settlement which were signed by them on 25 September 2003.

67 Some attempt was made on behalf of the Defendant to establish that the relationship between each Plaintiff and the Deceased was not such a close and affectionate one as the Plaintiffs would have the Court believe. However, I do not consider that the Defendant succeeded in that attempt.

68 In regard to these matters of the respective relationships between the Defendant and the Deceased and between each of the Plaintiffs and the Deceased, it is appropriate to set forth the following salutary admonition of Windeyer J in the High Court of Australia in Blore v Lang (1960) 104 CLR 124 at 137,

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

69 Each of the Plaintiffs is a young adult making her or his way in life. None of the Plaintiffs is in a position of financial or material affluence, although Alana is financially better off than either of Karley or Tony. Alana and her husband own their own residence, albeit subject to a substantial mortgage. Each of them has a reasonable income. Nevertheless, their outgoings are almost equal to their income. Alana and her husband are a young couple, just commencing their married life, who have aspirations to establish a family at some stage. Whilst the final answers given by Alana under cross-examination support a submission on behalf of the Defendant that Alana has no need for an order for provision for her maintenance, nevertheless I consider that she has established an entitlement to provision for advancement in life.

70 Neither Karley nor Tony has any significant assets. Each is starting upon her or his career.

71 In my conclusion each of the Plaintiffs has established an entitlement to provision for advancement in life, which will give to each Plaintiff a start in her or his career and personal life.

72 In addition, each of Karley and Tony has established an entitlement to provision not only for advancement in life, but also for her or his maintenance.

73 I consider that each of Karley and Tony is entitled to provision by way of a legacy in the sum of $40,000, and that Alana is entitled to provision by way of a legacy in the sum of $20,000.

74 I have already referred to the fact that the claim of the Plaintiff’s must be approached in the light of what might be described as the competing claim of the Defendant. The relationship of the Defendant with the Deceased (being the period during which they lived together from 1997 until 2000 and the period from their marriage in May 2000 until their separation a little over three years later) was a period of no more than six years, possibly somewhat less. There were clearly problems in the relationship, and the Defendant travelled back and forth between Australia and the Philippines on a number of occasions. As a result of the relationship and marriage between the defendant and the Deceased, the Defendant was enabled to become a permanent resident in Australia, and to acquire an identical status for her children, who now reside with her in this country. Further, it was recognised by the Defendant and the Deceased themselves (by notation B to their terms of settlement of 25 September 2004) that the Deceased brought into their marriage about $250,000 and that the Defendant had no significant assets at the time of the marriage.

75 Whilst the competing claim of the Defendant is not such as to extinguish any order for provision an entitlement to which the Plaintiffs might otherwise have established, nevertheless it seems to me that any order for provision which might be made in favour of one or more of the Plaintiffs should be in amounts which will not have the practical effect of depriving the Defendant of her present residence, being the Grevillea Drive property.

76 Since the Grevillea Drive property, although currently subject to a mortgage of $100,000, has a value of at least $240,000, and since the Defendant has other assets, including the funds held in her solicitors trust account of almost $75,000, I am satisfied that provision in favour of the Plaintiffs along the lines which I have already indicated should not be reduced, let alone extinguished, by reason of the competing claim of the Defendant.

77 It will be appreciated that there are no actual assets in the estate of the Deceased. Accordingly, the Plaintiffs seek that any provision an entitlement to which they might have established should be made out of the notional estate of the Deceased.

78 The concept of notional estate is dealt with in Division 2 of Part II of the Family Provision Act.

79 In the instant case it is submitted on behalf of the Plaintiffs that the provisions of that Division are called into operation by reason, firstly, of the fact that the estate of the Deceased is insufficient to allow the making of the provision that, in the opinion of the Court, should be made (section 28(1)(a)). Further, that the Deceased should be deemed to have entered into a prescribed transaction, in that to the time of his death he failed to sever the joint tenancy between himself and the Defendant in respect to each of the Moola Road property, the Cox Close property and the Manoa Road property. I am in agreement that such failure on the part of the Deceased constituted, in each instance, a prescribed transaction.

80 It will be appreciated that, in the instant case, the Defendant has, since she became the registered proprietor by survivorship of each of the foregoing properties, disposed of each of those properties, and has purchased in her own name the house property at 15 Grevillea Drive, Redridge, Queensland. At the conclusion of oral submissions herein I indicated that Counsel, should they so desire, might make further written submissions concerning the Court’s power to designate as notional estate real property presently held in the name of the Defendant. Counsel for the Plaintiff availed himself of that opportunity, by forwarding further written submissions dated 7 July 2006, which will be retained in the Court file.

81 I am satisfied of the preconditions identified in section 23 of the Act (that an order for provision ought to be made on the application; and that the Deceased before his death entered into a prescribed transaction of the nature described in paragraph (b) of that section, such prescribed transaction being the failure of the deceased in the instance of each of the three pieces of real property to sever the joint tenancy between himself and the Defendant) have been fulfilled. In consequence, therefore, the Court, in the concluding words of section 23,

may, subject to sections 26, 27 and 28, make an order designating as notional estate of the deceased person such property as it may specify, being property which is held by, or on trust for, the disponee or, where there is more than one disponee, any of the disponees, whether or not that property was the subject of the prescribed transaction.

82 I am satisfied that the effect of section 23 is that the Court may designate any property of the Defendant as notional estate of the Deceased, whether or not that particular property was the subject of the prescribed transaction, or whether or not that property was property owned by the Defendant during the lifetime of the Deceased, or was, as here, acquired by her only after the death of the Deceased.

83 I consider, therefore, that any assets presently in the hands of the Defendant may be designated notional estate of the Deceased, and may be the subject of an order for provision of the nature which I have indicated in favour of each of the Plaintiffs.

84 However, in exercising the discretion vested in the Court by section 23 of the Act, the Court, by the express terms of that section, is required to consider the matters set forth in section 27(1), and in determining what property should be designated as notional estate of the Deceased, the Court is required to have regard to the matters set forth in subsection (2) of that section.

85 Section 27(1) provides,

On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered -
(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;
(c) Any other matter which it considers relevant in the circumstances.

86 It will be appreciated that, had the Deceased not died tragically and unexpectedly in the boating accident only two days after he and the Defendant had entered into the terms of settlement regarding their property, the Defendant would have acquired only the Manoa Road property, whilst the Deceased would have retained sole ownership of the Moola Road property and the Cox Close property. In those circumstances, the reasonable expectations of the Defendant in relation to property would, after the signing by her of the foregoing terms of settlement, have been limited to the Manoa Road property, that property being subject to a mortgage solely in the Defendant’s name of $125,000. That is, accepting the valuation of the Manoa Road property as being $262,500, the Defendant would have received an equity in that property of $140,000.

87 In consequence of the death of the Deceased before orders were made to give effect to the foregoing terms of settlement and in consequence of the three properties still being held by the Deceased and the Defendant as joint tenants, the Defendant has unexpectedly, and clearly against the wishes of the Deceased, as well as against the express terms of the agreement between herself and the Deceased, acquired all three properties, and has been enabled subsequently to dispose of the Cox Close and Moola Road properties for total gross proceeds of sale of almost $410,000, and to acquire the Grevillea Road property for $237,000. I recognise that that property is now subject to a mortgage of $100,000, and that, in consequence, the Defendant has an equity of at least $140,000 in that property. In addition, the Defendant has received, consequent upon the death of the Deceased, one-third of the Deceased’s superannuation entitlement, which is presently held in the trust account of her solicitors in an amount of $74,862.

88 Further, I am far from satisfied, that the Defendant has placed before the Court a full and frank picture of her present financial circumstances. The many and large cash withdrawals made by the Defendant from the bank account conducted in the joint names of herself and Mrs Maria Fe Jobson (which person, if she exists, has no authority to make withdrawals from the account) have not in my view been adequately accounted for.

89 In all the foregoing circumstances, and having regard to the matters set forth in section 27(1) and (2) of the Act, it seems to me, therefore, appropriate that I should make an order designating as notional estate of the Deceased either the house property situate at and known as 15 Grevillea Drive, Redridge, Queensland to the extent of $100,000, or, if the Defendant has a preference in that regard, I should so designate the entirety of the funds held in the solicitor’s trust account, together with the Grevillea Drive property being so designated to the extent of the difference between the amount of those funds and the totality of the legacies to which I have held the Plaintiffs have otherwise established an entitlement.

90 Further, it will be appreciated that provision must be made for the costs of the present proceedings. It is estimated on behalf of the Plaintiffs that their costs will total about $60,000, whilst it is estimated on behalf of the Defendant that her costs will total $31,700. Subject to any preference on the part of the Defendant, it seems to me appropriate that the costs of all parties should be payable out of the notional estate of the Deceased and that, to the extent of those costs, the Grevillea Drive property should be designated as such notional estate. If, however, any party desires some other order as to costs, an opportunity will be given to that party to make such application.

91 Accordingly, I stand the 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, and, if desired, for argument as to costs.

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