Nina Sheuvalova Vaysbakh v Edward Vaysbakh

[2007] NSWSC 1223

CITATION:	Nina Sheuvalova Vaysbakh -v- Edward Vaysbakh [2007] NSWSC 1223
HEARING DATE(S):	27, 28, 29 and 30 August 2007
JUDGMENT DATE :	1 November 2007
JUDGMENT OF:	Associate Justice McLaughlin
DECISION:	1. I order that the summons be dismissed. 2. I order that the Plaintiff pay the costs of the Defendant. 3. The exhibits may be returned.
CATCHWORDS:	Succession. Family Provision. Intestacy. Claim by widow. Marriage of nine years. Plaintiff and Deceased lived seperately for last two and a half years of Deceased's life. Plaintiff entitled to entirety of estate upon intestacy. Financial and material circumstances of Plaintiff. Whether Plaintiff has been left without adequate provision for her proper maintenance. Competing claim of Defendant. Deceased made a will in favour of Defendant. Will revoked by Deceased's marriage to Plaintiff. Notional estate. Agreement between Deceased and his former wife that their son, the Defendant, should receive home unit. Deceased became joint tenant of home unit with Defendant. Whether failure of Deceased to sever joint tenancy constituted a prescribed transaction. Whether home unit should be designated notional estate. Valuable consideration for agreement between Deceased and his former wife. Agreement between Deceased and Defendant regarding Deceased's occupancy of home unit. Valuable consideration for agreement between Deceased and Defendant. Importance of not interfering with reasonable expectations in relation to property. Substantial justice and merits of case.
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) 221 CLR 191
PARTIES:	Nina Sheuvalova Vaysbakh (Plaintiff) Edward Vaysbakh (Defendant)
FILE NUMBER(S):	SC 6197 of 2005
COUNSEL:	Mr G. McVay (Plaintiff) Mr P. Strasser (Defendant)
SOLICITORS:	James A. Moustacas & Co. (Plaintiff) Milne Berry Berger & Freedman (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Thursday, 1 November 2007

6197 of 2005 NINA SHEUVALOVA VAYSBAKH –v- EDWARD VAYSBAKH

JUDGMENT

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

2 By summons filed on 9 December 2005 Nina Sheuvalova Vaysbakh claims an order that provision be made for her maintenance, education and advancement in life out of the estate and/or the notional estate of her late husband Yefim Vaysbakh (to whom I shall refer as “the Deceased”).

3 The Deceased died, aged 67, on 10 October 2005. He left no will. Although the Plaintiff (who is the only person entitled upon the intestacy of the Deceased) has not obtained a grant of administration of his intestate estate, nevertheless, Edward Vaysbakh, who is the Defendant named in the summons, on 1 September 2006 obtained a grant of administration of the estate of the Deceased, pursuant to section 41A of the Wills, Probate and Administration Act 1898, for the purposes only of an application being made by him under the Family Provision Act.

4 It is appropriate here to record that by summons 1685 of 2007, filed on 2 March 2007, Edward Vaysbakh claimed an order that provision be made for his maintenance out of the estate, and/or the notional estate of the Deceased. Subsequently, on 19 March 2007 an order was made that the two proceedings be heard together and that the evidence in the one be treated also as the evidence in the other. At the commencement of the hearing of the present proceedings Counsel for Edward Vaysbakh stated that that Plaintiff will not be pursuing those proceedings.

5 The only assets of the Deceased were moneys in bank accounts, totalling $34,129, and furniture, to which an estimated value of $4000 was ascribed. The Deceased at the time of his death had liabilities totalling $10,295. Thus the net value of the estate was $27,834. In calculating the value of the estate available for distribution, the costs of the present proceedings must be taken into consideration, since the Plaintiff, if successful, will ordinarily be entitled to an order that her costs be paid out of the estate of the Deceased, whilst ordinarily the costs of the Defendant, in upholding the rights of persons entitled upon intestacy, and as contradictor to the claim of the Plaintiff, will also be paid out of the estate of the Deceased.

6 It will be appreciated that in the instant case, it is the Plaintiff who, upon the intestacy of the Deceased, was entitled to a grant of letters of administration in respect to that intestate estate. The present Defendant is named as a party to the proceedings, since it is he whose interests will be materially affected by any order for provision which might be made out of the notional estate of the Deceased.

7 It was estimated on behalf of the Plaintiff that her costs will total somewhat over $69,000, whilst it was estimated on behalf of the Defendant that his costs will total $60,000. It should be noted, however, that the foregoing estimations were based upon the hearing occupying three days. In the event, the hearing occupied almost four days. In consequence, the costs of each party will be greater than the foregoing estimations. It will also be appreciated that the size of the actual estate is such that it is not sufficient to accommodate payment of the totality of the foregoing costs, and that, if any costs are to be awarded, they must either be paid out of the notional estate of the Deceased, or be paid by one or other of the parties to the proceedings.

8 The Deceased at the time of his death was the registered proprietor as joint tenant of a residential unit situate at and known as 7/76 Curlewis Street, Bondi (to which I shall refer as “the Curlewis Street unit”). The other joint tenant was the Deceased’s son Edward Vaysbakh (who is the Defendant to the present proceedings). Upon the Deceased’s death that residential unit passed by survivorship to the Defendant. Subsequently, the Defendant sold that unit in February 2006 for $425,000. One half of the net proceeds of sale (being an amount of $202,872) has been deposited in a controlled money account, awaiting the outcome of the present proceedings.

9 It is essentially in respect to that foregoing sum in the controlled money account (now, in consequence of interest earned thereon, standing at an amount of somewhat in excess of $210,000) that the Plaintiff makes her present claim. By prayer 2 of the summons the Plaintiff seeks a declaration that the Deceased’s share in the Curlewis Street unit is notional estate of the Deceased.

10 The Plaintiff, who was born in Siberia, Russia on 3 May 1945, is presently aged 62. She is a graduate of the University of Ekaterinberg, in Russia, and is a teacher by profession. The Plaintiff met the Deceased in 1993, when he was visiting his native Ukraine. At that time the Plaintiff was residing in Konotov, in the Ukraine, that town being located about 300km from Kiev, the capital of the Ukraine. She was teaching art and history in a primary school in Konotov. For about six years until 1989 the Plaintiff had also been working as a director of the Konotov Art Museum.

11 The Plaintiff had previously been married and had a son, Eugene Sharabin (who was born in 1976). Her husband had died in 1991. The Plaintiff, her husband and their son had been living in the Ukraine since 1970.

12 According to the Plaintiff, she and the Deceased developed a close friendship during the four weeks whilst he was staying in Odessa in the Ukraine, and after he departed, it was their practice to speak on the telephone at least once a week. The Plaintiff said that it was the Deceased who would usually telephone her, and that she would often write letters to him. She said that in 1995 the Deceased came to Konotov and met her parents, and that he requested permission to marry the Plaintiff.

13 The Plaintiff said that she gave up her employment and her residence in Konotov, and that she came to Australia in 1996. Upon her arrival she commenced to reside at the Curlewis Street unit with the Deceased. The Plaintiff and the Deceased were married in Sydney by a civil celebrant on 5 October 1996.

14 In 2003 the Plaintiff’s son Eugene Sharabin, then aged about 36, arrived in Australia (having been sponsored by the Defendant) and commenced to reside with the Plaintiff and the Deceased in the Curlewis Street unit.

15 According to the Plaintiff’s original evidence, by affidavit, it was as a result of problems between the Deceased and her son Eugene that the Plaintiff ceased to reside in the Curlewis Street unit in mid-2003. She said that she resumed residence therein in 2004, after the Deceased had broken his arm. It was the Plaintiff’s evidence that the Deceased had been constantly requesting her to return home, and that during the period after mid-2003 (when the Plaintiff and her son moved into a flat together) the Plaintiff still continued to visit the Deceased in the Curlewis Street unit, where she said that she continued to cook, clean, wash and iron for him, that she would also purchase groceries and clothes for him and that their sexual relationship continued. During the period throughout which she said that she was separated from the Deceased, from mid-2003 until some time in 2004, the Plaintiff said that she had her Centrelink pension changed from a carer’s pension to the equivalent of a widow’s pension, and that that income provided her with sufficient funds to pay the rent for herself and Eugene, as well as to purchase food and household necessities for herself and for the Deceased. Upon moving out of the Curlewis Street unit the Plaintiff arranged to have her mail redirected to other addresses.

16 In 2004 the Deceased broke his arm, and it was as a result of that occurrence that, according to the evidence of the Plaintiff, she returned to the Curlewis Street apartment, where she said that she cared for him on a full-time basis for a period of two months. The Plaintiff said that she again returned to live with the Deceased at Curlewis Street after he had been diagnosed with cancer in early May 2005, and that she remained with him for the next five months, until his death on 10 October 2005, apart from the periods whilst he was in hospital. She said that during those latter periods she would spend most of the day at his hospital bedside, would take to him specially prepared food, and would attend to his laundry.

17 The Plaintiff’s assertions of residing with the Deceased for periods of some months in 2004 and again in 2005 were, however, disputed by the Defendant, who said that at no time after mid-2003 did the Plaintiff reside in the Curlewis Street apartment. Under cross-examination the Plaintiff agreed that after she left in about mid-2003 she was living apart from the Deceased.

18 Many of the foregoing assertions of the Plaintiff in her affidavit evidence concerning the periods and details of her being with the Deceased and looking after him after the separation in mid-2003 were ultimately, under cross-examination, conceded by her to be false. For example, she agreed under cross-examination that the assertion that when the Deceased broke his arm in 2004 she cared for him 24 hours a day for two months, was untrue. Even without that admission, the Plaintiff’s evidence in that regard could not have been true, since, on her own evidence, she was living elsewhere at the time. When conducting a savings account with the Commonwealth Bank, from 1 April 2005 to 30 June 2005 the Plaintiff’s bank statements were addressed to unit 3, 229 Bondi Road, Bondi. Similarly, the assertion that she resumed occupation of the home unit in about May 2005, when the Deceased was diagnosed with cancer, was revealed under cross-examination to be untrue. The assertion that she nursed the Deceased for five months from May 2005, apart from the time when he was hospitalised, gave a totally misleading impression, since the Deceased was hospitalised in July of that year, and from then until his death returned home for a period of only three days, as was ultimately admitted by the Plaintiff.

19 The Plaintiff is presently residing in Department of Housing accommodation at La Perouse, for which she pays rent of $55.80 a week. It was her evidence that her sole income consists of a widow’s pension from Centrelink in an amount of about $428 a fortnight. Apart from furniture and household effects, the only significant asset disclosed by the Plaintiff was a small residential unit located in Konotov in the Ukraine, to which she attributed a value, in Australian currency, of about $5000. The Plaintiff also gave evidence concerning various items of clothing and various books which she asserted had belonged to her, and which she said she had left in the Curlewis Street apartment, but had not been returned to her by the Defendant. The Defendant disputed those assertions, and also disputed the Plaintiff’s evidence that she had no other income apart from her widow’s pension. The Plaintiff was cross-examined as to whether she, in fact, was or had been in employment. The Plaintiff denied any such suggestions.

20 According to the Plaintiff, she has debts of about $6000. She said that she relies on her son and friends for her accommodation (that was apparently before she moved into the La Perouse residence), and that basically she survives by the charity of her friends. She said that she is indebted to her son and to her “friend Helena” in amounts totalling $1000. According to the Plaintiff’s affidavit evidence, the entirety of her pension money goes towards everyday living expenses, including food and groceries, mobile telephone bills, travel expenses, medical and pharmaceutical expenses, as well as paying a small amount of money each week to friends for rent.

21 I was most unfavourably impressed by the responses of the Plaintiff during her cross-examination on the topic of her income (as I was by her responses on most other matters in dispute). Despite her denials, I was left with a strong suspicion that the Plaintiff did, indeed, have other sources of income which she was not prepared to disclose to the Court. The Plaintiff was asked questions regarding the letter of reference from Mr and Mrs Mike Jackson, of the United States Consulate-General in Sydney, for whose young daughter Sasha the Plaintiff had fulfilled the role of nanny. To the suggestion that she had been remunerated for her activities in this regard, I found the Plaintiff’s responses and explanation that those activities had been performed out of the goodness of her heart, and without pay, to be entirely unconvincing.

22 Overall, I regarded the Plaintiff as a most unsatisfactory witness, whose answers were prolix and verbose and were frequently evasive. On a number of instances the Plaintiff ultimately admitted under cross-examination that evidence which she had given in her affidavits was not true. On other occasions she was in cross-examination caught out in what can only have been a deliberate attempt by her to mislead the Court in her affidavit evidence.

23 The circumstances surrounding a card (Exhibit D) allegedly received by the Plaintiff from “Your friends at Sacred Heart”, aroused considerable suspicion that that card may have been arranged by the Plaintiff herself.

24 Objective facts, such as the direction of her mail to other addresses after the separation in mid-2003, support the conclusion that at no stage after her departure from the Curlewis Street unit at that time did the Plaintiff ever in any genuine sense resume residence in that apartment. The Plaintiff’s attempted explanation as to why she had her mail directed to other addresses was entirely unconvincing. I am most reluctant to accept the unsupported oral testimony of the Plaintiff on any matter which is in issue in the present proceedings. In expressing my foregoing views concerning the credibility of the Plaintiff I do not overlook the fact that her evidence was given, through an interpreter, in the Russian language.

25 It will be observed that no evidence was forthcoming from the Plaintiff’s son. He would be expected to have knowledge of the Plaintiff’s circumstances, at least at the time when she separated from the Deceased and left the Curlewis Street home unit in mid-2003. He would also be in a position to give evidence concerning the extent of any financial or material support which he might have provided for his mother, and, if the Plaintiff’s evidence regarding these matters was true, doubtless he could have corroborated her assertions as to the periods when she returned to the Curlewis Street residence and also he would be in a position, one would think, to corroborate her evidence that she had not worked, at least since leaving the Curlewis Street apartment.

26 Evidence was given by Mrs Halina Artykiewicz, a neighbour of the Plaintiff and the Deceased at 76 Curlewis Street, Bondi. The evidence of Mrs Artykiewicz that from May 2005 she recalled seeing the Plaintiff living at the Deceased’s unit and recalled seeing the Plaintiff and the Deceased regularly, did not appear to me to advance the case for the Plaintiff. That was because, as I have already recorded, the Deceased was hospitalised in July 2005 and from then until his death some three months later, he was at home for a period of only three days, facts ultimately conceded by the Plaintiff.

27 The Defendant, on the other hand, I regarded as a frank and truthful witness, whose evidence I far preferred to that of the Plaintiff.

28 A DVD was played during the course of the hearing. What was disclosed on that DVD cast doubt upon the Plaintiff’s evidence that she had left at the Curlewis Street unit 500 books and a very considerable quantity of clothing. Concerning those books and clothing, I would observe that the claim of the Plaintiff that she brought to Australia in a suitcase more than 500 books in the Russian language, without paying any charge for excess luggage, was fanciful. Although much of the clothing was in sizes far in excess of that worn by the Plaintiff, she offered no adequate explanation as to why she had acquired such clothing. The matter of the books and the clothing is of little importance in deciding the Plaintiff’s claim. However, these matters do reflect poorly upon the credibility of the Plaintiff.

29 The Plaintiff expressed a desire to receive from the notional estate of the Deceased a sum sufficient to enable her to purchase a small residence of her own. Evidence was placed before the Court of the availability and prices of appropriate home units in the Eastern Suburbs.

30 The claim of the Plaintiff must be approached in the light of competing claims upon the bounty of the Deceased. The only person who has such a competing claim is the Defendant (since his mother, Mrs Vera Vaysbakh, the Deceased’s first wife, and his half-sister, Faye Duncan, who is the daughter of the Deceased’s first wife, by an earlier marriage, each expressly stated that she did not intend to make a claim upon the estate of the Deceased).

31 The Defendant, who was born on 1 May 1974, is presently aged 33. Although he was aged only 16 when his parents separated in early 1991, the Defendant maintained a close and loving relationship with his father, with whom he continued to reside, and an equally close and loving relationship with his mother. After completing Year 12 at school he qualified as a motor mechanic and he has subsequently worked as a handyman. For the past two and a half years, he has been a fire fighter by occupation, receiving a net annual salary of $39,000. The Defendant is married, and has one child, aged two. The Defendant’s wife is a pre-school teacher and receives a net income of $41,000. She is presently not working, as she is currently pregnant with their second child. The assets of the Defendant and his wife, and the estimated values ascribed thereto, were stated by him to be as follows,

House property situate at and known
as 24 Oakley Road, North Bondi $900,000
Toyota Hilux motor vehicle $15,000
Toyota Rav4 motor vehicle $25,000

32 Their chief liability is a mortgage loan secured on their residence in favour of the Commonwealth Bank of Australia, presently in an amount of $145,000. The Defendant is also indebted to his mother in the sum of $100,000. Mrs Vera Vaysbakh lent him that amount on 6 January 2002 by direct transfer deposited into his bank account. That amount consisted of the proceeds of sale of a property owned by her at 11 Rees Street, Mays Hill.

33 The Defendant gave evidence of the outgoings of himself and his wife, in a total amount of about $1,180 a week, the largest item being mortgage repayments in an amount of about $300 a week. The Defendant also gave evidence concerning the additional expenses which he and his wife would incur for the education of their young son and for the education of their expected new child. He said that if they could afford it he and his wife would like to have a further child or children. The Defendant also gave evidence concerning the expected medical fees associated with his wife’s current pregnancy. Further, he gave evidence concerning the necessity for repairs and renovations to be carried on their present residence at Oakley Road, North Bondi.

34 It should here be recorded that most of the amount of about $200,000 which the Defendant received from the proceeds of sale of the Curlewis Street home unit was expended in reduction of his mortgage indebtedness upon his residence at Oakley Road, North Bondi.

35 During the course of evidence given by the Defendant’s mother, Mrs Vera Vaysbakh (the former wife of the Deceased) it emerged, that the house property in which she currently resides with her de facto partner, being situate at and known as 55 Warners Avenue, Bondi, is registered in the joint names of Mrs Vera Vaysbakh, her de facto partner and the Defendant in equal shares as joint tenants. Apparently, this title was so registered when that property was acquired some ten years ago, although Mrs Vera Vaysbakh seems to have provided the totality of the purchase price, from the proceeds of sale of her former residence at Merrylands. However, it would appear that the Defendant became aware of his interest in the Warners Avenue property only in relatively recent times.

36 During the course of the cross-examination of Mrs Vera Vaysbakh on this topic it was noted that it was agreed between the parties that the present value of the house property situate at and known as 55 Warners Avenue, Bondi is $1,200,000 and that the Defendant’s one third interest therein is $400,000.

37 It will be appreciated that in the assets which he disclosed to the Court in his evidence the Defendant made no mention of his interest in the Warners Avenue property. After his mother had concluded her evidence, the Defendant was recalled and gave further evidence on this topic. Under cross-examination he was asked the reason why he did not disclose his interest in the Warners Avenue property. He said that he did not count it as an asset. He regarded it as belonging to his mother. He had never treated it as an asset in, for example, any applications for housing loans. He regarded the Warners Avenue property as being the home of his mother and his step-father and said that he did not consider that he had any beneficial interest in that property, at least until his mother’s death. He said, “It is my Mum’s house, she lives there till the day she dies, and Dad’s too, he lives there till the day he dies.”

38 I have already referred to the fact that the Curlewis Street home unit was held by the Deceased and the Defendant as joint tenants. That home unit had originally been the matrimonial home of the Deceased and his first wife, Mrs Vera Vaysbakh, and their only child, the Defendant. Upon their divorce, it was agreed between the Deceased and his first wife that the Deceased should receive that home unit, but upon the understanding that it would ultimately pass to the Defendant. The Deceased carried out the terms of that agreement by making a will on 15 September 1992, by which he appointed the Defendant sole executor and gave to the Defendant the entirety of his estate. That will contained the following provision (as clause 3),

I express the wish to my son that he shall not sell my unit at No. 7/76 Curlewis Street, Bondi at least until after he shall have married.

39 That will was revoked by the marriage of the Deceased to the Plaintiff.

40 At about the time when the Deceased was contemplating that marriage to the Plaintiff, he expressed a willingness to transfer the home unit to the Defendant. However, after consulting with his solicitor, the Deceased decided that the most prudent course would be for him transfer the home unit to himself and the Defendant as joint tenants. That transfer was effected on 7 August 1997. The reason given was that the Deceased was concerned that if he transferred the home unit to the Defendant, then, in the event that the Defendant married (he was unmarried at the time) and that marriage broke down, then the Defendant’s wife might have a claim against that property. If, however, the home unit were held by the Deceased and the Defendant as joint tenants, any claim which might be made in respect of that property by a wife of the Defendant would have less prospect of success. I shall later make further reference, in greater detail, to the circumstances surrounding the transfer of the Curlewis Street unit to the Deceased and, subsequently, to the Deceased and the Defendant as joint tenants.

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

42 The Plaintiff, as the widow of the Deceased is an eligible person within paragraph (a) 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 appreciated that the Defendant also is an eligible person in relation to the Deceased (being such within paragraph (b) of the foregoing definition). (Further, that the Deceased’s former wife, Mrs Vera Vaysbakh, is also an eligible person (being such within paragraph (c) of the foregoing definition) and that the Deceased’s step-daughter, Faye Duncan (the daughter of Mrs Vera Vaysbakh by an earlier marriage), is also an eligible person (being such within paragraph (d) of the foregoing definition). As I have already recorded, each of Mrs Vera Vaysbakh and Mrs Faye Duncan has expressly stated that she does not intend to make any claim for provision out of the estate of the Deceased. )

43 In carrying out 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 correctness of which test was affirmed by the High Court in Vigolo v Bostin (2005) 221 CLR 191) the Court must determine whether in consequence of the intestacy of the Deceased the Plaintiff has been left without adequate provision for her proper maintenance.

44 As I have already observed, the Plaintiff is herself entitled to the entirety of the estate of the Deceased. Of the actual assets held by the Deceased the Plaintiff can receive by the present litigation no more than she is already entitled to receive by virtue of section 61B (3) of the Wills, Probate and Administration Act 1898.

45 Unless she is able to avail herself of the provisions of Part II, Division 2 of the Family Provision Act (in particular, section 23), relating to notional estate, the Plaintiff can receive no practical benefit from the present proceedings. The foregoing section provides, relevantly,

On an application in relation to a deceased person made by or on behalf of an eligible person, if the Court is satisfied -
(a) that an order for provision ought to be made on the application; and
(b) that, at any time before death, the deceased person entered into a prescribed transaction -

(i) which took effect within the period of 3 years before death and was entered into with the intention, wholly or in part, of denying or limiting, wholly or in part, provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person’s estate or otherwise;

(ii) which took effect within the period of 1 year before death, and was entered into at a time when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education and advancement in life of that or any other eligible person which was substantially greater than any moral obligation of the deceased person to enter into the prescribed transaction; or

(iii) which took effect or is to take effect on or after the death of the deceased person,
the Court 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.

46 The exercise of the Court’s discretion to make an order designating property as notional estate is, however, subject to sections 27 and 28 of the Act. Section 27 (1) precludes the Court from making such an order unless it has considered certain matters, being:

(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; and
(c) any other matter which it considers relevant in the circumstances

47 Section 27 (2) requires the Court, in determining what property should be designated as notional estate of a Deceased person, to have regard to certain further matters then set forth (including any consideration which may have been given in relation to the prescribed transaction).

48 Section 28 of the Act deals with the powers of and restrictions upon the Court in designating property as notional estate, and, relevantly to the circumstances of the instant case, provides that the Court shall not make an order designating property as notional estate of the deceased person unless it is satisfied,

(a) that the estate of the deceased person is insufficient to allow the making of provision that, in its opinion, should be made; or
(b) that, by reason of the existence of other eligible persons or the existence of special circumstances, provision should not be made wholly out of the estate.

49 The marriage of the Plaintiff and the Deceased subsisted for just nine years. However, I am satisfied that, for practical purposes, the parties had separated in mid-2003, and that it was for a period of less than seven years that the marriage was anything more than a marriage only in name.

50 Upon every applicant for provision under the Family ProvisionAct rests an obligation to place before the Court as fully and as frankly as possible all details concerning the applicant’s financial and material circumstances. As I have already indicated, I am far from satisfied that the Plaintiff has carried out that obligation. I have more than a suspicion that the Plaintiff either is, or at least has been, in receipt of earnings which she has chosen not to disclose to the Court.

51 The Plaintiff owns a residential unit in Konotov in the Ukraine, which she said was a gift from her parents (who are now deceased). She ascribed to that residential unit a value, in Australian currency, of about $5000. However, the Plaintiff offered no evidence as to how she arrived at that figure. Neither did she reveal whether the Konotov unit was rented out, thus producing income, or was left vacant and unoccupied. The Plaintiff has not been frank in disclosing to the Court full details of her assets and of her financial and material circumstances.

52 Concerning the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse, supra, Mason CJ, Deane and McHugh JJ said, at 209,

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

53 If then it becomes necessary to proceed to the second stage, the determination of that second stage involves similar considerations.

54 Since the Plaintiff is here seeking to avail herself of the provisions of the Family Provision Act relating to notional estate, it then becomes necessary to apply to the claim of the Plaintiff the provisions of sections 23, 27 and 28 of that statute.

55 The Plaintiff, who presently resides in Department of Housing accommodation, is now seeking that she receive an order for provision which would enable her to purchase a home unit. Nevertheless, during the lifetime of the Deceased she was encouraging him that they should give up the Curlewis Street home unit and live in Department of Housing accommodation. She has security in her present accommodation. I am not persuaded that a wife, who after less than seven years of marriage, chooses to leave her husband, has established an entitlement to receive provision which will enable her to purchase a home unit, in circumstances where she is secure in her present accommodation.

56 That is especially so, where, as in the instant case, the Plaintiff is the absolute owner of accommodation elsewhere, being the residential unit which she owns in Konotov. I am in agreement with the submission on behalf of the Defendant that the Court is entitled to infer that the reason why the Plaintiff chooses not to sell that residential unit is either because she wishes to return to what was her home town for a very large part of her adult life, or because that property continues to be of some financial benefit to the Plaintiff by way of rental income, or because she does not wish to receive the proceeds of any sale of that unit until the present proceedings are determined. Were she to sell the residential unit now it might be revealed that it has a value considerably higher than the $5000 which she attributes to it.

57 Further, it should not be overlooked that, had the Plaintiff not instituted the present proceedings, she would, upon the intestacy of the Deceased, have received the entirety of his intestate estate, being in a net amount of slightly less than $28,000. That amount would have been more than adequate to pay off her asserted debts of about $6000 and, if she so wished, to effect some enhancement to her lifestyle, or to provide a fund for unexpected contingencies.

58 The Court should not disregard such factors as those referred to in the foregoing judgment of the High Court in Singer v Berghouse. Such factors include the totality of the relationship between the Plaintiff and the Deceased. I have already expressed my conclusion that, for practical purposes, the marriage of the Plaintiff and the Deceased had come to an end in mid-2003. At least from her departure from the Curlewis Street apartment in mid-2003, I do not regard the marriage as being a marriage in anything other than name. Concerning the relationship between the Deceased and other persons who have legitimate claims upon his bounty, the claim of the Defendant to the entirety of the Curlewis Street unit (and to the entirety of the proceeds of sale thereof) is one not to be lightly disregarded. I will consider the nature of that claim in greater detail when I consider the Plaintiff’s application regarding notional estate. Having regard to the foregoing factors, I am not satisfied that the Plaintiff has established that she has been left without adequate provision for her proper maintenance.

59 But if (contrary to the conclusion which I have just expressed) she can establish that she has been so left, I am not satisfied that an order for provision of the nature which she seeks (which would deprive the Defendant of his interest in the entirety of the proceeds of sale of the Curlewis Street unit) ought to be made.

60 The conclusions which I have just expressed are determinative of the claim of the Plaintiff.

61 However, in the event that I am incorrect in my foregoing conclusions, it is appropriate that I should proceed to a consideration of the application in the light of those circumstances of the instant case which are asserted by the Plaintiff to attract the provisions of Part II, Division 2, of the Family Provision Act, relating to notional estate. In doing so, it is necessary that I should set forth in greater detail the circumstances regarding the Curlewis Street apartment, an outline of which circumstances I have already herein provided

62 The Deceased married his first wife Vera (née Grinberg) at Odessa in 1972. Of that marriage was born only the Defendant on 1 May 1974. The Deceased, his wife, the Defendant and Mrs Vera Vaysbakh’s daughter Faye came to Australia in 1978. The Deceased and Mrs Vera Vaysbakh separated in early 1991 and were divorced later in that year. At the time of their separation the joint assets of the Deceased and Mrs Vera Vaysbakh included the Curlewis Street apartment, upon which there was owing a mortgage debt in an amount of about $15,000. Throughout their marriage Mrs Vera Vaysbakh had been in employment. In Australia she worked as a cleaner, and at the time of separation she was working as a catering assistant with Qantas. The Deceased had not worked for about five years before the separation (apparently in consequence of a work related injury, for which he had received worker’s compensation). Essentially, Mrs Vera Vaysbakh was throughout that period the sole breadwinner for the family. It was her earnings which enabled the mortgage payments on the Curlewis Street home unit to be met.

63 When the Deceased and his first wife separated their son, the Defendant, was aged 16 and was in Year 12 at Vaucluse High School. Mrs Vera Vaysbakh upon the separation went to live at Merrylands. However, at about that time she had a discussion with the Deceased concerning a financial settlement and also concerning where the Defendant should reside. During the course of that conversation, precise details of which were set forth in the affidavit evidence of Mrs Vera Vaysbakh, the following was said:

Vera: Let’s sell the unit and divide everything.
Deceased: You are working and I can’t work anymore. Eddy is our only child. I want him to stay with me. Eddy should continue at the school he is at. His school is here, all his friends are here, he can’t go with you to Merrylands. The unit should be mine and I’ll give you the compensation money after paying out the mortgage.
Vera: OK, you can have the unit, but if you die everything must go to Eddy.
Deceased: Of course, he is my only son. I’ll go to the solicitor and I’ll make a will.
Vera: That is OK, but if ever you marry, Eddy must have the unit.
Deceased: I don’t have plans to marry, but I’ll go and see the lawyer.
Vera: Well if you are going to keep the unit, then you should at least pay me what is left of the compensation money.
Deceased: I’ll pay out the mortgage and give you the balance.

64 Following the foregoing conversation the Deceased and Mrs Vera Vaysbakh consented to notations, orders, and declarations made by the Family Court of Australia in proceedings 9372 of 1991 at Sydney.

65 The notations included a statement that there was an agreed value of $120,000 for the Curlewis Street home unit and a mortgage debt thereon of about $15,000; that the Deceased received $72,000 compensation for an injury suffered by him whilst he was married and that he paid that sum to Mrs Vera Vaysbakh who then paid $16,00 from that sum for a motor car; that the Deceased was receiving an invalid pension and that the wife was in employment. The orders included the following:

1. Forthwith upon the making of these orders, the wife shall pay the full amount owing on the mortgage on the matrimonial home from the compensation moneys she was given.

2. As soon as practicable thereafter the husband and wife shall procure a discharge of the mortgage and the wife shall transfer to the husband her interest in the home unit, being the property comprised in Certificate of Title folio identifier 7/SP5517. The wife shall pay the mortgagee’s costs, if any, relating to the discharge of mortgage.

3. The husband shall transfer to the wife his interest in the remainder of the compensation moneys held by her amounting to about $41,000.

4. ...

5. …

66 Mrs Vera Vaysbakh had sought and obtained legal advice in relation to her rights on a property settlement with the Deceased. She had been advised that in contested proceedings it was likely that she would receive about one half of the totality of the assets of the parties. In her evidence in the present proceedings she said that she agreed to the arrangements set forth in the foregoing conversation with the Deceased and to the consent orders, since she believed what the Deceased had told her, namely that he would ensure that upon his death the Curlewis Street home unit would pass to the Defendant. Mrs Vera Vaysbakh said that if she had believed at that time that there would be a possibility that a woman whom the Deceased might subsequently marry would have a claim upon the unit or any interest therein, she would not have agreed to the terms of the financial settlement.

67 Subsequently, the Deceased was for a time in a relationship with a Russian woman whose first name was Tamara, that being before the Plaintiff came to Australia. At the time when the Deceased was in that relationship Mrs Vera Vaysbakh had a conversation with him in which she said, “Did you do your will as you said?” to which the Deceased replied, “Yes, I left everything to Eddy.”

68 Mrs Vera Vaysbakh gave evidence of further conversations which she had with the Deceased in about 1996, after the Deceased had met the Plaintiff, but before she had arrived in Australia. In the course of one of those conversations Mrs Vera Vaysbakh raised her concern about the home unit, and the following was said:

Vera: I am worried about the unit, if there is a new woman coming into your life.
Deceased: She is not like that. She told me that she is not interested about money or anything; she just wants to be with me.
Vera: I left the unit in your name, but it is for Eddy. You promised me. Now that you are going to marry, I want you to put the unit into Eddy’s name.
Deceased: I will do this as you ask, but everything goes to Eddy. I have said so in my will.

69 About six to nine months later Mrs Vera Vaysbakh had a further conversation with the Deceased in which he said,

I have been to the lawyer’s office. He suggested to do a joint occupancy which means that if something happens to Eddy, I can still live in the unit until my old age. If everything is in Eddy’s name, if he marries, then his wife can ask me to move out. This way by doing a joint occupancy, I can’t be put out of the unit, but if I die the unit will go to Eddy.

70 In her evidence in the present proceedings Mrs Vera Vaysbakh said that she did not have a clear recollection of whether the expression used by the Deceased in the foregoing conversation was “joint tenancy” rather than “joint occupancy”. The foregoing conversations between Mrs Vera Vaysbakh and the Deceased took place in the Russian language, and in her evidence of those conversations she translated into English the Russian words used by herself and the Deceased.

71 Mrs Vera Vaysbakh was cross-examined at some length concerning the precise arrangement which she had made with the Deceased. The purport of that cross-examination appeared to turn upon whether the Deceased’s obligation to transfer the Curlewis Street unit was dependent upon the Deceased remarrying. Mrs Vera Vaysbakh was adamant that her agreement with the Deceased was that the unit should belong to the Defendant, regardless of whether any woman might have entered into the Deceased’s life. It will be appreciated that the Deceased had already made a will to that effect, thereby literally carrying out the terms of his agreement with his former wife. It was only because of his marriage to the Plaintiff and the consequent revocation of that will that the entirety of the home unit did not pass to the Defendant by will. The desire of the Deceased, contemplating matrimony to the Plaintiff, to take steps which would ensure that his binding arrangement with his former wife, concerning the Defendant receiving the home unit, was, for practical purposes, thwarted by what doubtless was the well intentioned advice of the solicitor, that the Defendant’s own agreement to the Deceased continuing to reside in the home unit, after it had been transferred to the Defendant might be prevented if, first, the Defendant married and, thereafter, his marriage failed and a claim was made against him.

72 The fact that the Deceased’s imminent marriage to the Plaintiff precipitated the consultation between the Deceased and his solicitor does not in any way qualify or diminish what was clearly the Deceased’s intention, to carry out the terms of his agreement with his former wife (which he had entered into for valuable consideration), that the Defendant should receive the Curlewis Street unit.

73 I agree with the submissions made on behalf of the Defendant that the agreement between the Deceased and Mrs Vera Vaysbakh in respect to the home unit, which became enshrined in the orders of the Family Court, was as a result of an agreement between them to the effect that the home unit would ultimately belong to the Defendant. That agreement was made for full consideration (since Mrs Vera Vaysbakh had worked throughout their marriage of twenty years, had supported the Deceased during his years of incapacity and had met the mortgage payments, and since she had received legal advice that, had there been no such agreement, it was likely that she would have received half the combined assets of the parties; whereas, in the event, she received about $41,000 plus a Toyota Corolla motor vehicle purchased for $16,000). One half of the joint assets of the parties would have been about $88,000. Mrs Vera Vaysbakh, by allowing the Deceased to have the home unit, forwent an entitlement of about $31,000.

74 The Deceased complied with the agreement which he had made with Mrs Vera Vaysbakh, by executing a will on 15 September 1992, by which he gave the entirety of his estate to the Defendant and appointed him sole executor of that will. That will was, of course, revoked by the marriage of the Deceased to the Plaintiff.

75 At the time of the divorce of his parents, the Defendant was informed of the agreement by which the Deceased would receive the home unit for his life and then it would go to the Defendant. Mrs Vera Vaysbakh in about 1992 said to the Defendant, to the following effect,

I am not taking much. I am letting your father have the unit to live in until he dies. And then it goes to you. If he gets married it has to be transferred to you.

76 At about the time when the Deceased married the Plaintiff, not only did Mrs Vera Vaysbakh remind him (in the conversation which I have already set forth) of their arrangement concerning the home unit, but at the same time Mrs Vera Vaysbakh also reminded the Defendant of that arrangement, telling him, “Your father shouldn’t forget our agreement that if he remarries the unit should be transferred to you”.

77 Shortly after the foregoing conversation with his mother, the Defendant had a conversation with the Deceased, in which he said, “Dad, Mum has reminded me of your agreement that if you remarry the unit should be transferred to my name”, to which the Deceased responded, “I want to do that but I don’t have the money for the stamp duty. You will have to pay that”.

78 The Defendant then made enquiries of the appropriate amount of stamp duty. He accompanied the Deceased to a solicitor in the firm T D Kelly and Co. The following exchange took place between the Deceased and the solicitor,

Deceased: I want to transfer the unit to my son, but I want to make sure that I can continue to live there until I die.
Solicitor: If Eddy marries one day and it doesn’t work out and his wife makes a claim, it’s just possible she could get the unit. I suggest you transfer one half to Eddy and that way you cannot be put out. Put the unit into joint names and that way Eddy still gets the unit when you pass away.
Deceased: OK

79 The Deceased then gave instructions to the solicitor to transfer the unit into the joint names of himself and the Defendant. The Defendant paid the stamp duty on that transaction, although he does not now recall the amount of that stamp duty.

80 It was only as a consequence of the advice given to the Deceased by the solicitor that the Deceased did not comply strictly, in terms, with his subsequent arrangement with Mrs Vera Vaysbakh, that upon his remarriage he would transfer the unit to the Defendant. If the Deceased had complied with that arrangement, and with his assurance given not only to Mrs Vera Vaysbakh but also to the Defendant, then there would now be no property available to be designated notional estate of the Deceased. The Deceased did not, as he should have done, transfer the unit to the Defendant, but transferred it to the joint names of himself and the Defendant. That action was taken for the sole purpose of protecting the occupation of the Deceased from any possible claims by a future wife of the Defendant. At the time when that was done the Defendant was assured by the solicitor that, in accordance with the agreement between his parents, the unit would pass to him upon the death of the Deceased. It is quite apparent that the Defendant in paying the stamp duty on the transaction did so in the expectation that upon his father’s death he would receive the beneficial ownership of the unit.

81 The Defendant also, with the assistance of friends, carried out substantial repairs and renovations to the unit, including painting, repairs and replacement of skirting boards, purchase and installation of new light fittings, construction of cupboards, purchase and installation of air conditioning, installation of new blinds.

82 A few months after the conversation between the Defendant and the Deceased which resulted in their visit to the T D Kelly and Co, the Deceased gave to the Defendant a copy of the certificate of title, and said, “If something happens to me, go and get the original from Kelly’s office”.

83 The foregoing factual matters and statements made by the Deceased (which are admissible in evidence pursuant to the provisions of section 32 of the Family Provision Act) are relevant to the making of an order designating property as notional estate.

84 Section 22 of the Family Provision Act provides the circumstances in which a person is deemed to enter into a prescribed transaction:

(1) A person shall be deemed to enter into a prescribed transaction if:
(a) on or after the appointed day the person does, directly or indirectly, or omits to do, any act, as a result of which:
(i) property becomes held by another person (whether or not as trustee), or
(ii) property becomes subject to a trust,
whether or not the property becomes in either case so held immediately, and
(b) full valuable consideration in money or money’s worth for the firstmentioned person’s doing, or omitting to do, that act is not given.
(2) Except as provided in subsections (5) and (6), a prescribed transaction referred to in subsection (1) shall, for the purposes of this Act, be deemed to take effect at the time property becomes held by a person or subject to a trust as referred to in subsection (1) (a).

85 It was submitted on behalf of the Plaintiff that the Deceased had entered into a prescribed transaction, in that he had at any time up to his death omitted to sever the joint tenancy in which the Curlewis Street unit was held, with the consequence that one half of the net proceeds of sale would, according to the submission of the Plaintiff, be available to be designated as notional estate of the Deceased.

86 It is relevant to a determination on whether the Deceased entered into a prescribed transaction that full valuable consideration was given to the Deceased for his becoming and remaining the joint tenant of the subject property. That valuable consideration consisted, first, in the Defendant agreeing to the Curlewis Street unit being transferred to himself and the Deceased as joint tenants, rather than being transferred to himself alone, and in doing so, agreeing to the Deceased remaining in occupation of that residence for his life, and, further, in the Defendant paying the stamp duty on the transfer. Further, it is also here relevant that the Defendant, in reliance upon the foregoing agreement with the Deceased, expended not inconsiderable money, time and effort upon renovations and repairs to the Curlewis Street unit. Further, it must also be appreciated that the Deceased had originally become the registered proprietor of the Curlewis Street unit in consequence of an agreement by which Mrs Vera Vaysbakh refrained from exercising her undoubted rights in the Family Court to receive a larger part of the pool of assets of herself and the Deceased, in return for the agreement by the Deceased, that the Curlewis Street unit would ultimately pass to the Defendant. That agreement between the Deceased and his first wife was also made for valuable consideration, in that Mrs Vera Vaysbakh, in return for allowing the Deceased to have the Curlewis Street unit, upon his foregoing promise that it would ultimately be transferred to the Defendant, refrained from exercising her undoubted rights to that property in the Family Court.

87 The agreement between the Deceased and the Defendant whereby the Defendant allowed the Deceased to remain in occupation of the Curlewis Street unit for his life, and by which the Defendant paid the stamp duty on the transfer of that property into the joint names of himself and the Deceased and by which the Defendant effected repairs and renovations, at his own expense, to the property, constituted full valuable consideration, at least in money’s worth, received by the Deceased. I am not satisfied that the Plaintiff has established that in these circumstances full valuable consideration was not received by the Deceased. Accordingly, I am not satisfied that the Plaintiff has established that the failure of the Deceased during his lifetime to sever the joint tenancy constituted such a prescribed transaction.

88 Further, it is here relevant to observe that the Defendant gave express evidence that, if during his father’s lifetime he had become aware that the Deceased intended to take any steps to sever that joint tenancy, the Defendant would have immediately sought legal advice in order to stop the Deceased from doing so, and would have sought an injunction from the Court to restrain him from severing the joint tenancy, in the words of the Defendant’s evidence, “because of what was promised to me”. I have little doubt that the Defendant would have been succeeded in obtaining such an injunction, to enforce what was in my view a binding agreement between himself and his father.

89 But, in any event, even if it were to be established that the Deceased had by failing to sever the joint tenancy entered into a prescribed transaction, section 27 of the Family Provision Act, as I have already observed, precludes the Court from making an order designating property as notional estate unless certain matters are considered, and requires the Court to have regard to other matters in determining what property should be designated as notional estate.

90 Among the matters which the Court must consider before it can exercise its discretion to make an order designating property as notional estate is the importance of not interfering with reasonable expectations in relation to property. It was the reasonable expectation of Mrs Vera Vaysbakh and of the Deceased himself, as well of the Defendant, that upon the remarriage of the Deceased the home unit would pass to the Defendant. The Deceased did not carry out the precise terms of the agreement which he had entered into with his first wife, an agreement which was made for valuable consideration, although he clearly intended that the general effect of the agreement should be respected. He was concerned at the possibility (to which he was alerted only when he and the Defendant consulted the solicitor) that a future wife of the Defendant might have a claim to the property if it were transferred to the Defendant absolutely, with the consequence that the Deceased himself would no longer be able to reside therein. The Deceased carried out the terms of his agreement with his first wife that he would make a will in favour of the Defendant, although, of course, upon the marriage of the Deceased to the Plaintiff that will was revoked.

91 I am satisfied that the reasonable expectations of all three persons having a concern in the Curlewis Street home unit (being Mrs Vera Vaysbakh, the Deceased and the Defendant) should not be interfered with. Further, I have considered the substantial justice and merits in making or refusing to make an order designating one half of the net proceeds of sale of that property as notional estate of the Deceased, and I am not persuaded that the substantial justice and merits of the case require the making of such an order.

92 Any order designating those proceeds (or any part thereof) will have the effect of depriving the Defendant of the benefit which the Deceased intended him to have, and which his mother intended (and still intends) that he should have, and which I consider that he, a man with a wife and young family, in receipt of a modest income, shortly to be the sole breadwinner of the family, requires.

93 In the exercise of the Court’s discretion I am not persuaded that it is appropriate to make an order designating any part of the net proceeds of sale as notional estate of the Deceased. Since the Plaintiff is already entitled to the actual estate of the Deceased, it follows that her claim must be dismissed.

94 I have not heard any submissions regarding costs. My present view is that the Plaintiff should pay the costs of the Defendant. However, if either party wishes to seek some other order, an opportunity will be given to that party to do so.

95 Accordingly, unless within seven days of the date hereof either party arranges with my Associate for the matter to be listed for argument as to costs, I make the following orders:

1. I order that the summons be dismissed.

2. I order that the Plaintiff pay the costs of the Defendant.

3. The exhibits may be returned.

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