Roche v Steven Constantine Varnavides in his capacity as Executor of the Estate of the late Lillian Rose Varnavides
[2004] WASC 164
ROCHE -v- STEVEN CONSTANTINE VARNAVIDES in his capacity as Executor of the Estate of the late LILLIAN ROSE VARNAVIDES & ANOR [2004] WASC 164
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 164 | |
| Case No: | CIV:2017/1999 | 18-20 MAY 2004 | |
| Coram: | MASTER NEWNES | 29/07/04 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Further provision made for applicant | ||
| B | |||
| PDF Version |
| Parties: | MARILYN VERA ROCHE STEVEN CONSTANTINE VARNAVIDES in his capacity as Executor of the Estate of the late LILLIAN ROSE VARNAVIDES STEVEN CONSTANTINE VARNAVIDES |
Catchwords: | Succession Inheritance (Family and Dependants Provision) Act 1972 (WA) Whether adequate provision for child of first marriage Adult applicant Turns on own facts |
Legislation: | Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6 |
Case References: | Bondelmonte v Blanckensee [1989] WAR 305 Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494 Goodman v Windeyer (1980) 144 CLR 490 Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 Re Sinnott (1948) VLR 279 Singer v Berghouse (1994) 181 CLR 201 Dun v Dun (1957) 99 CLR 325 Foster v Lisle [2003] NSWSC 1243 Grainger v The Public Trustee, unreported; SCt of WA; Library No 950670; 6 December 1995 Kitson v Franks [2001] WASCA 134 McCosker v McCosker (1957) 97 CLR 566 Ogden v Green [2003] NSWCA 352 Re Allen (Dec); Allen v Manchester [1922] NZLR 218 Shah v Perpetual Trustee Co (1981) 7 Fam LR 97 Shorey v Hansford [2003] NSWSC 889 Vigolo v Bostin [2001] WASC 335 White v Barron (1980) 144 CLR 431 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
and
Section 6 of the Inheritance (Family & Dependants Provision) Act 1972 (WA)
- Plaintiff
AND
STEVEN CONSTANTINE VARNAVIDES in his capacity as Executor of the Estate of the late LILLIAN ROSE VARNAVIDES
First Defendant
STEVEN CONSTANTINE VARNAVIDES
Second Defendant
(Page 2)
Catchwords:
Succession - Inheritance (Family and Dependants Provision) Act 1972 (WA) - Whether adequate provision for child of first marriage - Adult applicant - Turns on own facts
Legislation:
Inheritance (Family and Dependants Provision) Act 1972 (WA), s 6
Result:
Further provision made for applicant
Category: B
Representation:
Counsel:
Plaintiff : Dr P R MacMillan
First Defendant : Mr J C Curthoys
Second Defendant : Mr J C Curthoys
Solicitors:
Plaintiff : Friedman Lurie Singh & D'Angelo
First Defendant : South Legal
Second Defendant : South Legal
Case(s) referred to in judgment(s):
Bondelmonte v Blanckensee [1989] WAR 305
Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494
Goodman v Windeyer (1980) 144 CLR 490
Hughes v National Trustees Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134
Re Sinnott (1948) VLR 279
Singer v Berghouse (1994) 181 CLR 201
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Case(s) also cited:
Dun v Dun (1957) 99 CLR 325
Foster v Lisle [2003] NSWSC 1243
Grainger v The Public Trustee, unreported; SCt of WA; Library No 950670; 6 December 1995
Kitson v Franks [2001] WASCA 134
McCosker v McCosker (1957) 97 CLR 566
Ogden v Green [2003] NSWCA 352
Re Allen (Dec); Allen v Manchester [1922] NZLR 218
Shah v Perpetual Trustee Co (1981) 7 Fam LR 97
Shorey v Hansford [2003] NSWSC 889
Vigolo v Bostin [2001] WASC 335
White v Barron (1980) 144 CLR 431
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1 MASTER NEWNES: This is an application by the plaintiff under s 6 of the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act") seeking further provision out of the estate of her late mother, Lillian Rose Varnavides (the "testatrix"), who died on 16 November 1998. Probate of the Will was granted on 1 June 1999. The application was opposed by the second defendant, but none of the other defendants took any active part in the hearing.
2 It is well established that the application of s 6 of the Act to the facts of the case involves two distinct steps. First, a determination as to whether the plaintiff has been left without adequate provision by the Will of the testatrix, and, if so, secondly, a determination of what provision ought to be made for the plaintiff out of the estate.
3 The relevant principles were stated in Singer v Berghouse (1994) 181 CLR 201, by Mason CJ, Deane and McHugh JJ at 208 - 210 as follows:
"It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'. … That description means no more than that the court's power to make an order in favour of an applicant … is conditioned upon the court being satisfied of the state of affairs predicated [in s 6(1)]
…
The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 76. 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
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- 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 other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance."
4 The Court then went on to consider the nature of the two-stage inquiry. Their Honours said (at 210 - 211):
"Although the precise nature of the jurisdictional question has been the subject of some debate, the correct view is that the question is strictly one of fact, notwithstanding that it involves the exercise of value judgments … The evaluative character of the decision stems from the fact that the court must determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life.
…
The decision made at the second stage, by contrast, does involve an exercise of discretion in the accepted sense."
5 In Goodman v Windeyer (1980) 144 CLR 490, Gibbs J said at 502:
"[T]he words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards."
6 Whether a different approach is to be taken where the question of whether adequate provision has been made arises in the case of adult
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- children has been discussed in a number of cases. In Re Sinnott (1948) VLR 279, at 280, Fullagar J said:
"No special principle is to be applied in the case of an adult son. But the approach of the court must be different. In the case of a widow or an infant child, the court is dealing with one who is prima facie dependent on the testator and prima facie has a claim to be maintained and supported. But an adult son is, I think, prima facie able to 'maintain and support' himself, and some special need or some special claim must, generally speaking, be shown to justify intervention by the court under the Act."
"In some cases a special claim may be found to exist because the applicant has contributed to building up the testator's estate or has helped him in other ways. In other cases a son who has done nothing for his parents may have a special need. This may be because he suffers from some physical or mental infirmity, but it is not necessary for an adult son to show that his earning powers have been impaired by some disability before he can establish a special need for maintenance or support. He may have suffered a financial disaster; he may be unable to obtain employment; he may have a number of dependents who rely on him for support which he cannot adequately provide from his own resources. There are no rigid rules; the question whether adequate provision has been made for the proper maintenance and support of the adult son must depend on all the circumstances - that is, on all the facts that existed at the date of the death of the testator, whether the testator knew of them or not, and all the eventualities that might at that date reasonably have been foreseen by a testator who knew the facts."
8 In Kitson v Franks (supra), Parker J at [69] concluded that no distinct test is to be applied involving any notion of special need or special claim simply because a respondent is an adult. Such factors are merely to be weighed in determining whether adequate provision has been made for such a claimant in the Will of the deceased. In that case, Malcolm CJ considered that if "special need" was indeed required, it existed not only because the claimant was on a pension and without significant assets, but
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- also because she was contributing to the maintenance and support of two of her children and her aged mother.
9 See also Bondelmonte v Blanckensee [1989] WAR 305, where Malcolm CJ (at 309 - 310) considered that Fullagar J in Re Sinnott (supra) was not intending to lay down a rule of law or any principle.
10 It is clear that what is described as the jurisdictional question, namely, whether the disposition of the estate by the deceased was not such as to make adequate provision for the proper maintenance, support, education or advancement in the life of the claimant, is to be determined as at the date of death of the deceased: Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494. If that question is answered in the affirmative, the Court must then exercise its discretion to make such provision as it thinks fit, taking into account the relevant facts as they exist at the time of making the order: Bondelmonte v Blanckensee (supra) per Malcolm CJ at 307.
11 It is against that background that I turn to the facts of the present case.
12 The plaintiff was born on 4 April 1951 of the testatrix's first marriage, to a Mervyn Fitch. The plaintiff's sister, Glenys, was born in 1954. The testatrix and Mr Fitch were divorced in 1958. At or shortly before the time of the breakdown of the marriage, the plaintiff and Glenys went to live with their paternal grandparents. I did not understand it to be in issue that, following the breakdown of the marriage, the testatrix was in difficult financial circumstances.
13 In 1959, the testatrix married Constantine Varnavides. Mr Varnavides was at that stage running a general store and take-away food business in Pemberton. The business had been established by his parents in about 1938. The testatrix and Mr Varnavides built a house in Pemberton at Lot 157 Jamieson Street in 1959 into which they moved. The second defendant was born of the marriage on 5 April 1960.
14 The plaintiff went to live with her mother and Mr Varnavides in about 1963, when the plaintiff was in her first year of high school. At about that time, Mr Varnavides opened a butcher's shop in Pemberton and carried on business as the local butcher. In 1964, the testatrix and Mr Varnavides bought a farm (the "farm") on which cattle and horses were run and some cropping was carried out.
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15 The plaintiff left school after she had completed the compulsory years and started work as a shop assistant at a local chemist shop in Pemberton. The plaintiff says the testatrix encouraged her to take the job. The plaintiff continued to live at home with the testatrix and Mr Varnavides, paying an amount for her board, until she married a local farmer, Stan Roche, on 18 October 1970. The plaintiff was then 18 years of age. There are five surviving children of that marriage, one child having died soon after birth. At the time of the testatrix's death, one child, Mari, was still living with, and dependent upon, the plaintiff. Mari, who is now 20 years of age, left home early in 2003. All of the other children of the marriage were at the date of the testatrix's death, and still are, living independently of the plaintiff.
16 Mr Varnavides died in 1982. Shortly afterwards, in late 1983 or early 1984, the plaintiff's marriage to Mr Roche broke down and she and two of her children went to live with the testatrix and the second defendant. In the subsequent divorce settlement, the plaintiff received a house in Pemberton in which she lived for approximately one year.
17 In about April 1986, the plaintiff met Maxwell Healy, with whom she subsequently entered into a de facto relationship, initially for a period of about six months in 1986 and, then after a break, on a more permanent basis in late 1987 or early 1988. They have three children, Seann who was born on 15 November 1988, Shannon who was born on 17 June 1990 and Liam who was born on 22 October 1991.
18 In about 1988, the plaintiff sold the house in Pemberton, realising a net amount of approximately $36,000. She then acquired two adjoining blocks of land in Bindoon. Houses were subsequently constructed on each of the blocks, one of which is the property at 335 Forrest Hill Parade (the "Forrest Hill house") in which the plaintiff now lives.
19 At about that time, Mr Healy, the plaintiff and a third person commenced a business called Chittering Constructions. The plaintiff played no active part in the business. The business subsequently failed and in 1992 the plaintiff was declared bankrupt. The Forrest Hill house, which was encumbered by a mortgage to secure the indebtedness of one of the plaintiff's sons by her marriage, was purchased by a company controlled by Mr Healy's brother shortly before the plaintiff's bankruptcy. The other Bindoon property was sold at about the time of the bankruptcy and the proceeds apparently became an asset of the plaintiff's bankrupt estate. The plaintiff rented the Forrest Hill house from the company until October 1998, paying an amount of rental which met the payments under
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- the mortgage which the company had entered into to purchase the property from her.
20 The plaintiff was discharged from bankruptcy in 1995. In October 1998, the plaintiff purchased the Forrest Hill house from the company for $56,000. In order to do so, the plaintiff obtained a loan from Challenge Bank. The loan, in an amount of $85,000, is described as being to refinance the house, but it appears that the property was then still in the name of the company. Mr Healy said in evidence that the loan was to cover the purchase price and some improvements to the property. Mr Healy was a joint borrower with the plaintiff. At the time, the plaintiff was not in paid employment and was receiving Social Security benefits.
21 The plaintiff says that the relationship with Mr Healy broke down in late September 1999, shortly after these proceedings were commenced, and since that time they have lived separately. The plaintiff says that her relationship with Mr Healy had been unsatisfactory since at least April 1999.
22 At the present time, the plaintiff and her three children, Seann, Shannon and Liam, live in the Forrest Hill house. Mr Healy pays some expenses for the plaintiff and the children, and otherwise the plaintiff relies on payments from Centrelink, in the form of a parenting allowance and a family allowance, for the support of herself and the children. I will return to the question of the current status of the relationship of the plaintiff and Mr Healy, and their respective financial circumstances, in due course.
23 The plaintiff says that, at the date of her mother's death, she was in a poor financial position. At the time she had assets of a net value of $25,000. Those assets consisted of the Forrest Hill house, valued at $115,000, a Falcon Fairmont motor vehicle (purchased on 30 September 1998) valued at $40,000 and life insurance policy to the value of approximately $2000 - a total of $157,000. Her liabilities, including loans on the house and car, totalled $132,000.
24 The plaintiff says she cannot now say what her weekly expenses at the time were, but she was unable to save any money. All the money she received at that time was spent on day-to-day living expenses. The plaintiff was then living with Mr Healy and her four children, Mari Roche, Seann, Shannon and Liam. Mari was 14 years of age, Seann 10 years of age, Shannon eight years of age and Liam seven years of age. The plaintiff says she was receiving Social Security benefits totalling
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- $842.40 per week. Mr Healy was obtaining his real estate licence and at the end of 1998 was unemployed. He was receiving a disability support pension. That pension continued through 1999, as the real estate business, which commenced in January 1999, did not start to make a profit for some time. So far as the plaintiff knew, Mr Healy did not have any significant assets.
25 It is clear that the plaintiff is mistaken in her evidence that, at the date of the death of the testatrix on 16 November 1998, Mr Healy was receiving only a disability pension. It is clear from the contemporaneous documents, and Mr Healy's evidence, that Mr Healy was in full-time employment as a real estate representative by L J Hooker as at that date, but equally it was not disputed that he was made redundant very shortly afterwards, in December 1998. He commenced his own real estate agency early in 1999.
26 Mr Healy has sworn an affidavit of 19 May 2004 in which he says that, for the financial year 1996-1997, his total income was $83,771. He says, however, that he expended approximately $54,000 by way of deductible expenses incurred in earning his income, leaving what he described as a disposable income of approximately $30,000. After the deduction of further expenses, he had a taxable income of $19,041 for that year.
27 In the financial year ended 30 June 1998, Mr Healy's total income was $121,253. He says that he had deductible expenses of approximately $41,216, leaving a total "disposable" income of $80,000. After some further deductions, his taxable income was $73,582. For the financial year ended 30 June 1999, he worked for L J Hooker to December 1998, earning $11,815. Between December 1998 and June 1999, his only income was a disability support pension of $300.80 per fortnight.
28 In the application to Challenge Bank, dated 28 September 1998, for the loan to complete the purchase of the Forrest Hill house Mr Healy stated that his annual income (before tax) was $83,771. The application shows Mr Healy having total assets of $245,000 and liabilities of $31,000 and the plaintiff having total assets of $160,112 and liabilities of $55,000. The plaintiff's assets are shown as the Forrest Hill house valued at $125,000, on which an amount of $55,000 was then owing, and a bank account containing $35,112. Mr Healy's primary asset is described as a property valued at $190,000. Mr Healy gave evidence that that referred to a property he owned jointly with his three brothers, so he was entitled to
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- only a quarter share of it, although the full value of the property of $190,000 had been included in the application, he said, by the Bank.
29 The plaintiff's bank account referred to in the housing loan application was a Challenge Bank account. A statement of the account from September 1998 to December 1998 was put in evidence. That showed that the balance in the account at the time of the application was about $33,00. At the date of death of the testatrix the balance was some $20,000. The plaintiff said that the account was, in fact, Mr Healy's account, into which his income as a real estate representative was paid. Mr Healy's evidence was to the same effect. It appears that the plaintiff had drawn on the account on occasions to meet household expenses.
30 The estate of the testatrix is a substantial one. The estate was valued for probate purposes at $1,767,000. At trial, the agreed value of the estate was $2,211,477, the major items in the estate being the farm, valued at $1,062,500, 15,000 FAL shares valued at $273,150, a property at Lot 18 Brockman Street, Pemberton valued at $100,000, the house at Lot 157 Jamieson Street valued at $135,000 and a term deposit with National Australia Bank in the sum of $89,761. There are also various amounts owing by the second defendant and his wife to the estate.
31 Under the terms of the Will of the testatrix, the second defendant received a life interest in the farm with the remainder to his son, Ross; the second defendant's daughter, Monique, received the house at Lot 157 Jamieson Road; the second defendant's daughter, Rachel, received commercial land in Brockman Street, Pemberton; the second defendant's son, Luke, received 5000 FAL shares and the plaintiff received $20,000. Glenys received the moneys standing in the testatrix's Challenge Bank account. The residue of the estate was given to second defendant. There were several other small bequests to other members of the family. Glenys has since resolved any claim she may have against the estate under the Act by payment to her of the sum of $100,000.
32 Although the second defendant says he was told by the testatrix that over the years she had given $50,000 to the plaintiff, that is denied by the plaintiff who says that, during her mother's life, she received only a loan of $15,000, some furniture worth approximately $1000 and a car to the value of some $5800. The sum of $15,000 was put into the plaintiff's business venture with Mr Healy and was lost when the business failed.
33 It was not suggested that the plaintiff had other than a normal relationship with her mother and there was no suggestion that there had
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- been any conduct on the plaintiff's part of a sort which might have alienated the testatrix's affections. It appears the plaintiff maintained regular contact with her mother throughout her mother's life. The second defendant does, however, say that the testatrix told him she did not believe the plaintiff handled money well and that she (the testatrix) did not want the family's assets going to Mr Healy.
34 The second defendant contended, in substance, that the Will reflected, and properly reflected, the fact that the value of the estate was substantially the result of his efforts and the efforts of his wife, Linda, without which there would have been relatively little by way of assets.
35 The second defendant says that he left school at 15, in 1975, before he had finished year 10 and commenced work on his parents' farm and in the butcher's shop. He says he did so because he wanted to work in the business and on the farm with his parents, although he was doing well at school and believes that he could have gone on to University. According to the second defendant, he worked approximately 12 hours a day, seven days a week for his parents and initially received a weekly wage of $20.
36 In 1976 or 1977, the testatrix and Mr Varnavides started a new business in Pemberton known as "Pemberton Central Deli", which later became known as "Pemberton 4 Square Minimart". The latter was referred to throughout the hearing as "the Minimart" and I will refer to it in that way.
37 The second defendant says that he started his own transport business when he was about 18 or 19 years of age, that is, in about 1978 or 1979, carting for many of the local businesses. He purchased a truck for that business. Why he embarked upon that venture, given his stated reasons for leaving school and the hours he was working for his parents, was not apparent. In any event, the second defendant says he worked in his carting business for some 10 to 15 hours per week and when he was not working in his carting business he worked on the farm and in the Minimart.
38 According to the second defendant, he was always paid a very modest wage by his parent, indeed he described it as "embarrassingly low". From 1978 to 1982 he said he was paid $40 per week and, after his father died in 1982 and he took over the running of the farm and Minimart, he drew $100 per week. According to the second defendant, the testatrix lost interest in the Minimart and the farm to a great extent after his father died. He says he therefore handed his carting business
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- over to his cousin, as the workload and increased responsibility of running both the Minimart and the farm after his father's death made it impractical to continue with the carting business.
39 Although the second defendant does not say so, I take it that, in addition to the wage or the amount he drew from the business, his day-to-day living expenses were met.
40 In about April 1983, the second defendant and his then fiancee, Linda, who is now his wife, went to live on the farm in a caravan bought by Linda. They lived there until they were married in the middle of 1984. At about the same time, the second defendant assisted his mother to build a house on the farm into which she moved in about May 1984, approximately two weeks before the second defendant and Linda were married.
41 After their marriage, the second defendant and Linda moved into Lot 157 Jamieson Street. The second defendant says Linda then began to work full-time in the Minimart. The testatrix became ill with cancer in about 1984 and, according to the second defendant, from that time on played little active part in the running of the Minimart or the farm. I should mention that that is denied by the plaintiff who says that, in 1987, the testatrix was still running the Minimart business.
42 The second defendant says that, from 1982, he and his wife ran both the farm and the Minimart business on a full-time basis and they have had only 10 or 11 weeks' holiday in total in that period. The Minimart was a seven-day-a-week business. The second defendant says the Minimart made a loss of $11,724 for the financial year ended 30 June 1997 and a loss of $2912 for the financial year ended 30 June 1998, although there was a slight improvement after that. The Minimart was sold in 2000. The second defendant says the farm does not produce a significant profit.
43 In 1989, the second defendant and Linda purchased a business in Pemberton, called "Pits", in which Linda works full-time from Monday to Friday. She worked in the Minimart on Saturday and Sunday until it was sold. The second defendant said that the "Pits" business only generates sufficient income to cover its outgoings and costs.
44 The Minimart business and the farm were operated as a partnership between the second defendant, his father and the testatrix from about 1978 and, following the death of the second defendant's father, between the second defendant and the testatrix. The second defendant also held a one-third interest in the land on which the Minimart stood, for which he
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- says he paid $2000 in about 1977. According to the second defendant, the original partnerships were formed when his parents considered that the wages he had missed out on roughly equalled a one-third interest in the family business and the farm respectively. He says that, in about 1990 or 1991, the testatrix agreed to transfer to him 100 per cent of the goodwill of the Minimart.
45 The second defendant says that all of the money earned from the farm and the Minimart has been put back into those businesses. He says he and Linda have also put their own money into them from time to time. The second defendant also says that in March 1997 he borrowed $20,000 from his mother to revamp the Minimart and he has repaid all but $2425.90 from his portion of the FAL shares. He is unable to pay the balance because the shares are in the testatrix's name and since her death have been inaccessible. I should observe that it is not clear why the improvements to the Minimart should have been an expense borne solely by the second defendant as the business was run as a partnership with the testatrix. No explanation as to that was given in evidence.
46 The second defendant says that the increase in the FAL shares has been solely due to his efforts in the Minimart. The FAL shares were accumulated as the result of an incentive scheme run by Foodland Australia Ltd for retailers by which shares were issued on the basis of the value of goods purchased from it. Accordingly, over the years, as stock was purchased for the Minimart, the number of shares acquired increased. In 1982, Mr Varnavides had 8000 shares. In 1999 there were approximately 39,000 shares in the testatrix's name. Some have since been sold and there are now 15,000 shares in the testatrix's estate. The second defendant says that it was always understood between himself and his mother that 50 per cent of the shares were his, although they were all registered in the testatrix's name, and for some years, consistent with that understanding, the testatrix had paid one-half of the dividends from the shares to him.
47 There was an issue as to the extent to which the plaintiff had contributed to the family businesses over the years. The second defendant says that the plaintiff had not worked in the family business for more than a total of about 18 months and when the plaintiff worked in the Minimart she had always demanded award wages. The plaintiff says that her contribution was more extensive than that and she also contributed in the household when she was living with the testatrix and Mr Varnavides, and later the testatrix and the second defendant.
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48 It is, I think, impossible now to reach any definite conclusion about that, to the extent it might be relevant to do so. It seems to me, however, that the second defendant was somewhat too anxious to minimise any involvement of the plaintiff. In his affidavit of 7 May 2004, for instance, the second defendant said that, before she left home to get married, the plaintiff chose not to do any substantial work in the family business; that he could recall his parents inviting the plaintiff to work in the family business, but she had refused. When she left school she went to work in a chemist's shop. In cross-examination, the plaintiff conceded that he was only five years of age when the plaintiff left school and he had no personal recollection of such discussions.
49 Nevertheless, the plaintiff's contribution, whatever it might in fact have been, is simply not on any view comparable with that of the second defendant and it is clear that there was no contribution by the plaintiff after 1986.
50 The second defendant and Linda have four children. The oldest, Luke, is now 25 years of age. Monique was born in 1986, Ross in 1989 and Rachael in 1990. Ross and Rachel are at school in Pemberton. Monique completed year 12 at St Hilda's Anglican School for girls at the end of last year and apparently proposes to undertake tertiary studies to qualify as a teacher.
51 According to the second defendant, he and his family have always lived modestly, making do largely with second-hand furniture, or furniture and appliances that they have had for many years. He says that, over the years, they have spent thousands of dollars making improvements to the home at Lot 157 Jamieson Street, including a new bathroom and bedroom, a spa, and paving, landscaping and recarpeting. The second defendant estimated the total cost of those improvements to be in the order of $12,000. It was not clear, given the modest income of the second defendant and Linda, how the improvements were funded. I should mention that it appears that the second defendant and his family did not pay any rent for the house.
52 The second defendant and his family moved from the house at Lot 157 Jamieson Street to the house on the farm shortly after the death of the testatrix. The latter had previously been occupied by the testatrix. They have continued to live on the farm since that time. There was no evidence as to what has happened in respect of the house at Lot 157 Jamieson Street.
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53 Turning to the second defendant's financial position, the second defendant says that he and Linda each drew $100 per week from the Minimart to maintain themselves and their four children from 1982 until it was sold in 2000. In addition, they obtained their food from the Minimart, for which an amount of $5000 per annum was allowed in the accounts. He said that he had also received from the testatrix one half of the dividends from the FAL shares.
54 In cross-examination the second defendant acknowledged, however, that expenses such electricity and telephone charges were also met from the business and motor vehicle expenses were met from the proceeds of one or other of the businesses or from the farm. The half share of the dividends from the FAL shares resulted in the second defendant receiving an amount of approximately $5000 to $6000 per annum at about the time of the testatrix's death, and the family also received a Centrelink supplement for low income earners of approximately $300 per fortnight. The second defendant said that since they acquired "Pits", a clothing store, in 1989 they have also obtained clothes through that business.
55 The second defendant said in cross-examination, when asked to explain how the family had managed financially since the Minimart was sold in 2000, that since then he and his wife had each drawn $150 per week from the "Pits" business. Those drawings are not, however, mentioned in his affidavit sworn 7 May 2004, where the second defendant says, "I am totally reliant upon receiving the inheritance Mum left me in order to support my family. My wife Linda and I do have another business. That business is called 'Pits' and is also based in Pemberton. However, Pits is not profitable. We make enough from 'Pits' to cover the interest on the loan and for general operating costs, but nothing more than that."
56 It also emerged in cross-examination that the outgoings paid from the "Pits" business include approximately $1300 per month in payment of loans initially used in 1990 to purchase the property in Brockman Street, Pemberton on which the business, "Pits", stands, for the sum of $85,000. The loan was subsequently increased by the second defendant to enable the purchase in 1991 of a five-acre block in Brown Street for the sum of $47,000. At the time of the hearing, the amount owing on the loan was approximately $123,000. The outgoings paid from the "Pits" business also include $676 per month for a motor vehicle used as the family car.
57 The second defendant and his wife also purchased another property in late 1994 for the sum of $82,000, which they developed into a cottage
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- for rental to holiday-makers. The second defendant says they did a lot of work on the cottage, but it was never a profitable venture, the income only covering the interest on the loan and general running costs. The property was sold in January 2000 for $140,000.
58 At the time that the second defendant swore his first affidavit in these proceedings on 3 December 1999, he said the value of his net assets was $63,706 and the value of the joint assets he held with his wife was $208,745. A subsequent statement of assets and liabilities produced by the second defendant showed that, as at 1 February 2004, he and his wife had joint net assets of $271,368.30.
59 It was submitted on behalf of the second defendant that it was appropriate that the testatrix left her estate substantially to the second defendant and his family. In addition to the promises the second defendant said were made to him by his parents, he and his wife had done the work and they were responsible for the increase in the value of the estate. The second defendant says that it was as a consequence of the efforts and money that he and Linda have invested in the farm and Minimart business over the years that the testatrix's assets were in the order of $1.7 million at the time of her death.
60 The second defendant argued that the principal assets of the testatrix's estate were those inherited by the testatrix from Mr Varnavides in 1982. The value of Mr Varnavides' estate for probate was $144,000. Those assets grew in value to $1.7 million over the intervening 16 years.
61 It must, however, be said of that contention first that it overstates the position in that Mr Varnavides' estate did not include the half interest in the farm, and the one-third interest in the Minimart and the land on which it stood, which were then owned by the testatrix, and, secondly, it ignores the increase in property values since 1982. Nevertheless, it is the case that substantial assets were inherited by the testatrix from Mr Varnavides and that none of the assets of her estate were derived from the testatrix's first marriage. At the time of her marriage to Mr Varnavides, the testatrix had no assets.
62 I have no doubt that the second defendant considers very strongly that, by reason of the work that he and his wife have put in over the years, he (and through him, his family) is entitled to the bequests in the Will. He is plainly of the view that, as it was put by his counsel, the plaintiff "seeks to reap where she has not sown." The second defendant's view of the merits of his cause has, however, tended in significant ways to colour his
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- evidence. He has, in my view, sought to brush aside anything that might cast a different light on the part he has played in relation to the family businesses and especially he has been inclined to understate the financial benefits that he and his family have gained through those businesses, and from the testatrix, over the years and to overstate the extent of their deprivation. Although in respects in which he considered it assisted his case, the second defendant was able to produce detailed records, and to refer to incidents and specific sums of money (including quite small sums of money), going back many years, in other respects, and in particular in relation to his financial affairs of more recent years, the same meticulousness seemed to be lacking. It is also difficult to reconcile the scale of his borrowings and expenditure over the years with the income that he said he and his wife earned from the farm and the businesses. In the end, I am not satisfied that the full extent of the second defendant's financial affairs, or the benefits which he derived from the farm and the business, and otherwise from the testatrix, over the years were ever revealed.
63 When regard is had to all the circumstances, I am satisfied that the testatrix's Will did not make adequate provision for the plaintiff. I accept that, at the time, the relationship with Mr Healy was in difficulties. The plaintiff had then four dependant children, one of whom, Mari, was by her first marriage. The other children were all still of primary school age. The plaintiff had only a relatively modest amount by way of assets and had been discharged from bankruptcy only three years earlier. She had no formal qualifications and her work experience, which had been limited to various unskilled jobs, had been sporadic. It was unlikely that she would be able to obtain work other than that of a relatively unskilled, low paying nature. The accommodation the family had was adequate but no more than that, needing relatively expensive repairs.
64 It is the case that Mr Healy had some assets, although they were not of particularly great value, and that he was earning a reasonably substantial income. A good deal of weight was put on those assets and income by counsel for the plaintiff, it being contended that, when viewed in conjunction with the plaintiff's financial position, the plaintiff was not in a poor financial position, but rather in a good financial position.
65 Mr Healy's financial position must be viewed in context, however. As I have said, his assets were not of great substance. It could not be said that he had an established and stable career. His construction business had failed only three years earlier and he had served a term of imprisonment in 1995. The relationship between the plaintiff and
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- Mr Healy was in difficulties and in the event (as I accept subsequently happened) it failed, Mr Healy was not under an obligation at law to maintain the plaintiff, as opposed to the children of their relationship. Mr Healy also has another child from another relationship. That child was about 14 or 15 years of age at the time of the hearing.
66 The plaintiff's only secure source of personal income was through Centrelink payments and the extent to which she would be able to augment that by employment was limited by her lack of skills and experience, and the fact that she had dependant school age children to care for.
67 That leads to the question of what provision ought to be made for the plaintiff out of the deceased's estate.
68 In relation to her current financial position, the plaintiff relies on a statement of assets and liabilities dated 26 March 2004 and an affidavit of the same date.
69 According to the statement of assets and liabilities, the Forrest Hill house is valued at $140,000 and is subject to a mortgage on which an amount of $81,511.57 is owing. The Fairmont sedan is valued at $27,000 and an amount of $14,000 is owing to Westpac on it. There is also a Falcon station wagon valued at $4000 on which that amount is owing. In addition, the plaintiff has, or it is estimated will incur, total legal fees of $126,795 in these proceedings (an amount which, I must say, on the face of it seems very high). Her net position before the legal fees are taken into account shows the plaintiff with an excess of assets over liabilities of $76,257.77. After taking into account the legal fees, they show liabilities exceeding assets by $50,537.23. The plaintiff has no savings.
70 The plaintiff says she currently has an average monthly income of $1872 paid by way of Centrelink benefits and $421 per week paid by Mr Healy in lieu of child support. The latest assessment by the Child Support Agency is that Mr Healy has the capacity to pay only $21.67 per month by way of child support. That, however, appears to be only a provisional assessment and, given Mr Healy's current level of financial support, it is likely that a final assessment based on proper information would result in a figure at least closer to the amount of $421 per week that Mr Healy is now paying voluntarily.
71 The plaintiff receives a further amount of $150 per fortnight from Mr Healy to cover the additional costs she incurs by reason of his contact visits to the children from Friday to Sunday evening each week and to
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- cover the costs of feeding some 200 pigeons which he keeps at the Forrest Hill house. The estimated cost of feeding the pigeons is $65 per fortnight. The average weekly household expenses amount to $490, excluding the items for which Mr Healy pays. Mr Healy continues to meet the plaintiff's costs of telephone, electricity, shire rates, mortgage (an amount of $92 per week), home and contents insurance and car insurance.
72 The plaintiff says Mr Healy has told her the Ford Fairmont sedan has been refinanced in his name by way of a new loan of $16,500 (on which an amount of $14,500 remained owing at the time of the hearing), but that he still requires the plaintiff to reimburse him for the amounts he has paid both under the old loan and the new loan. The vehicle has been in Mr Healy's possession since about a year after it was purchased, when Mr Healy's car was stolen, but the plaintiff says she still has the use of it if required for long trips.
73 According to the plaintiff, the Forrest Hill house in which she and her three children are living (and were living at the testatrix's death) is barely adequate for their needs. It is a three-bedroom house, a closed-in garage serving as one of the bedrooms. It has extensive white ant damage. A quote obtained by the plaintiff in 1999 to repair the white ant damage and add an additional bedroom was in excess of $65,000. The limitations of the accommodation are exacerbated by the weekend contact visits of Mr Healy, which require the plaintiff to share a bedroom with the two youngest children for that time. The plaintiff says that because of the poor relationship between Mr Healy and herself, there is considerable tension and acrimony during these weekend visits. The plaintiff would like to change the arrangement, but considers she cannot do so while she remains financially dependant on Mr Healy to meet day-to-day living expenses. The plaintiff also expressed concern that Mr Healy's financial future is far from assured and says that, in any event, Mr Healy has told her that after the action is over he does not intend to keep paying her bills.
74 Since the beginning of 2000, the plaintiff has helped out at the local branch of the real estate agency in which Mr Healy is a partner. Until three months ago the plaintiff worked from 10 am to 2 pm Monday to Saturday each week without pay, answering the telephone and redirecting facsimiles as necessary. In the three months leading up to the hearing, the plaintiff has reduced that to three days a week. The plaintiff says she feels some obligation to do that work, as Mr Healy contributes to her expenses and she fears he will not make the same contribution if she did not do so.
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75 It was submitted by counsel for the second defendant that the separation of the plaintiff and Mr Healy in late 1999 was a sham, designed to improve the plaintiff's prospects in these proceedings. Counsel referred to the plaintiff's initial affidavit in these proceedings, sworn 10 September 1999, in which the plaintiff simply said of their relationship (at par 3) that "[o]n or about April 1986 I met my present de facto husband" and (at par 27) that "I am not presently employed and rely on Max to support myself and our four children aged 15, 11, 9 and 7." He noted that it was not until some two months later, on 9 November 1999, that there was any suggestion that the relationship was in any difficulty.
76 In an affidavit sworn on 9 November 1999, the plaintiff says that at the time of her earlier affidavit she was still in a de facto relationship with Mr Healy but even at that time, and at least since April 1999 the relationship had been "unsatisfactory and tenuous to say the least." The plaintiff says that, approximately two weeks after the date of her 10 September affidavit, the relationship broke down to the extent that they separated completely and since that time Mr Healy has lived separately.
77 It is also the case that, at the date of the hearing, an entry in the telephone directory gave Mr Healy's telephone number as the same as the plaintiff's number and his address was given as the Forrest Hill house. The electoral role entry also showed Mr Healy's address as that address. The plaintiff said she was unaware of those entries, but that Mr Healy had arranged for the original telephone connection to the Forrest Hill house and he has continued to pay the account.
78 Counsel for the second defendant also referred to the fact that the plaintiff was working for Mr Healy without pay and that he was spending each weekend at the Forrest Hill house. He argued that, in all the circumstances, it was evident that the separation was simply a pretext.
79 The plaintiff, who was cross-examined on her affidavits, struck me as an honest witness. The plaintiff has clearly had limited education and is a person who is plainly not versed in business or financial matters. While they were together, their financial affairs were handled by Mr Healy and I am satisfied that the plaintiff had little understanding of what they involved.
80 Although there were aspects of the circumstances surrounding her separation from Mr Healy that could give rise to an inference that it was a sham, I would not be prepared to draw such an inference. Whatever may be Mr Healy's view of the prospects of reconciliation if the plaintiff were
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- successful in these proceedings, I am satisfied that so far as the plaintiff is concerned the relationship has broken down. I also accept that the extent of the continuing contact between the plaintiff and Mr Healy, both through contact visits and working in his office, is due to the plaintiff's concern to ensure his current level of financial support is maintained. The likelihood of reconciliation at some stage in the future between the plaintiff and Mr Healy is not something on which I can or should speculate.
81 It is necessary then to turn to the question of what is an appropriate provision for the plaintiff.
82 It was argued on behalf of the second defendant that the farm should be quarantined from any award that might be made in favour of the plaintiff because the testatrix had promised the farm to the second defendant and he had relied on that promise in the work and money he put into it. The second defendant also said that he requires capital from the estate in order to run the farm as he does not have the financial resources to do so. In addition, if the farm is sold, the second defendant says he and his family will lose their home.
83 It was also argued on behalf of the second defendant that the proceeds of the sale of the Minimart, which was sold in 2000, and the FAL shares (and the income from them) should be quarantined from any award because the testatrix promised the business and shares to the second defendant and he relied on that promise in the 22 years of work and money that he put into the business.
84 I do not accept that specific assets of the estate should be quarantined in the manner suggested. I am, however, satisfied that, although his contribution was clearly not the only factor and to that extent may not have been quite as material as he contends, the second defendant has contributed very significantly to the increase in the value of the assets which comprise the estate. The second defendant's working life has substantially been devoted to the Minimart business and the farm. I am satisfied that from 1982 he ran the Minimart and the farm, if not solely, then at least in large part.
85 I accept that the plaintiff has some capacity to obtain paid employment, although it would be unskilled employment and relatively low paying, and it is limited, for some years to come, by the plaintiff having effective sole care during the week of her three children. Whether she would be better off in part-time paid employment than in the present
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- arrangement would largely depend upon whether a final Child Support Agency assessment resulted in Mr Healy paying an amount by way of child support comparable to the amount is currently paying. That is not clear on the evidence. The plaintiff currently has no savings and a mortgage over the Forrest Hill house on which an amount of approximately $81,000 is owing. The house requires some repairs.
86 The determination of an appropriate provision for the plaintiff from the estate of the testatrix involves a balancing of the various factors to which I referred at the outset. It is not a question that can be resolved by any formula or with mathematical precision. It involves matters of judgment and is in the accepted sense the exercise of a discretion.
87 The total value of the estate as at the date of hearing was agreed in the sum of $2,211,477. Having regard to the matters that I have canvassed, in my view an appropriate provision for the plaintiff would be an amount of $225,000.
88 I will hear the parties on the form of orders and on costs.
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