Savvaki v Papargyriou

[2008] NSWSC 830

CITATION:	Savvaki v Papargyriou [2008] NSWSC 830 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	11/08/08, 12/08/08
JUDGMENT DATE :	14 August 2008
JURISDICTION:	Equity jurisdiction
JUDGMENT OF:	Macready AsJ at 1
EX TEMPORE JUDGMENT DATE:	14 August 2008
DECISION:	Paragraph 87
CATCHWORDS:	Family Provision. Application by defacto partner in respect of small estate. Order for provision of whole estate to plaintiff.
PARTIES:	Catherine Savvaki v Con Papargyriou (Estate of Gregory Papargyriou)
FILE NUMBER(S):	SC 2226/06
COUNSEL:	Mr P Blackburn-Hart SC for plaintiff Mr M White for defendant
SOLICITORS:	Lane & O'Rourke Solicitors for plaintiff Truman Hoyle Lawyers for defendant

- 1 -

SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

THURSDAY 14 AUGUST 2008

2226/06 CATHERINE SAVVAKI (AKA KATERINA SAVVAKI) v CON PAPARGYRIOU AS EXECUTOR OF THE ESTATE OF GREGORY PAPARGYRIOU

JUDGMENT

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Gregory Papargyriou who died on 9 June 2005 aged 65 years. The deceased was survived by the plaintiff, with whom he had lived in a defacto relationship for 32 years.

2 The only other eligible persons are the plaintiff’s son, who lived with the plaintiff and the deceased from the age of five years until he was 32 years of age in 1999. He makes no claim and supports his mother’s application.

The last will of the deceased

3 The deceased made his last will on 28 April 1995, only a few years after he started living with the plaintiff. Under that will in the circumstances which have occurred the whole of his estate passed to the defendant, who is the deceased’s brother. He also was appointed as executor of the will.

The estate of the deceased

4 The deceased and the plaintiff lived at a property at Earlwood which was held by them as joint tenants. The property passed by survivorship to the plaintiff subject to an interest in the property held by their son, the details of which I will return to later.

5 The balance of the estate was mainly comprises of a half share in another property at Enmore held by the deceased and the plaintiff as tenants in common.

6 By the time of the hearing the estate of the deceased comprised the following:

Enmore property (half interest) $375,000.00
Nissan motor vehicle` $ 25,000.00
Bank account $ 345.92
Shares $ 736.00
Cash $ 10,000.00
Personalty $ 10,950.00

Total assets: $422,031.92

7 There are the following liabilities:

Half share costs of sale of Enmore $ 12,500.00
Half mortgage on Enmore $ 21,002.44
2005 income tax $ 692.00
2006 tax and accountant’s fees $ 1,200.00
Funeral expenses $ 12,520.00
Legal costs of probate $ 5,995.23
Headstone $ 9,400.00
Return from cash $ 2,500.00
Cost of the proceedings (est)
(both parties excluding defendant’s
costs thrown away on 3/3/08) $190,267.60

This provides a net estate of: $165,954,65

8 The costs are made up of the defendant’s costs $96,474.72, the plaintiff $103,792.88, a total of $200,267.60. From this is to be deducted an amount of $10,000 approximately as an estimate for costs thrown away, which the plaintiff has to bear, following the aborting of an earlier hearing in this matter on 3 March 2008 resulting from the plaintiffs need to change solicitors.

9 It assumes that the plaintiff is successful in her application. In any terms it is a small estate and the costs are very large.

Family History

10 The plaintiff was born in Crete in 1937 and the deceased was born in Greece in 1940. The deceased migrated to Australia as a carpenter in 1964, and the plaintiff also migrated to Australia in 1965. In 1966 the deceased’s brother, who is the defendant, also emigrated to Australia. Both of them worked in the building trade and the deceased lived with his brother until 1972.

11 The plaintiff had married and lived in Melbourne and their son, Bill Aifantis, was born in August 1966. She separated from her husband Con Aifantis in 1968 and moved to Sydney.

12 When she came to Sydney she commenced subcontracting dress making work at piece rates. In 1961 she entered into a partnership with some friends Denis and Tasio Faraos for four months doing the same sort of work. However, in April she acquired five sewing machines and a pressing iron and employed up to fifteen sub contract workers at piece rates, as well as two women working from her residence.

13 She moved in 1970 to rented premises in Enmore Road, Enmore. At that stage the plaintiff and the deceased met and the deceased would occasionally stay with her. The plaintiff purchased a Volkswagen Kombi van the following year to help transport dresses and materials as part of the business venture.

14 The deceased appeared to move in to live with the plaintiff at Enmore Road in late 1972 on a permanent basis. In 1974 the deceased and the plaintiff were in business together and this involved dressmaking. Precise details are not available but it is plain that the deceased and the plaintiff both worked in the dressmaking business from that time. It was on 28 April 1985, shortly after this, that the deceased made his last will.

15 In July 1975 the plaintiff and the deceased purchased another property in Enmore Road, Enmore as tenants in common as equal shares for $50,000. They borrowed $30,000 and extensively renovated that home while they lived there. The plaintiff used $10,000 of her own money, and also borrowed $10,000 from the vendor. Those loan moneys were repaid in due course from the income from the business. At the time the business was doing well, employing approximately thirty women on piece rates. The loans were paid off by 1980.

16 In December 1976 the plaintiff and his son travelled to Greece for three months. In 1977 the deceased and the plaintiff purchased a property at England Avenue, Marrickville for $25,000, which was paid for in cash, and it was rented until it was eventually sold in 1989. The plaintiff had occasional surgery in 1985 and 1987 for bowel problems and gallstones.

17 In 1998 the plaintiff and the deceased sold the England Avenue, Marrickville property for $156,000. They were finding it difficult to meet the loan repayments. The deceased used some of the proceeds -- about $15,000 -- to travel to Greece. He returned back to Australia month or so later.

18 In May of that year the deceased and the plaintiff purchased as joint tenants a property in Shaw Street, Earlwood. At the time there was a deed of trust dated 13 June 1989 which was executed, and to which I will return shortly.

19 At the end of 1989 there was a downturn in the clothing industry and the work was substantially reduced but still managed to continue. By 1993 the plaintiff was working on her home without doing any subcontracting in the business. In 1994 the deceased spent a year working for his brother as a carpenter and, unfortunately, injured himself on a site and did not work thereafter.

20 In 1997 the business effectively ceased to operate and the plaintiff travelled to Greece for only a few months. At this time the plaintiff and the deceased mortgaged the Earlwood property to obtain a loan of $60,000 to provide a loan to a friend Angelo Matsoukas. He has been repaying that and there is approximately $38,789 owing on the loan.

21 When she returned the plaintiff started working three days a week doing ordinary unskilled work. In 1999 she received the age pension and got $20,000 in settlement or a motor vehicle third party claim. That amount she spent in household items for herself and the deceased.

22 The next year she received another $9,500 for an injury to her knee and legs and that was used in the relationship, some of it being spent on the deceased's vehicle.

23 The deceased himself received a lump sum payment in 2001 of some $30,000 for injuries which he had received at work. When he received that sum he went to Greece for a few months.

24 In August 2003 the deceased purchased a new Nissan motor vehicle for approximately $38,000. That was done by increasing the loan on the Enmore property.

25 In 2004 the Earlwood property was mortgaged, secured by a sum of $340,000 which had been lent to the plaintiff's son by the bank to buy a concrete truck business. The plaintiff and the deceased guaranteed that loan and the repayments on it are still kept up to date by the plaintiff's son.

26 The deceased died, as I have already mentioned, on 9 June 2005. The motor vehicle was delivered up to the defendant after the deceased's death. The plaintiff paid the defendant $10,000 towards the funeral costs and a cemetery plot. This was paid out of a joint loan of $15,000 to Mr George made by the deceased to the plaintiff shortly before his death. The $10,000 was a repayment of that and the balance of the $15,000 has now been repaid to the plaintiff.

27 The proceedings commenced in April 2006 within time and, in due course, probate was granted to the defendant.

Eligibility

28 The plaintiff is an eligible person. Plainly, there is no dispute she was the deceased's de facto partner at the date of his death.

29 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:-

"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 Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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.
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. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

The plaintiff’s situation in life

30 The plaintiff is 70 years of age, single, and has no dependents. She suffers from problems with her right hip with tibial osteotomy, type 2 diabetes, aortic regurgitation, osteoporosis, arthritis, bronchitis and hypertension. She walks with a limp. Plainly she cannot work.

31 The plaintiff’s pension income has decreased due to the rent she has been collecting from the Enmore property.

32 In respect of the Earlwood property, there was a dispute as to whether her son, Bill Airfantis, has a one third share. At the time of the purchase by the plaintiff and the deceased they entered into a deed dated 13 June 1999. That deed was made between the deceased and the plaintiff as trustees of one part and the plaintiffs son Bill Aifantis, therein described as a beneficiary, on the other part.

33 The initial recital recited the terms for the purchase of the property at Shaw Avenue, Earlwood in consideration of the sum of $215,000; but then continued on with further recitals and the operative part is in these terms:

“AND WHEREAS the sum of $172,000 was borrowed for the Commonwealth Bank of Australia Enmore to complete the purchase AND WHEREAS the beneficiary will be responsible for the repayment as to one third of the said mortgage debt to the Commonwealth Bank of Australia and the pavement as to one third share of outgoings of the property on condition that the trustee hold one undivided one third share and interest in said property as trustee for an on behalf of the beneficiary NOW THIS DEED WITNESSETH:
1. That the trustee doth hereby declare that he holds the one third of his interest upon trust for the beneficiary upon the following terms and conditions:
(A) The trustee shall not sell or transfer or encumber the said property without the authority of the beneficiary.
(B) In the event of any sale or transfer lease or other account to the beneficiary as to the manner in which the net proceeds was arrived at."

34 There was also evidence from Mr Airfantis that he made regular weekly payments of between $500 and $700 a week to his mother, and the deceased, for a period of some three years. They were recorded in a book which is now lost and said to have totalled $85,000.

35 It also seems that both these sums were paid to his parents for the purposes of the reduction of the loan as he agreed in the deed but they may not have been paid to the bank. By five years later the loan had moved from $172,000 to $173,000 when it was transferred to Westpac at 1994.

36 The defendant’s argument was that his one-third interest was expressed to be conditional upon paying one third of the interest payment secured on the property, and that has not happened.

37 If one looks at the document it is the statement in the recital upon which the defendants rely for their submission. The usual rule with respect to the construction of deeds is that where the operative part is unambiguous, the recitals have no effect. This is felicitously illustrated in Odgers Construction of Deeds and Statutes, 5th Edition at page 150 in these terms:

“(a) Where operative part unambiguous the recitals have no effect. The reason of the rule is because ‘it is impossible by a recital to cut down the plain effect of the operative part of a deed.’ ‘The rule is that a recital does not control the operative part of a deed where the operative part is clear.’ The words here to be emphasised are plain ane clear.
So in Inland Revenue Revenue Commiossioners v Raphael Lord Warrington of Clyffe said the appeal involved the consideration of whether the words in the operative part of a deed are capable as a matter of construction of being construed and modified so as to give effect to the intention of the settlor as declared by the recitals. He quoted Lord Halsbury as saying:
‘I never in my life heard of the language of a deed which contained a perfectly unambiguous provision being twisted from the natural, ordinary meaning of the words by a preliminary statement of what the maker of the deed intended should be the effect and purpose of the whole deed when made.’

38 In that case, Lord Davey was also quoted as saying:

‘I take it to be a settle principle of law that the operative words of a deed which are expressed in clear and unambiguous language are not to be controlled, cut down or qualified by a recital or narrative of intention.’

39 And Lord Warrington himself said:

‘The fact is that the narrative and operative parts of a deed perform quite different functions, and ‘intention’ in reference to the narrative and the same word in reference to the operative parts respectively bear quite different significations. As appearing in the narrative part it means ‘purpose’. In considering the intention of the operative part the word means ‘significants’ or ‘import’ -- ‘The way in which anything is understood’ (Oxford English dictionary) supported by the illustration: ‘The intention of the passage was sufficiently clear.’”
On the other hand, where the words in the operative part are ‘susceptible of two constructions the context may properly be referred to for the purpose of determining which of the two constructions is the right meaning.’

40 And Lord Blackburn said:

‘I take the canon of construction to be that where the description of the premises assigned is clear and unambiguous, effect must be given to it by the court, even though convinced from other parts of the deed that it was not what the parties meant to say.’”

41 Odgers goes on to deal with the case where the operative part is ambiguous and refers to the case of exparte Dawes v Moon 17 QBD 275 at 286 where Lord Esher MR enunciated three rules in such a case:

1. If the operative part is ambiguous the recitals govern construction.
2. If the recitals are ambiguous and the operative part is clear, the operative part must prevail; and
3. If both the recitals and operative part are clear but inconsistent with each other, the operative part is to be preferred.

42 Clause 1, the operative clause, contains a declaration of trust which is only restricted by “the following terms and conditions”. Those conditions do not, as they quite easily could have, contain a condition of defeasance if the mortgage payments were not made.

43 In my view there is no ambiguity in the operative passages and therefore the recitals play no part in the construction of the grant. Even if they are both clear and inconsistent in the sense of the condition and the recital is not included in the operative part, the operative part must still prevail.

44 In my view the plaintiff holds one-third of the property on trust for her son, Bill Airfantis.

45 The plaintiff’s assets situation is as follows:

1. two-thirds share of Earlwood [$580,000.00] $386,666.66
2. one-half share of Enmore l[$750,000.00] $375,000.00
3. bank account $699.45
4. personalty $2,000.00
5. money owed by estate $2,500.00

Total $766,866.11

1. mortgage on Earlwood [Matsoukas $38,789.00] nil
2. one-half mortgage on Enmore [$44,277.00] $22,138.50
3. personal debt $2,887.00
4. costs order made on 3 March 2008 - amount to be assessed

Total $25,025.50
NetAssets $742,186.53

46 In respect of the Earlwood loan, Mr Matsoukas is irregular in his repayments of that loan and at times he has suggested he has repaid it all back.

47 The son Bill Afaintis has said that he does not wish to disturb his mother’s occupation of Earlwood and will not force a sale. However, if his mother did decide to sell it he would want his one-third share. His full financial situation is not before the Court but there is evidence that he has recently bought an investment property and borrowed $410,000 for that purchase. Whether the rent from that property covers the loan repayments is not known. His present venture has fortunately been on foot for four years.

48 It is plain that if he did fall on hard times and was sold up she would on present value only receive about $160,000 out of the proceeds.

49 So far as the income is concerned, the plaintiff receives a pension of $357 60 per fortnight. She collects all the rents from Enmore, not just her half, and these amount to $1,408 per fortnight. She meets all the outgoings and these, including the repayment of the loan, amount to $814 per fortnight. Her total expenses, including the Enmore expenses, amount to $1,202 per fortnight.

50 If one reverted to her entitlement at present her income would be $1,061.60 and her expenses would be $795 per fortnight.

51 It is necessary to consider the contributions the plaintiff has made to the estate of the deceased over the 37 years of this relationship. By far the most important was the financial contributions she made through the dressmaking business. As I mentioned, she worked in her own dressmaking business from prior to the commencement of her relationship with the deceased in 1972 until they commenced working together in 1974, and until 1997, when the business ceased, a period of 25 years, and those earnings were simply contributed to the relationship in one way or another. From 1997 to 1999 the plaintiff worked three days a week, the deceased having retired in 1994.

52 As I mentioned, the deceased worked for a year as a carpenter and this was the only outside job he had during their relationship. There was the contribution of the two claims for injuries, the payment of $20,000 and $9,500, and also the deceased's contribution himself of course of $29,000.

53 They purchased Enmore Road in 1975 using their own moneys from the business and $10,000 from the vendor with all repayments being made from earnings from the joint business. They borrowed moneys which were all eventually paid back by 1980. They purchased a property at Marrickville and that led to the purchase of the property at Earlwood with the plaintiff's son Bill Aifantis. About $21,000 from the sale of Marrickville went into the purchase of the Earlwood property.

54 There were repayments from the loan and I accept that the evidence of the plaintiff and her son is that an amount of some $85,000 was paid over that period of some three years.

55 There were, of course, other things that had to be done. The plaintiff son lived as part of the family for many years from when he was five years of age until he turned 32. The plaintiff seems, as well as doing her work in the business, to have done the household chores with the two of them sharing the shopping.

56 As a result of the various loans for the purchase of the car, the loan to Mr Matsoukas and George Georges, there were contributions made by the plaintiff because she was equally responsible for those loans when they were made. Fortunately, the loan to Mr. Georges has been repaid.

57 It is also necessary to consider the situation in life of others having a claim on the bounty of the disease. In this case the only relevant person is the defendant.

The situation in life of the defendant

58 The defendant is married, works as an excavator driver with his wife. His income from his 2007 tax return indicates an amount of $36,000 and his wife does part-time work for which she earns $300 a week. The defendant and his wife have assets valued at 23 February 2007 at $1,374,050. This includes two unencumbered properties worth $800,000 and $500,000 [the latter with his two children living therein], and superannuation of $167,000. They have no liabilities.

59 Compared with the plaintiff, he and his wife are in comfortable circumstances and the defendant is still able to work in his own business. It is plain the defendant was close to his brother, the deceased, during their lives and there was a continuous family relationship.

Discussion

60 It is necessary to see how the plaintiff says she has been left without adequate and proper provision for her maintenance, education and advancement in life.

61 Because of the financial contributions to the deceased’s estate and her non-financial contributions to his welfare, and having regard to her present financial situation, she seeks an order that she received the whole of the estate.

62 Although the plaintiff is not the deceased’s widow, it is useful to look at what has been said in respect to such claims before considering the application of such statements to what has been said in respect of claims of defacto spouses.

63 Widow's claims are frequently the subject of applications in this Court. The Court of Appeal in Goloski v Goloski (unreported 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April 1986. There his Honour said:

"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".

64 There have recently been reminders about the limited use of such formulations. In Marshall v Carruthers NSWCA Young JA said:

“73 It must be remembered that Powell J put his proposition as a “broad general rule”. However, there is in fact no “ standard former spouse” to which one can just apply that proposition as a rule of thumb.

74 Powell J’s broad general rule may not be a good guide as to what the Court will consider as the duty of a testator towards a spouse except in the case of a financially dependent spouse where there is a history of bringing up children with the deceased or in supporting the deceased while he was amassing his fortune. The broad general rule may well be inapplicable in cases of other spouses. Indeed, the cases in the first half of the 20th century show that as far as widowers were concerned, the proposition was quite untrue.

75 I also take this opportunity to reject Mr Ellison’s submission that a person who has a claim as a class (a) eligible person ipso facto has a stronger claim than a person who comes under class (b). Indeed, in many cases, such as where there are infant children, this may not be so.”

65 Palmer JA concurred in these sentiments.

66 The matter was again dealt within more detail in Bladwell v Davis & Anor [2004] NSWCA 170. In that case Bryson JA with whom Ipp JA concurred on this aspect said:

“12 There have been many statements in judicial decisions, including decisions in the Court of Appeal, generally to the effect that primacy of some kind is accorded to claims of widows for proper maintenance and advancement in life, including continuance of housing arrangements which they enjoyed during the lifetimes of their late husbands. These statements are not altogether uniform in expression, and should be understood as made in each case in relation to the facts under consideration; and those facts vary widely and in truth are unique to each particular case. “ Widow takes all” is not a rule which has been or could be established by judicial decisions: the Court cannot resign the functions which it has under s 7 of the Family Provision Act 1982 in favour of rules of thumb. A rule which was once followed which practically prevented ordering provision for an adult son who was fit to work has been abandoned.

13 Observations on the claims of widows were made by Powell J in Luciano v. Rosenblum [1985] 2 NSWLR 65 at 69-70 in these terms:

‘It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies.’


These observations were not made in the context of a competing claim or proved need by another eligible person, and were introduced by a guarded reference to a general rule and the absence of special circumstances. However they are frequently, almost universally cited in applications where provisions for widows are under consideration.

14 In Golosky v. Golosky NSWCA 5 October 1993 (unreported) the widow, second wife of the testator, was the applicant and the sons of the first marriage, the will beneficiaries whose interests were affected, were well off and did not assert financial need. The majority (Kirby P, Cripps JA concurring) ordered further provision for the widow, and Kirby P referred to Luciano v. Rosenblum briefly for comparison, but also said:

‘Matters such as these rule out an inflexible rule that every spouse or every widow is entitled, as of right and in every case, to look to a testator to provide accommodation for life. Such inflexible rules used to exist in this area, as for example the previous rule that an “able bodied son” was disentitled to a claim under the predecessor to the Act for that reason alone. That rule has now been abandoned in this State. See [ Hunter v Hunter and Ors (1987) 8 NSWLR 573 (CA) 575f] , 580f; cf Anderson v Teboneras and Anor [1990] VR 527 . So should inflexible rules about spousal provision.

15 In Hertzberg v. Hertzberg [2003] NSWCA 311 provision ordered by Acting Master Berecry for a widow, second wife of the testator, out of a large estate was confirmed by the Court of Appeal. There was no competing claim or circumstance of need of any will beneficiary. McColl JA said at [35] in the context of the claim of a widow for the matrimonial home (which in this case the claimant owns):

‘His Honour’s judgment recognised the community expectation that a testator should make provision for a widow to ensure that she can lead an independent and dignified life. That prospect is diminished when the widow does not have the benefit of the fee simple, but rather, a right of occupation of her home with a provision for expenses associated with that right being left in the hands of the executors. In this case the situation was exacerbated where, regrettably, the previously affectionate relationship between the appellants and the respondent had, as Acting Master Berecry found, completely broken down following the execution of the deed. Thus the situation in which the deceased may well have contemplated he had left the respondent appeared to have altered.


The statement in the first sentence of this passage should be understood in its context of a claim in a very large estate where there was no competing claim based on need.

16 In Sayer v. Sayer [1999] NSWCA 340 at [34] Sheller JA (with whom Davies AJA concurred) accorded primacy to the claim of a widow (of a second marriage) over the claim of a granddaughter who was an eligible person “in the circumstances and in accordance with prevailing community standards.” This does not in my opinion express any general principle of paramountcy.

17 In Cropley v Cropley [2002] NSWSC 349 at 56 Barrett J said:


‘When it comes to claims by adult children, it can be said at once that, if there is a competing claim by the widow and all claims cannot be fully accommodated, the widow’s claim should be afforded precedence in the sense that a demonstrated requirement for the allocation of resources in aid of the widow must be satisfied before any similarly demonstrated requirement for the allocation of resources in aid of an adult child. That a widow’s claim to maintenance out of the estate of her deceased husband is a claim which is “paramount” and “of a high order” is borne out by the judgments of Sheller JA in Sayer v Sayer [1999] NSWCA 340 (Davies AJA concurring) and Blackmore v Allen [2000] NSWCA 162 (Priestley JA and Foster AJA concurring). In the former case, Sheller JA described the relativities between the claims of the widow and those of an adult grandchild applicant (Francesca) as follows:

"In my opinion, the question is whether [the grandchild] has satisfied the Court that there is, in the circumstances and in accordance with prevailing community standards ( Permanent Trustee v Fraser (1995) 36 NSWLR 24 at 46 ), sufficient in the estate to provide for the widow’s proper maintenance and advancement in life and yet leave some amount out of which provision can be made for her.”


This was accepted as an accurate statement of the law by Palmer J in Latimore v Latimore (2003) NSWSC 364 at [59]. At [57] Barrett J proceeded to approach the applications according to the two stage approach described in Singer v Berghouse (1994) 181 CLR 201.

18 In my respectful view there is an inconsistency between an approach, in the context of competing claims, to the claims of widows as paramount, and the application to the facts and circumstance of each case of s.7 and the approach established by Singer v Berghouse . Preconceptions and predispositions are likely to be the source of inadequate consideration of the process required by the Family Provision Act 1982 .

19 In the application of the test in s 7, and of the exposition thereof in Singer v. Berghouse by Mason CJ, Deane and McHugh JJ at 409-411 it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v. Berghouse , in full and with reference to the instant facts. Defeat of the opponents’ claims does not necessarily follow from a demonstration, which the claimant can make, that all her needs with respect to income, home renovation, and provision for contingencies cannot be met if any provision is made for the opponents; indeed she could well demonstrate that even if the provisions of the will took effect without any modification, the provision for her is not adequate. That is not a demonstration that no claim by an eligible person can succeed; the claims and circumstances of the opponents also have to be weighed, and they too have their needs and merits.”

67 Interestingly Ipp J adopted this in para 1 of his judgment and also said:

“I agree with Bryson JA, for the reasons his Honour has stated, that 'it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse (1994) 181 CLR 201. I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others."

68 Stein AJA agreed with both judges.

69 In Marshal v Carruthers [2002] NSWCA 47 the Court was concerned with a claim by a de facto partner. Hodgson J had the following to say:

“63. The Master found that Ms Carruthers had a strong claim, and I agree with that ;finding. However, the strength of a claim of a surviving partner does, in my opinion, vary with circumstances. Although the Family Provision Act does, in some respect, equate de facto spouses with de jure spouses, this does not, in my opinion, make the existence or otherwise of a marriage irrelevant. In my opinion, a formal and binding commitment to mutual support through good times and bad, other factors being equal, adds strength to a legitimate claim. In my opinion also, the strength of a claim can be affected by the length of a relationship and contributions to the relationship. One factor which may be particulary important in a claim by a woman is that a woman may have, to the detriment of her own financial prospects, taken a major role in raising the children of herself and the deceased.
64. The Master referred to the following statement of principle which appears in Luciano v Rosenblum [1985] 2 NSWLR 65 at 69:
‘It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforseen contingencies.’
65. I do not think it is to be assumed that this statement is to apply in all cases, particularly where factors such as those I have mentioned are absent. In my opinion, it is not clear that this statement would apply to applications by widowers. The difference in attitude that the Court may take to applications by widowers is due in part, I think, to economic disadvantages which women still fact. One important aspect of this is the economic disadvantage occasioned by the greater responsibility which women often take in looking after children. That factor is of course absent here.”

70 While acknowledging his Honour’s comments in respect of the strength of the marriage bond there are a number of factors which are of importance in this case. The first is the relationship was a long one, 32 years. Second, the plaintiff’s son lived with them from aged five years to 32 years. Thirdly, and most importantly, both parties worked for the majority of the time in their joint business, which was the endeavour which allowed them to have the assets which they had achieved by the time of the deceased’s death. The plaintiff had no time out of the workforce to look after the child and the deceased apart from one year did not have any separate occupation.

71 There are other complications in this matter. Unfortunately both houses are not in a good state of repair. Each party has called evidence of repairs needed to Earlwood. The defendants builder estimates a cost of $108,090.65, and the plaintiffs builder $183,500. The defendant’s builder suggests that $35,988 should be spent as soon as possible and the rest [$72,102] should be done in a warmer season.

72 So far as Enmore is concerned, it required immediate repairs of $30,900 as it is non compliant with current Building Code of Australia requirements.

73 There is no cash in the estate and therefore it will be necessary for the Enmore property to be sold to at least meet the defendant’s costs of $96,474.

74 The defendant has endeavoured to meet this difficulty my making an offer to purchase the plaintiff’s half share of the Enmore property at its present value less half the mortgage in the sum of $353,997. Nothing was said as to costs but presumably it would be on the basis that the plaintiff should bear her own costs and the defendant’s costs should come out of the estate, namely that part of Enmore retained by the defendant.

75 It was also on the basis that the estate would forego the estate’s share of rental not received.

76 This suggestion has the merit that it does not leave the plaintiff with the burden of managing Enmore with its need for repairs. Her income situation would improve. After allowing for her costs she would need to renovate Earlwood and use the balance to provide an income to replace that received from Earlwood.

77 When cross-examined as to whether she had a need for the Enmore property she replied with this evidence:

“I paid for it because I have worked for it.”

78 This is an understandable emotional response but it does not necessarily govern what is the appropriate solution for the plaintiff’s case.

79 She has also made it plain in submissions that her preferred course, if she received the whole estate, would be to sell Earlwood and move back to the flat at the back of Enmore. If she did this she would be able to lease the shop and live in the house above it. She made it plain in her evidence that she did not wish to live in a unit.

80 It is necessary to step back from the plaintiff’s emotional involvement with the properties and see what is the appropriate provision the plaintiff should received from this estate. What stands out about this case is the three factors I have referred to above.

81 The only thing that distinguishes this case from the type of situation in cases such as Rosenblum is the absence of the marriage vows. There is also the work the plaintiff did in the business. There was some suggestion that there was some unhappiness in the relationship but I do not place any great weight on this and it seems the parties continued their relationship throughout without any separation.

82 I think in those circumstances to the extent that the estate can provide it she should have a house, sufficient income and a fund for contingencies. Her state of health indicates the need for such a fund.

83 If she were to receive the whole estate there would need to be deducted the costs of $200,000 plus whatever was necessary to repair the Enmore property. From the sale of Earlwood she could expect to receive, after allowing for these items, the sum of about $250,000. She would be wise to pay off the loan on Enmore, which would reduce her capital after allowing for the costs order against her, to about $195,000. She could then live in Enmore, receive some rent from the shop, and have a small fund for contingencies.

84 However, such a plan would be contingent upon her bank transferring the mortgage securing her son’s loan to Enmore presumably after he had reduced his indebtedness to the bank by his share of the sale price. She would still be subject to the contingent liability in the amount of $150,000 in respect of her son’s loan and $38,789 in respect of the Matsoukas loan. This is hardly a generous result.

85 In contrasting this, if the defendant’s offer was accepted she would need to renovate Earlwood at say a cost of $108,000 and meet her own costs. She would have left $150,000 and no income from the shop at Enmore. She would still be subject to the contingent liabilities of $338,000 and $38,000.

86 I think it is appropriate that the plaintiff should have some flexibility in what she wishes to achieve. The estate is not large and in my view the plaintiff should receive the whole of the estate.

87 The orders I make are as follows:

1. In lieu of the provision in the will of the deceased for the disposition of his estate, that the plaintiff receive the whole of the estate of the deceased.
2. That the defendant’s costs on an indemnity basis and the plaintiff’s costs on the ordinary basis be paid or retained out of the estate of the deceased, such order not to affect the plaintiff’s liability for the costs order made on 3 March 2008.
3. I direct the exhibits be returned.
4. I reserve liberty to make submissions on costs if that is necessary. I stand over the matter to my list at 9.45 am on 2 September 2008.

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05/09/2008 - Corrected name of solicitor for plaintiff - Paragraph(s) Not applicable