Simmons v Simmons

[2019] NSWSC 1050

Supreme Court

New South Wales

Medium Neutral Citation:

Simmons v Simmons [2019] NSWSC 1050

Hearing dates:

17 & 18 April; 17 May; 17 July 2019

Date of orders:

22 August 2019

Decision date:

22 August 2019

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Contracts Review Act claim dismissed. No resulting trust found for the second defendant’s benefit. Notional estate designated. Order for family provision made in the sum of $140,000. The plaintiff’s costs are capped at $80,000 but his recovery against the second defendant is reduced to 75 per cent of his capped costs, a maximum of $60,000.

Catchwords:

TRUSTS – resulting trust – plaintiff is the grandson of the second defendant and the son of the first defendant and of her deceased husband – second defendant alleges she supplied all the purchase money to acquire real property in Cootamundra that she purchased as a joint tenant with the first defendant and with the deceased – plaintiff alleges the second defendant agreed to loan the purchase money for the Cootamundra property to the deceased and to the first defendant and that they held the Cootamundra property beneficially, owing only a liability in debt to the second defendant – whether the first defendant and the deceased held their respective shares in the Cootamundra property on resulting trust for the second defendant – Cootamundra property sold and the proceeds applied to purchase another property, the Emerald Drive property, in the names of the second defendant, the deceased and the plaintiff – at about the time of the sale of the Cootamundra property, the deceased and the first defendant separate and reach a property settlement under the Family Law Act but are not divorced – the Emerald Drive property in turn was sold and its proceeds applied to purchase the final property, which was held in the name of the second defendant – final property sold to provide an accommodation deposit, so the second defendant can have secure accommodation in an aged care facility – whether the second defendant is the beneficial owner of 100% of the final property and in turn of the accommodation deposit.

 

CONTRACTS – Contracts Review Act 1980 – unconscionable conduct – the Emerald Drive property held in the name of the plaintiff, the deceased and the second defendant as joint tenants – plaintiff alleges the deceased and the second defendant pressured him into surrendering to them his joint tenancy in the Emerald Drive property for no consideration and without legal advice – second defendant claims no pressure was applied to the plaintiff and that the Emerald Drive property was always owned by her beneficially – whether the surrender of the plaintiff’s joint tenancy should be set aside under the Contracts Review Act or in equity.

 

SUCCESSION – family provision – plaintiff one of three children of the deceased, who left his residuary estate under his will to them in equal shares – estate of the deceased was fully distributed to the first defendant, the deceased’s wife, before trial – whether the plaintiff was left under the will of the deceased without adequate provision for his education maintenance or advancement in life – whether further provision should be made out of the estate or notional estate of the deceased for the plaintiff.

NOTIONAL ESTATE – family provision Succession Act Part 3.3 – the deceased’s estate is fully distributed – at time of his death, the Emerald Drive property was held in the name of the deceased and the second defendant as joint tenants – the Emerald Drive property sold and the final property purchased in the second defendant’s name – the final property was sold to provide an aged care facility accommodation deposit for the second defendant – deceased fails before his death to sever the joint tenancy in the Emerald Drive property – whether final property’s proceeds, in the form of the accommodation bond, may be designated as notional estate – whether designation of the final property’s proceeds as notional estate would interfere with the second defendant’s reasonable expectations in relation to that property.

Legislation Cited:

Contracts Review Act 1980
Family Law Act 1975
Probate and Administration Act 1898
Real Property Act 1900
Succession Act 2006

Cases Cited:

Corin v Patton (1990) 169 CLR 540
Detheridge v Detheridge [2019] NSWSC 183
Drury v Smith [2012] NSWSC 1067
Evans v Levy [2011] NSWCA 125
Ford by his tutor Watkinson v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42
Irvine v Irvine [2008] NSWSC 592
Kosmas as Administrator of the Estate of the Late George v Cherote (Supreme Court of NSW, Simos J, 14 March 1996, unrep)
Ludwig v Public Trustee (2006) 68 NSWLR 69
Nelson v Nelson (1995) 184 CLR 538
Penny Nominees Pty Limited v Fountain (No 3) (1990) 5 BPR 97,348
Public Trustee v Grivas [1974] 2 NSWLR 316
Re Speck (1983) 51 BCLR 143
Sammut v Kleemann [2012] NSWSC 1030
Singer v Berghouse (No. 2) (1994) 181 CLR 201
Wardy v Salier [2014] NSWSC 473
White v Shortall (2006) 68 NSWLR 650
Wright v Gibbons (1949) 78 CLR 313

Texts Cited:

Sir Edward Coke, Coke upon Littleton (1628)
Megarry and Wade, The Law of Real Property (3rd Ed, 1966)
B. Edgeworth, Butt’s Land Law (7th Ed, Law Book Co – Thomson Reuters, 2017)
J.D. Heydon and M.J. Leeming, Jacobs’ Law of Trusts in Australia (8th Ed, 2016, LexisNexis Butterworths Australia)

Category:

Principal judgment

Parties:

Plaintiff: Luke Simmons
First Defendant: Valma Gai Simmons as executor of the estate of the late Peter Charles Simmons
Second Defendant: Romona May Simmons

Representation:

Counsel:
Plaintiff: E. Cohen
Second Defendant: G. Waugh SC

  Solicitors:
Plaintiff: Mark Edward McAlpine, Camden Haven’s Local Lawyer & Conveyancer
Second Defendant: Kevin Patrick Byrnes, Byrnes Lawyers

File Number(s):

2017/77282

Publication restriction:

No

Judgment

1. In these proceedings, the plaintiff, Luke Simmons, sues his mother, Valma Simmons as first defendant, and his grandmother, Romona Simmons as second defendant. Valma Simmons is the executrix of the estate of Luke’s late father, her husband, Peter Simmons, who died in April 2016.

2. The parties and the principal actors in the proceedings are all from the one family and referred to one another in their evidence by their first names. For convenience, and without intending any disrespect to any party, the Court will mostly do the same in these reasons.

3. Valma and Peter Simmons had three children: Luke; a daughter, Loretta; and another son, Adam. Romona now lives in a nursing home and is legally incapable, so Adam has been appointed as her tutor. Notice of the proceedings was given to Loretta, but she declined to take part in them.

4. The proceedings involve three interrelated contests. The first contest is Luke’s claim under the Contracts Review Act1980 to set aside a January 2015 transaction, in which he divested to Peter and Romona his legal and beneficial interest as a joint tenant with them in certain real property known as the Emerald Drive property. The second contest arises from one of Romona’s defences to Luke’s first claim: Romona says Luke always held his interest as joint tenant in the Emerald Drive property on resulting trust for her, so that, in January 2015, he was not divesting himself of any equitable interest in the property.

5. The third contest is Luke’s claim for family provision from Peter’s estate under Succession Act2006. This claim is in two parts. First, Luke claims he has been left without adequate provision out of Peter’s estate for his maintenance, education and advancement in life. But second, Peter’s estate has been fully administered and holds no remaining assets. Luke claims that his late father, Peter, did not sever his joint tenancy with Romona in the Emerald Drive property before his death, so that this property thereby devolved upon his death to Romona. Luke says, and the defendants contest, that Peter’s interest in the Emerald Drive property (and in turn in its sale proceeds) are now available as notional estate under Succession Act, Part 3.3 to meet Luke’s present family provision claim.

6. Luke and Romona were the principal contestants in these three disputes. They were both represented by counsel. Valma played a more peripheral role in the proceedings. She represented herself. For convenience, these three main contests are now profiled in more detail before the Court sets out the full narrative of its factual findings.

Three Contests Between Luke and Romona

7. In the first contest, Luke seeks to set aside, under the Contracts Review Act, a transaction in January 2015. Before this transaction, he was one of three joint tenants (together with Peter and Romona) in the Emerald Drive property. He claims he held a legal and beneficial interest as a joint tenant in this property. He certainly held a legal interest as joint tenant. He executed a transfer removing himself as one of the three joint tenants and leaving the other two as joint tenants. This January 2015 transfer is referred to throughout these reasons as the “Emerald Drive Transfer”. Luke contends that he executed this transfer as a result of the undue influence, pressure and unconscionable conduct of his father and grandmother, and that he did not have the benefit of any legal or other independent advice before doing so.

8. The Emerald Drive Transfer was not lodged for registration until May 2016. In the meantime, Peter Simmons died in April 2016. The filing of a Notice of Death for Peter enabled the Emerald Drive property to be conveyed to a purchaser in a sale on behalf of the sole surviving joint tenant, Romona. Luke says that if this January 2015 Emerald Drive Transfer were to be set aside, he and Romona would have to be treated as joint tenants of this property at the time of Peter’s death. But the Emerald Drive Transfer has not as yet been set aside, and Romona sold the property and applied the proceeds of sale of the property to purchase other real property in her name, referred to in these reasons as “the final property”. And the final property has since been sold and its proceeds used as a financial deposit to support Romona’s accommodation in the aged care facility where she now resides.

9. In answer to Luke’s claim, Romona contends that: (1) this January 2015 transaction was not unconscionable and does not warrant Contracts Review Act intervention; and (2) even if it did, final relief should be refused as Romona has since changed her position by applying the proceeds of sale to support her aged care accommodation, such that a grant of relief would now work hardship upon her.

10. But in further answer to Luke’s primary claim, Romona raises what has become the second major contest: Romona says that even if the Emerald Drive Transfer were to be set aside, the Emerald Drive property would still have been hers in equity. She contends that Luke never held a beneficial interest in the Emerald Drive property, as it was always held on resulting trust for her benefit.

11. The resulting trust Romona alleges arises from the circumstances of the earlier purchase of a property in Cootamundra in January 2014. The sale of the Cootamundra property in turn became, Romona alleges, the source of funds for the acquisition of the Emerald Drive property. Romona says she supplied all the purchase money to acquire the Cootamundra property that was purchased in a joint tenancy among Valma, Peter and herself, and that the Cootamundra property was at all times held by the other joint owners on resulting trust for her. When the Cootamundra property was sold, Romona says that the proceeds of sale substantially funded the purchase price of the Emerald Drive property and that, although the Emerald Drive property was placed in the names of the three joint tenants, it too was always held on resulting trust for her, because of her financial contribution through the Cootamundra property sale proceeds.

12. Luke answers Romona’s resulting trust claim by contending that, when the Cootamundra property was acquired, Romona agreed to loan the purchase money for that property to Peter and to Valma and that, as a result, each of the registered proprietors held the Cootamundra property beneficially, but with Peter and Valma having a liability only in debt to Romona. At about the time of the sale of the Cootamundra property, Peter and Valma separated and reached a property settlement under the Family Law Act 1975, but they did not divorce.

13. As a result of the family law settlement between Valma and Peter, Valma’s share in the Cootamundra property was transferred to Peter. Luke’s case is that this transfer was of both the legal and beneficial interest in the Cootamundra property, the proceeds of which Peter then applied to the acquisition of the Emerald Drive property. The resolution of Romona’s resulting trust defence requires consideration of the circumstances in which the Cootamundra property was acquired and sold.

14. The third contest is Luke’s claim for family provision out of Peter’s estate. On this claim, Valma, as executrix of Peter’s last will, represents Peter’s estate. After leaving a legacy to Valma, Peter’s will left his residuary estate in equal shares to his three children. But after a distribution of the legacy to Valma, Peter’s estate is now fully distributed. Luke claims that, by reason of his personal circumstances, he was left under Peter’s will without adequate provision for his education, maintenance or advancement in life. He now seeks further provision out of Peter’s estate.

15. But even if he is entitled to further provision, Peter’s estate is now fully distributed. In the alternative to his primary claim, Luke claims that property in Romona’s name qualifies to be designated as Peter’s notional estate under Succession Act, Part 3.3. Luke says that, at the time of his death, Peter at least held the Emerald Drive property with Romona as joint tenants. Luke says that: as Peter failed before his death to sever his joint tenancy in the Emerald Drive property with Romona, the Emerald Drive property is liable to be designated as notional estate.

16. But the Emerald Drive property has been sold and the final property was purchased in Romona’s name. That property in turn has been sold and the proceeds applied to provide the accommodation deposit for Romona’s current accommodation at an aged care facility. The second issue on the third contest is whether the proceeds of the final property, now held in the form of the accommodation bond, should be designated as notional estate. Romona argues that it should not be so designated, because such a designation would interfere with her reasonable expectations in relation to that property.

17. These three contests are resolved later in these reasons, once the Court has made necessary findings in its factual narrative below.

18. The proceedings were heard on 17 and 18 April, 17 May and 17 July 2019. Ms E. Cohen of counsel, instructed by Camden Haven’s Local Lawyer & Conveyancer, appears for the plaintiff. Ms Valma Simmons, the first defendant, appears for herself. Mr G. Waugh SC of counsel, instructed by Byrnes Lawyers, appears for the second defendant.

19. The Court rejected an application to amend the Statement of Claim during the hearing. Before the factual narrative commences, the Court provides short reasons for this rejection decision, as it foreshadowed at the time it would do.

An Application to Amend the Pleadings

20. On the second day of the hearing, Luke sought to file a Further Amended Statement of Claim. This application was the response to submissions that the existing Statement of Claim inadequately pleaded matters that were being put on Luke’s behalf in oral submissions on the first day of the hearing. To crystallise the issues, the Court directed that an amended pleading be provided by Luke overnight, so that Valma and Romona could ascertain whether or not they were in a position to meet these contentions.

21. The amended pleading was served. It contained three major new allegations. First, an allegation was made that Peter owned two thirds of the Cootamundra property: new prayer for relief 6A. Second, an allegation was made that Valma had distributed from the estate a sum of $100,000 to herself and that this sum was liable to be designated as notional estate: new prayer for relief 7A. And third, an allegation was made that various other property transactions in which Valma was involved at about the time of her family law settlement with Peter were also liable to be designated as notional estate: new prayers for relief 7B to 7D.

22. The first amendment, adding prayers for relief 6A, was allowed. The new paragraph alleged that Peter had a two thirds interest in equity in the Emerald Drive property. That issue had been well notified in the evidence and submissions, and Romona was able to deal with it.

23. The same cannot be said for the other two amendments adding prayers for relief 7A to 7D, all of which sought to designate as notional estate particular property, other than Romona’s accommodation bond. The main problem with both claims is that they had not been clearly articulated on the pleadings, they directly affect the financial interests of Valma, and she was legally unrepresented and could not readily consider and respond to them during the hearing.

24. Luke had, for some time before the hearing, attempted to obtain information about various transactions in which Valma had allegedly been involved at the time of the family law settlement. Luke claims that by these transactions, Valma had allegedly diverted joint matrimonial property to herself. Luke had made efforts to get information from the then solicitors for Valma about these alleged transactions, but had not been able to do so. Reasonable but unsuccessful efforts had been made on behalf of Luke to try and obtain a response to a subpoena and notice to produce for documents about these transactions, in anticipation of the present hearing.

25. It was understandable that Luke did not seek to amend without proper knowledge of these transactions. On the other hand, the lack of amendment meant that the other parties, and particularly Valma, were not able to understand that the investigation of these transactions might lead to orders being sought against Valma’s personal property.

26. After considering the matter, the Court decided to decline the application for the other two amendments for the following reasons. First, the case sought to be made under new prayers for relief 7B to 7D was weak. The alleged transactions leading to Valma’s acquisition of matrimonial property were said to be in late 2014 or early 2015. They were thus made more than one year before the death of Peter, in April 2016: see Succession Act, s 80. This meant that to succeed in having this property designated as notional estate, Luke would have had to have shown that, when they occurred, the transactions were intended wholly or partly to deny or limit the provision that might be made in his favour out of the estate. Proving that intent as early as 2014 would have been very difficult.

27. Prayer for relief 7A sought to designate the distribution of $100,000 to herself as executrix as notional estate. Valma’s case, as explained from the bar table, was that she had already applied much of that sum for various purposes. She had at least an arguable basis to contend against proposed prayer for relief 7A that her reasonable expectations in relation to the property should not be interfered with, because she had dealt with some of the money before the proceedings were commenced and before she was notified about the claim: see Succession Act, s 87. The case that Luke articulated in response to these potential defences did not appear to be very persuasive.

28. But as to the distribution of the $100,000, as will be seen below and as Luke argues based on the existing pleading, it does not need to be designated as notional estate. To the extent that the $100,000 has passed through Valma’s hands, Luke submits she is still holding part of Peter’s actual estate, although distributed to herself. She has not advertised in accordance with the Probate and Administration Act 1898 before distributing this estate to herself. Luke says therefore she is still accountable to that extent to the estate’s external creditors, such as Luke on his claim for family provision.

20. Second, it would have been inevitable, had the amendment been allowed, that Valma would have been allowed an adjournment to obtain legal advice and prepare evidence and submissions in reply. That adjournment may have been for a substantial period whilst Valma and Luke each gathered evidence. This is not a large estate and the potential notional estate may only be a few hundred thousand dollars. The Court should not readily contemplate an adjournment incurring further legal costs and thereby further depleting the funds of the estate or any notional estate.

21. And Luke was acknowledged to be impecunious. A costs order against him may not be able to be recovered. Any delay that was occasioned by an adjournment may therefore not be able to be effectively compensated. The defendants may well therefore have suffered non-compensable pecuniary and non-pecuniary losses through an adjournment.

22. Third, Luke could have made his position clear much earlier and has delayed making his application to amend. Some of the situation was contributed to by Valma’s change of solicitors and her delay in producing documents. Documents that explain what happened to other family businesses and properties may exist. Whether it was really cost effective to pursue them from Valma was always a difficult question. But despite that, if Luke really was going to pursue this issue, he should have done so much earlier.

23. For these reasons, all but one of the amendments that Luke sought were declined.

Romona, Valma, Peter and Luke Simmons – From the Early Years to 2017

33. The following is a narrative of the relevant history. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded in these reasons. For reasons of economy, this narrative does not include reference to versions of the facts that have been rejected. More detailed factual findings are also made later in these reasons, when the three principal issues are resolved.

34. On the claim for family provision, early family relationships within the Simmons family are relevant. But the principal transactions leading to the three contests occur in the period 2014 to 2017. This factual narrative covers the 2014 to 2017 period in the most detail, but it begins with an account of some early family history.

Luke Simmons and Other Family Members

35. Luke was born in 1979 and was aged 39 at the time of the hearing. Peter Simmons was the only child of Romona Simmons. Romona was 90 years of age at the time of the hearing. Despite their marital differences, Peter remained married to Valma right up until his death. They separated in about March 2014. They arranged a property settlement in May 2014, but never divorced.

36. Valma has long been estranged from Luke. Relations between Adam and Luke are distant, as appear to be the relations between the other sibling, Loretta, and Luke.

37. Luke was an unusual witness. He had a persistent manner, with a tendency to relentlessly pursue his own interpretation of family history. He was single minded in persevering with particular ideas. He could clearly do so to the point of being unsociably difficult. He showed little insight into the interest or feelings of other people. This quality seemed to be the source of some of the past conflicts in his life. But despite all this, under cross-examination, he was prepared to make concessions that he could be wrong in aspects of his evidence, which showed some degree of flexibility. The Court approached his evidence cautiously, because of the risk that his fixed ideas would distort his memories of the past. His evidence was often unreliable.

38. Adam gave formal evidence that was ultimately not in contest and did not test his credibility. The Court accepted him as a witness of truth. Romona is not capable of giving evidence. She is in a nursing home and has a tutor in the proceedings, Adam. Her affidavit was read, but she was not cross-examined. It was given little weight as a result. But despite that, where Luke is disbelieved, Romona’s evidence, taken when she was in better health, is often the most rational account of events.

39. Luke was born prematurely and from birth has suffered from a mild form of cerebral palsy. In the first decade of his life, he had many appointments with medical specialists and physiotherapists to assist in treating this condition. There is no doubt that he has suffered a significant disability throughout his life. It has impaired his employability, his capacity to interact easily with other people, and consequently his quality of life. Having seen him in the witness box, the Court has little doubt about the all-pervading effect of his disability upon his everyday functioning and opportunities for advancement in life.

The Early Years

40. When Luke was about eight or nine, the family moved to Port Macquarie. He went to the local primary school. But when he was about to enter high school in about 1991, the family moved to Melbourne, so Peter could pursue work opportunities there. They finally moved back to Port Macquarie in about 1996, in Luke’s final year of school. He says, and the Court accepts, that the move back to Port Macquarie disrupted his schooling and prevented him completing the HSC in Melbourne. It is apparent from Luke’s presentation to the Court and his, at times, sophisticated use of language, that he is intellectually able. Quite apart from the effect of his disability, some disadvantage to his schooling from these family moves can readily be inferred.

41. Instead of undertaking his HSC, Luke was sent to work in the family printing business that opened up in Port Macquarie. Luke undertook some basic TAFE courses in computing, with a view to getting a position in the IT industry. But he found working at the family printing business difficult. He did not get on with his father well. Luke’s perception was that his father, Peter, was controlling and inflexible. The truth is Luke had some of these characteristics himself. The Court accepts that Luke worked in the family business between 1996 and about 2001, in part because he was afraid of his father who “who would not let him leave”.

42. The Court accepts that Luke’s disability attracted a degree of abuse from within his own family as he grew up. His perception is that his father belittled him and bullied him. Whatever be the objective situation, this is certainly how the family dynamic came across to Luke. So it can at least be inferred that whatever steps were taken to reassure Luke about his disability, and aspects of his personality, they did not work.

43. Luke undertook an apprenticeship related to his work as a printer, but he says he was bullied into it by his father. The Court accepts this is his genuine perception of what happened. But the apprenticeship had some advantages. It allowed Luke to travel for a few weeks at a time to Sydney, where he stayed with his paternal grandmother, Romona, and his grandfather. He got on particularly well with his grandfather.

44. But Luke has a volatile personality. Working with his father was unlikely to last long. A blow-up occurred in 2001, about the quality of a particular printing job. Exactly what happened does not now matter. But Luke says that his father, Peter, blamed him and other people, including Valma, for the error. Luke says that by this time, he could no longer accept his father’s abusive behaviour towards other family members, especially his mother, and he decided to leave work with his father. He moved out of home at the same time and into rental accommodation in Port Macquarie. He obtained employment at a local newspaper.

45. Luke found coping with his disability very challenging when he was away from home. He turned to drugs for a period. Luke has worked through that problem and no longer takes drugs.

46. The experiment of living away from home was short-lived. After about six months, he moved back. The move home lead to conflict between Peter and Luke. Luke presents as tense and wound up much of the time. He carries a slightly suspicious outlook on the world. It is not difficult to infer that he would have readily fallen into situations of conflict and misunderstanding back at home. After a while, such conflict had Luke thrown out of the house. He was living on the streets, with friends, or in temporary accommodation. Luke says, and the Court accepts, that this indeed was his pattern of existence for much of his life while the deceased was alive.

47. The Court accepts Luke suffers from both anxiety and depression. While he was working at the newspaper, he was encouraged to try and purchase a home unit in Port Macquarie. He saved enough for a deposit. The unit was purchased. But in 2006, he could not keep up the payments. His depression and anxiety prevented him from attending work. The unit was repossessed and sold. He lost much of his investment. But his parents were able to take the benefit of some residual surplus upon the sale, which meant they were not entirely out of pocket.

The Simmons Family Moves to Cootamundra – March 2014

48. After living, working and building a business in Port Macquarie over many years, Peter and Valma Simmons and Peter’s mother decided to liquidate their home, their business and their business premises and move together to Cootamundra in south-western New South Wales.

49. Prior to the sale of their Port Macquarie real estate business, and domestic assets, Peter and Valma decided to purchase a home at Cootamundra in the names of all three as joint tenants. It is not in contest that Romona paid the full purchase price for this property. Luke contended that this was on the understanding that a two thirds share of the purchase price, representing Peter’s and Valma’s interest in the property, would be repaid to Romona when Peter and Valma’s matrimonial home, commercial premises and business in Port Macquarie were all sold. This was said to be a convenient arrangement within the family, because Romona had sold her home at Port Macquarie before the other sales were finalised.

50. Romona’s evidence supports Luke’s case on this issue. She says she paid for the Cootamundra property on the understanding that it would go into all three names, and Peter and Valma would pay her back from the sale of their pre-2014 residence in Port Macquarie, and the sale of their commercial premises and business there. The Court accepts Romona’s evidence that Peter and Valma said to her, “You pay for the property in Cootamundra but put it in your name and our names. We’ll pay you our two third’s share when we sell our home at Lighthouse Beach”. She agreed with their request.

51. The Cootamundra purchase settled on 20 January 2014. Valma, Romona and Peter became the registered proprietors. Not long afterwards, Romona and Peter moved into the Cootamundra property. Valma did not follow immediately, due to increased marital tension between herself and Peter.

52. In March 2014, Valma completed the sales of the Port Macquarie matrimonial home for $520,000 and the couple’s commercial premises for $300,000. She moved to Cootamundra. But a short time later, she announced that she was separating from Peter. This came as a great shock to Romona, who was unaware that their relationship was poor. Just where the proceeds of sale of these properties went has been the subject of debate during these proceedings.

53. Luke contends, and the Court accepts, that his loyalties after this separation worked to his disadvantage within the family. He says that in response to the separation, his siblings, Loretta and Adam, sided with his mother, Valma. He remained loyal to his father, Peter. Luke’s evidence is supported to a degree by Romona, who says that Adam sided with his mother in this family dispute. A combination of Luke and Romona’s evidence is sufficiently strong to infer that this is what probably happened.

54. Luke alleges that Valma appropriated all of Peter’s superannuation and other liquid funds at the time of the separation. But there is very little objective evidence to support this allegation or to show what happened to those funds: Valma has given no evidence about them and Peter is deceased. But Romona’s evidence about what Peter said to her on this subject strongly supports the inference that Peter concluded Valma had access to their superannuation and had used the monies from the sale of their joint assets. What happened to these sale proceeds is unexplained in the evidence; although, as will be seen, some inferences can be drawn from the family law settlement that Peter and Valma reached.

55. That Romona knows so much about Valma’s use of matrimonial funds supports the inference that she did seek repayment from Peter of the money she had advanced to acquire the Cootamundra property and that she expected to be repaid. Her evidence was that she was going to be repaid by her son and daughter-in-law for her advances to them. Romona was upset about Valma’s conduct, in part, because it prevented her being quickly reimbursed for her advances.

The Family Court Settlement – May 2014

56. Peter and Valma’s separation and continuing marital differences led to the negotiation of a family law property settlement between them in May 2014. The precise details of their negotiations are not known.

57. On 23rd May 2014, the Family Court of Australia made orders between Peter and Valma, requiring Valma to pay $100,000 to Peter, and to transfer Valma’s share of the Cootamundra property to Peter. The text of the relevant orders was as follows:

“1.   That within seven (7) days of the date of these Orders the Wife pay to the Husband the sum of $100,000.00, in addition to the $42,000.00, the Wife has already paid to the Husband.

2.   That within 28 days the Wife do all such acts and things and sign all such documents as may be required to transfer to the Husband at the expense of the Husband all of her right, title and interest in the real property situate at and known as 27 Ross Friend Place, Cootamundra 2590 being the whole of the land more particularly described in certificate of title folio identifier 11/1055143.”

58. Order 3 of the 23 May 2014 orders required the wife to pay all the parties the 2013 and 2014 tax liabilities associated with the sale of their business, commercial premises and accountant’s invoices as they fell due. Order 4 recognised that each party was entitled, to the exclusion of the other, to all chattels and financial assets in each of their names at that time. This represented a complete separation of property based upon what they then held.

59. The structure of these orders is a basis to infer that Valma did appropriate some matrimonial property to herself before May 2014. In substance, these orders mean that she could keep that property if it was by then in her name, or if it had been realised and turned into financial assets in her name. In exchange, Peter could have Valma’s interest in the Cootamundra house and the sum of $100,000. Unless she had informally retained some matrimonial property, objectively speaking the settlement looked quite unfair to her. On the known facts, it seemed a perfectly rational settlement that Peter should take the remaining asset that he could control without launching into litigation to claw back assets that Valma had appropriated to herself.

60. On their face, these orders dealt with the Cootamundra property as though Peter and Valma owned beneficially the interests registered in each of their names. No suggestion emerges in these orders that any part of the Cootamundra property was owned beneficially by Romona.

61. Pursuant to the Family Court’s 23 May 2014 orders, Valma transferred her share in the Cootamundra property to Peter on 10 June 2014.

Back to Port Macquarie – August 2014

62. The Cootamundra adventure was short lived. Once the Family Court settlement had occurred, Peter resolved to return to Port Macquarie with his mother, Romona. Peter and Romona could then decide together where to live next. On 12 August 2014, they sold the Cootamundra property and moved temporarily into rented premises back in Port Macquarie. In the course of the sale, Valma was removed from the title of the Cootamundra property through a transfer she signed releasing her interest as join tenant in that property.

63. Later that year, Peter and Romona (and Luke) purchased a property in Emerald Drive, Port Macquarie, for $499,000. On acquisition, the transfer dated 5 December 2014 transferred the fee simple in the property to each of Peter, Romona and Luke as joint tenants. It was registered on 12 December 2014. Luke acknowledges that he did not provide any of the purchase money for the acquisition of the Emerald Drive property. Romona’s affidavit evidence is that Peter did not provide any of the purchase monies either and that she provided all of them herself. Luke contests this, but was not able to cross-examine Romona about it.

64. It can safely be said that the proceeds of sale of the Cootamundra property funded the purchase of the Emerald Drive property. There was no other source of funds. But whether or not those funds were Romona’s beneficially, as she claims, is an issue to be determined later in these reasons.

65. When they returned to Port Macquarie, Peter and Romona were reunited with Luke. Luke says, and the Court accepts, that their return to Port Macquarie at that time was beneficial to him. Peter now favoured Luke. He was the only one of Peter’s children who had not sided with Valma on the marriage breakup. As a result, when Peter and Romona came back to Port Macquarie, Luke moved in with his father and grandmother at their new Port Macquarie rented premises.

66. There is much to be said for Luke’s version of events about this time. It is difficult to understand, other than upon his reasoning, why it was that Luke was accepted into a close family relationship with Peter and Romona at that precise time. The marriage breakup between Peter and Valma had just occurred. Adam and Loretta had apparently sided with Valma. Luke had been, at times, quite a difficult personality for both his parents to deal with and was not close to the other two children. Despite, or perhaps because of, that background, Peter and Romona took a positive step to bring Luke within the domestic household that they set up in Port Macquarie.

67. Peter and Romona’s reconciliation with Luke started with them inviting him into their rented house. Then in December 2014, he was placed on the title to the Emerald Drive property with them. There does not appear to be any real dispute why Peter and Romona included Luke as the third joint tenant on the title with them. The joint tenancy was a gift to secure Luke’s future. His disabilities had left him with permanent disadvantages, leading to an unstable life history. Despite this, he had made the choice to remain loyal to Peter rather than Valma in the recent family separation. Peter felt a greater bond with him than perhaps with his other children at that time. And it might be inferred that, given Luke’s disabilities, he was the one of their children that then needed the most assistance.

68. This was a very significant decision from Luke’s point of view. Romona and Peter were much older than he was. It meant that, if the family generations survived in their expected age order, it was probable that he would ultimately inherit the Emerald Drive property. The Court accepts Romona’s evidence that Peter persuaded her to put the title in their three names, on the basis that it was likely Romona would leave the property to him, and that he would in turn leave it to Luke. As Peter explained to his mother, “it would save a lot of time and money if all three of us were put on the title, so that when you die it would automatically go to me and when I die it would automatically go to Luke”. Romona acquiesced in Peter’s suggestion.

69. The attempt at family harmony at Emerald Drive did not last long. Tensions arose between Luke and Romona. This is not surprising. Luke is a difficult and single-minded personality. Whether that is the result of his mild cerebral palsy, or something else perhaps, does not matter. It is a distinguishing feature of his character. The Court observed this directly in the witness box. Luke is quite capable of pursuing his own blinkered ideas without listening to others. The Court often had to direct him to focus on, and then answer, what he had been asked, rather than just speak about what interested him. This seemed to be deeply ingrained behaviour. It can be inferred that this is the kind of behaviour that emerged in late 2014 and early 2015 at the Emerald Drive property. As will be seen later in these reasons, this behaviour culminated in an unpleasant incident in December 2015 between Romona and Luke at the Emerald Drive property that generated a report to the local police.

62. But before that, Romona and Peter had decided to take Luke’s name off the title of the Emerald Drive property and turn it into a joint tenancy of just the two of them, excluding Luke. The Court accepts Romona’s evidence that this was precipitated by Luke’s failure to make any financial contribution, or contribution in kind, to the running of the Emerald Drive household. Romona, who was then in her eighties, resented Luke not paying anything towards food and other household expenses, and doing little or nothing to volunteer for household chores. These tensions came to a head on an occasion where Luke exploded aggressively at Romona’s requests for him to comply with her household expectations. This led to her having misgivings about him remaining on the title. She then asked Peter to talk to Luke about taking his name off the title. I infer that Peter had that discussion with Luke, which led to the formal preparation of a transfer of Luke’s interest to his fellow joint tenants.

63. By then, Romona was also coming to realise that she had made not just a practical mistake, but a legal mistake in putting Luke’s name on the title. She says, and the Court accepts, that she thought the placing of Luke’s name on the title acted somewhat like a will and did not give Luke an immediate interest in the property. She says, and the Court accepts, that she had come to realise this was an error on her part, by the time she asked Peter to ask Luke to reverse the transaction. But the driving motivation for the reversal was a practical one: Luke’s unco-operative behaviour in the household.

Luke Surrenders His Emerald Drive Joint Tenancy – January 2015

72. Luke signed the Emerald Drive Transfer that released his joint tenancy in the Emerald Drive property. He concedes his signature is on the document. But he says he was pressured into giving up his share in the property, and was tricked into signing. But Romona’s case is that he was responding quite consistently with their clear mutual understanding that the Emerald Drive property was always Romona’s, and was never Luke’s.

73. The disputed Emerald Drive Transfer is dated 27 April 2015 on its front and second page (Annexure “A”). The date 7 January 2015 on the second page has been crossed out and “27 April 2015” written next to it. This dealing was registered over 12 months later, on 9 May 2016; a month after Peter’s death. As the analysis below establishes, the Emerald Drive Transfer was executed on 7 January 2015, despite being finally dated on 27 April.

74. By the Emerald Drive Transfer, the three registered proprietors, Peter, Romona and Luke transferred an estate in fee simple to Peter and Romona as joint tenants. Luke did not give valuable consideration for this transfer. He acknowledged on the first page the receipt of the consideration of $1.00. There is no evidence this sum was actually paid. As this was not an arms-length dealing, the property was valued for stamp duty purposes. Ad valorem duty was paid on 19 August 2015 on a dutiable value of $166,333. The duty paid was $4,314.

75. On the second page of the Emerald Drive Transfer, the signatures of each of Peter, Romona and Luke are all witnessed by Suzanne O’Brien, a Justice of the Peace. Ms O’Brien gave evidence. She says she witnessed their signatures on the Emerald Drive Transfer in the library at Port Macquarie in January 2015. She was an excellent witness. Although Luke did not dispute his signature was on the Emerald Drive Transfer, he denied he signed it in front of Ms O’Brien, or at the library.

76. These events seem to have been accompanied by a warming in the relationship between Peter and Valma. On 4th February 2015, Peter had made a new will in favour of Valma. This is not the first act one might expect of a man who, less than 12 months earlier, had entered a property settlement upon separating from his wife.

77. Beyond Luke’s acceptance that his signature is on the Emerald Drive Transfer, there is wide disagreement. The parties disagree about where Luke signed the transfer, and whether he agreed to do so or whether he was tricked into signing it.

78. Romona’s account is that Luke verbally agreed to transfer the Emerald Drive property to Peter and her, and that he executed the transfer of his share to herself and Peter at the Port Macquarie Library on 7 January 2015, the date that appears on its second page. She alleges it was executed by all three parties together that day. Romona’s evidence is of limited weight, because she was not able to be cross-examined.

79. Luke says that he did not sign any transfer at Port Macquarie Library. He says he signed a significant document at a meeting with his father at the Sea Acres Café in Port Macquarie, in late December 2014. But his memory is that he signed just a blank piece of paper and that Peter told him that he must sign this paper “to keep the peace” with Romona. As Luke does not disclaim his signature on the second page of the Emerald Drive Transfer, his case really must be, that: (1) the document he signed at the Sea Acres Café was the second page of the Emerald Drive Transfer; and, (2) Peter must have somehow tricked him into signing it, without him realising what it was.

80. Luke says he and his father had a cup of coffee together at the Sea Acres Café where his father said to him, “Nan does not want you living there [the Emerald Drive property] anymore. I will give you $5,000 to leave”. He says that he protested, saying to his father, “Dad you are my father. Why are we even doing this?” But according to Luke this was to no avail. His father seemed perplexed saying to him, “I do not understand why you have caused this problem. Your grandmother was only trying to help you out.” According to Luke, at this point, Peter brought out a piece of paper and said words to the effect, “if you sign this transfer it will make your Nan happy, please sign son, I will guarantee you on my life you will get it back, you will not lose the property. Your Nan is paranoid that you will take your share and run.” Luke says that he then signed the piece of paper, when only Peter and he were present. He says he does not know exactly what he signed, but he believed it was the Emerald Drive Transfer. He explained that he understood his signing the document was just to “keep the peace” at home and that no other legal consequences would follow.

81. In deciding what happened here, Luke’s personality is relevant. He is single-minded and is likely to entrench his own sense of entitlement in any situation. It is very probable that had Luke been given a share of the Emerald Drive property, he could at first have been resistant to surrendering it.

82. The Court does not accept most of Luke’s account of signing the Emerald Drive Transfer. Luke believes that he was only signing “a piece of paper”. The Emerald Drive Transfer is hardly that. The second page, where Luke’s signature appears, contains printing on a standard or typed form. The words “Signature of Transferor” are recorded several times, and provision is made for the signature and name and address of a witness to each of the transferors’ signatures. If this document had been shown to Luke at the Sea Acres Café, it was probable that it would have provoked questions from him, even if it was free of other handwriting. The type written text on it is sufficient to alert someone of Luke’s intelligence that he was transferring something which would probably have legal consequences. Moreover, any theory that his signature was first placed on a blank document has to come to grips with the difficulties of manipulating all the other text and handwriting onto the document after his signature was placed there. Such manoeuvring seems improbable.

83. But most importantly, Luke’s oral and affidavit evidence on this subject should mostly not be accepted, because it is inconsistent with the evidence of Ms O’Brien. Luke says he cannot recall signing a document in front of a witness. But this cannot be correct.

84. Ms O’Brien was a powerful witness of truth. She was a precise, principled and faithful adherent to the first rule of being a good Justice of the Peace in witnessing documents: she declared, and the Court accepts, that she would never witness a document where she had not seen the signature she was witnessing actually placed upon the page; and, she would always obtain identification details of the persons who were signing before her and whose signatures she was witnessing. Ms O’Brien was completely independent and served the role for which the functions of the Justice of the Peace are so important. Her testimony became a beacon of certainty in a case where so much is in contest.

85. The Court accepts her evidence to the following effect. She witnessed the Emerald Drive Transfer on 7 January 2015 at the Port Macquarie Library, where she had worked for over two decades. She was working at the library that day. This was a not uncommon request of her, as a well-known local Justice of the Peace. She witnessed every signature on the Emerald Drive Transfer against which her name appears.

86. Ms O’Brien’s JP number and address are correctly recorded on the Emerald Drive Transfer, adding to the reliability of her testimony. She had no recollection of the events in question, because of the frequency with which she was asked to witness documents at the library. But she is certain about important relevant matters because of her usual practice.

87. The crossed out date of 7 January 2015 on the Emerald Drive Transfer is in Ms O’Brien’s handwriting. That was the date she witnessed the signatures on the document. But her handwriting of that date is crossed out by another hand which is unknown to her. A new date is inserted, “27 April 2015”, also in a hand that she does not recognise. Her signatures appear on the document as witness to every party’s signature: Peter, Romona and the plaintiff, Luke.

88. I infer from Ms O’Brien’s evidence that all signatories to the Emerald Drive Transfer must have been present together at the Port Macquarie Library that day, 7 January 2015. Because of the strength of Ms O’Brien’s evidence about her witnessing practices as a Justice of the Peace, the Court cannot accept that Romona and Peter were not present at the same time. This means the Court cannot accept Luke’s account that only he and his father were at the Sea Acres Café when he signed this document. There may have been a separate signing of another document at the Sea Acres Café between Luke and Peter, but it is difficult to know what it was.

89. The overarching importance of Ms O’Brien’s evidence is that Luke was acknowledging in a formal way, in the presence of the other two co-owners, that he was giving up his title to the Emerald Drive property. This was not some surreptitious transaction instigated by his father at a café. He is hardly likely to have participated in this mutual ceremony had he not fully agreed with the retransfer of his interest to his father and grandmother.

90. But although Ms O’Brien is right about the circumstances of the signing of the Emerald Drive Transfer, some important contextual elements of Luke’s account relevant to this event are probably true. His account of his father’s explanation for the signing of the Emerald Drive Transfer is probably right, at least in general terms. It was being done to please Romona, who was unhappy with Luke’s behaviour at the Emerald Drive property. She did not want Luke to have implicit overlordship of her and Peter, as the probable ultimate owner of the property upon their demise. Whatever Peter’s original good intentions were about putting Luke’s name on the title to the Emerald Drive property, in Romona’s mind those good intentions dissolved when she was confronted with his antisocial behaviour when they lived together. Romona had been trying to help Luke out by jointly agreeing with Peter to put Luke’s name on the title, but she found it difficult to endure the consequences of that decision.

91. But in my view, Peter did make some promises of the kind that Luke describes as occurring at the Sea Acres Café. Peter had created the expectation in Luke that one day Luke would inherit the Emerald Drive property, once Luke’s name was put on the title. It is logical that, to persuade Luke to return the gift, Peter would have offered some signal of long term commitment to Luke’s financial interests, despite the proposed removal of Luke’s name. This signal was not as firm as Luke says but, in my view, it was nevertheless given in some form. Peter recognised Luke’s loyalty to him. The making of this statement is an important platform for assessing the relationship between Peter and Luke for the purposes of Luke’s family provision claim, analysed later in these reasons.

92. The Court concludes that Peter and Romona changed their minds about their gift to Luke of an interest as a joint tenant. They decided to take Luke off the title to the Emerald Drive property. After discussion and a little reluctance at first, Luke accepted this, to keep the peace, and reduce tensions between himself and Romona. Luke continued to live at the Emerald Drive property until November 2015.

Luke Falls out with Peter and Romona – November 2015

93. But the household remained tense. Luke’s failure to contribute to the household continued. Issues came to a head in November 2015. Luke had travelled overseas for a holiday in the second half of that year. When he returned, he wanted financial assistance from Peter and Romona for new tyres on his car. Romona and Peter gently pointed out to him that he should not have gone on an overseas holiday, but should have used his money more prudently. This led to arguments and then incidents, the worst of which was in mid-December 2015.

94. On 15 December 2015, a heated incident flared up among Peter, Romona and Luke at the Emerald Drive property. As a result, Luke made a statement to the local police about Romona’s behaviour. The statement makes clear that relations between Romona and Luke had, by then, fully broken down. Luke’s statement to the police squarely puts the blame for the incident on Romona. He says that she aggressively attacked Peter and him at the property, put them out of the house and exhibited violent behaviour during tantrums directed at them. Luke says in the statement that he warned his grandmother that her behaviour “must stop” or he would contact the police. He described her conduct in the statement as constituting acts of “domestic violence”.

95. None of this seems at all likely. Strong though Romona might have been in personality, the Court does not accept that an elderly lady was able to intimidate her son and grandson in the way described. This, in turn, raises the question why Luke would make such a misleading complaint to the police. There is internal evidence in the complaint that Luke was worried about Peter, who by then was known to have cancer. Luke was concerned his father was, as Luke expressed it, “living in a toxic environment”.

96. But the Court does not accept that the toxic environment was caused by Romona. She denies abusing Peter and Luke. Rather, she says she was concerned about Luke’s volatile temper. She says that after a disagreement about household affairs, Luke shouted at her, “I am going down to the Court house and I am going to get you evicted”. In my view, that is likely to be what happened and Luke’s complaint to the police is the product of his own distortions.

97. Relations between Luke and the rest of the household broke down completely at this point. Luke moved out of the house and did not return to live there again on a permanent basis before Peter died.

Romona Changes Solicitors – Late 2015

98. Romona decided to change solicitors in late 2015. The change revealed to her that the Emerald Drive Transfer had not yet been registered, because the former solicitors did not have an authority from all the then current owners to release the Certificate of Title from the former solicitors’ safe custody, so it could be sent for registration to Land and Property Information. Apparently Luke had not been asked for such an authority and that was delaying the release of the Certificate of Title.

99. Romona’s new solicitors prepared an authority for Luke to sign. Romona had it at home when Luke called in one day. She asked him to sign it. He read the authority, indicated that he understood what it was and signed it. It is not in contest that his signature is on the authority. The Court accepts Romona’s evidence that Luke signed it on or about 25 January 2016. Luke’s contrary evidence is not accepted. His signature on this document is a reaffirmation of his original assent to the Emerald Drive Transfer 12 months earlier.

100. But there was continuing miscommunication between the new solicitors and the old solicitors about who was to register the Emerald Drive Transfer. It was not registered before Peter’s death.

After Peter’s Death – From April 2016

101. Peter died on 12 April 2016. At the time of his death, Luke’s signed Emerald Drive Transfer had neither been lodged for registration nor registered.

102. On 19 May 2016, Romona lodged the Emerald Drive Transfer for registration. On 15 July 2016, she lodged a Notice of Death, attaching Peter’s Death Certificate and declaring she was the surviving joint tenant. The Emerald Drive property was then transferred into her sole name. Probate of Peter’s will, dated 4 February 2015, was granted to Valma on 29 August 2016.

103. On 10 October 2016, Romona sold the Emerald Drive property to a third party for $544,000. Using the proceeds of sale at the same time, she purchased the final property in Port Macquarie for $452,500. This was the last property she owned before going into the aged care facility, where she presently resides. The final property was sold to fund the provision of the refundable accommodation bond for her in the aged care facility, and to provide a fund to meet her discretionary expenditure.

104. On 13 March 2017, Luke commenced these proceedings.

105. The above factual narrative provides the foundation to analyse the three main contests in these proceedings concerning Contracts Review Act relief, the resulting trust issues and the claim for family provision.

(1) Contracts Review Act Relief

106. Luke claims that, as at the date of Peter’s death on 12 April 2016, he was one of three joint tenants of the Emerald Drive property with Peter and Romona, and that he did not sign the Emerald Drive Transfer on 7 January 2015 at the Port Macquarie Library in the presence of Ms O’Brien. But if he did, he claims that the Emerald Drive Transfer should be set aside. If granted that relief, he says that he should be treated as if he continued as one of three joint tenants on Peter’s death. He says he would therefore on Peter’s death have become, by operation of law, a joint tenant with Romona in the Emerald Drive property and, in turn, would have become entitled to one half the proceeds of sale of that property.

107. A preliminary question arose as to the nature of Luke’s claim. His claim is pleaded in paragraphs 1 to 19 inclusive of the “Pleadings and Particulars” section of the Amended Statement of Claim and is referred to in prayers for relief 4 to 5B. The question arose whether this is a claim just under the Contracts Review Act 1980, or a wider claim in equity for unconscionable conduct.

108. Whatever the pleadings might be thought to say, the parties noted their agreement about the width of the issues in the Court record on 14 August 2018, well before the hearing: they said that to the extent that “undue influence” and “unconscionable dealing” are referred to in the pleading, they come under the umbrella of the claim made under the Contracts Review Act. No separate claim in equity will therefore now be considered.

109. Luke submits that, if he did sign the Emerald Drive Transfer in January 2015, he should have relief pursuant to the Contracts Review Act, Schedule 1 s(1)(b), on the basis that the Emerald Drive Transfer was “unjust in the circumstances at the time it was made”: Contracts Review Act, s 7. Notwithstanding that a contract is fully executed, the Court may still grant relief: Contracts Review Act, s 14. Luke commenced proceedings within the time limited by Contracts Review Act, s 16.

170. Romona and Valma have strongly submitted that he should receive no more. Whilst their expressed concerns about his anti-social behaviour are valid, none of what he did amounted to conduct which disentitles him to provision from Peter’s estate. Despite his difficult personality, Luke’s relationship with Peter remained generally as close as that of any of his siblings. The loyalty he showed to Peter at the time of his separation from Valma is a unique feature of his relationship with his father. But, more than any other family member, he had immense capacity to aggravate family relationships. And his unpredictable behaviour led to him not attending Peter’s funeral. But his longer term relationship with his father matters more.

171. Unpredictable behaviour is the hallmark of his personality that is mixed in unknown ways with his disability. Such conduct, though aggravating and perceived as disrespectful to Peter by other family members, does not disentitle him to consideration for an order for provision. Rather, because of the disadvantages in life the disability imposes on him, his conduct indicates the need for such an order.

172. Valma submitted that Luke was thoroughly undeserving of any provision from Peter’s estate or notional estate. Her submissions show that her motivation for this stance is in part what she perceives as the unfairness of Luke receiving provision from the estate/notional estate when his siblings miss out. Her concern about this is understandable.

173. But her concern misapprehends the Court’s jurisdiction under the Succession Act, Part 3. The Court’s jurisdiction is not to produce some overall level of equality of inheritance among the children of a deceased person. Rather, the Court’s jurisdiction is to consider the applications (sometimes competing) that are made by individuals who claim to be eligible persons and for whom adequate provision for their proper maintenance, education and advancement in life has not been made by the will of the deceased: Succession Act, s 59(1).

174. Neither Adam nor Loretta has made an application for provision out of Peter’s estate. The law allows the Court to assume that neither of them is in need of further provision. The Court could take their interest into account if they were to advance them. But they have chosen not to advance their interests in competition with Luke’s claim.

175. Valma’s submissions are also partly driven by a view that Luke is undeserving by reason of his conduct towards the family. But the Court’s reasons have already deal with this aspect of her case.

176. Quantification of Luke’s needs is difficult. He submits that an award sufficient to allow him to acquire a house is appropriate. But no order based on the existing estate or notional estate will realistically meet his needs defined in that way. Although the deceased set up a structure to provide a permanent residence for Luke at the Emerald Drive property, he ultimately did not persist in that objective. The immediate ownership of a permanent residence is not the measure of adequate provision for Luke’s proper maintenance, education or advancement in life.

177. But there certainly are grounds to provide him with a cushion against future financial vicissitudes. He should, in my view, be given a fund from which he can make financial choices to rent more comfortably in the longer term, to put a deposit on a house, or to pay fees or equip himself for further study. In my view, a figure of $140,000 plus a sum to cover his costs is appropriate to make adequate provision out of his father’s estate for his proper needs.

The Burden of Luke’s Claim

182. Luke should have an order for provision out of Peter’s estate in the amount of $140,000. A costs order has not yet been formulated for him. But the estate is without funds even to meet this order for provision. The next questions therefore are: whether Valma can and should bear any part of the order for provision; and then, whether any property held by Romona is available to be designated as notional estate under SuccessionAct, Part 3.3 to meet Luke’s claim.

183. Peter’s estate is “insufficient” within the meaning of Succession Act, s 88 (b) for the making of the family provision order that the Court is of the opinion should be made: and see Wardy v Salier [2014] NSWSC 473, (at [219]). An order for costs will only increase that insufficiency. There is no prohibition here upon the Court making a notional estate order. As will be seen below, the Court will designate Romona’s refundable accommodation bond as notional estate up to an amount sufficient to meet the order for provision plus capped costs.

184. But the Court also has power to make orders as to the part or parts of the estate out of which it is to be provided: Succession Act, s 65. The Court also has capacity to make broad consequential and ancillary orders: Succession Act, s 66.

185. As $102,000 of estate funds went through Valma’s hands as executrix, she is still liable on the plaintiff’s claim in this sum. But the recovery of those funds from her is attended by great uncertainty. The value of assets held in her name is an unknown. She has not volunteered to return the amount of $102,000 to the estate.

186. At a practical level, recovery of any money from Valma is uneconomic. She has given no indication she will return the $102,000 to the estate. To recover this money from her, as she is the executrix, someone would have to be appointed as an administrator ad litem to pursue the claim against her. If that administrator were to be Luke, he does not have the resources to pursue the claim in the short term. Those resources might be available to him from the notional estate, but the timing of that is in the uncertain future. The actual value of any debt owing by her to the estate is therefore speculative at best.

187. In the interest of certainty in this case for all parties, and the reduction of expenditure of future costs on potentially fruitless disputes, the Court will order that the whole of the order for provision in Luke’s favour should be borne by the designated notional estate.

188. And the allocation of provision in this way is consistent with the deceased’s continued recognition of a testamentary obligation to Valma. She is deserving of something from Peter’s estate and she will not be vexed by further claims.

Luke’s Notional Estate Claim

189. Luke claims that Peter’s failure to sever his joint tenancy with his mother in the Emerald Drive property at the time of his death was a “relevant” property transaction: Succession Act Part 3.3, ss 73, 74, 75, and s 76(2)(b). He therefore claims that one half of the proceeds of the sale of the Emerald Property can, and should, now be designated as notional estate.

190. Luke made two other claims to notional estate. These reasons have already explained that these claims were the subject of late amendments to pleadings that were disallowed.

191. Luke’s notional estate claim based on Peter’s failure to sever the joint tenancy in the Emerald Drive property has substance. At the time of Peter’s death, he was at law a joint tenant as to one third in the Emerald Drive property, together with Romona and Luke, as the register showed. The Emerald Drive Transfer had been executed, but had not been lodged for registration and therefore had not been registered. The Court has found that, in equity, Peter held a half interest in the Emerald Drive property as a joint tenant with Romona.

192. At law, the Emerald Drive property would have devolved at Peter’s death to Romona and Luke upon the filing of the Notice of Death, the way the register stood at the time of death. But the Emerald Drive Transfer was lodged first after Peter’s death: this took Luke off the title and allowed the Notice of Death to operate to transfer title directly into Romona’s name in accordance with the position in equity.

193. Luke did not argue that Peter’s executrix was not entitled to lodge the Emerald Drive Transfer before the Notice of Death. And in my view, she was. Luke had done all things necessary to assign all his interest in the Emerald Drive property to his father and to Romona. The other joint tenants were entitled to complete that assignment. Luke argued his notional estate case on the basis that lodgement of the Emerald Drive Transfer before the notice of death was accepted and his notional estate claim was over Peter’s half interest in equity in the Emerald Drive property that devolved to Romona.

194. Romona opposed the designation of any of her property as notional estate. She advanced a number of contentions to support this result. She first contended that Peter did not enter into a relevant property transaction within the meaning of s 75 or s 76 of the Succession Act 2006, because full valuable consideration was given to him for not severing the joint tenancy in that Romona had provided all of the purchase money for the purchase of the Emerald Drive property.

195. But the answer to this lies in the Court’s existing findings. Peter fully owned in equity a one half share in the Emerald Drive property. He (not Romona) provided the purchase money for his share and the share he acquired from Luke. Romona did not provide full valuable consideration to Peter for not severing the joint tenancy. Peter’s failure to sever the joint tenancy qualifies as a “relevant transaction” within Succession Act, Part 3.3.

196. Romona further argues that the making of a notional estate order would interfere with her “reasonable expectations in relation to property”: see Succession Act, s 87(a). She contends she had a reasonable expectation that, should she wish or need to sell the Emerald Drive property, she would be able to retain all of the net proceeds of sale for her own use.

197. The contention that she had “reasonable expectation” of this character is unfounded. She and Peter both left a joint tenancy in place in the Emerald Drive property, which was open to be severed by either of them to create a tenancy-in-common. Had Peter done that, Romona would only have received half of the proceeds of sale.

198. Romona further argues that “the substantial justice and merits involved” warrant the Court refusing to make an order: see Succession Act, s 87(b). The contention here is that Romona needs the proceeds of sale to fund her current accommodation in the aged care facility.

199. This contention is properly based in Romona’s existing financial needs. But it is well answered by the way that Luke has structured his case for relief after the designation of notional estate. Luke submits that, if a notional estate order is made, it should operate only after Romona’s death. In my view, the order can be crafted that way by making the order for provision itself operative on Romona’s death: Succession Act, s 65(1)(d). The making of such an order significantly reduces the possibility of prejudice to Romona.

200. Delaying the time at which the refundable accommodation deposit can be accessed to satisfy the order for provision will mean that it can continue to be used during Romona’s lifetime at the current aged care facility or at any other aged care facility which she may enter in the future. This designated notional estate will not be enjoyed by Luke until after her death. That is a reasonable balancing of her interests against Luke’s. She will still enjoy the security of accommodation the refundable accommodation provides. She cannot deplete it in her lifetime in any event and she will still have the whole of the funds in her bank account available to her to meet existing liabilities, such as her legal costs and other unexpected liabilities.

201. Orders crafted in this way might be thought to undermine the logic of Luke’s case that he needs money for advancement in life now. But, as there is no certainty of any recovery by the estate from Valma, Luke’s practical choice is between receiving nothing at all from the estate or waiting to achieve advancement in life from notional estate until Romona’s death. The latter course is the only realistic option for relief for him.

202. The parties should be able to work out a consensual regime by which notice of these orders is given to Romona’s aged care facility, so that upon her death the designated funds are preserved to be dealt with appropriately for Luke’s benefit. If there is any difficulty about making such arrangements, the matter can be relisted for that purpose.

Costs and Interest

203. Cost Caps. It is highly desirable in this case, where there are few available assets, that the parties not become involved in costs arguments. The plaintiff’s solicitors’ costs to 11 April 2019 were $33,000. All costs referred to here are inclusive of GST. Up to that date, the plaintiff also incurred disbursements of $3,184.18 and counsel’s fees of $43,637.45. Thus, the total fees up to 11 April 2019 were $79,821.63. This was plus an uplift fee, which the Court will ignore for present purposes.

204. Further solicitors’ costs, counsel’s fees, and disbursements were estimated up to the conclusion of the hearing at $34,234 ($1,494 for disbursements, $9,640 for solicitors’ costs and counsel’s fees of $23,100). Thus, the plaintiff’s total fees are estimated at $114,055.63 (being $34,234 + $79,821.63).

205. The second defendant’s costs were between $40,000 and $45,000, before the case was extended. These costs are very reasonable by the standards of such a claim. This was not a simple family provision claim. It became an expensive case to conduct by reason of the difficulty in sorting out the various issues raised about the Emerald Drive property.

206. The Court foreshadowed during final submissions that it was likely to make a costs capping order in this case. In my view, this is an apt case for the making of such an order. But this can be done in a way that does not cause difficulty for the parties. The Court has well established powers to cap costs in family provision claims. I recently discussed the sources of this jurisdiction in Detheridge v Detheridge [2019] NSWSC 183, (at [172] to [177]). The plaintiff’s costs will be capped at a figure of $80,000. This is still significantly more than the second defendant’s costs of the proceedings.

207. Should the Plaintiff Have All His Costs? This was not just a family provision case: it involved argument in relation to the Contracts Review Act and resulting trust issues. Luke was unsuccessful on the Contracts Review Act issues, but successful on the resulting trust issues. He was also successful in relation to his family provision claim. The resulting trust case was fielded as a defence to his claims for notional estate and, in my view, closely associated with the costs incurred by Romona in the family provision claim. But it is appropriate the plaintiff should have some diminution in his recoverable costs on account of the expenditure that was incurred in relation to his failed Contracts Review Act claim. This was not an insignificant part of the proceedings and was not an essential part of the family provision claim. In my view, he should only have 75% of his capped costs. So he will recover only $60,000 in costs altogether.

208. That leaves Romona’s costs. Romona was defending her own interests in avoiding the designation of her property as notional estate. She should bear her own costs. So should Valma, who has already had a distribution from the estate. Romona might wish to list the proceedings for the making of orders against the estate. But there seems little to be gained from such a course, as there is no money left in the estate.

209. The plaintiff should be compensated in interest for the delayed receipt of the designated notional estate. Some interest outgoings may be reduced for Romona’s budget at the aged care facility, by reason of the refundable accommodation bond. A figure of 2% per annum is reasonable for this.

210. This means that the total designated notional estate inclusive of costs will be $200,000. This is less than half of the proceeds of sale of the Emerald Drive property in October 2016 of $272,000 (being $544,000 divided by 2).

Conclusion and Orders

211. Accordingly, the Court makes the following orders and directions:

1. Order that provision be made for the plaintiff by way of a legacy out of the estate of the late Peter Simmons in the sum of $140,000.

2. Note that the estate of the late Peter Simmons is insufficient for the making of Order (1).

3. Order that the plaintiff’s costs be capped in the sum of $80,000.

4. Order that the second defendant pay 75% of the plaintiff’s costs of the proceedings, namely $60,000.

5. Subject to Order (6), designate the sum of $200,000 of the refundable accommodation deposit presently held in the name of the second defendant for her aged care accommodation as notional estate of the late Peter Simmons to satisfy Orders (1) and (4).

6. The notional estate designated in Order (5) may not be paid to the plaintiff until after the second defendant’s death when the refundable accommodation deposit will become repayable in the ordinary course to the second defendant’s estate.

7. Order that interest will be payable on the legacy provided for in Order (1) and the costs provided for in Order (4) at the rate of 2% per annum, whilst unpaid.

8. If the parties cannot agree upon a method for securing the payment of the refundable accommodation deposit to satisfy these orders they have liberty to apply for the making of orders to that effect.

9. Otherwise grant liberty to apply in relation to the implementation of these orders and in respect of any matter referred to in these reasons to be the subject of a grant of liberty to apply.

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Decision last updated: 22 August 2019