Taylor v Farrugia

[2009] NSWSC 801

CITATION:	Taylor v Farrugia [2009] NSWSC 801 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	1-4 June 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	5 June 2009
DECISION:	Orders for provision made in favour of plaintiffs upon undertaking that plaintiffs forgo any entitlement to their reserved portion under Maltese law, to the intent that the defendant be solely entitled to the Maltese assets.
CATCHWORDS:	SUCCESSION - Family Provision - Private International Law – testator dies domiciled in Malta leaving estate in both NSW and Malta - Whether Court has jurisdiction to deal with assets of the estate - Held: Court only has jurisdiction to deal with immovable property of the deceased in NSW - Court may take into consideration assets held in Malta when making determination and Maltese law in relation to distribution of estate assets – FAMILY PROVISION - adult children – whether adequate provision made for proper maintenance, education and advancement in life - discretionary considerations - whether provision ought to be made out of estate for the applicants - whether testatrix failed in her duty to those that have a claim on her – Extension of time to make application - where some plaintiffs did not bring application within time - where plaintiffs awaiting information as to entitlements under will which defendant fails to provide – whether prejudice suffered by defendant in extending time - discretionary considerations - Held: absence of adequate information about entitlements under will is sufficient cause – no prejudice suffered by defendant in extending limitation period - discretionary considerations favour extension
LEGISLATION CITED:	(NSW) Family Provision Act 1982
CATEGORY:	Principal judgment
CASES CITED:	Balajan v Nikitin (1994) 35 NSWLR 51 Chan v Tsui [2005] NSWSC 82 De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported) Fancett v Ware (Supreme Court of New South Wales, Needham J, 3 June 1986, unreported) Foley v Foley [2008] NSWSC 233 Gregory v Hudson (No 2) (New South Wales Supreme Court, Young J, 18 September 1997, unreported) Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151 Heuston v Barber (1990) 19 NSWLR 354 King v Foster (Court of Appeal, 7 December 1995, unreported) King v White [1992] 2 VR 417 Leue v Reynolds [1986] 4 NSWLR 590 Massie v Laundy (New South Wales Supreme Court, Young J, 7 February 1986, unreported) McGrath v Eves [2005] NSWSC 1006 Ostrander v Houston (1915) 8 WWR 367 Pain v Holt (1919) 19 SR (NSW) 105 Parker v Public Trustee (New South Wales Supreme Court, Young J, 31 May 1988, unreported) Re Butchart [1932] NZLR 125 Re Donnelly (1927) 28 SR (NSW) 34 Re Fulop Deceased (1987) 8 NSWLR 679 Re Guskett [1947] VLR 211 Re Osborne [1928] St R Qd 129 Re Paulin [1950] VLR 462 Re Sellar (1925) 25 SR (NSW) 540 Re WTN (NSWSC, Unreported, 3/7/59, McLelland CJ in Eq; noted (1959) 33 ALJ 240 Shah v Perpetual Trustee Company (1981) 7 Fam LR 97 Singer v Berghouse (No 2) (1994) 181 CLR 201 Stewart v McDougall (New South Wales Supreme Court, Young J, 19 November 1987, unreported) Vigolo v Bostin [2005] HCA 11, (2005) 221 CLR 191 Warren v McKnight (1996) 40 NSWLR 390 Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J, unreported) Zirkler v McKinnon [2002] NSWSC 285
PARTIES:	5129/05 Josephine Taylor (plaintiff) John Farrugia (first defendant) Ian Kenneth Greenwood (second defendant) 1174/06 Josephine Taylor (plaintiff) John Farrugia in the Estate of Sam Farrugia (aka Salvatore Farrugia) (defendant) 1499/06 George Farrugia (plaintiff) John Farrugia (first defendant) Ian Kenneth Greenwood (second defendant) 4518/07 Teresa Rose Murdoch (first plaintiff) Mary Lee O'Reilly (second plaintiff) John Farrugia (first defendant) Ian Kenneth Greenwood (second defendant) 2871/08 Joseph Farrugia (plaintiff) John Farrugia (first defendant) Ian Kenneth Greenwood (second defendant)
FILE NUMBER(S):	SC 5129/05; 1174/06; 1499/06; 4518/07; 2871/08
COUNSEL:	Mr M Condon w Ms P McEniery (plaintiff in 5129/05 & 1174/06) Mr L Ellison SC (plaintiff in 1499/06) Ms A Healey (plaintiffs in 4518/07) Mr B Skinner (plaintiff in 2871/08) Mr G McNally SC (defendants)
SOLICITORS:	Turnbull Hill (plaintiff in 5129/05 & 1174/06) David Begg & Associates (plaintiff in 1499/06) Stacks Taree (plaintiffs in 4518/07) Saunders & Standen (plaintiff in 2871/08) Matthews Dooley & Gibson (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Friday, 5 June 2009

5129/05 Josephine Taylor v John Farrugia & Anor
1174/06 Josephine Taylor v John Farrugia in the Estate of Sam Farrugia aka Salvatore Farrugia
1499/06 George Farrugia v John Farrugia & Anor
4518/07 Teresa Murdoch & Mary Lee O’Reilly v John Farrugia & Anor
2871/08 Joseph Farrugia v John Farrugia & Anor

JUDGMENT (ex tempore)

1 HIS HONOUR: Salvatore (Sam) Farrugia died in Malta on 27 February 2003, leaving assets in Malta and in New South Wales. The main Australian assets, including Lots 24 and 25 Gordon Street, Schofields, passed by survivorship to his widow Emanuela, although Lots 8 to 14 Perth Street, Riverstone, were and remain in his name alone. Emanuela herself died in Malta on 21 August 2004, leaving an estate, including what was said to be her interest in her deceased’s husband estate, in Malta of about $833,000, and in New South Wales – where both she and Sam had resided for many years until they returned to Malta in 1991 – of some $2.25 million net before costs. By her will dated 10 July 2003, Emanuela left the whole of her estate to her youngest son, the first defendant John. John, who is resident in Malta, appointed the second defendant Ian Kenneth Greenwood his attorney for the purposes of obtaining letters of administration with the will annexed in New South Wales, and on 2 December 2008 a grant of administration CTA to Mr Greenwood was made by the Court. On 21 May 2009, a grant of administration CTA was also made to Mr Greenwood in respect of Salvatore’s estate in New South Wales. In these proceedings, the other five surviving children of Salvatore and Emanuela claim provision out of Emanuela’s estate, and in the case of one of them also out of Salvatore’s estate.

Family History

2 Salvatore was born on 21 November 1919 and Emanuela on 24 January 1924. They were married on 1 April 1941. Their first child Joseph was born on 15 January 1942. A second child Carmelo (since deceased) was born in 1944 or 1945. Josephine was born on 15 November 1947, and Mary Lee on 5 April 1949.

3 The family migrated to Australia in August 1950. Salvatore and Emanuela purchased ten acres of farming land near Blacktown. In Australia, their fifth child George was born on 4 November 1951; Michael (also since deceased) in 1954; and their seventh child Teresa on 20 March 1956. In 1960, Carmelo purchased land at 56 Gordon Street, Schofields. John, the first defendant and their last child, was born on 7 May 1961.

4 In 1961, Josephine, Mary Lee, George, Michael and Teresa at least were taken into care by the Department of Child Welfare and either institutionalised or placed with foster parents for a period of two years, until they were returned to their parents’ care in about 1963. So far as the evidence shows - although it is not entirely clear - it seems that John, who had only been born in 1961, was not taken into care.

5 In the 1970s, Salvatore and Emanuela sold their Blacktown farm and purchased a property at Lalor Road, Quakers Hill. Michael was killed in a motor vehicle accident in 1978, and Carmelo died in 1980. Consequent on Carmelo’s death, the property at 56 Gordon Road passed to Emanuela and Salvatore. In 1984, they sold the Lalor Road property. They lived for a while with their daughter Teresa and then with their daughter Josephine, until in 1985 they purchased a property at Harrow Road, Marayong. On 21 November 1990, they purchased Lot 24 Gordon Road as joint tenants for $225,000; it adjoined their existing property at 56 Gordon Road, which they had inherited from Carmelo. On 13 February 1991, Salvatore and Emanuela purchased Lots 8 to 14 Perth Street, Riverstone, as joint tenants for $31,000.

6 In 1991, Emanuela developed diabetes. She and Salvatore, together with their youngest child John, travelled to Malta where they thereafter remained, except for one or two subsequent visits back to Australia on the part of Salvatore. It was on one of those visits that, on 23 January 1997, Salvatore made a will in New South Wales by which he left all his estate to Emanuela if she survived him, with substitutionary gifts to Joseph and John of the two Gordon Road properties, and to the children of George of the Perth Street, Riverstone, property.

7 Salvatore died in Malta on 27 February 2003 at the age of eighty-three. On 3 June 2003, Emanuela closed a term deposit he had held with the Commonwealth Bank of Australia and withdrew a sum of $187,500 which, it would seem, was repatriated to Malta but the whereabouts of which have never been fully or satisfactorily explained. On 17 June 2003, Emanuela made a will in Malta, leaving all her estate to their youngest child John. She made a further will on 10 July 2003, to the same effect. On 14 July 2003, she transferred to John a three-sevenths share in the property that she and Salvatore had owned at 40 Main Street, Xewkija, Gozo in Malta.

8 Emanuela died in Malta at the age of eighty on 21 August 2004. There appears to have been no grant of administration of any kind in Malta.

Family Provision Act

9 Applications such as these under the (NSW) Family Provision Act 1982 for provision out of the estate of a deceased person, have been described by the High Court of Australia in Singer v Berghouse (No 2) (1994) 181 CLR 201 as involving a two stage approach. The first requires the determination of the jurisdictional fact whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life, and the second – which arises only if the first is resolved affirmatively – involves the discretionary assessment of what provision ought to be made out of the estate for the applicant. However, as the High Court explained, similar considerations inform both stages of the process:

The determination of the first stage in the two stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance, et cetera, 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.

10 Because the considerations relevant to both stages overlap in this way, consideration of an application under the Family Provision Act does not always divide neatly into the two questions, as Callinan J and Heydon JJ pointed out in Vigolo v Bostin [2005] HCA 11, (2005) 221 CLR 191, 192. Nonetheless, in an application under the Act, the Court must consider, first, whether the plaintiff is an eligible person; secondly, whether the plaintiff has been left with inadequate provision for his or her proper maintenance, education and advancement in life; and thirdly, if so, what (if any) provision or further provision ought to be made out of the estate for those purposes. The relevant principles and considerations were summarised by McClelland CJ in Eq, in Re Fulop Deceased (1987) 8 NSWLR 679, 679:

In making these determinations, the following principles apply: First, the Court should not interfere with the dispositions in the will except to the extent necessary to make adequate provision for the plaintiff’s proper maintenance, education and advancement in life. Secondly, the expression ‘proper’ in this context connotes a standard appropriate to all the circumstances in the case, and thirdly, the Court may take into consideration any matter (whether existing or occurring before or after the death of the deceased which it considers relevant in the circumstances, including (a) the nature and quality of the relationship between the plaintiff and the deceased, (b) the character and conduct of the plaintiff, (c) the nature and extent of the plaintiff’s present and reasonably anticipated future needs, (d) the size and nature of the estate of the deceased, (e) the nature and relative strength of the claims to testamentary recognition by the deceased of those taking benefits under the will of the deceased, and (f) any contribution, financial or otherwise, direct or indirect, by the plaintiff to the property or welfare of the deceased.

11 It is important also to bear in mind the principle articulated by Young J, as his Honour then was, in Stewart v McDougall (New South Wales Supreme Court, Young J, 19 November 1987, unreported), in explaining that the Court’s role is limited to making adequate provision for an eligible person’s proper maintenance and advancement:

It is important to state what the Family Provisions Act permits a Court to do and what it does not permit a Court to do. The Act recognises that Australians have freedom to leave their property by their will as they wish with one exception. The exception is that a person must fulfil any moral duty to make proper and adequate provision for those whom the community would expect such provision to be made before they can leave money as they wish. Thus, in these cases, one does not ask if the will is fair, one does not ask if the testatrix divided her property equal, one does not as a judge ask how would I have made a will had I been the testatrix. What must be asked is did the testatrix fail in her moral duty to those who have a claim on her. Even if the Court comes to the view that the question should be answered in the affirmative, the Court still does not remake the will, but only alters it to the extent adequate provision is made for the eligible person in respect of whom the testatrix failed in her moral duty.

Eligibility

12 The present applicants are all children of the deceased, and are therefore eligible persons in category (b) of the definition of that term in the Act, and have the requisite standing to make the applications. So far as the evidence discloses, they are also all the eligible persons, so that the interests of all eligible persons are before the Court.

Extensions of time

13 George brought his application in respect of his mother’s estate within the period of eighteen months after her death and thus within time. Josephine also brought her application in respect of her mother’s estate within time, but was out of time so far as Salvatore’s estate is concerned and thus requires an extension of time in that respect. As I have ultimately come to the conclusion that any provision to be made for her should be made out of the estate of Emanuela, and that no provision will be made out of the estate of Salvatore, it follows that Josephine’s application for provision out of his estate will not succeed and there is no utility in extending time in that respect. Joseph, Teresa and Mary Lee each instituted their proceedings more than eighteen months after the death of Emanuela on 21 February 2006. Each of them therefore requires an extension of time under section 16 if their claim is to proceed.

14 The principles relating to the grants of extensions of time under section 16 are well-established. An applicant for such an extension must demonstrate that he or she has sufficient cause for not having made the application within time - that is to say, within the eighteen month period. So much is mandatory. This requires some explanation for the delay in making the application over that period. Other, discretionary, considerations include any further delay after that eighteen month period, and the sufficiency of any explanation for it; whether the extension of time would occasion prejudice to any beneficiary under the will; whether there is any unconscionable conduct on the part of the applicant (which is essentially concerned with deliberate decisions not to make an application, upon which the executor or a beneficiary has acted to their detriment); and the strength of the applicants case for relief under the Act [Re Guskett [1947] VLR 211; Massie v Laundy (New South Wales Supreme Court, Young J, 7 February 1986, unreported); Fancett v Ware (Supreme Court of New South Wales, Needham J, 3 June 1986, unreported); De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported); Warren v McKnight (1996) 40 NSWLR 390, 394E)]. A mere change of mind on the part of an eligible person, who has decided not to make a claim – even if that change of mind is triggered by the success of a claim of another eligible person, or by another eligible person bringing a claim – is ordinarily not sufficient cause for granting an extension of time [Zirkler v McKinnon [2002] NSWSC 285; Foley v Foley [2008] NSWSC 233].

15 Joseph assumed that he would have some entitlement under his mother’s will. That assumption, as it turns out, is correct to the extent that, as will be seen, Maltese law provided him with a share in the “reserved portion”. He, like the other claimants, is unsophisticated and had little education. He was unaware of his right to make an application, let alone of any time limit that related to it, until he was served with a notice to eligible persons shortly before 2 April 2008. He sought advice from a solicitor on 2 April 2008 and commenced proceedings on 21 May 2008. His lack of knowledge of his rights and of the time limit, in the context of his limited education and his assumption that he would in any event have some entitlement under the will – and the circumstance that it became apparent only after some time had passed that it would be very difficult to procure payment of his share of the reserved portion – provide sufficient cause for his not having made his application within time.

16 There are no discretionary factors which tell against granting an extension of time to Joseph. In particular, the fact that the estate is already subject to proceedings under the Act brought within time by his siblings, that probate had not been granted when he instituted the proceedings, and that there could have been no detrimental reliance by anyone – executor or beneficiary – on the circumstance that proceedings had not been commenced, tell against declining an extension on discretionary grounds.

17 Mary Lee was aware that her mother had made a will, but not of its contents. She assumed that her mother’s solicitor would contact her - as had occurred initially in respect of her father’s estate, when she was asked to sign some forms - although after her mother’s death she was unable to gain further information from Dr Vella, the solicitor in Malta who was handling the matter. After her mother’s death, she consulted Roderick Storie Solicitors, in Sydney, and was probably told then of the relevant time limit, as she conceded in cross-examination. She also discussed her mother’s estate with George and Josephine, and on 8 May 2004 lodged a caveat in relation to the New South Wales real property.

18 In early 2006, not long before the limitation period expired, she consulted another solicitor, this time in Queensland. On 13 June 2006, that solicitor wrote to her siblings, seeking their assistance and support in mounting a claim. Responses came only from Teresa, who indicated that she would support such a claim, and Josephine – who apparently indicated that she would not, although she had herself already commenced proceedings. Mary Lee was at this time unaware that George and Josephine had already commenced proceedings under the Act. At about this point, she joined forces with Teresa, and ultimately instructed solicitors to institute proceedings in August 2007, having discovered that George and Josephine had previously done so. Her summons was filed on 13 September 2007.

19 Teresa, on 16 September 2005, instructed solicitors to contact Dr Vella, the Maltese solicitor, who it was thought was handling her mother’s estate. Her solicitor then advised her of the eighteen month time limit for bringing proceedings under the Act. Letters were sent to Dr Vella in Malta on 19 September and 26 September 2005. It was then discovered that Mr Refalo, not Dr Vella, was handling the estate, and letters were sent to him on 2 November, 29 November and 8 December 2005. It is instructive that those letters do not appear to have foreshadowed claims under the Family Provision Act, but were pressing for information about Teresa’s entitlement under the will, what she had to do to obtain that entitlement, and when it would be released to her, and confirmation that there had been and would be no distribution otherwise. She, too, instructed solicitors to institute proceedings, having discovered that her siblings had done so on 21 August 2007, and her summons was filed on 13 September 2007.

20 Mr McNally, for the estate, argued that these were cases of deliberate decisions to defer taking proceedings, followed by a change of mind to bring proceedings for no better reason than that George and Josephine had brought proceedings. If that were so, then there would be a powerful case against granting an extension, consistent with Zirkler and Foley to which I have referred. However, there is more in this case than a mere change of mind triggered by the siblings having also commenced proceedings.

21 Fundamentally, no information was available about what was in the will of the deceased. It was not and could not have been apparent to any of the children that inadequate provision had been made for them. Neither Teresa nor Mary Lee knew until after the eighteen month period had expired that no provision had been made for them by the will of the deceased. Until they knew that, there was every prospect that adequate provision had indeed been made for them under the will. Accordingly, they lacked knowledge of a necessary material fact which would inform a decision to commence proceedings. They – in particular Teresa – had sought the relevant information (about the will and their entitlements), but it had not been provided (by the estate). Moreover, relief under the Act could not be granted until there had been a grant of administration in respect of the estate, and so an essential integer of their entitlement to relief was not yet established in that respect - though it is now established that proceedings under the Act may be instituted (as distinct from determined) before a grant of probate [Leue v Reynolds [1986] 4 NSWLR 590], it remains the case that a grant of administration must be obtained prior to any order being made.

22 Moreover, there was no mere deliberate decision to defer taking proceedings; there was a decision to do so informed by an inability to fund proceedings without assistance, and a hope that that assistance might be obtained from other siblings, in a context that they were unaware that those other siblings had already commenced proceedings.

23 Knowledge of a time limit, which has an inbuilt provision for a discretionary extension, is not always fatal to an application for an extension brought after it has expired. There may be in a particular case reason for an eligible person, with knowledge of the time limit, not to commence within time, but to rely on the ability to apply to the Court after the time has expired for an extension. One circumstance in which that will often be so is if knowledge of material facts which inform an assessment of the need to bring proceedings or the prospects of success is absent. Others may be if a lack of understanding, or of the funds necessary to bring proceedings, precludes their institution.

24 In this case, the circumstances that Mary Lee and Teresa did not have and could not obtain knowledge of whether or not they had been left with inadequate provision – because they were not told the terms the terms of the will - coupled with their lack of education and their lack of funds to risk on proceedings which might or might not prove to be justified, is sufficient cause for them not having brought proceedings within the eighteen month period. Again, there are no discretionary factors which tell against the grant of an extension, once the requirement of sufficient cause is established.

25 Accordingly, I will extend the time for each Joseph, Mary Lee and Teresa to bring proceedings with respect to the estate of Emanuela.

The impact of Maltese Law

26 Both Salvatore and Emanuela died domiciled in Malta, leaving real and personal property both in Malta and in New South Wales. In those circumstances the relevant law is, as stated by Scholl J in Re Paulin [1950] VLR 462 at 465, that in connection with the application of testator’s family maintenance legislation, first, the Courts of the domicile alone can exercise jurisdiction under the testator’s family maintenance legislation of the domicile in respect of movable and immovable property in the place of domicile; secondly, the Court’s of the domicile alone can exercise such jurisdiction in respect of movable property of the deceased outside the place domicile; but thirdly, Courts of the situs alone can exercise such jurisdiction in respect of immovable property of the deceased out of the place of domicile, and Courts of the place of domicile cannot exercise such jurisdiction [see also Pain v Holt (1919) 19 SR (NSW) 105; Re Sellar (1925) 25 SR (NSW) 540; Re Donnelly (1927) 28 SR (NSW) 34; Re Osborne [1928] St R Qd 129; Re Butchart [1932] NZLR 125, 131; Ostrander v Houston (1915) 8 WWR 367; Heuston v Barber (1990) 19 NSWLR 354; Balajan v Nikitin (1994) 35 NSWLR 51]. It follows that any order made by this Court can affect only immovable property of the deceased in New South Wales; it cannot affect movable property in New South Wales, nor any property outside the State. However, in deciding what order should be made affecting immovable property in New South Wales, the Court is entitled nonetheless to take into account assets beyond the reach of its jurisdiction which inform the extent to which eligible persons and beneficiaries and others having claims on the deceased’s testamentary bounty have and will receive provision. The Court can also take into account assets beyond the reach of the jurisdiction in deciding what order to make in respect of costs relating to the assets in the jurisdiction [see Re Paulin and Re Donnelly].

27 The evidence of a Maltese lawyer, Kris Balzan, establishes, for the purpose of these proceedings, the following relevant propositions so far as the law of Malta is concerned. In respect of property held jointly, Maltese law does not recognise accretion by survivorship where property is jointly held: half of the jointly held property is treated as part of the estate of the deceased, and half as belonging to the survivor. The Maltese law of succession contains enforced hereditary provisions by which portions of an estate are reserved for a surviving spouse and children. The reserved portion for children - where, as here there are five or more surviving children - is one half of the estate, which the surviving children share equally. The reserved portion for a surviving spouse, where there are also surviving children, is one quarter of the estate.

28 In this case, where there are six surviving children, each is therefore entitled to one twelfth of the estate. In respect of Emanuela’s estate, therefore, where there is no surviving spouse, each of the children is entitled to one twelfth of the estate, and under her will John as the sole beneficiary took the other six twelfths, so that he receives seven twelfths in all.

The estates

29 Emanuela’s estate in New South Wales comprises Lot 24 Gordon Road, Schofields, worth about $2 million, and Lot 25 Gordon Road, worth $700,000, a total of $2.7 million. The liabilities of the estate, including rates, land tax and so on, attributable to those properties, and ninety percent of the liabilities attributable to the combined estates in New South Wales (a proportion which I have struck bearing in mind the approximate relative values of Salvatore’s and Emanuela’s New South Wales estates) amount to $826,333. That includes a sum of about $50,000 said to be a refund due to Centrelink, which – though I do not need to decide for the purpose of these proceedings – may not be attributable to the New South Wales estate, but may be a liability of the personal estate of Emanuela; in any event, it makes little enough difference where it falls at the end of the day to the outcome of these proceedings. That means that in New South Wales the net estate is about $2 million, before providing for the costs of the proceedings. In Malta, Emanuela’s estate comprised funds and investments of about $250,000 and her half share in the Gozo property of $177,500, a total of $427,500; less provision of five percent for inheritance tax, leaving $406,125 net. Accordingly, her total estate is in the order of $2.4 million net.

30 Salvatore’s estate in New South Wales comprises the property at 8 to 14 Perth Street worth $250,000, less the rates and taxes attributable to it, and ten percent of the other costs and charges attributable to the administration of the combined estates in New South Wales. Together, these liabilities amount to $108,382, and accordingly, his net estate in New South Wales is about $140,000 before costs. In Malta, his estate comprised funds of about $370,000 and a half interest in the Gozo property of $177,500, a total of $547,500, less five percent inheritance tax, providing a net estate of $520,125.

31 The total net assets within the New South Wales estate of Emanuela are therefore about $2 million. The balance – comprising Salvatore’s New South Wales estate and the two estates in Malta – total about $1,066,000. The parties have agreed that each child’s reserved portion in respect of the two estates is, in the case of the funds in Salvatore’s estate, $30,689; in the case of the funds in Emanuela’s estate $36,134, and in the case of the Gozo property - which because of the various transactions that have taken place is a complicated exercise - $25,932. Accordingly, each child’s share of the reserved portions in the two estates, when combined, is $93,981.

Joseph

32 Joseph, who is sixty-seven years of age, was his parents’ eldest child; born in Malta during the Second World War, he accompanied his parents and those children who had been born to that point when they migrated to Australia in 1950, when he was eight years of age. He left school, at the age of eleven, in Year 5. He worked on his parents’ farm, performing heavy manual work. He left home in 1958, at the age of sixteen, to work away from the family farm. In 1968, he returned to Malta for three years, and married his first wife Sylvia, with whom he had three daughters. He married his current wife, Lillian, in 1994; they have one daughter. After his parents returned to Malta in 1991, he visited them once, and spoke to them by telephone a couple of times each year.

33 Joseph is unable to read or write English. He is inarticulate, and appeared to have the greatest difficulty in understanding and responding to quite simple questions. He has Diabetes Type II, for which he takes insulin. His wife Lillian is in poor health.

34 He has not worked for ten years. He receives a pension of about $480 a fortnight. His wife is not in employment. The assets of himself and his wife amount to about $630,000, including a five acre block on which he resides in a temporary but comfortable dwelling worth about $300,000, and investments of $330,000 (largely in the name of his wife) which include the proceeds of sale of a property which until recently he had owned. Questions were legitimately raised about the sufficiency of his disclosure, but I am inclined to attribute the defects in that respect to a lack of understanding and comprehension, rather than to deliberate deception.

35 Joseph wishes to improve his accommodation, or to purchase an alternate property in the range of $850,000 to $1,000,000. To permit that, he seeks provision out of the estate of about $300,000. His costs are said to amount to about $70,000.

36 Joseph’s claim is founded on the facts of paternity and maternity; that he had an unexceptional relationship with his parents; that early in his life he made significant contributions and sacrifices for their benefit, foregoing an education and instead working on their farm, performing heavy manual work - and thereby contributed, at his expense, to the ultimate accretion of his parents’ wealth and estates. He was given no such start in life as many parents would give their children. He lives today in modest accommodation. He is dependent on a pension.

Josephine

37 Josephine, aged sixty-two, was the third child. Also born in Malta, she was three when the family migrated to Australia. In 1959, at the age of twelve, she took time off school to care for her younger siblings. In 1961, at the age of fourteen, when her mother was ill, she and her siblings were taken into care by the Department of Child Welfare and placed in an institution or foster care for two years. Not long after they returned to their parents in 1963, at the age of sixteen, she left school and obtained work as a machinist. She left home in 1971 at the age of twenty-four, and married. She visited her parents weekly until they left Australia in 1991. On occasion, she provided accommodation for them. She maintained regular phone contact with them. She visited them in Malta in 2000 for six weeks. When Salvatore died, she returned to Malta for a time to care for her mother, clean the home and provide food. Of all the children other than John, she probably had the closest contact with the parents.

38 Josephine has no formal qualifications. She worked as a cleaner until 2006; in her last job she was earning less than $400 per week. She has physical disabilities, including difficulties with pain in her shoulders, a locking wrist and pain in her right knee. She has osteoarthritis and degenerative joint disease, and depression. She is presently unemployed and realistically - given her age and her medical and psychiatric condition - unemployable. Her expectation that she could return to work as a supervisor is an optimistic and I think not a realistic one. She receives a pension of $496 a fortnight. Her modest expenditure exceeds her income, and she receives some support from her son and daughter-in-law. Her estimated expenditure – excluding that which would be attributable to a motor vehicle – is about $900 a fortnight, against her income of $496 per week.

39 She owns her own house, worth about $330,000, but it is in need of some repairs. She has $5,000 in cash, and has borrowed from her son to assist with her living expenses, although she has recently repaid him. She claims needs of $30,000 to effect repairs and maintenance to her home; $35,000 for a replacement motor vehicle; $4,000 for dental work; and a fund to provide $35,000 gross per year for the remainder of her life, which actuarial evidence establishes would require $589,000. Her claims total $658,000.

40 Her claim is founded on paternity and maternity; an unexceptional relationship with her parents, perhaps somewhat closer than her siblings other than John; the early sacrifices and hardships of her life; and the circumstances that she was given no start in life by her parents, that she is now dependent on a pension, and unemployed and not in good health.

Mary Lee

41 Mary Lee, aged sixty, was the fourth child. She, too, was born in Malta, on 5 April 1949. She was eighteen months of age when the family migrated. She, too, was in care from 1961 to 1963. She left home in 1965, at the age of sixteen, and married in 1969. She travelled to Malta for her father’s funeral in 2003. Following a work injury in about 1992, she has been on workers compensation since 1994, and is in receipt of $706 compensation per fortnight net, which is less than her weekly expenditure of $415 per week. Her husband, who is not in employment, cares for her full-time.

42 She is a diabetic. She has suffered from asthma since 1984, and from depression since 1992. Her work injury, in which she injured her lower back and legs, continues to occasion her significant pain, for which she is medicated. She is unsteady on her feet. She walks with a stick. She has psychiatric issues and Dupuytren's contractures of both hands. She has constant chronic pain. She also has nasal polyps, for which she requires a surgical operation for their removal.

43 Her home at Agnes Water is worth about $330,000, and she has savings of $10,000, a motor vehicle said to be worth $3,000, and furniture, fittings and effects of $2,000 totalling $350,000. She has no superannuation. She would like a fund of $750,000, to generate a weekly income of $850 per week or $50,000 per annum. She would like $12,000 for dentistry and medical treatment; $50,000 for home repairs; $7,000 to install air conditioning; $13,000 to replace electrical goods; $15,000 for a holiday; $50,000 for a new motor vehicle; $12,000 to build a shed; and $8,000 for future medication.

44 Her claim is based on the relationship of paternity and maternity; an unexceptional relationship with her parents; the deprivations and hardships which she suffered in her childhood; her incapacity and dependence on workers compensation; the absence of any provision for her retirement; the absence of any provision for her of a start in life; the absence of any provision to cover contingencies; her medical difficulties and needs; and her lack of anything to supplement her workers compensation income.

George

45 George, aged fifty-seven, was the fifth child. He was born in Australia. With his siblings, he was in care for two years from 1961 to 1963. He left school, aged thirteen, in 1964. He married Yvonne in 1980, and they purchased a property at McGraths Hill, which they sold in 1991, when they purchased a property in Vineyard, which in turn was sold in 1996 when he purchased 222 Hamilton Street, Riverstone, most of which he retains. They have three children – aged thirty-four, thirty and twenty-seven. George paid for Josephine to travel to Malta for their father’s funeral. In 2008 he sold three of the ten lots at 222 Hamilton Street, and built a one bedroom home on his Melbourne Street property.

46 He is unsophisticated. He owns and operates an earth moving business, which generates income of about 400 to $500 per week. His wife does not work. He has two blocks of land, one comprising seven lots at 222 Hamilton Street, and one comprising seven lots at Melbourne Street. The Hamilton Street property is said to be worth about $124,000, and the Melbourne Street property about $300,000. He has cash of $20,000; personal assets of $10,000; a motor vehicle said to be worth $14,000; and some machinery for his business. In all, his net position seems to be about $500,000. He has no superannuation. He has supported his daughter’s mortgage payments in the past, and he has a contingent liability in respect of his daughter’s loan, which he appears to have guaranteed, to the extent of $40,000.

47 He wishes to improve his accommodation by the expenditure of about $250,000 to $350,000; seeks a fund of about $50,000 as a hedge against contingencies; and would like about $25,000 to fund a holiday. He seeks provision of $350,000 out of the estate.

48 His claim is based on the relationships of paternity and maternity; an unexceptional relationship with his parents; the deprivations and hardships of his childhood; the absence of any provision of any start in life; the modest circumstances in which he now lives; and the limited provision available for his retirement.

Teresa

49 Teresa, aged fifty-three, was her parents’ sixth child. She, too, was born in Australia and she, too, was in care from 1961 to 1963. She left school and home in 1971, in Year 9, when she was not yet fifteen. She married at the age of twenty in 1976. She has been out of employment for seven years. She has no qualifications for employment, and suffers from depression for which she is medicated. She lives in Junee with her husband Lindsay Murdoch, who has been working as a casual labourer, but has recently obtained full-time employment earning about $540 a week net. Their expenditure exceeds their income, and they have had to reduce their standard of living to accommodate this. They have also increased their borrowings to do so. Their expenses of $740 per week, including $275 interest only payments in respect of their mortgage loan, exceed their weekly income. Their home in Junee is worth about $175,000 and is subject to a mortgage securing a debt of $112,000. They have a car worth $20,000 and savings of $660. Mr Murdoch has superannuation of only $2,000, following a number of withdrawals which were approved for hardship reasons.

50 Teresa had quite frequent contact with her parents. She assisted them in their dealings with the English speaking community. She also assisted with the purchase of the property at Schofields, and was rewarded by the purchase in her name of a property in Chaucer Road for about $6,000, which she ultimately sold in 1997 for $65,000, using the proceeds to pay down the mortgage on the Junee property.

51 She would like to move to Campbelltown, at a cost of about $450,000 for accommodation there, but concedes that this is not a real necessity; and she would like $25,000 to replace furniture, fittings and equipment; $500,000 to provide a fund to generate an income for the rest of her life; $5,600 to install air conditioning, and $112,000 to pay off the mortgage.

52 Her claim is based on the relationships of paternity and maternity; an unexceptional relationship with her parents, perhaps closer than some of her siblings; the hardships and deprivations of her childhood; the difficult and vulnerable financial position in which she and her husband now find themselves; and the absence of any provision for their retirement and for contingencies.

John

53 The defendant John was the seventh child of his parents. He was born in Australia. As I have said, it is not entirely clear whether he was removed into care with his siblings between 1961 and 1963. He has had some psychiatric issues since birth; the evidence does not go into much detail about this but, drawing as best one can from such evidence as there is, it seems likely that he is affected by some form of schizophrenia: he went to a special school when a child, and he is on some sort of medication and his condition is said to deteriorate when he does not take this medication.

54 He never married. He remained with his parents throughout his life. He worked on their farms from the age of thirteen in 1974 until the early 1990s when he accompanied them to Malta – apart from two years when he worked as a storeman, during which he gave all his income to his father. He plainly contributed to the accretion of the family wealth. In Malta he continued to care for his parents, as his mother’s will attests.

55 His financial position is not entirely clear. He lives in a property at Gozo said to be worth $300,000, but this appears to be the property which is an asset of the estate in any event. He receives a disability pension of $877 a month. In 2005 he began to live with his niece Terisilla, Joseph’s daughter, to whom he gave about $100,000 approximately in February 2008 for looking after him. The source of those funds – though he said he brought them with him from Australia – remains uncertain.

56 John, of course, does not have to establish a claim. Nonetheless, he did have a relationship of paternity and maternity with his parents, and an ongoing close relationship with them, remaining with them when all the other children had left home. He has a case of special need, arising from his psychiatric disabilities. He, too, suffered hardships early in life, and he made significant contributions to the estate and welfare of his parents. Unlike any other of the children, he was apparently dependent on his parents as at their deaths.

Evaluation

57 These are claims by adult children. It is impossible in this area to describe in terms of universal application the moral obligation or community expectation of a parent in respect of an adult child. I think, however, it can be said that ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life – such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [McGrath v Eves [2005] NSWSC 1006].

58 Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute. It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent.

59 The Court’s attitude to the eligibility for means tested pension benefits of eligible persons and beneficiaries varies, depending on the circumstances of the case. Ordinarily, a testator makes a will and provides for those who have a claim on the testator without regard to the claimant’s eligibility for a pension. However, in a small estate where there are competing claims, a testator, and this Court on an application under the Act, may take into account the eligibility of a claimant for a pension as a means of deciding how such limited benefits as are available from the estate should be shared between claimants, and how those benefits might be structured. But this qualification to the principle that the burden of support should be borne in the first instance by an estate rather than by social security arises mainly, if not exclusively in smaller estates [Parker v Public Trustee (1988) NSWSC, Young J, 31 May 1998; Whitmont v Lloyd (New South Wales Supreme Court, 31 July 1995, Bryson J, unreported); King v Foster (Court of Appeal, 7 December 1995, unreported) King v White [1992] 2 VR 417, 424; Shah v Perpetual Trustee Company [1981] 7 Fam LR 97 100; Gunawardena v Kanagaratnam Sri Kantha [2007] NSWSC 151; Chan v Tsui [2005] NSWSC 82].

60 In my view, Salvatore and Emanuela, but relevantly Emanuela in particular, were entitled to regard John as the prime object of their bounty. Nonetheless, he will receive on any view effectively the whole of the Maltese estate, and the New South Wales estate of Salvatore, amounting in all to more than $1 million. That still leaves practically $2 million in Emanuela’s New South Wales estate available for distribution.

61 In this case, therefore, it was possible to make ample provision for the prime object of the testatrix’s bounty, without treating social security as a sufficient resort for the others who had a claim to testamentary recognition. A wise and just testatrix would have provided for the other children, to the extent that she was able to and they had relevant needs, rather than leaving them to resort to social security for that purpose. In this case, I am satisfied that provision ought to have been made for the claimants without regard to their receipts of means tested pensions.

62 Provision for eligible persons may be inadequate or improper in form as well as, or as distinct from, in quantum. Thus, provision which is dependent upon the exercise of a discretion by the trustee of a discretionary trust will often, though not invariably, be inadequate or improper [Re WTN (NSWSC, Unreported, 3/7/59, McLelland CJ in Eq; referred to in [1959] 33 ALJ 240; Gregory v Hudson (No 2) (New South Wales Supreme Court, Young J, 18 September 1997, unreported. Thus although it may not be so in every case, I think it can be said that provision which can only be accessed through protracted litigation against a recalcitrant executor in a remote part of the world at prohibitive expense is practically no provision at all, and is therefore not proper provision. At least that will be so where there are available more readily accessible assets.

63 In this case, the evidence establishes that to obtain their shares of the reserved portion, the plaintiffs would have to instruct lawyers in Malta to make claims on the lawyer acting for the estate and John, then enter into negotiations with those representing the estate in Malta, then commence litigation which, in the absence of a negotiated outcome, would take a minimum of three years to finalise. As I understand the Maltese position, the shares of the reserved portion effectively become a creditor’s claim for the value of that portion against the estate, which they would then have to enforce in the Maltese Courts. No doctrine of disclosure would apply in any such litigation. The evidence of absence of any response to the correspondence to Mr Defalo – when Teresa’s solicitors were seeking information about the estate before commencing proceedings, together with the demeanour of John when he gave evidence over the telephone, and the evident non-compliance by Mr Defalo with the Court’s request that he refrain from advising or coaching John’s answers during the course of his cross-examination, satisfies me that neither John nor his solicitor is likely to co-operate in any claim by the plaintiffs for access to their shares of the reserved portion. In the circumstances of this case, when there are assets in New South Wales out of which provision could be made for the New South Wales resident children unattended by those difficulties, provision which leaves them dependent upon resorting to litigation in Malta, which is plainly beyond the resources of any of them, is not proper or adequate provision.

64 The actuarial evidence adduced by Josephine establishes that a capital sum of $500,000 provides an income of $30,000 gross per annum for a period of about twenty-five years. Twenty five years is a reasonable approximation of the life expectancies of the plaintiffs; I do not think that the wise and just testatrix would have scrutinised too closely differences in age, life expectancies and so on between each of the children, though such testator might have had more regard to differences in their financial positions, in their contributions to the testator’s welfare and estate, and in the benefits already received by them from the testator.

65 A sum of about $500,000 would cover the basic income needs of the children for a period of approximately twenty-five years, being their approximate life expectancies after retirement. Some of the children have made greater contributions to the estate or the welfare of the deceased than others. Some have greater needs than others. The exercise of balancing these is one in which most wise and just testators would probably not engage, but resort to equality. The exercise of weighing the competing claims of the plaintiffs is an invidious one. I was sorely tempted to resort to the solution of dividing the New South Wales estate equally between them. Had the testatrix done so, she could not have been criticised for that course, but bearing in mind the observations of Young J in Stewart v McDougall to which I have referred above, I do not think that I have quite the liberties that the testator had in that regard.

66 Ultimately, I think the claims of the plaintiffs do fall into two different classes. Josephine is entirely dependent on a pension, with no other means of support, and will apparently be so for the rest of her life. The approximate $100,000 which her share of the reserved portion would have given her is plainly inadequate for her proper maintenance. Were funds available, a sum in excess of $600,000 might be appropriate to that end. Although Mary Lee is in receipt of workers compensation, which improves her position somewhat relative to Josephine, she too, after that expires at retiring age, will be entirely dependent on a pension, without any other means of support for the rest of her life. Teresa is in a similar category; her position is to some extent worse, because her assets are less, and she still has a mortgage. On the other hand, there is the countervailing consideration that she does have a husband who is now in employment. Teresa’s claim is also to some extent diminished by the circumstance that she received a benefit, which ultimately turned out to be worth about $60,000, from her father during his lifetime, but that is offset by the circumstance that her current financial position is worse than that of her siblings.

67 On the other hand, Joseph does have some provision for his retirement in the form of the funds of $330,000 held by himself and his wife and invested. That puts him in a significantly stronger position for the future than his siblings.

68 George’s position lies somewhere between them. He has funds of $100,000 in addition to his home, and he has the ability to continue to operate his own business which generates an income of $400 to $500 per week.

69 Essentially the claims of Teresa, Mary Lee and Josephine are claims for maintenance, whereas those of George and Joseph are claims for advancement. However, even for George and Joseph, I am satisfied that the provision of $100,000 or less, which would have been derived from their shares of the reserved portion, is inadequate for their proper advancement in life, having regard to their early sacrifices and contributions, the absence of any start in life provided for them by their parents, and the size of the estate.

70 Having regard to the size of the available estate in Australia, the competing claims of the siblings, and the costs which they have incurred in these proceedings to date, an appropriate allocation of the Australian estates seems to me to involve Josephine, Teresa and Mary Lee each receiving approximately $500,000 inclusive of their costs, and George and Joseph each receiving $250,000 inclusive of their costs. This is on the basis, as has been suggested, that as a condition each plaintiff will forego any claim to their share of the reserved portion, so that all of the Maltese estate, as well as the movable property in Australia, will be available to John, together with the net real estate of Salvatore in Australia. I have taken a “costs inclusive” costs approach, because the plaintiffs’ costs are in any event going to have to come out of the Australian estate, and the award of specific legacies and costs orders will leave each of the parties vulnerable to movements in the value of the properties involved, which may be productive of injustice.

71 To give effect to these conclusions, the appropriate course is to require the sale of the Australian properties in Emanuela’s estate and the division of the net proceeds, as to 25 percent each to Josephine, Teresa and Mary Lee, and as to 12.5 percent each to Joseph and George. Upon current values that will have the effect of providing Joseph with a sum of $180,000 (after his costs of $70,000 are deducted from $250,000); Josephine with $375,000 (after her costs of $125,000 are deducted from $500,000); George with about $70,000 (after his costs of $178,000 are deducted from $250,000); and Teresa and Mary Lee each with about $388,000 (after their shares of their joint costs of $225,000 are deducted from about $500,000).

72 To the extent that the plaintiffs’ have incurred different amounts of costs, I think this approach is not unfair, in the sense that each of the plaintiffs has been responsible for his and her own decisions as to the level of legal representation they have engaged and the amount of costs that they have incurred.

73 My order therefore is:

1. Upon the undertaking of each of the plaintiffs to the Court to do all things necessary on his or her part to assign release and transfer to the first defendant, John Farrugia, their respective shares of the reserved portions of the estates of Salvatore Farrugia and Emanuela Farrugia, Order that in lieu of the provision made by the will of Emanuela Farrugia in respect of her real property in New South Wales, the properties situated at and known as Lot 24 and Lot 25 Gordon Road, Schofields in the State of New South Wales be sold and the net proceeds of sale applied (after payment of rates, taxes and other liabilities charged on the land, costs of the sale, real estate commission and advertising expenses associated with the sale, and costs of the administration of the New South Wales estate of the deceased) to the plaintiffs in the following proportions:

· As to the plaintiff in proceedings 5129/05, Josephine Taylor, 25 percent.

· As to the plaintiff in proceedings 1499/06, George Farrugia, 12.5 percent.

· As to the plaintiffs in proceedings 4518/07, Teresa Murdoch and Mary Lee O’Reilly, 25 percent each.

· As to the plaintiff in proceedings 2871/08, Joseph Farrugia, 12.5 percent.

74 I make no order as to costs, to the intent that the plaintiffs’ costs be paid out of their respective shares and the estate bear its own costs. In making that costs order, I have taken into account the availability to the estate of the assets in Malta and ultimately the New South Wales assets of Salvatore’s estates.

75 In proceedings 1174/06 I order that the proceedings be dismissed. I make no order as to costs.

76 I direct in the event any party seeks any special costs order, or any costs order other than that which I have made, such application is to be made by arrangement with my associate not later than 11 June 2009. I direct that the order not be entered before 25 June 2009.

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26/08/2009 - Corrections - Paragraph(s) para 39, change "week" to "year"para 70, change second "Josephine" to "Joseph"para 71, change second "George" to "Joseph"