Newman v Newman

HIS HONOUR: This is a dispute between two brothers, Joseph Newman (“the Plaintiff”) and Alan Barry Newman (“the Defendant”). The proceedings, now, only involve a claim for a family provision order under Part 3.2 of the Succession Act 2006 (NSW) (“the Act”) out of the estate of their mother, Adele Newman (“the deceased”). Although, initially, the Plaintiff sought a declaration that the Defendant held an amount of $200,000 on trust for him, that relief was abandoned prior to the hearing. It will be necessary to dismiss that part of the Plaintiff’s claim in due course.

A family provision order is an order made by the court in relation to the estate, or notional estate, of a deceased person, to provide from that estate, or notional estate, for the maintenance, education, or advancement in life of an eligible person. The Act applies in respect of the estate of a person who died on, or after, 1 March 2008. The Act replaces the Family Provision Act 1982 (NSW) (“the former Act”), which was repealed, effective from 1 March 2008. In this case, there is no suggestion that there is any notional estate.

There is no dispute that the Plaintiff’s application was filed within the time prescribed by the Act (within 12 months of the date of the death of the deceased).

Although the matter was listed for 1 day, it did not conclude within that time. The reading of the affidavits and the objections to the Defendant’s affidavits took far longer than was necessary, principally because his substantive affidavit appeared to have been drafted by the Defendant himself and simply re-typed by his solicitors. It did not appear that any forensic consideration had been given to its contents and parts of it were objected to and rejected.

Furthermore, during the course of the cross-examination of the Plaintiff, and in light of certain matters raised with the Plaintiff and with counsel, following the completion of the cross-examination of the Defendant, counsel for the Plaintiff sought leave to re-open, and sought to have the hearing adjourned to enable further evidence to be given about the cost of a 1 bedroom apartment, the Plaintiff’s principal claim being for an amount to enable him to purchase accommodation (T67.20-T67.25). (Evidence had been given of the cost of a two bedroom unit being between $1.0 million and $1.5 million.) This demonstrates that in forensic contests of this nature, closer attention should be given to the ambit of the applicant’s real needs when the time comes to prepare his, or her, affidavits and prior to the hearing.

The Plaintiff’s counsel made the application at approximately 3:45 p.m. on the first day, shortly before oral submissions commenced. Counsel for the Defendant opposed any adjournment of the hearing.

As it appeared that the submissions would not conclude, I adjourned the matter until 2:00 p.m. the following day (as both counsel were engaged in the morning). I also stood over the oral application made on behalf of the Plaintiff, with a suggestion that, perhaps, the solicitors for the parties could consider whether an agreed bundle of documents, or at least an agreed range of asking prices for a 1 bedroom apartment, in the North Bondi area, might be tendered. In making the suggestion, I had in mind Practice Note SC Eq. 7, Paragraph 21, which, in certain circumstances, encourages internet, or other media, advertisements of the asking price of real estate.

When the matter commenced at 2:00 p.m. on 22 September 2015, counsel sought leave to file in court an affidavit of Mr C Rogers, a paralegal at the firm of solicitors representing the Plaintiff. Without opposition, I granted leave to the Plaintiff to file the affidavit in court.

(I should mention that the affidavit consisted of a copy of a number of internet searches showing amongst other things, the median price of 1 bedroom home units in the North Bondi area, some historical sales records achieved in respect of 1 bedroom home units and the deponent’s calculations of the “average sale price achieved”.)

Counsel for the Defendant, then, objected to me granting leave to the Plaintiff to re-open the Plaintiff’s case and to read the affidavit. He submitted that, as a matter of discretion, leave should not be granted because there had been no explanation for not having the evidence available previously and that the Defendant would be prejudiced by allowing leave as he would have asked some questions of the Plaintiff about the matter.

In relation to the first ground, I note that the Defendant had produced evidence regarding the costs of a studio apartment in a complex at Rose Bay, and that the Plaintiff explained his reasons for not wishing to live there. In relation to the second ground, counsel was unable to articulate the nature of the prejudice that the Defendant would suffer in answer to the question what would have been done if the evidence had been advanced in accordance with the directions made. In any event, I indicated that I would permit further cross-examination on the affidavit if the Plaintiff’s application to re-open was successful and the affidavit was read.

The principle which guides the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing, or rejecting, the application as the case may be.

This is not a case where the evidence in the late affidavit was not provided based upon a tactical forensic decision. Rather, it seems to me, that the decision was based on a mistaken apprehension of the facts that might be taken into account in determining what the court might consider to be adequate and proper provision in all the circumstances of the case, and in the events that happened (as a result of the further cross-examination of the Plaintiff), the nature of his need for accommodation. It seems to have been thought the need was for a two bedroom, as opposed to a one bedroom, apartment.

Furthermore, in the present case, as stated, the application to re-open was made before the hearing concluded, albeit after the evidence was read and each party had been cross-examined. This is a relevant matter on the exercise of the court’s discretion.

I have no doubt that it is in the interests of both parties to allow the Plaintiff’s application and to read the affidavit filed in court (although the weight to be given to some of that evidence will not be great). Otherwise, the position is that whilst the parties agree that the principal need of the Plaintiff is accommodation, there would be very little, if any, evidence upon which the court could determine the likely costs of obtaining that accommodation.

In all the circumstances, I granted leave to the Plaintiff to re-open his case and to read the affidavit sworn 22 September 2015. I also permitted counsel for the Defendant to cross-examine the deponent of that affidavit and to further cross-examine the Plaintiff. Naturally, then, I did not grant the application for the adjournment.

I should also pause to mention that following the order granting leave to the Plaintiff to read the affidavit, counsel for the Defendant tendered (as Ex. 6) a bundle of internet searches setting out historical searches of other 1 bedroom home units in the North Bondi area. The prices achieved were significantly less than the average sale price referred to by Mr Rogers.

As to the costs of the second day, I am of the view that there should be no order for costs of either party of the second day’s hearing. This conclusion is reached upon the bases that had there not been so many objections to the Defendant’s substantive affidavit, the matter may well have concluded within one day, and because the evidence upon which each party wished to rely on the estimated cost of a 1 bedroom home unit could have been produced prior to the hearing in accordance with Practice Note SC Eq. 7.

Accordingly, the costs orders to be made are not to include any costs of the second day of the hearing to the intent that each party is to bear his own costs thereof.

The following facts are not in dispute.

The deceased was born in February 1921 and died in September 2014 aged 93 years.

She was married to Samuel David Newman in October 1944. There were only two children of their marriage, being the Plaintiff, who was born in July 1946, and the Defendant, who was born in July 1958.

The deceased’s husband predeceased the deceased, having died in August 1978. Thereafter, the deceased did not remarry.

The deceased left a duly executed Will that she made on 8 June 2004. On 1 December 2014, this court granted Probate in common form of that Will, to the Defendant, the sole executor and the major beneficiary named in that Will.

The deceased’s Will provided for the payment of debts, funeral and testamentary expenses, and then directed the Defendant “to set aside sufficient funds out of my estate in order to pay a weekly benefit payment to my son [the Plaintiff] in the sum of two hundred and fifty dollars ($250.00) as long as he lives”. The remainder of the estate was given to the Defendant absolutely. (Interestingly, the Will provided that in the event that the Defendant did not survive the deceased for 30 days, the whole estate was left to the Plaintiff absolutely.)

There was no explanation provided in the Will by the deceased for the payment of the weekly benefit to the Plaintiff rather than making any lump sum payment to him. However, the Defendant gave some evidence, to which I shall refer, which he asserts explains the terms of the deceased’s bequest to the Plaintiff.

The Plaintiff estimated that his life expectancy is about 17.5 years and that “[a] sum of $250 for a period of 18 years assessed on the 3% and the 5% table of multiplies (sic) equates to $182,100 and $156,250 (respectively)”. (There was no objection to this passage in his affidavit and he was not cross-examined about it.) During submissions, the Defendant appeared to accept the accuracy of the range of calculations.

The Defendant has not paid any amount to the Plaintiff since the death of the deceased. If one estimates that about 54 weeks have passed since the death of the deceased until the date of hearing, the amount of $13,500 would be payable to the Plaintiff out of the estate of the deceased.

In answer to a question from the Bench, counsel for the Plaintiff stated that the Plaintiff did not seek to have this amount paid to him, as an amount payable under the terms of the deceased’s Will, and that the parties had agreed that the provision to be made in favour of the Plaintiff should be in lieu of the provision for him in the Will of the deceased (T7.05-T7.17).

According to the Inventory of Property, a copy of which was attached to the Probate document, the property owned solely by the deceased at the date of her death was disclosed as having an estimated, or known, gross value of $3,722,387. The estate was said to consist of real estate at North Bondi, a suburb of Sydney, ($2,500,000), real estate in Bellevue Hill, also a suburb of Sydney ($1,100,000), cash in bank ($117,066), and some shares in a public company ($5,321). (I have omitted, and shall continue to omit, any reference to cents in the amounts to which I shall refer, which will explain any minor mathematical errors.)

The Defendant disclosed no jointly held property, or any liabilities, in the Inventory of Property. In a later affidavit, he disclosed that there were monies in a joint bank account in the name of the deceased and himself, at the date of death (which, as at 12 August 2015, was $37,178). (There is no need to designate the deceased’s interest in the jointly held funds as notional estate as there is more than sufficient in the actual estate to satisfy the claim of the Plaintiff. However, counsel for the Defendant agreed that the court should bear in mind that the Defendant had received the whole of the amount following the death of the deceased.)

In an affidavit sworn on 8 April 2015, the Defendant disclosed that the Bellevue Hill property had been sold, in December 2014, for $1,100,000, and that the net proceeds of sale had been paid into a controlled money account. The amount held, as at the date of the affidavit, was $1,069,506.

The North Bondi property was purchased by the deceased and her husband in about April 1953. On her husband’s death, she inherited, by survivorship, his interest in that property. Under the terms of the deceased’s Will, the Defendant will inherit this property. It was agreed that both the Plaintiff and the Defendant had lived in the North Bondi property for the whole of his life.

The parties agreed that, at the date of hearing, the deceased’s estate consisted of a cash sum of $1,026,145, other cash in bank ($12,012), the shares ($5,304) and the North Bondi property, which the parties agreed should, for the purposes of the hearing, be taken to have a value of $2,400,000 (T3.22-T3.28)

It follows that the estimated gross value of the deceased’s estate at the date of hearing should be taken to be $3,443,461.

The parties were also able to agree that the liabilities of the estate included estate administration costs, as well as costs and expenses of sale of the Bellevue Hill property ($42,158), which have already been paid out of the estate. The balance of funeral expenses ($3,860), capital gains tax payable on the proceeds of sale of the Bellevue Hill property ($28,767), an accountant’s fees ($2,000) and that the costs and expenses of sale of the North Bondi property ($55,000), if the North Bondi property is to be sold, are yet to be paid out of the estate (T3.49-T4.26). These liabilities total $89,627.

They also accepted that it would be prudent, in the event that the Plaintiff were successful, and if the cash amount held, after payment of the liabilities (other than the costs and expenses of sale) and the costs of the proceedings were paid, to provide him, absolutely, with an amount calculated as a percentage of the net value of the estate. In this way, both parties would benefit if the North Bondi property were sold for a price greater than had been estimated, and each would be detrimentally affected if it sold for less than the estimate. There would also be certainty of price, costs and expenses of sale, and the legal costs of the proceedings, upon which calculations could be made.

The Defendant’s case was that he would rather retain the North Bondi property if that were at all possible. The evidence also reveals that significant repairs would have to be carried out to that property, at an estimated cost of $396,000 plus GST (Ex. 1/28-29). (In a more recent affidavit, the Defendant stated that he would need a minimum of $100,000 for urgent repairs and that the figure of $400,000 would be to completely renovate the house).

There is no suggestion that the Defendant has sufficient funds to pay either amount required to enable the repair or renovation of the North Bondi property, or that either amount would need to be spent if the property were sold. However, during submissions, counsel for the Defendant accepted that it would be for the Defendant to pay any renovation and repair costs if the cash was to be utilised for the family provision order and the costs of the proceedings.

In calculating the estimated value of the deceased’s estate finally available for distribution, the costs of the present proceedings should also be considered, with circumspection, since the Plaintiff, if successful, normally, will be entitled to an order that his costs and disbursements, calculated on the ordinary basis, be paid, whilst the Defendant, as the person representing the estate in the proceedings, irrespective of the outcome of the proceedings, normally, will be entitled to an order that his costs, calculated on the indemnity basis, be paid out of the estate of the deceased.

The Plaintiff’s solicitor, Mr H N Simons, in an affidavit affirmed on 27 August 2015, estimated the Plaintiff’s costs and disbursements of the proceedings, including counsel’s fees, calculated on the ordinary basis, to be $88,000 (not inclusive of GST, and upon the basis of a one day hearing). There was no evidence that the Plaintiff had paid anything towards these estimated costs and disbursements.

The Defendant’s solicitor, Mr V A Moulis, in his affidavit sworn 16 September 2015, estimated the costs and disbursements, including counsel’s fees, calculated on the indemnity basis, of the Defendant, for these proceedings to be $88,531 (inclusive of GST and upon the basis of a one day hearing). There was evidence that the Defendant had paid $38,531 towards these estimated costs and disbursements out of the estate of the deceased. It follows that $50,000 remains to be paid (T5.27-T5.34).

If the usual costs orders are made, and if the parties are unable to reach agreement on the quantum of costs to be paid, it will be for an assessor to determine the appropriate quantum of costs for both parties. Hopefully, this will not be necessary and the parties will be able to reach agreement, if necessary, without the need for additional costs to be incurred.

The parties agreed, and the court is satisfied, taking the estimated agreed value of the North Bondi property ($2,400,000), if the costs and expenses of sale of that property also proved accurate ($55,000) and were deducted, if the usual costs orders are made, and if the estimates of costs prove accurate, and costs are deducted ($146,800), and the other liabilities identified above are also paid ($34,627), the amount available to be distributed out of the estate to satisfy any order for provision for the Plaintiff, will be $3,207,034.

The parties also agreed that they were the only eligible persons within the meaning of that term in s 57(1) of the Act. It follows that it was not necessary to serve a prescribed form of notice on any person. The court will not disregard the interests of the Defendant as a person by, or in respect of, whom an application for a family provision order may be made but who has not made an application as he is the sole residuary beneficiary named in the Will of the deceased.

There were a significant number of factual disputes evidenced by the affidavits of the parties. The parties’ counsel had agreed that no Browne v Dunn point would be taken “in order to save valuable time at the hearing”, but there were a number of issues upon which there was some cross-examination.

I found the Plaintiff to be a somewhat verbose witness who had some difficulty answering the questions asked of him. On a number of occasions, I reminded him of the question that had been asked and requested him to answer it. I did not form the view that he was being deliberately unresponsive, but he obviously had difficulty answering the questions in a directly responsive way.

I also had the firm impression that the Plaintiff expected to receive a significant part of the deceased’s estate without any detailed consideration of his real needs. For example, he admitted that in providing an estimate of the costs of furnishing any accommodation ($40,000) to which he would move, he had made no enquiries by, for example, finding out the actual cost of the required items himself, but had just left it to his legal representatives to calculate what those costs might be.

He did not seem to have any idea of how the amount of $40,000 had been calculated although he had set out the whitegoods and furniture that he would require. (In Ex. 1, the Defendant had included various furniture and whitegoods and the advertised price of each by reference to a number of retailers that he said he would need in the event that he had to vacate the North Bondi property.)

By way of another example, the Plaintiff had asserted in his affidavit that “[g]iven my medical condition and expenses that I am likely to meet, I require a buffer of at least $500,000”. There was a statement that the amount had been calculated by reference to “ongoing expenses associated with my medical condition(s), which I expect will increase with age”; to “expenses associated with living in a property of my own… approximately $8,000 [to] $10,000 per year”; to “costs associated with maintaining a property which I would estimate between $6,000 to $10,000 per year”; to “domestic assistance”; and to “[o]ther expenses… relating to needs generated by me getting older”. There was no evidence explaining what those needs were, or how they were reflected in the buffer of $500,000. Nor was there any differentiation between the individual elements.

The Plaintiff also stated that he required $10,000 “to go away for a week or two in order to recuperate after my mother’s death and the evident breakdown of my relationship with my brother”.

I formed the view that the evidence had not been considered by the Plaintiff in a proper way, and that the amounts had effectively been chosen in order to increase his perceived claim on the bounty of the deceased.

When he was asked by his counsel, in re-examination, why he required a 2 bedroom, rather than a 1 bedroom studio apartment, as depicted in Ex. 3 and Ex. 4, he stated, first, that as it was in Rose Bay, it was not in an area that he desired to live, which was in North Bondi. I found this to be a somewhat odd response, as there had been a two bedroom apartment, in Bronte, a suburb seemingly further away from North Bondi, than Rose Bay, identified as suitable for his accommodation need. (He had stated that Rose Bay was somewhat distant to the Synagogue at which he attended (T31.33-T31.34), which was a more reasoned explanation for it being unsatisfactory.)

Second, he said that in relation to the 1 bedroom studio apartment, the kitchen facilities did not appear adequate (T40.22-T40.23; T40.33-T40.38), another rather surprising proposition given his evidence that he had not done very much cooking throughout his life, and that, “his preference would be to continue purchasing food or having someone prepare the meals”: T21.03-T21.05.

Third, he stated that the rooms appeared small in the photographs of the 1 bedroom studio apartment (T40.42-T40.43), another surprising assertion, because his evidence was that since the death of the deceased, when he was at the North Bondi property, he used only his bedroom and the bathroom, and even before her death, he had only used the living and dining rooms occasionally.

Finally, he said that he would be “claustrophobic” (T40.24; T42.44) if he was required to live in an apartment of that size. However, there was no evidence that he had suffered from such a medical condition, or that he currently occupied a greater space than that depicted by the photographs which had caused him to feel that way.

I found the Defendant to be a much more credible witness. Despite the contents of his substantive affidavit going to the facts of the family and the relationships of its members (to which affidavit I have earlier referred), he seemed far better able, and was prepared, to directly answer questions put to him in cross-examination.

Having observed each of the parties in the witness box, I tend to think that, in relation to the relationship of the Plaintiff and the deceased, the Defendant is likely to have provided a more realistic picture. In this regard, it is clear that the deceased regarded the Defendant as the person with a significantly greater claim upon her bounty.

Despite the contents of his substantive affidavits, the Defendant acknowledged in his affidavit of 16 September 2015, that he expected that “provision needs to be made for my brother” and further, in his affidavit in reply of the same date, that he “concede[s] that the court should make provision for his accommodation in relation to a one bedroom [unit] in the Eastern Suburbs”. At the hearing, he did not resile from this proposition; the area of debate related to the amount of the lump sum order for provision that ought to be made.

There was one matter about which there was a significant amount of cross-examination, which, in my view, really went nowhere. There was no dispute that in August 2011, the Plaintiff had paid the Defendant $200,000. The Plaintiff said that the payment, which was one half of the estimated costs, was made to enable renovations to the North Bondi property and to the Bellevue Hill property to be completed by the Defendant prior to its sale, which renovations had not been carried out (T35.36-T35.44).

The Plaintiff also had asserted in the Statement of Claim that the Defendant had promised to reimburse the Plaintiff from the proceeds of sale. On this basis, the Plaintiff asserted that the Defendant held $200,000 on trust for him.

It is this trust claim to which reference has been made earlier and which claim will be dismissed by consent of the Plaintiff. No explanation was provided for the Plaintiff taking this course.

The Defendant asserted that the amount paid was part of an amount ($280,000) which the Plaintiff owed to him, to the deceased, and to their uncle, Cyril Shostak (the brother of the deceased). No precise amount said to be owed to each of them was disclosed, but the Defendant stated that he, the deceased and the Plaintiff, had agreed that $200,000 would be paid and that, thereafter, no claim for payment would be sought.

The Defendant also gave evidence that the amounts making up the estimated amount of $280,000, had been borrowed by the Plaintiff to fund what was described by the Defendant as the Plaintiff’s “gambling problem”, a matter vehemently denied by the Plaintiff.

I was, initially troubled by the Defendant’s evidence about part of the alleged debt being owed to their uncle, and not having been paid, upon receipt of the $200,000, to the executor of his estate (the uncle having died in 2003). It became clear, in cross-examination, that the uncle had left the whole of his estate to the deceased, with the consequence that she would receive, in any event, that part of the amount that would pass to the uncle’s estate (T58.03-T58.08).

The Defendant also gave evidence, which was not the subject of cross-examination, that he had paid all of the expenses of the deceased from the bank account into which the amount of $200,000 had been paid, as she had no source of income, by way of a pension, following her inheriting her brother’s estate and because the Defendant was looking after her financial affairs.

Even if I were to accept the Defendant’s evidence on this topic, I must consider his evidence in answer to questions from the Bench that, following the repayment of $200,000, the Plaintiff did not borrow any more money from either the deceased, or from him, and that the Plaintiff continued to pay board to the deceased calculated as one half of his fortnightly income (T65.18-T65.25).

It follows that on the Defendant’s evidence, the Plaintiff, the deceased, and the Defendant had reached a compromise which resulted in the repayment of the debts said to be owed by the Plaintiff, following which compromise the Plaintiff did not borrow any further amounts from the deceased. His financial contribution thereafter will be referred to later in these reasons.

Another matter about which there was some cross-examination of each party, related to an agreement reached to enable the Plaintiff to continue to live in the North Bondi property pending the determination of the proceedings. This, too, really went nowhere, as the Plaintiff did not abide the agreement, not paying $780 per fortnight, for “board, food and all other living expenses” and the Defendant did not abide the agreement by not providing “an itemised breakup of debts owing to the estate of Adele Newman and Alan totalling $200,000”.

As there is no dispute about the Plaintiff’s eligibility as a child of the deceased, and as he commenced proceedings within the time prescribed by the Act, he may apply to the Court for a family provision order in respect of the estate of deceased. The language of s 57(1)(c) is expressive of the person’s status, as well as his, or her, relationship to the deceased. There is no age limit placed on an eligible person making an application.

Having satisfied these necessary preconditions to the making of a family provision order, the court must then determine whether it is satisfied, at the time when the Court is considering the application, that adequate provision for the applicant’s proper maintenance, education or advancement in life has not been made by the will of the deceased, or by the operation of the intestacy rules in relation to the estate of the deceased, or both: s 59(1)(c) of the Act. (In this case, the operation of the intestacy rules is irrelevant.)

It is this mandatory legislative imperative that drives the ultimate result. Relevantly, other than by reference to the provision made by the Will in relation to the estate of the deceased, s 59(1)(c) leaves undefined the norm by which the court must determine whether the provision, if any, is inadequate for the Plaintiff’s proper maintenance, education and advancement in life. The question would appear to be answered by an evaluation that takes the court to the provision actually made by the Will of the deceased, on the one hand, and to the requirement for maintenance, education or advancement in life of the Plaintiff on the other. No criteria are prescribed in the Act as to the circumstances that do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the Plaintiff.

The word “adequate” connotes something different from the word “proper”. “Adequate” is concerned with the quantum, described by Rosalind Atherton in “The Concept of Moral Duty in the Law of Family Provision – a Gloss or Critical Understanding?” (1999) 5 Australian Journal of Legal History 5, at 10, as reached upon “a purely economic and objective basis”, whereas “proper” prescribes the standard, of the maintenance, education and advancement in life: Devereaux-Warnes v Hall (No 3) [2007] WASCA 235; (2007) 35 WAR 127, per Buss JA, at [72] and [77], which seems to invite more subjective criteria.

These words were considered by Lord Romer in delivering the advice of the Privy Council in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at 476:

Their Lordships went on to state (at 478):

Dixon CJ and Williams J, in McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566, at 571-572, after citing Bosch v Perpetual Trustee Co Ltd, went on to say, of the word “proper”, that:

In Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, Gibbs J wrote, at 502:

In Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191, at [114], Callinan and Heydon JJ said:

Santow J pointed out in Gardiner v Gardiner (Supreme Court (NSW), Santow J, 28 May 1998, unrep), that “adequate” and “proper” are independent concepts. He wrote, at 12:

In Palagiano v Mankarios [2011] NSWSC 61, at [72], White J observed that the question of what provision for a person’s maintenance, education or advancement in life is “proper” and the question of whether the provision made by the deceased was “adequate” for that person’s maintenance, education or advancement in life involve value judgments on which minds can legitimately differ, and there are no definite criteria by which the question can be answered.

His Honour added, in Slack v Rogan; Palffy v Rogan [2013] NSWSC 522; (2013) 85 NSWLR 253, at [123]:

Beazley P in Phillips v James [2014] NSWCA 4; 85 NSWLR 619, at [54], commented:

In determining whether it is satisfied that adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the Will of the deceased, the court has regard to, among other things, 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 circumstances and needs of the other beneficiaries or potential beneficiaries: see McCosker v McCosker, at 571-572; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201, at 209-210; Vigolo v Bostin, at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757, at [70]; Verzar v Verzar [2014] NSWCA 45, at [39].

It is only if satisfied of the inadequacy of provision that the court may make such order for provision out of the estate of the deceased as it thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made: s 59(2) of the Act. The inclusion of the word “may” makes it clear that the court has a discretion whether any order should be made, and if so, what order ought to be made: Singer v Berghouse, at 211, per Mason CJ, Deane and McHugh JJ.

Section 60 of the Act, which at least in part is new, identifies the range of factors that may be considered:

It can be seen that s 60(2) enumerates 15 specific matters, and “any other matter the Court considers relevant”. The sub-section was described by Basten JA in Andrew v Andrew [2012] NSWCA 308; (2012) 81 NSWLR 656, at [37], as “a multifactorial list”, and by Lindsay J in Verzar v Verzar [2012] NSWSC 1380, at [121] and [123], as “a valuable prompt” to which the court may have regard.

In Chapple v Wilcox [2014] NSWCA 392, Basten JA, at [7], wrote:

The section does not prioritise the catalogue of matters that may be taken into account. No matter is more, or less, important than any other. The weight of such of the matters specified in the section, which may be taken into account, will depend upon the facts of the particular case. There is no mandatory command to take into account any of the matters enumerated. None of the matters listed is, necessarily, of decisive significance and none differentiate, in their application, between classes of eligible person. Similarly, there is no distinction based on gender.

The section also does not say how the matters listed are to be used to determine the matters identified in s 60(1). Considering each of the relevant matters does not prescribe a particular result, and whilst there is likely to be a substantial overlap in the matters that the court may take into account when determining the answers to what is posed in s 60(1), those matters are not identical.

A reference to some of the matters in s 60(2) not only permits, but requires, a comparison to be made between the respective positions of the applicant and any other eligible person, as well as of any beneficiary, whilst others do not.

Section 65(1) of the Act requires the family provision order to specify:

The order for provision may require the provision to be made in a variety of ways, including a lump sum, periodic sum, or “in any other manner the Court thinks fit” (s 65(2) of the Act). If the provision is made by payment of an amount of money, the order may specify whether interest is payable on the whole, or any part, of the amount payable for the period, and, if so, the period during which interest is payable and the rate of interest (s 65(3) of the Act).

Any family provision order under the Act takes effect, unless the court otherwise orders, in the case if the deceased made a will, in a codicil to the will (s 72(1) of the Act).

Section 66 of the Act sets out the consequential and ancillary orders that may be made.

Section 99(1) of the Act provides that the court may order the costs of proceedings in relation to the estate, or notional estate, of the deceased (including costs in connection with mediation) to be paid out of the estate in such manner as the court thinks fit.

Accepting that no two cases will be exactly alike, there are some general principles that may be stated. Whilst most of these principles were stated in the context of the former Act, they are equally apt in a claim brought pursuant to the Act. Other judges, and I, have repeated them in many cases under the Act.

Bryson J noted in Gorton v Parks (1989) 17 NSWLR 1, at 6, that it is not appropriate to endeavour to achieve “an overall fair” disposition of the deceased’s estate. It is not part of the court’s function to achieve some kind of equity between the various claimants.

The court’s role is not to reward an applicant. Nor is the purpose of the jurisdiction conferred by the Act to correct the hurt feelings, or sense of wrong, felt by an applicant. Rather, the court’s role is of a specific type and goes no further than the making of “adequate” provision in all the circumstances for the “proper” maintenance, education and advancement in life of an applicant.

The court’s discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased’s freedom of testation. “Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator’s decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court”: Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9, at 19 (Dixon CJ); McKenzie v Topp [2004] VSC 90, at [63].

Of that freedom, in Grey v Harrison [1997] 2 VR 359, at 366, Callaway JA said:

In Vigolo v Bostin, at [10], Gleeson CJ pointed out that the relevant legislation did not confer new rights of succession and did not create legal rights of inheritance. Rather, his Honour explained:

In Goodsell v Wellington [2011] NSWSC 1232, I noted, at [108], that:

Yet, in considering the question, the nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards: Pontifical Society for the Propagation of the Faith v Scales, at 19; Walker v Walker (Supreme Court (NSW), Young J, 17 May 1996, unrep); Stern v Sekers; Sekers v Sekers [2010] NSWSC 59.

As Allsop P said in Andrew v Andrew, at [16]:

Barrett JA, at [95], wrote:

In Chapple v Wilcox, Basten JA, at [12], and by Barrett JA, at [63]-[64], emphasised the central role played by “community standards” or “community expectations” in any decision whether to take the significant step of overriding the expressed wishes of the deceased.

How the community expectations or standards are determined cannot be explained other than by reference to the Act: Andrew v Andrew, at [36] (Basten JA). His Honour added, in Phillips v James, at [113]:

Thus, “there are difficulties for the Courts in making their own unaided assessment of current community attitudes in a complex and changing social environment”: Williams v Aucutt [2000] 2 NZLR 479, at [44]. As was said by White J in Slack v Rogan; Palffy v Rogan, at [125]:

In all cases under the Act, what is adequate and proper provision is necessarily fact specific.

The Act is not a “Destitute Persons Act” and it is not necessary, therefore, that the applicant should be destitute to succeed in obtaining an order: In re Allardice; Allardice v Allardice (1910) 29 NZLR 959, at 966. The use of the word “proper” requires consideration to be given to more than satisfying the basic needs of an applicant (cf Chandler v Coulson [2015] NSWSC 172, per Pembroke J, at [26]).

The standard of living of an applicant during the lifetime of the deceased is relevant, but the fact that he, or she, has lived frugally, or that he, or she, has become accustomed to a life of relative penury, does not mean that the deceased’s obligation under the Act is satisfied so long as the applicant can continue in that state: Pogorelic v Banovich [2007] WASC 45, [62]; Butcher v Craig [2009] WASC 164.

All of the financial needs of an applicant have to be taken into account and considered by reference to the other factors referred to in the Act and in Singer v Berghouse. What is proper provision is not arrived at by adding up all of the identified financial needs: Hyland v Burbidge [2000] NSWSC 12, at [56]. Nor does it follow that if the court decides it is inappropriate to make a specific provision in respect of one identified head of claim that any identified financial need, even a contingent need, in relation to that claim becomes irrelevant to the final assessment: Mayfield v Lloyd-Williams [2004] NSWSC 419, at [89].

What was said in Edgar v Public Trustee for the Northern Territory [2011] NTSC 5, per Kelly J, at [46], should be remembered:

In relation to the Plaintiff’s claim, being a claim by an adult child of the deceased, the following principles are also useful to remember:

A very similar statement of the principles stated by me in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111], was cited with approval in Chapple v Wilcox at [21] (Basten JA); see also at [65]-[67] (Barrett JA) and were referred to, again, without disapproval, in Smith v Johnson, at [62].

In Foley v Ellis [2008] NSWSC 288, Sackville AJA, at [88], noted that Singer v Berghouse “strongly suggests that the court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased’s bounty. These claimants include other beneficiaries entitled to a share of the deceased’s estate, whether or not they themselves have made a claim under the Family Provision Act”.

In this case, the estate is of reasonably large value. In Anasson v Phillips (Supreme Court (NSW), Young J, 4 March 1988, unrep), Young J (as his Honour then was) said at 20-21:

In Vigolo v Bostin, at [51], it was noted that “in the case of large estates, provision can be made for the well-to-do”.

In McCann v Ward & Burgess [2012] VSC 63, Hargrave J, at [32], wrote:

Yet, it must also be remembered, as McLaughlin AsJ (as his Honour then was) stated in Lumb v McMillan [2007] NSWSC 386, at [26]:

As I have stated in a number of cases (see, for example, Bowditch v NSW Trustee and Guardian [2012] NSWSC 275), I do not intend what I have described as “principles” to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction should be unduly confined, or the discretion should be constrained, by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered. I identify them merely as providing useful guidance, which may be applied, with circumspection, in considering the statutory provisions, the terms of which must remain firmly in mind.

It is necessary for the court, in each case, after having had regard to the matters that the Act requires it to consider, to determine what is adequate and proper in all the circumstances of the particular case. In addition, in each case, a close consideration of the facts is necessary in order to determine whether the bases for a family provision order have been established. Every case is different and must be decided on its own facts. As Lindsay J said in Verzar v Verzar [2012], at [131]:

The importance of the qualifications to which I have referred in the last two paragraphs have been stressed in Chapple v Wilcox by Basten JA, at [18]-[20], and by Barrett JA, at [66]-[67]. They must be remembered.

I set out the additional facts I am satisfied are either not in dispute, or that, in my view, have been established by the evidence. I do so by reference to s 60(2) of the Act. Where necessary, I shall express the conclusions to which I have come. I have taken this course, not “to dwell on particular matters as if they were, in themselves, determinant of the broad judgments required to be made under s 59” (Verzar v Verzar [2012], at [124]), but in order to complete the recitation of facts that will assist me to determine the questions that must be answered.

There is no dispute that the Plaintiff is an adult child of the deceased. He lived with her all of his life. He describes their relationship as “very close”, stating that they provided each other with “care and comfort”.

Even after her death, he remained in her home, at North Bondi, where he lived with the Defendant (other than for a short period when in dispute with the Defendant).

As stated previously, I do not think that the Plaintiff’s relationship with the deceased was as close as he would have me believe. Whilst I do not think that there was any particular conduct that would be regarded as disentitling him to provision, I must bear in mind the terms of the deceased’s Will in which the Defendant is named as the principal beneficiary. I also bear in mind that the Plaintiff is the sole substitute beneficiary in the event that the Defendant did not survive the deceased.

There is no definition of the words “obligations” or “responsibilities” to which the sub-section refers in the Act. Importantly, the Act does not expressly refer to, or identify, any “moral duty”. Yet, what is to be considered is the nature and extent of any legal, or moral, obligations or responsibilities to not only the applicant, but also to the beneficiaries.

This factor requires a balancing of potentially competing obligations as between the applicant and the beneficiary.

Leaving aside any obligation, or responsibility, arising as a result of their relationship as parent and child, the deceased did not have any legal obligation to each of her children, as an adult, imposed upon her by statute or common law.

Yet, an obligation or responsibility, to make adequate provision for the proper maintenance, education or advancement in life, is recognised in the case of a child. In Flathaug v Weaver [2003] NZFLR 730, at [32], the origin of the obligation which underpins the Act’s recognition of the duty owed by a parent to a child was put in this way:

Although the relationship of parent and child is important and carries with it an obligation or responsibility reflected in the Act, it is nevertheless an obligation largely defined by the relationship which actually exists between parent and child during their joint lives: Vincent v Lewis [2006] NZFLR 812, at [81]. The boundaries of that obligation or responsibility are not amenable to rigid definition.

I am satisfied that there was such an obligation owed by the deceased to each of the parties in the present case.

I have earlier dealt with these matters. The estimated value of the estate available for distribution is reasonably large, even after the costs are deducted.

The Plaintiff’s financial resources are as follows. He does not have very much by way of property. He has assets with a total value of $34,000. In his affidavit of 24 August 2015, he wrote that he received an income of about $2,862 per month. In cross-examination, however, he agreed that he has a current total monthly net income, which is secure, of $3,364: T24.43-T26.37. He attributed the difference to CPI adjustments and that the figures were simply an estimate: T26.39-T26.44. He has an estimated monthly expenditure of $1,615, leaving a surplus of monthly income of $1,749. I am satisfied that he no longer has earning capacity.

He continues to live with the Defendant in the North Bondi property, but it is accepted by the parties that this situation cannot continue. There have been disagreements between them since the deceased’s death. Not unnaturally, each wishes to go his own separate way and to be financially independent of the other.

The Defendant’s financial resources are as follows. He has cash in bank ($49,190), shares ($5,500) and a car ($16,000). He discloses no liabilities.

He says that he has no income, not being entitled to any Centrelink benefits because of his age. He estimates his monthly expenditure at $1,854 (as at 16 September 2015). His monthly expenditure has increased by about $1,000 since April 2015, at which time it was estimated to be $898 per month. There was no explanation why his expenses had increased in the 5 months.

I am also satisfied that the Defendant does not have any capacity to earn a level of income to meet expenditure.

The Defendant says that he does not wish to sell the North Bondi property. He says that there is sufficient in cash available to satisfy the family provision order that is to be made in favour of the Plaintiff and also that there should be some provision available to him from this fund even after the payment of costs.

He says that if the North Bondi property is sold, he, also, would require alternative accommodation, and he has inspected two bedroom apartments and town houses. He says that he would need to buy furniture and whitegoods, a new car, and “sufficient funds” to enable him to go on a holiday. He says that he needs “$25,000 every three years for overseas travel”.

There is no evidence that the Plaintiff is cohabiting with any person whose financial position is relevant. (Whilst he currently lives in the North Bondi property with the Defendant, it is clear that they do not share expenses.)

The Plaintiff has given some evidence of his medical condition. He suffers from oesophageal reflux, diabetes type 2, Aspergers syndrome (delay developmental), asthma, irritable bowel syndrome and a calcaneal spur. He takes a number of different medications daily.

The Defendant suffers from a medical condition called sarcoidosis. However, he did not provide any medical evidence about his condition or his prognosis. He says that a related problem is the swelling of his feet and pain that makes walking difficult, with the result that sometimes he uses a walking stick.

He gave evidence that in the last 12 months, he has had more good health days than bad health days (T48.41-T48.42).

As stated, the Plaintiff was born in July 1946 and is currently aged 69 years.

The Plaintiff does give some evidence of his contributions. He states that whilst he did not contribute to the purchase price of the North Bondi property, he did pay board calculated as 50 per cent of his weekly salary to the deceased. He commenced paying that amount in 1963 and continued to do so until the deceased’s death. At the date of her death, he was paying $980 per fortnight by way of board to the deceased. It is clear that part of this amount was being used to maintain the deceased.

He also gives evidence of his contribution to the welfare of the deceased. Whilst he may have made some contribution in this regard, I do not think that it was as significant as the contribution made by the Defendant. However, I bear in mind that the Plaintiff was working whilst the Defendant was not.

I have earlier stated what the Plaintiff receives under the Will of the deceased.

It is clear that the deceased provided him with accommodation and board throughout his life, but that the Plaintiff did pay board to her. In addition, accepting the Defendant’s evidence as to the reason for the payment, the Plaintiff did repay, albeit on a compromised basis, the deceased, the Defendant and the estate of his uncle, the amount that he had borrowed and, thereafter, did not seek to borrow any more money from the deceased.

The statutory language permits the court to take into account the deceased’s expression of testamentary intention, even though not incorporated in a properly executed will.

There is no evidence about testamentary intentions other than as disclosed in the Will of the deceased. As stated, she did not disclose why she made that provision.

As was recently written in Salmon v Osmond, at [72], “a testator’s explanation of why he made those decisions must be given appropriate weight. The weight that is given will depend, inter alia, upon whether it is apparent from the evidence that the testator’s wishes and testamentary intentions are soundly based and not, for example, attributable to irascibility, mere dislike, or based on lack of information, or wrong information”. Thus, whilst this sub-section permits the court to accept evidence of the reasons for the provision, or lack of provision, it does not compel the court to attribute any particular weight to that evidence or to accept the truth of what is asserted.

I am not satisfied that the principal reason advanced by the Defendant, namely the Plaintiff’s problem with gambling, was the basis for not making any more provision for the Plaintiff. In this regard, whilst I am satisfied that the Plaintiff might have spent some money on gambling, there is no evidence, for example, that he had a “problem”. This is evidenced by the fact that he did not ask the deceased for any loans after August 2011. In addition, his banking records, whilst revealing some withdrawals, do not reveal significant withdrawals, from the NSW Leagues Club, the place at which the Plaintiff attended to socialise with workmates and friends.

The deceased did not maintain the Plaintiff other than as set out above. It is difficult to know whether the amount that he paid to her for board was more or less than the amount that he would have had to expend if he had not lived in the North Bondi property.

There is no other person with a liability to support the Plaintiff.

An evaluation of “character and conduct” may be necessary, not for the sake of criticism, but to enable consideration of what is “adequate and proper” in all the circumstances. Importantly, the Act does not limit the consideration of “conduct” to conduct towards the deceased.

I am satisfied that there is no relevant conduct of the Plaintiff that impacts on the determination of what provision should be made for him out of the estate of the deceased. I have earlier referred to the nature of his relationship with the deceased and his contribution financially, and towards the deceased’s welfare.

There is no conduct by the Plaintiff after the death of the deceased that is relevant. I am satisfied that he and the Defendant do not get on and that it is in the best interests of both that any financial inter-relationship is terminated as soon as reasonably possible.

I am satisfied that there is no relevant conduct of the Defendant that impacts on the determination of what provision should be made for the Plaintiff out of the estate of the deceased. I remember, of course, that he is the principal chosen object of the deceased’s bounty.

There was really no dispute that he had been the principal carer of the deceased, although the Plaintiff asserted that this was not because he did not wish to assist her but because the Defendant did not work and, therefore, had more time available to do so. He also asserted that the Defendant did not like it when he offered to assist the deceased (T36.12-T36.15).

This factor is not applicable.

There is no other matter that I consider relevant.

I have already referred to the fact that the Plaintiff is an “eligible person” and that he brought his application within the time prescribed by the Act.

Thus, the court must first be satisfied, at the time when the Court is considering the application, whether adequate provision for the proper maintenance, education, or advancement in life, of the Plaintiff has not been made by the deceased’s Will.

I have set out the entitlement of the Plaintiff under the Will of the deceased. Whether inadequate provision has been made requires an assessment of the Plaintiff’s financial position, the size and nature of the deceased’s estate, the relationship between him and the deceased, and the other person who has a legitimate claim upon the deceased’s bounty, and the circumstances and needs of the other person.

Based upon these matters, I am satisfied, at the time when the Court is considering the application, that adequate provision for the Plaintiff’s proper maintenance or advancement in life was not made by the Will of the deceased.

It is clear that the Plaintiff has a need for accommodation and a modest capital sum for exigencies of life. I am not necessarily obliged to assess his financial needs by considering the cost of acquiring suitable accommodation separately from his other needs. Yet, it is clear that unless he receives additional provision from the estate, he does not have an amount sufficient to purchase any accommodation.

His income is sufficient to meet his current expenditure and even if he does have some additional expenses, incurred as a result of owning real estate, the surplus of his income over his expenditure should be sufficient to meet these expenses. In addition, until spent, the capital sum that he receives will provide a small additional income.

I must also remember that the task of the court is to make a determination “according to the feeling and judgment of the fair and reasonable man in the community, the spokesman of which is, and must be, the court itself”: Kearns v Ellis (Supreme Court (NSW), Mahoney JA, 5 December 1984, unrep), at 8. Doing so, I remain of the view that there was a failure, on the part of the deceased, to make adequate and proper provision for the Plaintiff.

Even though any provision the Court makes in favour of the Plaintiff has to be made at the expense of the Defendant to whom the deceased believed substantial provision ought to be made, and whose competing claim for provision from her estate appears as compelling, if not more compelling, as that of the Plaintiff, in my view, there will be sufficient left in the estate to ensure that he still receives a substantial part of the deceased’s estate, and, certainly, a sum sufficient to enable him to purchase alternative accommodation, if that is what he decides to do.

The more difficult question is what order should be made in favour of the Plaintiff having regard to the facts known to the Court at this time. This involves “an instinctive synthesis that takes into account all the relevant factors and gives them due weight”: Grey v Harrison. It is not a scientific, or arithmetic, exercise. Nor is it a mechanical process.

I am satisfied that the Plaintiff only needs a 1 bedroom apartment, a finding that counsel for the Plaintiff did not really dispute could be made: T84.09-T84.12. I note the statement by Sackville AJA (with whom Macfarlan and Ward JJA agreed) in Smith v Johnson, at [83], which is apt in this case, that:

Doing the best that I can, I am of the opinion that the Plaintiff, in lieu of his entitlement under the Will of the deceased, should receive a capital sum of $800,000. As a guide, this amount should be enough to enable him to purchase a one bedroom apartment (say about $550,000 to $600,000), pay the stamp duty and moving costs (say $30,000), purchase furniture and whitegoods (say $20,000) and leave him with a capital sum of $150,000 to $200,000 for exigencies of life.

If that amount of provision is made for the Plaintiff, the cash sum, after the payment of costs, will leave about $100,000 for the Defendant, which, when added to the capital amount he currently has, will provide him with a modest amount for exigencies of life. Of course, he will also have the capital value of the North Bondi property. (The costs of sale of the North Bondi property will not be incurred until he sells.)

I have earlier noted that the usual costs orders, subject to the limitation regarding costs of the second day, should be made unless either party wishes to make any submissions to the contrary based upon matters not currently known to the court.

The Court: