Penfold v Predny

HIS HONOUR: This is a claim for a family provision order, under Part 3.2 of the Succession Act 2006 (NSW) (“the Act”), out of the estate of Colin Kenneth Douglas (“the deceased”) who died on 10 April 2014. (At the hearing, the parties agreed that there is no property that may be designated as notional estate.) The claim is made by Donna Gaye Penfold, a child of the deceased. The Plaintiff seeks greater provision than that made for her in the deceased’s Will.

The Act applies in respect of the estate and notional estate of a person who died on, or after, 1 March 2009. The Act replaces the Family Provision Act 1982 (NSW) (“the former Act”), which was repealed, effective from 1 March 2009. A family provision order is an order made by the Court, under Chapter 3 of the Act, in relation to the estate, or notional estate, of a deceased person, to provide from that estate for the maintenance, education, or advancement in life, of an eligible person.

The Defendants in the proceedings are David Milan Predny, a solicitor, who is the first Defendant, and Brian Kenneth Douglas, the only other child of the deceased and the sibling of the Plaintiff, who is the second Defendant. Both are executors named in the deceased’s Will to whom Probate was granted.

The Plaintiff commenced proceedings by Summons filed on 7 April 2015. It is not in dispute that she is an eligible person, within the meaning of that term in s 57(1)(c) of the Act (a child of the deceased), or that the proceedings were commenced within the time prescribed by the Act (not later than 12 months after the date of the death of the deceased).

The only issues in dispute in the proceedings are whether the Plaintiff has been left with inadequate provision for her proper maintenance or advancement in life and, if so, what, if any, further provision ought to be made out of the estate for those purposes.

In the proceedings, one cannot help but remember what was written by Professor Rosalind Croucher in a speech entitled “Succession Law Reform in NSW – 2011 Update” (which was delivered at the Blue Mountains Annual Law Conference, Katoomba, 17 September 2011) in relation to some claims brought by:

I am satisfied that the following facts have been established, and that they provide a useful background. In relation to any disputed matters, the following facts should be regarded as the findings of the Court.

The deceased died aged 81 years, having been born in January 1932.

The deceased was married to Margaret Ruth Douglas (“Margaret”), and they remained married until her death in February 2013, aged 74 years.

The deceased and Margaret had only two children, who are both parties in the proceedings. The Plaintiff was born in February 1964 and the second Defendant was born in October 1966.

The Plaintiff and her husband, Gregory John Penfold, have three children, namely Luke, Chad and Brita. Each is an adult. The second Defendant has two children, Ella and Ryan, each of whom is a minor.

The deceased’s last Will was one dated 2 May 2013. By that Will, the Plaintiff received a pecuniary legacy of $50,000, and the rest and residue, after the payment of debts, funeral and testamentary expenses, was left to the second Defendant. This Court granted Probate of the deceased’s Will to the Defendants on 26 June 2014.

According to the Inventory of Property, a copy of which was attached to the Probate, the property solely owned by the deceased, at the date of his death, was disclosed as having an estimated, or known, gross value of $504,201. His estate was said to consist of real estate at Morisset (to which I shall refer as “No. 168”) ($450,000), monies in a bank account ($41,367), two cars ($4,500) and some shares ($8,344).

The liabilities of the estate, which have been paid, total $14,546.

At the date of hearing, the parties agreed that the deceased’s estate had an estimated value of $554,348. The estate, currently, is said to consist of No. 168 (with an agreed value, for the purposes of the hearing, of $510,000), cash in the Defendants’ solicitors’ trust account ($28,698), the cars ($3,350), the shares ($9,800) and tools ($2,500).

The parties agreed that it will be necessary to sell No. 168, whatever the result of the proceedings. They agreed, also, that the costs and expenses of sale of No. 168 would be $13,220. Subject to any order for costs, they also agreed that the legacy of $50,000 should be paid to the Plaintiff. There is also a claim for $2,500 by the second Defendant (which was in dispute but which was not the subject of any cross-examination) which also should be deducted from the gross value of the deceased’s estate.

It follows that, without deducting the costs of the proceedings, the value of the net estate available for distribution is $488,628.

Usually, in calculating the value of the deceased’s estate finally available for distribution, the costs of the present proceedings should be considered with circumspection, since the Plaintiff, if successful, normally will be entitled to an order that her costs, calculated on the ordinary basis, be paid out of the estate of the deceased, whilst the Defendants, as the administrators, irrespective of the outcome of the proceedings, normally, will be entitled to an order that their costs, calculated on the indemnity basis, be paid out of the estate.

Because the costs and disbursements of each of the parties are, in my view, disproportionate, bearing in mind the nature of the case, the issues in dispute, and the value of the estate, more will need to be written later in these reasons regarding what order for costs would be appropriate. For the time being, however, I shall simply refer to the evidence of costs read at the hearing.

The Plaintiff’s solicitor, Mr M E Hanlon, deposed in an affidavit sworn on 12 February 2016, that the Plaintiff’s costs and disbursements, calculated on the “party/party basis”, are estimated to be $93,625 (upon the basis of a two day hearing and inclusive of GST). At the hearing, I was informed from the bar table, without objection, that the Plaintiff’s estimated costs and disbursements, calculated on the ordinary basis, were estimated to be $85,825, but, later, I was informed that this estimate was in error as it did not include any amount for GST, with the result that the earlier costs estimate should be used.

The first Defendant, in an affidavit affirmed on 8 February 2016, estimated the Defendants’ costs and disbursements of the present proceedings, including senior counsel’s fees, calculated on the indemnity basis (upon the basis of a two day hearing) to be $74,704 (inclusive of GST and on the basis of a 2 day hearing). However, at the hearing, I was informed from the bar table, without objection, that the Defendants’ estimated costs and disbursements, calculated on the indemnity basis, are estimated to be $76,675 (inclusive of GST and on the basis of a 2 day hearing).

Before leaving the subject of costs, I should mention that although, when raised by the Court, counsel for the Plaintiff indicated that there may be a Calderbank offer made by the Plaintiff, the terms of which offer could be relevant on the question of costs, after the calculations about the size of the estate were made, she conceded that it was unlikely that the terms of the Calderbank offer would be relevant: T6.07-T6.20. For this reason, the parties agreed that I should determine how the costs of the proceedings should be borne as part of the reasons for judgment. I propose to do so. For reasons to which I shall come, it is unnecessary to determine any question of costs capping, a subject upon which some attention was paid during submissions.

The only other matter to which reference should be made is the Defendants’ concession that, in the event her proceedings are dismissed and an order is made for the Plaintiff to pay their costs calculated on the ordinary basis, such costs will be limited to the amount of the legacy. It was submitted that, in this way, it would not be necessary to delay the completion of the administration of the estate, and that the legacy payable to her would be utilised to satisfy that order as to costs.

It follows, then, that if all of the costs of the parties ($170,300) were deducted, the amount available for distribution would be $318,328. If only the Defendants’ costs were deducted, the amount available for distribution to the second Defendant would be $411,953.

The parties agreed that there are no other eligible persons in respect of whom an application for a family provision order may be made.

There are a number of other facts that are the subject of evidence that I am satisfied have been established. I mention these facts now since there was some dispute about some of them.

The first Defendant prepared three Wills for the deceased, the contents of the first two of which will be referred to later in these reasons. The first in time was dated 11 October 2005, the second in time was dated 22 April 2013, and the last Will has been identified above.

The first Defendant held a number of meetings, and had a number of telephone discussions with the deceased, prior to the preparation and execution of each of the 2013 Wills. The first Defendant made contemporaneous file notes of each of the meetings and of the telephone conversations, a copy of all of which file notes were tendered by the Defendants (Ex. 1).

It is not necessary to rehearse the contents of the diary notes, all of which I have carefully considered. In any event, the rationale for what the deceased intended is set out in other documents, the terms of which will be referred to.

On 29 April 2013, the first Defendant also had a discussion with the second Defendant. I do not place the same emphasis on this discussion as did counsel for the Plaintiff in cross-examination. However, I have noted that there was such a discussion.

The first Defendant gives the following evidence which I accept:

(The first Defendant gave evidence that when the deceased expressed things, he did so in terms of “We did this” or “We did that”. The first Defendant understood the deceased’s reference to “we” as referring to Margaret and himself. Counsel for the Plaintiff sought to highlight this aspect, submitting that the provision made for the Plaintiff in 1997 derived as much from Margaret as from the deceased.)

Subsequently, the deceased instructed the first Defendant to write to each of his children, which the first Defendant did on 30 October 2013. The following is part of the contents of the letter:

The Plaintiff did not respond to the letter that was sent to her by the first Defendant.

The deceased left a signed Statement dated 2 May 2013 which is in the following terms:

I have included the contents of the letter and the deceased’s Statement, each of which was not objected to, because I consider that it reveals the deceased’s view of the conduct of each of his children and the considerable amount of thought that he seems to have given to his testamentary intentions.

The letter written by the first Defendant, on instructions from the deceased, also reveals the deceased’s view of what appears to have been the deep feelings of entitlement held by each of his children, and the distrust by each of the other. (These emotions are likely to have to have played some part in the conduct of this litigation.)

The real property now in the name of the Plaintiff, originally owned by the deceased’s mother, Elsie May Douglas, was a parcel of land to which I shall refer as No. 178. On intestacy, the parcel of real property was to pass to her 5 children equally, one of whom was the deceased. Following the death of the deceased’s mother, the 5 children agreed that the deceased could purchase the interest of his siblings for $72,000 (each of his 4 siblings to receive $18,000). Thus, the value of No. 178, at the time of its purchase from that estate, was $90,000 (since the deceased did not receive the amount of $18,000).

By Transfer dated 17 April 1990 (a copy of which is Ex. A), No. 178 was transferred to Margaret, as to one-half share as tenant in common, to the Plaintiff, as to one-quarter share as tenant in common, and to the second Defendant, as to one-quarter share as tenant in common. The Transfer was registered on 14 May 1990.

Of the balance of the purchase price of $72,000 ($90,000 less the deceased’s share of $18,000), the Plaintiff contributed $22,000 and the second Defendant contributed $25,000. How the balance ($25,000) was contributed is not entirely clear from the evidence, but it was paid by one, or both, of the deceased and Margaret. (A number of documents, forming part of Ex. 1, to which I shall refer, suggest that the deceased may have paid the amount. However, whether the deceased, alone, paid that amount may not matter, since the whole of No. 178 was transferred in 1990, to the persons referred to).

Whilst counsel for the Plaintiff cross-examined the second Defendant, suggesting to him that the whole of the balance had come from Margaret, I am not satisfied that this is so. Indeed, the Plaintiff’s evidence is that the deceased “proposed that he and my mother pay the defendant for his share of [No. 178] and that my mother’s and brother’s interest be transferred to me”. She also says that she and her husband “offered to pay out the defendant for his share of [No. 178] and pay my mother for her interest” but that they refused, saying that “they do not want or expect Greg and me to pay for the transfer”.

By Transfer dated 24 August 1997 (a copy of the first page of which is Ex. B), the whole of Margaret’s one-half share as tenant in common, and the whole of the first Defendant’s one-quarter share as tenant in common, in No. 178, was transferred to the Plaintiff. The consideration shown on the Transfer was $1.00. The Transfer was subsequently registered, with the result that the Plaintiff came to be, and currently remains, the sole registered proprietor of the whole of No. 178.

At the time of the transfer to the Plaintiff, a valuation was obtained which revealed that as at August 1997, No. 178 had a market value of $90,000. Thus, the one quarter share held by the Plaintiff in No. 178, at that time had a value of $22,500.

There is no dispute that the second Defendant was paid $25,000 by the deceased for his share of No. 178 prior to its transfer to the Plaintiff. Margaret’s share was also transferred, but as stated, the Plaintiff did not pay any amount for that share at the time of its transfer.

There was, originally, only one house on No. 178, which house was described in the evidence as “the Pink House”. It was described in the valuation then obtained as “an old single weatherboard cottage of approximately 90 square metres on brick pier foundations with corrugated iron roof. The floors, window and door frames are timber, the internal wall linings and ceilings are panelboard. There was 1 bedroom, sunroom, lounge, kitchen bathroom, and laundry.”

The Plaintiff gave evidence that since the transfer of No. 178 to her, she and Gregory have replaced the kitchen, installed a new bathroom, had the floorboards polished, have had it painted, had all the antennas replaced, added a little front patio and had the roof fixed because it had been leaking: T 31.36 – T32.00. She did not give evidence of the costs of the repairs and renovations.

Subsequently, after the transfer of No. 178 to the Plaintiff, the Plaintiff and Gregory built another residence on it, in which they and their children lived. Currently, only they live in this residence.

The Plaintiff was unable to inform the Court how much had been spent in building the second residence but said that it was at least $95,000, this amount being the proceeds of sale of a property that they owned which they sold in Windermere Park, a suburb of the City of Lake Macquarie: T32.10-T32.50.

In 1997, the Plaintiff and her family moved into the Pink House, where they lived for a few years until the second residence on No. 178, which they built, was partially erected. Thereafter, she has either rented the Pink House, or has allowed one or more of her children to use it. It is currently rented for $290 per week.

There is no doubt that evidence of the intentions and wishes of the deceased in respect of provision for an applicant are admissible in family provision proceedings: Bosch v Perpetual Trustee Co Ltd [1938] AC 463, at [481]-[482]. Those testamentary intentions may also be taken into account by virtue of s 60(2)(j) of the Act.

However, it is to be remembered, as well, that the fact a statement is said to have been made by the deceased does not mean, necessarily, that the statement must unquestionably be accepted as true. Such a statement may be just as inaccurate, or as unreliable, as a statement of a living witness, whether as the result of mistake, or failure of memory, or deliberate untruth: Worsley v Solomon [2008] NSWSC 444, per McLaughlin AsJ, at [35].

In Pincius v Wood [1998] TASSC 46, Cox CJ noted:

In Diver v Neal [2009] NSWCA 54 at [61], Basten JA wrote:

More recently, in Brimelow v Alampi [2016] VSC 135, McMillan J wrote, at [15]:

The first complaint made by the Plaintiff is that the deceased was not ever the registered proprietor of the whole, or any part, of No. 178. Accordingly, it was submitted that part of the deceased’s Statement relating to the Plaintiff having “derived benefit from my transfer of title” to her is inaccurate. Furthermore, it was submitted, that he made no provision for the Plaintiff during his lifetime, a submission which I do not accept, since it seems that he contributed at least his share of his mother’s estate and may have paid the second Defendant for his share when No. 178 was transferred to the Plaintiff in 1997.

It is also said that there is no evidence at all that the transfer to the Plaintiff of Lot 178 “has allowed her to benefit by developing the land as a dual-occupancy with potential to subdivide into two separate titles”. Indeed, she gave evidence that she had never made application for dual occupancy of No. 178 or considered its sub-division (though there are now in fact two houses on the land).

Furthermore, it was noted that the Plaintiff had paid almost the whole of the value of her one-quarter share as tenant in common at the time of the purchase of No. 178 from the estate of the deceased’s mother. It followed that, at its highest, the provision made by the deceased, during his lifetime, for the Plaintiff, was 75 per cent of its value at the date of the transfer of Lot 178 to her (assuming, without accepting, that Margaret made no contribution to the initial purchase price as consideration for her interest in No. 178).

The Plaintiff, having contributed $22,000 to the purchase of No. 178, a contribution acknowledged by the deceased, it was submitted, correctly, that the calculations made by the deceased (as stated in the diary note of the first Defendant of 22 April 2013), which led to the legacy of $50,000 being included in the last Will, are incorrect in that the deceased attributed the benefit of the transfer of the whole of the value of No. 178 to the Plaintiff ($350,000), instead of only attributing the benefit of the transfer of 75 per cent to her ($262,500) as she was the registered proprietor of a one quarter share as tenant in common, with her mother and brother, for which interest she had paid.

The calculation, if it had been made correctly, and if the deceased had intended to use the transfer of “his interest” in No. 178 in his calculations (assuming that the whole of Margaret’s interest may be attributed to him) in determining what was “fair”, the legacy in his Will would have been $93,750, rather than $50,000.

It appears, therefore, that the reasoning of the deceased, on the mathematics, was flawed.

It may next be helpful to set out some features of the Act that are to be borne in mind in considering the only issue in the case.

Since the Plaintiff is an eligible person, and as she has commenced proceedings within the time prescribed by the Act, the Court must next determine whether adequate provision for her proper maintenance, education or advancement in life has not been made, relevantly, by the operation of the deceased’s Will (the operation of the intestacy rules being irrelevant (s 59(1)(c)).

It is this mandatory legislative imperative that drives the ultimate result and, it is only if the Court is satisfied of the inadequacy of provision that consideration is given to whether to make a family provision order (s 59(2)). Only then may “the Court… make such order for provision out of the estate of the deceased person as the Court 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”.

Relevantly, other than by reference to the provision made by the Will 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 an applicant’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 made for the applicant in the Will of the deceased, on the one hand, and to the requirement for maintenance, education or advancement in life of the applicant 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 applicant.

Under s 59(1)(c), the time at which the Court gives its consideration to the question of inadequacy of provision is the time when the Court is considering the application.

The question whether the deceased has made adequate provision for an applicant is a question of objective fact, the determination of which involves an evaluative judgment (Singer v Berghouse [1994] HCA 40; 181 CLR 201 at [210]-[211]; White v Barron [1980] HCA 14; 144 CLR 431 at [434]-[5]; [443]).

If the Court is satisfied that inadequate provision for the proper maintenance, education or advancement in life has been made by the Will of the deceased, for the applicant, then the Court may make a family provision order. In determining the question, 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 (1957) 97 CLR 566 at [571]-[572]; Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at [209]-[210]; Vigolo v Bostin (2005) 221 CLR 191 at [16], [75], [112]; Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757 at [70]; Verzar v Verzar [2014] at [39].

The determination of the question whether the disposition of the deceased’s estate was not such as to make adequate provision for the applicant will always, as a practical matter, involve an evaluation of the provision, if any, made for the applicant on the one hand, and the applicant’s “needs” that cannot be met from her or his own resources on the other: see Hunter v Hunter (1987) 8 NSWLR 573 at [575] (Kirby P).

Thus, whether an applicant has a “need” or “needs” is also a relevant factor: see s 60(2)(d) of the Act. It is an elusive and an elastic concept to define, yet it is an element in determining whether “adequate” provision has been made for the “proper” maintenance, education and advancement in life of the applicant in all of the circumstances. The concept involves economic considerations.

“Need” has also been used in the context of a value judgment or conclusion, namely, that the applicant is “in need” of maintenance, education or advancement in life, because inadequate provision has been made for her or his proper maintenance, education and advancement in life: see Gorton v Parks (1989) 17 NSWLR 1 at [10]-[11] (Bryson J).

Although the existence, or absence, of “needs” which the applicant cannot meet from her, or his, own resources will always be highly relevant and often decisive, the statutory formulation and, therefore, the issue in every case, is whether the disposition of the deceased’s estate was not such as to make adequate provision for her or his proper maintenance, maintenance education and advancement in life: see Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201at [227] (Gaudron J). Compare Gorton v Parks at [6]-[11] (Bryson J); Collicoat v McMillan [1999] 3 VR 803 at [38], [47] (Ormiston J).

“Need”, of course, is also a relative concept: de Angelis v de Angelis [2003] VSC 432 at [45] (Dodds-Streeton J). It is different from “want” and does not simply mean “demand” or “desire”. The latent difference between the words was stated by Lord Neuberger of Abbotsbury (now President of the Supreme Court of the United Kingdom), in the House of Lords decision, R (on the application of M) v Slough Borough Council [2008] UKHL 52; [2008] 1 WLR 1808 at [54]:

In Boettcher v Driscoll [2014] SASC 86; (2014) 119 SASR 523 at [41], David J added:

In Diver v Neal at [67], Basten JA wrote:

As Callinan and Heydon JJ emphasised in Vigolo v Bostin at [122], the question of the adequacy of the provision made by the deceased “is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably”. The inquiry is not confined only to the material circumstances of the applicant. The whole of the context must be examined. Thus, “need” may be assessed by considering the applicant’s financial position, lifestyle and general expectations in life and health: Stewart v Stewart [2015] QSC 238 at [11] (Applegarth J).

In the event that the Court is satisfied that the power to make an order is enlivened (i.e. that adequate provision for her proper maintenance, education or advancement in life has not been made), then the Court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the Court at the time the order is made.

Then, under s 59(2) and s 60(1)(b) of the Act the Court determines what provision, if any, ought be made for the applicant out of the deceased’s estate. Mason CJ, Deane and McHugh JJ, in Singer v Berghouse at [211], affirmed that this decision involves an exercise of discretion in the accepted sense. The fact that the Court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant’s favour.

Section 60(2) of the Act, at least in part, is new. It provides:

It can be seen that s 60(2) enumerates 15 specific matters, in addition to any other matter the Court considers relevant, 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] at [123] as “a valuable prompt” to which the Court may have regard for the purposes of determining eligibility, whether to make a family provision order and the nature of any such order. It has been suggested that the expanded list of criteria provides a “more focused direction to the court”: Phillips v James [2014] NSWCA 4; 85 NSWLR 619 at [51] (Beazley P, Meagher JA agreeing).

The section does not indicate the relative weight that should be given to different matters, or “how conflict between opposing considerations should be resolved – those things are left to the court's discretion, which must, of course, be exercised judicially” (Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605 at [608]-[610], per Gibbs CJ in relation to the Family Law Act 1975 (Cth)).

Leaving aside the question of eligibility, the matters referred to in s 60(2) may be considered on “the discretionary question”, namely whether to make an order and the nature of that order. Importantly, under s 60(2), attention is drawn to matters that may have existed at the deceased’s death, or subsequently.

Sub-section (2)(d) refers to “earning capacity”, which means no more than the capacity to find employment to earn or derive income.

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.

I have set out the principles that apply in many other cases. There was really no dispute about them and counsel for the Plaintiff identified the principles that I set out in Newman v Newman [2015] NSWSC 1207 as being applicable to the facts of this case. I shall not repeat what I wrote in that case.

I should, however, refer to Cooper v Dungan (1976) 50 ALJR 539 at [542], in which Stephen J reminded the Court to be vigilant in guarding “against a natural tendency to reform the testator’s will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant”.

In Stott v Cook (1960) 33 ALJR 447 at [453]-[4], Taylor J, although dissenting in his determination of the case, observed that the Court did not have a mandate to rework a will according to its own notions of fairness. His Honour added:

I set out some more facts by reference to s 60(2) of the Act. Where necessary, I shall express the conclusions to which I have come in relation to areas of dispute between the parties. 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.

The Plaintiff lived at home with her parents until about 1984, when she was about 20 years old.

Later, “[a]fter the house was built on 178”, the Plaintiff saw her parents on “almost a daily basis”, except when she had a falling out with her mother and did not speak to her for a “considerably [sic] time”.

Overall the Plaintiff described her relationship with her father as being “close”, although elsewhere she wrote that “I had a good relationship with my father up until the time he decided to change his will”.

In an affidavit read by the Defendants, the deceased’s sister-in-law, Gladys Peacock, deposed that “[i]t was my observation from our shared activities and conversations that [the Deceased] was especially fond of Donna and he doted on her”.

Evidence of the closeness of their relationship is also revealed by the fact that the deceased appointed the Plaintiff and the second Defendant as his attorneys in August 2013.

Having heard all of the evidence, I am satisfied that both the Plaintiff and the second Defendant each had a close relationship with both the deceased and Margaret for most of their lives. Importantly, the deceased did not attribute any differentiation between his children based upon his relationship with her or with him respectively.

There is no definition of the words “obligations” or “responsibilities” to which the sub-section refers to in the Act. Each word is to be understood in its ordinary, grammatical meaning as the condition of being morally or legally bound.

The responsibility of a testator was expressed by Lord Romer in Bosch v Perpetual Trustee Co Ltd at [478]-[479]:

Yet, the Act does not expressly refer to, or identify, any “moral duty”. However, 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 beneficiary or beneficiaries. There is a balancing of potentially competing obligations.

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 his children, once they become adults, imposed upon him by statute or common law. (There is no suggestion of any promise of testamentary benefaction having been made or that the Plaintiff, to the knowledge of the deceased, changed her position in the expectation of an inheritance.)

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 recognition of the duty owed by a parent to a child in the equivalent Act in New Zealand was put in this way:

It should also be remembered that “[a]lthough the relationship of parent and child is important and carries with it a[n]… obligation 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.

There is no “presumptive testamentary entitlement of an offspring”: Underwood v Gaudron [2015] NSWCA 269 at [73] (Basten JA).

The size of the deceased’s estate is also relevant to determining the extent of the obligation or responsibility.

I have earlier dealt with these matters. The net value of the estate is relatively small.

The Plaintiff sets out her financial and material circumstances as follows:

Of course, that estimate of value does not include the provision made for the Plaintiff under the Will of the deceased (if she were to receive the legacy of $50,000). The Plaintiff has no superannuation.

The Plaintiff has the following amounts in bank deposits which are said to be hers and Gregory’s:

The Plaintiff, thus, currently, has assets with a value of $708,250 in her own name (which would increase by $50,000 if she received the legacy payable to her under the Will of the deceased) and $75,000 jointly with her husband.

The Plaintiff sets out Gregory’s assets as follows:

The Plaintiff’s husband’s liabilities are as follows:

Whilst the assets in her husband’s name are of greater value, his liabilities are significant. He currently receives $2,462 income per week (from his police pension, wages from Lowes Petroleum, and rental income from the Stockton and the Pelaw Main Properties), so their combined income is currently sufficient to cover their estimated expenditure of $1,332 per week (even after paying her husband’s $1,100 per week on all three investment properties). Indeed, they are comfortable enough in meeting their own basic needs that their weekly expenditure includes providing $200 to their adult married daughter to help support her while she studies in New York, as well as providing financial support to their adult son who recently finished university and is looking for full-time work

Yet, the Plaintiff’s husband’s income from employment – currently comprising wages of about $650 per week – is said to be precarious, as he has been informed that his 12 month contract will not be renewed. He believes that his poor physical health (torn ligaments in both shoulders and Dupuytren’s contracture in both hands, ligament damage in his left foot, a large prolapsed disc in his spine at L5 and tinnitus in his right ear) will prevent him from finding new employment and that he may retire. Without his wage from employment, he and the Plaintiff would have a combined income of $1,815 per week, leaving them with a shortfall of $620 per week, based on their current expenditure. (Of course, part of this expenditure is incurred in respect of property that is negatively geared. Gregory gave evidence that he only contributes about $100 per month to the Stockton property because the income received from the Pelaw Main property is sufficient to meet the outgoings on it: T41.)

When asked about her future plans and the prospect of moving to the Newcastle area, the Plaintiff said “I really don’t know what we are doing at the moment until this is all sorted out”: T28. However, she admitted that “downsizing” may be an option.

However, Gregory gave evidence that the Stockton property had been purchased with the intention to move there and that he and the Plaintiff would move there “as soon as the [vendors] move out”. He also said that one option would be to sell No. 178 and for the Plaintiff to use the proceeds of sale to pay out the mortgage on the Stockton property: T43-T45.

The Defendant outlines his, and his wife’s, assets and liabilities as follows:

However, in cross-examination the second Defendant conceded that the Belmont North property was probably worth $400,000. He also acknowledged that he owned a tractor (purchased second hand for $6,800), 48 sheep (which the second Defendant suggested were worth about $100 each) and a gazetted road in Eumungerie (for which he paid $5,500) that were not declared on his list of assets. If the value of these additional assets is included, then their total assets are approximately $631,000. However, the second Defendant gave evidence that the amount of $15,000 (which was in Melissa’s savings account) had been spent on their daughter. It follows that the total value would be $616,000.

Of course, that estimate of value does not include the provision made for the second Defendant under the Will of the deceased.

The second Defendant is employed full-time as a fitter and machinist and has an income, after tax, of about $1,100 a week. He has been on reduced duties following an injury suffered in July 2015. If he returns to his previous role after recovering he will then earn about $1,480 a week after tax. While the second Defendant runs sheep on his land in Eumungerie he insisted that this is not an income producing asset. His wife, Melissa, currently works three days a week as a laboratory aide and earns about $500 a week. It follows that the second Defendant and his wife, currently have a combined income of about $1,600 a week.

The Defendant and his wife support two minor children, Ella and Ryan, currently aged about 16 years and 13 years respectively. Ryan needs to have treatment for an eye problem which will cost $800 for the initial treatment and then $180 for each ongoing visit, which they have been informed will be required “indefinitely”. Ryan also has learning difficulties and requires special tuition, although no cost estimate for that tuition was provided. Both children also require braces, with Ella’s alone estimated to cost $5,000. Melissa suffers from carpal tunnel syndrome which requires surgery, which she says she has been unable to undergo as the family cannot afford for her to take time off work.

The Plaintiff is currently cohabiting with her husband. I have set out his financial circumstances earlier.

In about 2014, the Plaintiff and Gregory separated, but by the time of the hearing they were reconciled and were living together again. She was hopeful that their marriage, which is of about 30 years duration, will survive.

In about 1996, the Plaintiff received an electric shock that caused permanent loss of hearing in her right ear and loss of strength in her right arm. The Plaintiff also suffers from osteoarthritis (which she says makes it difficult for her to walk up stairs), tachycardia, hypertension, type 2 diabetes and, since about 2013, depression. Further, she has recently been diagnosed with rheumatoid arthritis.

The second Defendant also suffers from poor health, having injured his arm at work in July 2015. He takes regular medication for a hiatus hernia (having done so for the past six years), he has a torn meniscus in his right knee which causes him pain in everyday work activities, and tennis elbow in the left arm (for which he takes anti-inflammatory medication). He has suffers from low back pain and has to regularly got to the physio at a cost of $60 per visit.

The Plaintiff is currently 52 years old.

The Plaintiff gives evidence of the contributions made to the deceased. After 1994, Gregory was regularly asked to help the deceased around the property, including mending fences and mowing laws. He also assisted the deceased with his business of selling firewood and surveyor pegs by cutting and carting the firewood. (Even though the contribution identified was not by the Plaintiff, it is relevant).

According to the Plaintiff, for about four years after her mother went into a nursing home, she did the shopping for the deceased, cooked his meals, cleaned his house, took him to doctor’s appointments, collected his medication, and helped him care for his dog.

I have referred to the provision made by the deceased earlier.

In addition, the deceased helped the Plaintiff build her first home at Windermere Park, he having “supplied and cut the timber for the frame and erected the frame himself and organised other trades to complete the construction”.

Senior counsel for the Defendants put to the Plaintiff that had she not become the registered proprietor of No. 178 in 1997 and moved into the Pink House, she and Gregory would have found it a struggle financially since she was not in paid employment. Although she denied that, I am satisfied that being able to live in the Pink house, rent and occupation fee free, did provide a significant benefit to her. In addition, the ability to rent the Pink House and to derive an income from it, thereafter (until the death of the deceased) did provide her with a substantial benefit. (I have not forgotten the Plaintiff’s evidence that she only rented the Pink House “from time to time”.)

The deceased also provided ongoing assistance to the second Defendant. Specifically, he gave the second Defendant timber for a building, paid about $6,000 to erect a fence at his property in Eumungerie, and paid about $4,000 to purchase a 2000 Toyota Hi-Lux vehicle. The deceased also gave the second Defendant financial assistance to purchase the second hand tractor for $6,800.

Although counsel for the Plaintiff cross-examined the second Defendant on an amount of $18,000 which she asserted had been advanced by the deceased to him to complete the purchase of the Eumungerie property, the second Defendant denied that was so. However, he could not identify the source of that amount.

The deceased made a Will in October 2005, in which he appointed Margaret as the sole executrix. He left his tools to the second Defendant and after the payment of debts, funeral and testamentary expenses, left the whole of the residue of his estate to Margaret absolutely provided that she survived him by 30 days. In the event that she did not, he left the residue of his estate to the Plaintiff and the second Defendant as tenants in common in equal shares.

The deceased made a Will in April 2013, in which he appointed the Defendants as the executors. He gave a pecuniary legacy of $50,000 to the Plaintiff and after the payment of the debts funeral and testamentary expenses left the whole of the residue of his estate to the second Defendant.

In the April Will, Clause 5 was in the following terms:

I have earlier referred to the deceased’s last Will which he made on 2 May 2013. Clause 5, set out above, was not included.

The Plaintiff was not being maintained, either wholly or partly, by the deceased before his death. Indeed, it appears that she was financially independent of the deceased for many years prior to his death.

Other than Gregory, there is no person with a legal obligation to support the Plaintiff. She did not give any evidence of her entitlement to receive an age, or other form of pension, now or in the future.

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.

In Collicoat v McMillan at [40], Ormiston J wrote, in relation to the manner in which an applicant’s behaviour towards the deceased is to be considered:

There is no conduct of the Plaintiff that is relevant.

I am satisfied that there is no 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 one of the chosen objects of the deceased’s bounty. He is also a child of the deceased.

This factor is not applicable.

There is no other matter that I consider relevant.

Being an “eligible person” is a necessary precondition to the Court being empowered to make an order for the maintenance, education or advancement in life of the applicant. There is no dispute the Plaintiff, as a child of the deceased, is an eligible person within the meaning of that term in s 57(1)(c) of the Act.

I have referred to the apparent error in the deceased’s instructions provided to the first Defendant. This misunderstanding, apparent from the estimate of the value of the interest “given to” the Plaintiff, and the methodology that the deceased adopted using the mistaken value, is relevant to the Court’s consideration. Yet, the decision for the Court depends upon what is “adequate” and “proper”. Ultimately, the deceased’s methodology, whether correct or not, is not decisive of the result of the issues the Court must determine.

Although the Plaintiff has assets of reasonable value, those assets being unencumbered, her personal ability to earn income is very limited, as she has no formal qualifications; she has not worked since 1986; and because she suffers from several physically disabling health problems. Currently, her only income is $290 a week from the Pink House. She also has no superannuation.

If she were to sell No. 178, the income that the net proceeds of sale would generate, might result in more than $290 per week. However, she would no longer have the security of accommodation that she now has.

If she and Gregory were to move to the Stockton property owned by Gregory, it may be that the Plaintiff could rent the house on No. 178 in which they currently live. Gregory thought that the Plaintiff might be able to rent it out for about $400 per week. If this were done, and they moved, the total income from No. 178, if so utilised by the Plaintiff, could be used to service the mortgage on the Stockton property. In this way, the Plaintiff would retain No. 178 as her own, and, so long as both homes on it were rented, and the Plaintiff used the rent to service the mortgage on the Stockton property, she would be secure in that accommodation (even if Gregory had to contribute a little more to make the mortgage repayments). (Somewhat surprisingly, neither the Plaintiff nor Gregory could tell me the amount of the current monthly repayment on the Stockton investment property mortgage.) Alternatively, the Plaintiff would receive almost $700 gross per week from which to support herself or otherwise contribute to the family’s finances.

Counsel for the Plaintiff submitted that I should not speculate on what the Plaintiff and her husband might do. That is correct, but I must determine the case on the balance of probabilities at the date of the hearing. Having heard the Plaintiff and Gregory, I am satisfied that it is more probable that the Plaintiff will move, with Gregory, to the Stockton property; and that she will not sell No. 178, but will rent both houses on No. 178, thereby receiving an income of about $700 gross per week. I also consider it likely that if they do this, the Plaintiff will contribute an amount from the rental income to assist in the payment of the mortgage instalments because the Stockton property will then not provide any rental income.

Alternatively, if Gregory sells the Stockton property and they remain living on No. 178, presumably the proceeds of the Stockton investment property would be utilised to pay out the mortgage debt secured thereon, which would result in no significant diminution of the family income.

A further alternative would be to remain living as they currently are.

In any of those alternatives, the Plaintiff will have a property worth $670,000 which is unencumbered.

On balance, I am not satisfied, for the purposes of s 59(1)(c) of the Act, that the deceased did not make adequate provision for the proper maintenance and advancement of the Plaintiff. It follows that the Court has no jurisdiction to make an order for further provision out of the estate of the deceased.

In coming to the ultimate conclusion that the Plaintiff has not established that the provision made for her in the deceased’s Will is inadequate, I have borne in mind all of the matters set out above, and, as submitted by the Plaintiff’s counsel, have also borne in mind that the Plaintiff and Gregory could be viewed as a family entity. Important, also, is the size of the deceased’s estate, the competing claim of the second Defendant, as well as the importance of the deceased’s testamentary intentions.

I test the conclusion that I have reached in another way. If one used the methodology that the deceased identified in his discussions with the first Defendant, using the current value, but remembering that the Plaintiff owned one quarter of No. 178 at the date of transfer, the value of three quarters of No. 178, at the date of hearing, is $502,500. On the estimates previously stated, that is slightly more than the gross value of the estate passing to the second Defendant under the terms of the deceased’s Will. I am alert to the fact that the current value of No. 178 is reached after repairs and renovations have been carried out on the Pink House and that there is a second house constructed on the land, the costs of which the Plaintiff and Gregory have paid.

However, if one then deducts from the gross value of the estate, the amount of the Defendants’ costs of the proceedings, the amount that the second Defendant is likely to receive is about $411,953. This is about 61.5 per cent of the current value of No. 178. (I remember that the Plaintiff has had the benefit of income, from time to time, since 1997, from the rental of the Pink House, and the provision said to have been made for the second Defendant during the lifetime of the deceased.)

Accordingly, the Summons must be dismissed.

I next consider the question of costs.

Section 98(1) of the Civil Procedure Act 2005 (NSW) provides that subject to the rules of court and to this, or any other Act, costs are in the discretion of the Court. Similarly, UCPR r 42.1 provides that costs should follow the event unless it appears to the Court that some other order should be made as to the whole, or any part of the costs. UCPR r 42.20(1) provides that if the Court makes an order for the dismissal of proceedings, then unless the Court otherwise orders, the plaintiff must pay the defendant’s costs of the proceedings to the extent to which the proceedings have been dismissed.

The effect of these rules in this case, is that the Plaintiff must bear the Defendants’ costs of the proceedings for the family provision order, unless the Court otherwise orders. The Court can only order otherwise if there is a discretionary decision to depart from what the UCPR provide.

There is no suggestion that the Civil Procedure Act and the UCPR do not apply to family provision proceedings.

I have earlier referred to s 99 of the Act, which section provides for an unfettered discretion as to how the costs of the proceedings for a family provision order may be borne.

In Harkness v Harkness (No 2) [2012] NSWSC 35, I wrote:

In Bruce v Greentree (No 2) [2015] NSWSC 1636 at [43], I wrote:

Had she not commenced these proceedings, the Plaintiff would have received a legacy of $50,000, which amount would have provided a lump sum for the exigencies of life. As it is, by commencing proceedings she took the risk that she would not receive an order for her costs out of the estate or that she would have to bear the burden of the Defendants’ costs.

I also remember that in defending the proceedings, the Defendants were endeavouring to protect the second Defendant’s financial interests only. There was no other person entitled to any part of the residue of the deceased’s estate.

With some hesitation, I am of the view that the overall justice of the case requires no order for the Plaintiff to bear the burden of the Defendants’ costs since that would impact so adversely on her financial position. To do so, and make to no order as to her own costs being paid out of the estate, would, in all probability, result in the Plaintiff having to sell No. 178. I do not think that this would, in all the circumstances of the case, be a just result. I have earlier referred to the Plaintiff’s lack of superannuation and her limited earning capacity.

Yet, I do not think that I should order that the estate to bear the burden of the Plaintiff’s costs. This would not be a just result either, as a significant amount of costs, even if capped, would have to be paid out of the estate. As I have written elsewhere, “[A]n application for a family provision order ought not to be launched unless there is, or there appears to be, a real chance of success, because the result of the proceedings simply diminishes the estate and notional estate and is a significant hardship on those beneficiaries entitled if the applicant is ultimately unsuccessful in the litigation”: Bruce v Greenetree (No. 2) at [57].

Accordingly, the Court: