Morgan v Black

Raymond Leslie Morgan (the deceased) died on 27 December 2018, aged 63 years. The Plaintiff, Tara Morgan, is the daughter of the deceased and his former wife, Carla Morgan. She was born in 1984, and is aged 39. The Defendant, Janette Black, was the de facto spouse of the deceased, and had been in a de facto relationship with him for approximately 22 years at the time of his death. She was born in 1949, and is aged 73.

In these proceedings, the Plaintiff makes a claim for a family provision order out of the estate or notional estate of the deceased pursuant to s 59 of the Succession Act 2006 (NSW) (“the Act”).

The claim was commenced by Summons filed on 11 August 2022, more than 3 years and 7 months after the date of the deceased’s death. It was therefore necessary for the Plaintiff to seek, and she did seek, an order pursuant to s 58(2) of the Act extending the time for the making of her application to the date of her Summons. The Defendant opposed such an extension.

The deceased left a duly executed Will made on 4 June 2013, in which he appointed his brother, David Glyn Morgan, and the Defendant as the executors and trustees of his estate. Probate of the deceased’s Will was never granted.

As at the date of the deceased’s death, he and the Defendant owned, as joint tenants, a property located at 3010 Bucketts Way, Belbora, being Lot 201 in DP1160081 and Lots 202 and 203 in DP1207470 (the Belbora Property).

In the Will, the deceased purported to make the following bequest in respect of the Belbora Property:

Daniel Morgan is the Plaintiff’s brother. He was born in 1985, and is aged 37. He is not a party to the proceedings, and has not made any claim for provision from the deceased’s estate or notional estate.

It was common ground that the gift of the Belbora Property adeemed and was of no effect, as the Belbora Property passed to the Defendant by survivorship, and therefore did not form part of the deceased’s estate.

The Will left an identified painting to his former wife, Carla, and otherwise gave the whole of his residuary estate to the Defendant. As outlined below, the value of the assets of the deceased’s estate was negligible, and was less than the extent of the estate’s liabilities.

For convenience, and without intending any disrespect, I will use, in this judgment, the versions of the first names which were used in the evidence and submissions to refer to the Plaintiff, Tara, to the Defendant, Jan, and to the deceased’s son, Dan.

At the hearing, Tara was represented by Mr K Morrissey of counsel. Jan was represented by Mr S Chapple and Mr D Yazdani of counsel.

It was common ground that:

Accordingly, there was no need for any grant of probate in respect of the deceased’s estate.

By an Amended Summons filed in Court on the first day of the hearing, 14 August 2023, Tara sought an order pursuant to s 91(2) of the Act, granting administration in respect of the deceased’s estate for the purposes of only permitting her application for a family provision order to be brought.

Section 91 of the Act provides as follows:

It is not clear whether it is necessary for such an order to be made in order for Tara’s claim to be determined. In this regard, I refer to the observations by Hallen J in Stanford v Stanford [2021] NSWSC 1469 at [27]-[33]. However, Jan did not oppose an order being made under s 91(2) solely for the purpose of the claim being dealt with, and in those circumstances, out of an abundance of caution, I am satisfied that an order should be made in the terms that have been sought: see Stanford v Stanford at [34] per Hallen J; and Boatswain v Boatswain [2023] NSWSC 763 at [17] per Hallen J.

Given the position of the deceased’s estate, outlined above, no family provision order could be made in Tara’s favour unless there were assets capable of being designated as notional estate.

Jan’s counsel accepted in opening submissions that she has received the benefit of two assets which, as at the date of the deceased’s death, were capable of being designated as notional estate, being a one-half interest in the Belbora Property, which was agreed to have an estimated value of $495,000 at the time of the deceased’s death, and a sum of $81,383.67, being the amount of the superannuation death benefit paid to Jan on 13 August 2019 from the deceased’s CBUS superannuation account (CBUS superannuation benefit).

The CBUS superannuation benefit was paid to Jan after Tara completed a statutory declaration dated 11 June 2019, declaring that the total amount of this benefit should go to Jan.

In 2020, more than a year after the deceased’s death, Jan sold one of the lots comprising the Belbora Property, namely, Lot 203. The net proceeds of sale were $175,672.37. Jan used those proceeds, together with the CBUS superannuation benefit, to discharge the mortgage held by the Commonwealth Bank over Lot 201 in the sum of $94,146.03 on 14 April 2020. She used the remainder of those moneys to fund her living expenses, with none of those funds remaining as at 25 October 2022, when she swore her first affidavit, being some two months after the proceeding was commenced.

On 19 May 2023, Jan sold the balance of the Belbora Property, being Lots 201 and 202. The net proceeds of sale were $875,390.23. Jan has received advice from her accountant that she will have a liability for capital gains tax in respect of the proceeds of the sale, which has been estimated to be $79,050. Allowing for this liability would leave a balance of some $796,340.

From those funds, Jan has paid an amount of $550,000 to Uniting Elizabeth Gates Nursing Home at Singleton (Uniting Elizabeth Gates Singleton) by way of a “Refundable Accommodation Deposit”. The nature of this Refundable Accommodation Deposit is considered in further detail below. Jan has also paid an amount of $66,113.64 to Uniting Elizabeth Gates Singleton in respect of her accommodation fees for the period from around July 2022, when she moved into that accommodation, through to 31 July 2023. She has also paid a number of invoices which were issued in July 2023 by various suppliers of goods and services in the amount of $19,625.49, and has purchased a portable oxygen concentrator in the sum of $4,500 which will enable her to travel. In addition, she has paid legal costs to date of $33,811.

Jan identified, in an updated affidavit of 12 August 2023, further amounts owing to third parties in the sum of around $45,000. This includes a sum relating to the care of her animals which is owing to a family member, Tracy Farnham, and is calculated at a rate of some $250 per week. Ms Farnham was the former wife of Jan’s brother, Ian Black, who is now deceased. Ms Farnham and her daughter, Sherry (Jan’s niece), live in Mirannie near Singleton. They have cared for and fed Jan’s animals since June 2021, including a pony, three dogs, a cat, five parrots and 160 budgerigars.

Once the identified liabilities are paid, and outstanding legal costs are paid, Jan estimates she will be left with only some $30,000 in cash.

Tara has sought an order that the Refundable Accommodation Deposit be designated as notional estate of the deceased, and that an order for provision be made out of that notional estate.

Given the matters outlined above, the issues that arise for determination are, broadly:

These questions are not distinct enquiries, but instead overlap in various ways. For example, one factor in considering whether to extend the time for the making of an application (issue 1) is the strength of the claim, which would include, in this case, forming a view as to the strength of Tara’s application for a notional estate order (issue 2), and her application for a family provision order (issue 3). Similarly, in order to establish special circumstances so as to justify the making of a notional estate order in the circumstances of this case (issue 2), Tara may, and did, rely on matters relevant to her application for extending time (issue 1).

Given that overlap, I will set out facts relevant to the determination of these issues, prior to considering each. Other than in respect of the question of the steps taken by Tara in the period from the deceased’s death until the commencement of this proceeding, there was little factual contest at the hearing. Jan’s counsel provided detailed written submissions in opening, which summarised the effect of the evidence, and Tara’s counsel expressly agreed with the majority of those submissions, subject only to adding or qualifying a limited number of matters. Accordingly, the argument at the hearing focused primarily on what orders should be made against a background of facts that were mostly agreed.

Jan commenced a de facto relationship with the deceased in around 1996. Initially, Jan lived with him in his home in Springwood, New South Wales.

In 1997, Jan’s mother made a gift of $25,000 to her, which she and the deceased used to purchase a property at 103 Ellison Road, Springwood (Springwood residence). The balance of the purchase price of the Springwood residence was funded by a mortgage in the names of Jan and the deceased, and they shared the payments on that mortgage.

On 30 December 2000, Jan’s mother died. She received an inheritance of approximately $380,000 from her mother.

In around 2001, Jan and the deceased sold the Springwood residence, and purchased the Belbora Property for $250,000. The bulk of the moneys for the purchase price came from Jan’s inheritance, with some also coming from the sale of the Springwood residence. Nonetheless, Jan put the property into her name and the deceased’s name as joint tenants because “I thought that was the right thing to do as we were in a relationship together”.

Jan used much of the balance of her inheritance to make improvements to the Belbora Property. At the time of purchase, there was a dilapidated two-bedroom fibro house on the property. Jan hired a builder to perform work on the property for around three months. The deceased provided some assistance to the builder.

Jan also purchased with her inheritance a large shed which she and the deceased erected, a 1000-litre water stand and pump, and the materials for a veranda which the deceased constructed. In addition, she used her inheritance to purchase cattle and steel stock yards, together with 25 young steers and 25 heifers. She looked after the cattle, and was sometimes assisted by a paid stockman.

Jan’s evidence was that, besides assisting with the construction work referred to above, the deceased did very little work on the farm. Tara described her father as an alcoholic, and Jan recounted that for the first two to three years after they moved to the Belbora Property, he was unemployed, and excessively drank alcohol and smoked continuously from midday onwards.

From 2001 to 2005, Jan was, in addition to running the farm, usually working seven days a week at a cafe in Foster. She ceased that job when she underwent intensive chemotherapy and surgery for ovarian cancer. After the cancer went into remission, she went back to work full-time at a horse stud, working five to seven days per week depending on the season.

From around 2004, the deceased started getting odd jobs around the area, including building sheds. He was employed to build a set of stallion stables on the horse stud where Jan worked.

In 2007 and 2008, the deceased worked as a sub-contractor on the construction of the Seqwater desalination plant in South-East Queensland. He stayed up in Queensland while he was on that project, returning to the Belbora Property for short periods. Around this time, Jan left the horse stud and got a cleaning job at a local caravan park where she worked for eleven years, for five to seven days per week depending on the season.

After returning from the Seqwater project, the deceased returned to the Belbora property and continued doing odd jobs. However, this work ceased in 2013 when he was diagnosed with alcohol related liver disease.

In 2013, the deceased was pursued by the Australian Taxation Office for unpaid taxes relating to his work on the Seqwater project. The balance of the amount owing, with interest up to 25 May 2013, was assessed at $116,257.85 by the ATO. The deceased’s accountant wrote to the Commissioner of Taxation in July 2013, referring to the fact that the deceased was terminally ill with Cerebella Atrophy, and was incredibly worried that he would pass away leaving a large debt to the ATO for which Jan would be responsible. Since the deceased did not have funds to pay this debt, Jan arranged for one of the lots owned by them at Belbora (Lot 204) to be sold. The sale occurred on 8 May 2015, with some $153,119 being received on settlement. The amount owing to the ATO was paid on 30 May 2015.

The deceased became confined to a wheelchair for the remaining years of his life. Jan cared for him because they were unable to get nursing help. She assisted him to get out of bed, washed and dried him, and helped him with his personal hygiene. She received the carer’s pension for looking after him. The deceased was admitted to hospital around five weeks before he passed away on 27 December 2018.

As outlined above, with the Belbora Property passing to Jan by survivorship, the deceased left negligible assets other than his CBUS superannuation benefit, which Tara and Dan agreed should be paid to Jan.

It appears from the terms of his Will that the deceased either did not know that the Belbora Property was held by him and Jan as joint tenants rather than as tenants-in-common, or did not understand the difference between those two forms of ownership. It does not appear that he understood that it was necessary to take any step to change the basis on which the Belbora Property was held in order to be able to leave an interest in the property to his children.

The deceased also indicated in a number of conversations with Tara and Dan that the Belbora Property would one day be theirs. Jan agreed that conversations of this type took place in her presence. Jan accepted that she did not express disagreement when this was said, but explained that was because she considered there was no use in arguing. She reiterated a number of times that she was of the view that it was “my farm”.

In about 2018, the deceased proposed to Tara that one of the lots comprising the Belbora Property be transferred to Dan and Tara, on the basis that they would take over a loan of some $70,000 that was secured against the Belbora Property, because the deceased and Jan did not have funds to service the mortgage. The deceased explained that “we’re going to leave this lot to you, but we want you to help now because we haven’t got any money”. However, shortly afterwards, the deceased became seriously unwell and this proposal did not proceed.

Given those matters, I find that the deceased intended that, following his death, the Belbora Property would be dealt with in the manner set out in his Will, and that this remained his intention up until his death.

Shortly after the deceased’s death on 27 December 2018, a copy of his Will was sent to Dan. He read it at this time, and gave evidence that he probably discussed it with Tara.

In about April 2019, Tara received a telephone call from a friend of the deceased and Jan, who asked her to consent to Jan receiving the deceased’s CBUS superannuation benefit because Jan needed the money to pay debts and for living expenses.

Following this, Tara asked Dan for a copy of the Will, and he sent it to her. Tara deposed that she considered the contents of the Will at about this time, following which she sent off a signed statutory declaration in relation to the CBUS superannuation benefit.

In the middle of 2019, Dan relayed to Tara a conversation with Jan, in which Jan had proposed that one of the lots comprising the Belbora Property be transferred to Dan and Tara, if they helped with the $70,000 mortgage over the property, and Jan’s credit card debts. Tara was, at this time, employed by an events management company in San Francisco, and had the funds to assist, as long as Dan also assisted, but the proposal did not go further.

Instead, in around early November 2019, Dan told Tara that Jan wanted to sell one of the lots. Tara did not want any lot to be sold, and it was her understanding of the Will at this time that Jan did not have power to sell the Belbora Property. This was a view that she had reached without, at this stage, the benefit of any legal advice, based on her own reading of the Will.

Tara stayed with Jan and Dan at the Belbora Property between 26 and 30 December 2019, that is, over the first anniversary of the deceased’s death. During this visit, Jan confirmed to Tara that she intended to sell one of the lots comprising the Belbora Property (known as the ‘long paddock’) to a neighbour, because she needed money for living expenses, and also needed money for her brother, Ian Black.

There were further discussions over the following days about the proposed sale, including some discussions involving the neighbour. Tara and Dan also resumed discussions with Jan about taking over the payment of the mortgage over the Belbora Property.

However, after 30 December 2019, Tara did not have any further contact with Jan, who ceased returning her calls.

Tara explained that by this time she had become concerned that Jan wanted to break up the Belbora Property, and she understood that this was something which Jan was not permitted to do under the Will.

This led to Tara seeking legal advice for the first time since the death of her father, just over a year earlier.

In early January 2020, Tara contacted a law firm, Burgess Thomson, to discuss these matters and seek advice.

On 6 January 2020, prior to meeting with Burgess Thomson, Tara sent an email to her uncle, David Morgan, who was a solicitor, and who had drafted the Will and was one of the executors. She explained that Jan was planning to sell one of the lots, expressed the view that Jan either did not understand or was not willing to accept the contents of the Will, and said that it was her own “utmost priority to try and keep the property as a whole and not sell off parts of it". Tara told Mr Morgan that she and Dan were “speaking with an attorney currently to see what some of our options are”, but that she wanted to reach out to Mr Morgan first, to see if he had time to discuss those matters with her and Dan.

On 14 January 2020, before receiving a response from Mr Morgan, Tara met with Damien Burgess at Burgess Thomson. The only document that she took to this meeting was a copy of the Will. At this meeting, Mr Burgess indicated a view that Jan would need to obtain probate and, when that was done, she would not be able to sell without the consent of Mr Morgan. He suggested that there was not much that Tara could do in the meantime, other than look up the title to the lots comprising the Belbora Property.

On 23 January 2020, Tara flew back to San Francisco, where she was residing at this time.

On 29 January 2020, Tara received a response from Mr Morgan to her email of 6 January 2020. In this email, Mr Morgan made the following statements:

On the following day, 30 January 2020, Tara obtained title searches of the three lots comprising the Belbora Property, which showed that Jan was the owner of the farm.

Also on that day, Tara sent to Dan, by text message, links to the websites of two other law firms, GMP Lawyers and Steven Wawn & Associates Lawyers. Tara explained that she wanted independent legal advice in order “to figure out what the title being incorrect in the will meant”. She found these firms by internet searches. She explained that “over the last several years”, she had “googled a lot about this stuff”, including about “family provision claims, things like that”. The GMP Lawyers’ website stated that they provided services on a “no win, no fee” basis.

The address for the GMP Lawyers website was “contestingwills.com.au”. Tara sent these links via a text message to her brother, in which she stated: “Looks like we could definitely contest it”. She agreed that the word “it” referred to the deceased’s Will and that, by 29 January 2020, she was aware that “it looked as though we might be able to do something” regarding the Will.

At this point, Tara contacted Burgess Thomson again, and was told that the firm required payment of $1,000 in order to provide advice. Tara asked Dan to pay this amount, because of difficulties transferring funds from the United States of America, indicating that she would pay him back via Paypal. Dan promised to call Burgess Thomson, but did not pay the $1,000. He later said he would approach another lawyer. When Tara followed up with Dan as to whether he had approached a lawyer in late February 2020, he did not respond.

Tara gave little evidence about what happened in the period of more than 18 months following February 2020. She referred to the fact that the event industry in California was shut down in March 2020; that she lost her job on 15 March 2020, and did not have funds for lawyers at that time; and that she moved to Chicago in March 2021.

Dan did not, in his evidence in chief, refer to any events for the period of more than two-and-a-half years from the end of 2019 through to the commencement of Tara’s claim. However, in cross-examination, he acknowledged that he and Tara discussed “quite a lot” the need to obtain some legal advice about their father’s estate, stating that this “conversation probably happened over those couple of years, I mean, maybe a dozen times, I guess or half a dozen.” He agreed that he and Tara had discussed the possibility of contesting the will, but explained: “we thought there was a problem with the will and then I guess we didn’t see a point in moving forward.”

In the meantime, the sale of lot 203 settled in April 2020, and Jan used the proceeds to discharge the mortgage over the Belbora Property, and to fund various expenses.

By September 2021, Tara was again employed. In that month, Dan told her that he had visited the Belbora Property and had found that the property was unoccupied and looked as though it was being prepared for sale. Upon learning this, Tara was even more concerned. She agreed that, by the time she visited Australia in December 2021, she appreciated that it was getting to the point where there was a need for urgent action. She had discussions with Dan about the need to do something, and they made a joint decision to contact lawyers. On 8 January 2022, she returned to the United States.

In around early January 2022, Dan contacted Butlers Business Lawyers (Butlers). Tara agreed that she probably found out about this afterwards, but was unsure of the timing: “I would imagine it was a couple of days afterwards, weeks, I’m not sure”.

On 17 January 2022, Butlers sent Dan a letter dated 12 January 2022. In that letter, Butlers stated that they would be “pleased to assist you advising on your late fathers will and making a claim on his estate”. Butlers also identified various circumstances to which the Court would have regard “if you were to make a family provision claim challenging the validity of the will”, these being circumstances set out in s 60(2) of the Act (although there was no express reference to that section). Dan was asked, in order to assist with preparing the advice, to consider those circumstances and to provide Butlers with further information. Butlers also attached a costs disclosure and costs agreement, estimating the costs of the advice to be $1,797.70, inclusive of GST, and asking for that amount to be paid into their trust account before commencing work on the matter.

It appears that nothing was then done for a further four months. Tara explained that she did not do anything in the period from January to May 2022 because she was relying on Dan.

On 8 May 2022, Dan forwarded to Tara the material that he had received from Butlers in mid-January 2022. On 13 May 2022, Tara paid the amount of $900 to Dan, this being approximately one half of the amount which had been required by Butlers. She followed up with Dan on 15 May 2022 to check whether the money was received, and Dan advised that he would follow up with Butlers.

Tara followed up with Dan again on 11 June 2022, and asked if there was any update. On 22 June 2022, Dan asked her for a copy of the Will as he could not find it and was meeting with Butlers the following day. On 23 June 2022, Tara provided the Will to him.

On 6 July 2022, Butlers sent a letter of advice to Dan. In particular, Butlers advised that one option was to file an application for a family provision claim in this Court, and explained the nature of that claim. The letter contained the following statement (emphasis in original):

Dan forwarded a copy of this letter to Tara. He told her that Butlers had indicated that the costs could go up to about $50,000. Tara did not have those funds available.

Following this, Tara looked for a lawyer who could advise her on a contingency fee basis. On 8 and 9 August 2022, she spoke to her current solicitor and counsel, and on 11 August 2022, she gave instructions to Turner Freeman Lawyers for a family provision claim to be brought. Her claim was filed on that day.

Tara’s counsel submitted that until receipt of the letter from Butlers dated 6 July 2022, she was unaware of the time limitation period. However, Tara did not herself give evidence one way or the other whether she was aware of the limitation period in respect of a family provision claim prior to the letter from Butlers being sent to her. It is the case that Dan responded, when asked in cross-examination what he was doing between January and May 2022: “We didn’t really understand that there was a time limit on this thing”. I do not regard Dan’s answer as probative evidence of Tara’s state of mind. That is particularly so because in the same answer, he uses the first person plural to refer to steps that he himself had taken in relation to Butlers, stating “we’d contacted them”, when Tara’s own evidence is that she did not have contact with that firm.

Similarly, while the letter from Butlers of 6 July 2022 states, in the passage quoted above, that Butlers understood that “up until this point you were not aware of the 12-month limitation period”, I read the second person “you” as referring solely to Dan, and not to Dan and Tara. Tara did not, on her evidence, speak to Butlers at any point, and therefore could not have been the source of the instructions that gave rise to this statement. Butlers’ Costs Disclosure and Costs Agreement of 17 January 2022, and letter of 6 July 2022, are addressed solely to Dan. Where Butlers’ letter of advice does make, very limited, reference to Tara, it refers to “you and your sister”, indicating that the second person is used in the singular, to refer to Dan, and not in the plural, to refer to him and Tara. Therefore, the letter of 6 July 2022 does not provide evidence that Tara told Butlers that she was unaware of the limitation period until that time, or that she was so unaware.

Tara is the party seeking an extension under s 58(2) of the Act and if she sought, on that application, positively to rely on her ignorance of the time limit until a certain point in the chronology, then this was a matter on which she could, but did not, lead evidence. Further, I have referred to Tara’s evidence that she googled family provision claims on a number of occasions over several years. Tara did not give any evidence about what information she obtained as a result of those searches and did not say, one way or the other, whether those searches revealed anything about the limitation period. Given those matters, I have approached the issue that arises under s 58(2) of the Act on the basis that Tara has not led evidence as to when she first became aware of the limitation issue, and there is no sufficient basis to infer when this occurred.

Prior to Tara commencing these proceedings, or Jan receiving any notice of Tara’s claim, Jan entered into an agreement with The Uniting Church in Australia Property Trust (NSW) (the UCAPT), which is dated 25 July 2022 and entitled “Resident Agreement”.

Pursuant to the Resident Agreement, UCAPT grants Jan a licence to reside in Uniting Elizabeth Gates Singleton and to occupy the “Accommodation”: cl 3.1. UCAPT agrees to provide Jan with the Accommodation and with Residential Care Services based on her assessed needs at the Commencement Date: cl 3.3. Clause 3.4 provides that, if Jan’s assessed care needs change, UCAPT does not guarantee to be able to continue to provide her with Accommodation and Residential Care Services at Uniting Elizabeth Gates Singleton. In those circumstances, UCAPT may ask her to leave the Care Home: cl 7.1.2.

The Resident Agreement contains provisions regarding the payment of Accommodation Fees (cl 11) and Resident Fees (cl 12).

Clause 11.2.1 provides that Jan must choose, within 28 days after the Commencement Date, whether she will pay the Accommodation Fee by Daily Payments, or a “Refundable Deposit”, or a combination of a Refundable Deposit and Daily Payments. The Resident Agreement provides that the amount of the Refundable Accommodation Deposit is set at $550,000. The effect of the payment provisions is that if the Refundable Accommodation Deposit decreases below the level of $550,000, the amount payable by way of Daily Payment increases. By way of an example provided in the Resident Agreement, if the amount of the Refundable Accommodation Deposit is $280,000 (or around 50.9% of the total stipulated), then Daily Fees are payable at a rate of $36.99 (or around 49.1% of the total maximum fee of $75.35 stipulated in the Resident Agreement).

In addition, clause 12.1.2 of the Resident Agreement provides that Jan must pay a “Resident Fee” for the Residential Care Services provided to her by UCAPT. The Resident Fee is made up of a “Basic Care Fee”, which was $54.69 per day as at the Commencement Date, and a Means Tested Additional Care Fees (if any).

As outlined above, prior to the sale of the Belbora Property, Jan did not pay a Refundable Accommodation Deposit, and instead incurred a liability for fees in the period from around June 2022 to 31 July 2023, totalling some $66,113.64. Following settlement of her property, she paid the Refundable Accommodation Deposit of $550,000.

Clause 11.2.6 provides as follows:

The “other payments” which Jan could choose to have deducted from the Refundable Accommodation Deposit pursuant to cl 11.2.6(b) include the fees which are payable by her in respect of the Residential Care Services that she receives, such as the Resident Fee referred to in cl 12.1.2.

Clause 11.3 provides that UCAPT may also deduct certain amounts from the Refundable Accommodation Deposit:

Clause 11.4 deals with the circumstances in which UCAPT will refund the “Refundable Deposit Balance” which is defined as meaning “on any day, the amount of a Refundable Deposit after we have taken out any amounts that we are permitted to deduct from the Refundable Deposit under this Agreement or under the Aged Care Act”. It provides as follows:

The Resident Agreement identifies that Tracy Farnham is the Guarantor in respect of Jan’s obligations under the Resident Agreement in accordance with Clause 20. Clause 20.3 provides as follows:

Clause 20.5 provides as follows:

The Aged Care Act 1997 (Cth) contains various rules about “refundable deposits”. A “refundable deposit” is defined as including a “refundable accommodation deposit”, which is in turn defined as an accommodation payment that does not accrue daily and is paid as a lump sum. The provisions concerning such refundable deposits include those in Division 52J, headed “Rules about Refundable Deposits”, and the provisions of Part 3A.3 regarding the management of refundable deposits. For example, section 52J.6 provides that an approved provider may retain income derived from a refundable deposit; section 52J.7 identifies amounts that must be deducted from a refundable deposit, and amounts that may be so deducted, including the amounts specified in the “Fees and Payments Principles” as being able to be deducted; and section 52N.1(2) provides that an approved provider is permitted to use a refundable deposit for various listed purposes, including, for example, for capital expenditure of a kind specified in the Fees and Payment Principles (section 52N.1(2)(a)), or to make a loan of a type specified in section 52N.1(2)(c), or to repay certain types of debt.

The Fees and Payment Principles 2014 (No 2) (Cth), which are made under section 96-1 of the Aged Care Act 1997 (Cth), include regulations concerning the permitted uses of refundable deposits (see, in particular, regs 61-64). These purposes include, for example, to meet reasonable business losses incurred in the period specified in the regulations, or to make certain types of investments.

In opening written submissions, Jan’s counsel submitted, and Tara’s counsel agreed, that Jan’s financial circumstances are precarious.

As outlined at paragraphs 18-24 above, Jan has only limited assets, which will be almost exhausted after outstanding liabilities and legal expenses are paid. I deal separately with her rights in respect of the Refundable Accommodation Deposit below.

Her pension is $2,088.67 per month, and she owes Uniting Elizabeth Gates Singleton some $3,077 per month. In addition, she identified in her affidavit further expenses of some $3,800 per month.

Jan’s counsel submitted that, given that Jan’s expenses exceed her income, it would be sensible for her, in order to maintain her present accommodation and to allow her to apply some of her pension income towards her personal and lifestyle expenses, to maximise the fees that are deducted from the Refundable Accommodation Deposit, including at least the Accommodation Fee and perhaps any other amounts in respect of which she can reach agreement with UCAPT.

In response, Tara’s counsel submitted that there is no foreseeable reason why the amount of the Refundable Accommodation Deposit needs to be reduced from $550,000. The basis of this submission was that Jan’s cash position would be significantly increased if two liabilities are disregarded: first, the claimed liability of $79,050 for capital gains tax in respect of the Belbora Property; and second, the claimed liability of $40,476 said to be owed to Ms Farnham in respect of Jan’s pet animals. Tara contended that, if the amount of those claimed liabilities was added back to the $30,000 which Jan estimates that she might have left (after all liabilities), this would result in a total fund of around $150,000, which was said to be a substantial sum to fund her expenses in circumstances where Jan had a life expectancy of two to three years.

The material before the Court does not provide a basis for disregarding, or discounting, either the liability for capital gains tax or the liability in respect of pet animal expenses.

As regards the capital gains tax liability, Jan led, without any objection, evidence of her accountant’s advice and calculations regarding this liability. In opening written submissions, Jan’s counsel referred to the liability for capital gains tax, and to Jan’s net asset position after all liabilities (including for capital gains tax) were taken into account, and Tara’s counsel agreed with those submissions without qualification. Likewise, no issue was raised in oral addresses. Instead, the issue was raised in supplementary written submissions provided after the end of the hearing, on 18 August 2023. Further, this liability was queried on the basis of a conversation between Tara’s solicitor and a tax professional who noted that she had not read any of the materials sent to her in relation to this specific situation, and who indicated that a tax adviser would be looking at concessions which may be available in respect of the liability. There is no evidence that Jan’s accountant did not do so. Nor was Jan asked any questions in cross-examination relevant to whether a basis for any particular concession might be established. Nor did Jan have any opportunity to address, by way of evidence, any such issue, in circumstances where a concession had been made by Tara in opening in respect of the capital gains tax liability, and the issue was only raised after the hearing.

In those circumstances, I consider I should proceed, in considering Jan’s financial circumstances and needs, on the basis that there is a liability for capital gains tax in the amount stated, or at least a significant risk of such a liability.

As for the pet animal expenses, Tara’s supplementary submissions did not identify any basis on which I should disregard Jan’s stated liability to Ms Farnham in respect of the costs of caring for her animals. Again, the liabilities which Jan owed to family members (including the pet animal expenses owed to Ms Farnham) were identified in a paragraph of Jan’s opening submissions with which Tara expressly agreed. Jan gave evidence that this liability exists, and explained the nature of the expenses. It was not put to her that such expenses had not been incurred, or that she had no liability to pay for them. Instead, Jan was asked whether Ms Farnham was charging her these expenses, and she confirmed that this was the case. Given those matters, I do not consider there is a sufficient basis in the evidence to disregard or discount this liability. In any case, if this liability were reduced, or even disregarded, it would not substantially improve Jan’s financial position.

Finally, there is not a sufficient basis to conclude, as Tara contends, that Jan’s life expectancy is limited to two to three years. This estimate came from a report of Dr Jonathan Burdon, which was tendered by Tara. Dr Burdon is a Consultant Physician practising medicine exclusively in the specialities of Respiratory and Sleep Disorders Medicine. He did not examine Jan for the purposes of preparing his report. Instead, he reviewed certain files relating to Jan which are identified in his report, and expressed an opinion solely on the basis of the content of those files. It appears from the “Medical History” section of his report that the latest information in the files was dated around October 2022. On the basis of this material, Dr Burdon expressed the opinion that Jan suffers from severe chronic obstructive pulmonary disease of the emphysematous type, and according to the medical records suffers from multiple severe medical co-morbidities, including having “extremely limited” physical activity, may experience pain when moving due to a medical diagnosis of neuropathic pain, and is at higher risk of falls; and is suffering from confusion, anxiety, insomnia, depression, short and long term memory problems and communication difficulties. Given those matters, Dr Burdon is of the opinion “based on the information made available to me and noting that it is always difficult to be certain”, that Jan’s present life expectancy is in the order of two to three years.

In response, Jan provided, in an affidavit of 28 July 2023, unchallenged evidence concerning her current health status. While acknowledging that she has chronic obstructive pulmonary disease, she explained that her health has improved so that, since January 2023, she has been able to regularly leave Uniting Elizabeth Gates Singleton and spend weekends with Ms Farnham and her family at Reedy Creek, usually twice a month. She further deposed that, at that property, she is able to sit on her horse and be led around the yard, and play with her dogs; and that since June 2023, she has been able to ride a fitness bicycle and arm trainer a couple of times a week. She explained that she has been improving with use of this equipment, and can now do ten minutes with her legs on the bicycle, and two sets of five minutes with her arms on the arm trainer. It does not appear that this evidence was provided to Dr Burdon in order to see if it affected any of his opinions.

Jan also tendered two further medical reports, dated 23 and 27 June 2023 respectively. The first was a report of specialist geriatrician, Dr Withanage, who attended on Jan at Uniting Elizabeth Gates Singleton on 23 June 2023. Whereas Dr Burdon had referred to, and relied upon, observations in the papers provided to him that Jan was suffering from confusion, short and long term memory problems, communication difficulties and depression, Dr Withanage reported that Jan scored a 28/30 in the Mini-Mental State Examination (MMSE), losing only 1 in orientation, and that none of the nursing care staff raised any concerns regarding cognition. Dr Withanage noted that Jan denied any significant depressive symptoms over recent months, and concluded that there was not a need to consider any antidepressant therapy, though close monitoring of her mood would be reasonable over the coming months. The second report was provided by a general practitioner, Dr Mitchell Tanner, who expressed the opinion that Jan was “highly unlikely to die in the near future despite her serious illness”. He expressed the view that Jan is likely to continue to live for several years, but noted that it is wrong to suggest that the timing of her death is imminent or predictable. Dr Tanner concluded as follows:

In those circumstances, I do not consider there is a sufficient basis for me to proceed on the basis, when assessing Jan’s financial circumstances and needs, that any needs for expenses will be limited to a period of only two to three years, or that all expenses can be met from her existing assets, without recourse to the Refundable Accommodation Deposit.

Tara’s parents separated when she was aged 10. At this time, the family was living in Springwood. Following the separation, her father moved to another house in Springwood.

Tara gave unchallenged evidence, and I find, that she and the deceased had a loving relationship. After her parents separated, she continued to see the deceased all the time, spending several weekdays and nights at his house. Whenever he travelled for work, she talked to him on the phone and visited him as soon as he returned.

Jan and the deceased commenced their relationship in 1996, when Tara was 12. After Jan moved into the deceased’s house in Springwood, Tara and Dan continued to come to the house after school, and Jan and the deceased took them to weekend sports events.

After Jan and the deceased moved to the Belbora Property in mid 2001, Tara visited the property, sometimes taking friends, and spent every Christmas and New Year period there until she left Australia in 2010, to work in the United States. In the period from 2010 until the deceased’s death in December 2018, Tara only visited the deceased once, for around two weeks in December 2017. She explained that, in this period, she was unable to leave the United States while her application for a green card was pending. During this time, Tara maintained telephone contact with the deceased, calling around once every few months.

Tara is currently single and has no dependents.

Tara lives in Chicago, and is employed by Fern Expo in the position of Account Executive/Strategic Accounts, earning USD$92,500 per annum before tax and deductions, and USD$59,749 after tax and deductions. Using the exchange rate that was adopted in her affidavit of 12 July 2023 (USD$1 = AUD$1.5009031), this amounts to around AUD$139,000 per annum before tax and deductions, and AUD$89,700 after tax and deductions.

According to an earlier affidavit of 7 September 2022, Tara was at that time working with the same employer and earning USD$82,500 per annum before tax and expenses, indicating that her income has increased by some USD$10,000 per annum (before tax and expenses) over the past year, which equates to an increase of around AUD$15,000.

Tara’s expenses are approximately USD$5,141 per month, and her net income is approximately USD$4,979 per month. She has assets with an estimated value of around USD$30,000, and liabilities of around USD$40,000, mainly consisting of credit card debts.

In her affidavit of 12 July 2023, Tara deposed that her total claim on the deceased’s estate was approximately AUD$573,633.15, which she itemises as comprising moneys needed for a new car, a deposit for a home, a retirement fund, an emergency savings fund, and the amount of her existing debts.

In the proposed orders which Tara provided to the Court, she sought an order that provision be made in an amount not less than $330,000. She also proposed that there be no order as to costs of the proceedings. There was evidence that Tara’s total costs and disbursements on the indemnity basis to the end of the trial are estimated to be $132,000, including an uplift of 25% on solicitors’ costs pursuant to the terms of a conditional costs agreement. In the absence of any evidence to the contrary, it appears that, if the Court were to make the orders sought by Tara, she would have a liability of $132,000 in respect of costs that she would need to meet from the proposed provision. Assuming that to be the case, Tara, if successful in obtaining an order for provision in the amount of the $330,000, would receive, after payment of this costs liability, some $198,000. If regard is also had to the costs that are estimated to have been incurred by Jan to the end of the hearing, being some $71,811 on the indemnity basis, then the total costs of this claim being pursued (over $203,000) exceed the amount that would be left in Tara’s hands if she were entirely successful.

Pursuant to s 57(1)(c) of the Act, Tara is, as a child of the deceased, an eligible person to make an application for a family provision order in respect of his estate.

Subsection 58(2) of the Act provides as follows:

An application is taken to be made on the day it is filed in the Court’s registry: s 58(3).

The deceased died on 27 December 2018. Tara commenced her proceedings by a Summons filed on 11 August 2022, that is, more than 3 years and 7 months after the deceased’s death. Since Jan has not consented to the application being made out of time, Tara’s application cannot proceed “unless the Court otherwise orders on sufficient cause being shown” that the time for the making of an application be extended to the date of the Summons. Tara seeks such an order by paragraph 1 of her Summons.

The time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality: Verzar v Verzar [2012] NSWSC 1380 at [98]. It is not merely procedural, but is substantive: Stone v Stone [2016] NSWSC 605 at [36] per Brereton J.

In Madden-Smith v Madden (Estate of late Doris Linda Madden) [2012] NSWSC 146, Pembroke J wrote at [23]-[24]:

The onus lies on the applicant to establish sufficient cause: Thomas v Pickering; Byrne & Anor v Pickering [2011] NSWSC 572 at [86].

In Moore v Randall & Anor [2012] NSWSC 184 at [39], While J observed that the expression “sufficient cause” in s 58(2) means “sufficient explanation or sufficient justification or excuse for the application not having been made within the prescribed period”. In Stone v Stone at [36], Brereton J made the following observations regarding the operation of subs 58(2):

On this approach, an applicant need only show that he or she had “sufficient cause” for not filing an application within 12 months of the deceased’s death (in this case, prior to 27 December 2019). If this is established, then the discretion to extend time is enlivened and, in exercising that discretion, it is relevant to consider any further delay from the expiry of the 12-month period up until the filing date of the application, and any reasons or explanation for that delay.

However, a different view appears to have been expressed in Verzar v Verzar [2014] NSWCA 45 at [24], where Meagher JA (with whom Macfarlan and Barrett JJA agreed) commented that the “sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time.” This approach was adopted by Hallen J in Boatswain v Boatswain at [219], where his Honour observed that the meaning of “sufficient cause” is “sufficient, in all the circumstances, to justify the granting of an extension of time”. On this approach, the delay both before and after the expiry of the 12-month period for commencing an application, and any explanation for the delay, would be relevant to determining whether “sufficient cause” has been shown: Boatswain v Boatswain at [224].

In Verzar v Verzar at [25], Meagher JA identified matters to be considered when determining whether “sufficient cause” has been shown for the purposes of s 58(2) of the Act:

Where sufficient cause is shown, the Court then has a discretion whether to grant the extension sought. In Sreckovic v Sreckovic [2018] NSWSC 1597 at [88], Hallen J observed that, there are no statutory criteria that must be taken into account, and no rigid rules in regard to the exercise of the discretion. His Honour continued:

As regards the issue of prejudice, Hallen J explained (at [88]):

As regards the strength of the claim, Hallen J observed in Boatswain v Boatswain at [228] that good prospects of success “are not, invariably, the trump card”. In that regard, his Honour referred to Choras v Farmakidis [2020] NSWSC 367 at [168], where Parker J expressed the view that the strength of a claim cannot overcome the lack of an explanation of delay, or prejudice to the defendant from the delay:

Ultimately, the critical question will be whether it is in the interests of justice that the time for the application to be made should be extended and, in determining this question, the approach of the Court should be flexible: Boatswain v Boatswain at [230].

In the present case, having regard to the principles and evidence summarised above, I have determined that Tara has not shown sufficient cause for allowing her application to be brought out of time, more than 3 years and 7 months after the deceased’s death, and in any case that I would not, in the exercise of the discretion under s 58(2), make an order extending time.

That is for three main reasons.

First, there has been a lengthy delay in bringing the application, and a lack of any cogent or satisfactory explanation for large periods of that delay.

I accept that, for much of the first year following the deceased’s death, Tara understood that the deceased had an interest in the Belbora Property, which would be dealt with according to his stated intentions and his Will, and that Jan could not deal with the property inconsistently with the terms of the Will. However, by around the first anniversary of the deceased’s death, Tara was aware that Jan was taking steps to sell part of the Belbora Property, despite the wishes of Tara and Dan; was seriously concerned by this development; and understood that she should seek legal advice.

In January 2020, Tara took steps to obtain such advice. She contacted her uncle, Mr Morgan, who was a solicitor and had drawn up the Will. He told her, in clear terms that there was no interest in the Belbora Property that was part of the deceased’s estate; that the Belbora Property was held by the deceased and Jan as joint tenants, and had passed to Jan on the deceased’s death; that there were no assets in the deceased’s estate; and that she should obtain independent legal advice. Tara also met with a lawyer from Burgess Thomson, who told her that she should conduct title searches for the Belbora Property. Tara obtained property searches which confirmed that the Belbora Property was owned by Jan. She also conducted internet searches in relation to family provision claims and contesting wills, including finding at least one firm that took on work on a “no win, no fee” basis. At this time, Tara formed the view, as expressed to Dan, that “we could definitely contest” the Will. She sent the details of two law firms to Dan, including one with the website “contesting.wills.com.au”.

All those steps were taken within the matter of a few weeks after the expiry of the 12-month period in s 58(2) of the Act, and shortly after learning of Jan’s intentions in relation to the Belbora Property. If a claim had been filed within a short period following those steps, and while Jan still owned the Belbora Property, then the outcome of the s 58 application might well be different.

However, at this point, there followed a period of almost 2 years, from February 2020 through to the end of 2021, in which no further significant steps appear to have been taken by Tara to obtain advice in relation to her father’s estate or the Belbora Property, let alone to bring any claim. The only explanation offered for not taking any steps in this period was that Tara lost her events management job in mid-March 2020, when the events industry in California shut down because of COVID, that she only had limited funds, and that she moved to Chicago in March 2021.

However, this is not a satisfactory explanation for the delay. As for the move from San Francisco to Chicago, it is difficult to see how this could affect her ability to seek advice. As for her loss of employment, Burgess Thomson had indicated that they required only $1,000 to provide advice. She asked Dan to pay this amount, on the basis that she would reimburse him, but he did not do so. There was no evidence from Dan that he was unable to pay this relatively modest sum. In any case, as noted above, Dan had been provided with the contact details of one firm that advertised work on a “no win, no fee” basis. Dan promised to contact another lawyer, but did not do so. At this point, no further steps were taken for almost two years. That was despite Tara continuing to conduct internet searches regarding family provision claims and contesting wills in the years leading up to filing her application, and despite her having “quite a lot” of discussions with Dan about the need to obtain some legal advice about their father’s estate, about half a dozen to a dozen times.

It was not until the start of 2022, when Dan contacted Butlers after a discussion with Tara, that any further steps to obtain advice were taken. Butlers responded immediately in mid-January 2022, indicating that advice could be provided and requesting a sum of just under $1,800 be paid into trust. There was no evidence that the request for this sum presented a problem for Tara or Dan. However, no steps were then taken for a further four months. It is true that Dan does not appear to have forwarded the request from Butlers for funds to Tara until May 2022, but there is no evidence that she made any enquiry of Dan in that period. She provided no satisfactory explanation for her failure to take any step from January to May 2022, other than to say that she was relying on Dan. This was despite the fact that she was of the mindset by early 2022 that the need for advice, and the need to take action, was becoming urgent.

After the requested funds were paid to Butlers in May 2022, and the Will was provided in June 2022, Butlers provided advice in early July 2022, and Tara’s claim was commenced around one month later. However, the relatively swift movement to bring a claim after advice was received cannot make up for the lengthy, and mostly unexplained, failure to obtain advice, in the period from January 2020, when Tara was told that the Belbora Property had passed to Jan and that she should seek independent advice, through to mid-2022, when funds were finally paid to a lawyer to obtain advice.

As I have noted above, there was no evidence from Tara herself that she was unaware of the time limit for commencing a family provision claim, or, if she was, as to when she did become so aware. In those circumstances, I am not prepared to infer that ignorance of the time limit was a factor in her conduct. I find that the likely position is, as stated by Dan, that although he and Tara “thought there was a problem with the will”, they “didn’t see a point in moving forward.”

In Vasconelos v Bonetig [2011] NSWSC 1029, White J noted at [20], in respect of the section of the former Act, that the “policy behind s 16(2) would be put at nought if an applicant could decide, at his own choosing, how long he or she should wait before plucking up the strength to institute proceedings.” Similarly, in the passage from Stone v Stone quoted above at paragraph 125, Brereton J noted that a “mere change of mind on the part of an eligible person, who has decided not to make a claim … is ordinarily not sufficient cause for granting an extension of time.”

In the circumstances outlined above, there has been no satisfactory explanation for the lack of any substantive steps from early 2020 to mid-2022. It appears that Tara was waiting for a time that suited her before taking steps, or had a change of mind or heart about bringing a claim, which led her to move more swiftly from mid-2022 onwards. This does not provide sufficient cause for allowing the application to be brought more than 2 years and 7 months after the expiry of the 12-month application period. Alternatively, if sufficient cause need only be shown for not bringing the application within the 12-month period, I consider that the excessive and largely unexplained delay in the period after the expiry of the 12-month limit through to mid-2022 provides a basis for exercising the discretion under s 58(2) to refuse the extension of time that is sought by Tara.

Even if the evidence had established that Tara was unaware of the limitation period for a family provision claim prior to July 2022, I would not have regarded this as a satisfactory explanation for her delay in bringing these proceedings. On this scenario, Tara would have learned of the limitation period in July 2022 when Butlers provided advice on what steps could be taken in relation to the deceased’s estate. However, the problem with relying on this as an explanation for the delay in bringing a claim is that it does not explain why she took so long to obtain advice, when she had understood since January 2020 that she should do so.

Secondly, allowing the application to be pursued so long after the expiry of the limitation period would cause prejudice to Jan. This is not a case where Jan had any notice of Tara’s claim before it was commenced. According to the evidence, Jan and Tara ceased all communications after 30 December 2019. There was no indication to Jan that a claim would or might be brought prior to the Summons being filed in August 2022.

By not foreshadowing to Jan any claim prior to her Summons being filed, Tara allowed Jan to live her life, and make significant decisions about her assets and her future, without any idea that a proceeding might be brought against the property which had passed to her by survivorship.

In particular, in the period from the deceased’s death in December 2019 through to August 2022, Jan used her assets to pay her living expenses and incurred liabilities to her family and friends, resulting in a reduction of capital available to satisfy any family provision order. She sold one of the lots comprising the Belbora Property, and used the proceeds to discharge a mortgage and fund living expenses. She decided to move into accommodation at Uniting Elizabeth Gates Singleton, and entered into the Resident Agreement with UCAPT, based on the assets that she then had available to her, including the remaining lots in the Belbora Property, which were subsequently sold in order to fund the payment of the Refundable Accommodation Deposit. Jan took all those steps in circumstances where there had been no indication given to her that an application might be brought for any of her assets to be designated as notional estate. Instead, she had received the deceased’s superannuation with the consent of Tara and Dan, and had proceeded with the sale of Lot 203 without any issue being raised by them.

Tara’s counsel contended that there was no prejudice caused to Jan by the delay because the steps which she took in the interim are steps which she would have taken in any case. When asked in cross-examination whether she would have done anything differently if notified of a claim, Jan responded “I wasn’t even thinking of anything, I wouldn’t, I don’t know”. However, I do not consider that it is necessary, in order to establish prejudice, to show that as a matter of fact some alternative course would have been followed, if a claim had been notified, which is now foreclosed. I consider it is sufficient that Jan, in ignorance that a claim might be brought against her, took significant steps in relation to her assets in the years following the deceased’s death, which have led to her being in the position where her only substantial remaining asset is her bundle of rights in respect of the Refundable Accommodation Deposit, and the orders that are sought by Tara in this application would have the effect that she would be unable to have unrestricted use of that asset in order to fund her remaining years. (I deal below with the impact that Tara’s proposed orders would have on Jan’s ability to exercise her rights in respect of the Refundable Accommodation Deposit.) Further, Jan has found herself in that position without having the opportunity to consider whether, in light of a potential claim, her affairs should be structured in a different way.

Thirdly, I have formed the view, on a preliminary consideration of Tara’s claim that the notional estate order proposed in respect of the Refundable Accommodation Deposit either cannot be made in the terms sought, or would not be made as a matter of discretion. The result is that there is no property in the deceased’s estate, and no property of Jan’s that would be designated as notional estate, out of which any order would be made. Further, I am also satisfied, on a preliminary consideration of Tara’s claim, that Tara does not have a claim for a family provision order that would succeed. The matters I have taken into account in reaching that view on a preliminary consideration are those which I have referred to in addressing the remaining issues below.

I consider these factors mean that sufficient cause has not been shown for extending the time for bringing an application to the date on which the Summons was filed. Further, and in any case, having regard to those factors, even if sufficient cause had been shown, I would exercise the discretion under s 58(2) to refuse an extension of time.

My decision to refuse the application is not dependent on all of the three matters outlined above having been found. Even if Tara had provided a satisfactory explanation for not commencing the proceeding until August 2022, and I had concluded that Jan suffered no prejudice by reason of that delay, my views regarding the weakness of Tara’s claim would have led me to conclude that no extension of time should be granted.

Accordingly, I refuse Tara’s application under s 58(2) for an order extending the time within which an application must be brought. As a result, the whole of the proceedings must be dismissed.

In Underwood v Gaudron [2015] NSWCA 269 at [89], Basten JA observed that, in circumstances where such a view has been reached, there is no need for a full consideration of the circumstances of the claim:

However, in case I am wrong in refusing Tara’s application under s 58(2), I will deal substantively below with the question whether any order should be made designating the Refundable Accommodation Deposit as notional estate of the deceased.

A family provision order may be made in relation to property that is not part of the deceased’s estate, but which is designated as “notional estate” of the deceased by an order under Pt 3.3 of the Act: s 63(5) of the Act.

Section 73(1) of the Act provides that Part 3.2 of the Act applies to property designated as part of the notional estate of a deceased person in the same way as it applies to property that is part of the estate of a deceased person.

The Court may only make a notional estate order for the purposes of a family provision order to be made under Part 3.2, or for the purposes of an order that the whole or part of the costs be paid from the notional estate: s 78(1) of the Act. In this section of the judgment, I consider whether there would be any other impediment to the making of a notional estate order, if I were to conclude that a family provision order should be made. It was not controversial that, if I were to determine that any family provision order should be made, there were no assets in the estate capable of satisfying any such order: see s 88(b) of the Act.

In the present case, the only property which Tara has sought to have designated as part of the deceased’s notional estate is the Refundable Accommodation Deposit. In that regard, Tara has sought orders to the following effect:

The power to make a notional estate order only arises where the Court is satisfied that the deceased “entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies”: s 80(1) of the Act.

Section 74 of the Act provides that a "relevant property transaction" means a transaction, or circumstance, affecting property and described in s 75 or s 76. "Property" includes “any valuable benefit”.

Section 75(1) of the Act provides as follows:

Section 76 of the Act describes some of the circumstances that constitute the basis of a relevant property transaction for the purposes of s 75. One of those circumstances is particularly relevant in the present case, namely, s 76(2)(b) of the Act:

Any such circumstance is “subject to full valuable consideration not being given”: s 76(1) of the Act. In that regard, s 76(4) of the Act provides that, in the circumstances described in s 76(2)(b), “a person is not given full or any valuable consideration for not severing an interest in property held as a joint tenant merely because, by not severing that interest, the person retains, until his or her death, the benefit of the right of survivorship in respect of that property”.

Jan’s counsel accepted that the failure by the deceased to sever the joint tenancy in respect of the Belbora Property is a relevant property transaction.

Likewise, Jan’s counsel accepted that the deceased’s failure to make a nomination to direct his superannuation to be paid to his legal personal representative falls within s 76(2)(a) of the Act, and therefore is a relevant property transaction: referring to Benz v Armstrong; Benz v Armstrong; Benz v Armstrong [2022] NSWSC 534 at [173] per Ward CJ in Eq.

Section 80(1) provides that if (as is the case here) the Court is satisfied that there has been a relevant property transaction, the Court “may” make a notional estate order “designating property specified in the order as notional estate of a deceased person”. As is clear from the terms of that provision, the power to make such an order is discretionary; and the nature of such an order is that it designates specific property as notional estate. It is therefore necessary to identify property which might be specified as notional estate, and to consider provisions in the Act limiting the power, and informing the discretion, to make a notional estate order.

The only property in respect of which Tara has sought a notional estate order is the Refundable Accommodation Deposit. I have described above Jan’s rights, and also UCAPT’s rights, in respect of the sum of money that Jan paid in July 2023 by way of a Refundable Accommodation Deposit. It is necessary to pay close consideration to the particular rights that Jan has in respect of the Refundable Accommodation Deposit when considering whether a notional estate order could, or should, be made in respect of the whole or any part of those rights.

The Refundable Accommodation Deposit does not represent a sum of money held as a separate fund by Jan. Instead, it is an amount that has been paid by her to UCAPT pursuant to the terms of the Resident Agreement.

Nor is the Refundable Accommodation Deposit held as a separate fund by UCAPT. As explained above, UCAPT is entitled to use the moneys paid by Jan for the purposes permitted by the Aged Care Act, including for capital expenditure, for reasonable business expenses, to pay debts and to make loans.

Jan has two main types of contractual rights in respect of the Refundable Accommodation Deposit, namely, her rights that:

Those contractual rights under the Resident Agreement are the property of Jan. I understood Tara’s proposal that a notional estate order be made in respect of the Refundable Accommodation Deposit to be a proposal that such an order be made in respect of Jan’s contractual rights under the Resident Agreement to receive the balance of the Refundable Accommodation Deposit as at the date when it becomes repayable pursuant to the terms of that agreement. As set out in cl 11.4 of the Resident Agreement, the amount to which Jan is entitled in such circumstances is the “Refundable Deposit Balance”, which is defined as “on any day, the amount of a Refundable Deposit after we have taken out any amounts that we are permitted to deduct from the Refundable Deposit under this Agreement or under the Aged Care Act”.

The difficulty with a proposal that Jan’s rights in respect of the Refundable Accommodation Deposit be designated as notional estate of the deceased, and that a family provision order be made for 60% of the amount of the balance, with such amount not to be less than $330,000 (being 60% of the amount of $550,000) is that such an order would have the effect that Jan would not be able to exercise her rights in respect of the Refundable Accommodation Deposit in a way which would affect Tara’s entitlement to provision in that amount. That this is the intended effect of the proposed regime appears to be confirmed by the proposed order that Jan must give prior written notice to Tara before taking a step that would reduce the value of the Refundable Accommodation Deposit.

The imposition of such a regime would significantly affect the financial position of Jan, who otherwise has the right under the Resident Agreement to direct that any amounts payable to UCAPT be paid from the balance of the Refundable Accommodation Deposit. As I have explained above, there are sound economic reasons why Jan would give such a direction and, given the negligible amount of cash available to her, and her monthly income and expenses, it in fact appears to be essential for her to give such a direction in order to be able to meet her current living expenses.

Further, the proposed regime might also affect persons who are not a party to the present proceedings. Under the Resident Agreement, UCAPT has the right to make certain deductions from the balance of the Refundable Accommodation Deposit, including any amounts that it is entitled to deduct under the Aged Care Act (cl 11.3). It is not clear how those rights would be affected if I were to make orders that, in effect, required the balance of the Refundable Accommodation Deposit not to be reduced below a certain level, or which allowed Tara to enforce a charge over the balance of the Refundable Accommodation Deposit, or some portion of it. Similarly, the proposed regime might also affect the rights of the guarantor under the Resident Agreement, Ms Farnham. She could potentially be liable to UCAPT in the event that some amounts due and payable by Jan to UCAPT under the terms of the Resident Agreement cannot be paid out of the balance of the Refundable Accommodation Deposit, leaving UCAPT with recourse against Ms Farnham under the guarantee.

These matters were not explored in the parties’ submissions. I do not need to resolve them because I have reached the view, for the reasons set out below, that the Court cannot, and in any case should not, make a notional estate order in the circumstances of this case.

Section 86 of the Act provides that the Court’s power to make a notional estate order is subject to the provisions in Division 3 of Part 3.3 of the Act, being ss 87-90.

For the reasons outlined below, I have determined that, having regard to the terms of s 90(2) of the Act, the Court cannot make the notional estate order that Tara seeks. Further, even if I am wrong in that regard, I have determined that I would not, in the exercise of my discretion, make that order, particularly having regard to the matters set out in s 87 which must be considered by the Court before making any such order.

Section 90 of the Act relevantly provides as follows:

Section 90 applies whenever an application is made 12 months after the death of the deceased, that is, even if time has been extended under s 58(2): s 90(1)(a).

Since s 90(2)(a) does not apply in respect of the Refundable Accommodation Deposit, or any other identified property of Jan, the Court cannot make a notional estate order unless it is satisfied that there are “other special circumstances that justify the making of the notional estate order”: s 90(2)(b).

The existence of “special circumstances” justifying the designation of notional estate poses a different hurdle to the requirement of “sufficient” cause to extend time: Vaughan v Curran [2019] NSWSC 1562 at [41] per Emmett AJA. In Stone v Stone at [71]-[72], Brereton J made the following observations about “special circumstances”:

The only matters put forward by Tara as constituting special circumstances were as follows:

The matters concerning Tara’s personal and financial position in the period from the deceased’s death in 2018 through to the filing of the Summons in August 2022 are similar to those which I have addressed in dealing with the s 58(2) application. As noted above, Tara did not give evidence that she only became aware of the limitation period in July 2022, and I am not prepared to draw such an inference. In any case, whether or not she was so aware, I have concluded that these matters do not provide “sufficient cause” for time to be extended for commencing the application, and similarly I am of the view that there is nothing unusual, uncommon or exceptional about them such as to justify the making of the notional estate order sought by Tara.

As for the matters regarding Jan’s life expectancy, I have addressed the evidence on this issue above. Further, in closing addresses, Tara’s counsel submitted that, while Jan’s life expectancy is “considerably compromised”, and while this has been quantified by Dr Burdon at two to three years, “your Honour doesn’t have to make a decision about that, your Honour can’t make a decision about that, about the time”. In any case, there is nothing unusual, uncommon or exceptional in character about a situation where the surviving spouse of a deceased person is in ill health and has a limited life expectancy, or has her own relatives (that is, separate from the deceased’s children) who stand to benefit from her estate.

As for the submission that Tara is entering middle age “facing the prospect of penury”, I find that this is not established on the evidence. As set out above, her current gross income is around AUD$139,000, up some AUD$15,000 from last year; she is 39, with no dependents; and her debts are mainly limited to her credit card balances, with her credit card payments being included in the monthly expenses that she currently meets from her net income. In any case, even if I had found that Tara is in a precarious financial position, there is nothing “special” about the situation where an applicant for a family provision order has a demonstrated need for funds to meet her debts or expenses.

For those reasons, I am not satisfied that there are any circumstances in this case that are unusual, uncommon, or exceptional in character, quality or degree so as to justify the making of a notional estate order. It follows pursuant to s 90(2) of the Act that the Court cannot make such an order. That provides another basis on which to resolve the proceedings against Tara.

Even if I had been satisfied that special circumstances existed so as to justify the making of a notional estate order, I would have declined, in the exercise of my discretion, to make any such order in respect of the Refundable Accommodation Deposit, for the reasons set out below.

Section 87 of the Act provides as follows:

The phrase “reasonable expectations” is not defined in the Act. There is a divergence of judicial opinion as to whether the Court may only consider the reasonable expectations of the person holding the property, or whether the Court ought to take into account the reasonable expectations of the deceased.

In John v John; John v John [2010] NSWSC 937, Ward J wrote, at [118]–[120]:

In Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4, Basten JA appeared to disagree with the decision in John v John, and instead took the view that the Court should only take into account the reasonable expectations of the person who presently holds an interest in the property. His Honour noted at [125]:

However, Beazley P (Meagher JA agreeing) quoted with apparent approval, at [105], Ward J’s decision in John v John.

Since Phillip v James, the Court of Appeal has not had occasion to resolve the apparent conflict between Beazley P and Basten JA, and some first instance decisions have applied the views of one or the other: see authorities summarised in Boatswain v Boatswain [2023] NSWSC 763 at [250]-[252] per Hallen J.

I consider that particular significance in this case should be placed on the importance of not interfering with Jan’s reasonable expectations in respect of her property. The Refundable Accommodation Deposit has been, in effect, wholly funded from the sale of the Belbora Property. That was a property which, as Jan explained, she regarded as her own, repeatedly referring in evidence to the property as “my farm”.

It is easy to see why Jan held that view. The bulk of the money for the purchase of the Belbora Property came from Jan, not the deceased, and she also funded substantial improvements to the property after its purchase. She ran the farm, with minimal assistance from the deceased, while working 5 to 7 days per week in paid employment. In contrast, the deceased was an alcoholic, who was unemployed for substantial periods. While the deceased made a contribution in the form of labour to some of the improvements to the Belbora Property, it is also the case that he received substantial financial benefits from the property during his lifetime, with one of the lots being sold in order to discharge his liability to the Australian Tax Office.

Given those matters, and in circumstances where the Belbora Property was held by way of joint tenancy and passed to her on the deceased’s death, Jan has a reasonable expectation that the proceeds of the sale of the Belbora Property are her own.

Similarly, Jan has a reasonable expectation that she is able to use the Refundable Accommodation Deposit, which has been paid from the proceeds of that sale, in order to meet her expenses in respect of Uniting Elizabeth Gates Singleton or to meet her needs going forward.

Jan’s reasonable expectations that she would have, for her own use, the Belbora Property, and would be able to rely on the proceeds of sale of that property in meeting her financial obligations under the Resident Agreement which she entered in respect of her accommodation at Uniting Elizabeth Gates Singleton in July 2022, would have been cemented by the failure by Tara to commence, or even to threaten to commence, proceedings any time before August 2022.

If it is relevant to consider the deceased’s own expectations in relation to the Belbora Property, I do not consider his expectations as to how the property would be dealt with on his death, as set out in his Will, as reasonable. In particular, despite Jan having been overwhelmingly responsible for the purchase, improvement, operation and maintenance of the Belbora Property, and having made significant contributions over many years to the deceased’s own welfare, the deceased’s Will sought to impose conditions on Jan’s interest in his half share in the property, which would likely have been challenged by Jan in the event that ownership in the property had been converted into a tenancy-in-common. First, the deceased stipulated that Jan’s interest in his half share in the Belbora Property would be lost on her marrying or entering into a de facto relationship. In Farr v Hardy [2008] NSWSC 996 at [76], White J held that such conditions are inappropriate in current times (see also Szlazko v Travini [2004] NSWSC 610 at [33] per Young CJ in Eq). Secondly, the deceased proposed only to give Jan a life interest in the deceased’s share of the property. In Farr v Hardy at [76], White J observed as follows:

I consider that it would also be open under s 87(a) to have regard to the reasonable expectations of UCAPT, that all amounts which were able to be deducted from the Refundable Accommodation Deposit balance of $550,000 pursuant to the terms of the Resident Agreement could be so deducted. As I have explained above, the proposed notional estate orders have the potential to interfere with such rights.

Further, I regard the matters outlined above as bearing upon the substantial justice and merits involved in making or refusing to make the order that has been sought (s 87(b)), and also as matters which are relevant to the determination whether the order should be made (s 87(c)).

In addition, this is not a case in which an applicant for provision has made personal, or financial, sacrifices in caring for the deceased or in contributing to his estate. On the contrary, it was Jan who had lived with, cared for, and made significant contributions to the deceased. There was unchallenged evidence from Jan regarding her contribution, financial and otherwise, to the Belbora Property, and to the welfare of the deceased. In particular, after the deceased became seriously ill, he was cared for by Jan for a number of years before his death, without any assistance from health care services or other family, all while Jan remained for most of that period in full time employment.

If I had not determined that Tara’s claim fails by reason of s 58(2) or s 90 of the Act, those are all matters which would lead me, in the exercise of my discretion, to refuse to make the notional estate order that has been sought.

In seeking the proposed notional estate order, Tara relied on the decision of Brereton J in Stone v Stone. That is a case far removed from the present. In that case, the property in question had been owned by the deceased and his widow as tenants-in-common in equal shares, and the deceased left the whole of his estate to her. His half-interest in the property, which was his only asset of significance, was transmitted to his widow as executor and sole beneficiary. One of the deceased’s children then brought a family provision claim, only six weeks after the expiry of the 12-month limitation period. However, the widow had been put on notice of a claim well before it was commenced, and the applicant delayed in commencing her claim because of a representation by the widow that an extension of time would be granted. Further, the widow came to hold the relevant property, being the deceased’s half-share, after resiling from her agreement to extend time, and with notice of the impending claim. Accordingly, Brereton J found, in terms of the matters in s 87 of the Act, that the widow was not “entitled to entertain any reasonable expectation that her ownership would not be disturbed”; and there was no substantial injustice in making an order designating a one-half share in the property as notional estate of the deceased. His Honour said (at [69]):

“Although the defendant submitted that the substantial justice and merits of the case did not warrant the making of such an order, in my view, there is no injustice in doing so given the circumstances by which the defendant became registered with notice of the claim, immediately after resiling from an agreement to extend time for the plaintiff’s claim; and given also the absence of prejudice to the defendant, there having been no subsequent dealing with the property or detrimental reliance on ownership.”

Further, his Honour found (at [73]) that there were special circumstances to justify the making of a notional estate order given that the widow’s initial agreement to an extension of time materially contributed to the plaintiff’s failure to bring proceedings within time; the widow then resiled from that agreement, which led to the plaintiff promptly commencing proceedings; the plaintiff’s claim was a strong one; the widow took the transfer of the property with notice of the plaintiff’s family provision claim; and there was no prejudice as there had been no dealing with the notional estate in the meantime.

In contrast, in the present case, the lengthy delay on Tara’s part in commencing her claim, which is largely unexplained, cannot be attributed to any conduct on Jan’s part; the deceased had no interest in the Belbora Property as a tenant-in-common; the Belbora Property passed to Jan by survivorship, rather than due to any conduct on her part; Jan only received notice of Tara’s claim when it was commenced in August 2022, after she had sold some of the Belbora Property and after she had committed to her obligations under the Resident Agreement with UCAPT; and Tara’s claim is not strong.

For those reasons, I am not satisfied that there are special circumstances which justify the making of a notional estate order, and therefore such an order cannot be made: s 90(2) of the Act. Further, if I am wrong about that, I would refuse, in the exercise of my discretion, to make the notional estate order that has been sought.

Given that I have reached the view that Tara’s claim should be dismissed on the bases outlined above, it is unnecessary to deal in detail with the issue whether, if those hurdles had been overcome, I would have determined, in the exercise of the power under s 59(2) of the Act, to make a family provision order in favour of Tara out of the deceased’s notional estate.

However, since I have relied above, in dealing with the s 58(2) application, on my determination on a preliminary basis that Tara’s claim for a family provision order would not succeed, I will briefly explain why I have determined that I would not, in the exercise of my discretion, have made any such order, particularly in light of the matters set out in s 60(2) of the Act.

While I have regard to all of the evidence summarised above and all of the matters in s 60(2) in reaching this view, including for example the testamentary intention of the deceased that Tara should receive an interest in the Belbora Property, I consider the following matters to be of particular importance for the determination of this case.

While I accept that Tara had a loving relationship with her father, she saw him infrequently from the time he moved to the Belbora Property, and spoke to him on the telephone every few months. In contrast, Jan lived with the deceased for over 20 years, and for large parts of that period, provided for him, cared for him, and nursed him.

Although each case depends on its particular facts and circumstances (Cross v Wasson [2009] NSWSC 378 at [98]; Marshall v Carruthers; Marshall v Marshall [2002] NSWCA 47 at [63]), broadly speaking, and in the absence of special circumstances, the deceased owed a duty to his spouse, to the extent to which his assets allowed, to ensure that she was secure in the matrimonial home, to ensure that she had an adequate income to permit her to live in the style to which she was accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies: Luciano v Rosenblum (1985) 2 NSWLR 65 at 68-69; Cropley v Cropley [2002] NSWSC 349 at [56]. I consider that the deceased particularly owed obligations to ensure Jan’s financial security in the circumstances of this case, given that Jan was largely responsible for purchasing, improving, operating and maintaining the Belbora Property which was held by her and the deceased as joint tenants, and given that she financially supported him for extensive periods when she was working five to seven days per week and he was unemployed or too ill to work. After the deceased was diagnosed with alcohol related liver disease in around 2013, she cared for him without any nursing assistance in his remaining years. In contrast, Tara did not make any contribution to the deceased’s estate or welfare. She is an adult child of the deceased, with a well paid job, and no dependents of her own.

There are no assets in the estate. The Belbora Property has been sold. The only property that has been identified by Tara as being able to be designated as notional estate consists of Jan’s contractual rights in respect of the Refundable Accommodation Deposit. I have explained above the nature of those rights, and the impacts that a notional estate order would have on Jan and, potentially, third parties.

Jan has negligible assets, other than her rights in respect of the Refundable Accommodation Deposit. She receives a pension of $964 per fortnight. She cannot meet her monthly expenses from her monthly income. It would be economically sensible, and likely necessary, for her to give a direction that any fees payable by her in respect of Uniting Elizabeth Gates Singleton be deducted from the balance of her Refundable Accommodation Deposit, in order to maximise the extent to which her other expenses can be met from her limited income. She has no means of increasing her income or assets. In contrast, Tara is able to meet her expenses, including her credit card payments, from her monthly income. She is at an age and stage of her working life where she can reasonably expect her financial circumstances to improve, as demonstrated by the fact that her gross income has increased by some 12% over the past year. In Bladwell v Davis & Anor [2004] NSWCA 170 at [2], Ipp JA agreed with Bryson JA that it is an error to proceed on the basis that there is a rule which treats the claims of widows as paramount, but added:

“where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others.”

I consider those observations have particular force in this case.

For those reasons, I have determined that the application under s 58(2) of the Act should be refused, and the proceedings should be dismissed.

As there are no assets in the deceased’s estate, and I have determined that no notional estate order should be made, no costs can be awarded out of the estate or the notional estate of the deceased. In those circumstances, I will direct the parties to provide short submissions in respect of any proposed costs order, with the intention that the issue of costs, if disputed, be dealt with on the papers.

Accordingly, I make the following orders: