Ovens v Ovens; The Estate of the late May Enid Ovens

May Enid Ovens (“the deceased”) died aged 92 on 29 June 2018. The deceased was a retired dressmaker. She married Anthony John Ovens in 1950 and together they had four sons: James Ovens (born 1951), John Ovens (1954), the first defendant, Grant Ovens (1957), and the plaintiff, Brett Ovens (1961). In her lifetime, the deceased suffered the deaths of her husband in 1991, and of her eldest son, James, to a brain tumour in June 2017. She was survived by three of her four sons.

All the parties and witnesses to these proceedings come from the one family, have the same surname, and referred to one another in the evidence by their first names. Without intending any disrespect to any party or witness the Court will do the same in these reasons.

The deceased’s last will was dated 15 April 2016 (“the Will”). Probate of the deceased’s Will was given to Grant, on 16 January 2019, the named executor and trustee of the deceased’s estate. The deceased’s gross distributable estate, omitting the costs of these proceedings, is $644,071.37. After deducting the defendants’ costs of these proceedings of $51,700 inclusive of GST, the net distributable balance of the estate is $592,371.37. This sum is held in cash.

The deceased’s Will left her jewellery to Grant’s wife and to James’ widow. It then gave Brett a three-quarters share of the residuary estate. John was given the remaining one quarter share of residue, to be held on a testamentary trust for his four children, the deceased’s grandchildren, as discretionary beneficiaries. One of those children has a disability.

Brett will therefore receive under the Will the sum of $444,278.52. And John will receive the balance of the residuary estate of $140,802.85, to be held on the testamentary trust.

Brett claims in these proceedings that he has been left without adequate provision from the deceased’s estate for his proper maintenance education and advancement in life. He now seeks an order for further provision under Succession Act 2006, Chapter 3.

The contest that Brett’s claim generates in these proceedings is not between himself and the fund that John holds on the testamentary trust. Brett already has a significantly greater share of the estate than is represented by John’s interests.

Rather the thrust of Brett’s case is a claim: to have certain real property that the deceased transferred to Grant and Grant’s wife, Penelope, in 2016, some two years before her death, designated as notional estate; and to have a Succession Act order made in his favour against that notional estate. For the purposes of these reasons it is sufficient for the property in question to be described as “Annandale 3”.

Grant resists this claim. He points out that as Penelope was not joined before the hearing as a defendant, an order designating their joint property as notional estate cannot be made: Yee v Yee [2017] NSWCA 305 at [196] – [198]. Upon this preliminary issue being raised at a directions hearing, Brett put on a motion returnable at the hearing to join Penelope. And she was joined as the second defendant but subject to an order preserving all her and Grant’s rights as if she had not been joined. This order was made so the case could proceed on the appointed hearing dates but otherwise protecting her rights.

Grant contends in response this notional estate claim over this property, that it is out of time, does not show the necessary Succession Act, s 90(2)(b) “special circumstances” for designation of property as notional estate and interferes with Grant’s and Penelope’s reasonable expectations of retaining ownership of the property, Annandale 3.

These proceedings were heard on Friday 14 February 2020. Mr R Weaver of counsel appeared for the plaintiff. Mr J Armfield of counsel appeared for the defendant.

These proceedings involve the comparison of property values in two currencies, the American dollar and the Australian dollar. The parties have agreed to the conversion rate of US$1 to AU$1.49. All financial figures in these reasons are in Australian dollars unless specifically indicated to be US.

Only two witnesses were called and cross-examined, the plaintiff Brett and the first defendant, Grant. The Court was able to assess the credibility of both of them, a matter which should be addressed before their evidence is analysed.

The plaintiff, Brett, was a vague witness who gave puzzling evidence. He presented in the witness box consistently with his lack of recent work history. He did not appear to have much practice in the discipline of organising himself in the context of a working life or career. He did not appear to bother to notice much of the world around him. He could not remember the names of any of the suburbs of Panama City, even though he has lived there for years. That being said, he was not deliberately exaggerating in his evidence or attempting to present distorted evidence. The Court found him to be honest but casual about everything in his life.

He gave the impression to the Court that he had trouble thinking through his future. He could not show that he had given any forethought to his actual financial needs. When asked why he needed a three-bedroom apartment as distinct from a two bedroom apartment, in Panama City he could not give a satisfactory answer. This tended to show both that his financial needs were not as great as he had painted them and that he had not analysed what his future needs were. He was extremely confused about his career ambitions. He gave contradictory evidence about whether he had already started a photography business or was still seeking to establish one. The Court did not find his evidence of the detail of his life planning and financial needs reliable.

Mr Grant Ovens was a pharmacist who had retired after a successful career. He now no longer needs to work full time. He presented to the Court as efficient, solicitous of his mother's interests and ready to answer questions directly and truthfully. None of his cross-examination provided a reason why the Court should reject his evidence or regard it as unreliable. It is accepted.

The following is a narrative of the relevant history. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded in these reasons. For reasons of economy this narrative does not always include reference to versions of the facts that have been rejected.

Brett is the youngest son of the deceased. He currently resides in Panama City, in Panama. Prior to living in Panama City, Brett spent time travelling and living in Brazil and Russia. But when he was resident in Australia, he lived with his mother at her property in Kingsgrove, New South Wales (“Kingsgrove 73”), or at Annandale 3, either rent-free or for board of about $100 per week.

Brett claims that when he was in Australia, he “extensively” assisted his mother. He described this assistance to her thus: he “would care for her, drive her to appointments, shop for her, prepare her meals, take care of her personal needs, and painted and generously maintained her home”. Brett also advanced the account that his contribution to house maintenance had been longstanding, and that he had assisted both his parents in the same way prior to his father’s death in 1991.

Grant agrees that Brett provided “some general assistance whilst at the deceased’s home”. But he qualified that his brother’s care for their mother was “limited”. He summarised Brett as, “not proactive in providing support and was often asked to assist and did not co-operate”. He stated that his mother had also described to him Brett’s lack of support and cooperation. Grant also disputed that Brett had provided the house maintenance that he alleges. Grant’s account in evidence is that their parents used outside assistance from tradesmen to repair and maintain the home, including a person to do the lawn mowing.

The Court prefers Grant’s account of these matters. He was the more reliable witness of the two about such matters, for the reasons given above.

Although Grant is the executor of his mother’s estate, he is not a beneficiary under the Will. Penelope, Grant’s wife, was named as the Executor and Trustee of the Will in the event that Grant was unable or unwilling to act in these capacities.

This choice implies that the deceased placed a considerable degree of trust in the defendants. As these reasons will set out, in her later years, the deceased was reliably able to lean on Grant and Penelope to loan her money, to arrange her nursing home accommodation, to organise her finances, and to keep assets within the family in accordance with her wishes. Her trust in them appears to have been in part responsive to her experience of being able to rely upon them for these important financial matters.

The deceased’s dispositions of her assets during her lifetime are relevant to the issues in contest. Central matters are the transfers of real property between family members.

The deceased held title to one parcel of real estate in Tasmania and three other properties situated in New South Wales. Both parties agree that the deceased’s original intention was to gift to each of her sons a property, either in her lifetime or in her will. However, as will be seen, unforeseen circumstances intervened. The relevant details of these four properties are set out below.

The first property is located in Blackmans Bay, Tasmania (“Blackmans Bay 210”). It was gifted to James in 2010, prior to his death. This property is not the subject of any dispute in these proceedings and does not feature significantly in the evidence.

The second property is located in Annandale, New South Wales (“Annandale 5”). This was the property originally intended to be given to John. Prior to 1998, the deceased took out a mortgage over the property for the purpose of advancing $250,000 to John, who required debt relief at that time. John in turn was to be responsible for the mortgage repayments. No transfer of title took place. But in about 1998, John failed to make the repayments and the deceased could not pay out the mortgage herself. A Notice of Default was issued in March 1998.

Grant and John both gave evidence, which the Court accepts, that their mother wanted to keep Annandale 5 in the family. Annandale 5, and an adjoining property referred to below as “Annandale 3”, had been in the family for a long time. Both properties held significant sentimental value to the deceased. Grant says, and the Court accepts, that he and his mother had a conversation about John’s default on Annandale 5 in words to the following effect:

On 30 April 1998, the deceased transferred the title to Annandale 5 to Grant and Penelope, as joint tenants, for the consideration of $290,000. Grant and Penelope also paid out the mortgage before the bank exercised its power of sale over the property.

The circumstances of this transfer of title, as explained in evidence by Grant and John, is corroborated by a statement made by the deceased on 15 April 2016, under s 100 of the Succession Act (“the s 100 Statement”). The deceased stated:

Grant and Penelope still own Annandale 5. They currently lease the property for $1,050 per week, which assists them in paying off the outstanding mortgage on the property of $490,987.

The third property, Annandale 3, adjoins Annandale 5, as semi-detached dwellings. Annandale 3 was the house that the deceased originally intended to give to Grant. Having already purchased Annandale 5 from his mother when John was unable to meet the mortgage repayments, Grant had a conversation with his mother about the cost effectiveness of renovating the adjoining Annandale 3 and Annandale 5 at the same time.

Following this conversation, Annandale 3 was transferred to Grant and Penelope as joint tenants in May 2016 for consideration of $1. Grant and Penelope personally paid the stamp-duty of $43,240 on the transfer. Annandale 3 is presently occupied by Grant and Penelope’s son, Christopher, and they continue to pay off an outstanding mortgage on this property of $489,328.

Renovations of Annandale 3 and 5. Consistent with the conversation he had with his mother, Grant engaged an architect for the renovation of the two properties. The local Inner West Council granted development approval in December 2016. The required improvements were extensive. By the end of construction, the renovation costs exceeded $1 million. The ground floor of each house had a new concrete slab laid at the rear, a bathroom installed, a kitchen installed, as well as new flooring. Second storeys were added to the houses, adding two new bedrooms and a bathroom to each.

By the time construction concluded, both properties were four-bedroom homes, having formerly been two-bedroom homes, each with two bathrooms. Grant estimates their present approximate value to be in the range $1.8 million to $2 million each.

The fourth property is Kingsgrove 73, which the deceased sold for $1,160,000 in March 2016. The net sale proceeds were $1,133,092. This was the last of the properties to which the deceased held title. It had been her main residence. The sale took place to meet the costs she incurred upon her transition into a nursing home for respite care after she broke her ankle in 2015. The nursing home she entered cost approximately $5,700 per month, and she was ineligible for a pension to help cover the costs. The first year of her accommodation was paid by her liquid funds, which were topped up by Grant. The proceeds of the sale of Kingsgrove 73 covered her future nursing home costs of $224,948.04. The remainder of the deceased’s estate is largely the balance remaining from the sale of Kingsgrove 73.

Grant told the Court that prior to the April 2016 Will being made, he and his mother had a conversation concerning how much money would be left in her estate after the sale of Kingsgrove 73. As the market value of Kingsgrove 73 had increased significantly over the years, the deceased made the decision to give to Brett only 75% of her residuary estate, and to give to John the remaining 25%. The Court accepts that in 2016, the deceased said to Grant words to the following effect:

Grant also recalls, and the Court accepts, that he had the following conversation with his mother about this subject approximately two months before she died:

This is consistent with the deceased’s s 100 Statement. From the proceeds of the sale of the property, $800,000 was initially invested through Pinn Deavin in a cash management account from which money was expended on the deceased’s needs.

Brett’s case is that his mother intended to give Kingsgrove 73 to him in her will, and that he was not advised either by his mother, or by Grant, of the decision to sell Kingsgrove 73. In his affidavit evidence, Brett stated:

But Grant says that the deceased discussed the sale with both of his brothers, and they provided no objection. Further, at the hearing, when asked whether he was living at Kingsgrove 73 “until it was sold”, Brett responded “until it was sold, yeah”. The Court infers that Brett was living at the property until its sale and was likely to have had some knowledge of the sale process of Kingsgrove 73.

Brett said that no one had explained to him why Annandale 3 could not have been sold, instead of Kingsgrove 73. But Annandale 3 had long been purchased by Grant and Penelope. Moreover, significant restoration work was being undertaken on it in conjunction with Annandale 5.

In the Court’s view, these real property dispositions show some effort on the deceased’s part to distribute her property equitably among her sons. But this does not show the plaintiff missed out on the deceased’s testamentary bounty. She ultimately gave him a significant part of the value of the proceeds of Kingsgrove 73, which needed to be sold to fund her nursing home accommodation.

In the three years prior to her death, and after the settlement of the sale of Kingsgrove 73, the deceased met a number of significant expenses and made cash gifts to family members.

The expenses she paid included $20,258 in land tax and $176,386 in capital gains tax to the ATO on account of the transfer of Annandale 3. Further, she reimbursed Grant $62,687 on account of her prior expenses, which he had covered for her.

The deceased also made cash gifts to two of her sons in this period. In 2016, she gifted James $20,000 as his health further declined. And she gifted to John $25,000 for Jack’s school fees, as well as $25,000 for a new car. This was done by the sum of $50,000 being transferred to Grant, who paid the school fees and for the new car on John’s behalf.

The plaintiff put to the Court that he was the only offspring of the deceased to not have received benefit of the deceased’s financial largesse in her lifetime. Whilst that may be true, he did receive support whenever he needed accommodation in Australia.

The deceased executed two testamentary instruments, one in 1998 and the other on 15 April 2016. The Court was not provided with a copy of the 1998 Will. However, the contents of the 1998 Will are not contested. The parties are in agreement that the 1998 Will did not include John as a beneficiary.

This is confirmed by the following paragraphs in the deceased’s s 100 Statement, which dovetail with these paragraphs of this statement already set out in these reasons:

As indicated, probate of the deceased’s 15 April 2016 Will was granted on 16 January 2019. The estate was held in cash, apart from a number of specific gifts.

The deceased’s Will left jewellery to Penelope and to James’ widow. The residue of her estate was to be distributed so that Brett was given a three-quarters share, and John was given the remaining one quarter share of the residuary estate, to also be held on trust for his four children, the deceased’s grandchildren, as discretionary beneficiaries. The Will provided that if John were to predecease the testator, Brett’s share of her estate would increase by one half of John’s interest; the remaining half passing to John’s children.

Under the Will, Brett will receive the sum of $444,278.52 less the amount of $10,000 already paid to him on 4 February 2020. And John will receive the balance of the residuary estate of $140,802.85, to be held on the testamentary trust identified above.

The Plaintiff’s Financial Circumstances. At the time of the hearing, Brett was 57 years’ old. He lives alone in Panama City, Panama, and has resided there for at least two years before the hearing. He has never married and he has no dependents.

Brett has not had steady employment for 25 years. He presently lives on Centrelink benefits from the Australian Government. He has very limited assets. He estimates that he owns $10,000 in camera equipment, and $5,000 in personal possessions. He has no superannuation.

He has previously worked across a number of industries, namely as a fitter and turner in marine engineering for four years, in computer support for one year after obtaining a Certificate 3 in micro-computing, and as an accounting clerk in the Australian public service for 10 years. Brett told the Court that over the past 25 years he has worked “only from time to time”.

Brett’s true passion is nature photography. Brett has previously come into a considerable sum of money to fund this passion. In late 2004 or early 2005, Brett was appointed as the attorney under power of attorney for a family friend, a Ms Hilda King. When Ms King’s health declined and she moved into a residential care home, Brett asked John to organise the sale of Ms King’s apartment in Edgecliff, as John had formerly worked in the area and knew local real estate agents. Part of the proceeds of the sale of Ms King’s property went towards her nursing home care, and $200,000 was transferred into Brett’s account, as a gift from Ms King.

John recalls receiving the pay-in slip for the $200,000 transfer from the solicitors who acted on the sale of Ms King’s property. He was to provide this receipt to Brett. However, despite having already received the funds, Brett declined to accept it. Instead, Brett said to John, “I will make an allowance on mum’s estate”. John interpreted this, as Brett “would pay an amount to his siblings in view of he having received this amount of $200,000”. But this does not seem to have been what Brett meant. Brett did not pay any of this money to his siblings. But Brett had conveyed an intention to use some of the money from Ms King to set up a business in Russia.

After this interaction, John says that Brett was not heard from for two years. But when Brett returned to his mother’s home, John visited his mother and spoke to Brett. John enquired how the business in Russia had gone. Brett replied, “It did not work out”. When John asked where Brett had been for the past two years, Brett replied, “I have been travelling”. This is consistent with what Brett said in oral evidence. When asked in cross-examination how the business went, Brett stated it “did not work out”.

Brett has more recently been trying to set up a photography business in Panama called “Latin America Photography”, or “LA Photography”. It is unclear how established this business is. In his affidavit evidence Brett described LA Photography as a “proposed photography business”. But in his oral evidence he told the Court that he had “established the company” in around 2018. He provided no evidence of the company’s incorporation, or about any income that had been derived from the business so far. He said to the Court that he “get[s] work from time to time” and the income generated was an “almost insignificant” sum. Brett appears to have made little contingency planning. He told the Court he had not properly contemplated what he would do if his business did not generate an income.

Brett estimates his fortnightly personal and business expenditure to be US$1,235 (approximately AU$1,770), which is accounted for by US$350 in periodic accommodation in Panama, US$350 in meals and day-to-day groceries and related expenses, US$35 for personal storage, and US$500 in travel expenses.

His existing provision within the Will is three-quarters of the residue, namely $444,278.52. Were Annandale 3, which Grant estimates to be valued between $1.8 million and $2 million, to be designated as notional estate of the deceased, this figure would potentially increase by at least $1.35 - $1.5 million.

The plaintiff’s solicitor estimates that Brett’s costs up to and including mediation were $36,300 inclusive of GST, and $32,000 to $50,000 plus GST in costs and disbursements in respect of the one-day hearing.

John’s Financial Circumstances. At the time of the hearing, John was 62 years of age. He holds on trust for his four children a one-quarter share of the deceased’s residuary estate.

John’s financial positioning has been impacted by his health. At the age of 48, John suffered a stroke which partially paralysed his left side. Through rehabilitation he made what he describes as “a reasonable recovery”, however he still feels its effects.

These reasons have already set out the financial predicament John found himself in with respect to the mortgage over Annandale 5.

John is retired, having formerly held employment as an insurance broker, and in sales up until three years ago. But he is currently unemployed and receives Centrelink unemployment benefits. He will be eligible for the aged pension in September 2020. John subsists entirely on his unemployment benefits and pays rent of $180 per week for bedsitter accommodation. He still owns the vehicle that the deceased gifted to him, which is estimated to be valued between $10,000 and $15,000.

John has children from two marriages. From his first marriage to Catherine, he has Daniel (45 years), Michelle (42 years) and Ryan (37 years). Daniel is a high school principal and is purchasing a property in NSW. Michelle has a disability and lives with her mother. She receives benefits from the National Disability Insurance Scheme (“NDIS”) and holds no assets. Ryan is a police officer in Texas in the USA, and is purchasing a property there. The deceased regularly babysat these grandchildren and had a very strong relationship with them.

From his second marriage, to Jennifer, John has a son, Jack (20 years), who is undertaking an overseas working holiday and does not hold any known assets.

John does not seek greater provision under the deceased’s Will.

Grant and Penelope’s Financial Circumstances. Grant and Penelope own several parcels of real estate and appear to be reasonably well off financially. As these reasons indicate, they own Annandale 3 and Annandale 5 and have invested a significant sum of money in the restoration of these properties. Except for some jewellery gifted to Penelope, neither Grant nor Penelope are financial beneficiaries of the estate. They do not seek further provision from the estate and the Court infers they are not in need of provision.

The solicitors for the estate estimate that its costs and disbursements of the proceedings up to and including mediation amounted to $24,000 to $28,000. The costs and disbursements up to and including the one-day hearing were estimated at $40,000 to $47,000. There are some other figures suggesting the defendant’s coasts may be $51,700 including GST. Such costs matters can be reconciled in a grant of liberty to apply.

Brett’s principal contention to justify his claim for family provision claim is that he needs enough money to purchase a three-bedroom property in Panama City. When asked why he required a three-bedroom home rather than something smaller, Brett responded that he would be operating his business from the property and would need more rooms for that reason. But the Court doubts he needs more than a two bedroom apartment.

Brett argues that a “modest house or home unit” of three bedrooms in Panama City costs in excess of $1,506,016.01 (US$1,010,749) is appropriate. To establish this Brett presented the Court with evidence of three real-estate listings in a central part of Panama City:

Brett conceded that he “made no enquiries about places further out” from the city centre. But he argued that these suburbs were “near the centre of town, near where I am staying or working at the moment”. He advanced this location because he regarded it as safer than other parts of Panama City. Brett currently resides at a hostel Casa MonaLisa on Street 55 East, Panama City. This location became the reference point from which the parties then advanced their competing arguments about the appropriate price bracket of a well-situated three-bedroom property in Panama City.

The Supreme Court Practice Note No. SC Eq 7, clause 21 – Family Provision, relaxes the rules for strict proof of market value. Under the Court’s direction the parties took advantage of this and Grant and Penelope provided evidence, taken from the internet, of properties for sale in Panama City. It is recognised that these are merely the asking prices of the property in question and caution should be exercised in using such material.

Grant and Penelope dispute that a two to three-bedroom home would be as expensive as Brett contends. They argue that a suitable apartment in comparable suburbs to his current accommodation in Panama City can be purchased for between $100,000 and $200,000.

Grant and Penelope provided evidence of 10 sample listings of two-bedroom properties ranging from $90,890 to $172,840. Grant and Penelope’s internet based searches were identified by reference to their distance from Casa MonaLisa, the reasonable assumption being that the closer to Casa MonaLisa was the property the more likely it was to be fairly safe, as this is an area with which Brett was plainly comfortable to reside.

Due to difficulties in following up the material that had been reasonably researched on the internet the distance from Casa MonaLisa was not available in every case. And the tables below express a blank with respect to such cases. But the Court accepts the evidence of Grant and Penelope that when the research was originally done the blank areas were within a comparable distance of Casa MonaLisa to the other properties shown in the tables. A search was done firstly in respect of two bedroom properties and then three bedroom properties. The results are shown in the two tables below:

Grant and Penelope’s evidence also included 10 sample listings of three-bedroom properties ranging from AU$193,700 to AU$223,500:

During the trial, Brett was shown several of these listings and was challenged with the proposition that two to three-bedroom apartments were readily available at costs far less than the figure which he identified. This line of questioning during the hearing was complicated by Brett not being able to identify the suburbs of Panama City. When shown Grant and Penelope’s real estate listings evidence, Brett conceded “for this information here, that seems to be the case, but I haven’t had a good look at it though”. He expressed concern that properties selling for around $100,000 and $200,000 could be “fairly run-down”, “on the cheap” or in “a favela” and susceptible to criminal activity.

Despite having been given the real estate listings proffered by Grant and Penelope, Brett had not investigated any concerns regarding safety, or made an assessment of the suitability, of any of the suburbs in which their real estate listings were situated. But when shown pictures of one of the listings presented by Grant and Penelope, in which cars lined the apparently quiet streets outside, Brett conceded “from the photograph it seems okay”. Brett also agreed that the favelas were “generally on the outskirts of town”, although perhaps “a bit closer” than within a 20km radius of the city.

The real estate listings in Grant and Penelope’s evidence are almost all within 10km from Brett’s current residence. The Court is satisfied on the available evidence, that these properties are reasonably likely to be analogous to Brett’s current accommodation.

The Court was able to judge these properties in a somewhat restricted way from the photographs in their internet searches from which at least basic inferences can be drawn about the nature of the neighbourhood and the quality of the buildings. Using such reasoning, it seems to the Court that it is probable the plaintiff is able to purchase a three bedroom apartment and certainly a two bedroom apartment in one of these areas for less than $225,000 Australian. The Court is prepared to reason on the basis of that conclusion.

Brett is an “eligible person” able to make a Succession Act, Chapter 3 application. The next question relates to whether an order for provision should be made in Brett’s favour. The statutory test of whether provision should be made in any case is set out in Succession Act, s 59(1)(c):

There are many judicial statements summarising the operation of what is said to be a two-step provision. For example in Singer v Berghouse (No. 2) (1994) 181 CLR 201; (1994) 123 ALR 481; (1994) 68 ALJR 653; (1994) 18 Fam LR 94; [1994] HCA 40 at 209, the High Court of Australia said of the test under the previous legislation:

Whether the two-step test operated with the same full vigour in the current legislation has been discussed in the Court of Appeal: Evans v Levy [2011] NSWCA 125. But such considerations are not an issue in this case, which is a very clear one on the question of whether or not adequate provision has been made.

Some other authorities have explained in more detail the meaning of the words in the legislation "adequate", "proper", and "advancement in life". Some of these authorities have been conveniently collected in the decision of Hallen AsJ in Drury v Smith [2012] NSWSC 1067 at [153], [154], [155], [158] and [160], which relevantly provides:

That leaves the Court to decide what, if any, is appropriate provision in this case.

In my view, the plaintiff's claim fails at several levels. First, the plaintiff has not established that he has been left without adequate provision for his maintenance, education and advancement in life.

He wishes to continue living in Panama City so he can develop a photography business specialising in nature photography. He says he needs to acquire secure accommodation. It can be accepted that because of his present life choices this is likely to be in Panama City. But the best available evidence suggests that a reasonably priced two-bedroom apartment in a relatively safe part of Panama City and that is reasonably close to the city centre could be acquired for less than US$150,000 (approximately AU$225,000). If the plaintiff were to receive only $400,000 under the Will, he could purchase such a property for $225,000 and would still have AU$175,000 left over to provide either for his future maintenance, or as a fund to be deployed as working capital to support a modest but emerging photography business. Nothing in Brett's evidence indicates that he wants to commence a substantial photography business at this stage of his life.

Brett’s needs are in part to be measured by his own efforts. A plaintiff’s needs for advancement in life as an adult may be readily demonstrable. He may have for example applied for jobs and not been able to get them. But despite existing qualifications and experience in marine engineering and clerical work involving accountancy, Brett’s preference has been not to apply for jobs at all and not to work in either of these fields. Instead, he wishes to create a modest photography business. His desire to accumulate working capital has not been so great that he has been prepared to work for reward to accumulate that capital. Rather, his failure to take such steps is an indication of the overall modesty of his ambitions and therefore the limited nature of his real needs for capital. His financial need for advancement in life should be measured by the limited standard that he has set for himself.

If the Court approaches Brett’s need for capital on this basis, it is difficult to see he needs much more than what has been provided for him under the will. He will be able to buy an apartment in Panama City and he will have a modest sum which he can husband either to provide some superannuation for himself, or alternatively, to invest in advancing an emerging photography business.

And this is not a compelling case for the making of an order because of the straightened financial and personal circumstances of John and his family. Even if Annandale 3 were to be designated as notional estate (about which there are the problems which will be considered below), Brett does not get past the threshold of showing that adequate provision for his proper maintenance, education and advancement in life has not been made by the Will of the deceased. The plaintiff’s claim fails on this basis before the Court is even required to consider issues of notional estate. But for the reasons which follow, the Court is also not prepared to designate Annandale 3 as notional estate.

The plaintiff also fails to obtain an order designating the Annandale 3 property as notional estate, for a number of reasons.

The plaintiff’s application is out of time. Brett’s application to designate Annandale 3 as notional estate cannot succeed unless Mrs Penelope Ovens is joined as a second defendant: Yee v Yee [2017] NSWCA 305 at [196] – [198] per Gleeson JA. Succession Act, s 58(2) requires an application to be made within 12 months after the death of the deceased in June 2018 “unless the Court otherwise orders on sufficient cause being shown”. Penelope Ovens was not joined until just before the hearing, in February 2020. The application against her was therefore made some eight months out of time. She was joined without prejudice to her right to argue that her joinder was out of time and that the plaintiff’s claim should be dismissed on that basis.

The plaintiff had been alerted by the defendant to the Yee v Yee joinder issue in August 2019, some two months after the s 58 period had expired. But he did not apply immediately to correct the omission and no explanation has been given by Brett for his further delay since August 2019 in joining Penelope. The case of Ebert v Ebert; Ebert v Ebert [2008] NSWSC 1206 is authority for the proposition that the Succession Act, s 58(2) one year time requirements apply to an application to bring proceedings to designate property as notional estate. The application is out of time. In my view, without an explanation for the delay in joining Penelope, time should not be extended. Brett has not made out a case of “sufficient cause being shown” for an extension under Succession Act, s 58(2).

Grant argued there was a failure to comply here with the “special circumstances” requirement in Succession Act, s 90.

Succession Act, s 90 provides as follows:

But that is not a weakness in this case. If an application for a notional estate order is out of time under s 90(1)(a), as this one was against Penelope, a plaintiff must satisfy Succession Act, s 90(2)(b). This claim is in respect of a “relevant property transaction”, namely the transfer of Annandale 3 to Grant and Penelope. But Grant and Penelope still hold Annandale 3 as a result of that “relevant property transaction”. Thus s 90(2)(a) is satisfied. This is not a case where Brett alternatively needs to establish “other special circumstances” that would justify the making of a notional estate order under Succession Act, s 90(2)(b).

Grant next argued it had not been established that the deceased’s estate was insufficient for the making of a family provision order, a threshold issue for making a notional estate designation order under Succession Act, s 88. In fact the Court has dismissed Brett’s claim. But it can be assumed against Grant for the purposes of considering the notional estate claim that Brett can satisfy this issue. Although if an order for provision were otherwise to be made here, the Court would not be inclined to make an order diminishing John’s share. So Succession Act, s 88(c) would be satisfied in this case.

But Brett cannot satisfy Succession Act, s 80(2)(a). Section 80(1) and (2) provide as follows:

Brett cannot prove that the “relevant property transaction” was entered into “with the intention wholly or partly of denying or limiting provision being made out of the estate of the deceased”. The “relevant property transaction” in July 2016 was the transfer of Annandale 3 to Grant and Penelope for nominal consideration, which took effect within 3 years - but more than one year – before the death of the deceased. That may have had the practical effect of limiting Brett’s interest, as a later claimant upon the estate. But the evidence does not justify the conclusion that this outcome was the deceased’s purpose in making the gift. The deceased’s own written s 100 statement made about that time suggests that was not her motivation. And her other oral statements do not provide support for the contention that this was her actual motivation. The evidence paints her as a considered woman who wanted the best for all her children. So a desire to leave Brett without adequate provision is not consistent with that outlook, nor are the terms of the Will she made in Brett’s favour.

Finally, a notional estate order should not be made because of the considerations raised by Succession Act, s 87, which provides as follows:

The making of an order designating Annandale 3 as notional estate is likely to interfere with Grant and Penelope’s “reasonable expectations in relation to property”: Succession Act, s 87(a). Nor do the substantial “justice and merits” of the case (s 87(b)) create a compelling case for the making of such an order. The defendants have spent a considerable time and energy in jointly renovating Annandale 3 and the adjacent property, Annandale 5. As they have said, they are only likely to have done this renovation in the expectation that they would be able both to use and manage those properties themselves in the longer term. Their substantial renovations to those two adjacent properties strongly bespeak their future expectations to hold the properties for their own financial benefit in the long term and to fulfil the deceased’s wishes to keep the properties in the family. Making a notional estate order would be likely to thwart the first of these legitimate expectations.

For these reasons the case will be dismissed. The question of costs orders needs to be considered. Penelope was joined late in the proceedings and, as Mr Armfield of counsel readily and properly admitted, her separate legal costs are minimal. The Court will not make any separate order concerning her costs in the circumstances.

Ordinarily the successful defendants’ costs would be paid out of the estate on the indemnity basis. The Court will so order. But the question arises as to how those costs should be borne. In my view John has done nothing to provoke, aggravate or contribute to this litigation. He has wisely stood on the sidelines. This has had the effect of reducing the overall costs incurred in the proceedings. The Court is mindful of his separate interests and particularly that the deceased created the testamentary trust for his children, one of whom has a disability. Because of his conduct in seeking to minimise the cost of this litigation there is no sensible reason why his interest in the estate should bear any part of the costs. Therefore the Court will exempt his interest in residue from bearing any of the estate’s costs. The result is that in substance Brett’s three quarters share of residue must bear the estate’s costs.

Brett will therefore ultimately bear the cost of both sides of this litigation. But because of the deceased’s testamentary generosity to him that Will still give him a reasonable financial outcome, provided there is certainty as to the costs that will be incurred on both sides. It seems unnecessary in the circumstances for the Court to make any order other than he should bear his own costs. This means that those costs will be paid out of the share distributed to him from the estate.

The Court is conscious of the need to limit costs in family provision cases such as this one. That is partly why the Court makes standard orders for the parties to put on affidavits of costs. That has happened in this case. The parties have estimated their costs up to the conclusion of the hearing. The plaintiff’s costs will be taken as $50,000 and the defendants’ as $47,000 (subject to adjustment). The hearing was efficiently conducted on both sides in accordance with what might have been expected when those affidavits were sworn.

So in the exercise of its powers under Succession Act, s 99, the Court will include in its orders an order that the parties will charge no more than those declared costs. This kind of order was foreshadowed to the parties at the hearing, as a likely order.

For these reasons, the Court makes the following orders: