Stern v Sekers; Sekers v Sekers [2010] NSWSC 59 (12 February 2010)

Last Updated: 15 February 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Stern v Sekers; Sekers v Sekers [2010] NSWSC 59


JURISDICTION:
Equity Division
Family Provision Act List

FILE NUMBER(S):
5024 of 2007
5645 of 2007

HEARING DATE(S):
14, 15, 16, 17 December 2009

JUDGMENT DATE:
12 February 2010

PARTIES:
Ralph Stern (First Plaintiff in 5024/07)
Dorothy Carroll (Second Plaintiff in 5024/07)
David Sekers (aka David Shoresh) (First Defendant in 5024/07)
Daniel Sekers (Second Defendant in 5024/07)
Jasper Sekers (Third Defendant in 5024/07)
Finley Stern (Fourth Defendant in 5024/07)
William Carroll (Fifth Defendant in 5024/07)
Edward Carroll (Sixth Defendant in 5024/07)
Carol Judy Jennifer Sekers (by her tutor Thomas Joseph McLoughlin) (Plaintiff in 5645/07)
David Sekers (aka David Shoresh) (First Defendant in 5645/07)
Daniel Sekers (Second Defendant in 5645/07)
Ralph Stern (Third Defendant in 5645/07



JUDGMENT OF:
Ward J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Mr R Wilson (Plaintiffs and Third, Fourth, Fifth and Sixth Defendants in 5024 of 2007)
Dr C Birch SC with him Mr M Cleary (First and Second Defendants in both matters)
Mr C Simpson SC (Plaintiff in 5645 of 2007)

SOLICITORS:
Turnbull Hill (Plaintiffs and Third, Fourth, Fifth and Sixth Defendants in 5024 of 2007)
Milne Berry Berger Freedman (First and Second Defendants in both matters)
L Rundle & Co (Plaintiff in 5645 of 2007)


CATCHWORDS:
SUCCESSION – family provision and maintenance – principles upon which relief granted – application made by three adults from first marriage for provision from father’s estate –large estate left to five children from both marriages and second wife – whether inadequate provision made for three children from first marriage – if so, what provision ought to be made – one claimant with serious psychological condition requiring provision for special care – application of discount tables to lump sum award – whether property held by second wife as a result of survivorship and distribution of deceased’s estate is available to be designated notional estate after second wife’s death – held that inadequate provision made – property held by or distributed to second wife not able to be designated notional estate – provision ordered for plaintiffs by rewriting of testamentary trusts and capital sum to be held under special disability trust for one of claimants

LEGISLATION CITED:
Corporations Act 2001 (Cth)
Explanatory Memorandum for the Corporate Law Economic Reform Program Bill 1999
Family Law Act 1975 (Cth)
Family Provision Act 1982
Social Security Act 1991 (Cth)
Succession Act 2006
Workplace Relations Act 1996 (Cth)

CATEGORY:
Principal judgment

CASES CITED:
Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419
Bladwell v Davis [2004] NSWCA 170
Bosch v Perpetual Trustee Co [1938] AC 463
Bovaird v Frost [2009] NSWSC 337
Brookfield v Yevad Products Pty Limited [2004] FCA 1164
Button v Lynch [2002] NSWSC 1148
Caldwell v Ang (unreported, NSWSC, 11 April 1991)
Cetojevic v Cetojevic [2006] NSWSC 431
Civil Liability Act 2002 (NSW)
Collings v Vakas [2006] NSWSC 393
Crisp v Burns Philip Trustee Company Ltd (unreported, NSWSC, 18 December 1979),
Cropley v Cropley [2002] NSWSC 349
Davies v Eli Lilly & Co [1987] 1 All ER 801
Diver v Neal [2009] NSWCA 54
Falkingham v Falkingham [2002] NSWSC 534
Fellows v Paterson [2002] NSWSC 190
Foley v Ellis [2008] NSWCA 288
Ford v Simes [2008] NSWSC 1120
Ford v Simes [2009] NSWCA 351
Gillett v Holt [1998] 3 All ER 917
Gorton v Parks (1989) 17 NSWLR 1
Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846
In Re Hattie [1943] SR (Qld) 1
Kalmar v Kalmar [2006] NSWSC 437
Kavalee v Burbidge (1998) 43 NSWLR 422
Kearns v Ellis (unreported, NSWCA, 5 December 1984)
Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366
Lloyd-Williams v Mayfield [2005] NSWCA 189
Lonrho Limited v Shell Petroleum Co Limited [1980] 1 WLR 627
McGrath v Eves [2005] NSWSC 1006
Minister of Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 1994
Nicholls v Hall [2007] NSWCA 356
O’Loughlin v Low [2002] NSWSC 222
Palmdale Insurance Limited (in liq.) v L Grollo & Co Pty Limited [1987] VicRp 8; [1987] VR 113
Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361
Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9
Pope and Ors v Christie Matter No 4918/94 [1998] NSWSC 118
Prince v Argue [2002] NSWSC 1217
Re Buckland deceased [1966] VicRp 58; [1966] VR 404
Re Gilbert (1946) 46 SR (NSW) 318
Retter v Permanent Trustee Co Limited: Re Estate of Rita Retter, (unreported, NSWSC 13 April 1994)
Robinson v Tame (unreported, NSWCA, 9 December 1994)
Schaeffer v Schaeffer (1994) 36 NSWLR 315
Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201
Tan & Ors v St George Bank Ltd & Ors [2005] WASC 143
Taylor v Santos Limited (1998) 71 SASR 434
Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
Walker v Walker, unreported, NSWSC, 17 May 1996
Wheatley v Wheatley [2006] NSWCA 262

TEXTS CITED:
R P Austin and I M Ramsay, Ford’s Principles of Company Law, 13th ed, Butterworths, Sydney
R P Austin, H A J Ford and I M Ramsay, Company Directors: Principles of Law and Corporate Governance, LexisNexis, Sydney, 2005

DECISION:
Provision made



JUDGMENT:

- 134 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
FAMILY PROVISION ACT LIST

WARD J

FRIDAY 12 FEBRUARY 2010

5024/07 RALPH STERN & ANOR V SUZANNA SEKERS

5645/07 CAROL JUDY JENNIFER SEKERS by her Tutor THOMAS JOSEPH MCLOUGHLIN V SUZANNA SEKERS

JUDGMENT

1 For hearing before me on 14-17 December 2009 were two sets of proceedings, together involving claims by or on behalf of each of three adult children for provision out of the estate of their father, the late Peter Sekers. The deceased died on 27 May 2006 at the age of 85, leaving his widow, Suzanna, and his five adult children.

2 The plaintiffs in the first set of proceedings (5024/07), Ralph Stern and Dorothy Carroll, are the youngest and eldest, respectively, of the deceased’s three children with his first wife Eva, who died in October 1989. The plaintiff in the second set of proceedings (5645/07) is Carol Sekers (the second child of the deceased and Eva). Prior to the hearing, an order was made for the appointment of a tutor, Thomas McLoughlin, to conduct these proceedings in Carol’s name, on the basis that Carol has a long history of psychiatric illness and did not have the capacity to do so on her own behalf.

3 Probate of the deceased’s will was granted to Suzanna on 18 September 2006. Both sets of proceedings were commenced in late 2007, shortly before expiration of the time period for bringing claims of this kind. Suzanna died on 20 April 2008. Probate of her will was granted jointly to the two children of her marriage with the deceased (David and Daniel Sekers) on 21 October 2008, as a consequence of which they then became executors by representation of their father’s estate. This sequence of events is of relevance insofar as some criticism seemed to be made during cross-examination of David and Daniel of actions taken to distribute the deceased’s estate at a time before David and Daniel had any role as executors of the estate.

4 For convenience, and without intending any disrespect, I will refer to the respective parties by their first names.

Issues

5 Each of the plaintiffs, as a child of the deceased, is an eligible person (within the definition contained in s 6(b) of the Family Provision Act 1982) to bring a claim for provision out of the estate of the deceased and has done so within the time required under the Family Provision Act.

6 As the deceased’s estate was wholly distributed within the 18 month period in which any Family Provision Act claim could be brought, if any provision is to be made for one or more of the plaintiffs it will be necessary for some part of the estate or the distributed estate to be designated as notional estate, pursuant to s 23 or s 24 of the Family Provision Act. In that regard, there is an issue as to whether property formerly held by Suzanna (pursuant to a right of survivorship and/or distributed to her out of the estate) is able, following her death, to be designated as notional estate.

7 The power of the court to designate property as notional estate is dependent (among other things) on the court first being satisfied that an order for provision ought to be made on the application. Accordingly, the first step is to address the adequacy (or otherwise) of the provision made by the deceased for each of the plaintiffs during the deceased’s lifetime and out of his estate.

8 The issues for determination, leaving aside the question of costs (in relation to which an issue was raised as to whether there is power to designate property as notional estate simply for the purpose of satisfying costs orders), are relatively straightforward:

(i) was the provision, if any, made in favour of each of Ralph, Dorothy and Carol inadequate for his or her proper maintenance and advancement in life?

(ii) is the property which was held by Suzanna jointly with the deceased at the time of his death (a substantial share portfolio) property which, after Suzanna’s death, remains available to be designated as notional estate of the deceased pursuant to s 23 of the Family Provision Act (and, if so, should any part of that property be so designated)?

(iii) to what extent, if any, should the distributed estate of the deceased be designated as notional estate of the deceased pursuant to s 24 of the Family Provision Act?

(iv) if there has been inadequate provision for any one or more of the plaintiffs, what orders, if any, should be made for the proper provision out of the deceased’s estate for his or her maintenance and advancement in life?

Summary

9 For the reasons set out below, I am of the view that:

(i) the provision in favour of each of Ralph, Dorothy and Carol was inadequate for his or her proper maintenance and advancement in life;

(ii) property held by Suzanna by right of survivorship following the deceased’s death or distributed to Suzanna out of the deceased’s estate is not property which is now able to be designated as notional estate;

(iii) the proceeds of the sale of the Denning Street property ($2.68 million) should be designated as notional estate;

(iv) as to the provision to be made for each of the plaintiffs:

provision should be made for each of Ralph and Dorothy by way of the re-writing of the testamentary trusts made in respect of the Francis Street property and Unit 4 in the Edward Street property, respectively, as indicated in my reasons below;

provision should further be made in favour of Ralph by way of the forgiveness of a loan claimed to be owing by him to the estate in respect of borrowings to fund renovation works for the Francis Street property;

provision should be made for Carol by way of the re-writing of the testamentary trust over Unit 1 in the Edward Street property (in which she currently has a life estate), as indicated in my reasons below, in order to permit its sale and for a capital sum to enable a trust to be established for the acquisition of suitable accommodation for Carol and for her ongoing care; and

further provision should be made, to the extent possible out of the property designated as notional estate, for each of Ralph, Dorothy and Carol by way of a sum to meet any costs which might ultimately be ordered in these proceedings.

Deceased’s assets

10 As at the date of the deceased’s death, his assets in the main comprised:

various parcels of real estate (a property consisting of four units at Denning Street, Coogee; a property consisting of three units in Francis Street, Bondi – one of which was, and still is, occupied rent-free by Ralph and his family; and two units in a building at Edward Street, Bondi – one of which (Unit 1) was, and still is, occupied rent-free by Carol);

a one-quarter shareholding in a company, Denning Real Estate Pty Limited (in which Suzanna, David and Daniel each held one of the remaining three shares), which company owns two commercial properties in Alexandria; and

a substantial share portfolio (which the deceased owned jointly with Suzanna), including large parcels of shares in Macquarie Bank, the National Australia Bank and the Commonwealth Bank, which passed by way of survivorship to Suzanna on the deceased’s death.

11 There were substantial liabilities of the estate (in the order of $830,000), which were in due course consolidated with Suzanna’s liabilities and paid out of funds drawn from a joint account held by David and Daniel (and, before her death, Suzanna). Into that account were deposited the proceeds of the sale by David and Daniel in late 2008 of the Denning Street property (title to which had been transferred to them out of their father’s estate) and of the sale from Suzanna’s estate (to David and Daniel) of some of the shares which Suzanna had held jointly with the deceased prior to his death.

12 The difficulty in identifying with precision the source of the funds used to pay the deceased’s liabilities (and, in particular, whether those were funds held by David and Daniel in their own right or as trustee of their mother’s estate) arises because, prior to Suzanna’s death, she and her sons had operated a loan facility through an account jointly held with the National Australia Bank. David and Daniel have continued to operate that account since Suzanna’s death. David confirmed that funds from that account were used to pay for several transactions (T 117.23), among them the acquisition after the deceased’s death of a property in O’Brien Street, Bondi, for $1 million.

13 When the net proceeds of sale of the Denning Street property and of the shares acquired from Suzanna’s estate were placed in this joint account, this had the effect of reducing and/or discharging the then outstanding liabilities to the bank (including liabilities in relation to the O’Brien Street loan, which was secured over both the Denning Street property and the home which the deceased had shared with Suzanna in Oceanview Avenue Dover Heights). No line of credit was secured by the O’Brien Street property (Daniel T 166).

14 David gave evidence that the National Australia Bank facility or line of credit remains available to be drawn down at least to the extent of the Denning Street sale proceeds (T 113). As David and Daniel accept that the proceeds of sale of Denning Street are available to be designated as notional estate (David at T 105 said that “as far as I am concerned it is still available to the trust”), it seems to me that nothing turns on how much of the actual funds used to pay out the deceased’s liabilities came from Suzanna’s estate and how much from David and Daniel in their own right. Nevertheless, I do note that, to the extent that the discharge of the deceased’s liabilities came out of the assets left to Suzanna, this has enabled distribution of estate assets to the plaintiffs, by way of transfer of estate properties on the trusts created under the will, free of any portion of the estate debts which they might otherwise have borne and the plaintiffs have thus obtained a benefit from the way in which the estate was administered in this regard.

15 Estimates of the net value of the estate, including the deceased’s interest in the jointly held assets, have varied. In the Inventory of Property sworn by Suzanna on her application for probate, the deceased’s estate was valued at $3,585,001. A higher estimate of the estate’s value was put in the affidavits sworn by each of David and Daniel in these proceedings and in the Outline of Contentions served on their behalf prior to the commencement of the hearing. (Part of the increase in the estimate of the estate’s value is due to the fact that, in the Inventory of Property, the value of the deceased’s share in Denning Real Estate was estimated at $1, though by reference to the value of the underlying assets of the company the deceased’s interest in the company would have been worth considerably more.)

16 In the defendants’ Outline of Contentions dated 9 December 2009, the net assets of the estate were put at $7,117,206 (excluding weekly payments made to or on behalf of Carol in accordance with the directions under the will). This sum includes a debt of $208,238 said to be owing by Ralph to the estate (which Ralph says had been forgiven by the deceased prior to his death). Further, the calculation by the executors of the estate’s net assets takes into account not only the deceased’s liabilities but also an amount said to represent interest on estate debts paid out of Suzanna’s estate (which the plaintiffs contend should not be included in the calculation of net assets).

17 It was submitted by Counsel for Ralph and Dorothy (Mr Wilson) that the value of the net estate was somewhere in the order of $9,000,000. In part, this was based on the increase, since the date of death, in the value of the shares in the portfolio the deceased had held jointly with Suzanna.

18 In evidence before me was a “kerbside” appraisal by Laing & Simmons of the respective properties as at July 2009 (Exhibit 1). That appraisal is broadly consistent with the estimates of value placed on the properties by the respective parties – the main difference being the value to be attributed to the Francis Street property (which Ralph had estimated at a lower figure – around $2 million, as opposed to the appraisal of $2.5-$2.7 million). There was no challenge in respect of this evidence and I have assumed that the Laing & Simmons appraisal gives a reliable indication of the current value of the properties.

19 For present purposes (treating the deceased’s share in Denning Real Estate as being worth around a quarter of its underlying assets and not including the debt claimed to be owing by Ralph or the interest claimed on the payment of estate debts), the deceased’s assets as at the time of death (including the deceased’s share of the share portfolio he had jointly held with Suzanna) would seem to be in the order of $8.48 million, valued as at the date of the hearing.

20 This sum is comprised as follows: Francis Street (adopting the midpoint of the valuation range) - $2.6 milllion; Edward Street units - $780,000 (again adopting the midpoint of the estimated range); Denning Street – the proceeds of sale of which were $2.68 million; deceased’s share in Denning Real Estate - say, $682,500 (the underlying properties being valued at $2 million and $730,000 respectively); and the share portfolio – now valued at around $2.8 million; less debts of $830,000. Even allowing for adjustments in the valuation of individual items, there is no doubt that this was a large estate (the executors, in effect, accepting that it was not less than around $7 million).

21 Counsel for the respective plaintiffs, Mr Simpson SC and Mr Wilson, contend that both the deceased’s interest in the share portfolio (which passed on survivorship to Suzanna) and his share in Denning Real Estate (which was transferred to her on the distribution of the estate) may be designated as notional estate (as well as the proceeds of the sale of Denning Street). Senior Counsel for the executors (Dr Birch SC) contends, on the other hand, that only the proceeds of sale of Denning Street ($2.68 million) are available to be designated as notional estate (T 156).

22 In looking at the size of the estate out of which provision could be made, the court ordinarily has regard to the parties’ costs of the proceedings. The costs of Ralph and Dorothy are estimated to be $194,261.10 inclusive of GST. Carol’s costs are estimated to be $153,234.99 inclusive of GST. The executors’ costs are estimated to be $441,468 inclusive of GST.

23 Senior Counsel for Carol (Mr Simpson SC) submitted that the disproportion in the respective costs was such that it would be appropriate for a costs capping order to be made in this case. Mr Simpson raised the concern that the level of fees incurred by the executors would otherwise diminish any claim for provision out of the estate. Dr Birch’s response is that no such concern arises in circumstances where, as here, the estate has been wholly distributed. I understand that, for all practical purposes, David and Daniel accept that they are likely to end up having to bear their own costs.

24 Although submissions as to costs were generally deferred until after judgment in the matter, Dr Birch did note that the unavailability of any undistributed estate from which to meet costs orders of the kind usually made in Family Provision Act proceedings might be a factor bearing upon the determination of what orders, if any, might be made in favour of some or all of the plaintiffs.

Deceased’s will

25 The deceased made provision in his will for each of his children other than Dorothy (though he did make provision for Dorothy’s adult children), and left the residue of his estate (after some minor pecuniary legacies) to Suzanna. In this regard, the manner in which he made provision for his children (or, in Dorothy’s case, her children) was broadly consistent – separate parcels of real estate were left to each of them (or to a trustee on trust for them) (and, in the case of David, Daniel and Ralph, on trust for any children each might have) for life with the remainder interest passing on their death to their respective children (or, in the case of the property held for Carol during her life on trust, to Ralph). The various properties were divided up amongst the family as follows.

26 The property at Francis Street, Bondi (valued in the order of $2.5 – 2.7 million) was left under the will to Suzanna (the deceased’s trustee) on trust for Ralph and any children he might have for life, with the remainder interest passing on his death to his children in equal shares (clause 3(5) of the will). Title to the property was transferred to Ralph by Suzanna prior to her death. (There is a dispute as to whether this was at Ralph’s request, although nothing seems to turn on this).

27 Unit 1 in the Edward Street property, which is currently occupied by Carol and was appraised at approximately $380,000 - $400,000, was left to Ralph to be held on trust for Carol for her life, with the remainder interest left to Ralph or his children (clause 3(3) of the will). Title to that property was also transferred to Ralph before Suzanna’s death. Given that Carol has a normal life expectancy, despite her psychiatric condition, of around 41 years and is only two years older than Ralph, the present value to Ralph of this remainder interest would seem to be low.

28 The second unit owned by the deceased in the Edward Street property, Unit 4, (similarly valued at $380,000 -$400,000) was left to Ralph as trustee for the benefit of Dorothy’s two adult children (William and Edward) (clause 3(4) of the will) but subject to a direction that the property be managed by Ralph and that he provide the net income from the property to Dorothy for the education of her two sons until Edward, the younger son, turns 25 (which will be in just under 5 years’ time from now) and thereafter that the income be given to Dorothy’s sons in equal shares. Each of Dorothy’s sons was joined as a party to, and swore an affidavit in, the proceedings brought by Ralph and Dorothy. Again, title to that property was transferred to Ralph prior to Suzanna’s death.

29 As I understand it, the executors accept that the intention disclosed in the will, though not clearly expressed, was that the effect of this bequest was that (subject to the payment of the income to Dorothy for her sons’ education for the next almost 5 years) Unit 4 was left to Dorothy’s two sons in equal shares. As the will is phrased, however, the entitlement of Dorothy’s sons seems to be only as to the income of the property and hence the will is open to the construction that Dorothy’s sons receive no more than a life interest in the property and that on their death the remainder interest in the property would form part of the residuary estate. Although no issue is taken on this point by the executors, it is a matter which should be taken into account when considering the effect on William and Edward of any orders for provision in favour of Dorothy out of the property left in trust for them – in that what they would be deprived of if the bequest in their favour were to be amended would on one view be no more than a half share in an income stream from the property for life.

30 Provision was made for each of David and Daniel under the will (clauses 3(1) and 3(2)) by an equal division between them of the four units in the Denning Street, Coogee property. Each was appointed trustee of two of the four units in the building, to hold on trust for himself and any children he might have as discretionary beneficiaries as to income for his life and then for his children. (David is married with two minor children; Daniel has no children but is shortly to marry.)

31 The Denning Street property was sold in November 2008 (notwithstanding that it was subject to the testamentary trusts created by the will) for a net sum of around $2.68 million. Two comments may be made as to this – first, the provision for each of David and Daniel under the deceased’s will was structured by way of trusts very similar to that under which provision was made for Ralph (so that there was no differentiation in that regard) and, secondly, the provision made for Ralph’s half brothers and their children can be valued, by reference to the net proceeds achieved on the subsequent sale of the building, at approximately $1.3 million (roughly half that of the value of the provision made under the will for Ralph).

32 The deceased’s share in Denning Real Estate was left to Suzanna (clause 3(6) of the will) on condition that during Carol’s life she pay $200 per week to Carol (thus maintaining the weekly provision the deceased had made prior to his death for Carol). The residue of the estate (after the two small pecuniary bequests to nephews of the deceased) was also left to Suzanna (on condition that she pay the strata management fees for Unit 1 during Carol’s lifetime). Clause 3 of Suzanna’s will (Exhibit P1/G) in turn directed David and Daniel during Carol’s life to pay Carol $200 per week and the strata management fees for Unit 1, a direction which they have honoured since their mother’s death.

Background facts

33 The deceased and his first wife, Eva, migrated to Australia from Hungary in 1957. According to Ralph, his parents had married in Hungary in 1956 and were never formally divorced. The executors, on the other hand, said that the relationship between the deceased and Eva had been a de facto relationship. As to the fact of the marriage, support may be gleaned from Ralph’s birth certificate (Annexure F to his 10 December 2009 affidavit), which, based on information recorded as having been provided by the deceased, describes Eva as the deceased’s wife; as well as from the reference by the deceased to Eva as his first wife in an earlier will which was prepared in 1998. There is no evidence before me as to the dissolution of that marriage, though the deceased referred to Suzanna as his wife.

34 It does not seem to me that anything turns on the question of the actual marital status of Eva and the deceased (though if the executors’ contention as to the lack of a marriage between the deceased and Eva were correct it would presumably explain why there was no formal divorce, assuming in that regard that Ralph’s contention in relation to the lack of a formal divorce is itself correct). The significance which Ralph seems to attach to his parents’ marital status is that he says that, had there had been a property settlement between his parents in 1978 (when his father left home) and had Eva received half of the deceased’s assets at that point (which Ralph estimates at approximately $300,000), he would have been in the position where he could have expected to receive, on his mother’s death, a third of those assets. Ralph has annexed to his affidavit a copy of a list, which he says is in his father’s handwriting, of the deceased’s net assets as at 1978, in support of the contention that Eva’s half share would have been worth $300,000. I do not consider this to be of assistance in the task before me. Such an exercise is, of its nature, speculative. It requires assumptions to be made as to the type of settlement that might have been made in 1978; as to what would have happened to any property so transferred to Eva; and as to how Eva would then have left her estate as between her three children.

35 The Francis Street property (by which provision was made for Ralph and his children under his father’s will) represents, on my calculations, almost one-third of the deceased’s assets at the date of death. The possibility that Ralph might, in other circumstances, have received a part of that inheritance at an earlier time through his mother’s estate does not assist me now in determining the adequacy of the provision made for Ralph in the deceased’s lifetime and under his will (particularly when I am unable to assess what effect an earlier property settlement would have had on the size of the estate which would later have been available for distribution). (Similarly, the fact that Eva may have been hard done-by, as seems the thrust of some of the affidavit evidence from Ralph and Dorothy, is not relevant to the claims made in these proceedings except perhaps to the extent, which I cannot quantify, that the assistance her children gave her, in lieu of any greater support from the deceased, may as a practical matter have operated to enlarge the deceased’s estate. In the absence of anything to suggest that the deceased would have been more generous to Eva but for the assistance provided to her by her children, I cannot see that this takes matters any further.)

36 The deceased and Eva were together for over 20 years. After the deceased left the family home he had shared with Eva (the unit now occupied by Ralph in Francis Street), the deceased continued to provide some financial support to Eva (in terms of rent-free accommodation and part of the rents from the other unit in the Francis Street property) until her death in 1989.

37 During the course of his relationship with Eva, the deceased had acquired various properties in Coogee and Bondi. In 1979 the deceased married Suzanna Sos, who had emigrated from Hungary where she had worked as a journalist, and they had two children, David and Daniel, in 1979 and 1981 respectively. Suzanna did not work during their marriage (other than to assist the deceased to an extent, which was disputed, in relation to the management of his or their properties). There was a reasonably large age difference between the couple (the deceased being 58 and Suzanna being 31 when they married), something to which Mr Wilson pointed when submitting that Suzanna had married the deceased at a time when he had already established not insubstantial property assets. According to David and Daniel, however, Suzanna had herself brought to the marriage funds which assisted the couple to acquire further property and assets.

38 Together, the deceased and Suzanna acquired the Alexandria properties, through Denning Real Estate Pty Limited, which was incorporated in 1980. (Each of David and Daniel was issued a share in 1984, when they were still very young.) The deceased and Suzanna also acquired a substantial share portfolio, largely utilising for that purpose the proceeds of sale of the deceased’s earlier acquired property at Coogee Bay Road, Coogee (which Dorothy contends had been promised to her). It seems that there were also in place one or more margin loan facilities through which shares were acquired at least by Suzanna and perhaps also by the deceased.

39 Both Dorothy and Ralph have given evidence that, after their mother’s death in 1989, their father informed them that he intended certain of his properties to be theirs (though Dorothy and Ralph appear to differ as to whether they understood that this was to occur during their father’s life or by way of inheritance on his death).

40 Dorothy says that when her mother died the deceased informed her and her two siblings that (of his then properties) the Coogee Bay Road property would be Dorothy’s to own; that Ralph would own Francis Street and that Carol would own all of the Edward Street units. (Although by this stage Carol’s mental illness had just begun to manifest itself, it may be that the deceased was then unaware that it would be of a lasting nature; hence the proposition that Carol would be left the whole of the (then three) Edward Street units in her own right, which is what Dorothy says her father had indicated, may not then have been as impractical as it would now seem.)

41 As I understand it, Dorothy saw this as being a promise as to her eventual inheritance, not as a promise that the property would be transferred to her in the immediate future.

42 Ralph, on the other hand, says that in March 1990 there was a conversation with his father (during which Dorothy, Carol, Suzanna and Ralph’s then girlfriend were present) in which his father said that he was ‘giving him [Ralph] his inheritance now’ (T 25.5-22). Ralph says that he understood by that that his father was promising to transfer the title of Francis Street to him. Ralph says that he planned to use this as the stepping stone for a career in property development (seemingly on the basis that this would give him sufficient capital to pursue such a career) (T 26.20). Ralph accepted in cross-examination that there was nothing given or required to be given in return, by him, for that promise, nor was there any condition that he do anything in return for what he described as his ‘inheritance’ (T 25.41); his father’s promise being unconditional (para 30, affidavit 13 March 2008). Ralph says that he asked his father over the years when he was going to honour that promise and that his father kept making excuses.

43 Ralph seems, at least since his father’s death, to have harboured a strong grievance at the fact that, having left his then employment at Lend Lease in 1990 on the strength of that promise, and having worked for his father since about that time, his father did not transfer the Francis Street property to him either during his father’s lifetime or under his will. He says that he has been made “no more than” a ‘caretaker’ of properties by his father.

44 I note that, according to Ralph, it was not until some three to four months after he left his employment at Lend Lease that he ‘volunteered’ to help his father with the management of his father’s properties. Therefore, on Ralph’s own evidence, it cannot be said that Ralph left his employment at Lend Lease in order to take up the position of property manager for his father. At most, he seems to have done so in the expectation or hope that this would (to use his own words) be a “shortcut” to the success and wealth as a property developer to which he seems to have aspired.

45 On 26 April 1998, the deceased signed a document that, on its face, appears to have been intended as his then will. It referred to Eva as his first wife; indicated his desire to be buried next to her; and included a bequest to Ralph of the whole of the Francis Street property “together with any encumbrances on it and costs to be borne by Ralph”, though noting that there were no encumbrances existing on that property at that time.

46 The 1998 will provided for the Denning Street and Edward Street units, as well as a Botany Road Mascot property, to be held in a testamentary trust with directions for the payment of annuities to Dorothy and Carol; for Carol to have the use of Unit 1 in the Edward Street property during her lifetime; and for Dorothy’s sons each to receive a $5,000 legacy. The residue was to be left for the further education of David and Daniel.

47 The deceased included in the 1998 will an explanation for his then testamentary treatment of each of his daughters – in relation to Carol, he did so by reference to her ailment and her inability to control her own financial affairs; in relation to Dorothy, the deceased described the situation as “more complicated”. He wrote (somewhat defensively, it might be said) that “It cannot be said I am hostile to her [Dorothy]”, on the stated basis that he was giving Dorothy $350 per week and that from June 1990 to May 1991 she had received the rent and had the management of the Coogee Bay Road units. In the 1998 will the deceased noted that after that management role had been “terminated”, he had resumed paying Dorothy $300 per week “as I knew they [Dorothy and her husband Michael] could not survive without my assistance”. He went on to say:

I have to conclude that she does not love me to say the least. But I love her and therefore I leave this annuity to her. If I would not love her I would leave her with a set amount which she would quickly scatter and would be left without assistance. I am writing all this unsavoury relationship down to present a clear picture of her attitude to me in the case if she decides to attack my will and would start a lawsuit to upturn my legacy ...If Dorothy institutes legal proceedings to change my will then the weekly payments to her should stop and cease immediately without any later refund of the missed weekly payments.

48 (The 1998 will also referred to the issue of the deceased’s disappointment at the proposal for his grandsons’ schooling and stated that he had ‘confined’ himself to protesting against this proposal.)

49 It seems that, in 2000, the deceased prepared a codicil to that will (although there was not a signed codicil in evidence). The purported codicil was dated 11 August 2000. Ralph said in the witness box that the language used in this document was reminiscent of that of his father (T 42.16) and seems to have accepted that it is likely his father prepared it.

50 To put the codicil in context, it is relevant to note that, during 2000, work was carried out (at Ralph’s instigation) to the Francis Street property. A third unit was built, at a cost of around $150,000 or $155,000. The deceased paid for the cost of the extension. The basis on which the funds were provided to Ralph for the renovations is not clear.

51 Ralph says that he “offered” to repay that money when the deceased gave him title to the property (para 40 of his affidavit of 13 March 2008). If the agreement by Ralph to repay the loan was linked to his father transferring him the property, that would make some commercial sense (since it might be thought unlikely that Ralph would be prepared to meet the interest payable for a loan to fund building works if he were to get no benefit other than some increased rent for an uncertain time as a result of the extension), though this logic would also apply if it were merely expected that the property would be left to Ralph under the deceased’s will. In any event, if that was the case, it does not explain why Ralph proceeded to assume responsibility for repayment of interest payments in advance of any such transfer.

52 The executors, on the other hand, say that Ralph borrowed the money to undertake the Francis Street renovations from the deceased at a 6.4% interest rate – the deceased having borrowed those moneys on an interest only loan from the National Australia Bank – and that this remains to be repaid by Ralph. (Again, it does not seem commercially logical for Ralph to borrow a not insubstantial sum for the renovation works unless he anticipated that at some stage the Francis Street property would be his, lending support to Ralph’s claim that it was promised to him by his father but sheds no light on whether the deceased had intended the debt to run with the Francis Street property.)

53 There is no document recording the making of the loan as such (something which might have been expected from a meticulous record keeper, as David accepted the deceased was – T 148). However, there was a reference to the loan in the unsigned 2000 codicil to the deceased’s 1998 will, in which the following statement appears: “I have to change the third paragraph of the first page of my above will because a new third level was erected over 97 Francis Street Bondi Beach and I have given a loan of $155,000 to my son Ralph for this purpose. ...Ralph is paying interest to me at the same rate which the bank is charging me on my mortgage on this $155,000.”

54 In the codicil, the deceased recorded a complaint as to his inability to make the Francis Street property available for inspection on behalf of a prospective mortgagee (due, it was said, to the failure of Ralph to complete certain works to the handrails on the property). Ralph disputes that there was any failure on his part (the time frame in which he could have completed the railing works after completion of the main building works, according to Ralph, being unrealistic). The codicil is nevertheless relevant insofar as it indicates an intention on the part of the deceased that the Francis Street property should be put forward as security for the loan (particularly since, under the 1998 will, Ralph was to be responsible for any encumbrances on the title, and hence under the then contemplated testamentary arrangements this would have left Ralph responsible for the cost of the renovations).

55 Ralph contends that the provision of the funds for the building work was at zero cost to his father because the deceased had claimed a tax deduction for the interest only loan (para 41, affidavit 13 March 2008) even though the interest payments had been largely made by Ralph. Whether or not that be the case, it does not seem to me to be relevant to the question whether there subsists a current obligation on the part of Ralph to repay the balance of the loan, the benefit of which has been and continues to be enjoyed by him in the form of the revenue from the renovations carried out with the funds provided by his father. (I note in passing that this is one of a number of instances in which Ralph has, since his father’s death, cast aspersions on his father’s integrity, including the assertion made by him, when complaining to Suzanna and half-brothers as to his treatment under the will, that his father had asked or tried to coerce him to mislead tenants and to perjure himself in relation to a statutory declaration for insurance purposes.)

56 Whatever the terms on which the funds were provided in the first place, Ralph seems to have accepted that there was a loan arrangement of some kind in place (and hence that he would bear the cost of the interest payments in respect of the money borrowed for the renovations), insofar as he made nearly all interest payments on the deceased’s loan until the deceased’s death (para 40 affidavit 13 March 2008).

57 Although Ralph does not dispute that there was a loan arrangement in relation to the renovation costs, what Ralph says (in answer to the executors’ assertion of the debt) is that in 2004, after his father settled an insurance claim for approximately $130,000, the deceased told him that he did not have to repay the loan or interest (paragraph 7 of Ralph’s affidavit of 28 July 2009). Again, if that is the case, Ralph’s conduct is inconsistent with this, in that he continued (with some exceptions on occasions) to make interest repayments after 2004 (when he says the loan was forgiven) and up to shortly before his father’s death. There seems no logical reason why Ralph would have continued to repay a loan that had been expressly forgiven by the lender. Therefore, although Mr Wilson notes that Ralph was not challenged on this conversation in cross-examination, the inconsistency in Ralph’s conduct is a matter which I think relevant to take into account in considering whether I am persuaded that the loan was in fact forgiven by the deceased.

58 The timing of the conversation in which, according to Ralph, his father indicated that he would forgive the loan, is also curious since (according to Ralph) the deceased told him in August 2004 that he was not going to receive anything from the deceased. (Ralph says that it was after this conversation that Suzanna had asked him not to fight the deceased and had told him she would look after him.) It is not clear whether there was any link between the two statements so attributed to the deceased (for example, whether the forgiveness of the loan was because the deceased had formed the view that Ralph should be left with nothing and hence thought that he should no longer be held responsible for its repayment), nor was any such link suggested by the parties. Therefore, I place no weight on this coincidence in timing.

59 On balance, the continuation by Ralph of interest payments for quite some time after the alleged 2004 conversation (even though there were times in that period when Ralph says he did not meet some of the interest repayments) is a strong indication that the loan was not forgiven by the deceased. Therefore, insofar as it be necessary to determine this issue, I am not persuaded that the deceased ever formally forgave the renovation loan.

60 After the deceased’s death in May 2006, Suzanna and her two sons became the beneficiaries of a newly formed Sekers Superannuation Fund, the trustee of which is Denning Real Estate (see affidavit David Sekers made in February 2009), and acquired the property at O’Brien Street, Bondi under a loan facility secured over the Denning Street property and the Oceanview Avenue property.

61 Of the 155,000 National Australia Bank shares that the deceased had held jointly with Suzanna at the date of his death, it seems that 29,331 were transferred into the Sekers Superannuation Fund to the credit of Suzanna’s member account (which on her death had a balance of close to one million dollars) and those shares still remain held in that fund (David and Daniel being entitled to them pursuant to the terms of the will of their late mother); 30,865 National Australia Bank shares were acquired by David and Daniel from their mother’s estate in November 2008 and remain held by David and Daniel for their respective testamentary trusts; and the remaining 94,804 National Australia Bank shares were held by Daniel and David at least as at 1 September 2009. Between 1 September 2009 and 28 September 2009, some 5,540 shares have been sold by Denning Real Estate (the trustee of the Sekers Superannuation Trust) for a sum of around $200,000, which it is said has been used to fund part of the defendants’ legal costs).

62 As noted earlier, Suzanna died in April 2008. When probate was granted of her will, the net value of her estate had been estimated at in excess of $5 million (Exhibit P1/C). This included her interest in the deceased’s estate, which by then had been distributed to her. Her estate assets thus included two shares in Denning Real Estate, as well as an interest in the Sekers Superannuation Fund of $930,000, the Oceanview Avenue property, in which Daniel now lives (valued at about $2 million) and a one-third interest (with her sons) in the property (described by David – T 115 - as a ‘commercial shopfront’ at O’Brien Street Bondi, which was owned outright by the superannuation trust), her share of that being valued at $300,000. Suzanna’s liabilities as at the date of her death included the moneys owing under the loan facility from the National Australia Bank of $1,876,896 ($1 million of which was referable to the O’Brien Street acquisition), secured by her Oceanview Avenue property and the Denning Street property, and a margin loan facility of $487,824 (which was used to acquire some of the shares held in her share portfolio).

63 The relevance of the size of Suzanna’s estate is that, as David and Daniel have inherited equally the bulk of their mother’s estate, they are both in a very comfortable financial position even apart from the bequests in their favour under their father’s will (though neither has apparently turned his mind to the extent of his net personal worth).

64 After Suzanna died, there was a consolidation of her and her late husband’s debts and these were paid out from the sale of some of the shares which had originally been held jointly by Suzanna and the deceased (para 20, David’s February 2009 affidavit). (Not disclosed in the affidavit was that the sale of the shares from Suzanna’s estate was a sale to David and Daniel for the benefit of their testamentary trusts.)

65 As noted above, the Denning Street property was sold (on 25 November 2008) for net cash proceeds of $2.68 million. (In Ralph’s affidavit evidence there was a suggestion, denied by David and Daniel, that this property was sold for less than its market value – something to which Ralph pointed as an indication that his half-siblings are so well-off that it was of no concern to them whether the property was sold at an undervalue. According to Daniel, however, the Denning Street property was in a dilapidated condition and beyond repair – T 166. David and Daniel appear to have considered the sale necessary in order to preserve the capital represented by the property for the benefit of their respective testamentary trusts.)

66 There was considerable confusion during the cross-examination of David and Daniel as to how exactly the consolidated estate debts were paid and as to how the funds from the sale of Denning Street were applied. In part, that confusion seems to have stemmed from the fact that David and Daniel were acting both as executors of their mother’s (and father’s) estate and also (on the sale of the Denning Street property and their acquisition of shares from their mother’s estate) in their capacity as trustees of their respective testamentary trusts.

67 As I understand it, out of the proceeds received by David and Daniel in their capacity as trustees of the testamentary trusts created in their favour out of the sale of Denning Street ($2.68 million), $1.1 million was used by them to acquire, from Suzanna’s estate, 30,865 National Australia Bank shares on 21 November 2008 and 18,000 Commonwealth Bank shares on December 2008; and the balance (of $1.58 million) was paid into the joint account they had held with their mother (by which they discharged or paid down the existing liability under the National Australia Bank loan facility, that loan facility having at least in part been used to acquire the O’Brien Street property). (It was apparently a condition of the bank that the proceeds of sale of Denning Street be used to discharge the O’Brien Street borrowings.) It was the evidence of David and Daniel that part of the balance of the proceeds they received from the Denning Street sale (after the $1.1 million share purchase) was used to discharge approximately $780,000 in debts of the deceased, consolidated with debts of Suzanna’s estate.

68 In turn, the $1.1 million consideration received by David and Daniel, as executors of their mother’s estate, on the sale (to themselves) of their mother’s shares was used by David and Daniel to pay down the loan facility account and/or a margin lending facility liability of about $487,000 which had been used for various of their mother’s share acquisitions.

69 As mentioned earlier, it seems to me likely that, apart from the potential for confusion stemming from David and Daniel’s roles on both sides of the sale of shares transaction, the main source of confusion derived from the fact that Suzanna and her sons had jointly operated, for some time prior to Suzanna’s death, a loan facility with the National Australia Bank, enabling moneys to be drawn down and repaid from time to time without there necessarily being any specific attribution of funds to the repayment of particular loans or debts to the bank. Hence, the difficulty for the plaintiffs and their representatives in ascertaining exactly what moneys had gone where (and the confusion between witness and cross-examiner during the cross-examination as to what moneys had gone where). Nevertheless, I think it fair also to say that the potential for confusion may have been exacerbated by the apparently piecemeal fashion in which it seems that information as to the financial affairs of the Sekers family was provided for the purposes of the proceedings. (It was conceded, for example, that some of the financial documents of the respective superannuation trusts – such as Exhibit P1/F - were produced only on the eve of the trial – T 168, and there was delay in compliance with at least one notice to produce – explained on the basis that it was necessary to obtain documents from the executors’ accountants.)

70 The complexity of the interlinked financial arrangements within the family, at least after the deceased’s death, was something that David and Daniel did not seem to be at pains (at least in their affidavits) to explain (and, indeed, in the witness box they were not always readily able to determine, by reference to their affidavits, what was comprised by certain of the amounts set out in their evidence – for example, at T 130/131 where David was not sure whether he had included, in his 4 December affidavit, any entitlement he had to a half share of his mother’s superannuation benefits and accepted it was possible this had not been brought to account).

71 Whether or not there was some reluctance (or perhaps resentment) on the part of David and/or Daniel to make clear their personal financial situation at the behest of their half-siblings, or whether they simply left compliance with discovery/notices to produce in the hands of their legal advisers, there were at least some aspects of their financial position (such as David’s ownership of a property in Israel, acquired for a not inconsiderable sum from funds provided by his parents, which David says he had ‘overlooked’ – T 144.36) which emerged only just before the commencement of the hearing and some (such as a detailed breakdown of Daniel’s credit card liabilities) which did not surface at all (Daniel having produced to his lawyers simply a photocopy of the front page of the summary sheets issued in relation to his various credit cards and not the details). Though the latter instance was explained by reference to the belief by Daniel that the records relating to his credit card expenses had already been produced, it seems to me that there was a basis for the complaints made by the plaintiffs’ legal representatives as to the time and manner in which this and other documents (of apparent relevance at least to an assessment of the financial position of those with competing claims on the estate, if not the estate itself) had been produced.

Reasons

72 The test required to be applied in Family Provision Act claims of the present kind is that outlined in Singer v Berghouse (No 2) [1994] HCA 40; (1994) 181 CLR 201, and approved in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. It is a two stage test.

73 The first stage is a question of fact, namely whether the provision (if any) made for the applicant is inadequate for his or her proper maintenance, education and advancement in life. A factual finding of inadequacy of maintenance is necessary in order to enliven the statutory power to make an order for provision, as was recognised in Collings v Vakas [2006] NSWSC 393 at [66] per Campbell J.

74 An assessment of whether the provision made, if any, was “inadequate” involves an assessment as to what level of maintenance was appropriate having regard to the applicant’s financial position; the size and nature of the estate; the relationship between the applicant and the deceased; and the relationship between the deceased and other persons who have legitimate (and in this sense competing) claims upon the deceased’s bounty. The question as to the adequacy of provision falls to be decided having regard to facts as they exist at the time of the hearing, not at the time of the death (Nicholls v Hall [2007] NSWCA 356 at [40]).

75 The second stage of the Singer v Berghouse test, which involves the exercise of discretion, is to assess the proper level of maintenance and adequate provision which should be made. The factors to be taken into account in making such a determination are contributions to the property and welfare of the deceased; the character and conduct of the applicant in relation to the deceased; and the circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased).

76 With that in mind, I turn to the four issues I have enumerated for determination.

(i) Inadequacy of provision by deceased?

77 In summary, having regard to the various factors identified above, I am of the view that each of the plaintiffs has established that there was inadequate provision made for him or her as a matter of fact and thus that the first part of the test in Singer v Berghouse is satisfied.

Plaintiffs’ financial circumstances

Ralph

78 Ralph is aged 45. He is married with two young children (aged seven and five at the time of the hearing). Neither Ralph nor his wife is presently in paid employment. Currently, Ralph assists his wife in the care of their young children. He concedes that this leaves him a significant amount of free time (T 11.25). Indeed, from June 1990 onwards, Ralph has not been employed in any paid capacity other than in his role as a property manager and maintenance engineer for his father, for which he says he was paid $20,000 a year.

79 Ralph describes his occupation as that of property manager (T 8.21). The properties he has managed over the past 20 or so years were those owned by his father; the properties he currently manages (for which he is not paid and does not seek a wage) are those which are the subject of the testamentary trusts for himself and for the respective beneficiaries of the trusts created over the Edward Street units (T 10.7; T 10.4). For a short time after his father’s death he continued to manage the other properties which had been owned by his father but he was told a couple of months after his father’s death that his services were no longer required other than for the Francis/Edward Street properties (T 10.23).

80 For most of the period since his mother’s death, Ralph has lived rent-free in one of the units at Francis Street and has received (and has continued since the deceased’s death to do so) the rental income from the rest of the property (approximately $84,660 gross per annum) plus rent from a garage, which brings his total annual income from the Francis Street property and garage currently to around $91,520 per annum.

81 Ralph’s affidavit of 4 December 2009 puts his income at $1,949.45 per week and his weekly expenses at $2,233.31. Ralph has little in the way of assets. He has no ongoing superannuation contributions. He has a motor car, on which there are loan payments to be made. He says his credit card, car loan account and tax liabilities total $118,573.00 (not including the debt claimed by the estate relating to a loan in 2000 for the purpose of the renovations at Francis Street, which, if subsisting, would increase Ralph’s liabilities by a further $208,238). (It is not clear to me whether Ralph’s present tax liabilities include both an amount referable to the 2005/2006 tax year, which Ralph says his father had agreed to bear (in return for the tax deduction his father had claimed for the interest repayments made by Ralph on the building works loan), and an amount referable to the current tax year, or simply the latter, although I assume the former is the case, since it appears from some of the material before me that Ralph has an arrangement in place to pay arrears of tax by instalments.)

82 Ralph says that there are major building repairs necessary to be carried out on the Francis Street property, which he says suffers from concrete cancer (para 69, affidavit 13 March 2009). He has estimated these repairs “as a minimum” in an amount of $97,908.25 (affidavit of 10 December 2009), although the quotation provided by his builder seems to divide the repairs into two amounts – repairs of $51,928.25 plus a ‘provisional’ sum of $45,980. Although Ralph says he wishes to carry out all of the repairs (T48.24), it might be inferred from his builder’s quotation that the essentials are roughly half of the amount claimed. Further, Ralph concedes in his affidavit that he could borrow against his income to meet the repairs (para 25, 10 December 2009 affidavit; para 61, 13 March 2009 affidavit).

83 Ralph’s summation of his current position is contained in paragraph 65 of his 13 March 2008 affidavit:

I worked in my father’s real estate business for over 30 years as property manager and maintenance engineer. My father’s second family has removed me from the property management of my father’s assets. My future prospects are poor. The only work I believe I could do is either manual or clerical, with zero assets at my disposal. I do not have adequate educational experience to support myself and my dependants in the future. There is little work in my field without more qualifications without starting at the very bottom again (my emphasis) [something which Ralph seems to be reluctant to do]

84 As can be seen from this, Ralph paints himself as having poor employment/financial prospects by reference to his lack of qualifications. However, elsewhere in his affidavit (paragraph 20) he has emphasised his drive or ambition for success and wealth and his alternative claim for provision assumes that he will be undertaking a tertiary degree. In assessing Ralph’s current and future financial position, it is necessary to look at what are his qualifications/work experience.

85 In 1983, after he completed high school, Ralph commenced study for a Bachelor of Commerce degree at Wollongong University. He did not complete that degree course. Indeed, it is fair to say that his university career was not a stellar one. In his first year Ralph failed all but one of his subjects (and in that one he received a bare pass). Thereafter he discontinued his studies.

86 Ralph explains his university results by complaining that the deceased had promised to purchase a car for him and to support him at university but had failed to do so. Ralph concedes that he was not without financial support during his short time at university (indeed he says that the deceased minimised his income on his tax return in order to enable Ralph to qualify for Austudy assistance). Thus it seems that Ralph’s complaint is not so much as to the lack of financial support but the source from which it came and that he was not provided with as much financial support from his father as he believed his father had promised (in circumstances where Ralph had expressed an interest in following an acting career from which he says he had been dissuaded by his father.)

87 It is difficult to see how Ralph’s unpromising start to tertiary education can be blamed on the fact that his father had not purchased him a car or had not provided the level of financial support he had promised he would. There is no suggestion that Ralph was forced, out of necessity or otherwise, to earn a living while he was studying which might have interfered with the time advantageous for him to attend to his studies or that he was otherwise in such dire financial circumstances as to be unable to do so. Ralph says that the need to travel “definitely distracted” him from his “ability to study comprehensively” – T 22.39 – though it is not clear to me that travelling by car to and from Wollongong instead of train would have been any less distracting, nor indeed why travel between Sydney and Wollongong (at the expense of his studies) was either necessary or was a matter related to his father’s failure to fulfil any promise of financial support.

88 The only potential relevance of Ralph’s unpromising start to academic life to my mind, is as to whether it sheds light on Ralph’s future career prospects (ie if it adversely impacts on Ralph’s future earning capacity, and Ralph suggests his lack of qualifications will do). However, the reason put forward by Ralph for his earlier failure at university seems to me to indicate not that Ralph was incapable of obtaining tertiary qualifications but rather that Ralph was not sufficiently interested in his university course, at the time, to want to pursue a degree (and that he was not prepared to do so simply to please his father in circumstances where he considered that his father had not made it worth his while financially to do so).

89 After discontinuing his university course, Ralph worked as a teller for ANZ Bank from 1984 to 1986, then as a Reconciliation Clerk with the Bank of New Zealand from 1986 to 1988 and then as an Accounts Clerk with Lend Lease Interiors Pty Limited until 30 June 1990. (Ralph, with no little degree of exaggeration in my view, has previously described this as banking experience sufficient to qualify him to act as a financial guardian for his sister, though he readily admitted in the witness box that he has had no experience in providing financial advice in relation to investments or the like.) Ralph nevertheless relies on this earlier work experience for the assertion that he has a “background” in banking and accounting. He says he has “an interest” in economics (T 33.49; T 34.14).

90 As to the prospect of Ralph finding work with his current qualifications, I am not satisfied that the evidence establishes a difficulty in obtaining work. True it is that Ralph has had no remunerative work since about the time of his father’s death (T 10.48), but relevantly it appears that he has made no attempt over the past 3 years to secure any form of employment (other than considering a job offer made to him by a friend – which he considered would be “interesting” but which was no longer available by the time he had considered it - and reading job advertisements on the internet or in the paper, none of which he followed up in any way – T 12.25). When explaining in the witness box why he had not telephoned or written or made any job applications to anyone over the period since his father’s death, he said that it was “because I did not think the remuneration was sufficient for the position I was qualified for. There were a lot beneath where I should be at this point in my life.” (T 13.2) (my emphasis). Ralph does not appear to have tested the employment market in any serious way to see if he could obtain paid employment (he seems simply to have formed the view, without discussion with any potential employer or agency, that any job for which he would be qualified would be at too low a level to be acceptable to him).

91 Insofar as Ralph seemed to suggest that he was only interested in property management positions advertised for someone with his qualifications or experience at a salary above the threshold at which he considers it would be worthwhile to get a job (T 13.2), he put that threshold (when questioned) at about $40 - $45,000 per annum. He later qualified that evidence by saying that it was not so much a question of threshold of remuneration but as to his qualifications and experience (T 13.35). He said that he had experience in clerical, banking and real estate positions and had he had looked at advertisements for those kinds of positions (T 13). (When tested, his banking/clerical qualifications are limited to his early work experience some years ago. He seemed to complain that his “employer”, referring rather dismissively to his father in this way, had left him without a reference – T 40.19.)

92 It seems to me that, despite Ralph’s assertion that it is not so much the question of threshold of remuneration which is the test for him in assessing job advertisements, the evidence he gave (at T 13.2) is a clear indication of Ralph’s position in relation to the idea of obtaining paid employment. He is currently receiving rental income of roughly double the amount he nominated as his “threshold” remuneration level with the only work required of him to achieve that income being the property maintenance activities which seem to leave him with a significant amount of free time. Ralph considers that had he remained at Lend Lease (in employment of the kind he would not now consider), his career would have been at a certain point and hence seems to be looking for something which would match or at least approach that higher level of remuneration (and presumably responsibility). It would seem that his apparent preference to date to have a reasonably comfortable family-oriented lifestyle over a full-time career is one that will only be overcome if that career is sufficiently remunerative and/or at a particular level. Ralph does not want to have to start from “scratch” (even though that is not far from where he seems to have left off in terms of his only independent paid employment).

93 As noted above, there is nothing to suggest that Ralph would not now be able to obtain further qualifications of a kind which might permit him to obtain paid employment at the level Ralph considers would be suitable for himself at this stage of his life. Ralph’s ability, albeit many years ago now, both to gain a place at a selective high school and to obtain admission to university would not suggest any academic limitation on his capacity successfully to undertake a course of tertiary study.

94 Ralph’s professed desire now (if he does not succeed in his claim to be provided with a home of his own and the means to commence a career in property development) is to commence a law degree at Bond University, for which he seeks provision in the form of a large sum to pay the university fees. He seems to have nominated Bond University based on the belief that his school results would not gain him admission elsewhere (though he has not made enquiries in that regard). Leaving aside the question of the particular institution through which Ralph might reasonably be in a position to pursue any tertiary studies at this stage, and the doubt I have as to whether he is really committed to such a course (this being something which was apparently suggested, or occurred, to him in discussions with his lawyers in relation to this application and Ralph conceding in the witness box that undertaking such study is a ‘possibility’ – T 40.8, though he is still hoping to undertake a career as a property developer or investor – T 40.11), there is nothing to suggest that he would be incapable of obtaining tertiary qualifications of some kind if motivated to do so.

95 Thus, although it is submitted that Ralph is likely to be out of work for significant periods of time in the future, it is not clear to me why that should be so (even if it is necessary for Ralph to obtain further academic or professional qualifications to obtain the kind of work he would like to undertake), other than if Ralph chooses not to apply himself to the task of obtaining appropriate employment and/or any qualifications necessary to be able to obtain such employment. The fact that Ralph may need to undertake a course of study to obtain the qualifications for any career he now chooses to follow does not of itself mean that he would be incapable of earning any form of additional income during that time, should he put his mind to it (and, of course, he has the security of a base level of income from the Francis Street property which would assist him to provide support for his family during any such period of study).

Dorothy

96 Dorothy is 48. Dorothy completed her high school education and then worked in various roles, first at Dairy Farmers and then in the army. In 2005, Dorothy graduated with a Bachelor of Arts/Physical Education degree from Macquarie University. She is unemployed at present, while completing a Diploma of Education at university in Queensland, after which Dorothy wishes to begin a teaching career.

97 Dorothy is married. Her husband is a truck driver and earns $903 net per week. He has worked for most of the time the couple have been married. Dorothy and her husband have two adult sons, both of whom are currently full-time university students and wholly dependent on their parents.

98 Dorothy and her husband have little in the way of assets and rent their home. The family living expenses are $2,457 per month. Dorothy and her husband receive a family tax benefit of $269.36 per week. They have joint assets of $23,000 and no debts (other than Dorothy’s HECS debt of $30,000).

Carol

99 Carol’s financial position is hardly affluent. She is the recipient of a pension in the sum of $575.80 per fortnight and receives $200 a week from her half brothers. Carol has two bank accounts, one of which has a current balance of approximately $4,000 and the other is used for day-to-day living expenses and has a minimal balance. Carol has no Medicare benefits cover. Her lifestyle is described by her tutor as frugal.

100 Carol left school after the completion of her School Certificate. She undertook some TAFE courses but is, and has been for some time, unable to work due to her longstanding psychiatric condition (although she has in the past performed some volunteer work for Friends of the Earth).

101 Carol’s condition is only partly responsive to treatment. Her consultant psychiatrist (Mr Doutney), whose report (annexed to the affidavit of 25 November 2008 by Carol’s solicitor, Ms Pamela Suttor) was put before the court on the application for appointment of a tutor for Carol, noted that Carol has had persisting delusions and psychotic phenomena.

102 The most recent specialist diagnosis was made by a psychiatrist, Dr Julian Parmegiani, who provided a report (jointly commissioned by the relevant parties) as to Carol’s condition. In this report, which was annexed to his affidavit sworn 1 December 2009, Dr Parmegiani noted that Carol had a 20 year history of schizophrenia. Evidence of Carol’s admissions to Prince of Wales Hospital with psychotic symptoms (at least 11 admissions in the period from 1988 to 2008) was before me. Carol was first admitted to hospital with symptoms of mental illness around mid 1988. Carol is (and will for the foreseeable future remain) on anti-psychotic medication (clozapine). Her ongoing medication costs are currently met out of her pension entitlements. Dr Parmegiani noted that Carol’s compliance with medication over the years was at times poor. Although Carol has confirmed, in her affidavit sworn 1 May 2009, that she is aware that she suffers schizophrenia and that at times she has not taken her medication and has had to be taken to hospital, Dr Parmegiani states that her insight into her illness is only partial.

103 Dr Parmegiani has confirmed that in his opinion Carol will need to take anti-psychotic medication indefinitely and will need to remain under the care of a specialist psychiatrist; that there will be times when the frequency of applications will need to be increased and when she will need admission to a specialist psychiatric unit. He confirmed that she is not able to manage her affairs, her thinking is disorganised and she is vulnerable to external influences.

104 At present, Carol lives alone in the unit in which she has a life estate (unit 1 in the Edward Street building). The unit was described by Mr Kennedy-Gould, a social worker who gave evidence in these proceedings, as being in a state of decrepitude akin to what he would describe as ‘pensioner-only’ accommodation. Carol has minimal furniture. The unit was described by Ralph (who holds it on trust for her) as an “unrenovated unit that [the deceased] had let out for over 20 years prior to her occupation to low rent paying tenants who did not look after the place” (para 39 affidavit 28 July 2009). Ralph (clearly critical of his father) asserted that his father had ignored Carol “relieving his conscience with a paltry $200 per week and a rundown flat” (para 42 affidavit 10 December 2009). Photographs of the unit were in evidence before me, which to my observation confirm the descriptions given of it. In 2008, Carol used most of her savings ($6,000) to have some work done to the kitchen of her unit (thereby, according to her tutor, demonstrating her vulnerability to exploitation in that instance in having made payment for work not performed).

Size and nature of the estate

105 I have outlined above the deceased’s assets as at the date of his death. On any view of the matter this was a sizeable estate. Even leaving aside the jointly held assets, which passed to Suzanna on survivorship, the net value of the estate prior to its distribution (excluding the loan claimed to be owing from Ralph and the interest paid on estate debts) was in the order of $6 million, on the figures set out earlier.

Relationship between deceased and applicants/others with claim on estate

106 The deceased’s relationship with the respective plaintiffs varied. I consider each in turn.

Ralph

107 Of the three children from his first marriage, the deceased seems to have had the closest (and certainly the closest working) relationship over the course of his life with Ralph. Ralph claimed to have contributed to the deceased’s estate commencing from about the age of 8 when he helped his father with repairs, cleaning and letting of properties. Even allowing for some exaggeration in Ralph’s recollection of his contribution as a child, it is not disputed that from 1990 he had a management role in relation to his father’s properties. There must have been ongoing contact between the two, therefore, over a large number of years in that role, leaving aside the ordinary family contact (and in this regard Ralph gave evidence of his interaction with the deceased’s second family). The deceased acknowledged Ralph’s contribution both in his final will and when, in correspondence with Dorothy, he rejected the notion that she had a stronger moral claim to his estate (in the context of the proceeds of the Coogee Bay Road property) than Ralph and his family.

108 Ralph gave evidence, which was not challenged in cross-examination, that his father also tended to call upon him to perform personal services, such as driving him to appointments, even when Daniel was living at home with the deceased and could more easily have done so. This again indicates a level of trust and reliance by his father on Ralph. Ralph visited his father regularly when his father was in hospital.

109 Ralph also gave evidence as to the support he gave to his mother while she was alive (after his father left the family home) and to Carol (after her psychiatric condition became apparent) and I accept that, even if his contact with Carol may have been overstated (his affidavit suggesting greater frequency of contact than expressed by Carol to Mr Kennedy-Gould), Ralph performed over many years an important family role which his father might otherwise have been expected to do in this regard. He maintained contact over the years with Carol and assisted her when she was in need; and it was he, not his half-brothers, who notified Dorothy of his father’s imminent demise.

110 There was some evidence as to Ralph’s reaction to the news that his father had only hours to live, which it seemed to be suggested did not reflect well on Ralph. Ralph chose not to return to the hospital during his father’s final hours but instead returned home to his own family and did not, after his father’s death, maintain a vigil over his father’s body (as his half-brothers did and as I understand accords with Jewish custom). Ralph said, in response, that he had been at the hospital all day; that his father was unconscious and unresponsive; that he had said his farewells to him privately; and that he did not return because he had to look after his children.

111 It does not seem to me that a negative inference can be drawn from this conduct or that this is a matter which should weigh against a finding of need. Ralph seems to me to have been a dutiful son both to his father and to his family.

112 While I note that, since his father’s death, Ralph has been critical of his father (and, it seems, ready to accuse his father of poor or dishonourable conduct in a number of respects), there is no suggestion that Ralph had had a particularly difficult relationship with his father when the latter was alive and I do not consider that the criticism now made by him of his father amounts to disentitling conduct on the present application.

Dorothy

113 As to Dorothy, the evidence does not suggest that she had a particularly close relationship with her father or that she paid any close regard to his welfare at least in the last years of his life. This certainly seems to have been the deceased’s view of his relationship with Dorothy, as set out both in his earlier 1998 will (which I have noted above) and, in part, in his final will. Some brief history of their relationship is necessary in order to put the deceased’s comments in context.

114 After her first son was born in 1987, Dorothy received from her father intermittently an amount of $50 to assist with expenses. Dorothy and her husband were at that time living in the inner western suburbs of Sydney. Dorothy says she visited her father from time to time.

115 The deceased increased those payments for Dorothy’s benefit at about the time that Eva died. According to Dorothy’s affidavit, for some time after her mother died, the deceased paid to Dorothy a weekly amount first of $300 then from 1989 (after the birth of her second child) $350 per week. (Dorothy’s evidence was somewhat confused in this regard. In the witness box, she seemed to suggest that the payment of $300 per week had commenced only at or about the time that the deceased resumed the management of his then Coogee Bay Road property, which was in about 1995 (T 59.50; T 60.5).) In any event, it is not disputed that the deceased for some time made weekly payments to assist Dorothy and he referred to these in his 1998 will.

116 These payments subsequently ceased when the deceased was contacted by a creditor in respect of a garnishee sought to be placed on Dorothy’s ‘wages’ in relation to an unpaid credit card debt. Dorothy’s evidence was that, as her father was employing her to manage the Coogee Bay Road property at the time, she had nominated Denning Real Estate Pty Limited as her employer on her application for finance for a car loan on which she was subsequently unable to meet the repayments (T 62). Dorothy apparently regarded this as appropriate as she considered her father to be her employer. However, the deceased’s annoyance at this was what apparently caused him at one stage to cancel payment of the weekly amount to Dorothy.

117 In 1990, apparently after the then weekly payments ceased, the deceased gave Dorothy the role of managing a rental property then owned by him at Coogee Bay Road, Coogee, comprised of nine flats. Insofar as this was similar to the role he had by then given Ralph in relation to the Francis Street property, this suggests that it was the deceased’s practice to provide financial assistance to some of his children by providing them with the means of earning a rental income from his own properties.

118 Dorothy readily acknowledges that the management role was not a success (T 60.30). Dorothy gave evidence that her husband had undertaken most of the management role as she had two small children at the time (T 60.33). Her stated priority was the care of her young children. She seems to have done little more in relation to the property than to place advertisements in the newspapers for the lease of the units (T 61.7).

119 The deceased was critical of the way the property was managed by Dorothy and her husband. Dorothy did not accept that her father’s criticism was warranted (T 33.41), though by this she seemed to mean not that the management of the property had been a success (since she did not deny that she and her husband “didn’t do such a great job”) but, rather, being of the view that any “failure” to manage the property was not her husband’s fault, explaining that her husband had had no experience in such a role (T 33.49). (Ralph, in paragraph 97 of his affidavit, seems to support the blame thus attributed to the deceased, being critical of his father’s complaint in relation to Dorothy’s management of the Coogee Bay Road property and ascribing the poor management to a lack of training, assistance or instruction from the deceased, even though elsewhere he had described Dorothy’s management as “farsical” and he was unable in the witness box to give any real indication of what relevant instruction or training would have been necessary to enable the management task to have been properly carried out.)

120 In 1995, the deceased took the management of the property out of the hands of Dorothy and her husband. In 2000, he sold the property. The sale of the property was apparently the source of some friction between Dorothy and the deceased in the years prior to the deceased’s death. Clause 3(4) of the deceased’s will made reference to this:

I would like to state that my daughter Dorothy Carroll and her husband Michael Carroll were working for me as the managers of a property which comprised nine flats but my daughter and her husband mismanaged the property and left 6 flats vacant. I terminated their management of the property. I have never promised that the building with the nine flats mentioned above would become the property of my daughter Dorothy and/or her children at any time. The property was later sold. ... (My emphasis)

121 Dorothy took issue with her father as to the proceeds of sale of the Coogee Bay Road property. She regarded the property as her inheritance and after its sale she contended that the shares acquired out of the proceeds should be given to her (or to her children). Dorothy’s belief seems to be based on the conversation that she says took place in 1989, after her mother’s death, in which she says her father promised that this property would be hers. Dorothy raised this issue with the deceased in correspondence and, according to the evidence she gave in the witness box, in at least one telephone conversation with her father the year before his death. The deceased denied that he had promised the property to Dorothy and it seems clear, from the correspondence written by the deceased in 2005 and from the reference to this issue in the deceased’s will, that this was an ongoing point of contention between the two.

122 Meanwhile, in late 2004, Dorothy had moved with her husband and children to Queensland. Dorothy says in her affidavit of 11 April 2009 (para 29) that this was because of her father’s “demands” in relation to the decision she and her husband had made as to her sons’ schooling – her father’s dissatisfaction with this, according to Dorothy, being a matter of persistent comment by him. Given the age of her sons at that stage (the younger son then being around 15 and the older son commencing his penultimate year of schooling when the move occurred) it seems hard to believe this could have been the main reason for the move, or, indeed, that the deceased was still by 2004 making “demands” in that regard, although there seems no doubt that he had voiced his disagreement with the decision (the deceased himself acknowledging in his 1998 will that he had protested this decision) and it may well be that he had done so on many occasions. In any event, this was clearly not the sole reason for the move insofar as, both in her affidavit of 24 July 2009 para 28 and in the witness box (T 63.38), Dorothy acknowledged that another reason for the move was that she and her husband could not afford to remain in Sydney. She nevertheless persisted in her denial that the financial reason was the main reason for the move.

123 The seemingly disproportionate emphasis which Dorothy placed on her father’s criticism of her sons’ schooling (“I would have found another one [home] in Sydney had we been able to afford it and if my father had have been more amenable about where my sons went to school” (T 65.17)” – my emphasis), while perhaps indicative of an over-sensitivity on Dorothy’s part to any matter affecting her sons (consistent with her later focus on their activities to the exclusion of any comment about her father’s imminent death, evident from the content of her email to Ralph responding to news that her father’s condition was terminal), does not seem to me to shed much light on her relationship with her father, other than to note that there were ongoing differences of opinion between them and that Dorothy seems to have found that upsetting enough to attribute her move to another state at least partly to those differences.

124 After Dorothy’s move to Queensland (which her father, perhaps displaying a similar self-centredness to that of his daughter, seems to have regarded as a deliberate move to deprive him of contact with his grandsons as per his reference to this in the 1998 will), her contact with her father seems to have been very limited (mainly consisting of exchanges on the occasion of her sons’ birthdays and some telephone calls). Dorothy says that she was unable to afford to travel to Sydney to visit her father (although she seems to have been able to afford to do so on the occasion of her university graduation in 2005). When pressed as to the issue of her visits to her father in the period from 2004, she somewhat defensively said “I had no money to be able to do that even if I wanted to” (T 77.7), by which I did not understand her to be saying that she would not have been motivated to visit her father regularly from Queensland even if she had been able to afford to do so, although the comment might bear such a meaning.

125 By letter dated 22 June 2005, the deceased wrote to Dorothy denying that he had promised her the Coogee Bay Road property and denying that he had promised to invest $1 million from the sale of that property for her. In that letter he commented on his relationship with Dorothy compared to his relationship with Ralph. Of Dorothy, he said “Whilst you were living in Sydney you took them [her sons] to see me only rarely... you moved to Queensland with them so that they can never see me”. Of Ralph, he said “Ralph is collecting all my rents and does some maintenance work and comes to see me every week – should I push him and his children aside for your sake?”

126 The letter went on to say (with some prescience) “You can have dreams and believe that you can set aside my will, but I will take proper care of you and your children in my will and then you can spend your money on solicitors and waste away what I have left for you and your children.”

127 On the one occasion that Dorothy did return to Sydney after her move to Queensland, Dorothy contacted her father by telephone but did not visit him. Dorothy (seemingly being critical of this, although she accepted in cross-examination that this was not a cause for criticism) pointed out that her father had not attended her graduation ceremony (T 72.35) (though he was in his mid 80’s). While the fact that Dorothy was unable to visit her father on that occasion may not be of much significance in the circumstances, the fact that she did not take any steps later to contact her father or anyone else in the family to ascertain her father’s welfare (T 73.15) even though she considered that he had been incoherent and disoriented on the telephone (T 72.35) is of more significance.

128 Even more revealing, insofar as the relationship between them is concerned, was the attitude displayed by Dorothy in her communications with each of Ralph and Daniel just prior to her father’s death – an attitude described by Dr Birch (in my view, with admirable understatement) as one of general indifference.

129 As noted above, the deceased died in May 2006. Shortly before his death, Ralph emailed Dorothy to inform her that her father was in hospital. Although Dorothy initially did not concede that she was informed at that stage of her father’s imminent death, she ultimately accepted in the witness box in effect that the thrust of the message from Ralph was that their father’s condition was terminal and that she appreciated that his condition was serious. Dorothy’s response, by email to Ralph, was in fairly bland terms “That is sad indeed. I hope that all is well as can be. Let us know where so we can send a card directly to him ... He missed William’s 18^th birthday.” (My emphasis). No card was in fact sent by Dorothy, nor was any contact made with him. Dorothy sent an email to Daniel about three quarters of an hour after receipt of Ralph’s email, expressing the hope (rather oddly in the circumstances) that all was well; passing on news of her sons; and giving Daniel her address, with not a word about their dying father.

130 The fact that, when contacted with news that her father was in the terminal stages of cancer, Dorothy’s only response (other than to air an apparent complaint that her father had failed to contact her son the previous month for his birthday) was to ask Ralph where she could send a card (but made no further attempt to ascertain where her father was or to make contact with him) and then to write to Daniel speaking only about her own family and not mentioning the deceased’s terminal condition, seems extraordinary. Thereafter, Dorothy did not make any further attempt to contact her father before he died (in the witness box she seemed to think it was sufficient that she had given Daniel her contact details in her email to him) and, when arrangements were made at Daniel’s expense for her to attend her father’s funeral, held in accordance with Jewish custom within a short time after his death, she complained that she had not been consulted first to arrange convenient flight times.

131 It therefore does not seem to me that Dorothy has demonstrated any particularly close relationship with her father for some years before his death. Rather, Dorothy seems to have had the view that she was entitled to a substantial inheritance from her father but was under no corresponding duty to consider him or his needs. However, and despite the deceased’s complaints in his 1998 will, it does not appear that there was any outright estrangement or hostility between the two, as such (though it seems clear that communications between them caused offence from time to time on one or other side).

132 In Foley v Ellis [2008] NSWCA 288 at [101] the Court of Appeal noted:

The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of the testator or testatrix to provide for the claimant.

133 While it was not suggested (and I do not consider) that Dorothy’s conduct amounts to ‘disentitling conduct’ in the sense referred to by Jordan CJ in Re Gilbert (1946) 46 SR (NSW) 318 at 321, it was submitted by Dr Birch that this is a factor to be taken into account when considering the adequacy of the provision made for Dorothy.

134 In Ford v Simes [2008] NSWSC 1120, at first instance, Macready AsJ (at [89]) referred to what has been said in In Re Hattie [1943] SR (Qld) 1 at 26, namely that “a just father’s moral duty is to assist the lame ducks amongst his offspring, provided they be not morally or otherwise undeserving” (my emphasis). I do not suggest by this that Dorothy (or Ralph for that matter) should be said to be lame ducks (indeed both seem to have provided for their families largely within their means and to be capable of continuing so to do). However, it is instructive that the courts have recognised that conduct of a morally undeserving nature is ordinarily required before a testator is regarded as absolved from what would otherwise be seen as his obligations to his offspring.

135 Reliance was placed by Dr Birch on what was said by Bergin CJ in Eq sitting in the Court of Appeal in Ford v Simes [2009] NSWCA 351 at [71], when considering the effect of estrangement and bad conduct by an applicant towards the deceased:

... in my view it is very important for the maintenance of the integrity of the process in these types of applications that this Court acknowledge once again the entitlement of testators, in certain circumstances, to make no provision for children: Pontifical Society for the Propagation of the Faith & St Charles Seminary: Perth v Scales [1962] HCA 19; (1961) 107 CLR 9. This is particularly so in respect of children who treat their parents callously, by withholding without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility.

136 At [58], the Court of Appeal noted that “acrimony or estrangement does not necessarily destroy the bonds of parental ties” citing Diver v Neal [2009] NSWCA 54 at [27] and observing that it was the underlying reason for the acrimony or estrangement that was relevant to an application under the Family Provision Act (see also Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 at [104]). In Ford, Bergin CJ in Eq (at [59]-[62]) further noted that in Wheatley v Wheatley [2006] NSWCA 262 there had been some explanation for the acrimonious relationship between the testatrix and the claimant and observed that it was there material that the deceased was not entirely blameless in the breakdown of the relationship (at [62]).

137 Here, the question of any blame for the state of the relationship between Dorothy and the deceased is impossible to determine. The factors contributing to it, so far as they can be discerned from the evidence, seem to include Dorothy’s reaction to comments or criticism made by her father as to her sons’ schooling, the physical distance between them once Dorothy’s family moved to Queensland, Dorothy’s financial position which precluded her from travelling back to Sydney other than on one occasion, and perhaps any ongoing resentment by the deceased arising from the circumstances in which a garnishee was sought to be placed on Dorothy’s ‘wages’ or the perceived mismanagement of the Coogee Bay Road property.

138 Most likely to have been the subsisting cause for dissension between father and daughter as at the time of his death, however, seems to have been the sale of the Coogee Bay Road property and the destination of the sale proceeds, to which Dorothy asserted she was entitled. She clearly felt strongly that this property had been promised to her and that the sale proceeds were her inheritance. Her father denied that this was the case. The tone of their correspondence in relation to this issue suggests that it was keenly felt on both sides.

139 There was, nevertheless, still some degree of communication between them in the years leading up to the deceased’s death and the deceased himself appears to have recognised a duty to provide for Dorothy (hence his explanation in the will as to why he had not done so). In the present case, the conduct of Dorothy towards her father (while it smacks of disinterest) does not seem to me to go so far as to evidence callousness or hostility. Further, to the extent the contact between father and daughter was limited and somewhat perfunctory (as it seemed from the material before me to be), it may be fair to say that this was so on both sides of the relationship.

140 My conclusion therefore is that though there was not a very close relationship between the two for a number of years, the situation was not such as to absolve the deceased from any moral obligation to provide for his daughter on his death.

141 That said, when balancing Dorothy’s needs against those of others with a claim on the deceased’s testamentary bounty (in particular, Carol), for the purposes of assessing what would be the proper provision for Dorothy, the apparently distant relationship between Dorothy and her father is a factor to be taken into account.

Carol

142 As to the deceased’s relationship with Carol there is less information. There was evidence that the deceased had taken Carol to Hungary in an attempt to arrange a marriage for Carol, which suggests that at least at that stage the deceased had an incomplete appreciation of the ramifications or extent of her psychiatric illness (or was particularly insensitive to her needs) but this is not necessarily inconsistent with the deceased having a desire (misguided as it may have been) to do what he could to see Carol settled for the future. Ralph suggested that his father had avoided Carol (perhaps not being able to come to terms with her illness). Whatever be the case in that regard, the fact that contact between them may have been limited is not something which, in the circumstances, would tend against the community expectation that the deceased would be concerned to make more than adequate provision for his disabled daughter after his death. The deceased himself seems to have been very conscious of the need to provide for Carol’s ongoing support in view of her illness and her vulnerability to exploitation (see 1998 will, for example).

Conclusion as to first issue

Ralph

143 Ralph’s application is, at least in one sense, the weakest of the three plaintiffs. Not because of any disentitling conduct on Ralph’s part, but because Ralph has had substantial provision made for him under the will (and has had substantial assistance during the deceased’s lifetime in the form of rent-free accommodation and an ongoing income which enabled him to live a lifestyle seemingly ideally suited to Ralph and his wife being able to spend considerable time with each other and their young children).

144 Ralph has security (though not flexibility) of accommodation and an income for life, plus a remainder interest in the Edward Street unit which he holds on trust for Carol. In terms of the overall estate, Ralph has received a benefit comprising somewhere close to half of the net estate (if the deceased’s interest in the share portfolio is excluded), not including the remainder interest in unit 1 at Edward Street.

145 While Ralph has ongoing duties as trustee of the property at Francis Street (of which he was the property manager for nearly 20 years and with which he should be familiar having occupied one of the units there for many years) and the two units at Edward Street, it seems likely that he could attend to those in addition to earning some remuneration (or while undertaking further studies) if he so wished.

146 Ralph has both the capacity to earn a living (albeit that with his current qualifications and experience this might not be at the level of remuneration which he considers should be due to him at this stage of his life) and, according to him, he has the ambition to achieve wealth and success in his life; he is at a stage when his children will soon be at school full time during the week in school terms and thus will not require the level of daily attention he has hitherto been able to give them; and, if it be necessary for him to obtain further qualifications in order to pursue whatever his desired career path may ultimately be, there seems no reason why that could not be achieved (using his own resources and, if so required, supporting himself and his family while so doing by obtaining some form of paid employment to supplement the rental income from Francis Street).

147 It is, quite properly, conceded by Mr Wilson that the Francis Street property provides Ralph with both accommodation and a source of income. However, Mr Wilson submits that, in terms of need, this does not provide flexibility of accommodation (in that it might not in the future be suitable for his family as his children grow older and will not provide a capital base from which to acquire accommodation in a nursing home or similar facility as Ralph ages).

148 Further, it is said that because (having only a life interest) Ralph will not be in a position to borrow on the security if the Francis Street property (at least other than for the borrowings which Ralph himself acknowledges he could make on the security of the income from the units at Francis Street – para 67, affidavit of 13 March 2008), Ralph will have no way of raising capital. It is submitted that Ralph’s lack of capital and inability to adjust his accommodation in the future to meet his differing needs requires the provision of a capital sum to enable him to buy a (second) house, to pay the debts he has and to cover for unexpected contingencies.

149 It is further submitted that if Ralph’s claim for provision in order to enable him to buy a semi-detached home in the Bondi area is declined, then a greater capital sum will be required in order to assist him to pursue the legal career he now considers he might wish to commence.

150 For the executors, it is submitted that Ralph has not demonstrated that the deceased made adequate provision for him as a matter of fact because:

the will provides him with an income from the Francis Street property into the future;

there is no suggestion that Ralph does not have the means to pay off his debts and unpaid taxes or to pay for his children’s schooling or his own future education at a public university;

there is no suggestion that Ralph cannot fund the repairs to Francis Street (and he has acknowledged that he can raise money against the income he receives from the remaining units – paragraph 67 of his 18 March 2008 affidavit);

there has been no substantiation of the sum claimed for future expenses or contingencies;

the loan for the renovation of the Francis Street property remains substantially unpaid.

151 Each of those criticisms has some force, although it seems to me unlikely that the income from Francis Street alone would enable Ralph to fund all of his current debts as well as the private schooling he wishes to provide for his children (and, as to the penultimate point, the very nature of a contingency is that it may not be able to be substantiated in advance). Moreover, the fact that the loan for renovation works (if it has not been forgiven) remains outstanding would surely add to Ralph’s difficulty in meeting his current debts (unless it is suggested that the executors would be prepared to forego repayment of that debt).

152 But for one matter, I think there would be much force in the submission by Dr Birch that Ralph has not demonstrated that the provision under the will was inadequate as a matter of fact (since Ralph has had the benefit of a substantial bequest in his and his children’s favour) and I would have found that that the first stage of the test was not made out in Ralph’s case.

153 The factor which has ultimately led me to conclude in Ralph’s favour on this issue is that the interest he has been given in the Francis Street property is no more than that of a life estate. I accept that this is likely to impose restrictions on Ralph’s ability to make decisions in relation to his and his family’s future accommodation and as to his career. Ralph has no flexibility of accommodation (absent the consent of the holders of the remainder interest in the property or relief from the court) and, although he concedes he is able to borrow on the security of the income from the other two units in Francis Street in order to carry out necessary repairs to the property, it seems to me likely that he may have difficulty raising sufficient funds in order to pursue his business interests or, later in life, to acquire accommodation in a suitable aged care facility. He seems to have immediate cash flow difficulties insofar as he has ongoing credit card debts, which seems to be increasing, although if he were to obtain some form of paid employment (even at a lower level than he would like) that would presumably assist in providing an additional cash flow.

154 While I consider that, at the age of 45, there is still time for Ralph to establish a career and to make provision himself for his future needs, I think the existence of uncertainty as to how he will do so, coupled with the restrictions of the life estate in the property which has been bequeathed to him, is such that the provision made for him under the will was inadequate.

155 Therefore, while it seems to me that this issue was the most finely balanced in Ralph’s case, I find that there was inadequate provision for Ralph as a matter of fact under the will.

Dorothy

156 As for Dorothy, she is 49 with few assets and is presently unemployed, though she has tertiary qualifications and presently completing qualifications to enable her to take up a teaching career. Her husband’s income is not large. She and her husband live in rented accommodation and Dorothy has a HECS debt of $30,000.

157 The will made no provision at all for Dorothy (other than providing her with an income for five years to meet the education expenses of her two children). Instead the deceased gave to her two children a life interest in the net income from Unit 4 in the Edward Street property (or, on the construction of the will which the executors appear to accept, the interest in that property in equal shares).

158 I consider that to make no provision at all for Dorothy (particularly in circumstances where this was a large estate and where the deceased, by his other testamentary dispositions and by the manner in which he explained the gift to her sons, clearly evinced an understanding that he had a moral obligation as a father to make some form of provision for his each of his children) was inadequate as a matter of fact.

159 Insofar as it is suggested that such a finding means that the deceased should not have taken Dorothy at her word regarding her wishes in relation to her inheritance (to adopt the wording of the defendants’ submissions), I think that the community expectation would be that, in the absence (as is the case here) of a fully informed or independently advised disclaimer by Dorothy, the deceased should not have effectively disinherited her (even though, perhaps in a fit of pique, this was what Dorothy seems to have invited him to do). (That said, nor do I accept that provision for Dorothy and her family under the will should, in effect, be inflated simply because the deceased acceded to Dorothy’s expressed wishes as to her inheritance – a matter I consider in due course.)

Carol

160 The clearest case of the three plaintiffs in relation to the inadequacy of provision is that of Carol (as was quite properly conceded in the submissions made for the executors).

161 The provision made under the will for Carol corresponds largely to the provision which had been made for her prior to the deceased’s death. She remains entitled to possession of the premises in which she has resided rent-free for some years and she continues to receive a weekly stipend from David and Daniel, who say that they also meet the council rates, strata fees and water rates for the unit (although the summary of the estate’s net assets suggests these are borne out of the deceased’s estate).

162 The provision of a life tenancy under the will (even with the additional weekly income to be provided as a condition of the bequest made to Suzanna of the quarter share in Denning Real Estate Pty Limited) is clearly inadequate to meet Carol’s future needs. It provides security of accommodation only for so long as Carol is able to live alone and to look after herself (and even then there is a question as to the suitability of the standard of her current accommodation) and does not allow for Carol to receive the kind of day-to-day care which would be most appropriate to monitor her condition and to minimise the incidence of further psychotic disturbances.

163 At 47, Carol has a life expectancy of just over 41 years. There is a clear need on Carol’s part for assistance over the whole of that period.

164 Carol has some limited social contact with friends and with Ralph (who maintains contact with her and has previously been named as her carer when she has been admitted to hospital). Carol has sworn an affidavit in these proceedings in which she said that she would like to be sure that there will always be someone who can help her to look after herself and who can accompany her if she goes somewhere unfamiliar to her. Both Dr Parmegiani and Mr Kennedy-Gould consider that there is a need for Carol to be in a position to employ a companion carer on a regular basis to keep in contact with Carol, to visit and accompany her on outings (and, importantly, to monitor her condition on a regular basis in order to enable early intervention if Carol’s condition deteriorates). Provision is also sought to retain a case manager both to monitor Carol’s condition and to act as her advocate in relation to any dealings which may be necessary in relation to government assistance or the like.

165 The evidence is that as Carol ages her condition is likely to deteriorate and her tolerance to the anti-psychotic medication she must take to manage her condition will be lessened making her symptoms more florid (T 87.23). Mr Kennedy-Gould, who has considerable experience as a social worker in the mental health care area and in managing patients such as Carol, explained with evident concern from a social worker’s perspective the dilemma which those suffering from mental illnesses such as schizophrenia tend to experience in seeking places in government assisted aged care accommodation and the deficiencies he sees in the facilities available for care of people so afflicted as they become older (T 88). In her present situation, Carol would not have the necessary funds to be able to secure privately funded aged care accommodation and would be dependent on the care she could obtain from the health care system and her family’s kindness.

166 As noted, the executors do not cavil with the proposition that the will made inadequate provision for Carol in light of her specific needs. They do, however, make submissions as to the proper provision in order to accommodate those needs and I consider those submissions when I come to the second stage of the Singer v Berghouse test.

(ii)&(iii) Notional Estate

167 Before turning to the second stage of the Singer v Berghouse test, it is necessary to determine whether the estate is to be expanded to include any notional estate.

168 Pursuant to s 23 of the Family Provision Act, if the court is satisfied that an order for provision ought to be made on an application for provision under the Family Provision Act, then there is power (subject to ss 26, 27 and 29) to make an order designating as notional estate of the deceased such property as the court may specify, whether or not that property was the subject of the prescribed transaction. However, the property which may be so designated is “property which is held by, or on trust for, the disponee...”.

169 “Disponee” is defined in s 21 of the Family Provision Act as including, where property becomes held by a person (whether or not as trustee), that person and, where property becomes held subject to a trust, the object of the trust.

170 Relevantly, the requirement to be satisfied under s 22(1)(a), as the first limb of the test for a person to be deemed to enter into a prescribed transaction, is that the person “does, directly or indirectly, or omits to do, any act, as a result of which” property becomes held by another person or subject to a trust (my emphasis). “Property” is defined in very broad terms.

171 Pursuant to s 24 of the Family Provision Act, if the court is satisfied that an order for provision ought to be made on an application for provision under the Family Provision Act and there has been a distribution of the estate within the relevant period then there is power (subject to ss 27 and 29) to make an order designating as notional estate of the deceased such property as the court may specify, whether or not that property was the subject of the distribution. Relevantly, again, the property which may be so designated is “property which is held by, or on trust for, the person ...” (which must be a reference back to the person referred to at the beginning of the section in the phrase “as a result of distribution from the estate property became held by a person”).

172 Section 27(1)(a) of the Family Provision Act requires the court, before making an order in relation to notional estate, to consider (among other things) the importance of not interfering with reasonable expectations in relation to property. In this case, there was no suggestion that any steps have been taken by David or Daniel in relation to any distributed estate in the reasonable expectation that there would be no claim against the estate of their father. In relation to the jointly held assets, while the fact of a joint tenancy may found a reasonable expectation that the property so held would be enjoyed solely and absolutely by the survivor upon the death of the other joint tenant(s) (see Button v Lynch [2002] NSWSC 1148 at [90], per McLaughlin M, as the Associate Justice then was), here no such issue was raised.

173 I have grouped issues (ii) and (iii) together as the principal question in relation to each in this case is broadly the same. The relevant distinction between them on the facts of this case is that, as the deceased’s interest in the jointly held shares passed by way of survivorship to his widow, that interest did not ever form part of his estate and thus does not form part of the distributed estate (and hence any designation of part or all of that interest as notional estate would be governed by s 23 of the Family Provision Act), whereas assets forming part of the deceased’s estate (such as his share in Denning Real Estate or the Denning Street property) but which were distributed within the 18 months after his death form part of the distributed estate and any designation of those assets as notional estate comes within the power conferred by s 24 of the Family Provision Act.

174 As indicated at the outset, the power to designate property as notional estate under s 23 of the Family Provision Act or to designate property which has been distributed as notional estate under s 24 of the Family Provision Act is enlivened only if there has been either a prescribed transaction or a relevant distribution of the estate and the court is satisfied that an order should be made for provision. I am satisfied, in the case of each of the plaintiffs that there has been inadequate provision made under the will as a matter of fact and (as discussed later in these reasons) that an order for provision should be made for each of them.

175 The plaintiffs seek the designation as notional estate of the deceased’s share in Denning Real Estate (valued by the executors at $20,000 but which, if the value of the Alexandria properties is taken into account, would seem to be worth a far greater amount, namely $682,500) and of the share portfolio held by Suzanna by way of the right of survivorship (valued by the executors as at 27 July 2009 at approximately $2,002,324 but which, if valued as at the date of the hearing by reference to the closing share prices for the relevant shares, would be worth an increased amount of somewhere in the order of $2.8 million as indicated in Mr Wilson’s closing submissions).

176 As to the jointly held share portfolio, the failure of the deceased to sever the joint interest in those shares falls within the definition of a prescribed transaction by reason of the operation of section 22(1) of the Family Provision Act (which deems the entry into a prescribed transaction if sub-paragraph (a) is satisfied; and (b) if valuable consideration in money or in money’s worth for the act or omission is not given) and subsection 22(4)(b) of the Family Provision Act (which provides, in effect, that a person is deemed to do or omit to do an act as a result of which property is held by another person or subject to a trust for the purposes of s 22(1)(a) if, holding an interest in property which would, on the person’s death, become, by survivorship be held by another person (whether or not as a trustee) or subject to a trust and the power to exercise a power to prevent this happening that person does not exercise the power before he or she ceases (by reason of death or the occurrence of other event) to be so entitled). Thus, in Cetojevic v Cetojevic [2006] NSWSC 431 at [62], Campbell J held that a failure to sever a joint tenancy is an event which falls within s 22(4)(b).

177 The issue raised on the facts of this case is whether any designation as notional estate of property held by or distributed to Suzanna is available to be made following her death, ie once the initial “disponee” of that property is no longer alive.

178 In Prince v Argue [2002] NSWSC 1217, Macready AsJ heard proceedings involving claims on the estates of two deceased persons who had been husband and wife. The husband’s interest in a jointly owned property had passed by right of survivorship to the wife and it was claimed that there was a prescribed transaction as a result of the failure of the husband to sever the joint tenancy. The “disponee” in relation to that transaction was the wife who had died prior to the commencement of the proceedings.

179 Macready AsJ dismissed the claim, holding that a designating order cannot be made under the Family Provision Act where the relevant property to be designated as notional estate is no longer held by or on trust by the disponee (as was there the case, as the disponee had died). I have been unable to find any authority which has doubted the correctness of that decision. (Although in Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419, an order was made designating property as notional estate notwithstanding the death of the relevant disponee, it seems that the court’s attention was not drawn to the decision in Prince v Argue and the issue was not raised.) The NSW Law Reform Commission noted the import of Prince v Argue when recommending that the legislature enact a provision which, in effect, reverses that result, as it has done in s 82 of the Succession Act 2006 (see Report 110 (2005) – Uniform Succession Laws: Family Provision [paras 3.33 – 3.34]).

180 A liberal approach is to be taken to the question of construction of the Family Provision Act in determining whether a prescribed transaction has occurred (Schaeffer v Schaeffer (1994) 36 NSWLR 315; Kavalee v Burbidge (1998) 43 NSWLR 422) and there is no reason to think that a liberal approach should not equally be adopted in construing the provisions of the Family Provision Act relating to the designation of distributed estate as notional estate. (By way of example as to the approach taken in construing this legislation, Mr Simpson SC noted the broad construction attributed to the definition of ‘property’ in the Family Law Act 1975 (Cth) by the High Court in Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 at [89].)

181 In Minister of Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 1994 at 208, the majority of the High Court, when considering the expression ‘business of an employer’ in s 149(1)(d), which formed part of the succession provisions in the Workplace Relations Act 1996 (Cth), noted that the section must be read in a way that gives effect, so far as possible, to its legislative purpose but emphasised the need to consider the words of the section when seeking to discern the legislative purpose:

It is only if some a priori assumption is made about the intended reach of the provision that considering its purpose casts light on the question [that being how far the extension of the operation of awards went beyond those party to the dispute in question]. To reason in that way begs the question. Rather, it is necessary to consider the words of the provision. It is there that the intended reach of the legislation is to be discerned.

182 In Kavalee v Burbidge, (at 443) Mason P (with whom Meagher JA agreed) noted that the legislative scheme underlying the notional estate provisions was beneficial to applicants and restrictive of the property rights of disponees, stating that:

“Prescribed transaction” is defined in s.22. It is obvious that the legislature has cast the net very wide, in pursuit of its goal of providing adequate provision in favour of eligible persons. As beneficial legislation, a liberal approach to construction is called for, notwithstanding the obvious impact of a designating order upon existing property rights’

183 However, his Honour went on to say that:

... the ability to choose a construction which promotes the purpose of extending the powers of the Court to the full range of benefits and advantages controlled by testators exists only ‘in so far as any question of construction presents a choice’

184 Here, the issue as framed by Mr Simpson is whether “disponee”, on its proper construction in s 23 (or “the person” in s 24) is limited to the first recipient of the property in question. It is said that if that is the case then David and Daniel, as beneficiaries of Suzanna’s estate, take the interest formerly held by the deceased in the share portfolio shorn of the prospective liability that this may be designated (in whole or in part) as notional estate, such that her estate is enlarged for the benefit of her beneficiaries and the deceased’s estate is diminished to the detriment of his beneficiaries.

185 It is further said for the plaintiffs, in advocating a construction contrary to that applied in Prince v Argue, that a construction limiting the application of the sections to the first recipient would have the result that in any Family Provision Act proceeding where a claim is made for property to be designated as notional estate there would be a risk until the date of judgment that an otherwise valid claim might fail (if the recipient of the property the subject of the prescribed transaction were to die before then). I accept that the uncertainty inherent in such a case would be undesirable. However, that of itself does not warrant the construction for which the plaintiffs contend.

186 In Kavalee, Mason P held that, when considering the question whether the deceased, directly or indirectly, did or omitted to do something ‘as a result of’ which property becomes held by another person, that act or omission need not be the operative cause of the property becoming held by that other person; it would suffice if the act was “a” cause even if not the sole cause (at 446). Mason P noted (at 443) that the definition of prescribed transaction used the expression “as a result” not “as the result”, and that the link may be direct or indirect. Therefore, the act or omission need not be the sole (or direct) operative cause of the property becoming held by the relevant disponee or person, it must be a cause.

187 Even affording the words “as a result” a liberal operation, the construction for which the plaintiffs contend would seem to stretch the causal link required by those words. In Kavalee, it was noted by Mason P (at 447-446) that the question of causation in fact was one upon which minds may differ. His Honour noted that the legislation was clearly intended to operate in the context of human agents where several may have to act in concert and where there is the possibility that one may not co-operate (at 446). In that case, the expert evidence established that a particular by-law had given rise to enforceable rights, such that the deceased had the legal capacity to compel a particular disposition to be made by a third party holding the relevant property, which was said by the majority to be sufficient to establish the causal link. His Honour expressly adopted a “looser approach” to the factual issue of causation (at 446-447). He referred to examples given by Handley JA, including the situation where a husband requests his wife to make a disposition of property which is acted upon (Handley JA, at 460). Mason P contrasted this example with the facts in Kavalee, where the deceased had a legal capacity to compel the third party to make the disposition and considered that if that capacity existed then a finding of causation was open (at 447).

188 It seems to me that the facts in Kavalee can be distinguished from the situation in this case, where the deceased did not have any legal capacity to compel Suzanna or the trustees of Suzanna’s estate to make any further dispositions in relation to property which passed or was distributed to her on his death. Absent any legal capacity to compel a disposition, it is difficult to see how there was any act or omission on the part of the deceased which was a relevant cause of the dispositions of property from Suzanna’s estate under her own will.

189 The wording of section 23 makes it clear that, relevantly, the court’s power to designate property as notional estate arises only in respect of property held by a person “as a result of” a particular act or omission of the deceased. It does not seem to me that the section can readily be construed as applying to property held by a subsequent person as a result of a separate or further act or omission made not by the deceased but by the person to whom the property in question initially passed.

190 Tested by reference to the facts in this case, assume for present purposes that the deceased’s interest in the jointly declared shares would have fallen within the definition of prescribed transaction (and the shares held by Suzanna could have been declared notional estate) were she still alive. Had Suzanna sold those shares to a third party in the interim, would that third party be a person holding the shares as a result of the failure of the deceased to sever the joint tenancy? True it is that, but for the fact that the deceased had failed to sever the joint tenancy, his interest in those shares would not have passed on his death to Suzanna and thus would be able to be transferred by her, but it is hard to see the deceased’s omission as a relevant cause of the third party acquiring the shares. The intervening act by Suzanna is what, from a common sense point of view, has caused (and is the only relevant cause of) the shares to become held by that person, on the example I have given.

191 Therefore, while I accept that the definition of ‘disponee’ in s 23 is not in its terms limited to the first recipient of the property in question, it seems to me that the definition of prescribed transaction, by requiring a relevant causal link between the act or omission and the holding of the property, has that effect in this case. Similarly, the reference in s 24 to property becoming held by a person was a result of a distribution from the estate, operates to the same effect in this case to preclude reliance on s 24 in respect of the property distributed to Suzanna.

192 I note that Dr Birch submitted that, were the result to be otherwise, this would expose third parties to the prospect of being embroiled in litigation simply by reason of having acquired property from a deceased estate and that such persons (even if, as Mr Simpson notes, able to raise a defence based on the requirement that the court have regard to the need not to interfere with reasonable expectations in relation to the holding of property) should not be exposed to the cost of having to mount a defence to such a claim in the first place.

193 I am of the opinion that the construction adopted by Macready AsJ in Prince v Argue is correct and that, for there to be a designation of property as notional estate for the purposes of s 23 of the Family Provision Act, it is necessary that the property the subject of the prescribed transaction, must remain held by or for the benefit of the person first receiving the property as a result of the prescribed transaction in question (at least unless there are successive transactions so intertwined that the first transaction involving the act or omission of the deceased or distribution of his or her estate can be said to be a cause of the property so being held for on behalf of that subsequent person). That is not the case here. Similar logic applies to s 24 of the Family Provision Act and this the power to declare distributed estate as notional estate will ordinarily subsist only while the distributed estate is in the hands of the party to whom it was first distributed.

194 This has the effect that the deceased’s interest in the share portfolio which he jointly owned with Suzanna is not open to be designated as notional estate nor is that part of the deceased’s estate (the Denning Real Estate share) which was distributed to Suzanna. (Although it was suggested, in passing during argument, that property held by Suzanna’s trustees under her will might still be said to be held by her, this would require an extended reading of “disponee” to include the disponee’s successors, and no authority was cited for that proposition.) Further, the property has since been distributed by Suzanna’s trustees, David and Daniel, and it is by no means clear that any claim could be brought against them in their personal capacity for premature distribution of their mother’s estate by reference to a claim of which they were, at the time, on notice in respect of their father’s estate only – nor was any such claim pleaded.

195 What is open to be designated as notional estate is any part of the deceased’s estate which has been distributed to David or Daniel. (Dr Birch in effect acknowledged that any provision to be made for the plaintiffs, unless made by variation of the testamentary trusts in favour of them or their children, will necessarily have to be borne out of the provision made for David and Daniel under the will since there is no other available estate from which provision can be made.)

196 I am of the view that, to the extent that an order for provision ought to be made out of the deceased’s estate in favour of Ralph, Dorothy and Carol beyond the provision which it would be open to make by way of a variation of the respective testamentary trusts in their favour, there should be designated as notional estate the property distributed to David and Daniel out of the deceased’s estate.

197 In essence, this means that the property available to be designated as notional estate would be the proceeds of sale of the Denning Street property (in the order of $2.68 million). In circumstances where David and Daniel were on notice at the time of the sale of the Denning Street property of the claims made by the plaintiffs for provision out of their father’s estate, and the evidence that it remains open to David and Daniel to draw down upon their account for the funds representing the proceeds of sale of that property, there is no suggestion that this would interfere with any reasonable expectations in relation to the property and they have had the benefit of generous provision under their mother’s estate (which includes the benefit of her interest in the share portfolio), I think it appropriate that the full amount of the Denning Street property be designated for that purpose.

(iv) What is the proper provision to be made for each of Ralph, Dorothy and Carol?

198 Having found, as a matter of fact, that there was inadequate provision for each of the plaintiffs under the will, the second stage of the test in Singer v Berghouse requires the making of a holistic and multi-faceted judgment of an evaluative kind as to the proper provision to be made for them (Kalmar v Kalmar [2006] NSWSC 437 at [67] per White J; Foley v Ellis at [3] per Basten JA). Before considering the factors to which regard is to be had on the second stage of the test, I summarise the claims for provision that have been made by each of the plaintiffs.

Claims made by the plaintiffs for provision

Ralph

199 Ralph’s claim for provision is made in the alternative. His primary claim on the estate is for a substantial deposit to enable him to purchase a semi-detached home in the Bondi area (for about $1.2 million), accepting that credit should be given for any money that he can borrow from the bank on the basis of the rental income from the Francis Street property, together with the following additional sums of $118,573 to pay his credit card debts, car loan and tax liabilities; $97,908.25 for the repairs he says are necessary to the Francis Street property; a contingency sum (or nest egg) of $150,000; the sum of $25,000 for him to replace his motor vehicle; plus $200,000 to enable the private school education of his two young children.

200 In relation to his children, Ralph’s evidence is that his father and Suzanna had planned to pay for him to send his sons to private schools for their education (para 53, affidavit 13 March 2008). (Ralph’s affidavit points out that, while he and his sisters went to public schools, his half brothers had a private school education.) Ralph’s children are in good health and seem to have no special physical or educational needs.

201 Alternatively, it is said that if the court is not minded to allow for a substantial deposit to acquire what would be, in effect, a second home for Ralph’s benefit, Ralph seeks not only the abovementioned amounts but also an increase in the contingency sum from $150,000 to $500,000 having regard, among other things, to his desire to undertake a law degree. In all, Ralph’s alternative claim totals $941,481 out of his father’s estate.

202 Dr Birch submits that if the court finds that there has been inadequate provision for Ralph then the proper order for provision would be effected by re-writing the testamentary trust to permit the Francis Street property to be sold and to allow Ralph all or the substantial portion of the proceeds. It is suggested that a sum could be reserved out of the proceeds to pay for the education of his children.

203 It is submitted that it is appropriate that the burden of any further provision for Ralph should be borne out of the interest given to his children because they are young, their interest is unlikely to vest in possession for a considerable time assuming Ralph lives to a normal life expectancy, they were owed no special obligation by the deceased and are not eligible persons to bring an application for provision under the Family Provision Act, their needs are fully provided for by their parents (who it is not suggested are other than good parents, and are likely, it is said, to inherit in due course from their parents.

204 I should note that the minor children of Ralph and his wife Nicola were joined as parties to these proceedings, by their mother as tutor, shortly prior to the commencement of the hearing. Mr Wilson, at a pre-trial directions hearing had raised a question as to the interests of the minor beneficiaries insofar as it was perceived the executors might seek to take (as they have indeed taken) the stance that any order for further provision for Ralph should be borne out of the interests given to his sons under the will. I expressed concern that the minor beneficiaries should in those circumstances be represented. In the event, Mr Wilson appeared also on their behalf.

205 Mr Wilson, acting on instructions from Ralph, made it very clear that Ralph was not seeking an order for provision out of the interest left to his children under the will. I was informed that Ralph was concerned that such an order would destroy the family harmony. Frankly, given the very young age of Ralph’s children, I can only see that family harmony would be ‘destroyed’ at this stage (by any re-writing of the testamentary trust, as suggested by the executors) if the children’s parents encouraged such a situation to arise. Ralph’s children are 5 and 7 respectively. I find it hard to believe they are in a position to have formed strong (or indeed any) views as to the value of their remainder interest in the Francis Street property or the ramifications of it being dealt with otherwise than as provided for under the will. I accept that an issue might potentially arise in the future if they felt they had been deprived at the suit of their father of a life interest in the property. This could surely be dealt with by preserving the present day value of their life estate in trust for them.

206 Given the extensive nature of Ralph’s initial ‘wish list’ for provision out of the estate, I am inclined to think that the real motivation behind his desire not to disturb the existing testamentary trust is to increase the overall provision in favour of his family. Nevertheless, this was not put to Ralph and his motivation behind this claim is not in any event relevant to the factors which I have taken into account in considering the question as to what the community would expect by way of the proper provision to be made for him.

207 Insofar as Ralph’s credit card debts are concerned, Dr Birch submitted that no evidence had been adduced as to those. In Nicholls v Hall (at [36]) it was said that where an applicant has not led satisfactory evidence about his or her financial situation the court cannot resolve any uncertainty left by that situation in favour of the person who has failed to give the satisfactory evidence. Ralph gave brief evidence about his debts in his affidavit. In the event, it is unnecessary for me to express a view on this issue, given my overall conclusion in relation to the proper provision to be made for Ralph.

Dorothy

208 As for Dorothy, her claim on the estate was quantified by reference to her HECS debt ($30,000), desire to purchase a home in Queensland ($540,000 - $660,000), desire to purchase a replacement car ($40,000) and home furnishings ($20,000) and a contingency sum of $150,000, together with provision for education of her sons ($58,000) (the last being a somewhat surprising claim when the will expressly makes provision for this, by way of direction for the income from Unit 4 at Edward Street unit for this very purpose over the next 5 years).

209 Again, Dr Birch submits that if provision were to be made for Dorothy the appropriate course would be to alter the terms of the testamentary trust in order to enable the unit at Edward Street to be sold and the proceeds made available to her, with some money put aside for the education of her children. As noted earlier, Dorothy’s children were joined as parties to the proceedings and were also represented by Mr Wilson. They swore affidavits deposing as to their respective financial positions. Both are completely dependent on their parents (although there is no suggestion that they would be incapable of earning some form of income while continuing their studies, if that were to become necessary). Their immediate needs relate to the ongoing cost of their tertiary/postgraduate education and their maintenance while studying full-time.

210 For Dorothy, it is similarly submitted that there should be no interference with the gifts made to her sons under the will although it was not suggested by her sons that any such interference would be at the price of family harmony.

Carol

211 Turning then to Carol, provision is sought to enable Carol to acquire a suitable residence in the area with which she is familiar (Bondi) (or, alternatively, to renovate her current accommodation), the cost of providing a modest level of furnishings and household items for her use; funds sufficient to meet the cost of the care and medical attention as her condition may require; costs associated with the management by the NSW Trustee and Guardian of the funds made available for her provision; a sum to supplement her pension of the kind contained in the will but capitalised to address any uncertainty which might otherwise exist; and a contingency fund. These are costed as follows:

(a) acquisition of a house (between $550,000 and $650,000 but say $585,000) plus stamp duty and legal expenses of the sale (estimated at up to $28,000 in total);

(b) relocation expenses ($2,000);

(c) body corporate rates (capitalised at $79,426);

(d) furnishings etc ($17,141);

(e) funds for medical care – costs of companion carer 2 hours per day capitalised on the basis of a 41 year life expectancy ($716,315); costs of a case manager one hour per week similarly capitalised ($185,985), costs of a clinician again capitalised ($14,258), totalling $916,558);

(f) costs of management by NSW Trustee and Guardian (charged as a percentage on the value of assets and gross income on a sliding scale);

(g) supplement to pension ($200 capitalised per week - $247,980); and

(h) contingency sum ($125,000).

212 In all, on my calculations it would seem that the claim is quantified at around $2 million, leaving aside the costs of management by the NSW Trustee and Guardian of any such fund.

213 In Foster v Lisle [2003] NSWSC 1243 (at [56]-[58]), Young J observed that it is no answer to a claim of this kind that the defendant is entitled to a pension, but that a wise and just testator would take into account such income received by the defendant. Mr Simpson submits that I should not take into account (by way of any reduction of the provision to be made for Carol) the impact of such provision on the benefits or social security entitlements which might otherwise be available to Carol.

214 The executors quite properly accept that there is a reasonable basis for a claim for further provision in favour of Carol. However, they raise issues as to the quantum of such provision in a number of respects.

215 First, they note that Mr Kennedy-Gould, the social worker who gave evidence in the proceedings, when asked by me what would be his recommendation as between the alternative options of moving to new premises and remaining in her existing premises to be renovated as necessary, leant towards Carol’s preference which he said was not to move.

216 Evidence was adduced for the executors by a qualified builder as to the potential cost of renovation of Carol’s unit. They made no submissions as to the claim for furnishings or any relocation expenses.

217 Secondly, they raise an issue as to the cost of a companion carer. Mr Kennedy-Gould, in his first report, recommended a carer for 8 hours per week (on the basis that contact could some days be made by telephone) but in his second report he increased this to 2 hours per day (14 hours per week). Dr Parmagiani, the consultant psychiatrist retained as a joint expert, expressed the view that the 8 hour per week recommendation was reasonable. He had both reports before him but had not been asked to express an opinion on that particular issue and it is not clear that he was expressing a view that 14 hours per week would not also be reasonable nor did he give any reason for preferring the lower level of care.

218 Thirdly, it was submitted that the terms of the trust in relation to any real estate in which Carol is housed should be altered so that it may be sold and the proceeds used to fund a bond for a nursing home and additional care. This, it was said, would have the result that the need for a single capital sum would be reduced in quantum.

219 Fourthly, insofar as the calculation of a single capital sum is concerned, the defendants submit that instead of using the 3% tables (on which Carol’s calculations are based) the 5% tables should be used. It is said that this is appropriate in circumstances where the lump sum amount claimed for future care does not provide any reduction for future contingencies, which of itself greatly inflates the final present value lump sum figure. It is noted that in Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402, the High Court, in setting out the rule for the calculation of lump sum damages claims for loss of earning capacity in personal injury cases, made it clear that there must be a reduction for contingencies before the application of the 3% tables. Further, it is noted that the Civil Liability Act 2002 (NSW) now makes provision for the 5% tables in lump sum damages claims (s 14(2)(b)). It was submitted that if the fund were placed in the care of the Trustee and Guardian then this would produce the rates of return that would make the 5% tables the appropriate ones. (By way of example as to the difference between the two, on the executors’ calculations if the lesser number of hours were adopted, and the 5% tables utilised, it is said that the cost of medical provision is achieved by a lump sum of $460,000; if 3% tables are used the lump sum on the reduced hours would be $630,000.)

220 Fifthly, it is said that there is no need for the capitalisation of the pension supplement (as the defendants both acknowledge an obligation to make such payments under the will and it is highly improbable that both would be rendered incapable of meeting that obligation in the future); nor is there any need for the contingency insofar as Carol has the acknowledged support of Ralph and the defendants and also any buffer in the capital produced if the terms of the trust in respect of Carol’s unit are altered.

221 Finally, it is submitted that any trusts for Carol should provide a remainder for the beneficiaries from whose share of the estate the fund was sourced. In that regard it is suggested that consideration should be given as to whether contribution should also be sought from the property distributed to Ralph and his children.

222 In response to the above, Mr Simpson emphasised that what the Family Provision Act requires is an assessment of the “proper” provision for an applicant for whom inadequate provision was made (not an assessment of what might be the compensation to be awarded in a personal injury case).

223 With the various claims for provision in mind, I turn to the factors to be taken into account on the second stage of the Singer v Berghouse test:

Contribution by the applicants to the property and welfare of the deceased

Ralph

224 Much weight was placed by Mr Wilson on the length of time during which Ralph made contribution to his father’s estate by acting as his (in Ralph’s view underpaid) property manager and as to the promises made by his father as to Francis Street (which I consider in due course).

225 I have referred above to the paid contribution made by Ralph, as property manager from 1990 onwards, to the property and welfare of the deceased (and to the unpaid contribution he made before then to assist his father in the collection of rents/repairs to his father’s properties) and to his contribution as a child in assisting his father in relation to the units owned by his father.) Ralph says that he saved his father ‘a fortune’ by his work in relation to the properties (see paras 9 and 23, affidavit 13 March 2008) and put his own career in property development ‘on hold’ in order to provide property management services for his father (in the expectation encouraged by his father that he would be given the Francis Street property during his father’s lifetime).

226 I accept that there may be some overstatement in relation to Ralph’s contribution, particularly in the early years, when it would seem this work overlaps with the assistance which Dorothy says she also provided around that time. (Dorothy, for her part, says she never saw Ralph physically doing any work – he just told her about it.)

227 Ralph was cross-examined as to the level of effort and time that he suggested was required, from which it seems apparent that in his affidavit evidence he has exaggerated both the time commitment actually involved and the dangers inherent in that work). However, on any view it seems likely that had Ralph not performed those property management services for his father from at least 1990 then it would have been necessary (particularly during the deceased’s later years) for the deceased to retain someone else to do so at a cost to the deceased. The deceased’s will expressly acknowledged Ralph’s contribution in this regard, as had the deceased in his correspondence with Dorothy.

228 In particular, I note that the deceased expressed his bequest in relation to the Francis Street property as a reward for Ralph undertaking the role of managing the deceased’s properties. Even if, as Ralph seems to have interpreted this, his father was intending this as a reward for imposing on him the burden (which Ralph considers onerous) of continuing to manage the properties (or being, in Ralph’s words, a ‘caretaker’) after the deceased’s death, it is also (as I read it) a clear recognition of Ralph’s past services in that regard. That recognition has been reflected in the bequest to Ralph and his family of the lion’s share of those properties which were distributed among his children. Of the five children, Ralph (with his family) received by far the most generous bequest under the will of all the deceased’s children (including David and Daniel, against whom Ralph tends to compare his position). Insofar as Ralph complains of any disproportion in that regard, his complaint in essence seems to be that he received no share ultimately of what Suzanna was herself left under the deceased’s will.

229 While on one view it might be said that Ralph has already received a measure of recompense for his service (and provision during his lifetime) in the form of rent-free accommodation and an income both from the Francis Street property and from his father (and that he made a conscious decision to adopt the family-oriented lifestyle which he did), I accept that in the provision of those services to his father, Ralph made a long term contribution to his father’s estate. It was a contribution which I can only assume his father considered satisfactory on the whole (notwithstanding his criticism of Ralph’s failure to effect repairs to the railing at Francis Street) since, had he not, there seems little doubt that he would have stepped in to remove the property management role from Ralph (as he did in the case of Dorothy’s management of the Coogee Bay Road property).

230 I accept that Ralph made a material contribution over a long period of time to the assets and estate of the deceased in that capacity. The fact that it may have suited him to do so (whether for work/life balance reasons or in the hope that his father might eventually transfer Francis Street to him) does not negate that contribution. However, of itself Ralph’s contribution does not take the matter much further in light of the substantial provision already made for him under the will.

231 I consider later the import of the promises said to have been made by the deceased to Ralph.

Dorothy

232 There is little evidence of any significant contribution by Dorothy over the relevant period to the deceased’s assets (the only substantial contribution in the property management area – that in relation to the Coogee Bay Road property - being an unsatisfactory episode from all accounts) and she did not appear overly concerned either to keep in contact with the deceased in the final years of his life or to assist in his welfare.

233 Dorothy’s evidence was that, both as a child and later when she was still living at home, she assisted her father in the management of his rental properties by showing tenants through the other Francis Street unit (T 56) and (somewhat surprisingly for someone so young) writing receipts for deposits on the rental of the unit. Later, Dorothy says that she warded off a potential threat to her father’s safety when he was collecting rents on one occasion.

234 Dorothy also claims that she provided assistance to her mother after the deceased left the family home. Although commendable, there is nothing to suggest that by so doing she saved the deceased expense which he would otherwise have incurred and hence no basis for assuming that by so doing she enabled the deceased to build up his estate.

235 Overall, it seems to me that Dorothy’s contribution to the deceased’s estate was relatively minor and her attitude towards him could best be described as indifferent.

Carol

236 Carol’s contribution to the assets and estate of the deceased was at best small, and more likely non-existent, over the years but this is hardly something for which she can be criticised given her undisputed medical condition over the past 20 or more years. The deceased clearly considered he had an obligation to provide for Carol (as, to her credit, did Suzanna – having regard to the provision she made for Carol’s ongoing support in her own will).

Character and conduct of the applicants in relation to the deceased.

237 I have considered this above. I accept that Ralph had a reasonably close working relationship with his father even if he was not overly attentive in the deceased’s final hours. I consider that Dorothy’s relationship was not close but that her conduct was not sufficient to amount to disentitling conduct. Carol’s relationship with the deceased seems to have been affected by her mental condition and, perhaps, his difficulty in accepting or understanding the extent of her illness (illustrated by his attempt to arrange a marriage for her).

Circumstances before and after the death of the deceased including the extent of claims of other persons on the estate of the deceased.

Competing claims of David and Daniel

238 Obviously, David and Daniel are the principal persons with competing claims on the deceased’s testamentary bounty. (None of the grandchildren would ordinarily be seen to have a claim on the deceased’s bounty.) Both are well educated (indeed Daniel’s affidavit has stressed his capabilities) and both have substantial personal wealth, although the precise details of their respective financial positions were somewhat difficult to pin down and neither was able to express an opinion as to his present personal worth. (The fact that neither David nor Daniel had turned his mind to the quantum of his personal wealth is suggestive of a greater level of comfort in that regard than that enjoyed by at least Dorothy and Carol, and, to a lesser degree, Ralph.)

239 David is a practising lawyer living in Tel Aviv with his wife and two children. He has an apartment in Jerusalem (the existence of which was not disclosed until his final affidavit, sworn on 11 December 2009 after he arrived in Sydney for the commencement of the hearing) acquired with funds in the sum of US$270,000 provided by his father and mother. He has not only had the benefit of the distributions made from his father’s estate but also a half share of his mother’s not inconsiderable estate. He and his wife earn approximately $4,250 per month (which income is largely expended on family expenses) and have savings of $37,800.

240 Daniel, as at February 2009, was unemployed and concentrating on the completion of studies in an Executive Masters degree in Business Administration run through the Australian Graduate School of Management. He is a graduate of NIDA and has deposed to being the youngest person to be admitted to the Australian Graduate School of Management. Like David, he shared in the distribution of his mother’s estate. He lives in the Oceanview Avenue property (valued at $2 million), which is held on trust for David and him jointly. (He expended a considerable sum to add an additional storey to that property some time ago.) Daniel is due to be married this year. His fiancé is a teacher (T 196.22). He has allocated $50,000 to the completion of his studies and $160,000 for his wedding. He also has surgery scheduled or proposed for this year.

241 There was evidence as to a contingent amount which might become payable by David and Daniel in respect of property damage to one of their father’s properties for which an insurance claim might lie – the prospects of David/Daniel having to bear those costs personally seemed, however, to be low when there seemed to be no basis for a concern that insurance would be denied.

242 Daniel’s business interests include a shareholding in a company incorporated in 2009 as a resource entity (Greenfields Energy Pty Limited). Little information was able to be gained about this company, as Daniel was surprisingly not in possession or control of much in the way of company documentation (notwithstanding that the company’s registered office is Daniel’s home) and said there were no minutes of any discussions of directors in relation to the company. It would seem, from Daniel’s evidence, that although the company has already (albeit unsuccessfully) made application for government funds, it has no business plan. (I can only assume that the directors proposed to prepare a business plan in a hurry if their application for funding had been successful.) Daniel’s evidence was that the company has no present business plans.

243 Although much of the assets of David and Daniel are said to be held on various trusts, these arrangements seem largely to have materialised without any formal documentation (other than the will itself in the case of the testamentary trusts) (and contrary, I must say, to what the financial statements produced in court would themselves seem to suggest – a matter I raised during the hearing but for which there was no explanation). For the brothers to know so little about how the trusts and their financial affairs are structured, seems to be rather surprising since David is a lawyer and Daniel claims to be one of the youngest graduates admitted to the AGSM to study business management.

244 There was criticism by the plaintiffs’ respective Counsel of the incompleteness of financial information provided by each of David and Daniel in answer to notices to produce served on them or in compliance with their discovery obligations, particularly in the case of Daniel as to his compliance with the requirement to produce documents in relation to companies of which he is a director (such as Greenfields Energy and Denning Real Estate).

245 In that regard I am not satisfied that the criticism of the non-production of documents in the possession of third parties (such as any documents held by Greenfields, Denning Real Estate or the Sekers group companies) has been sustained. The weight of authority suggests that the obligation to give discovery does not extend to making requests of those entities even for documents which they would likely produce on request and that it extends only to documents which the discovering party has a presently enforceable legal right (or perhaps an actual and immediate ability) to obtain for inspection.

246 Therefore, in the case of documents in the possession of companies of which Daniel is a director but not in his own possession, the question would be whether he had a presently enforceable legal right to obtain those documents for inspection.

247 In Palmdale Insurance Limited (in liq.) v L Grollo & Co Pty Limited [1987] VicRp 8; [1987] VR 113, Marks J (lighting something of a controversy) suggested that a party’s discovery obligation extended to making requests for documents no longer in that party’s possession and expressed the view that the full reach of the word ‘power’ in the expression ‘possession, custody or power’ had not been settled by what had been said by Lord Diplock in Lonrho Limited v Shell Petroleum Co Limited [1980] 1 WLR 627 at 636 (namely, that in the absence of a presently enforceable rights there was nothing in the court rules for discovery to compel a party to take steps that would enable that party to acquire such a right in the future).

248 Marks J noted that in Lonrho, his Lordship had expressly declined to consider more generally the law of discovery, confining his comments to the special facts of the case before him. Lord Diplock said at 636-637, “In particular, I say nothing about one man companies in which a natural person and/or his nominees are the sole shareholders and directors. It may be that, depending upon their own particular facts, different considerations may apply to these.” (I note, in passing, that even if it were to be the case that different considerations should apply to one man companies that would not change the position viz-a-viz any obligation on Daniel to discover documents in the possession of Greenfields, in which Daniel is only one of three shareholders and directors, and it could not be said this was a one man company or that the remaining directors were his nominees.)

249 The issue has arisen not uncommonly in cases where it is suggested that a subsidiary company is obliged to give documents held by its parent company or vice versa. In Taylor v Santos Limited (1998) 71 SASR 434 at 437-8, Doyle CJ, with whom Prior J agreed, quoted the relevant passage from Lonrho and said that he did not agree that what Lord Diplock had said should be treated as stating exhaustively the content of the expression ‘power’ in the relevant court rule. His Honour said:

In my opinion the court should be cautious in extending the concept of power beyond the concept of a presently enforceable legal right, even though it may be appropriate to do so. Reading r 58 as a whole, my view is that the obligation to discover a document is limited to a document that the person in question has the legal power or (I can think of no better expression) actual and immediate ability to inspect, even though the document is the property of or is held by another person. ... in my opinion, the obligation to discover hinges upon having a right or actual and immediate ability to examine the document. A person does not have that right or actual immediate ability if the person is able to inspect the document only if a third person, who has control of the document, agrees to permit inspection, or agrees to refrain from so exercising that person’s control as to prevent inspection...

The point I wish to emphasise is that to the extent that the concept of power extends beyond a presently enforceable legal right, it should be held to so extend only when the court can say that the person in question does have the actual immediate ability to inspect the document. Otherwise, I consider, the law would place an impossible obligation upon a party. I consider that the cautious extension which I contemplate was the sort of thing that Lord Diplock had in mind in the second of the excerpts from his speech.

250 I note that in Brookfield v Yevad Products Pty Limited [2004] FCA 1164, Lander J, dealing with an application to set aside a judgment on the ground, inter alia, that discovery had been fraudulently withheld, emphasised that the integrity of the discovery process must be maintained, referring at [367] to what was said by the Master of the Rolls in Davies v Eli Lilly & Co [1987] 1 All ER 801 at 804, namely that “litigation is not a war or even a game. It is designed to do real justice between the parties and, if the court does not have all the relevant information, it cannot achieve this object.” Lander J considered it essential for the administration of justice that the parties’ legal advisers properly instruct their clients as to their responsibilities in the discovery process, noting that in many ways the process was dependent upon the honesty of the parties and their legal advisers at [369].

251 As a director of, say, Greenfields, would Daniel have had a presently enforceable right to call for and inspect the documents in question? He clearly has power under s 198F(1) of the Corporations Act 2001 (Cth) to seek access to the books of the company for the purpose of legal proceedings but it was submitted by Dr Birch that this power could be exercised only for legitimate company purposes (and that compliance with Daniel’s personal discovery obligations in litigation to which he was a party as executor and in a capacity unconnected with the company’s business or affairs was not such a purpose).

252 In Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846, per Emmett J (at [25]) (whose reasoning was applied by Newnes M in Tan & Ors v St George Bank Ltd & Ors [2005] WASC 143), applying Hardcastle to section 198F(1), (at [46] – [47]), observed that a possible limitation on s 198F(2) is that it may be confined to legal proceedings which arise in the director’s capacity as director of the company. His Honour said:

A second possible limitation on the operation of s 188F(2) [sic] is that the proceeding must be a proceeding to which the former director is a party or believes might be brought against him or her or which he or she proposes to bring in his or her capacity as a director of the company. It would be curious if a person who, fortuitously, happened to have been a director of a company in the past would be entitled to access to books of the company that might be material to proceedings brought by that former director or which might be brought against the former director in a capacity totally unconnected with the capacity of the former director as a director. I do not express any firm or final view on that question at this stage because it does not arise in the application before me. Section 1303 authorises intervention by the Court where a person in contravention of the law refuses to permit inspection. [original emphasis]

For the reasons I have just indicated, I do not consider that the mere fact that a proceeding has been commenced entitles a former director to inspect all of the books of a company.

253 In Tan, Master Newnes, found that s 198F(1) does not mean that a director has company documents in his or her “power or possession of a company director” for the purposes of discovery (at [47]) saying: at [46] – [47];

I was not referred to any authority which supported the contention that s 198F gave a right of inspection in circumstances such as the present. Indeed, it seems that the effect of s198F has received very little judicial attention in that respect.

[After noting the judgment in Hardcastle, Newnes M went on to say...]

The curious result referred to by Emmett J applies, in my view, with equal force to s 198F(1). It tends strongly to point to the conclusion that no such right was intended and when regard is also had to the Explanatory Memorandum is, I think, sufficiently clear that the purpose of s 198F was not to give access to directors or former directors for purposes unconnected with a liability or claim arising out of their capacity as a director. It was to overcome the limitation at common law that access must be for the purposes of the company, which, to adopt the example given in the Explanatory Memorandum, made it difficult for a director or former director who was sued by the company to get access to the company's records for the purpose of those proceedings. I do not, therefore, accept that s 198F has the effect contended for by counsel for the plaintiffs.

254 Some commentators have, suggested that, in the absence of an express limitation in the text of section 198F, there is no requirement that proceedings be related to the director’s capacity as a director and that a director will have a right under 198F to have access to “the books of the company”, for the purposes of a legal proceeding, regardless of whether the director is acting in the interests of the company or in his or her personal interests (at least where the legal proceeding involves a claim of breach of duty against the director) (see R P Austin, H A J Ford and I M Ramsay, Company Directors: Principles of Law and Corporate Governance, LexisNexis, Sydney, 2005, at [4.11]; R P Austin and I M Ramsay, Ford’s Principles of Company Law, 13th ed, Butterworths, Sydney, at [10.410]; referring to the Explanatory Memorandum for the Corporate Law Economic Reform Program Bill 1999, at [6.107] – [6.110]). However, it is not suggested that the director would be in a position to compel access to the company’s records for purposes wholly unconnected to the company or the director’s position with the company (such as would be the case here if such an argument were available on the subpoena issue raised by the plaintiffs) and it would seem to me to be a surprising result if that were to be the case.

255 The statutory right of access extends to all documents, financial reports and records, and any other record of information providing it falls within the phrase “of the company”; s 9 of the Corporations Act. It seems difficult to believe that a provision designed to ameliorate the difficulty faced by a director at common law in obtaining access to documents necessary to defend himself or herself against an action for breach of duty by the company (because the information may be used only for the purposes of the company), could be relied upon by a director to obtain access to potentially highly confidential company documents solely for the purpose of producing those on discovery in proceedings unconnected with the company or the director’s role or conduct as a director.

256 The evidence from Daniel was that he was not in possession of any documents relevant to the issues in the case or in answer to the notice to produce other than those which he had produced and that he had enquired of his co-director who did not consent when asked to produce any documents. It seems to me that in light of that evidence, the matter goes no further and it has not been established that Daniel was in default of his obligations in relation to the production of documents in the possession of third parties, whether on discovery or in answer to the notice to produce.

257 A different position would apply if it had been shown that Daniel had failed to produce documents held, say, by his accountant in relation to his financial position (since it might reasonably be assumed that Daniel would have had a presently enforceable right to call for those documents) but the complaint in this regard was, in essence, that the documents had been produced late.

258 Daniel’s apparent non-compliance with a notice to produce credit card statements evidencing or in relation to the personal expenses to which he deposed seems to me again to be a different issue, particularly as I can only assume he had the benefit of legal advice in so doing (since his response to the notice was apparently under cover of a letter from his solicitors). It was difficult not to form the view that the level of cooperation in the production of relevant documents of that kind in these proceedings on the part of the executors left something to be desired.

259 That said, I do not consider that this takes the matter very far. The relevant point to note from the material which was produced and from the evidence that both David and Daniel gave is that they were well provided for by their parents, have or are in the process of obtaining qualifications which should enable them to establish successful careers, and are in a very comfortable position financially. While an order for provision out of their father’s estate which deprives them of all or a significant portion of the Denning Street sale proceeds will obviously have a financial effect on them, it is not something which seems likely to lead them to financial penury or so adversely to affect their position or prospects in life as to cause me to limit what would otherwise be the proper provision for Carol by reference to their position. (Indeed, Dr Birch submitted early in the hearing, when it was suggested that an application would be made to join one or more of the Seker associated companies to the proceedings, that an order for provision could be met out of the estate funds distributed to and held by David and Daniel without the need to join any of the family companies.)

260 For completeness, I should also note that while I accept that the effect of what happened was that the properties left in trust for Eva’s children or grandchildren were distributed free of any estate debts which might not have been the case had the debts been paid proportionately out of the respective beneficiaries’ assets, it is difficult on the material before me to know how much of those consolidated debts were debts jointly owed by Suzanna and it may well be that, directly or indirectly, David and Daniel have also benefited, through their inheritance from their mother’s estate, in the discharge of some of the debts attributed by them to the deceased’s estate.

261 In terms of the competing claims to the estate, David and Daniel seem to have had a close relationship with their father – who, not surprisingly perhaps, appears to have had more day to day contact with them during their upbringing than with the children who remained living with his first wife when he left home. I accept that they contributed to his welfare over the last years of his life. I also note that they have accepted the obligation of funding the rates in respect of Carol’s unit and have paid her a weekly stipend since their mother’s death (in accordance with the direction made to that effect in their mother’s will – Suzanna clearly recognised that Carol was in need of support insofar as she was concerned to make provision for the continuation of the weekly stipend for her stepdaughter after her death). David and Daniel have also had the benefit of considerable support from their parents during the course of their respective parents’ lives (a private school education, comfortable home, assistance with tertiary education here or overseas, and, in David’s case at least, the provision of not insignificant funds to acquire property overseas).

Equality of treatment

262 The tenor of the complaints made by Dorothy (in her correspondence with her father before he died) and by Ralph (both in his correspondence with Suzanna after his father’s death and in these proceedings) was a sense of entitlement to an equal share of the estate simply because of their position as a child of the deceased (or a sense of injustice that they or their children had not been given the same opportunities or treated equally with the children of the deceased’s second marriage).

263 So, for example, Ralph was of the opinion that his father had breached his contract (no such claim being pleaded however) and said that: “A wise and just testator would have treated me as an equal to my half-brothers. I can only assume that my father was unduly influenced against his first 3 children since we have been so loyal all our lives” (para 19, affidavit of 10 December 2009). He compared his position with that of David and Daniel, offering the opinion that they had at least $7.5 million from their mother’s estate with which to make adequate and proper provision for their own offspring – para 23, affidavit 10 December 2009. Again, this seems to be more a complaint that his step-mother Suzanna did not treat him equally with her own sons, than as to the treatment by his father.

264 Tellingly, perhaps, Ralph, in a letter sent to his stepmother and stepbrothers after his father’s death (in which he describes himself as a university dropout), set out what he considered to be the acceptable alternative means of ‘compensation’ (presumably by that meaning compensation for his father’s breach of promise), those being either one-third of a half of the whole of the estate plus compensation (unquantified) for “deceit” and lost career and for 17 “lost years” or the value of what was promised and compensation for the “lie” and lost years and opportunities.

265 The first method of ‘compensation’ sought by Ralph indicates very clearly that his complaint is that he should have had an equal share of the estate as did David and Daniel (or, more precisely) that the estate should have been halved and the children of each marriage should have shared equally in that half. That wholly ignores the position of Suzanna and it ignores the fact that, of the 5 children, Ralph received a property which was substantially more valuable than any of the others did. True it is, that he received it under a testamentary trust created by the will. So too were the provisions made for David and Daniel, with whom he wants to be treated equally.

266 For the executors it is noted that even if the estate is valued at the $9 million figure placed on it by Mr Wilson, a one-third share of half of that amount would be $1.5 million, yet the property given to Ralph and his children was valued by Laing & Simmons at $2.5 –2.7 million – and even on Ralph’s lower estimate of $2.2 million it exceeded what he saw as his ‘share’ of the estate. (Ralph’s letter then went on to describe what he had considered he had done for his father over the years (in the job he referred to in his affidavit as often life threatening) including to offer shoddy and shabby units for rent, make bodgy repairs, bear false witness against tenants, commit perjury, assertions which do not reflect well on him insofar as he seems to have been prepared to engage in such conduct to preserve his expectations of an inheritance.)

267 In any event, equality of treatment with one’s siblings or half-siblings is not the determining factor on an application such as the applications the plaintiffs now make. In Cooper v Dungan (1975) 9 ALR 93 a situation where the position as between siblings was being considered, Stephen J observed that “equality may be equity” but that “in this jurisdiction equality is not in itself an aim and to seek to attain it may well indicate that the discretion exercisable in this statutory jurisdiction has miscarried” (at 99).

268 It is neither the purpose of the Family Provision Act to ensure that there is an overall fair division of the estate; Gorton v Parks (1989) 17 NSWLR 1 at 6B, nor to deal with the “righting” of moral wrongs in the relationship between the deceased and the applicant: Robinson v Tame (unreported, NSWCA, 9 December 1994). What is relevant, when considering the second stage of the test, is the competing position of others with a claim on the deceased’s testamentary bounty and it is only in that context that an assessment of the financial position of David and Daniel is relevant.

Community Expectations

269 It has been said more than once that the court should be careful not to interfere with freedom of testation except in circumstances where the legislation requires this to be done. In Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1961) 107 CLR 9, Dixon CJ said (at 19):

All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator’s decisions expressed in his will have only a prima facie effect, the real dispositive power being deposited in the court.

270 The important matter (as observed by Young J in Walker v Walker, unreported, NSWSC, 17 May 1996) is whether in all the circumstances the community expectation of the testator or testatrix would be for greater benefaction to have been made for the proper or adequate provision for the person seeking provision.

271 As Gleeson CJ observed in Vigolo v Bostin, the justification for interference with freedom of testation is to be found in the failure of a testator to meet the obligations which the community would expect in terms of maintenance for those persons within the class of eligible persons (at [11]). It does not seem to me to be consistent with the policy identified as underlying this legislation, that the court should interfere with a testator’s dispositions beyond that which was necessary.

272 Caution was expressed in Cropley v Cropley [2002] NSWSC 349, where Barrett J said (at [53]):

It must also be borne in mind that, if the threshold is resolved in favour of intervention by the court, that intervention should only be to the minimum extent necessary to make adequate provision for the proper maintenance, education and advancement in life of an applicant. (Citing Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24; King v Foster (unreported, NSWCA, 7 December 1995).) (my emphasis)

273 I also note the caution expressed much earlier in Cooper v Dungan by Stephen J:

It is notorious that in this particular jurisdiction courts must be vigilant in guarding against a natural tendency to reform the testator's will according to what it regards as a proper total distribution of the estate rather than to restrict itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant.

274 In Walker v Walker, in a comment repeated elsewhere (as in O’Loughlin v Low [2002] NSWSC 222, although there in the context of an application by a widow), Young J as his Honour then was said:

... I reject the approach that all an applicant under this Act has to do is to prove that he or she is an eligible person and that he or she reasonably needs more financial assistance. The cases show that there must be a full investigation into all the facts of the matter to see whether the community would expect that a person in the plight of this testator ought to have made provision or further provision for the applicant... (my emphasis)

275 Adapting that test to the present circumstances, what is the provision that the community would think a person in the position of the deceased should have made for each of Ralph, Dorothy and Carol? I consider first the general principles relating to the position of adult children in the context of the claims by Ralph and Dorothy, since their position is markedly different from that of Carol.

276 In McGrath v Eves [2005] NSWSC 1006 at [67], Gzell J, when considering the position of claims by adult children for provision from their father’s estate, said that:

When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father

though there noting also that there is no special principle or rule which precludes such a claim by an adult child from making (citing Bryson J in Gorton v Parks at 7 and White J in Barbara Mayfield v Suzy Carolyn Lloyd-Williams (at [109]–[110])).

277 Not surprisingly, reliance was placed by Mr Wilson on Barbara Mayfield v Suzy Carolyn Lloyd-Williams, where the decision by White J to make provision for the purchase of a house for the benefit of an adult child was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. On appeal, Bryson JA in Lloyd-Williams v Mayfield (at [32]), considered it altogether appropriate for the trial judge to have looked well beyond needs when interpreting and applying community standards to decide what provision the court ought to order.

278 White J had considered that a relevant factor in determining the appropriate provision for the maintenance of an applicant was that applicant’s obligation to support others (such as a parent’s obligation to support a dependent child) (at [86]). His Honour said that if the proper maintenance or advancement in life requires that provision be made, then the court could make such a provision even if it were not necessary in order to meet the applicant’s needs in the sense of the applicant’s necessities or requirements. His Honour noted that in Re Buckland deceased [1966] VicRp 58; [1966] VR 404, Adams J had emphasised that in a large estate a more extravagant allowance for contingencies could be made than would be permissible in a small estate (at [112]).

279 Various factors which featured in that case can be seen in the present case. The property designated as notional estate was large (as is the distributed estate available for designation in this case, even leaving aside the share portfolio) and the person with a competing interest was well provided for (as is the case with each of David and Daniel).

280 In Foley v Ellis, Sackville AJA (at [88]) noted that the language in Singer v Berghouse, “strongly suggests that the court cannot consider the propriety and adequacy (or inadequacy) of any testamentary provision for an applicant in isolation from the resources and needs of other claimants on the deceased’s bounty. These claimants include other beneficiaries entitled to a share of the deceased’s estate, whether or not they themselves have made a claim under the Family Provision Act.” However, I do not understand the position to be that, when determining the proper provision for maintenance, an applicant’s claim should be enhanced (beyond that which would otherwise be proper provision) by reference to the fact that though those with competing claims may be in a more comfortable position. The test ultimately remains that as to what is proper provision in all the circumstances.

Ralph

281 Turning first to the position of Ralph, it is relevant to note that, had Ralph been left the freehold title to the Francis Street property, in which he and his family had lived for some time, or even the present day value of a life interest in that property (as to which there was some argument but which presumably would have been a not insubstantial proportion of the property’s current value given that Ralph is only 45), then it could hardly have been said that there had been inadequate provision for Ralph.

282 The Francis Street property represents a substantial proportion of the distributed estate. A gift of freehold title to the property (or a sum, out of the proceeds of sale of the property, equivalent to the present day value of a life interest in the property) would have given Ralph both security of accommodation (or a sufficient deposit to enable him to acquire suitable accommodation for his growing family) and the flexibility to use the equity in those premises (or any premises he might acquire with such a deposit) to fund any career development initiatives he might then choose to take or to effect any necessary repairs to those or alternative premises, and/or in due course to secure accommodation in an appropriate residential aged care facility.

283 Ralph’s claim for provision seems in a large part based on his father’s promise to give him Francis Street, which Ralph says was the reason Ralph left his employment at Lend Lease. Ralph’s resignation from Lend Lease took effect from 30 June 1990. Before he resigned, he told his father what he was planning to do. In cross-examination he said that he was “reasonably happy” in that employment (T 22.10) and that he generally enjoyed work as an accounts clerk (T 23.31). In his affidavit of 13 March 2008, Ralph said that “due to” the promise he says his father made to him in relation to the Francis Street property he gave up his job at Lend Lease (para 26), a career which he believes could have been lucrative (para 27).

284 At paragraph 29 of that affidavit, he goes further and says that he gave up that career “so I could work for my father 7 days a week”. However, when questioned on this in cross-examination he conceded that his father had not asked him to give up his job (rather, he told his father that he was going to do so) and that the promise (on which, according to his evidence, he has placed much store over the years) in relation to the Francis Street property was not in any way conditional on him commencing work as a property manager for his father.

285 Ralph says the role he performed for his father required him to be “on call” 24 hours a day in respect of the properties owned by the deceased. However, he conceded that the demands made on him in that role by his father were not onerous (T 23.23) and the suggestion in his affidavit that he worked 18 hours a day 7 days a week (in a job which was at times “life-threatening”) is clearly an exaggeration. At most, he regarded himself as “on call” during that time. Ralph freely conceded in cross-examination that he had significant amounts of free time during the period in which he was employed by his father.

286 Ralph accepted that there was no suggestion by his father that he resign from his job at Lend Lease (T 25.37) and that he “absolutely” could have continued to work at Lend Lease (T 25.45). (In that regard, it is not clear to me that Ralph could not have continued to work at Lend Lease at the same time as he performed his property management services for his father – given that there seems likely to have been a reasonable ability for Ralph, absent emergencies, to attend to those property management services at a time convenient to himself and that he conceded he had significant free time during the working day even though he was “on call” to assist his father as his property manager.)

287 Whether or not Ralph was wholly satisfied with his career at Lend Lease (he describing his degree of satisfaction in somewhat lukewarm terms as being ‘reasonably happy’ there) and despite the career prospects he now says he would have had as an accounts clerk there, Ralph seems to have made the decision to leave in advance of his father giving him the Francis Street property and without there being any condition that he do so (T 25.41). It is difficult in those circumstances to conclude that Ralph had any serious career aspirations or ambitions in his role at Lend Lease. (And he disavowed any thought of going back to Lend Lease – T 28.46.)

288 Accepting that Ralph decided to leave Lend Lease because he thought that his father was going to transfer the title of the Francis Street property to him (rather than, as his father did, simply give him the rental income from the property), Ralph was nevertheless seemingly content thereafter to take on and continue the role of property management for his father in the knowledge that the Francis Street property remained in his father’s hands, albeit pressing his father from time to time to transfer the property to him.

289 To that extent, while Ralph may be said at the outset to have put on hold any plans he had for a career in property development, at some point in the 16 or so years from the making of the promise to his father’s death it must have become apparent to Ralph that there was no certainty as to when any transfer of the property would eventuate (particularly given his father’s varying explanations or excuses for the delay). Ralph says that over the period from 1990 to his father’s death his father was constantly promising that he would transfer the property to him (T 28.10). Even the least sceptical person must surely have entertained some doubts as to the prospect of a transfer in light of the 16 year delay. Nevertheless, Ralph took no steps in that period to explore the possibility of a career in property development otherwise than through his father’s largesse or to gain any formal qualifications that might have assisted him to do so; nor has he done so since his father’s death.

290 It seems to me that at best what Ralph had were ideas about doing what his father had done in building up a portfolio of property assets but that he was only interested in, or proposing to follow, such a course if his father provided him with the capital to do so (in the form of the transfer of the Francis Street property). It does not seem that Ralph had any concrete plans or goals in that regard (the most he could point to was having at some stage put forward a proposal for his father to acquire the next door property, which his father rejected) other than taking on the project of renovating Francis Street to incorporate a third unit (an enterprise in which his father did assist him by way of the provision of funds, thus, intentionally or otherwise, enabling his son during the deceased’s lifetime to gain at least some experience in property development).

291 Ralph says in his affidavit that:

If my father had not made his promise to me I would have continued working my way through the corporate path I had already commenced. As it now stands I am looking at starting from scratch. My father’s promise allowed me to think and act like my financial future was bright and secure. I only accepted the relatively low remuneration and often life threatening work because of the promise of a measure of wealth in the future. If the inducement had been to be a caretaker for the rest of my life, I would have taken measures to ensure my ambitions were fulfilled instead of relying on my father to my detriment”.

292 To similar effect, in paragraph 17 of his affidavit of 10 December 2009, after Ralph expressed the opinion that the estate was more than capable of honouring his father’s promise (though it should be noted that that promise was for the Francis Street property to be Ralph’s and Ralph does not in fact now press for the title to this property to be given to him absolutely), Ralph said that he is seeking “funds of equal value from the estate to redress his [father’s] omission”. He went on in paragraph 20 to complain that “If it were my father’s intention for me to have nothing but a pension he should never have made his promises to me, as I worked for my father to my own personal detriment and ultimately to the detriment of my family” (the last comment being somewhat of an overstatement given that his family has security of accommodation and his children have been left the remainder interest in a substantial asset of the estate.) Ralph asserted that (but for the promise) “I would have continued with my own independent career [which at the time was as an accounts clerk]. My labours and loyalty were remunerated with minimum moneys for many years and ultimately, apparently, unappreciated and unrewarded”. Ralph’s bitterness at his current position seems evident in passages such as this in his sworn affidavits and his assertion that he had been exploited by his father.

293 Insofar as it was suggested that Ralph’s claim should be elevated by reason of the fact that promises were made to him in relation to the transfer of the Francis Street property (Ralph giving evidence that his father had said to him during his life that “I am giving you this property now so you do not have cause to rejoice on my death” – T 25.20), Dr Birch submits that the promise to Ralph was substantially fulfilled in that from 1990 Ralph received all the financial benefits that flowed from the Francis Street property and had the ongoing financial benefit from that property by reason of the gift under the will. Dr Birch points to the acknowledgment by Ralph in the witness box that the deceased’s statement was not made conditional on Ralph doing anything in return (T 25.40) and that Ralph had further accepted that he resigned from Lend Lease of his own volition (T 26. 10) (ie not in the expectation of what his father might do in relation to the property nor with a view necessarily to taking on the property management role for his father).

294 Indeed in relation to the reliance apparently placed both by Ralph and Dorothy on their father’s promises of an inheritance or the like I note that in Barnes v Alderton [2008] NSWSC 107 at [58] Young CJ in Eq (as his Honour then was) noted the wisdom in not relying on such promises, when commenting that “people are well aware that everyone can change their will as often as they like” and that the court will infer this unless there is evidence to the contrary.

295 In Gillett v Holt [1998] 3 All ER 917 at 950 Carnwath J referred (albeit in the context of proprietary estoppel) to the statement that one should not count one’s chickens before they hatched as being:

[A]n apt statement of how, in normal circumstances, and in the absence of a specific promise, any reasonable person would regard – and should be expected by the law to regard – a representation by a living person as to his intentions for his will.

296 In his affidavit of 13 March 2008 Ralph described his father’s conduct as having deprived him of the opportunity to achieve his ambitions in life and ‘derailed’ his progress towards the goals he had for success and wealth. He said that: “I have always held a strong ambition for success and wealth. I was independently working towards those goals when my father derailed it all with what should have been a short cut to those ambitions” (para 20). Most telling, it seems to me is the comment that what his father had offered him was “what should have been a short cut” to the achievement of his ambitions. What Ralph seems to have done, insofar as he says he put his ambitions on hold in reliance on his father’s promise, was to opt for the easy option or short cut to wealth. That was, of course, a choice open to him to make but it does not mean that, having done so, he should now look to the estate to put him in the position he would have been in had he not done so.

297 On his own testimony, Ralph has spent the last 16 years of his father’s life waiting to be provided with the capital to start a property development career (and, he seemed to accept, has spent the last three and a half years since his father’s death ‘sitting on his hands’). He has done nothing since his father’s death to obtain any employment or any qualifications (other than reading advertisements for positions for which he has not once applied – T12.30-45 - and making what can only be described as desultory enquiries of a friend or by reference to one university website as to law courses). He is still waiting, it seems, to be provided with a kick start from his father’s estate to pursue his goal of success and wealth.

298 In that context, Ralph’s current desire to study law (formed during the course of his discussions with his legal advisers and having become aware of the legal profession during this case – T 14.11) was expressed with a degree of ambivalence and seems at best a fallback to his desired career as a property developer. Indeed, his evidence was that he thought the nomination of the University of New South Wales as a desired institution in which he might study law was put into his affidavit by error of his solicitor (T 16.16). While he professed an ambition to study law, he has made no enquiries about courses other than the law course at Bond University and at UNSW (T 16). He agreed he had made no serious enquiry as to how realistic such a goal might be (T 17.49) nor had he made any plan for what might happen if this application were to fail in this regard (T 18). It is difficult to see his desire for tertiary education in this area as more than an aspiration (as opposed to a serious aim).

299 It seems to me that this was a choice that Ralph made, not one forced upon him, and Ralph’s real complaint now is that he did not receive the title to Francis Street, as his father promised, but simply a life interest in the income from that property (or ‘pension’ as he so dismissively described it).

300 I am left with the firm view that what Ralph wishes, in effect, is to have full title to the Francis Street property from which he could choose to commence a career as a property developer or retain his current lifestyle as the case may be. He made it very clear that he is not interested in acquiring any accounting qualifications or pursuing the career he abandoned in 1990.

301 Dr Birch submits that the lifestyle choice that Ralph has made (to have more leisure and to spend more time with his family rather than to make a substantial commitment to a career) does not give him ‘needs’ now to be met from the estate. He submits, and I agree, that the estate is not obliged now to provide for Ralph the wealth and success that could possibly have come to him had he chosen at an earlier time to pursue a career in law or business.

302 To all intents and purposes, the deceased intended, the Francis Street property to benefit Ralph and his family (and it is significant, I think, that the deceased made provision for each of his children, or in Dorothy’s case her children, under a similar trust structure). The deceased’s treatment of Ralph is not unique in that regard. It seems to me that Ralph is capable of making a decision (as he seems to have done in the past) as to the lifestyle he wishes to lead and, if he now chooses to activate his hitherto dormant ambitions, he is in a position to do so utilising his own resources and the substantial equity (or funds) that would have been available to him in those circumstances. This would also have left sufficient capital for his debts and the private school education of his sons to be met.

303 I therefore would not have considered any further provision necessary had the Francis Street property (or a substantial portion of its value) been left to Ralph outright. It was not. However, in the circumstances I consider that the community expectation would be that a man of his age, who is capable of taking up full-time paid employment in order to provide for his family and who has for lifestyle reasons apparently chosen to date not to do so, should not be provided for further than by way of providing flexibility of accommodation in his lifetime and a means, thereby, of meeting his debts and other expenses out of proceeds obtained from the sale of the substantial property which has been left to him and his family.

304 In circumstances where his children are young, in good health, unlikely to inherit for some time if Ralph lives to the normal life expectancy of someone his age, and can expect to be well provided for by their parents, I would have thought that the making of an order for provision to put Ralph in the position where he has the freehold title or at least the funds representing the present value of his life interest in the property (if not the freehold title to the property) would be the appropriate order for his proper provision. However, Ralph does not wish provision to be made to that effect. While maintaining that he has been left with inadequate provision, Ralph seems to have set his face against any order which would detract from a gift to his sons (which gift is itself unlikely to vest in possession for a considerable time).

305 It seems to me that it is not for Ralph to burden the estate with additional obligations simply because he fears that an order for provision of the kind which would otherwise be the appropriate order might disturb his family harmony.

306 The decisive factor in this regard is that I must balance Ralph’s claim against all the competing claims. In circumstances where I consider that Ralph’s claim for provision is far weaker than that of his sister Carol, for whom substantial provision needs to be made (and can only be made out of distributed estate thus affecting the provision made under the will for one or more of the remaining beneficiaries), and where Ralph’s claimed needs seem to me to be little more than a wish list (and a wholly unrealistic wish list in my view insofar as he seeks to be provided with a substantial deposit for what would, in effect, be a second home for the family or, alternatively, a $500,000 capital sum for contingencies and to enable him to pursue a career which hitherto he has shown no apparent interest in pursuing), if Ralph seeks to maintain the provision made for his sons then I think he must do so at the expense of his ‘wish list’.

307 In view of Ralph’s adamant position that there be no interference with the bequest to his children, I consider that the proper provision for Ralph’s maintenance, education and advancement in life should be that which provides him with the flexibility of accommodation that is currently lacking in the provision made for him under the will but, subject to the qualification I make below, nothing further. (In that regard, I note that it is by no means automatically the case that provision will be made to adult children as a nest egg or contingency to cover the vicissitudes of life. In Howe v Lowry [2009] NSWSC 451, for example, Macready AsJ held that (at [48]), given the adult daughter’s health and situation in life, the claim for a $200,000 fund for contingencies was not appropriate.)

308 I have considered whether additional provision should be made for Ralph to enable him to meet his credit card debts. I note that he would readily be able to meet those debts out of the proceeds of sale of the Francis Street property if the testamentary trust were to be re-written to permit this (and this might well be in the interests of his minor children so that Ralph is able to clear his debts, which I understand have built up over some time, and commence afresh. However, it appears that Ralph would prefer not to make use of the capital tied up in the Francis Street property for that purpose.

309 In circumstances where Ralph has a reasonable income, has the ability to maintain that income and to add to that income if he chooses to take steps to obtain employment for which he is presently qualified (or further qualifications to enable him to obtain higher remunerated employment as he seems to wish to do) and has set his face against an order for provision which would give him the opportunity to sell the Francis Street property if necessary to clear his debts and start afresh, and particularly in light of the strength of the competing claim Carol has on the deceased’s testamentary bounty (which will subsume most of the property to be designated as notional estate), I do not consider that the proper provision for Ralph requires a lump sum payment to enable him to clear his debts or for contingencies.

310 I therefore propose to make an order for provision in terms of what is generally known as a Crisp order (an order of the kind made by Holland J in Crisp v Burns Philip Trustee Company Ltd (unreported, NSWSC, 18 December 1979), which will have the effect of re-writing the testamentary trust in favour of Ralph and his children so as to permit Ralph to sell the Francis Street property for the purpose of acquiring other suitable accommodation for himself and his family and, in due course, aged care residential accommodation should he so require it but which will preserve the remainder interest in the Francis Street property or any substitute property for the benefit of his children.

311 I consider that it would be appropriate, as part of the Crisp order, to make provision for a sum to be set aside out of any sale of the Francis Street property for the purpose of providing a fund for the children’s education. I will hear submissions as to whether and how any such provision should be made. Further, while I do not consider it appropriate to make provision for a ‘nest egg’ or contingency sum of the substantial amount claimed, I think it would be appropriate to allow out of any sale of Francis Street an amount to be applied to discharge the debts which have been incurred by Ralph for family expenses. Again, I will hear submissions as to this aspect of the orders.

312 The qualification I referred to above is that I consider it appropriate, to remove any uncertainty as to the status of the funds provided to Ralph for the renovation of the Francis Street property, to declare that as part of the provision for Ralph on this application any outstanding liability to the estate in relation to those funds be discharged.

313 Finally, I think it appropriate, in light of the orders I propose to make in relation to Carol, that Ralph maintain the benefit of the remainder interest in the unit at Edward Street, which his father had intended him to have. I have considered whether the proper provision for Ralph would be to provide for him now to have the benefit of the present day value of his remainder interest in that property, which would provide an immediate fund out of which to meet part or all of his current debts depending on the value of that life interest. However, in circumstances where the bulk of the burden for provision in favour of Carol will have to fall on David and Daniel (and will consume much of the funds derived by them from the bequests in their favour) I have concluded that the contribution of Ralph to the provision for Carol should be that he is simply left, in effect, to the remainder interest in her Edward Street unit rather than there being an acceleration of his interest in that property.

Dorothy

314 Dorothy asserts a need for larger accommodation (said to be at a cost of $540,000 - $660,000), a motor vehicle, money for medication expenses for her son and costs of her sons’ tertiary education. In relation to the last item, Dorothy has estimated that the cost of education of her sons would be $28,000 and $30,000 respectively and this is supported by the affidavits sworn by each of her sons. (As her youngest son is now 20, the direction under the will for Ralph to pay the rents from the property to Dorothy towards the education of their sons would apply for a further 5 years. Thus, it might reasonably be thought that there is no need for any separate provision in respect of the needs of her children’s tertiary education, as claimed by Dorothy, as this amount should be covered by the terms on which the trust has been established.)

315 Clause 3(4) of the will, after referring to the property which Dorothy and Michael had unsuccessfully managed for the deceased and denying any promise to give that property to his daughter or her children (as set out earlier) explained the reason for the fact that no provision was made for Dorothy:

... I am leaving ... Edward Street to my two grandsons and not to my daughter Dorothy Carroll because she expressly requested that I leave her nothing but that I leave her inheritance to her children.

316 This explanation is of interest. First, it follows immediately upon the denial by the deceased that he had made any “promise” to give the Coogee Bay Road property to Dorothy and/or her children. That denial has a defensive tone and appears to be the deceased’s final response to the assertions Dorothy had made while he was alive to the effect that he had made just such a promise. Dorothy’s evidence is that this is what was promised to her by her father in October 1989. The fact that the deceased felt the need to include such a denial in his will, even though the property had by then been sold and hence could no longer have been the subject of testamentary disposition, suggests that the issue still rankled with him and/or that he anticipated the possibility of a claim by Dorothy.

317 Secondly, and more significantly, to my mind it shows very clearly that what the deceased considered to be Dorothy’s “inheritance” (and what he apparently considered would have been the appropriate legacy for her), was the Edward Street Unit 4 (whether outright or, which seems more likely given the manner in which his testamentary beneficence was displayed to his other children, by way of a trust for Dorothy and her children for life and on her death to her children). The stated reason for this bequest to Dorothy’s children makes it clear that it is in substitution for any such bequest to Dorothy.

318 Paragraph 7 of Dorothy’s affidavit sworn 11 April 2008 denies in absolute terms “ever saying to my father any words to the effect that he leave me nothing and to leave my inheritance to my children”. However, it seems difficult to take that denial at face value in light of the correspondence passing between Dorothy and the deceased.

319 By a letter dated 10 June 2005 (which I acknowledge that Dorothy says she did not receive), the deceased wrote to Dorothy offering her a sum of money in lieu of any bequest under his will. The letter opened by referring to his asthma (a point of no relevance other than the fact that there is a letter in evidence from Dorothy to her father which appears to respond to this comment in a letter she says she did not receive). The deceased offered Dorothy $100,000 “if you could visit personally a solicitor and identify yourself and sign an undertaking that you are accepting this amount as your full and final inheritance from me and you shall not make any demands, requisition or claim against my will after receiving this amount”. The letter concluded (sarcastically, it can only be said) with the words “you do not have to stress yourself, if you answer this letter in less than 8 months”, which appears to be a thinly veiled complaint at the time taken by Dorothy to respond to earlier correspondence.

320 The letter from Dorothy to which I have referred above was undated and handwritten. Its subject matter bears a marked similarity to the matters raised in her father’s letter and, despite Dorothy’s denial, I would infer that it was a response to the deceased’s letter of 10 June 2005.

321 In her letter, Dorothy referred (somewhat unsympathetically to her father’s complaint as to his problems with asthma), thus seemingly responding to the text of the letter she denied having received; thanked her father for some cheques (apparently sent as birthday presents for her sons) “especially that they have been written correctly”; and stated that she did not have time or money for a solicitor (“all of my income goes very willingly for William and Edward’s needs and wants”). Dorothy denied that this was in response to her father’s invitation for her to see a solicitor in relation to the $100,000 offer. She says it was a response to a suggestion her father had made in a telephone conversation that she see a solicitor about a traffic matter that her husband had (T 67.23), although the first mention of this conversation was in the witness box.

322 Significantly, Dorothy’s letter included the statement “For myself I won’t be claiming anything but if William and Edward are cheated then I will fight.” (my emphasis). In the witness box, Dorothy adamantly denied that this was a reference to an offer made in relation to her inheritance (or to her inheritance at all) (T 68.6), rather, she said this was a reference to a telephone conversation with her father in which she said they discussed her father’s earlier promise that when the Coogee Bay Road property was sold that her boys would get the shares purchased with the sale proceeds of that property. Dorothy said that in that telephone conversation she asked her father to transfer the shares to her sons (the elder of whom was then 17) straight away (T 68/69). Despite having (according to her evidence in the witness box) asked her father to transfer the shares straight away the letter she sent to her father threatened to fight if they didn’t receive their inheritance by the time her son turned 23 (T 70) – she accepted that she had given her father an ultimatum to have transferred the shares by that time (T 70.23).

323 Dorothy’s letter concluded with the entreaty “Be nice, not offensive as your last letter is”, which could easily be read as a reference to the sarcastic comment made by her father at the conclusion of his 10 June letter, but which Dorothy said was a reference to another letter. However, Dorothy says that she doesn’t recall exactly what letter she had been upset about (T 71.2) (or what it was in whatever letter which had upset her, though she thought it probably was about the boys not being brought up in the Jewish faith).

324 Faced with her undated letter, which was annexed to the affidavit of David sworn in February 2009 and which seemed to call into doubt Dorothy’s denial that she received her father’s 10 June letter, Dorothy asserted in the witness box that her letter was in response to a telephone conversation she had had with her father about a different topic (T 69.5) and one to which reference had not been made in her affidavit. That rather strains credulity, particularly when the demand she says she made in that telephone call was that the deceased transfer to her then minor sons a substantial share portfolio representing the proceeds of sale of the Coogee Bay Road property, (a demand which itself was inconsistent with her June 2005 letter and which was predicated on a right to the proceeds of sale of that property which the deceased had for some time disputed). The suggestion that, in response to that demand, the deceased would have invited Dorothy to visit a solicitor to document anything of the kind discussed seems highly unlikely given the tenor of the deceased’s denials of any obligation in that regard.

325 Whether or not, as Dorothy says (though her letter strongly suggests otherwise), Dorothy did not ever receive her father’s offer, its terms are an indication of what her father at that stage seems to have considered to be adequate provision for Dorothy, in lieu of any other distribution of his property to her – a substantial lump sum compared to the annuity he had considered appropriate in his 1998 will.

326 While the statement in Dorothy’s letter that she would not be claiming anything for herself is not expressly a request that she not be left anything, I think it is fair to say that that is its import and that, in those circumstances, the deceased could well have understood her to be requesting that anything the deceased might leave to her should instead be left to her sons. However, I also think that any such ‘request’ must be taken in the context of the ongoing dispute with her father as to the entitlement she believed she had to the proceeds of sale of the Coogee Bay Road property. I doubt that the letter was seriously intended as an invitation to her father to disinherit her (as opposed to an attempt to influence her father to leave a more substantial inheritance for her and her sons) and the deceased’s letter of 10 June 2005 (whether or not ever received by Dorothy) itself suggests that the deceased did not consider that Dorothy was actually intending to give up any claim to his estate.

327 It is not suggested on behalf of the executors that there was any binding disclaimer by Dorothy of any claim to her father’s estate, though it is submitted by Dr Birch that the decision of the deceased to leave no provision for Dorothy in the will is explicable in circumstances where Dorothy herself appeared to adopt the position in correspondence with her father (in the context of Dorothy having for some time taken issue with the fact that her father had promised to leave her the Coogee Bay Road property or the proceeds of sale and having made repeated requests in relation to that issue) that she wanted nothing for herself and that her inheritance should be left to her children. In Retter v Permanent Trustee Co Limited: Re Estate of Rita Retter, (unreported, NSWSC 13 April 1994 at p 6), McLaughlin M (as the Associate Justice then was) observed that a statement of the deceased’s reasons must be accorded respect, but must be weighted in light of the evidence of the case.

328 It seems to me clear from the will that the deceased had intended the Edward Street unit the subject of his bequest to Dorothy’s sons to represent ‘her’ inheritance. In that regard, they were, perhaps accurately, described by Dr Birch as ‘accidental beneficiaries’. Insofar as the position of Dorothy’s children is concerned, not only would they not ordinarily be considered the natural objects of the deceased’s testamentary beneficence, there is some doubt on the face of the will as to whether it was intended that they have more than a life estate and, but for Dorothy’s rather petulant correspondence in June 2005, they may well not have shared in the estate at all. It seems to me likely, given the vehemence with which Dorothy staked her children’s claim to ‘their’ inheritance that her children will be likely to inherit from her in due course any capital remaining from any provision now made for her.

329 Balancing the needs of their mother and the competing interests of the other beneficiaries (particularly Carol), it seems to me that the proper provision for Dorothy is to re-write the testamentary trust in respect of that property so as to provide for the sale of that property and direct that the proceeds be paid to Dorothy subject to a direction that she pay, out of the proceeds of sale, an amount payable to each of her children which can be used for their education and advancement in life (as the deceased had intended) or otherwise as they may wish in lieu of their entitlements under the will. I note that Mr Wilson submitted (while strongly pressing for Dorothy’s principal claim in full) that at least $50,000 each might be an appropriate sum if I were to be of the view I have expressed above and I consider that to be appropriate.

330 I will hear submissions as to whether any form of Crisp order should be made in respect of the proceeds of sale of Unit 4 in the Edward Street property after deduction of the allowances for Dorothy’s children and the clearance of Dorothy’s debts. A provision of this kind, while it will not secure the purchase outright of a larger house in the price range indicated by Mr Wilson should provide a substantial deposit for perhaps a more modest home for Dorothy.

Carol

331 In relation to Carol, it was suggested that her position was not dissimilar from that of a wife left without means of support, insofar as she has no capacity to improve her current position, unlike her siblings and half-siblings, and thus her needs should be accorded primacy to theirs. In Bladwell v Davis [2004] NSWCA 170, addressing the position of elderly widows, for example, Ipp JA said (at [2]):

...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, would ordinarily result in the needs of the widow being given primacy.

332 Mr Simpson also placed emphasis on the fact that when considering claims under the Family Provision Act what one is concerned with is not simply what would be adequate provision but what is proper in all the circumstances and that, as recognised in Bosch v Perpetual Trustee Co [1938] AC 463 at 475, that which might be adequate is not necessarily proper.

333 Here, of those with competing claims to the estate (including her own siblings), both David and Daniel are in markedly superior financial positions and have the ability to establish successful careers and further to improve their position (factors relevant in Foley v Ellis).

334 In Caldwell v Ang (unreported, NSWSC, 11 April 1991), Young J referred to Mahoney JA’s comment in Kearns v Ellis (unreported, NSWCA, 5 December 1984) that “the content of the moral obligation [which a deceased has] is [not] to be determined by opinion surveys or by the lowest common denominator of community feeling at the time”.

335 I am of the view that the community expectation of the deceased, having a very large estate at his disposal and knowing that his daughter had suffered for many years from a serious psychiatric illness, would be that he would ensure that she was left well provided for and not left at risk of (now or in her old age) having to fend for herself or at the mercy of the kindness and charity of her family no matter how attentive and well-meaning they might be.

336 In that regard, I accept that Ralph has been attentive to and solicitous of his sister over the years (even though he may have overstated the level of his current contact with his sister, if the account given by her to her social worker is reliable), but he has his own family to attend to and is now at the stage of his life where he apparently wishes to pursue with some vigour a more high powered career.

337 I accept the evidence of Mr Kennedy-Gould, who I considered to be a thoughtful and objective witness, that, in light of the most recent admission of Carol to hospital, it is important for her to have the regimen of day-to-day contact with a companion carer in order to maintain routine and to monitor her condition and that in his experience an independent carer is preferable for a number of reasons including the stress which a condition of this chronicity places on the family (T 93.10). I accept that it is preferable that Carol be in a position to engage an independent person to carry out such a service rather than being dependent on friends and relatives to do so.

338 As to the matters with which the executors have taken issue in relation to the quantum of her claim, I am of the following views:

(i) Accommodation

339 The decision as to whether it is better for Carol to remain in the Edward Street unit (and have it renovated) or to acquire suitable alternative accommodation is one which has troubled me, as it seems that any relocation is likely to be stressful for Carol; and Mr Kennedy-Gould acknowledged this (T 85.26). I sensed from Mr Kennedy-Gould’s quiet deliberation and tentative response when I posed this question to him, that he was similarly troubled and that there is no easy answer. Mr Kennedy-Gould’s practice in such situations is to recommend that preference be given to the wishes of the patient. However, it did not seem to me that this was a result which he would endorse in this case without considerable reservation and he certainly did not suggest that to make provision in terms which required Carol to relocate would be harmful to Carol’s long term health or unduly disruptive to Carol. Carol’s legal representatives press for an order which would provide Carol with alternative accommodation, noting that Carol’s stated preference was not given in absolute terms and that Carol will in any event have to relocate for some time if the Edward Street property is to be renovated.

340 I am of the view that the proper provision is for Carol to be provided with sufficient funds to acquire suitable accommodation in the Bondi area (with which she is familiar) and that I should allow a sum of $600,000 (plus stamp duty, legal costs, relocation expenses and the cost of furnishings, as estimated) for this purpose. (Had I been of the view that the proper provision was for a sum to allow Carol’s unit to be renovated, then I would have allowed a contingency over and above the costs of the repairs estimated by Mr Reid (the builder called for the executors) since it seemed to me that his estimate (of necessity perhaps) did not have regard to Carol’s particular needs but was, rather, an estimate of what it would cost to carry out works of the kind he identified as would be required to the unit and as to which ‘no parameters’ had been given to him.)

341 My reasons for reaching this conclusion are that it is clear that Carol will have to relocate for a period of time in either event (since there is evidence that it will be necessary for her to do so while any renovations are carried out to her Edward Street unit) and hence she will have the stress of relocation whatever my decision in this regard; that even if she does remain in Edward Street for the immediate future there is no certainty that this will remain suitable accommodation for her (although I accept that this could be dealt with by a Crisp order); that the condition of the current unit, though kept clean by Carol, is described as decrepit and of ‘pensioner only’ type accommodation (I observe that Carol’s unit, from the photographs provided, is small and that the opinion expressed by Mr Reid, the builder who gave evidence as to the cost of renovations, was that this was an ‘add-on’); that her current accommodation is not what, in the view of Mr Kennedy-Gould, would be described as dignified and safe accommodation that to which any person in her situation should have access (T 85.19) (I gather from Mr Kennedy-Gould’s evidence that there is a concern that a unit such as this may be unlikely to attract neighbours of a type who would be able to assist Carol if she were to need); that Mr Kennedy-Gould said Carol “clearly didn’t reject the idea of a move” and had expressed the idea that she would like somewhere with a garden (T 85.42); and, significantly, Carol’s tutor, Mr McLoughlin, gave evidence by affidavit that he had inspected another flat with Carol and that Carol was relaxed and calm during the inspection and had indicated in discussion with him afterwards that she was not unreceptive to the idea of a move at least insofar as she had said that she liked the flat and the garden which they had inspected.

342 Although I accept that Carol’s preference would be to remain where she is, in familiar surroundings, this is not a situation where there has been an adamant objection raised by Carol to a move, nor has Mr Kennedy-Gould cautioned strongly against it. Mr Simpson, no doubt on instructions from Carol’s tutor, presses for provision in relation to the provision of a suitable home. I consider that that would be the proper provision for Carol in all the circumstances. I trust that, with the benefit of assistance from carers and her family, the stress of such a move can be minimised for Carol.

343 I accept Dr Birch’s submission that the appropriate course is to make an order for the sale of the Edward Street unit and to roll the proceeds of sale into the purchase price of the new unit and, allowing for the purchase price to be in the order of $600,000 plus consequential costs and an allowance for furnishings as estimated, any shortfall between that amount and the sale proceeds of the unit should be supplemented by provision out of the designated estate.

344 I was helpfully provided by Mr Simpson with information as to the creation of special disability trusts (Exhibit P1/A), from which I understand that for the relevant concessions to be available it is necessary that the trust be established for the sole purpose of providing care and accommodation for a person with a severe disability. Carol has already been assessed and approved as a person entitled to be made the beneficiary of such a trust (Annexure C to the 8 December 2009 affidavit of Ms Suttor being a letter dated 27 November 2009 from Centrelink advising that Carol was granted special beneficiary eligibility status on 4 November 2009). I understand that, at present, assets of up to $500,000 plus the home in which the disabled person lives should be able to be held in the trust without affecting the support benefits available to that person.

345 I think it is appropriate to structure the provision for Carol in such a way as to preserve her benefits and will seek submissions from Counsel as to the way that can best be done. I note that the Public Trustee on 16 March 2009 indicated consent to appointment as trustee in relation to any provision which might be made in these proceedings for Carol. The relevant office is now that of the NSW Trustee and Guardian (as from 1 July 2009 the offices of the Public Trustee and the Protective Commissioner having merged.

(ii) Level of care

346 The three objectives of a companion carer seem to be for someone to minimise Carol’s social isolation, to assist in organising activities for Carol, to observe Carol’s condition and alert medical practitioners to any need for intervention. I consider that the appropriate provision is for the increased level of care recommended in Mr Kennedy-Gould’s second report at least until such time as Carol is likely to be progress to some form of aged care accommodation, where such needs should to a large degree be met. (In that regard, I note that Mr Kennedy-Gould referred to some of the difficulties which people with conditions such as Carol’s may have in retaining places in aged care accommodation – T 88.30.)

347 I have taken into account Dr Parmagiani’s observations but it seems to me that, while making those observations, he did not expressly reject the proposition that a higher level of care would also be reasonable. Mr Parmagiani was asked to provide observations on Carol’s condition including as to the nature duration and extent of further treatment. He had regard to, and commented on, Mr Kennedy-Gould’s first recommendation as to the level of companion care per week. He had regard to, but did not comment on, Mr Kennedy-Gould’s second recommendation of a higher level of companion care (made after there had been a further admission to hospital the need for which might perhaps have been avoided had there been a monitoring of Carol’s condition of the kind possible with daily physical contact with Carol).

348 I consider that the reasoning underlying Mr Kennedy-Gould’s changed recommendation was logical. Mr Kennedy-Gould said that he changed his recommendation because he felt that the level of contact with a companion carer needed to be consistently structured (T 92.28) and face to face rather than telephone contact to enable early intervention to prevent decompensation. He regarded Carol’s circumstances in 2008 as indicating a very serious exacerbation of her condition.

349 I think that the community expectation would be that the deceased would err on the side of caution to make sure that there is sufficient care available throughout the whole of his daughter’s life, when funds are available to meet this cost.

350 Accordingly, I think the cost of the companion carer should be calculated on the assumption of 14 hours per week, the case manager at one hour per week and the clinician as estimated. However, as discussed below, I think this should be for a set period up to such time as it would be reasonable to assume that Carol would be well settled into an aged care facility and thereafter to reduce the level of provision for companion care to 7 hours per week in order to provide ongoing social interaction for Carol.

(iii) Care after admission to an aged care facility

351 I note that the executors have submitted that once Carol is admitted to an aged care facility much of the need for a companion carer, case manager and independent clinician would not be necessary and that hence the single capital sum now required should be reduced to reflect that possibility. There is, however, uncertainty as to the age at which Carol might be admitted to aged care and whether she will have difficulty by reason of her condition in being admitted to, or being permitted to remain, in any particular aged care facilities. (It seems to me that there is also a risk that if Carol finds aged care accommodation difficult to obtain (or retain) as Mr Kennedy-Gould indicated might be the case at least in relation to government assisted accommodation, then there might be a period in which she might require considerably more in terms of one to one care as she ages than the hours presently suggested.)

352 In the circumstances, I think that any reduction for the possibility that the one-to-one care may be reduced after Carol is admitted to an aged care facility should be a conservative reduction. Carol is now 47. She may not wish, or be able, to enter aged care accommodation as soon as she turns 65 and might otherwise be eligible for such accommodation. She may have difficulty obtaining appropriate accommodation in light of her condition. In that regard I think a cautious approach would be to allow for the higher level of care for, say, 28 years (by which time Carol will be 75 and it seems likely, from the evidence given by Mr Kennedy-Gould, that she would be able to obtain suitable aged care accommodation even if her symptoms are by then more florid and less easy to manage) and that for the balance of her life expectancy the hourly level of care for which allowance is to be made should be reduced to 7 hours per week (thus permitting an hour per day of continued companion care contact).

353 I think the community expectation would be that the testator would be concerned to ensure that there was no lacuna in appropriate assistance for Carol as she ages, particularly as that is when her symptoms may be more difficult to manage as her tolerance to anti-psychotic drugs is lessened.

354 As for the terms of the trust in regard to the real estate to be acquired for Carol’s occupation, I have in mind that any property acquired out of the funds so provided for that purpose should be held on trust for Carol for her life on terms that permit the trustee, if that be in the interests of Carol, to sell that property and acquire alternative accommodation for Carol, including aged-care accommodation or the like in due course.

(iv) Use of discount tables

355 As to the use of the 3% tables as opposed to the 5% tables, the adoption of the 3% table by Mr Simpson was based on the decision of Todorovic v Waller, a decision admittedly not in the Family Provision Act context where, as here, the court is looking at the proper provision which ought to have been made having regard to community expectations, not what would represent compensation for losses sustained as a result of negligence or the like. In choosing one set of tables over the other there is a balancing exercise to be undertaken.

356 Todorovic states that the 3% discount tables (rather than the 5% discount tables or some other prescribed discount) are to be applied when assessing the amount of damages to be awarded for loss of earning capacity and the future costs of goods and services which a plaintiff will need as a result of negligence; at 424 (per Gibbs CJ and Wilson J); 451 (per Mason J); 460 (per Aickin J); 480 (per Brennan J).

357 The 5% discount tables must now be applied to the assessment of damages for negligence claims to which the Civil Liability Act 2002 (NSW) applies (section 14 of that Act). Neither the Second Reading Speech nor the Explanatory Notes in relation to the Civil Liability Bill, expressly discuss the reasons for the choice of the 5% discount tables, and departure from the position in Todorovic. There is no express indication in the Explanatory Memorandum or Second Reading Speech (28 May 2002) of the relevant factors and reasons for the application of the 5% tables nor for the departure from the position in Todorovic (beyond the implicit assumption that the adoption of the 5% tables is consistent with the overall purpose of the Civil Liability Act of reducing the damages awarded for personal injury as a result of negligence).

358 The only real contingency in Carol’s case is that she may live less than or more than her normal life expectancy (which is around 41 years). As I have said earlier, I consider that the community expectation would be to err on the side of a generous provision for someone in Carol’s position. After the events in global financial markets over the past year, one cannot necessarily assume that if the fund is invested for the long term in a growth portfolio including investment in the leading companies that will produce any particular level of return. Dr Birch points to the more recent application of the 5% tables in the context of applications to which the Civil Liability Act applies and submits that if there is to be no discount for contingencies (as submitted by Mr Simpson) then the 5% tables should be adopted in the calculation of the lump sum for future care for Carol.

359 In various cases the 3% tables appear to have been used without discussion as to the appropriateness of such tables. So, in Pope and Ors v Christie Matter No 4918/94 [1998] NSWSC 118, Young J (as his Honour then was) applied the 3% tables, without discussion of the factors relevant to determining the appropriate discount. Similarly, in Falkingham v Falkingham [2002] NSWSC 534 (at [34]), Macready M (as the Associate Justice then was) also applied the 3% discount tables.

360 There seems little guidance in the authorities on this issue. Nor, so far as I can ascertain, does it seem that the amendment to the Civil Liability Act has had any real impact on the practice of the court in Family Provision Act applications. I note that in Fellows v Paterson [2002] NSWSC 190 (at [36] and [42]) (albeit only the day after the commencement of the Civil Liability Act, Macready M (as the Associate Justice then was) looked to Todorovic in determining that the proper approach would be to apply a 3% discount rate.

361 In Barbara Mayfield v Suzy Carolyn Lloyd-Williams, the parties had agreed that it was appropriate to use a 3% discount rate in order to provide a capital sum which would yield a certain amount per week after tax for a specified period. There was no suggestion, when the matter was determined on appeal by the Court of Appeal, that this was inappropriate.

362 In McGrath and Anor v Eves and Anor (at [50]), Gzell J applied the 3% tables, without discussion of alternative discount levels or factors to be considered.

363 In Caldwell v Ang, Young J (as his Honour then was) had regard to the 5% tables when considering the value of a remainderman’s interest in property. There, again, the issue as to the appropriateness of the different tables was not argued before his Honour.

364 I have been unable to find authority which would be conclusive on the issue as to which of the tables is most appropriate in the present circumstances. I do note, however, that Todorovic was recently relied upon to apply the 3% tables in Bovaird v Frost [2009] NSWSC 337 by Brereton J in relation to a case concerning the assessment of damages for breach of a promise to fund the plaintiff’s retirement accommodation and associated expenses for life. Brereton J acknowledged the prescribed 5% discount in the Civil Liability Act but stated that for damages claims to which that Act does not apply, it would be appropriate to apply the 3% discount tables (at [73]). Bovaird v Frost also involved an application under the FPA, and Brereton J indicated that such an application would have been successful, but for the finding that the plaintiff was entitled to damages under the contractual claim and as such would have adequate provision, although did not go on to indicate what level of discount would have been applied to the FPA claim if awarded (at [122]).

365 I am of the view that the community would expect a conservative approach to be taken in a case where the testator is looking at the proper provision for a severely disabled daughter. On balance I consider that it is appropriate for the 3% tables to be used on this application.

366 I consider that there should be no discount for contingencies. It is accepted by Dr Birch that there is no likelihood that Carol’s condition will improve to the extent that ongoing care will not be required for the balance of her life. The contingency that Carol may not reach her normal life expectancy can be in part addressed by providing for the manner in which any fund remaining at the date of her death is distributed and is, in any event, reflected in the adoption of the life tables.

367 I consider that the fund held in trust for Carol, and any capital in any real estate then owned on trust for her, should on her death be distributed as between David, Daniel and Ralph (or in each case their respective children should any of them pre-decease Carol) such that Ralph receives that proportion of the fund which represents the proportion which the present day value of the Edward Street unit ($400,000) bears to the overall provision now to be made in favour of Carol out of the deceased’s estate and that David and Daniel receive in equal shares that proportion of the fund which represents the proportion which the amount of the estate distributed to them and which is now declared to be notional estate contribution bears to the overall provision now to be made in favour of Carol out of the deceased’s estate. I will hear any submissions from Counsel as to this proposed order to effect such a result, as it was not debated in those terms before me.

(iv) Capitalization of pension supplement

368 As to the capitalization of Carol’s $200 per week pension supplement, I think this falls within the proper provision to be made for Carol. I recognise that it may be unlikely that David and Daniel would both be unable to fund this in the future and that they have acknowledged an obligation to meet this amount but I consider that Carol should not be at risk of any subsequent failure or inability of her half-brothers to make this payment.

(iv) Contingency sum

369 As to the contingency sum claimed, I think this is reasonable and removes the risk of changes in the level of support from family members over the years.

370 I have not attempted to calculate the management fees which would be payable to the NSW Trustee and Guardian for a fund totalling the provision which I propose to order. I will ask that the parties liaise and prepare short minutes of order to reflect the above and to incorporate the management fees in such orders. I consider it appropriate for the NSW Trustee and Guardian to be appointed to manage the fund rather than the executors in order to remove any conflict of interest and to allow them to get on with their own lives without the responsibility of managing the funds for Carol’s care.

371 After calculation of the quantum of the amount ordered to be provided for provision in accordance with the above (namely to provide for the acquisition of a house or unit to a value of $585,000, plus stamp duty and legal expenses estimated at $28,000; relocation expenses of $2,000, body corporate rates capitalised at $79,426; furnishings at $17,141; funds for medical care (costed for a companion carer (14 hours per week for 28 years and 7 hours per week for 13 years) capitalised by reference to the 3% tables, plus costs of a case manager one hour a week for 41 years similarly capitalised ($185,985) and costs of a clinician similarly capitalised at $14,258); costs of management by the NSW Trustee and Guardian; supplement to pension ($200 per week capitalised at $247,980): and a contingency sum of $125,000) there must be deducted the sum of $10,000 already made available for Carol’s care by reason of the order for interim provision which I made at the conclusion of the hearing on 17 December 2009. Any funds remaining out of that $10,000 should be added to the fund to be held for Carol’s benefit in accordance with this judgment.

372 As the provision for Carol includes a number of components, I invite Counsel to draw to my attention if I have omitted to address any particular item of care which should be addressed.

373 On my calculations the provision to be made for Carol (excluding the management fees) should be somewhat less than the $2 million claimed (because of the differential in the companion carer’s hours over the period of Carol’s life expectancy), plus whatever the management fees of the NSW Trustee and Guardian will be. This will subsume to a very large degree (if not wholly) the amount received by David and Daniel from the proceeds of sale of the Denning Street property. They have nevertheless both had substantial provision during their life (in the form of a quarter share each of Denning Real Estate and provision of funds for various purposes – David to acquire a property in Israel; Daniel to fund part of his tertiary studies) and they have each inherited an equal share of their mother’s considerable estate.

374 In view of the findings I have made in relation to each of Ralph and Dorothy’s applications for provision (in effect limiting the provision made for them to the re-writing of the testamentary trusts under the will), I consider that it is appropriate that the provision for Carol be met out of the sale proceeds of Unit 1 in the Edward Street property, together with such amount out of the distributed estate received by David and Daniel from the sale proceeds of the Denning Street property (to be designated as notional estate) as is necessary to meet the shortfall.

375 Finally, insofar as it was submitted by Dr Birch that any trusts for Carol should provide a remainder for the beneficiaries whose share of the estate was the source of the fund, to which Mr Simpson objected on the basis that any order for provision is made out of the deceased’s notional estate as designated (not from the executors personally), I think that as the practical effect of the current position (albeit so reached in part because of the distribution of the estate before the expiry of the time for commencement of the present claims) is that David and Daniel will be compelled to fund a large part of the provision ordered to be made for Carol it is appropriate for such an order to be made (as contemplated above), though effectively preserving Ralph’s remainder in what represents the proceeds of sale of the Edward Street unit currently occupied by Carol.

376 As to costs, while I consider that Dr Birch is correct in his submission that the Family Provision Act in its terms does not provide for the designation of notional estate purely for the payment of costs (as opposed to a designation for the purposes of an order for provision which may include provision to meet debts such as costs), the Family Provision Act does contemplate in section 33 that an order for costs may be made out of notional estate once designated. (I note that in Barbara Mayfield v Suzy Carolyn Lloyd-Williams, both at first instance and on appeal, costs were ordered to be paid out of the notional estate.) In the circumstances I think it appropriate that the order for provision for each of the plaintiffs should reflect the fact that if they are required to bear their own costs of these proceedings it will operate to reduce the provision which I consider ought to have been made for them.

377 I therefore am inclined to expand the provision for each of the plaintiffs to order as a separate sum by way of provision out of the designated notional estate, such amount as would cover so much of their liability to their legal representatives for costs on a party/party or other basis as I would have been prepared to make the subject of a costs order in the ordinary course. That can only be determined after I have heard submissions as to costs. I am minded to cap any such provision so that, together with the monetary provision ordered for Carol, the total does not exceed the proceeds of sale of the Denning Street property. I will hear submissions on this issue when I hear submissions in relation to costs generally.

Conclusion

378 I find as a matter of fact that inadequate provision was made under the deceased’s will for each of Ralph, Dorothy and Carol.

379 I consider that the distributed estate comprised of the proceeds of sale of the Denning Street property should be designated as notional estate to the extent necessary for the making of the provision for Carol (after the application towards that fund of the net proceeds of sale of the Edward Street unit in which she currently resides) and to enable the plaintiffs’ costs (as may be ordered in due course) to be met.

380 I find that the proper provision to be made for Ralph is as set out in paragraphs 310-313 above.

381 I find that the proper provision to be made for Dorothy is as set out in paragraph 329 above.

382 I find that the proper provision to be made for Carol is as summarised in paragraph 371 and outlined in the preceding paragraphs of my conclusions in relation to Carol’s claim. I note that this will take into account the sum of $10,000 already ordered by way of interim provision for Carol.

383 I will hear submissions from Counsel as to the appropriate form of orders to implement my findings and, in the case of Carol, as to how those orders should be framed in order to constitute the trust, or an appropriate part of the trust, for her benefit as a special disability trust under Part 3.18A of the Social Security Act 1991 (Cth).

384 I will also hear any submissions as to costs. I consider it appropriate that the order for provision for each of the plaintiffs should include any amount which I may order in their favour in relation to the costs of these proceedings.

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LAST UPDATED:
12 February 2010