Leary v NSW Trustee and Guardian [2017] NSWSC 1113 (23 August 2017)

Last Updated: 23 August 2017

JUDGMENT

1. HER HONOUR: This matter involves an application by the plaintiff (John Justin Goyen Leary) for provision out of the estate of his deceased mother (Colleen Margaret Pidcock), who died on 21 August 2014 aged 74. The deceased was survived by her second husband, John Pidcock, who died about 6 months later in January 2015. Probate was granted to the NSW Trustee and Guardian on 23 March 2015 of the deceased’s last will and testament made on 11 July 2013.

Background

2. The plaintiff, aged 49, is the youngest of the deceased’s four adult children, each of whom has survived the deceased (the remaining children being Suzanne Mary Daniel, Andrew Patrick Leary and James Nicholas Leary). With no disrespect intended, I will refer to the children by their first names. The deceased was also survived by 12 grandchildren.

The will of the deceased

3. Pursuant to cl 4 of the deceased’s will, each of the surviving grandchildren who attains the age of 18 years will take an equal share of a portfolio of shares nominated as the “grandchildren’s account” as well as the moneys held in a St George Bank account designated as an account in trust for the grandchildren and the deceased’s shares in ALS Ltd. A sub-trust account was opened to deposit the proceeds of the St George Bank account and the share dividends given specifically to the grandchildren under the will. The current balance of that account (as at 16 May 2017) was $10,057.05 (as disclosed in an affidavit sworn on 16 May 2017 by the manager of the NSW Trustee & Guardian’s Service Centre, where the estate is being administered). That affidavit also records the amount in respect of the legacies to the grandchildren and the nominated shares the subject of the bequest under cl 4 of the will (in the spreadsheet to that affidavit) as being in the order of $160,000.
4. By cl 5 of her will the deceased also gave to each of her grandchildren as should survive her and attain the age of 21 years a legacy of $2,000 unless such sum had already been paid during the deceased’s lifetime.
5. By cl 7 of her will the deceased gave the rest and residue of her estate on trust for her four children in equal shares as tenants in common. There was, however, a hotchpot provision (cl 6 of the will) by which the deceased directed that particular amounts of money, described as “money paid or advanced” to her children or paid for their benefit “or paid as a result of their actions during [her] lifetime”, be taken into consideration in determining the extent of their shares in her residuary estate, and further directed that they be brought into account on the distribution thereof. The amounts so specified were as follows: as to John, $551,541; as to Andrew, $372,351; and as to James, $102,256. John disputes that the sum of $551,541 (referable to legal fees incurred in other proceedings to which I will refer shortly) was a loan to him (as it appears to have been characterised by the executor). Nothing turns on whether there was a loan, as such. It is clear that the deceased considered that sum to have been expended either on John’s behalf or as a result of his actions, and it was for that reason that the deceased directed that that sum to be brought into account as part satisfaction of his share of her estate (see [8] below).

The deceased’s two statutory declarations

6. The deceased made two statutory declarations on 11 January 2013, the same day she made her will.
7. In one of the two statutory declarations the deceased explained her reason for not making any provision for her husband (who was then suffering from Alzheimer’s disease and whose needs she considered were comfortably provided for by a discretionary family trust with assets built up by her husband, with “substantial assistance” from her) or his children (who she declared were all financially comfortable in their own right and received regular substantial distributions from the said discretionary family trust each year). (The deceased’s home was owned by the trustee of the discretionary trust. Hence it did not form part of the deceased’s estate.)
8. In the other statutory declaration the deceased set out her reasons for providing that the moneys she had advanced to each of her sons should be brought into account on the division of her estate (i.e., the hotchpot provision). She stated that she had discussed that provision with each of her sons; and that Andrew and James (but not John) had agreed that the specified amounts were owed by them to her. Relevantly, in that statutory declaration the deceased stated that:

3. Tim Crumpton of Clarke Kann Lawyers, has advised me as to the amount paid in legal expenses incurred in criminal proceedings arising out of John’s actions which resulted in criminal proceedings being brought against not only himself but also against me and his brother, James and James’ wife when we tried to help him. The total amount was $551,541. I paid for all those legal expenses as I considered that it was not right that James and his wife should be burdened with them. I have paid other expenses for him, including removalist and storage fees over several years of his goods [sic] and rent for his unit at Mosman for which I am not making any claim.

4. I believe that John believes that he has not been treated the same or as well as his brothers and sister. He has implied that he was not given the same education as the other children were provided with. He has had the same opportunities in schooling as his brothers and sister but did not use them. He was expelled from De La Salle College, Caringbah, Christian Brothers Sutherland, St Joseph’s College Hunters Hill and Marist Brothers North Sydney. He did not make use of the opportunities provided to him and now appears to blame everybody else.

5. His criminal activities have cost me more than half a million dollars, not to mention the worry and sadness.

9. Annexed to an affidavit sworn by the defendant’s solicitor, Ms Krasa Bozinovska, on 21 July 2016 is a copy of a letter from Clarke Kann Lawyers in which the legal fees incurred by the deceased are apportioned as to fees incurred in acting in criminal proceedings brought against each of the deceased, James and James’ wife ($152,803.90); fees incurred in acting in the criminal proceedings brought against John ($296,423.17); and fees incurred “for the family law matter of John Leary and Colleen Pidcock” ($102,314.23).

The criminal proceedings

10. The respective criminal proceedings in which John and various members of the family were involved (and to which the legal fees paid by the deceased relate) followed John’s abduction in October 2006 of his infant child. John already had children from a previous failed marriage. The child he abducted was from a relationship with his then fiancée, that relationship having come to an end by the time he abducted the child. John admits that he took the child to Singapore (apparently not spontaneously as he withdrew not insubstantial sums of cash in advance to do so), then travelled to Malaysia (where he dyed his hair with peroxide – according to him, this was in order to evade private investigators and not, as was suggested in cross-examination, to avoid arrest by the police), and then entered Thailand illegally without a visa to do so.
11. John was aware, from shortly after he left Australia, that orders had been made by the Family Court granting sole custody of the child to the child’s mother because his brother James had read those orders out to him over the telephone. However, John claims that he was not aware that the police were involved in the matter (although the orders made provision for the police to recover the child). During the period from October 2006 to March 2007, when John was overseas with his young child in breach of the Family Court orders, he made contact with various members of his family and either requested or demanded that the child’s mother pay money to him or on his behalf.
12. John was in due course arrested in Thailand. His sister, Suzanne, and his brother James and James’ wife travelled to Thailand after John’s arrest to provide assistance and to consult with consular authorities. After representations made on John’s behalf by members of his family, rather than being extradited he was deported voluntarily to Australia where, on arrival, he was arrested and denied bail. When bail was granted, some three and a half months later, Andrew posted the $200,000 bail surety on his behalf. John was initially charged with a number of offences but eventually pleaded guilty to one charge of abducting and holding his child for ransom. John was sentenced to 15 months’ imprisonment with a non-parole period of 3 months and 12 days (that time having already been served as at the time of sentencing). Each of the deceased, James and James’ wife was charged (with accessorial liability, as I understand it) but the charges against them were ultimately not pressed.
13. John accepted in cross-examination that his criminal conduct had caused the deceased much stress and said that he was “not ungrateful” for the assistance his family had provided to him at the time (T 86.48). However, he maintains (inconsistently with an acknowledgement signed by him at the time of the advice given to him by his legal representatives and of his instructions as to the plea entered by him on the criminal charge – see Exhibit 8) that he was not involved in the conduct of the defence of his criminal proceedings. He said that he had requested his mother not to incur legal costs in relation to the proceedings and wanted to defend himself. As already noted, he denies that the moneys paid by way of fees in respect of those proceedings were a “loan” to him.

The circumstances of the deceased’s other children

14. Andrew and James have sworn affidavits attesting to their respective personal and financial circumstances. (Although Suzanne has also sworn an affidavit in the proceedings she does not raise her financial circumstances as a competing claim.) In summary, the position of Andrew and James is as follows.
15. Andrew is divorced and has two children from his first marriage. He and his partner are preparing to launch a new business, though it is unlikely that this will occur until Andrew receives a distribution from the deceased’s estate. Andrew and his partner live in a home owned by his partner, which secures a facility of around $305,000 in respect of borrowings for the purpose of the proposed new business. Andrew has deposed to having incurred substantial borrowings from his partner which were applied towards the start-up expenses of the business. He and his partner’s current liabilities are substantial and their assets are comprised largely by his partner’s home (mortgaged as already noted), two cars, some cash, superannuation and shares in the new company. As at 6 September 2016, Andrew deposed that he and his partner had average monthly outgoings of around $8,111 and credit card debts of around $93,000.
16. James is a real estate salesperson. He lives with his dependent wife and two of their three children, the youngest still being at school, in a rented home. James deposes that the home that he and his wife formerly owned was sold in December 2008, after he and his wife were charged in criminal proceedings relating to the abduction by John of his young child and there was a concern as to the deceased’s financial ability to pay for the legal fees for each of John, James and his wife and herself. James and his wife have since rented a home. As at September 2016, James estimated that there was a shortfall in the family’s income and expenditure, which was met by loans from his wife’s parents in the amount of $75,000. His debts have increased (as at 4 April 2017) to $159,300. As well, as at 4 April 2017 he had an increased credit card debt of around $22,500 and was in arrears of school fees.
17. Pausing there, although at the hearing John did not resile from his claim for provision for his needs by way of accommodation, Senior Counsel appearing for him accepted that this was an “ambitious” claim, having regard to the evidence adduced as to Andrew’s and James’ respective financial circumstances (since it was accepted that the cost of such accommodation could then only come from Suzanne’s and/or the grandchildren’s shares of the estate). Instead, what was more firmly pressed was a claim by John for an improved capital sum (of $400,000) in lieu of the provision made for him under the will (of, in effect, $245,000). Moreover, it was submitted that any such provision ought be subject to a protective trust, which it was said would enable John to put money down on a bond for a lease, to have his rent paid, to have private medical care and to put away a lump sum for the vicissitudes of life in circumstances where, given his state of mental health, he will not be able to work for the rest of his life.

Basis of John’s claim for provision

18. John’s claim for provision is based on his personal and financial circumstances as set out in the latest affidavit sworn by him, that being his affidavit sworn on 15 May 2017 (two days before the hearing was due to commence). Also read on his application were parts of an affidavit sworn by him on 15 June 2016 (excluding [37(d)], [38]-[42] and the words “to pay my debts” in the fourth line of [43], those parts not being not read on the basis that they do not now accurately reflect John’s financial circumstances); and affidavits in reply sworn on 22 August 2016 and 29 November 2016. An earlier affidavit sworn by John in the proceedings on 5 August 2015 was not read in his case.
19. In summary, John maintains that the deceased’s will does not adequately provide for his maintenance and advancement in life in circumstances where: he is presently homeless; he is and has been for a number of years in receipt of a CentreLink disability pension; he suffers from a long term psychiatric illness in the form of a generalised anxiety disorder, panic disorder, anxiety and depression (see the report dated 9 December 2015 by his treating psychiatrist, Dr Howard Napper, a copy of which is annexed to John’s affidavit of 15 June 2016); he suffers from physical disabilities arising from an accident in October 1987 which caused multiple fractures to his left leg; and, he says, he suffers from an addiction to gambling and alcohol and has “recently squandered significant amounts of money gambling”.
20. Further, it is submitted that, whether or not the will otherwise made adequate provision for John, the fact that it does not build in any form of protection which would prevent John from squandering his inheritance of itself means that adequate provision was not made for him. It is submitted that:

The Plaintiff accepts that he is not able to manage money by himself. A protective trust needs to be imposed, either on the Plaintiff’s inheritance under the Deceased’s Will or in respect of any additional provision ordered in his favour. For this reason alone, the Will of the Deceased does not make adequate provision for him.

21. I will come back to this issue in due course. Suffice it for the moment to note that in Dr Napper’s most recent medical report of 9 December 2015 (unlike an earlier report dated 27 October 2015 which expressed the contrary opinion – Exhibit 7) Dr Napper concluded that John did have the capacity to manage his financial affairs. How much weight can be placed on that conclusion is moot in circumstances where it is obvious that Dr Napper received only a selective account from John of his personal circumstances. Apart from the fact that there is no reference in any of Dr Napper’s medical reports to the gambling addiction that John now professes to have, there is no reference by Dr Napper to the fact that for at least some period John had traded in a substantial holding of shares (see [35] below), with assistance from various sharebrokers or financial advisers. John, however, maintains that he did tell Dr Napper and his general practitioner Dr Arber, that he was gambling and says he told them “many times” that he was really worried about his gambling (T 81.27). There is nothing to substantiate that assertion.

John’s conduct in the course of the proceedings

22. Before turning to the issues for determination, reference should be made to certain aspects of John’s conduct of the proceedings, which the executor contends has been in bad faith.
23. John’s summons was filed on 14 July 2015. John accepts that the case he put forward at that time (as indeed he did up until his last affidavit of 15 May 2017) was that he was homeless; that he had no assets, his only income being his disability support pension; that he maintained a frugal lifestyle; and that he needed money to pay his debts. As per [43] of his 15 June 2016 affidavit, John was seeking a sum sufficient at least to purchase a one bedroom apartment in the Sydney area, estimated at up to $500,000, though his preference was for 2 bedroom accommodation, plus money for legal costs and stamp duty on any purchase; as well as surplus moneys (after paying his bills) and retention of a sum of $25,000 to be held on trust by his solicitors with “reasonable access to those funds from time to time for unexpected expenditure such as hospitalisation and psychiatric treatment”.
24. As at June 2016 (though he resiled from this to some extent in his oral evidence), John accepted (see his affidavit at [43](g)) that he had made no financial contribution to the deceased’s estate. He deposed that he had been a companion to his mother when he was well “and more so” after her second husband was admitted to a nursing home. He deposed that his mother gave him free board and rent during most of his life except when he was living with his former wife ([43(h]).
25. After affidavits from each of his siblings had been served on him, John swore an affidavit in reply (22 August 2016) in which he responded to various matters raised in their affidavits. Among other things, he deposed that he was never estranged from his mother (p 5 at [19]). Responding to Suzanne’s evidence of an incident in which the deceased had called her early one Sunday morning, at a time after the deceased’s husband was in a nursing home, and had said words to the effect that “John has just arrived home in a terrible state from the Casino and I don’t know what to do with him”, seeking help from Suzanne and her husband, John denied “the alleged incident” and deposed that “[i]t is many years since I visited the Casino” (p 6 at [36]) (a statement he sought in the course of the hearing to withdraw as being false to his knowledge at the time it was made). He deposed in his August 2016 affidavit that “I have had little money in the past 10 years. I am dependant [sic] on the Disability Support Pension” (p 6 at [37]).
26. On 29 November 2016, John swore a further affidavit in which he again responded to matters raised in his siblings’ affidavits and in which, among other things, he denied that he had lived an extravagant lifestyle (p 16), said that the bulk of his assets were “lost in the property settlement” [in November 2004] with his former wife (p 16); deposed that compensation he had received had enabled him to acquire the assets which were transferred to his former wife by way of property settlement (p 14); deposed that he had been dependent on the disability support pension for many years (p 14); and deposed that he did not have periods of non-contact with his mother (p 13). As will be seen, these assertions present neither a complete nor an accurate picture of John’s personal and financial circumstances over the period leading up to and after his mother’s death in 2014.
27. Shortly prior to John’s November affidavit being served, the executor served a notice to produce dated 17 August 2016 requiring John to produce various documents relating to his financial circumstances (including income tax returns, assessment notices, bank or building society deposit books, bank statements and loan statements in respect of all bank accounts including credit card accounts, documents relating to debts managed by Baycorp Australia, documents relating to shares held or sold by John and dividends received on shares over the past three years, and all pension and entitlement statements from CentreLink or any other government department for the period from 1 January 2011 (Exhibit 1)).
28. Pausing there, the requirement for production of documents relating to debts managed by Baycorp Australia appears to have arisen from a statement in John’s affidavit of 15 June 2016 (which was not read at the hearing but to which John was taken in cross-examination) ([37(d)]) in which John made reference to having “factored” his debts to Baycorp. Questioned about this in cross-examination, John was unable to explain what was meant by the expression “factored my debts” (as used by him in his own affidavit). He said that he did have letters from Baycorp, referred to the Credit Reference Authority (CRA) and then seemed to attribute responsibility for the wording of his affidavit to his then solicitors. In any event, a subsequent subpoena to Baycorp produced no record of any debt owed by John to Baycorp nor any record of any correspondence between Baycorp and John in relation to any debts.
29. John seems to accept that he produced no documents in relation to the August 2016 notice to produce. He also did not comply with a direction of Hallen J, made on 2 December 2016, that he file and serve his updating affidavit as to his financial and other circumstances by 5 April 2017.
30. On 12 April 2017, John’s solicitors unsuccessfully applied for leave to cease to act in the proceedings. At that time, orders were made to permit an interim distribution of $75,000 to be made to John on the basis that this amount was to be paid to his solicitors on account of legal fees for the proceedings.
31. Further notices to produce were issued to John on 9 and 15 May 2017 (Exhibit 1). The first of those notices required the production to the court of the material that had been sought in the initial notice to produce. The second required the production to the court of various other documents including documents relating to a claim made by John on travel insurance and payments made to him in relation to that claim from 1 January 2013; documents relating to all betting and gambling accounts held by him from 21 August 2014; documents relating to all purchases and sales of shares by John and all share dividends received by him from 21 August 2014; documents relating to the dissipation and expenditure of the proceeds of shares sold by John in 2017; and documents relating to all insurance policies taken out by John on the lives of the deceased, his stepfather and any other person, and payments made in relation to such insurance policies.
32. Meanwhile, the executor had also caused a number of subpoenas to be issued to third parties seeking documents in relation to John’s financial position, including, relevantly, to insurance companies for copies of all documents relating to insurance policies over the lives of the deceased and her second husband (John’s step-father) (Exhibits 2, 4 and 5); and to Baycorp for loan applications, records, agreements and account statements in relation to John (Exhibit 3). Documents were produced by the insurance companies, from which it is apparent that not only did John take out policies on the lives of the deceased and of his step-father (which he accepts he did once he learnt in each case that his relatives had been diagnosed with terminal cancer) but also that at least in some instances he did so in the names of the deceased and his step-father. In relation to his step-father, John appeared to accept that he must also have signed a nomination of beneficiary form (in his own favour) in his step-father’s name, since John accepted in cross-examination that his step-father was suffering from Alzheimer’s disease at the time and could not have done so himself (and indeed that his step-father did not know about the policies). Copies of correspondence addressed to the deceased and the step-father but sent to John’s post office box address were in evidence.
33. The hearing before me was scheduled to commence on 17 May 2017.
34. It was against that background that John served his most recent affidavit of 15 May 2017, in which he corrected what he now accepts were false statements made in his earlier affidavits as to his personal and financial circumstances. In that 15 May 2017 affidavit, John deposed that:

3. Until 12 April 2017 I have lied to my former and current solicitors in relation to the extent of my assets and personal circumstances until I swore this Affidavit.

4. I admit that I have also lied to the Court.

35. John then deposed (at [5]) that on 12 April 2017 he had disclosed to one of his solicitors, Mr Dornan, the following matters:

• That I received approximately $450,000 in about 2013 from the proceeds of a claim on my travel insurance.

• That I insured the lives of my step-father John Pidcock and my mother and that after their deaths I received significant amounts from TAL Life Limited and Australia Seniors Insurance Agency Pty Limited.

• That I owned a motor vehicle.

• That I banked monies in my St George, ANZ and Commonwealth Bank accounts.

• That I purchased and sold public company shares and that I dealt with shares with CommSec and Bell Potter Securities and currently through a financial adviser Valor Private Wealth with the proceeds of sales and dividends paid through Macquarie Bank and RABO Bank accounts.

• That I developed an addiction to gambling and I have had accounts with TAB, Sportsbet, Ladbrokes, William Hill and Centrebet.

• That I drink alcohol to excess and that I was charged with high range PCA as a result of a driving incident on Melbourne Cup Day in 2016.

• That I have had extensive overseas and domestic travel in the period since my mother's death.

36. Even more extraordinary is what was disclosed at [6] of that affidavit, namely that:

6. After advising Mr Dornan on 12 April 2017:

• I sold my shares.

• I accept that my solicitors have been unable to verify my expenditure.

• I have dissipated the proceeds of about $250,000.00 except for approximately $48,000.00 held as gambling chips.

• I have withdrawn all monies from my bank accounts except as set out in the annexures to this affidavit.

37. In his oral evidence in chief, John corrected this evidence further by disclosing that in the 48 hours before the hearing (which in fact only commenced on 18 May 2017, due to the unexpected ill-health of the defendant’s Counsel), he had spent further moneys at the casino. The disclosure of that “activity” was made in the following evidence adduced orally in chief on 18 May 2017:

Q. And what is that activity and what was the result of it?

A. Well, the end result is I don’t have the 48,000, I have just about 40,000.

Q. And

A. Or I think 40,200 or thereabouts, I think, 40,000 give or take a

Q. Where did that activity occur?

A. In the last 48 hours, I think.

Q. And where?

A. At, at the casino.

Q. How long did you spend at the casino on that occasion?

A. It was actually, I’m pretty sure, I’m pretty sure it was twice on that, on that 48 period, a number of hours, a fair few hours on both times.

Q. And where are the gambling chips at the moment, the $40,000 worth?

A. They’re, they’re, they’re hidden at a friend of mine’s place. I can get them.

38. John also deposed in his affidavit of 15 May 2017 (at [12]-[13]) that:

12. I have not been frank with the Court in relation to my living arrangements. During my mother’s life from 2010 and since her death. Until my mother’s death I was in a de-facto relationship with Hillary Mooney. We lived together variously at her Five Dock residence and at her Kirribilli Unit. When I was not living with Hillary I stayed at my mother’s unit with her apart from periods when I was an inpatient at psychiatric hospitals. I have also lived intermittently with Sara Fletcher. It was an abusive relationship characterised by excessive drinking by both of us and multiple reports to the Police. I used to stay at Falcon Lodge, North Sydney when my brother Andrew was at my mother’s home in Mosman. I also spent about six weeks at Wesley Central Mission.

13. I have also stayed from time to time in the house in the Hills District of a friend whose name I do not wish to disclose.

39. John went on to depose:

14. I have paid my solicitor to date the sum of $250.00. I am aware from the invoices rendered to me they have paid disbursements for me of $3,352.00. Although I had money available I have made excuses and told lies to avoid paying the disbursements.

15. I admit that after receiving the insurance payout for my injuries and for my mother's and stepfather’s death claims and any entitlement in the Estate I had sufficient money to purchase a modest home unit for my accommodation. The amounts that I had did not provide sufficient to discharge my accumulated debts in such amount as may be proved. [This, I take to be a reference to the amount specified in cl 6 of the will]

16. I have dissipated the monies now disclosed by me and seek additional provision from the Court to enable me to provide accommodation, to pay my debts and to give me an amount for contingencies.

...

19. My mental health has continued to deteriorate.

20. I am addicted to gambling. I use cash and cheques withdrawn from my bank accounts to purchase gaming chips.

40. It is clear from the latest affidavit that John was aware, by the time he swore that affidavit (15 May 2017), of the numerous subpoenas that had been issued by the executor in relation to his financial affairs (see [24] of his affidavit). Given that at least some of those subpoenas appear to have been issued before 12 April 2017, it seems likely that John would have been made aware by his solicitors of the enquiries that the executor was then making at or about the time that he decided to correct the false information that had previously been given by him to his solicitors about his financial circumstances. Absent those enquiries by the executor (from which John must surely have realised that his earlier evidence would likely have been proven false), it is at the very least questionable whether John would have taken the steps he did to correct his earlier false statements in the proceedings. John, however, denied that his actions were referable to knowledge that the subpoenas had been issued. In particular, he denied that the movement of money from his accounts (i.e., from the Macquarie cash management account to the Commonwealth Bank account) occurred after his meeting with the solicitors on 12 April 2017 (though the bank statements are inconsistent with this) and says it occurred “well before” he knew the subpoenas had been issued (see T 82.36-83.14). He also maintained that he had not sold his shares “because of [the] subpoenas” and said that he had “swapped over hundreds of thousands of dollars some time ago ... to Valor” because he was not happy because he was losing a lot of money trading shares with Bell Potter (T 83.6-15; T 88.47-6).
41. In his 15 May 2017 affidavit, John went on to provide certain information in relation to accounts held by him (a Macquarie Cash Management Account into which he admits he deposited the sum of $390,000 on 4 April 2016 and which he deposed had a current balance of $7,175.48; a Direct Investment Account with Commonwealth Bank, from which he said there had been substantial deposits and withdrawals; and accounts with Westpac Banking Corporation, St George Bank, ANZ and RABO Bank); the policies taken out by him on the lives of his mother and stepfather; share accounts held by him through Commonwealth Securities Limited; his trading of shares through Bell Securities (and receipt of dividends); and his trading of shares with the assistance of a financial advisor at Valor Private Wealth (see from [25]-[37]). Not mentioned in that affidavit were accounts at NAB and ING that John admitted in the witness box that he had, but which he said had almost nothing in them (T 31.4-34), nor were any documents produced in relation to those accounts.
42. John disclosed in his May 2017 affidavit that he had not filed any income tax returns ([38]). He deposed that he had failed to admit to his solicitors the extent of his alcohol addiction (providing details of various driving offences while affected by alcohol – [39]) and his history of criminal charges relating to intoxication and violence (see [41]). He also provided detail of overseas and domestic travel since his mother’s death (see [40]) (though in the witness box he still appeared to resist any suggestion that this was an extravagant lifestyle, saying that “it wasn’t like [he] was staying in penthouses”) (T 30.39) and that “as Dr Napper said, you’re allowed to go on holidays” (T 30.38).
43. The position, therefore, is that John, on his own evidence (and contrary to the basis on which his case was conducted until 15 May 2017), held significant assets (in shares and in cash) over the very period in which he was asserting that he was homeless, impecunious and dependent on a disability support pension. He was vague in the witness box as to the amount of money that had gone in and out of his bank accounts in recent years but seemed to accept that it was in the hundreds of thousands of dollars. Similarly, he was vague as to the amount he had earned in dividends in 2016, though in his 15 May 2017 affidavit he deposed to the receipt of dividends from ten different companies in the 2016-2017 income tax year.
44. The executor points to other aspects of John’s evidence (relating to his alleged periods of co-habitation with the deceased, the quality of his relationship with the deceased, the unilateral periods of estrangement from the deceased, and the conduct of his siblings) which the executor maintains were false and concocted to improve the merits of his claim for further provision.
45. In cross-examination, John admitted that he had lied to the Court throughout the proceedings. He accepted that they were significant lies about serious matters and, relevantly, he accepted that they were lies that were calculated and designed to strengthen his case. He admitted that on 24 April 2017 he withdrew a substantial sum from his Macquarie cash management account and that he could have afforded to pay rent or even stay in a hotel. It was put to him that he had portrayed himself as homeless throughout the proceedings when he had no need to be homeless because he thought it would enhance his case and his response, in effect, was to refer to his mental health problems. In substance however, he appeared to accept that it would have been open to him to stay in rental or hotel accommodation.
46. John admitted that he had not produced any documents relating to the dissipation of the proceeds of sale of his shares (T 85.12). He claimed he had made three suicide attempts in the last four months (T 86.16); had been in and out of hospital (T 86.14); and had been “scheduled” about four or five months ago. The most recent report from Dr Napper did not report any suicidal ideation on John’s part; nor was there any independent evidence to support John’s account of recent suicide attempts in the last four months, during which period John also says that he spent about a month in Perth with friends he met on one of his holiday trips. (Pausing there, I note that James, at [67] of his 6 September 2016 affidavit, has deposed to a conversation with John, which John denies, to the effect that John had told him when he needed to embellish his position with CentreLink or avoid a Court date he would have himself admitted to hospital – an account which, if true, might cast an adverse light on John’s account in the witness box of multiple admissions to hospital in recent months – but as to which there is insufficient evidence to form any conclusion.) John also volunteered in the witness box that he had engaged in “doctor shopping” and was addicted “off and on but more off, more on than off” to prescription medication (OxyContin, which he described as synthetic morphine) (T 90.48), though disavowing the use of illicit drugs.

Application for provision

47. In Hogan v Hogan [2013] NSWSC 1405, Hallen J discussed the statutory scheme in place under the Succession Act 2006 (NSW) by which the Court is empowered, if the statutory conditions are met, to exercise its discretion to alter the testamentary disposition of a deceased’s estate. It is not necessary here to revisit those matters or to explore the subtle difference in the expression of the task required by s 59 of the Succession Act from that required under previous legislation (as to which, see Andrew v Andrew; (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6] (Allsop P, as his Honour then was); at [26] (Basten JA); at [82]-[86] (Barrett JA)).
48. Section 59 of the Succession Act empowers the Court to make a family provision order in relation to the estate of a deceased person if the Court is satisfied of the matters set out in s 59(1). There is no dispute that, as a child of the deceased, John is an eligible person within the meaning of s 57(1)(c) for the purposes of s 59(1)(a). Relevantly, the question in the present case is whether I am satisfied of that which is set out at s 59(1)(c), namely that “adequate provision for the proper maintenance, education or advancement in life” has not been made for John. The time at which the adequacy of provision is to be tested is the time the Court is considering the application (Succession Act, s 59(1)(c)).
49. If satisfied of the matters set out at s 59(1)(a)-(c), such that the power to make an order for family provision is enlivened, the Court may make such an order for provision out of the estate of the deceased as the Court thinks ought be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made (s 59(2)).
50. Pursuant to s 60(1) of the Succession Act, the Court may have regard to the matters set out in s 60(2) for the purpose of determining “whether to make a family provision order and the nature of any such order”. Those matters may be relevant to the question of inadequacy of provision (see Fulton v Fulton [2014] NSWSC 619, [309]-[311] and the authorities cited therein) as well, if the provision is found to be inadequate, as the question whether, and if so what, order for provision should be made.
51. Whether the task remains the two stage process outlined in Singer v Berghouse (No 2) (1994) 181 CLR 201; [1994] HCA 40 (and approved in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11) or a task differing subtly from that process, it is clear that the first step to be addressed is what has been recognised as 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. I therefore address that issue first.

Is the provision made for John inadequate?

52. An assessment as to the adequacy of provision involves an assessment as to what level of provision was appropriate for the applicant, having regard to matters such as 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 or competing claims upon the deceased’s testamentary bounty.
53. It is (and John accepts that it is) incumbent on an applicant for provision to disclose to the Court as fully and as frankly as possible all details of his or her financial and material circumstances (see Collings v Vakas [2006] NSWSC 393 at [66]- [67] (Campbell J, as his Honour then was); Foye v Foye [2008] NSWSC 1305 at [14]- [15] (McLaughlin AsJ); Re Estate of the late Anthony Marras [2014] NSWSC 915 at [238] (Bergin CJ in Eq); and, more recently, Singh v Singh [2015] NSWSC 1457 (Black J)).
54. It is submitted for John that he has now met that obligation by having served the latest updating affidavit which corrected the earlier false statements as to his circumstances and by not having read those parts of his earlier statements that he concedes were false.
55. In particular, reference is made to what was said in Wilson v Vine [2003] NSWSC 341 by Macready M, as his Honour then was, at [39]. There, an application had been made under the Property (Relationships) Act 1984 (NSW) for an adjustment of the parties’ property interests and the plaintiff had filed affidavits parts of which were admitted by her to be false. Macready M noted that most of the material in the case before him was not contentious except in relation to some of the contributions made by the plaintiff and said (at [33]) that it would be necessary, even though the plaintiff had made “a clean breast of her dishonesty”, that he treat her evidence with some reserve and require corroboration on essential aspects. At [39], addressing a submission that the conduct of the plaintiff in falsifying her evidence was such as to disentitle her from relief, his Honour said:

The principles as to proper disclosure of assets are of course very important and need to be observed for the court to exercise its discretion. In the present case there has been no misleading of the court because, by not reading relevant paragraphs of her affidavits and admitting to their falsity, the plaintiff corrected her situation. Although submissions were made about the deliberate attempt to improve her case by giving the false evidence, even if there were finding of such deliberate intent, it does not affect the outcome of the court’s deliberations. In my view, in the circumstances of this case the court is not entitled to refuse relief because of the deception to which I have referred.

56. In the present case, it is submitted for John that: he has confessed that he misled his solicitor; he has confessed that he misled the Court; he has sought to make amends and to put forward an accurate statement of his circumstances; and, to that end, he also sought (through the evidence of Mr Harrison) to corroborate his evidence as to his gambling.
57. The executor, on the other hand, submits that John’s claim should be dismissed on the basis of the false evidence given by him throughout the proceedings (referring by way of example to Ahmad v Ahmad [2002] NSWSC 579); and, in any event, on the basis that, on his most recent evidence, John has expended in the order of $200,000 or more since 24 April 2017 without offering any adequate explanation or documentary evidence as to what he has done with that money (referring to Mayfield v Public Trustee [2009] NSWSC 330). The executor further submits that in the circumstances it is not possible for the Court to find what John’s true financial circumstances currently are, so as to be able to make a determination as to whether the plaintiff has been left without adequate provision (referring to Collings v Vakas and Singh v Singh).
58. In Ahmad, McLaughlin M, as his Honour then was, considered a family provision application in circumstances where the applicant had filed an affidavit in support of her application that contained statements concerning her income, expenses, assets and debts that his Honour described as “totally false and that his Honour found were intended deliberately to mislead the Court and to mislead the Defendants” ([23]). His Honour found that these statements were false to the applicant’s knowledge at the time the affidavit was sworn ([39]). That part of her affidavit was not read by her (though it seems to have been read as part of the defendants’ evidence). His Honour considered that the corrections were made only when the plaintiff had been “caught out” in her earlier false statements and was not persuaded that the admission of the true facts was the result of some change of heart on her part or reflected any credit on the plaintiff. In particular, his Honour was not persuaded that if the plaintiff had not realised that the defendants had become aware of the true facts, the plaintiff would have voluntarily disclosed them (see [41]-[42]).
59. There are obvious analogies to be drawn between Ahmad and the present case. The coincidence of timing as between John’s awareness of the enquiries that the executor was making as to his financial circumstances and his decision to “come clean”, so to speak, is noteworthy. However, it is also relevant to note that in Ahmad such conduct (though reflecting badly on the credit of the plaintiff and recognised as being a serious abuse of the process of the Court) was not of itself determinative of the claim for provision (reference being made in that regard to what was said in Re Will of Gilbert [1946] NSWStRp 24; (1946) 46 SR (NSW) 318).
60. In the present case, if John’s evidence is accepted then his conduct in deliberately divesting himself of almost all of his assets (less than a month before the hearing), at least insofar as that was intended or calculated by him to improve his position in relation to his claim for family provision, would be a clear abuse of process of the Court. It surely cannot be the case that the legislature contemplated (when appointing the time of the making of an order for family provision as the time at which adequacy of provision is to be assessed) that someone who had held substantial assets (which, if retained, might lead to the conclusion that there had been adequate provision made for him or her) could by his or her own deliberate conduct divest those assets in the weeks leading up to a hearing so as to improve (or establish) an argument as to inadequacy of provision.
61. John’s position, however, appears to be that his gambling was a result of an addiction and therefore something for which he could not be regarded as responsible or accountable. His Counsel referred to it as reckless and “completely aberrant” behaviour and said that it was not inconsistent with John’s earlier behaviour in kidnapping his young child and demanding ransom money (T 144.6.) However, as already noted, there is no medical evidence to support a conclusion that John had no control over his behaviour in that regard.
62. That said, in the absence of a claim that John’s summons should be struck out as an abuse of process, I would not dismiss John’s claim for provision by reference to the fact that he chose (up until 15 May 2017) to pursue a claim based on what he now admits was false evidence and was prepared to swear false affidavits in support of that claim (though that will be a matter of relevance when considering the costs of the proceedings).
63. Rather, for the reasons that follow, I am driven to dismiss John’s claim because I am not satisfied that John has, even now, presented a full and frank picture of his personal and financial circumstances (despite his correction of the false statements made in his earlier, unread, affidavit evidence and his withdrawal of other similarly false statements made in the affidavits that were read). That is because there is nothing to establish a documentary trail in respect of the money withdrawn from the Macquarie cash management account after it was deposited into John’s Commonwealth Bank account.
64. So far as can be gleaned from the bank statements that have now been produced by John, and the admissions made by him in his 15 May 2017 affidavit, the position is as follows.
65. John received a sum of about $450,000 on a travel insurance claim in 2013. Since his property settlement with his former wife was in November 2004, it is reasonable to assume that whatever assets were used to fund that settlement they were not assets referable to the later acquired travel insurance moneys. John also obtained moneys on life insurance policies taken out on the lives of his mother and step-father in amounts he accepts totalled about $110,000.
66. On 4 April 2016, an amount of $390,000 was credited to the Macquarie cash management account. Although John deposes (at [25] of his 15 May 2017 affidavit) to that deposit he gives no explanation of its source. On 6 April 2016, the sum of $203,015.39 was withdrawn from the account (again with no explanation for this withdrawal being provided by John). The notation “TPP Trust A/C Buy [...]” on the account statement might perhaps indicate that this was a share acquisition. Other smaller withdrawals with the notation “TPP Trust A/C Buy” were made on 13 and 15 April 2016. Other withdrawals (of $20,000 and $108,000) were made with a “John Leary” reference on 8 April 2016. Further “TTP Trust A/C Buy” notated withdrawals were made on 26 and 31 May 2016. There were continued withdrawals, and some credits transferred from a Rabo bank account, through June/July 2016; and other withdrawals/deposits up to February 2017.
67. On 28 February 2017, which John accepted was shortly before the sale of his shares (T 80.11), the opening credit balance disclosed on John’s Macquarie cash management account statement was $61,238.37, of which $55,000 was withdrawn on 13 March 2017 (with a RaboDirect account reference seemingly matching up to a deposit in the RaboDirect account statement on the same day, which amount was then transferred out of that acount on 5 April 2017). Credits of $56,215.00 and $4,006.88, followed by a withdrawal of $3,956.00 on 18 April 2017, then brought the balance of the Macquarie cash management account to a credit of $28.92.
68. On 19 April 2017, the sum of $171,501.09 was deposited into that account (with a reference to a numbered TPP Trust A/C). There was a “same day deposit” on 21 April 2017 of $68,043.20 and then another differently numbered TPP Trust A/C deposit entry for $7,336.30, bringing the Macquarie cash management account as at 21 April 2017 to a credit balance of $246,909.51.
69. On 24 April 2017, the sum of $239,520 was withdrawn from the Macquarie account, and apparently transferred (see the notation on the account statement) to a bank account the number of which corresponds to the number of a Commonwealth Bank account in John’s name (the balance of which, as at 15 May 2017, was confirmed by the Commonwealth Bank to be $489.92).
70. What happened between 24 April 2017 and 15 May 2017 to the money transferred from the Macquarie account to the Commonwealth Bank account cannot be discerned from the documentary evidence.
71. What John contends is that he lost it all (other than the $40,000 left in gambling chips) having gambled it away in the space of a very short period of time (see T 80.50). While his friend, Mr Harrison, was called to provide corroboration of John’s gambling habits, all that was established by that evidence was that John had indeed left with his friend some casino gambling chips in denominations totalling $40,000 (Exhibit A); and that his friend had been with John at the casino “three or four, five times” in the past few weeks. There was no evidence adduced from Mr Harrison as to what he observed by way of bets being placed by John on those occasions or generally as to what had occurred on those occasions.
72. John’s evidence that he has a gambling addiction was not the subject of reference in any of the medical reports tendered by him in the proceedings, although he insisted in cross-examination that he had told both Dr Napper and Dr Arber (and, for that matter, his share broker) of a gambling problem. It is difficult to accept that he had told Dr Napper this at the time of the reports given by Dr Napper, since one would have thought this would have been relevant to an assessment of John’s ability to manage his finances and would therefore have been included in Dr Napper’s reports. Moreover, Dr Napper refers to history given by John as to his father having a gambling problem, so it might be thought that Dr Napper would have included a similar reference to John having a gambling problem had John given him this history.
73. There is evidence in Andrew’s affidavit (sworn 6 September 2016, see [19]) to the discovery of a document in John’s room of a sports betting account in credit for an amount of $80,000 some time ago, but the only documents produced in answer to the notice to produce did not disclose evidence of betting in the order of that amount which was allegedly dissipated from the Macquarie cash management/Commonwealth Bank moneys (which represented, as I understand it, the proceeds of sale of the shareholdings held by John). Moreover, John does not suggest that the moneys he says he dissipated in April 2017 were spent through a sports betting account. He says he spent those moneys at the casino (in Sydney, as I understand it, though perhaps also in Perth).
74. I have noted above the reference in Suzanne’s affidavit to a conversation with her mother after John had returned early one Sunday morning from the casino, John’s response to which (later said by him to have been false) was that he had not been to the casino for many years.
75. Some of the responses given by John in cross-examination (where he had a tendency to ramble on) indicated a familiarity with casinos. For example, he volunteered, when asked about his overseas travel, that “they give you free accommodation in Las Vegas or $10 a night if you're gambling there or, you know, $9.99 a night if you're gambling in their casino ...”; and, when asked about his trip to Perth (said to have been for nearly a month about a month before the hearing), that “I did go to the Burswood Casino there as well” and “But I did go to the Burswood Casino ‘cause Debby doesn’t mind a flutter but she was a bit amazed how much I – ‘cause I took over a fair bit of cash and she was amazed how much I was gambling on the thing and she said, “You shouldn’t be gambling”. He also referred to there being “... on the, on those, on those, on those big, big trips, you know, the big ships there’s casinos on them as well ...”.
76. However, there is a difference between accepting that someone has a familiarity with, or has visited a number of, casinos and accepting on the balance of probabilities that that person has a gambling addiction (not hitherto noted by any of his doctors) and has unsuccessfully gambled away some $240,000 or more in approximately 3 weeks (the period from 24 April 2017 to 15 May 2017) or perhaps somewhat longer if the $55,000 withdrawal was also said to have been dissipated in that fashion.
77. John’s explanation for his inability to produce documents was, variously, that he had trouble with paperwork; that he was a luddite and he did everything on his mobile phone; and that he had given everything to his solicitors. He also says that there are no invoices or receipts issued when gambling at the casino. He claims to have withdrawn moneys by producing his passport at banks and says that his share transactions were effected by phone or text messages.
78. However, that does not explain why John could not, through his solicitors, have obtained more complete bank records in relation to his Commonwealth Bank account; nor as to why there could not have been an explanation as to the kind of documentation kept by casinos in respect of customer betting (or at least an explanation as to why such documents do not exist) from a more credible source than John himself. Leaving aside the absence of any casino records (of which I accept there may or may not be any), I am troubled by the lack of documentary evidence as to the withdrawals from the Commonwealth Bank account.
79. It was put to John, and he denied it, that the money he had withdrawn might be sitting in another account somewhere or might have been given to someone else to look after for him. I do not suggest that this is the case. However, it points to the unsatisfactory nature of the evidence as to what happened to the almost $240,000 deposited in the Commonwealth Bank account on 24 April 2017.
80. I am not satisfied that a complete picture of John’s financial position has been provided by him and I cannot accept that John is a reliable witness whose evidence can be accepted without corroboration on matters of significance such as his financial position.
81. In particular, John’s willingness in the past to swear false affidavit evidence in an attempt to improve his claim for family provision means that I must scrutinise with care the evidence that he now gives. Regrettably, though he proffered numerous apologies for his conduct in lying to the Court and to his solicitors, and stated on many occasions in the witness box his shame at other morally repugnant conduct (in particular his conduct in taking out insurance on his mother’s life as soon as he became aware that she had been diagnosed with terminal cancer – something about which she became aware at least to a limited extent before she died and which John says she told him felt like he was “dancing on her grave”, which John accepts upset her), I cannot place any reliance on John’s assertions as to what has happened to the substantial sums of money he says he dissipated.
82. A review of the transcript reveals a convenient lack of recollection about many things, imprecision about events that occurred, and a tendency to excuse his inability to answer questions by reference to his mental condition or other limitations (such as John’s continued assertions as to not being good with paperwork and the refuge placed by him in what his solicitors did or did not do in relation to the production of documents). Some of his assertions, such as his evidence that he was sleeping on the street the night before the hearing (which according to him was so that he did not fail to be in court on time) seemed calculated to emphasise his homeless status. However, in circumstances where the hearing had in fact been scheduled to commence a day earlier than it did and the night before the scheduled commencement of the hearing John did not appear to have had any concern about making it to court in time (since he said on that night he had slept at a friend’s place), the fact that he slept on the streets seems more likely to have been his choice than an inability to find a roof over his head with friends.
83. There were instances where John had sworn to matters in his affidavits (such as his lack of any financial contribution to his mother during her life) and then insisted to the contrary in the witness box (insisting that he had provided her with bits and pieces of money during her life), without any evidence to support the later assertion. He sought to distance himself from the giving of instructions in relation to, or involvement by him in the conduct of, his criminal trial even though there was a signed acknowledgement of the advice he had been given by Senior Counsel in relation to the charges laid against him and ofhis then instructions in relation to an offer to plead guilty to either the kidnapping or child abduction charge conditional upon certain matters (Exhibit 8). His evidence as to particular matters (such as whether his mother had changed the locks at her house in response to his conduct) is contradicted by other contemporaneous accounts (such as the record of a surgery consultation given by the mother to her doctor – Exhibit 6 – a doctor who John dismissed in the witness box as having the reputation of being “a bit bombastic” and with whom he had an apparent dispute at the doctor’s refusal to bulk bill his consultation). The statutory declaration signed by the deceased makes clear that John’s conduct caused his mother much stress, a fact that was attested to by all the other members of the immediate family.
84. I therefore cannot conclude that John is a reliable witness and I am unable, in the absence of a full and frank account of his financial circumstances, to determine as a matter of fact that inadequate provision was made for him by reference to the share of residue that he was left under the will (also taking into account the inter vivos provision made for him during his life, including the benefit of the legal fees that were expended on his behalf or as a result of his criminal conduct, and the other aspects of his personal circumstances and relationship with the deceased to which reference was made at the hearing).
85. It is therefore unnecessary to consider the other matters to which regard may be had in determining adequacy of provision. John submits, and I agree, that this is not a case where the relationship between the various family members would be determinative in a consideration of his claim. While the executor submits (and I accept) that John caused his mother heartbreak, worry and significant distress, I would not conclude that the overall effect of his conduct (including his expulsion from four schools, his unilateral periods of estrangements from the deceased, his criminal activities, and his abusive and uncaring conduct towards the deceased and others) amounted to disentitling conduct such that there could be no reasonable community expectation, given the circumstances of this case, that John should receive further provision. Despite the stress caused by John’s criminal conduct and the stress caused by his conduct thereafter (including when the deceased discovered he had taken out a policy on her life), and despite the fact that I accept there were periods of estrangement (or at least of no contact) between John and his mother, at the end of the day it is clear that his mother wished to provide for all her children on an equal basis (taking into account the provision she had made for them or on their behalf in their lifetime).
86. As to the relationship between the deceased and her other children, each of whom clearly have a legitimate claim on the deceased’s testamentary bounty, it cannot be doubted that each made significant contributions to the welfare of the deceased and, in the case of Suzanne, that she made financial contributions to the deceased. I accept the executor’s submission that each of John’s siblings has been a dutiful, caring and loving child throughout his or her life and has provided attention and assistance to the deceased. While I accept that there is evidence that supports the conclusion that Andrew too was a cause of stress to his mother (see Exhibits 6 and B), again it is clear that the deceased sought to treat all her children equally (and I note that this evidence was only relied upon by John’s Counsel to give a “fairer” picture insofar as the siblings had given evidence of the stress caused to their mother by John).
87. For the same reason, the allegations made by John as to Andrew’s conduct towards him (which on one instance led to a charge of assault) take the matter no further; nor do John’s unsubstantiated allegations (volunteered for the first time in the witness box) of other misconduct towards him by his siblings during his early childhood. (The latter is arguably supportive of the deceased’s belief as to John’s tendency to blame everybody else for his situation.)

Fact that the bequest was not structured to protect John from squandering his inheritance

88. As to the submission made on John’s behalf that, leaving aside the size of the provision made for him, the manner in which that provision was made (i.e., without any mechanism to safeguard that inheritance, such as the creation of a trust in his favour), of itself made the provision for him inadequate, I do not accept that this factor would necessarily have been determinative. Although strictly speaking it does not arise (since I am not persuaded that there has been full and frank disclosure of his financial circumstances), I make the following observations.
89. There is an extensive line of authority addressing the question of provision for, and protection of, spendthrift applicants. However, there does not appear to be any case (and certainly none was drawn to my attention) in which it has been held that inadequate provision was made for an applicant solely because the provision that had been made was not structured so as to prevent the applicant from squandering his or her inheritance.
90. It is well-established that “merely because there is a fear that a successful plaintiff might squander his or her benefaction is no reason not to provide for the plaintiff”, although the plaintiff’s financial habits may bear on the form of the order made (Carroll v Cowburn [2003] NSWSC 248 at [17] (Young CJ in Eq); see also Bondy v Vavros (Supreme Court (NSW), Young J, 29 August 1988, unrep) ; Close v Close [2001] NSWSC 668 at [40]- [42] (Berecry AM); McLean v Public Trustee [2001] NSWSC 970 at [19]- [21] (Macready M)).
91. In Bondy, after observing that the plaintiff, the widow of the deceased, had been living above her means and was seeking provision to maintain a lifestyle to which she had become accustomed when living with her husband, Young J (as his Honour then was) concluded that:

... it does not matter if I form the view that a plaintiff is a spendthrift. If a person is entitled to an order, what they do with the money that they receive is their business and it is none of my affair if I very much fear that the money may be wasted on wine, women and song in a short period of time. I have deliberately used that expression to make it clear that I am not referring at the moment to the facts of this particular case. On the other hand, when one is considering what a wise and just testator would have done, if one can see that a plaintiff is a spendthrift and the testator has arranged his will in such a way as to limit the funds flowing to the plaintiff, then one may very well come to the conclusion that the plaintiff has failed to establish that there has been any breach of moral duty.

92. This approach was adopted by Powell J, as his Honour then was, in Howarth v Reed (Supreme Court (NSW), 15 April 1991, unrep). There, his Honour ordered a condition to be attached to two family provision orders, of $60,000 and $30,000 respectively, that the amounts be charged on a particular property, being the deceased’s home. The basis of the protective orders was to mitigate his Honour’s concern that if the applicants continued to adopt “the totally unrealistic approach to the management of their affairs” that they had done “the benefit of any Order which might be made ... [would be] dissipated in short order”. Similarly in Carroll v Cowburn, a case where no provision had been made by the deceased for the plaintiff, the deceased’s only son, who was held to have a “limited” ability at handling money (see [12]) (the estate property instead being left to the plaintiff’s children), various protective orders were made in order to ensure that the provision ordered was used to pay off the applicant’s debts and make specific purchases of a motor vehicle and computer.
93. However, in other matters orders have been made in favour of spendthrift applicants without any such safeguards addressing the applicants’ vulnerability in dealing with financial matters. In Close v Close, for example, Berecry AM described (at [40]) the defendant as exhibiting “all the hallmarks of a spendthrift”, noting that the defendant had given money away, had lent money without trying to recover it, and had gambled away a significant amount of the money, all at a time when he was not in employment. However, despite this, the conclusion reached (at [41]-[43]) was that:

... Whether he does that in the future with any money he receives out of this estate is also open to speculation, but that is not an exercise that I can enter into in these proceedings.

It is clear from decisions such as Bondy v Vavros (Young J, 29 August 1988, unreported) and Howarth v Reed (Powell J, 15 April 1991, unreported) that the fact that a child may be regarded as a spendthrift is no reason for a court to disallow an adequate allowance to be made for that person.

If the person decides to spend the money in an ill-conceived manner, so be it. It is not a matter for the Court. Therefore, in doing a balancing exercise between these siblings, I must take into account the needs that the defendant does have.

94. Similarly in Stares v Public Trustee [2005] NSWSC 37, Macready M, as his Honour then was, did not place any restriction on an $80,000 lump-sum legacy awarded to the plaintiff (the de facto partner of the deceased), despite it being recognised that the plaintiff had already likely spent $38,000 of the deceased’s superannuation on poker machines (see [24]) and that there was a “real possibility that the plaintiff may waste any further inheritance by her addiction to gambling” (see [38]).
95. A different type of order was made in Alquist v ANZ Executors & Trustees Co [2004] NSWSC 1116, where Berecry AM considered the provision to be made for an applicant for whom no provision had been made in his late mother’s will but who had “wasted in excess of $230,000 mainly on gambling and alcohol” (at [41]). Berecry AM held that (at [56]):

It is clear that should provision be made to the plaintiff by way of a lump sum payment, then the money will be wasted in a short period of time thus the plaintiff will be left in a position where he has no funds and where he has no security of accommodation. In my view, the proper provision that should be made for the plaintiff out of the estate of the deceased is that the Maroubra property [valued at $725,000] should be transferred to him.

96. While this order did take into account the applicant’s addictions, it cannot be described as a protective order in a true sense as no restrictions were placed on the disposal of the property and, consequently, the applicant had the freedom to sell the property to fund his gambling addiction (however unlikely such a course of action may have been).
97. In Lowe v Lowe [2014] NSWSC 371 Hallen J reviewed the case law as to spendthrift applicants (see [144]-[149]), repeating what his Honour had earlier said in Young v Outtrim [2011] NSWSC 391 at [132], to the effect that the court was entitled to take into account the history of the applicant’s expenditure of money not only on gambling. His Honour considered that a wise and just parent would be likely to take that sort of expenditure into account both in fixing the amount of provision and in deciding whether it should be protected in some way.
98. In Poole v Barrow [2014] VSC 576, McMillan J summarised the law in this respect, as follows (at [21]):

...There are a number of testator’s family maintenance cases in which courts have dealt with applicants who are spendthrifts, have a record of squandering money, are chronic problem gamblers, or are penurious owing to their own lifestyle choices. Consistently, it has been held that those circumstances do not disqualify a person from applying for further provision. However, they are relevant to the form of any order made, and very often limited interests, such as orders that money be held on trust or life interests, are ordered instead of orders for outright capital provision. Where an applicant has caused their own financial difficulties, it may reduce the moral obligation of the deceased to provide for those difficulties. [footnotes omitted] [my emphasis]

99. The fact that an applicant may have a tendency to waste money on items that are either of no use or are positively damaging to him or her can be taken into account for the purpose of the jurisdictional question in s 59(1)(c) (see Hampson v Hampson [2010] NSWCA 359 where Campbell JA, with whom Giles JA and Handley AJA agreed, considered (at [94]) that, in some circumstances, an applicant’s use and cultivation of marijuana may well be a relevant consideration to the question of whether there had been adequate provision for the proper maintenance, education or advancement in life of an applicant). There, after quoting from Bondy, Campbell JA said (at [101]):

.... The sense of the whole of the paragraph is, if a person is entitled to an order (ie, to receive what is adequate for proper maintenance, education and advancement in life, or what the wise and just testator would have given him) it is no further concern of the court that there is a prospect that the applicant might waste the money. However, to the extent to which the wise and just testator would take it into account, the prospect of the applicant wasting the money is a legitimate matter to take into account in deciding whether the applicant has been left without adequate provision for proper maintenance, education and advancement in life. [my emphasis]

100. His Honour went on (at [102]) to say:

There is ample precedent, and justification in principle, for a tendency of an applicant to spend excessive amounts of money unwisely (whether through an addiction to alcohol, drugs or gambling, or simply through habitual spendthrift characteristics) to enter into consideration for the purposes of the second stage of the process identified in Singer v Berghouse (No 2), namely, once jurisdiction is established, formulation of an order under the Family Provision Act.

101. Conversely, there may be cases where the fact of imposition of a protective structure (such as the imposition of a testamentary trust or the creation of a life estate rather than provision of an unconditional gift) may be said to be inadequate provision if there is a need for immediate access to funds or an ability to access those funds (say, for the purpose of facilitating entry into a retirement home in due course) (see for example Stern v Seker [2010] NSWSC 59). Young J alluded to such a provision being made in the case of a spendthrift applicant in the passage quoted above from Bondy.
102. That said, the argument advanced on behalf of John (that a failure to structure a will in a particular manner of itself justifies the conclusion that there has been inadequate provision in the relevant sense) risks elevating one factor above others. The authorities emphasise that the test as to adequacy of provision involves a holistic, multi-faceted and evaluative judgment (see Life v Hall [2016] NSWSC 316 at [61]- [63]).
103. I accept that, in an appropriate case, the absence of a protective trust (or some other safeguard for the testamentary bequest) may be a relevant consideration when determining whether there has been inadequate provision for the applicant’s proper maintenance, education and advancement in life. What I do not accept is that the absence of a mechanism to safeguard the provision made for an applicant will, of itself, necessarily be determinative of that threshold question.
104. In the present case, the lack of evidence as to John’s recently professed gambling addiction makes it difficult to form a view as to whether, even if the amount of the provision would otherwise have been adequate, the lack of a safeguard to prevent the inheritance being squandered would of itself have meant that the provision made for John was inadequate (so as to enliven the discretion to alter the provision made for him under the will by the imposition of protection in the manner suggested in submissions). However, it is not necessary finally to determine that issue given that I am not satisfied that John has presented a full and frank picture of his personal and financial circumstances so as to permit a conclusion on the threshold question. In any event I note that there is nothing to stop John, insofar as he now acknowledges a problem in managing money – see the submissions extracted at [20] above – himself to put in place protective mechanisms in relation to his inheritance without any assistance from the Court in that regard.

Conclusion as to the adequacy of provision for John under the will

105. In Collings v Vakas, the application for family provision was dismissed in circumstances where a crucial element of the applicant’s financial situation (her income and expenditure) had not been satisfactorily proved. In that context, his Honour said (at [67]):

...before a court can be satisfied that a plaintiff was left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff’s financial situation.

106. Having regard to the evidence before me, including the evidence of John in the witness box, I am not satisfied that the whole picture concerning John’s financial position, even in broad outline, has been truthfully put before me and on that basis, as adverted to earlier, the application for provision should be dismissed.

Costs

107. Reference was made in the course of the hearing to offers of compromise having been served. In the circumstances, and particularly where the question of costs may be impacted by the manner in which John chose to conduct his case (on an admittedly false basis) up to 15 May 2017, I am of the view that an order for costs should be deferred until the parties have had the opportunity to provide brief written submissions on that issue.

Other matters

108. At the conclusion of the hearing I asked that submissions be provided on behalf of John as to whether this matter should be referred to the relevant government authority in relation to the adequacy of John’s disclosure of his financial circumstances to CentreLink (or other relevant authority), as a disability pensioner. I did so because it seemed to me likely that there had been inadequate or false disclosure of John’s financial situation (having regard to the fact that for some time he had a shareholding worth a considerable sum of money yet seemed to have been receiving disability benefits). Those submissions were duly provided.
109. Reference was made to the principles applicable to the referral by superior Court judges to the relevant authorities with respect to breaches of revenue laws, as summarised by Hall J in Simpson v Hodges [2007] NSWSC 1230 at [266]- [268]:

... It is important to observe that such a referral, if it is to be made, simply has the effect of directing the attention of the executive arm of government to a possible breach or breaches of the law so that it may, if it seems fit, investigate the matter and, as a consequence of that investigation, take such steps as it seems to be appropriate: see In the Marriage of P and P (1985) Fam LR 1100 per Lindenmayer J; Normandy Woodcutters Limited v Simpson [2002] NTSC 43 at [53].

In a number of cases, the question of a referral of papers has arisen with respect to breaches of revenue laws as disclosed in evidence: see Magafas v Carantinos [2007] NSWSC 416; Petera Pty Limited v FAg Pty Limited [1985] FCA 277; (1985) 7 FCR 375 and Georginis v Kastrati (1988) 49 SASR 371 and the cases referred to in the preceding paragraph. A question of referring the papers equally arises, in my opinion, where the evidence in proceedings discloses an offence or a possible offence involving an abuse of this Court’s process or otherwise concerning the proceedings of this Court.

A judicial officer who believes that offences have been committed is under a duty to refer the proceedings to the relevant authority: Normandy Woodcutters (above) per Mildren J at [53]. Accordingly, where evidence is given in proceedings in this Court that reasonably suggests that an offence has or may have been committed in relation to proceedings conducted before it, the Court has a duty to refer the proceedings. As Mildren J observed in Normandy Woodcutters (above), referring the papers is not an exercise of judicial power and no findings are made and no injury to anyone's reputation arises by a mere referral. Nor, as his Honour observed, is the judicial officer required to give anyone an opportunity to be heard in such a matter.

110. In that case, Hall J directed the Registrar of the Court to forward a copy of the reasons for judgment to the Director of Public Prosecutions and to make available, as may be required, the full transcript of those proceedings and the exhibits for inspection by any officers authorised in that behalf by the Director of Public Prosecutions.
111. In the present case, there was tendered by the defendant a CentreLink document which, for the period 1/7/2014 until 30/4/17 under the heading “Details of Earnings from Employment”, did not disclose any income received by John including dividends from shares in public listed companies. When cross-examined about the document, John denied that he had failed to make an appropriate disclosure to CentreLink. He said that he had made a disclosure by telephone and that he understood this was an acceptable way in which disclosure could be made to CentreLink.
112. For John, it is submitted that the reference in the CentreLink document to income from employment does not make clear that it refers to the reporting of other income, including dividends from public listed shares. It is submitted that the fact that the CentreLink document does not record other income is not evidence that John did not in fact report other income or assets by telephone.
113. Provided with the submissions on this issue were documents obtained from the internet on the letterhead of the Australian Government Department of Human Services entitled, respectively, “Income Reporting” and “Centrelink phone service”. It is submitted that those documents make clear that income can be reported over the telephone via the Report Income Line.
114. It is submitted that, having regard to the thresholds for income and assets which apply to pensioners, including disability pensioners in the case of John, it is arguable that John did not commit an offence by way of receiving a pension greater than that to which he was entitled.
115. It is submitted that, in 2013, the minimum asset test limit for a single, non-home owner was $339,250 and that after the minimum threshold the pension is reduced by $1.50 per fortnight for every $1,000 above the minimum amount, to a maximum asset limit of $890,750 (by reference to a document entitled “A guide to Australian Government payments 20 September – 31 December 2013”). It is said that in 2013 the minimum income before the disability support pension payment was affected was $156 per fortnight. Income from investments is calculated by deeming rates and not actual income. It is calculated that in November 2013, assuming assets of $400,000, the deemed income is $13,301 per annum or $510.20 per fortnight:

Below threshold rate on $46,600 @ 2% $932

Above threshold rate on $353,400 @ 3.5% $12,369

Total deemed income $13,301

116. Turning to the position in 2017, the minimum asset limit for a single non-home owner was $450,000. After the minimum threshold the pension is reduced by $3.00 per fortnight for every $1,000 above the minimum amount, to a maximum asset limit of $742,500. In 2017 the minimum income before the disability support pension payment was affected was $164 per fortnight. It is calculated that in 2017, assuming assets of $400,000, the deemed income is $11,776 per annum or $451.70 per fortnight:

Below threshold rate on $81,600 @ 1.75% $1,428

Above threshold rate on $318,400 @ 3.25 $10,348

Total deemed income $11,776

117. The CentreLink disclosure document in evidence applied for the period from 1 July 2014 until 30 April 2017. It is submitted for John that, having regard to the disclosure in John’s 15 May 2017 affidavit as to the proceeds of sale of his shares (of $250,000) and that he had disbursed those amounts except for approximately $40,000 held as gambling chips, it may be concluded that the holding by him of such shares and the deemed income from those shares would not have affected the level of his disability pension.
118. In the absence of rejecting the oral evidence given by John that he made the appropriate disclosure to CentreLink by telephone, it is submitted that the Court cannot have a persuasion that John has committed any offence by receiving a pension to which he was otherwise not entitled. It is therefore submitted that the circumstances do not justify the referral of the papers to the relevant government authority.

Conclusion

119. Though I have real doubts as to the reliability of John’s evidence that he notified CentreLink by telephone of the assets comprised by the proceeds of sale of his shares (or indeed as to the existence of those assets in the first place), particularly having regard to the admitted lack of veracity in his account given in these proceedings as to his financial position up until the affidavit sworn by him in May 2017, I have decided not to refer the papers to any relevant governmental authority. I do, however, consider it appropriate that John be directed (subject to any claim by him for privilege against self-incrimination – as to which, on the submissions made on his behalf, there presumably would be none) to notify CentreLink in writing of the matters disclosed in his 15 May 2017 affidavit as to his level of income over the period 2013-2017.

Orders

120. For the reasons set out above, I make the following orders:
     • (1) Dismiss the plaintiff’s summons.
     • (2) Direct the parties to serve brief written submissions as to costs, not exceeding 3 pages in length, within 14 days.
     • (3) Direct the plaintiff (subject to any claim by him for privilege against self-incrimination, such claim to be supported by a confidential affidavit deposed to by him and served on the defendant and by email to Ward CJ in Eq’s associate within 14 days) to notify CentreLink in writing within 14 days of the matters disclosed in his 15 May 2017 affidavit as to his assets/income over the period 2013-2017.

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