Supreme Court New South Wales Medium Neutral Citation: Alvarez v Matthews [2021] NSWSC 1551 Hearing dates: 25, 26 November 2021 Date of orders: 26 November 2021 Decision date: 26 November 2021 Jurisdiction: Equity Before: Parker J Decision: See [90] Catchwords: SUCCESSION – family provision – notional estate – deceased's superannuation passed to children pursuant to nomination given before deceased's death – application for designation of superannuation monies as notional estate to provide liquid funds – sufficient value in the estate to make provision for applicant in due course – application untenable SUCCESSION – family provision – husband and wife – parties separate about twenty years before deceased's death – parties register wife as separated for pension purposes – parties sever joint tenancy over matrimonial home, continuing to live in separate parts of it – husband's will leaves estate including his half-share of the property to the parties' three children in unequal shares – application by wife for provision – children agree on figure for provision in wife's favour but disagree on its incidence – no settlement – wife must establish entitlement to provision – application refused Legislation Cited: Real Property Act 1900 (NSW) Succession Act 2006 (NSW), ss 59, 88 Supreme Court Act 1970 (NSW), s 73 Cases Cited: Bladwell v Davis [2004] NSWCA 170 Kalmar v Kalmar [2006] NSWSC 437 Marshall v Carruthers [2002] NSWCA 47 Palmer v Dolman [2005] NSWCA 361 Re Clissold (deceased) [1970] 2 NSWR 619 Re Mercer (deceased) [1977] 1 NZLR 469 Sarant v Sarant [2020] NSWSC 1686 Steinmetz v Shannon [2019] NSWCA 114 Category: Principal judgment Parties: Angelica Mercedes Alvarez (Plaintiff) Maribel Matthews (First Defendant) Michael Angelo Alvarez (Second Defendant) Aquiles Alvarez (Third Defendant) Representation: Counsel: A Hill (Plaintiff) RD Wilson SC (First Defendant) R Colquhoun (Second and Third Defendants) Solicitors: Antunes Lawyers (Plaintiff) L.Rundle & Co Solicitors (First Defendant) George Bassil & Associates (Second and Third Defendants) File Number(s): 2020/359410 Publication restriction: Nil Judgment – EX TEMPORE Revised and annotated; issued 2 December 2021 1. This is an application for a family provision order under s 59 of the Succession Act 2006 ("the Act"). The application concerns the estate of the late Aquilino Alvarez who died in February 2020 at the age of 73. He was survived by his wife and their three children. 2. The deceased was born in Spain in August 1946. His widow is Angelica Mercedes Alvarez. She was born in October 1945 in Peru. They married in September 1972 in Sydney. 3. Together the deceased and his wife had three children. They were: Maribel Alvarez, now Maribel Matthews, and Aquiles Alvarez, twins who were born in December 1972; and Michael Angelo Alvarez, born in March 1980. In the rest of this judgment, I will refer to the deceased's widow as Mrs Alvarez. For convenience and without disrespect, I will refer to the three children by their given names. 4. The major asset of the family was the former family home, a house at Dobson Crescent in Ryde. The house consists of two storeys with bedrooms on the upper level. It was purchased in 1996. Originally, the property was acquired by the deceased and Mrs Alvarez as joint tenants. In 2004, Mrs Alvarez severed the joint tenancy with the result that the property was thereafter held by her and the deceased as tenants in common in equal shares. 5. The deceased and Mrs Alvarez separated about twenty years ago. Thereafter they continued to live at the Dobson Crescent property but separately. Mrs Alvarez lived on the upper level. The deceased lived mainly on the lower level. 6. The deceased was unwell from December 2018 onwards. He made what proved to be his last will in December 2019. In the will, he appointed his three children as executors. He left his half of the Dobson Crescent property, as to half, to Maribel. The remaining half he left one third each to his three children. The result is that Maribel receives a one-third share of the property as a whole and each of her brothers receives one-twelfth. The residue of the estate was left to each of the children in equal shares. The deceased left nothing to Mrs Alvarez. 7. Probate of the will was granted to the children in April this year. The estimated value of the property is between $2.5 million and $2.7 million, meaning that the deceased's half-share is worth between $1.25 million and $1.35 million, with $1.3 million as a central estimate. The estate also contains cash of approximately $200,000 (apparently this is a net figure after the sum of the costs of these proceedings and some other administration expenses have been paid out of the residuary assets). 8. The deceased also had $200,000 in superannuation. Pursuant to a nomination which he made before his death to the trustee of the superannuation fund, this amount passed to his children in equal shares. It thus did not form part of the estate. 9. In these proceedings, Mrs Alvarez, as plaintiff, seeks provision from the deceased's estate to cover what she describes as her accommodation needs and future expenses. There is no dispute about her eligibility to make the claim. The defendants deny that, in the circumstances, the provision was inadequate. They also contend that their own circumstances are such as to justify the provisions made in their favour; that is, they have put their own financial circumstances in issue. 10. Both the deceased's half‑share of the Dobson Crescent property and the residual cash are available to meet Mrs Alvarez's claim. On her behalf, a further claim is made to have the superannuation moneys designated as notional estate. 11. As I have mentioned, each of the children is an executor, and each of them has been joined as a defendant in these proceedings. It has not been possible to arrange for common representation. The first defendant, Maribel, is represented by one firm of solicitors and counsel, and the second and third defendants, her brothers, have been represented by another firm of solicitors and counsel. This reflects their separate interests as beneficiaries in different components of the estate. Purported settlement 1. Pre‑trial directions required the exchange of objections and submissions, as well as the preparation of an electronic court book. When, two days beforehand, none of this had happened, I had inquiries made and was told that the matter had been settled. I convened a directions hearing later that afternoon, at which it emerged that the validity of the purported settlement was in dispute. I granted leave to Mrs Alvarez to file a notice of motion seeking to have the Court enforce the purported settlement in its jurisdiction under s 73 of the Supreme Court Act 1970. 2. The purported settlement arose out of an offer made by the solicitors for Maribel to the solicitors for Mrs Alvarez on 10 November. The solicitors wrote proposing that the proceedings be settled on the following basis: 1. the Court was to designate the superannuation fund as notional estate; 2. the Court was to order that Mrs Alvarez receive a legacy from the estate in the sum of $75,000, together with the whole of the superannuation moneys, a total of $275,000; 3. the $75,000 component of the legacy was to be payable only on completion of the sale of the property; 4. the plaintiff's costs were to be paid out of the estate on a party-party basis; and 5. Maribel's costs were to be paid out or retained out of the estate on a solicitor-client basis. 1. On the following day, 11 November, the solicitors for Mrs Alvarez wrote accepting the purported offer. 2. It will be clear already that the offer was designed to operate in favour of Maribel and against her brothers. It was designed to ensure that the legacy to be paid to Mrs Alvarez would be paid out of the superannuation monies and the residue of the estate. On this basis Maribel would bear only a one‑third share of that legacy, rather than the two‑thirds share that she would bear if the legacy were payable out of the deceased's half‑share in the Dobson Crescent property, which was the major asset of the estate. The offer also provided for Maribel's costs to be met at the general expense of the estate on a full solicitor-client basis, but made no provision for the costs incurred by her brothers. 3. I interpolate that the affidavit of administrator, which is a formal requirement of litigation of this sort, was prepared and filed by Maribel's solicitors. It seems that they also attended to any other matters which were formally required of the executors. 4. But Maribel's evidence did not end with the administrator's affidavit. As I have mentioned, she put her own financial position in issue. Part of her evidence was directed towards establishing that if any provision was made at all, it should not be made out of the estate's share in the Dobson Crescent property. 5. The letter of offer stated that the offer would purportedly be effective whether or not consent was obtained from the other executors and beneficiaries. It was accepted on that basis. But in subsequent correspondence, the solicitors for Aquiles and Michael objected to the making of orders giving effect to the settlement. Their position was that while they were content for the provision of $275,000 to be made in favour of Mrs Alvarez, the burden of that provision should fall on their sister's share of the Dobson Crescent property, or alternatively, on the estate's share as a whole. They also contended that their costs should be paid from the estate. 6. This was unacceptable to Mrs Alvarez and Maribel, and as a result, no consent orders were ever prepared. Why the Court was not told of this earlier, the evidence does not explain. 7. It will be plain from what I have said already that the purported settlement went beyond inviting the Court to making consent orders which only affected the parties to the settlement. For the orders the subject of the purported settlement to be made, the Court would have needed to be satisfied that the provision was proper in the circumstances and that it was appropriate to make a notional estate order (noting that there are statutory restrictions on the Court's ability to make such an order: see [26] below). The Court would have needed to be satisfied that it was appropriate to make orders for costs in favour of Mrs Alvarez and Maribel out of the estate. Obviously it would not have been open to the Court to do any of those things without, at least, the consent of Aquiles and Michael as the other parties interested in the estate. 8. In the notice of motion, Mrs Alvarez sought to have the Court order the entry of judgment in her favour against Maribel in the sum of $275,000 and to order Maribel to pay her costs. That is the typical form of order which would be sought in the case of a conventional settlement under which one party agrees to pay the other a sum of money in satisfaction of its claims in the proceedings. 9. As counsel for Maribel pointed out, an order in that form is not the common form of an order made in a family provision case. But I see no reason, in principle, why Maribel could not have agreed with the plaintiff that she would pay $275,000 in return for the plaintiff giving up her claim against the estate. Such a settlement would not have required the Court to make any orders under the Act on Mrs Alvarez's claim. Maribel would still have needed to persuade the Court in due course that she should be entitled to indemnity out of the estate for the obligations assumed in the settlement. That, however, would have been a matter for debate between Maribel and her brothers. It would not have involved Mrs Alvarez. 10. Thus a settlement in the form specified in the notice of motion could in theory have been agreed. But the difficulty is that such a settlement is entirely different, as a matter of substance, from the purported settlement made by exchange of letters between the parties. After the evidence in support of the motion had been read, but before there had been full argument, counsel for Mrs Alvarez abandoned the motion and I therefore ordered that it be dismissed. Notional estate claim 1. As will be seen, in these proceedings Mrs Alvarez ultimately claimed a provision of around one quarter of the estate. The quantum of the claim was set out in the written submissions lodged by counsel for Mrs Alvarez shortly before the hearing began. Clearly, there was sufficient value in the estate (being the Dobson Crescent property and the $200,000 residue) to meet that claim without recourse to any notional estate. 2. I therefore raised the question with counsel for Mrs Alvarez whether he could legitimately continue to propound the notional estate claim. Counsel's explanation for seeking the order was that the sale of the Dobson Crescent property, which everyone agreed was going to be necessary, might take some time to complete, and cash from the superannuation fund could be made available immediately (this appears to ignore whether, in fact, that money might have been spent by the beneficiaries in the meantime). As I have mentioned, the residue contained $200,000 in liquid funds, but the assumption seems to have been that that money should be held in reserve, so as to pay costs. Counsel submitted that this state of affairs amounted to "special circumstances" for the purposes of s 88(c) of the Act. 3. Section 88 provides: The Court must not make a notional estate order unless it is satisfied that— (a) the deceased person left no estate, or (b) the deceased person's estate is insufficient for the making of the family provision order, or any order as to costs, that the Court is of the opinion should be made, or (c) provision should not be made wholly out of the deceased person's estate because there are other persons entitled to apply for family provision orders or because there are special circumstances. 1. The term "special circumstances" in (c) takes its content from the context. In particular, s 88 reflects an intention on the part of Parliament that notional estate orders should be limited to cases where there is a lack of funds in the estate to meet the provision which the Court considers proper, or costs. The reason for that is obvious. Parliament wishes to keep to a minimum interference with the proprietary rights of those who own property which may be designated as notional estate. 2. In these circumstances, I think it is doubtful whether it could ever be proper to make a notional estate order so as to obtain a source of liquid funds to meet a provision which ultimately can be met from the estate but cannot be met immediately. In any event, I considered that such an order was plainly unjustified in the present case. It may be that it would suit the convenience of Mrs Alvarez and her lawyers, but that fell far short of being a good reason to oblige the children to surrender their interest in the superannuation money. Accordingly, I considered that the claim for notional estate was untenable, and made an order summarily dismissing it. Claim for provision 1. Counsel then proceeded to pursue Mrs Alvarez's provision claim by reference to the assets of the estate. This was done in a very abbreviated way. 2. As is required by the rules, the parties had filed affidavits going to their financial circumstances and other factual matters relevant to the claims. They had responded to each others' affidavits and they had provided updating affidavits with fresh financial information. Including the affidavit of administrator, thirteen affidavits were filed from the parties themselves. All of those affidavits were taken as read, as well as the formal affidavits of the parties' solicitors. No objections were taken to any affidavits and no witnesses were required for cross‑examination. The final submissions were brief in the extreme. 3. The Court's directions had required production of an electronic court book in advance of the hearing. As I have mentioned, the book was not produced in accordance with the timetable fixed for the directions. When a book was eventually produced on the afternoon before the hearing was due to begin, it did not comply with those directions. It was not searchable and it was not bookmarked. This meant that for practical purposes, the Court had no opportunity to prepare for the hearing in the way contemplated by the directions. 4. In these circumstances, I advised the parties that I would not undertake to look at any part of the evidence (including even the affidavits) unless it was specifically referred to me. No party took any objection to this approach. In the rest of this judgment, when I say that there is no evidence of a certain matter, what I mean is that I was not referred to, nor did I discover in the course of preparing my judgment, any evidence on that matter. 5. Even though there was no dispute that I should proceed this way, the parties' approach still left a problem with conflicts between the witnesses. It was of course impossible to make any judgment about the credit of those witnesses in the absence of cross‑examination, and even full reading of their affidavits. Mrs Alvarez was the party most affected by this problem, as the one bearing the overall onus. I put to her counsel that in these circumstances I did not consider that it was open to me to make any affirmative finding on any matter of dispute, and accordingly, a party bearing a legal or evidentiary onus on that issue would fail. Counsel accepted this approach. 6. The claim on behalf of Mrs Alvarez was put in the following way. Counsel contended proper provision entailed provision for Mrs Alvarez's continued accommodation in a suitable replacement home, together with a lump sum of money to cover future contingencies which she might encounter. It was accepted that with the sale of the Dobson Crescent property, Mrs Alvarez would receive between $1.25 million and $1.35 million for her share. Counsel submitted proper provision required a legacy of a further $350,000. This was made up of $250,000 to be added to the value of the Dobson Crescent property for accommodation and $100,000 as a cash buffer. 7. Counsel for both defendants did not object in principle to the plaintiff receiving $275,000 by way of provision. But consistently with the positions they had previously taken, the defendants were at issue as to how such a provision should be borne. Counsel for Maribel contended that provision should be made out of the residue (until exhausted). Counsel for Aquiles and Michael contended for his clients' part that provision should be borne either by Maribel's share of the Dobson Crescent property or by the estate's share. The difference between the parties was that under Maribel's proposal, the provision would be funded by each of the children as to one third, whereas under the proposal from Aquiles and Michael, the provision would fall, or fall mainly, on Maribel, reflecting her greater interest in the estate through her larger share of the Dobson Crescent property. 8. Counsel for the defendants both sought to present their clients' positions as being directed, not so much against Mrs Alvarez as plaintiff, as against their co‑defendants. Both emphasised that they would be quite happy to see Mrs Alvarez receive $275,000 and sought to present the debate as one between the defendants as to the incidence of that provision. 9. So persistent was this that it requires a response. However desirable it might have been perceived as being in order to preserve the personal relationship between the children and their mother, it was quite misleading from a legal point of view. 10. If an order for provision is made, it takes effect as a codicil to the will. Therefore, it is not possible for the Court simply to order that provision be made for a specified sum. The Court must consider how the provision is to be satisfied, and in particular, whose entitlements are to be used to fund it. Necessarily, this involves a comparison between the respective merits of the claimant and the beneficiaries whose entitlements are to be displaced. 11. Thus, whether any of the parties wanted to admit it or not, the case does involve a contest between Mrs Alvarez, as claimant, and each of her children, as a person whose entitlements were to be displaced. That necessarily involves Mrs Alvarez demonstrating that she has, to the extent of her claim, an entitlement to the estate which is superior to that of her children. I emphasise that this must be an entitlement recognised by the Court as arising under the law. Neither of the defence counsel invited me to dismiss Mrs Alvarez's claim, but that was where the logic of their arguments led. 12. If all parties interested in the estate had been able to agree on a scheme for rearranging the beneficial entitlements, I have no doubt that the Court would have been happy to give effect to that arrangement. But in the absence of agreement, Mrs Alvarez's claim must be decided according to law. For that purpose, the Court does not have the luxury of adopting a popular but logically incoherent outcome. 13. I must therefore consider whether Mrs Alvarez has established a claim for provision out of the residue or out of the half-share of the Dobson Crescent property. If she has not, her claim fails. The separation 1. The separation between Mrs Alvarez and the deceased began in about 1998. Prior to that time, they occupied a single bedroom upstairs at the Dobson Crescent property. According to Mrs Alvarez, she found her husband's sexual demands to be too much for her. She told him to move to another bedroom, which he did. But on occasions he came into the former matrimonial bedroom and forced himself on her. This happened on about three or four occasions. Eventually, she said that if he did it again, she would scream the house down, and at that point, all sexual contact between them ceased. This was in about 1999. 2. According to Mrs Alvarez's evidence, in about 2001 the parties separated their financial affairs. They closed the joint bank account which they had previously been using and established their own separate accounts for their own income and expenses. They registered with Centrelink as having been separated. 3. Mrs Alvarez was then 55. There is no evidence that she later tried to obtain any paid employment, and presumably her registration with Centrelink was to enable her to receive a social security benefit as a divorced or separated woman. Thereafter, in due course, she would have qualified for the age pension. 4. I have already mentioned the severance of the joint tenancy. This was effected by lodging a form of transfer under the Real Property Act 1900 in January 2004. Mrs Alvarez gave the following evidence about how that transfer came to be drawn up and registered: Before signing the Transfer the Deceased and I had many conversations, and I said words to the effect to him: (a) I want to sever the joint tenancy because then after the last of us pass away our individual shares can be gifted to the children and so there is less risk of the house going to a new spouse or de facto partner on the death of the first of us to pass away. I want you to be able to live in our house until you pass away if I pass away first. This change is to make sure that if I pass away first and you re-partner that new partner does not receive my ½ share of the property as I want it to be given to the children in my will after you pass away. He replied saying words to the effect: (a) Is this what you want? Then I will agree. 1. At some point, Mr Alvarez moved downstairs at the Dobson Crescent property. The separation did not end the contact between the parties. To some extent, they socialised together. They attended all family birthday and Christmas functions together. According to Mrs Alvarez, she also cooked for Mr Alvarez on occasion. After he became ill in 2018 and was admitted to hospital, she cleaned his clothes and provided moral support. The deceased's will 1. The background to the making of the deceased's final will was that in about 2018, tensions arose between Maribel and Mrs Alvarez. Mrs Alvarez made a new will, in which she gave one‑half of her estate to her two sons, with Maribel to receive only a one‑twentieth interest. The rest of the estate was divided between the grandchildren. This will was made in October 2019. 2. The deceased found out about Mrs Alvarez's new will because one of his sons stayed overnight on his sofa and accidentally left behind a copy of the will, which the deceased found. According to Maribel, whose evidence on this subject was not contested, the deceased showed the will to her. She continued: After I read the will, my father said to me words to the effect: "I'm disgusted with your mother and disappointed with Michael and Aquiles. They lied to me when I asked each of them if she had a new will. This is not fair. I have to change my will again. It has to be fair. I will figure out a way to make it so my three children get an equal share of the family home. I want to see John Lukas [the deceased's solicitor] again to change my will. I have to do it quickly. Can you phone him?". 1. According to Maribel, she then made a telephone call to Mr Lukas, and the will, the provisions of which I have already summarised, was later executed. It is not suggested that Maribel had any role in preparing the will, other than to take her father to his solicitor's office. Other factors 1. Counsel for Mrs Alvarez identified two further factors which, so he contended, were relevant to determining the existence and scope of the deceased's moral obligations towards Mrs Alvarez. I will deal with them in turn. 2. The first factor concerned the management of the parties' finances before their separation. Counsel pointed me to evidence in Mrs Alvarez's affidavit that the deceased had adopted a domineering approach and forced her to spend money which she was earning on the children. Mrs Alvarez also said in her affidavit that, following her separation from the deceased and the severing of the joint tenancy, she and the deceased were careful to contribute equally to all of the costs of running the house and all of the outgoings for the property. But this was contested by Maribel, who said that the deceased had complained to him that Mrs Alvarez left him to pay for everything. She produced a handwritten document of the deceased's which was said to support this contention. 3. In accordance with the approach that I have outlined, it is not possible for me to resolve this dispute of fact. I therefore cannot make any finding that the deceased contributed a half‑share to the expenses of the property after separation. Even if, strictly speaking, the deceased's evidence about the parties' financial affairs at the time when the children were young is not in dispute (and I am not sure that that is a realistic view to take), it seems to me to be so long ago as to have little, if any, relevance to the present application. When I put these matters to counsel for Mrs Alvarez, I understood him, in effect, to abandon any reliance on the first factor. 4. Counsel's second factor was the sexual assaults which, on Mrs Alvarez's evidence, were committed by the deceased upon her in 1998 and 1999. This jurisdiction is not generally one to compensate for wrongs. Misconduct by a claimant may amount to a disqualifying factor which prevents the claimant from receiving the provision which the Court may otherwise have made in that claimant's favour. It is a different thing to say that misconduct by the deceased towards a claimant will necessarily increase that claimant's entitlement. 5. In the present case, I find it hard to see why the Court should take the sexual assaults into account in a dispute which is one between the relative merits of Mrs Alvarez, on the one hand, and her children, who are not responsible for the assaults, on the other. Furthermore, no attempt was made to place any financial value on the assaults, and I am not sure how a value could be put on them for the purposes of determining a proper level of provision out of the deceased's estate. In my view, this factor makes no difference to the outcome of the present case. Parties' current circumstances 1. According to Mrs Alvarez's latest affidavit, she holds shares worth $14,000 and has $55,000 in a bank account. She receives the age pension, which amounts to $24,800 per annum gross. There was no evidence before me as to her dividend or interest income, or the tax which is payable. 2. Mrs Alvarez's affidavit contained a list of expenses. Counsel accepted that, in view of the substantial amount of cash that Mrs Alvarez holds, I should assume that she has been able to save some money out of her pension income, since there is no other apparent explanation for where the cash came from. That implies that her expenditure has not, over time, exceeded her income. 3. Mrs Alvarez has a heart condition, a prolapse, cataracts and other medical conditions as well. In her affidavit, she estimated her need for ongoing medical treatment as $50,000 for specified dental treatment, optical treatment and other procedures, and $2,300 per annum in ongoing costs. 4. The figure includes $40,000 for dental treatment, which seems high. Although no point had been taken about this, I checked the supporting documents and found that they do not refer to health insurance, which I know from other evidence that Mrs Alvarez holds. Making that check has exposed the shorthand way in which this case has been conducted and increased the uncomfortable feeling that I have that I am being asked to deal with it in a very superficial way. But as I have explained, that is the way in which the parties have asked me to deal with it. 5. Maribel has superannuation but not very substantial other assets in her own name. She is married and she and her husband between them have a family home and an investment property. The value of the two properties is estimated at $2.95 million but they carry between them $950,000 in debt. According to Maribel's latest affidavit, she and her husband are experiencing marital difficulties and it is possible that they will separate. The properties are in his name alone. 6. Aquiles has a house valued at $800,000 which carries a mortgage of $150,000. He has a good job as a car salesman for a European car company, but his employment is in jeopardy because it appears that he refuses to be vaccinated for COVID-19. He and his wife have three young children, one of whom has learning difficulties. 7. Michael was previously employed but was made redundant in November 2019. He and his wife have five young children, the youngest of whom has only just been born, and accordingly, his wife at the moment is unable to carry on her usual occupation as a teacher. 8. As counsel for Mrs Alvarez pointed out, each of the children has a potential future earning capacity. But it was not suggested that any of them was particularly well off. 9. In one of her affidavits Mrs Alvarez identified her "needs" as including a new two-bedroom home. She wants a second bedroom mainly so that her sons will be able to come and visit her. She also wants a townhouse or villa on the ground floor rather than a flat, for ease of access. She also wants to continue to live in Ryde because she has lived there since 1996. 10. Mrs Alvarez annexed to her affidavit a copy of an internet advertisement for a property which she stated would be suitable. As she observed in her affidavit, the property did not have any price specified. 11. I asked counsel if he had any evidence of what a property of the type desired by Mrs Alvarez would cost. He referred me to an appraisal from the agent who was asked to give a value of the Dobson Crescent property. Having given the estimate between $2.5 million to $2.7 million to which I have referred, the agent went on to say that a replacement home for Mrs Alvarez might cost in the region of $1.65 million. When I pointed out to counsel that that would be more than Mrs Alvarez could afford, assuming she received $350,000 and kept $100,000 for a buffer for the future, he acknowledged this but said that she was prepared to "adjust her expectations". 12. Later in the hearing, counsel for Maribel produced and tendered an internet search showing that the property nominated by Mrs Alvarez had sold at the end of October for $1.1 million. There was no objection to this evidence, nor was any application made to tender any further evidence in reply. 13. Shortly before I came on the bench to deliver judgment this afternoon, I received an email from Mrs Alvarez's solicitor which attached an email sent by Michael to Mrs Alvarez. Because this was an ex parte communication, I did not read the attachment, but it apparently incorporates internet searches which are said to show that the type of property that Mrs Alvarez wants would in fact cost more than the $1.1 million for which the property that she nominated sold. 14. Counsel for Mrs Alvarez, who does not seem to have been involved in the sending of the email, apologised very properly for the breach of the rule against ex parte communications. But he said he felt that he was under an obligation to seek to reopen Mrs Alvarez's case so as to tender the further searches produced by Michael. I must say that I do not understand why counsel conceived himself to be under any such obligation, especially as counsel conceded that had the searches been done by Mrs Alvarez's solicitor, there would have been no justification for a re-opening. But this is of no great importance. 15. Counsel for the defendants objected, pointing out that there was no adequate justification offered for Mrs Alvarez's failure to present the evidence at an earlier point. Counsel also observed that if further evidence were tendered, it would be necessary for the defendants to have an opportunity to respond to it, which would likely result in a delay in the proceedings. In these circumstances, I had no alternative but to refuse the application. Conclusions 1. I asked counsel for Mrs Alvarez whether there was any authority on the approach the Court takes where a claim is made by a separated, but not divorced, spouse. Counsel was unable to refer me to authority, but counsel for Maribel drew my attention to the judgment of Hallen J in Sarant v Sarant [2020] NSWSC 1686 at [240]. In that paragraph, his Honour referred to a number of decisions, which I will discuss in chronological order. 2. The first case is Re Clissold (deceased) [1970] 2 NSWR 619, a decision of Street J. In that case the parties were married in 1937 and separated in 1950. No financial arrangement was made in her favour by the husband (or indeed sought). Gradually they drifted apart. The husband died in 1969. In the meantime, he had formed a de facto relationship with another woman. They were living in a home unit which passed to her by survivorship. His estate consisted of cash valued at about $12,000. Counsel for the estate argued that the claimant wife had forfeited her moral claim, apparently as a result of the lack of interest that she had shown in her husband after they separated. 3. Street J said that he found this a difficult question. In the end, he did not feel able to say there was any particular event or conduct by which the wife had forfeited her moral claims. He said that she was entitled to some consideration but not "of a high order". In the end, he made a provision in her favour of $3,000, about twenty-five per cent of the estate. 4. The next case is the New Zealand decision in Re Mercer (deceased) [1977] 1 NZLR 469. The case concerned a marriage where the parties separated in 1968 after twenty-one years. The husband died in 1974 and provision was made for the wife. The judgment has been cited in later cases by reference to a passage which appears at 472-473. That passage occurs in the course of a discussion about disentitling conduct. What it says is that cases in which "moderated" claims by a separated party had been allowed were examples of conduct which reduced, but did not necessarily eliminate, the claimant's entitlement to provision. 5. Next is the decision in Palmer v Dolman [2005] NSWCA 361. That was not merely a case of separation. In fact, there had been a divorce, which had been bitterly contested. The deceased's ex‑wife obtained a provision in her favour. Her case was that the deceased had misrepresented his financial affairs for the purposes of the family law settlement. This was upheld on the facts by the Court of Appeal. 6. At [118] of the judgment, the Court of Appeal referred to Clissold and Mercer, but this was not in the part of the judgment which addressed the claim by the deceased's ex‑wife. The paragraph was part of the Court's reasoning on a separate claim which was made in the proceedings by the deceased's daughter. It was contended on behalf of the estate that she had been guilty of disentitling conduct, in effect by being estranged from the deceased. In that context, Ipp JA said: In determining this issue, I take into account the consideration that an estrangement between father and child may well reduce the moral claim that the child might have to maintenance, support or advancement in life [citations omitted]. Compare the effect of an estrangement between husband and wife which does not lead to divorce [citations omitted]. 1. The next case is the decision of White J, as his Honour then was, in Kalmar v Kalmar [2006] NSWSC 437. The claimant in that case was the second wife of the deceased. They married in April 1997 and had separated at the latest by April 2002. The deceased died in September 2002. The claimant appears to have had no other means of support and moved in with her daughter. The estate was relatively small, consisting of a modest house, and there was a strong competing claim based on need on the part of the defendant, who was the deceased's son. 2. In order to provide for a sufficient amount of money to fund the deceased's ongoing accommodation, half of the estate would have been required. His Honour was not prepared to award that much and, in the end, awarded a lump sum equating to about twenty per cent of the net estate. At [50] his Honour said: First, the bond of matrimony, prime facie, gives rise to a testamentary obligation (Re Clissold (deceased) (1970) 2 NSWLR 619 at 621). Although each case will depend on its own facts, it cannot be assumed that that obligation comes to an end on the parties separating without their being divorced, at least where there has been no disentitling conduct by the claimant (Re Clissold (deceased) at 621–622; Re Mercer (deceased) [1977] 1 NZLR 469 at 672-673, cited with approval in Palmer v Dolman [2004] NSWCA 361 at [118]). 1. Finally, there was Sarant itself. That was a very long marriage, forty-eight years, the last four of which the parties were separated but had not divorced. As with the other cases I have discussed, there had been no property settlement between the parties of a formal or informal kind. Hallen J made orders designed to allow the plaintiff to continue to occupy the former matrimonial home. 2. The cases show, as White J points out, that there is no rule that separation severs one spouse's moral obligations to another for the purposes of family provision. On the other hand, it would be absurd to say that married parties who have separated are to be treated for the purposes of family provision as if they had not. The cases show that separation is clearly relevant to the strength of any ongoing moral obligations. 3. That is hardly surprising. Separation removes what is usually a foundational element in a marriage. As White J recognised, the effect must depend on the circumstances. Even when the parties do not separate and the marriage lasts until the death of one of them, there is no rule that the surviving spouse must receive a prescribed level of testamentary provision. [1] It is always a matter of determining the particular moral obligation, if any, which arises on the particular facts of the case. 4. In the present case there are, I think, two factors of great importance. Neither of them was present in the cases to which I was referred. 5. The first is the circumstance that in about 2001, the parties formally and officially severed the financial ties between them. I say "officially" because the separation of the parties' financial affairs was bound up with Mrs Alvarez's decision to live thereafter on the pension as a separated woman. While this may not have been completely irrevocable, neither party in fact sought to revoke it. I think this is particularly relevant because a feature of marriage which underpins a surviving spouse's claim for provision is the existence of a "formal and binding commitment to mutual support through good times and bad". [2] 6. The second factor is of course the parties' agreement to divide the Dobson Crescent property. Mrs Alvarez's own evidence shows that the division was undertaken as part of a mutual estate planning arrangement. It avoided the expense and uncertainty of a formal division procedure, and allowed both the deceased and Mrs Alvarez to make provision for their children from their own shares of the property. 7. There is no suggestion in the present case that the plaintiff was at a disadvantage. Indeed, on her evidence, she seems to have proposed it. Nor is there any suggestion of material non‑disclosure of assets. In my view, the law should be cautious about overriding such an informal settlement fifteen years after the event. There is every reason to think that the deceased would have based his financial and testamentary planning on that arrangement in the meantime. 8. It has not been argued that there has been any relevant change in circumstances which would falsify the expectations which the parties would have had in 2004. It was inherent in dividing the ownership of the property that it would, in all likelihood, eventually have to be sold, if not during the parties' joint lifetime then after one of them died and the children inherited the deceased party's share. The events which the parties would have foreseen have now come to pass. I am not satisfied that the mere fact that Mrs Alvarez says now that she needs more than half of the Dobson Crescent property (or an equivalent sum of money) to live as she would wish, gives rise to a moral obligation of the sort that is required before the Court can order provision. 9. In any event, Mrs Alvarez's claim faces a major evidentiary difficulty. As I have described, her case left what was effectively an evidentiary vacuum about the cost of a suitable property. That vacuum was filled by the evidence about the sale price of the property which Mrs Alvarez had nominated as a suitable one. On the basis of the value of that sale, the plaintiff's claimed needs could be satisfied for $1.2 million. The midpoint valuation of the Dobson Crescent property is $1.3 million, which exceeds that amount. 10. I recognise that the low valuation is $1.25 million and there will be both sale and acquisition costs. But as counsel for Aquiles and Michael pointed out, this is not a jurisdiction which is exercised to make marginal adjustments to otherwise proper testamentary arrangements. Particularly is that so when the "need" for a home with two bedrooms is contestable and the $100,000 figure is quite arbitrary (noting that Mrs Alvarez has $50,000 already). Even if the sale proceeds of the Dobson Crescent property proved not quite enough, it does not seem unreasonable that Mrs Alvarez might modify her expectations slightly by buying a smaller home, or a home in a less expensive suburb, or putting aside less cash. Conclusions and orders 1. For the reasons that I have given, I consider that the plaintiff's claim fails. The summons must be dismissed. 2. Before parting with the case, I should address some remarks to the parties directly. It is clear from the course of the proceedings that there is still goodwill on a personal level between Mrs Alvarez and her children. The result of these proceedings should not alter that goodwill. As I have explained, the Court's role in these proceedings is to determine legal issues only. Once the Court has determined the legal outcome, control will return to the parties. They will be free to craft a family arrangement to suit their interests, in accordance with their conception of what fairness requires. It would be a second unnecessary tragedy if they failed to grasp that opportunity. (It was agreed that the parties needed time to address the question of costs.) 1. The orders of the Court are: 1. Order that the plaintiff's claim be dismissed. 2. Costs reserved. ********** Endnotes 1. See Kalmar at [48], citing Bladwell v Davis [2004] NSWCA 170; see also Steinmetz v Shannon [2019] NSWCA 114 at [37]-[39]. 2. Marshall v Carruthers [2002] NSWCA 47 at [63]. Amendments 28 June 2022 - [11] change "separate" to "common" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 June 2022