New South Wales Supreme Court CITATION : Laspitis v Laspitis [2001] NSWSC 749 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1897/2000 HEARING DATE(S) : 29 June 2001 and 3 July 2001 JUDGMENT DATE : 31 August 2001 PARTIES : Phyllisse Laspitis v Irene Laspitis JUDGMENT OF : Master Macready at 1 COUNSEL : Valerie Heath for plaintiff M.S. Willmott for defendant SOLICITORS : Brian Muir & Company for plaintiff Eric Butler for defendant CATCHWORDS : Family Provision. - Application by a daughter. Estate too small to accommodate plaintiff's claim and that of the widow. Order that the widow receive the whole of the estate. DECISION : Paragraph 39 - 1 - 1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Terry Laspitis who died on 26 November 1998 aged 65 years. He was survived by his daughter, the plaintiff, and the defendant, his widow. The principal asset in the defendant's estate was his home at 4 Lemnos Street, Homebush. That was valued at $250,000. There were also items of personal property including a boat which were valued at $40,000. In the application for Letters of Administration the affidavit showed one particular bank account with the Commonwealth Bank having $376.97 and another entry for funds in other bank accounts (estimated) at $50,000. There was also shown in that application a joint account for the deceased and the defendant, a named account for $23,572.21. In the evidence sworn by the defendant as to the assets in the estate she swore to the fact that the only account in the estate was the one having a credit balance of $376.97. That was not challenged by the plaintiff and accordingly I accept that the only bank accounts in the estate at the date of death was $376.97. Accordingly, the amount of the estate is $290,376.97. 2 The plaintiff's costs are estimated at $21,907. These costs include some costs of administration of the estate. The defendant's costs are estimated at $50,000. 3 The deceased died intestate and the plaintiff and the defendant were both granted Letters of Administration on 17 January 2000. The defendant gave notice under s 61D of the Wills Probate and Administration Act on 29 May 2000. The plaintiff disputes that the home at Lemnos Street, Homebush was occupied by the defendant and the deceased as their principal place of residence at the date of death. 4 There is a cross claim by the defendant seeking an appropriate declaration that the home is held in trust for her pursuant to s 61D of the Wills Probate and Administration Act. The defendant also makes a claim for provision under s 7 of the Family Provision Act. A judge of the court has referred the whole of the matter to me for determination. If the defendant is entitled to the home pursuant to the election under s 61D then the whole of the estate will pass to her. If not then the estate will be held under s 61B as to $34,234.98 for the plaintiff and $184,234.98 for the defendant assuming that all the costs are paid out of the estate. 5 In order to properly evaluate the plaintiff's and the defendant's claim under the Act it is necessary that I first determine whether a notice under s 61D of the Wills Probate and Administration Act was effective so that I know what are the present entitlements of the parties to the estate. In order to determine that matter it is necessary to refer to some of the history of the matter. 6 The defendant was born on 27 October 1928. In 1964 she migrated to Australia with her first husband and their sons. In 1964 the plaintiff's parents married and their only child, the plaintiff, was born on 12 March 1965. For many years they lived in rented accommodation and in 1970 the deceased and his wife purchased 4 Lemnos Street, Homebush. On 23 February 1977 the defendant's first husband died. On 9 January 1978 the plaintiff's mother, the first wife, died. The deceased and the defendant met shortly after when they were both visiting the graves of their respective spouses. In 1980 the deceased and the defendant commenced an association at 4 Lemnos Street, Homebush. In about 1986 when the plaintiff was in her twenties she travelled to Europe. On 21 June 1986 the deceased and the defendant married. 7 At some stage during 1986 the plaintiff moved out of the family home. In 1988 she met a gentleman with whom she formed a de facto relationship which existed until shortly before this hearing. In 1991 the deceased was retrenched and with some of his retrenchment money he discharged the balance of the mortgage of $4,000 on his home at Lemnos Street, Homebush. By 1993 the deceased and the defendant were spending some time with the defendant's children at Ash Street, Terrigal and in 1998 they spent some time with another son at Bush Street, Nora Head. I will return to these matters in more detail. 8 The deceased died on 26 November 1998. In 1999 the defendant transferred to her four sons a property at 3 Clare Crescent, Five Dock. The consideration was expressed to be $1.00. It seems that the defendant and her first husband had purchased the property in 1968 for $13,700 using borrowed funds of $11,100. The defendant, her husband and their four children worked and all contributed to the repayments of the mortgage and household expenses. The initial mortgages over the property were discharged by 1978. It was 1980 or some time shortly thereafter that the defendant moved out of the Five Dock property and went to live with the deceased in his property at Lemnos Street, Homebush. She never returned to live at Five Dock. Since that time the property at Five Dock has been mortgaged on a number of occasions for the purposes of the defendant's sons' businesses. The last mortgage was discharged in 1997. The evidence before me establishes that there was a substantial contribution to the repayment of mortgages by the sons to whom the property had been transferred. Clearly the defendant would have had some equitable interest in the property the extent of which would no doubt be reflected by her contributions and those of her husband. There is no evidence of the value of the property but whatever interest the defendant had she decided to give to her children in 1999. There is no evidence to suggest that this was done in order to improve her claim. 9 On 17 January 2000 there was a grant of Letters of Administration to the two parties and the s 61D notice was signed on 29 May 2000 and apparently served about two weeks later. 10 The plaintiff separated from her de facto husband in May 2001 and she is now pregnant with his child. She does not know the whereabouts of her de facto husband and apparently the pregnancy was the cause of the separation. She proposes to have the child. 11 The evidence in support of the defendant's claim that she and the deceased were living at Lemnos Street was dealt with in paragraph 16 and 17 of her affidavit of 23 December 2000 in these terms. "During the time we lived at 4 Lemnos Street, Homebush Terry and I visited my children frequently. In 1993 at Christmas time we spent five weeks at Terrigal with my son Ross. At Easter, 1994 after Terry was released from Gosford Hospital after his heart attack, we stayed with Ross for about a month. Around Christmas time 1994 we spent holidays in Terrigal with Ross for about two months. During 1995 we remained at Homebush most of the year, however we spent a couple of weekends visiting Ross and for one week in July (school holidays) we stayed with him. 1995 Christmas time we spent two or three weeks with Ross. In July, 1996 we again stayed at Ross' home for a couple of months while he was on holidays. In October that year we stayed with him for about two months. In 1997 we spent five weeks with my son Paul at Nora Head. We also visited Ross and Paul on other weekends. Christmas time 1997 we stayed a couple of days with my son Nikitas at his home in Padstow. On the occasions when I visited my children all I ever took was a small bag with me with some underclothing and medication." 12 The plaintiff's case was that her contact with her father between 1993 and 1998 was mainly by telephone. On each occasion that she did make contact it was only with him when he was staying with the defendant's son, Ross at Terrigal. She also gave evidence of one visit she made to Terrigal in 1997. She observed that the defendant and her father had one room like a granny flat. They had their own entrance, living area and bedroom. 13 There was little other affidavit evidence given on the matter although there was some cross-examination of one of the defendant's sons, Paul. There were tendered a series of admission documents when the deceased was admitted to hospital. The first of these was on 5 December 1994 when he was admitted to Gosford hospital and the address was shown as 46 Ash Street, Terrigal. That was the address of the deceased's son. His doctor was shown was Dr. McCredie of Terrigal. On 5 April 1995 similar information was shown on the sheet on that occasion. On 14 November 1998 the address was shown as Bush Street, Nora Head and his local doctor was Dr Harris of Tuggerah. He then moved to Wyong Hospital on the same day and there his address was shown as Lemnos Street, Homebush. However, his local doctor was Dr Harris of Tuggerah. It seems fairly clear from the evidence that all major admissions that the deceased had during his later years were on the Central Coast where he was treated by Central Coast doctors. He died in hospital on 26 November 1998. 14 No evidence was given by Ross Glynatsis but this was explained by his inability to return to Australia in time for the hearing because of an airline strike. Admittedly his draft affidavit which was waiting for him to sign failed to deal with the subject but no doubt that avenue may have been explored on the hearing. 15 Another son, Paul Gynatsis gave evidence at the hearing and he referred to the deceased spending up to two months at Terrigal during which time they would come back each fortnight to pick up the mail and mow the lawns. He also suggested they were at Homebush for four or five weeks at a time. His evidence was general and did not address in detail the period immediately prior to death. 16 Section 61D is in the following terms:- "Rights of surviving spouse with respect to shared home (1) Subject to the Fourth Schedule, where: (a) an intestate dies leaving a spouse and issue, (b) the value of the estate of the intestate (excluding any household chattels) exceeds the prescribed amount, (c) the intestate, at the time of the intestate's death, held an interest in a dwelling-house which is situated in New South Wales, and (d) that dwelling-house was, at that time, occupied by the intestate and the intestate's spouse or by the intestate's spouse as their, or as the spouse's, only or principal residence, the spouse may require the administrator to hold that interest in trust for the spouse, and on being so required, the administrator shall hold that interest accordingly. (2) A reference in subsection (1) to the spouse of an intestate is, where the intestate dies leaving a spouse and a de facto spouse, a reference to the spouse or de facto spouse for whom part of the estate is required to be held in trust under section 61B (3), (3A) or (3B)." 17 There is evidence of service of the notice on the other administrator and also the filing of a notice in the Registry. The procedural requirements are thus fulfilled. The question, of course, is whether Lemnos Street, Homebush was the only or principal residence of the defendant and the deceased at the date of death. Clearly it was not the only residence and the question is whether it was the principal residence. That means that the residence has to be the first in rank or importance to the defendant and the deceased. The existence of family such as children or grandchildren may indicate Terrigal as the most important but the evidence did not descend into matters of this nature. 18 In my view the evidence in this matter is very scant. I need to be satisfied as to whether or not it was the principal residence and given the present state of the evidence I am not satisfied on the balance of probabilities that Lemnos Street was the principal residence of the defendant and the deceased at the date of the deceased's death. 19 This then means that it is necessary to consider the two applications by the plaintiff and the defendant under the Family Provision Act. It also means that it is not necessary for me to consider a submission as to the inter-reaction between s 61D of the Wills Probate & Administration Act and the provisions of s 7 of the Family Provision Act which was advanced in argument. 20 The plaintiff's application is in time but the defendant's is which brought by a cross claim is not within time. 21 Under section 16 of the Family Provision Act the Court may allow an application to be made notwithstanding it is out of time. There are a number of cases which refer to the principles to be applied in an application for an extension of time. In Re Guskett (deceased) (1947) VLR 211 the following was said: "It is necessary for the applicant to make out a case that will justify the grant of the indulgence sought. He is to show reasons why his failure to apply within the time allowed should be excused. Every case will have to be dealt with on its own facts but it would seem necessary for the applicant to satisfy the court that the circumstances are such as to make it unjust for him to be penalised for being out of time. As moreover he is seeking an indulgence he should apply promptly for an extension of time." 22 His Honour Young J has in several cases dealt with the principles governing application to extend time under this Act. In Massie v Laundry (unreported 7 February 1986) he indicated that the factors which one looks at include the following:- (a) is the reason for making a late claim sufficient? (b) will the beneficiaries under the will be unacceptably prejudiced if the time were extended? (c) has there been any unconscionable conduct on either side which would enter into the equation? 23 Apparently he also accepts a view which was expressed by his Honour Needham J in Fancett v Ware (3 June 1986) that there is no purpose in extending the time with respect to a claim which must fail. In Phillips v Quinton (unreported 31 March 1988) Powell J when considering the matter at the substantive hearing leant to the view that a plaintiff seeking an extension of time under the Testators Family Maintenance Act must now demonstrate not merely a reasonable prospect but at least a strong probability of obtaining substantive relief. That view was not accepted by his Honour Hodgson J in Basto v Basto (unreported 8 September 1989). 24 In De Winter v Johnston, a decision of the Court of Appeal on 23 August 1995 his Honour Powell J referred to this matter and in particular the fact that nowadays the application for extension of time is invariably dealt with at the time of the application for substantive relief. He said at page 23: "In such a case, so it seems to me, no extension of time ought to be granted unless it be established (inter alia) that the application for an extension of time would, in the event of that extension being granted, be entitled to an order for substantive relief." 25 The first matter to be determined is the explanation for delay. This was not dealt with in the plaintiff's evidence although it is fairly plain from the progress of the history of the matter and other evidence before me that the defendant's application, by way of cross claim, was no doubt prompted by the plaintiff bringing these proceedings. The plaintiff commenced proceedings by a summons which was filed on 29 March 2000. In January there had been an incident when the locks were changed and the defendant was locked out of the Homebush home. On 29 May notice under s 61D was signed. The cross claim was filed on 9 August 2000 after the first mention of the matter for directions when a timetable was set. It was thus brought on early in the proceedings. In the circumstances it seems tolerably clear having regard to the history that the defendant no doubt did not see any need to commence her own proceedings given her entitlement and the fact that she had a right to lodge a notice under s 61D. In the circumstances I am satisfied that the course of the proceedings provides a sufficient explanation for the delay in filing the cross claim. 26 There is no unconscionable conduct and there are no other matters which need to be taken into account. Accordingly, subject to her having prospects of success, I am satisfied that it is appropriate to extend time for the making of the defendant's application. 27 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 set out the two stage approach that a Court must take. At page 209 it said the following:- "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." 28 I turn to consider the position of the plaintiff. The plaintiff is 36 years of age, single and is expecting the birth of her first child. I have mentioned her de facto partner of some years standing has left her and given the circumstances it is unlikely that he will provide support for her. The plaintiff lives in rented accommodation which she has done for most of her life. She has items of jewellery inherited from her mother worth about $5,000 and her furniture worth about $10,000. She has a credit card and other loans standing at $25,000, a car lease of a 1998 Saab with $44,000 outstanding. She thus has no equity in the car. She has outstanding legal expenses of some $14,000 some of which relate to a business operated by her former de facto partner. She is, however, on a substantial salary it now being $91,950 per annum. She recently let her health insurance benefits lapse and although she has rejoined they will not cover the costs associated with the birth of her child. The plaintiff's employment position is one where she is a creative director for a television company and as such travels from time to time. She will have to resign from her permanent employment in order to care for her child during its infancy and she hopes to be able to obtain freelance work two days a week after the first year of caring for her child. 29 The plaintiff did receive some benefits from the deceased during his lifetime. She accepts that $7,000 that was advanced about 1989. The defendant suggested the amount was $10,000 and there were some other small amounts but there was no cross examination on this aspect in order for me to resolve this conflict. 30 There is no evidence of any assistance the plaintiff gave to build up the estate of the deceased. So far as the relationship between the plaintiff and the deceased is concerned it is clear that there were some problems between the plaintiff and the defendant although this did not stop the plaintiff keeping in contact with her father. For a while she was based in Wollongong away from Sydney and she used to try and contact her father which, as I have mentioned before, was by phone and where he was residing with the defendant's children on the Central Coast. I am not satisfied that there was any conduct which would reduce the plaintiff's claim. 31 It is necessary to consider the position of others having a claim on the bounty of the deceased. In the present case this is the defendant. She is 72 years of age and currently resides on the Central Coast with her children. Her financial circumstances are that she now has a car worth about $8,000 and savings of some $13,300. She receives a pension of $400 per fortnight which is not sufficient for her outgoings and her income is supplemented by provision made by her children. 32 There is nothing in the evidence to suggest that the relationship between the defendant and the deceased was unhappy although there were some minor complaints by the deceased. It is important to realise that the defendant contributed to the estate by paying off the mortgage at Lemnos Street, Homebush. The repayments were $60 a month and the defendant paid another $40 a month bringing up the repayments to $100 a month. As a result the mortgage was paid off earlier and ultimately in 1991 when the deceased was retrenched the balance was paid by him from his retrenchment package. 33 Widow's claims are frequently the subject of applications in this Court. The Court of Appeal in Goloski v Goloski (unreported 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April 1986. There his Honour said:- "Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring". 34 In the present case one has a claim by a widow of some 12 years standing. There obviously was also a relationship between the deceased and the defendant from at least 1980. The defendant said that she and the deceased lived together but the plaintiff who was living at home at the time said that the defendant used to spend time with her father but did not live there permanently until after they were married. There was no cross examination on these conflicting stories for me to be able to resolve that matter. The plaintiff presented as a careful witness and I would accept her evidence on this aspect but in any event it is clear that there was a long relationship from 1980 on to 1998 between the deceased and the defendant. One is therefore looking at a relationship of 18 years the last 12 of which were spent as a married couple. In these circumstances the defendant has a strong claim on the bounty of the deceased. The amount of costs, even if the plaintiff's claim were dismissed, are substantial and in the ordinary course the property would be sold. The defendant says that her sons will help her with meeting these costs and expenses and that she wants to live in the property. However, the tenor of her evidence suggests that she is more likely to consider continue to live with her son with whom she has virtually resided since she retook possession of the property on 28 May 2000. 35 The plaintiff in the ordinary circumstances would have little claim against the prior needs of the deceased's widow. However, in this case she has some pressing needs given the imminence of the birth of her child. I accept that she will have difficulties with employment for a while because of the birth of her child. Fortunately she is young and has sufficient ability to secure employment once her child can be minded. 36 Once again this case is a situation where the estate is not sufficient to provide for the widow. She exists on the pension, she has accommodation only and only some $13,000 to guard against the contingencies of life. She is clearly dependent upon her sons for support and even if the house is sold such funds may be needed in the future to provide further nursing home care. She has a prior claim over that of the daughter. In the circumstances the only order that I think is appropriate is that the plaintiff's claim be dismissed. 37 There are examples in the evidence of promises made to the plaintiff by the testator that she would inherit the house and this may well have coloured her approach to the litigation. In these circumstances I do not think it appropriate to order the plaintiff to pay the defendant's costs. 38 Accordingly, the only order as to costs I will make, subject to any submissions from the parties, is that the defendant's costs be paid or retained out of the estate of the deceased. 39 I order that the defendant receive the whole of the estate of the deceased. 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