New South Wales Supreme Court CITATION : Collings v Vakas [2006] NSWSC 393 HEARING DATE(S) : 3 May 2006 JUDGMENT DATE : 11 May 2006 JURISDICTION : Equity JUDGMENT OF : Campbell J DECISION : Claim dismissed. CATCHWORDS : SUCCESSION - FAMILY PROVISION AND MAINTENANCE - jurisdiction - need for cogent evidence of plaintff's financial situation before jurisdiction is established - otherwise turns on its facts LEGISLATION CITED : Family Provision Act 1982 Vivienne Joanne Collings - Plaintiff PARTIES : Nickolas Theodore Vakas - First Defendant Christopher Phillip Vakas - Second Defendant FILE NUMBER(S) : SC 3624/04 COUNSEL : J Turnbull - Plaintiff M Lawson - Defendants SOLICITORS : Hosie & Partners - Plaintiff Cass Lawyers - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J 11 May 2006 3624/04 VIVIENNE JOANNE COLLINGS v NICKOLAS THEODORE VAKAS & ANOR JUDGMENT 1 HIS HONOUR: This is a daughter's application under the Family Provision Act 1982. 2 The testator, Theodore Peter Vakas, died on 5 June 2003, aged 91. 3 During his lifetime he worked as a restaurateur, retiring in about 1982. 4 The deceased was married twice. With his first wife he had a daughter who, it seems, predeceased the testator. 5 With his second wife he had three children – Nickolas (born on 24 January 1962, and so now aged 44), Vivienne (born on 1 January 1964, so now aged 42), and Christopher (born 9 June 1965, so now aged 40). Vivienne is the plaintiff in this case. 6 The testator separated from his second wife in December 1974 – ie, when the plaintiff was aged 10, nearly 11. His second wife subsequently remarried, but her husband predeceased the testator. She visited the testator from time to time from mid-2002, and assisted the plaintiff in providing help to him. 7 There is evidence of the terms of the last three wills that the testator made. One will was made on 21 December 1999. It left his home unit to the plaintiff, and the residue equally between the three children of his second marriage. Another was made 21 March 2003. It gave a personal right of residence in his home unit to his former wife for her life, and then gave the home unit to the plaintiff, with the residue divided equally between the children of his second marriage. 8 His last will, made on 9 May 2003 (about three weeks before he died) appointed all three of his children by his second marriage as executors, and left his entire estate to them equally. Relationship of Plaintiff and Testator 9 At the time her parents separated in 1974, the plaintiff was at a boarding school in New Zealand. Around that time she was, for a reason not explained by the evidence, looked after by her maternal grandparents. 10 While the plaintiff has been married once, that marriage lasted only a short time, and produced no children. 11 The plaintiff has a daughter, Ashlea, born in November 1987, and a son, Adam, born in June 1990. They were the product of a relationship she had with a man called Dale, which lasted four years. Since the death of her father she has had another son, Amon Freeman, born 20 August 2005. The father of that child is David Freeman. 12 There were some years of little contact between the plaintiff and her father until, at some stage in 1995, she came to visit him with her two children, who were then aged eight and five. It is more likely than not that the testator had not seen the children before that meeting. 13 Christopher was present at the meeting, because the plaintiff had specifically asked him to be there. 14 The meeting was not a pleasant one. The testator asked where the plaintiff's husband was, and she explained that they were divorced. This was, it seems, news to the testator. He referred to her children as bastards, and told the plaintiff that he was going to cut her out of his will. 15 Partly at Christopher's urging, over the next few years the testator improved his relations with the plaintiff. 16 In 1997 the testator became ill with bladder cancer and a heart condition. At that time he was living in a home unit which he owned at Allawah. The plaintiff came to Sydney and she and her mother nursed him through that illness, over a period of about four months. 17 In 1998 the testator's unit at Allawah was sold, and he moved to Byron Bay, where the plaintiff was living. He lived with the plaintiff and her children, in her home at Byron Bay, for some months. He bought a property known as 46/19 Cooper Street Byron Bay, which is in a retirement village. He moved into that property in early August 1999. It is the home unit to which two of his last three wills refer. 18 The home in which the plaintiff lives in Byron Bay is one which she rents from the Department of Housing. She has lived in that home since about 1989. 19 From the time the testator moved to Byron Bay, the plaintiff provided him with considerable support. She visited him frequently (though not as frequently as he would have liked), had him to dinner with her children twice a week, and took him on outings most weekends. She did his shopping, or accompanied him when he went shopping, and assisted with cleaning. 20 In these circumstances, he became increasingly close to his grandchildren. He spent a lot of time with the children, and taught them to cook, to play board games, and assisted in their homework. He taught them gardening skills, and they went on long walks together. 21 During the early years of the testator's living at Byron Bay he was not the only one who benefited from the relationship. He sometimes cooked for the plaintiff and her children. He often paid for, or assisted her to pay for, her grocery shopping. He paid for the children's school fees, and gave the children pocket money. The large amounts of time which he spent with his grandchildren relieved the plaintiff of a need to make other childcare arrangements. In the early part of 2003 the testator set up a trust account, containing $20,000, for the benefit of Adam. 22 In October 2000 the testator underwent surgery for the removal of tumour bulk. Following that operation, the medical advice was that no further palliative surgery would be possible. He continued to be well for about 20 months after the surgery, but the cancer re-occurred in mid-2002. 23 In connection with the medical treatment of the testator, the plaintiff sometimes took him to medical appointments (though sometimes he was able to go by himself), and, particularly around the time when he was hospitalised, she provided extra services for him. 24 From late 2002 or early 2003, the testator received home care, on five days a week, from some sort of community support organisation, and had meals on wheels delivered. 25 The last six months of the testator's life were miserable. He suffered increasingly from the symptoms of the cancer, and nothing could be done to stop it. His distress about his condition was so great that, in May 2003, he made an unsuccessful suicide attempt. 26 The testator died in the very early hours of 5 June 2003. 27 On 5 June 2003 the plaintiff withdrew $5,500 from the testator's bank account, using a withdrawal form which he had signed. He had told her, the previous Monday, to use it to withdraw money from the bank. She thought that she was entitled to make the withdrawal by virtue of having a power of attorney from her father, and having been told by him to do it. She used at least part of the money withdrawn to pay the school fees of the children until the end of that year. 28 Sometime between January and April 2003 the testator told Nickolas that he was not happy with his will, and wanted a new one. He complained to Nickolas that the plaintiff was spending all her time with her boyfriend, and not with him. In May 2003 the testator telephoned Christopher (who was in Brisbane at the time) and asked him to come immediately, and bring a solicitor. When Christopher did so, the testator complained to Christopher that the help he had been receiving from the plaintiff and his ex-wife was not as extensive as he would have liked. He had made such a complaint to Christopher on previous occasions. At the testator's request, the making of that will was kept secret from the plaintiff, until after the testator had died. Basis of the Plaintiff's Claim for Provision 29 The plaintiff claims that she should be awarded the entirety of the estate. She submits that not only did she perform significant services for the testator, but as well she has very limited assets, poor earning capacity, and family responsibilities. She submits she is in a very much worse financial situation than either of her brothers. 30 I accept that she owns no real estate. Apart from furniture and furnishings in her home (estimated to be worth $7,500) she owns a 1989 motor vehicle. As well, she owns the fixtures and fittings of a beauty salon business, which cost around $15,000 to purchase. All those fixtures and fittings have, however, been purchased since the time of her father's death. At the time of his death, her only assets seem to have been the household furniture, and the car. 31 It is not possible, on the evidence, to make any finding about what liabilities she had at the date of death, or has now. Her affidavit in chief, sworn on 17 June 2004, stated that she had a liability of $8,500 on a credit card. In cross-examination, it turned out that this was the credit limit on the credit card, not the amount actually owing. The amount actually owing is unproven. 32 The evidence concerning the plaintiff's income and expenditure is in a most unsatisfactory state. In her affidavit in chief, the only income which she claimed to have was a supporting parent benefit of $235 per week. She listed outgoings of $825.25 per week. In cross-examination she agreed that she received family assistance of about $200 per fortnight in addition to the amounts which she had disclosed in that affidavit. When cross-examining counsel called for a document relating to that family assistance payment, it was produced, and showed that the rate at which family allowance was being received was $274.90. An amount as high as that would only have been payable, however, since the birth of her third child. 33 She made no mention in her affidavit of June 2004 of any maintenance received from the father of her (then) two children. In an affidavit in reply, sworn on 11 February 2005, she said that the children's father occasionally paid $20 per week in child support. Her oral evidence on that topic was different, to the effect that the father of the first two children paid $175 per month into an account, and that there was both a court order and an agreement requiring him to do so. I accept her evidence, however, that he was not always regular in making the payments. 34 If the figures which the plaintiff presented for income and expenditure in her affidavit in chief were correct, and even allowing for her having additional income of the order of $100 per week from family assistance, she would still be incurring household expenditure at a rate of the order of $500 per week greater than her income. She accepts that, at the time of her father's death, she had for practical purposes no money. 35 For some years prior to November 2003, the plaintiff had been giving beauty treatments at her home to paying customers. It was, she says, more of a hobby than a business. She moved to leased premises in November 2003. Her evidence is that the business is not profitable. On her own account of herself, she is quite unbusinesslike – she says she did not give careful consideration to the financial wisdom of moving the beauty treatment activity into leased premises. 36 While one financial statement for the business was produced in evidence (but only on the day of the hearing) that financial statement was one prepared by her accountant only on 30 April 2006. The plaintiff agrees that they were prepared for the purpose of this case. The financial statement is a balance sheet and profit and loss account covering the years ended 30 June 2004 and 30 June 2005. It says it is based on information provided by the plaintiff. One cannot say what that information was, or what form it took. It is not apparent whether the financial statement is based on any books of account, but if it is there is no evidence concerning them. The financial statement shows that the business made a loss of the order of $27,000 in 2004, and another loss of nearly $6,000 in 2005. 37 The accounts of the business show that a capital contribution was made to it in the year ended 30 June 2004 of $44,000. She says that $10,000 of that amount was provided by Mr Freeman, but the other $34,000 is unexplained. It was presumably from that capital contribution that the fittings and fixtures of the business (para [30] above) were purchased, as well as the stock in trade (para [38] below). 38 The accounts show that $12,000 was spent on purchase of goods in the year ended 30 June 2004, and that the opening stock of goods at 1 July 2005 was $2,500. However, those accounts also show that only $200 of sales of goods was made during the year ended 30 June 2004, and no goods were appropriated for the plaintiff's own use. The plaintiff said in cross-examination that she had gone into the business with a friend, who stole all the stock, and that the police were not prepared to do anything about it because it was a civil matter. I am not satisfied I should accept that evidence. It had not been mentioned in any of the plaintiff's affidavits. The accounts, which are professionally prepared, do not include any entry which shows any writing off of the stock which was supposed to have been stolen. One would think that a note to explain the very strange situation which appears on the fact of the accounts concerning stock would have been appropriate. 39 I simply cannot see from what source the plaintiff could have financed the losses she says she incurred in her business, and the deficiency which she says she sustains in her household expenditure. Concerning the latter, she said in cross-examination that she has received help from a lot of people. That had not been mentioned in her affidavit evidence, and was in any event quite vague. 40 In March 2005 Mr Freeman moved into the plaintiff's home. At the time of an affidavit which the plaintiff swore in May 2005 Mr Freeman was not working, in consequence of a motor vehicle accident which he had sustained in about 2003, in which he had suffered some quite severe injuries. At that time, he was receiving a disability pension from Centrelink totalling $520 per fortnight, at least some of which he used for household expenses of himself and the plaintiff. He has a compensation claim in connection with his accident pending. He is ten years younger than the plaintiff. There is no evidence about whether he has any future prospects of employment. By February 2006 he was living, according to the plaintiff's affidavit of 13 February 2006, at 4/1 Banksia Drive Sunrise Beach. Surprisingly, the tax return which the plaintiff's accountant prepared for her on 1 May 2006 shows the business address of the plaintiff's business as being shops 3 and 4 Banksia Drive Byron Bay. In her June 2004 affidavit, the plaintiff had identified her business premises as being units 3 & 4, 1A Banksia Drive Byron Bay. There has been no evidence of there having been any rift between herself and Mr Freeman in the period since March 2005. I am not able to make any positive findings about where Mr Freeman is now living, or what, if any, contribution he continues to make to the plaintiff's household budget. I mention these matters as another illustration of the unsatisfactory nature of the plaintiff's evidence about her income and expenditure. 41 During 2003, the plaintiff's children had been attending school at Xavier Catholic College, Skennars Head. In 2004, she could not afford to keep the children there, so they attended school at Byron Bay High School. 42 The plaintiff's February 2006 affidavit shows that Ashlea is now attending a dance school in Brisbane. She boards in Brisbane during the week, and comes home at weekends. Adam is presently enrolled in year 10 at the Steiner School at Bryon Bay. The plaintiff gives no account of how she is able to meet the expenses necessarily associated with these ongoing educational activities of her children. 43 The plaintiff is presently enrolled in a course, which leads to a Bachelor of Naturopathy, at Southern Cross University. She has two years to go in that course. She hopes to incorporate the skills she learns in the course into her beauty treatment business. While the Byron Bay area is one which is receptive to naturopathy and complementary medicines, it is also an area in which there is a lot of competition for the provision of such services. I could not conclude that, even assuming the plaintiff completes her course, it will improve her financial position. 44 At one time, an element of the plaintiff's claim of need related to her health. After the testator's death, the plaintiff became depressed. Her general practitioner diagnosed her as suffering from depression, and prescribed antidepressant drugs. Dr Champion, a psychiatrist who saw her in May 2005, at the defendant's behest, thought that her condition should better be described as an Adjustment Disorder with depressed mood. The plaintiff suffered a miscarriage in late May 2003, and the combination of that miscarriage, Mr Freeman's accident, and her father's death, on top of looking after her children and attempting to continue her university studies, provoked her condition. Another contributing cause was that, after her father's death, there was some unpleasantness between the plaintiff and her brothers, arising from the change by the testator in his will. Even though the plaintiff suffered from this condition, she ceased taking antidepressant medication in 2004, and appears to have no ongoing symptoms of depression. Relationship of Nickolas and Testator 45 Before the testator moved to Byron Bay, Nickolas visited him on a very regular basis. They saw each other at least once a week, and would speak on the telephone at least twice a week. They often went shopping, and out to dinner together. Nickolas sometimes stayed with the testator when he was feeling unwell, and Nickolas paid a number of his bills when they became due. They spent special days like birthdays, Christmas Day and evening, and Greek Easter together. 46 When the testator was unwell in the period between 1997 and 1999 Nickolas took his father to medical appointments, and assisted his father with the more technical aspects of English concerning his health condition. Nickolas often paid the taxi fare. He estimates he attended no fewer than 50 medical appointments with his father, each taking about three hours, including travelling time. 47 After the testator moved to Byron Bay Nickolas kept in contact with him, speaking on the telephone at least once a week, and visiting him on at least 15 occasions between the time he left Sydney, and his death. Nickolas' Situation 48 In 1985 Nickolas was working as an apprentice technician. At that time he was involved in a car accident, which injured his neck, back and hips. 49 In 1993 he started a university course, from which he graduated with Honours in 1998. Since 1998, he was worked part-time, teaching computer and study skills to students with physical and intellectual disabilities. In 1998 and 1999 he had a position as a casual tutor at the University of Wollongong, but since then he has worked part-time for a TAFE. His only income is as a TAFE teacher, from which he earns about $40,000 before tax each year. He has been enrolled in a PhD programme since 1998, but has not yet completed his thesis. 50 Nickolas is in a long-term de facto relationship, with a lady who works as a public servant, and now earns approximately $65,000 gross per annum. They keep their finances separate. 51 Nickolas and his domestic partner own a house together, in the Sydney suburb of Newtown, held as to one-third by Nickolas, and as to two-thirds by his partner. They purchased that house for $265,000 in 1999. In November 2004 the mortgage on the property was for $105,000, of which $61,000 was owed by Nickolas. By the time of the trial his share of the mortgage had reduced to $57,000. His only other asset is a 1994 Toyota Camry. 52 He had a hip arthroscopy in 2003, about a month after the testator died. It did not succeed in reducing his pain. He continues to suffer from hip pain, neck pain, numbness, back spasms, hip spasms, and sleep interruption. 53 He has an ongoing need to have physiotherapy and chiropractic treatment, which (after a health fund rebate) leave him out of pocket about $80 per month. As well he spends about $40 per month on medication, for which there is no rebate. 54 He is able comfortably to cover his ordinary living expenses from his salary. However, he has an understandable concern about whether the aftermath of his accident will interfere with his future employability. In 2004, he was able to work about 20 hours a week. His hours were restricted because of his back and hip pain. By the time of the trial, he was working about 27 hours a week as a teacher, and spending another six to eight hours a week working on his PhD thesis. However, he has found that working the longer hours aggravated his condition. 55 Nickolas gave a solicitor instructions to make a claim for damages on his behalf concerning the accident, but something went awry, and the claim was not made in time. At the solicitor's suggestion, he has made a claim on Law Cover. That resulted in a payment to him last year of $104,000 after legal expenses. He and his partner are contemplating selling their present house and buying another, using at least part of that $104,000. Relationship of Christopher and Testator 56 Christopher gives no account of the state of relations between himself and his father prior to 1993. In about January 1993 he moved from the Sydney area to Coffs Harbour, but still visited his father from time to time. 57 In about July 1994 he moved to Sydney from Coffs Harbour, and commenced living with his father at his father's Allawah unit. Christopher continued living there for approximately 18 months. Whilst there, he shared the cooking with his father, and generally looked after him. During that time, Christopher was working part-time, and studying as well. He finished his course of study in 1994, after which time he worked in real estate sales. During that 18-month period he did not pay rent, but made contributions to the household expenditure. 58 By early 1996 the testator had improved considerably, and Christopher moved out to live with friends at Sutherland. He continued to see his father about once a week. He moved to Brisbane in January 1998, to work as a mortgage broker. 59 He assisted his father to obtain a loan in 1999, to cover the costs of preparing the Allawah unit for rental and later resale, and buying a new residence at Byron Bay. The Allawah unit was rented until it was sold in December 2000. There was a shortfall between the income generated from the rent, and the combined expenses of the outgoings of the property and the mortgage, which Christopher subsidised, in an amount which he estimated at $5,000. 60 When the property at Allawah was sold, there was a surplus of about $45,000, which the testator invested. 61 After the testator moved to Byron Bay, Christopher made visits to him every few weeks. Christopher's Situation 62 While he was in Brisbane, Christopher studied environmental health science, and received a qualification in that discipline. By 2004 he was working as an environmental health officer with the local council at Cooktown. He earned $664.50 nett per week. His wife was not in paid employment. 63 In 2004 he and his wife owned jointly a block of vacant land, and two investment properties which were mortgaged. They had a total equity in these properties of about $100,000. They lived in a rented house. 64 Now, Christopher and his wife are living at Hervey Bay. His wife purchased a house there in January this year for $385,000, subject to a mortgage. The vacant land they had previously owned was sold to purchase the house. It was sold for $160,000, out of which a bank loan of $118,000 was paid, and also other transaction costs. He still owns (in his own name) the two investment properties. As well, he and his wife jointly own a house on the Atherton Tableland. 65 They are unable to have children, but as long ago as 1994 applied for adoption of a child, and are awaiting allocation of a child to them. The adoption process will, they estimate, cost between $30,000 and $50,000, and there will be other expenses associated with having a new baby, if one is allocated to them. Decision 66 Before the Court can make an order in the plaintiff's favour, it needs to be satisfied that she was left, at the testator's death, without adequate provision for her maintenance, education or advancement in life. It is clear that she owns no real estate (unlike her brothers), and that she has ongoing family responsibilities. 67 However, before a court can be satisfied that a plaintiff has been 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. In the present case, even though there are two elements of the plaintiff's financial situation about which I am satisfied (that she owns no real estate, and has family responsibilities), when another crucial element of the plaintiff's financial situation (namely, her income and expenditure) is not satisfactorily proved, it is not possible to conclude that she has been left without adequate provision. 68 In these circumstances, the plaintiff's claim is dismissed. 69 Whenever a plaintiff brings a claim under the Family Provision Act 1982, and fails, that plaintiff is at risk of not only having to meet his or her own costs, but also of having to pay the costs of the defendants of the action. However, as in all litigation, the costs are in the discretion of the Court. In this case, the appropriate order is that the plaintiff's costs of the action be paid from the estate. Orders 1. Claim dismissed. 2. Costs of the plaintiff to be paid by the defendants from the assets of the estate of the late Theodore Peter Vakas. 3. Costs of the defendants on an indemnity basis to be paid from the assets of the said estate. ********** 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.