New South Wales Supreme Court CITATION : Kharpoutlian v Manoukian Minassian v Manoukian [2009] NSWSC 251 HEARING DATE(S) : 02/04/09 JUDGMENT DATE : 23 April 2009 JURISDICTION : Equity Division JUDGMENT OF : Macready AsJ at 1 DECISION : Paragraph 48 CATCHWORDS : Family Provision. Application by two daughters for further provision. Orders made. No matter of principle. Taline Kharpoutlian v Hagop Jack Manoukian - Estate of Kenarik Kharpoutlian PARTIES : Shoghik Minassian v Hagop Jack Manoukian FILE NUMBER(S) : SC 4914/2007; 1715/2008 Miss R Winfield for Taline COUNSEL : Mr PR Glissan for Shoghik Mr GM McGrath for defendant Griffin Lawyers for Taline SOLICITORS : Lander & Lander Pty Limited for Shoghik Burridge & Legg for defendant - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE MACREADY Thursday 23 April 2009 4914/2007 Taline Kharpoutlian v Hagop Jack Manoukian 1715/2008 Shoghik Minassian v Hagop Jack Manoukian (Estate of Kenarik Kharpoutlian) JUDGMENT 1 HIS HONOUR: This is the hearing of two applications for provision under the Family Provision Act 1984 in respect of the estate of the late Kenarik Kharpoutlian who died on 6 September 2006. The applications are brought by the two daughters of the deceased who are her only children. The deceased's husband predeceased her. 2 The applications were heard together and the parties have treated the evidence in one application as the evidence in the other. Accordingly, I order that the evidence in one application be evidence in the other. Last will of the deceased 3 The deceased made her last will on 30 August 2006 a week before she died. Under her will, the deceased appointed her brother, Jack Manoukian, the defendant as her executor. The deceased left a one quarter share of the residue of her estate to a friend, Juliet Nahabedian, a one quarter share to her daughter, Taline Kharpoutlian, a one quarter share to her daughter Shoghik Minassian and a one quarter share to be held jointly for Kassia Minassian and Meenas Minassian the children of Shoghik Minassian. Kassia and Meenas' share was to be invested and held until they reached the age of thirty years. 4 The deceased left a statement in which she explained her reasons for the provisions in her will in these terms: "I Kenarik Kharpoutlian of 15 Forsyth Street Willoughby, in the State of New South Wales, Widow state - 1 I am today making my last Will and Testament. 2 The reasons I have made the provisions I have for my daughter Shoghik Minassian are - 2.1 (a) Her marriage is in difficulties and she has already taken steps to obtain legal advice. (b) Her husband is a reckless gambler, he has physically abused her, and he treats her very poorly. (c) He is very domineering, controlling and manipulative. (d) My daughter has told me that even though she wants to cut back her working hours her husband insists she continue at her present pace. (e) I do not want to leave Shoghik assets which will be transferred directly into her name, because her husband will force her to transfer them to him or he will ensure that he obtains the benefit from them to the detriment of my daughter. 2.2 I do not want any part of my estate to be enjoyed by Shoghik's husband. I want it preserved for her and ultimately for her children. 3 The reasons I have made the provisions I have for my daughter Taline are (a) Taline is a practising lesbian and living with her partner. (b) She has no children and is unlikely to have any. (c) I have not enjoyed the best of relationships with Taline over the years. She has not behaved towards me with kindness or much affection. (d) I love Taline but I do not approve of her lifestyle. I do not want my estate to benefit Taline's partner. 4 My dear friend Juliet Nahabedian has been caring for me selflessly since I became ill. I cannot repay her kindness. She is very deserving, and I would prefer that she should receive a benefit from my estate rather than have Shoghik's husband or Taline's partner receive that benefit." Estate of the deceased 5 The substantial asset in the estate was the deceased's home at Willoughby which has been sold and the proceeds of sale have been invested. The present value of the estate is as follows: Cash investment $1,093,895.26 Less Taxation liabilities $22,000.00 Net estate $1,071,895.26 6 Costs to date which remain unpaid are: Hagop Jack Manoukian $27,000 Taline Kharpoutlian $20,000 Shoghik Minassian $30,000 Total $77,000 7 The estimate for costs were for a two-day hearing. The matter was completed within one day and, accordingly, it would be expected that the costs would be in the order of $71,000. This leaves a net estate of slightly in excess of $1 million. 8 There was earlier litigation concerning the proof of the deceased's will and a number of payments were made on account before arriving at the figure to which I have referred above. 9 In December 2008 Taline Kharpoutlian and Shoghik Minassian were paid a preliminary payment of $10,000 each. They were also paid the sum of $25,000 each to enable settlement of the probate litigation concerning the deceased's will. In addition Taline Kharpoutlian's legal representatives have been paid $66,918.83 on account for their costs. The costs which are unpaid have been included in the above figures. Appropriate adjustments for these payments will have to be taken into account in respect of the distribution of the estate in due course. Family history 10 The deceased, who was of Armenian background, married and had her daughter, Shoghik Minassian, in Lebanon. Her friend, Juliet Nahabedian, to whom she left a share of her estate was born in 1938. Juliet's marriage was dissolved 1969 and she had no children and remains single. As I have mentioned the deceased had two daughters. Shoghik was born in Lebanon in September 1964 and is now aged 44 years. Her sister Taline was born in Sydney in May 1972 and is now aged 36 years. 11 Shoghik married Krikor Minassian in January 1987 and they had two children, a daughter Kassia born July 1989 now aged 19 years and a son Meenas born in March 1997 now aged 12 years. 12 In her will dated February 1990 the deceased left her estate to her husband, but if he predeceased her it went to Shoghik and Taline in equal shares on attaining 25 years of age. 13 In 1994 Taline moved out of her parents' home to make her own way in life and commenced paid employment. 14 In 1998 the deceased's friend, Juliet, retired from her employment and now resides alone with her Maltese terrier in a Housing Commission unit. 15 In 2002 Taline returned to her parents' home due to the illness of her father and her mother. 16 In July 2004 Taline's father was diagnosed with Alzheimer's disease and emphysema. In December 2004 Taline ceased employment and commenced caring for her parents full-time. In March 2005 she received a Carer's Pension from Centrelink. By mid 2005 the deceased was terminally ill with leukemia. 17 In September 2005 Taline suffered with depression and insomnia and from January 2006 she spent less time in her parents' home at Willoughby. At about this time Juliet commenced visiting and caring for deceased. 18 In February and March 2006 Taline suffered a nervous breakdown and was unable to care for her parents. In April 2006 she moved out of her parents' home and moved to live with her present partner. At this time the deceased's sister Azadouhie Kechichian (Azad) travelled from her home in the USA to visit the deceased. She stayed initially with Juliet. 19 On 6 May 2006 the deceased's husband died and from about this time Azad and Juliet stayed with deceased and cared for her. 20 On 27 May 2006 the deceased made another will leaving one-quarter of her estate to each of her sister, Azad, Taline, Shoghik, and a quarter jointly to Shoghik's children Kassia and Meenas. 21 In late May 2006 the deceased told Juliet that she intended to change that will in favour of Juliet who at that time rejected any suggestion that she should be benefited by the deceased. 22 In June 2006 Shoghik and Krikor's marriage broke down and they separated in January 2007. In May 2007 they had a property settlement and Shoghik received the sum of $175,934.60. 23 In August 2006 Azad returned to USA and a few days later on 30 August 2006 the deceased made the will which has been admitted to probate. The deceased died on 6 September 2006. 24 In March 2007 probate proceedings were commenced and were compromised in March 2008 under terms which provided for Shoghik and Taline to pay Azad $50,000 which was in due course paid. Probate was granted on 9 April 2008. 25 The present proceedings were commenced within time. Eligibility 26 Taline and Shoghik are both eligible persons. 27 In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 the Court 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." Shoghik Minassian's situation in life 28 Shoghik is 44 years of age and is single. She has the care of her two children, Kassia, aged 19 years and Meenas aged 12 years. Kassia is working but lives at home. Shoghik's assets consist of a bank account with a negligible balance, a car worth $8,000 and household furniture and equipment worth about $10,000. She has superannuation benefits of $62,500.95. She has debts for school fees for Meenas and a MasterCard debt totaling $3,862.30. 29 Shoghik is unemployed and receives an allowance of $478 per fortnight for a New Start allowance. Her former husband does not does not pay child support. Her expenses are $820 per week. Some indication of the expenses she incurs can be appreciated from the fact that in May 2007 she received $175,934.60 and those funds have been expended. 30 Since her mother's death and the breakdown of her marriage Shoghik has been suffering from acute stress, depression and other health problems, as a result of which she has been unable to work. She receives counseling from a psychologist each week. In the past she has been employed and it is likely that once the stress of this litigation is over she will be able to recover and resume employment. Shoghik had a good relationship with the deceased from the time she left home at the age of 22 years to marry. Her contact with the deceased was on at least a weekly basis and she and her children had contact with the deceased which was appreciated by the deceased. Shoghik did not contribute to the estate of the deceased. Taline Kharpoutlian's situation in life 31 Taline is the youngest daughter of the deceased and is aged 36. For some years she has lived in a relationship with her female partner. She has no assets of significance other than superannuation of $19,367.75. She has a HECS debt of $1,897 which is not presently repayable. Her income from Centrelink is $250 per week which just covers her expenses. In a practical sense the Court cannot be satisfied about her true financial situation as her partner has refused, probably for personal reasons, to give any evidence about her financial situation. She suffers from depression and arthritis and she currently takes medication for these problems. There is evidence before the court substantiating that she suffered from these problems when she could no longer care for her parents in March and April 2006. At that stage, Azad and Juliet had to take care of her parents. As far as the relationship with her mother is concerned, it is plain that her mother disapproved of her sexual preferences. Despite this the relationship between the deceased and Taline continued and Taline spent time looking after her parents after she gave up work in 2002. I accept that the medical evidence supports the fact that she could not have continued to look after her parents after March 2006. 32 Taline did not contribute to the estate of the deceased. Juliet Nahabedian situation in life 33 Juliet is 71 years of age and single. As I have mentioned she divorced many years ago and does not have children. She retired from her employment and receives the age pension of $567.90 per fortnight. She resides alone in a Housing Commission unit for which she pays rent of $141.60 per fortnight which is deducted from her age pension. She has a small debt to Centrelink and she has a car worth $5,000 which is her only asset apart from her personal effects. She was a friend of the deceased for over 35 years. 34 As I have mentioned in 2006 Juliet and the deceased's sister, Azad, assisted with the care of the deceased after Taline could no longer look after her mother. 35 Juliet did not contribute to the estate of the deceased. Kassia's situation in life 36 Kassia is 19 years of age and lives with her mother and brother in rented accommodation. She has completed two years of Bachelor of Business degree at UTS, Sydney but she recently decided not to continue her studies and is working to support herself. She is now working and earning $550 net per week. She did pay some of her earnings to her mother but has now ceased to do this. She wishes to return to full-time study to complete her accountancy qualifications. This will require either one year of full-time study or four years part-time. Thereafter she would like to do three years part-time study while working to qualify as a chartered accountant. She is in good heath and has no assets of any substance. She gave evidence that she would prefer her share to pass to her mother immediately to allow her mother to buy accommodation. I will return to this matter later. I note that her intention in this regard was very plain. This was notwithstanding the fact that she has recently become engaged although there is no date set for the wedding. Her belief is that her mother should have her share and that in due course if she does inherit anything it would be from her mother. In the meantime she feels that she and her future husband should be able to support themselves. Meenas' situation in life 37 Meenas is 12 years of age and lives with his mother. He is in good heath and is doing well at school and, according to his sister, he is a bright student. In this case it may be that he will continue to university study although it is too early for him to have any view at this time on which the Court could rely. Discussion 38 It is necessary to see how the Shoghik and Taline say they have been left without adequate and proper provision for their maintenance, education and advancement in life. 39 Both daughters are reliant on Centrelink payments and neither has significant assets or owns real property. Both are not working primarily due to stress and anxiety that is related to the death of their parents and these legal proceedings. Both Shoghik and Taline have established that the provision made in their favour by the deceased was inadequate for their proper maintenance, education and advancement in life. 40 Shoghik and Taline both put forward a primary need to secure accommodation. 41 The approach to be taken by the Court when considering claims by children to be provided with funds for a house were dealt with by Gzell J in McGrath v Eves [2005] NSWSC 1006 at, par [67]: "[67] When it comes to children, as Young J observed in Shearer v The Public Trustee, NSWSC, unreported, 23 March 1998, it has never been said by any court that the community expects a mother to leave her children in a position to have a house of their own. That observation applies equally to a father. And in Gorton v Parks (1989) 17 NSWLR 1 at 7, Bryson J pointed out that there is no special principle that able-bodied adults earning a living have no claim, his Honour pointing out that such a proposition in relation to resources of any size was quite erroneous. [68] In Barbara Mayfield v Suzy Carolyn Lloyd-Williams [2004] NSWSC 419 at [109]-[110], White J, having referred to this passage, went on to observe that there was no rule to the effect that proper provision for an adult and presently able-bodied child did not extend to providing him or her with a house or money to buy one. His Honour noted that instances in which this had occurred included Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352. [69] White J's decision was upheld by the Court of Appeal in Lloyd-Williams v Mayfield [2005] NSWCA 189. In the course of his judgment, Bryson JA at [31] pointed out that there were features to the case that were rarely encountered in claims under the Family Provision Act 1982 and rarely encountered together. First, the value of the shares designated as notional estate was very large in comparison with the estates ordinarily encountered. Secondly, because the appellant was otherwise amply provided for, the further provision ordered by White J could have no adverse effect on her wellbeing. Thirdly, the applicant did not have any needs in terms of lack of present provision for necessities and amenities of life on an ordinary scale of needs as understood in the community generally. [70] It was submitted that Mayfield was distinguishable by the absence of these features in the instant circumstances and because the appellant in Mayfield had filed no financial evidence and put forward no competing financial or other needs for the Court to consider. [71] There are differences of fact between Mayfield and the present case. But they do not affect the central proposition that there is no rule to the effect that proper provision for an adult and presently able-bodied child does not extend to providing him or her with a house or money to buy one. That proposition was not criticised by the Court of Appeal. Indeed, at [32], Bryson JA observed that it was open to White J and altogether appropriate to look well beyond needs when interpreting and applying community standards to decide what provision the court ought to order." 42 As a result of a property settlement with her former husband Shoghik received close to $175,000 in May 2007 which she spent on living expenses. Due to anxiety, depression and stress Shoghik has not worked since July 2007. Shoghik and her children had a close relationship with the deceased and their need was acknowledged in the will of the deceased who left a quarter of her estate to Shoghik and a quarter to be divided between Kassia and Meenas. Her need takes priority as it includes being able to secure accommodation for herself and her two children. Shoghik suggests that she would like a three bedroom villa in Eastwood and West Ryde area. The evidence before me shows availability of this accommodation for $530,000 to $579,000. She also asks for an additional $25,000 to enable her to discharge her present liabilities and to meet future contingencies. It has to be noted that she has had an advance from the estate to which I have referred of some $35,000. 43 Taline ceased employment in March 2005 to care for her parents which she did until March 2006 and continues not to work due to her health issues. Taline left the Willoughby home in March 2006 and she moved in with her long term partner with whom she continues to reside. Taline has not fully disclosed her financial position to the court as no evidence of the assets of her partner has been given. Taline suggests that she would like a 2 bedroom house in the Newtown area and the evidence suggests that such accommodation could be obtained for $525,000 to $560,000. In the alternative she suggests that she could buy a similar property in Newcastle for $500,000 where he has friends and finds it convenient. Although she claims she requires a house as she owns a dog it is unclear why a smaller property would not be suitable and the extent to which her' partner could assist her in obtaining accommodation is also unclear. 44 Kassia and Meenas have no assets and for the most part they are both dependant on their mother, Shoghik. Their needs for maintenance will largely be satisfied by the provision ordered for Shoghik. Further, Kassia has given evidence that she received independent legal advice on her understanding of her interest in the estate and has indicated that she would like her interest to be directed to her mother for the purpose of obtaining a house to accommodate the family. Kassia and Meenas will both need funds in the future to provide for their education. As Kassia has substantially completed her education her needs will be less than her brother. 45 Juliet has little in the way of assets and has approximately $12,000 in outstanding legal costs arising from the probate dispute. She states if she were to receive the bequest she would buy a property in rural New South Wales with a garden, buy a dog as company for her existing dog and donate some money to charity. She had a long friendship with the deceased and assisted the deceased in the last few months of her life. She has no dependants and has secure accommodation in public housing. She uses all her pension to cover her living expenses. 46 Juliet's claim on the bounty of the deceased is substantially less that that of the deceased daughters who should have priority. The substantial provision in favour of Kassia and Meenas is not necessary and was prompted by reasons which no longer have any application. Such provision should not have priority over the daughters' claims except for a modest amount. 47 Notwithstanding the evidence given by Kassia. I think that in all the circumstances of the case there ought to be some provision to cover the needs of the children's tertiary education. 48 Bearing in mind the size of the estate, the needs of the various parties and the other relevant matters, most of which I have referred to in this judgment, I propose to order the following provision: 1. In proceedings 1715/2008: that in lieu of the provision for Shoghik Minassian in the will of the deceased, Shoghik Minassian, receive a legacy of $600, 000. 2. That in lieu of the provision for Kassia Minassian in the will of the deceased, Kassia Minassian receive a legacy of $20,000 to be held on trust for Kassia Minassian until she attains the age of 25 years. 3. That in lieu of the provision for Meenas Minassian in the will of the deceased, Meenas Minassian receive a legacy of $40,000 to be held on trust for Meenas Minassian until he attains the age of 25 years. 4. That in lieu of the provision for Juliet Nahabedian in the will of the deceased, Juliet Nahabedian receive a legacy of $35,000. 5. In proceedings 4914/2007: that in lieu of the provision for Taline Kharpoutlian in the will of the deceased, Taline Kharpoutlian receive the residue of the estate. 6. I order Shoghik Minassian and Taline Kharpoutlian's costs on an ordinary basis and the defendant's costs on an indemnity basis be paid or retained out of the estate of the deceased. 7. The legacies for the children Kassia and Meenas Minassian are to be held upon suitable trusts for their education and advancement in life. 49 I direct the parties to bring in short minutes. ********** 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.