Supreme Court New South Wales Medium Neutral Citation: Drayson v Drayson [2011] NSWSC 965 Hearing dates: 21 & 22 July 2011 Decision date: 24 August 2011 Jurisdiction: Equity Division Before: Ward J Decision: Property not held by deceased on a resulting or constructive trust as claimed by plaintiff. Order for provision made in favour of the plaintiff under the Succession Act 2006 (NSW) out of the estate of the deceased. Catchwords: TRUSTS - whether deceased held property on a resulting or constructive trust for plaintiff - HELD - property not held by deceased on a resulting or constructive trust for plaintiff - SUCCESSION - family provision and maintenance - application by one of two children for provision from father's estate pursuant to s 59 of the Succession Act 2006 (NSW) - whether inadequate provision made for plaintiff and, if so, what provision ought to be made - HELD - provision inadequate - provision ordered for plaintiff Legislation Cited: Conveyancing Act 1919 (NSW) Family Provision Act 1982 (NSW) Succession Act 2006 (NSW) Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137 Bhana v Bhana (2002) 10 BPR [97953] Cetojevic v Cetojevic [2006] NSWSC 431 Cetojevic v Cetojevic [2007] NSWCA 33 Collings v Vakas [2006] NSWSC 393 Cooper v Dungan (1975) 9 ALR 93 Cropley v Cropley [2002] NSWSC 349; (2002) 11 BPR 20,171 Delaney v Jones [2008] NSWSC 229 Foley v Ellis [2008] NSWCA 288 Gazzola v Gazzola (1990) 92 ALR 45 Green v Green (1989) 17 NSWLR 343 Henderson v Miles (No 2) (2005) 12 BPR 23,579 Kalmar v Kalmar [2006] NSWSC 437 Mayfield v Lloyd-Williams [2004] NSWSC 419 McGrath v Eves [2005] NSWSC 1006 Muschinski v Dodds (1985) 160 CLR 583 Nelson v Nelson (1995) 184 CLR 538 Newcastle City Council v Kern Land Pty Ltd and Commonwealth Bank of Australia (1997) 42 NSWLR 273 Nicholls v Hall [2007] NSWCA 356 O'Loughlin v Low [2002] NSWSC 222 Ogden v Green [2003] NSWCA 352 Parianos v Melluish (Trustee) [2003] FCA 190 Pengilley v Public Trustee (unreported, NSWSC, 9 October 1985) Re Buckland, deceased [1966] VR 404 Re Gilbert (1946) 46 SR (NSW) 318 Ryan v Hopkinson (1990) 14 Fam LR 151 Singer v Berghouse (No 2) (1994) 181 CLR 201 Singh v Singh [2004] NSWSC 109 Vigolo v Bostin (2005) 221 CLR 191 West v Mead [2003] NSWSC 161 Texts Cited: De Groot and Nickel, Family Provision in Australia (3rd edn) Heydon and Leeming, Jacob's Law of Trusts in Australia (7th edn) Ong, Trusts Law in Australia (2nd edn) Category: Principal judgment Parties: Nicholas Drayson (Plaintiff) Terrance Drayson (Defendant) Representation: Counsel M Lawson (Plaintiff) G McGrath (Defendant) Solicitors Atkinson Vinden (Plaintiff) Jorian Blanch & Co (Defendant) File Number(s): 10/138628 Judgment 1HER HONOUR : In these proceedings claims are made by one of the sons of the late Peter Ernest Drayson (Peter Nicholas Drayson, usually referred to as Nicholas), in a Statement of Claim filed on 3 June 2010, against the deceased's other son (Terrance Drayson), in his capacity as executor of the deceased's estate. Without any disrespect to the parties, I will refer to the brothers as Nicholas and Terrance, respectively. Terrance is the executor of the estate and the main beneficiary under his father's will. 2Nicholas brings two discrete (and essentially alternative) applications in these proceedings: first, he seeks a declaration that he is the beneficial owner of a one-third share in a property in Pymble (which forms the main asset of the estate) and, secondly (and this logically must be determined having regard to the outcome of the first claim), he brings a claim under s 59 of the Succession Act 2006 (NSW) for provision out of the estate of the deceased for his proper maintenance or advancement in life. Counsel for Nicholas (Mr Lawson) submitted that Nicholas seeks only to be put in the position in which he would have been but for the transfer in 2004 of his one-third interest in the property, taking account in that regard of the moneys which Nicholas received out of a senior's loan then obtained by his father. 3The basis of Nicholas' claim to a beneficial interest as to one-third of the property arises from the circumstances in which in 2004 he and his brother each transferred to their father their respective one-third shares in the property, thereby conferring legal title to the whole of the property on their father. There seems to be no dispute that the purpose of so doing was to enable their father (then in his late 80's or early 90's) to take out a senior's loan (or reverse mortgage) over the property in order to provide funds to Nicholas (who at that time was convinced, as was proven to be the case, that he was suffering from cancer). What is in dispute between the brothers is as to whether the funds so provided to Nicholas were provided by way of a loan or a gift (albeit with an expectation that the gift would be taken into account as part of Nicholas' inheritance) and as to whether what was transferred to their father was more than a bare legal interest in Nicholas' one-third share of the property. 4Terrance maintains that the agreement between the parties in 2004 was for an absolute transfer of Nicholas' interest to their father. He denies any contractual reservation, common intention or other basis for a constructive trust to have arisen in respect of the property in Nicholas' favour and denies that any equity of redemption could arise, asserting that what Nicholas entered into, and carried out, was an arrangement whereby he exchanged his one-third share in the family property for the benefit of the money he received in December 2004. Terrance says that he also transferred his one-third share to their father (to assist his brother) without any promise of a benefit (but says that the moneys he later received out of the senior's loan facility were provided to him, unlike those provided to Nicholas, as a loan). 5As to the Succession Act claim, under the deceased's will the Pymble property (which has been valued at around $835,000 but on which there remains a St George bank mortgage securing the 2004 borrowings now outstanding in an amount of approximately $243,000) was left as to a 75% share to Terrance and as to a 25% share to Nicholas. However, the bequest to Nicholas was subject to the proviso that he discharge the whole of the debt owing to St George Bank secured by the property. Therefore, for Nicholas to take a 25% share of the Pymble property under the terms of the will he would have to pay out more than that share of the property is now worth in order to comply with the condition attached to that bequest. 6Terrance, in his capacity as executor, asserts that Nicholas is relatively wealthy compared to his own position and that adequate provision has been made for him. He takes issue with the extent of the disclosure made by his brother of his financial circumstances. Issues 7The issues for determination are relatively straightforward: (i) first, whether at the time of his death the deceased held the Pymble property on a resulting or constructive trust for Nicholas as to a one-third share; and (ii) if the answer to (i) is no, then whether (as a matter of fact) the provision made for Nicholas in his father's will was inadequate for his maintenance and advancement in life and, if so, as a matter of discretion what (if any) provision should be made in Nicholas' favour. Summary 8For the reasons I set out below, I am of the view that: (i) at the time of his death the deceased did not hold the Pymble property on a resulting or constructive trust for Nicholas as to a one-third share; and (ii) the provision made for Nicholas in his father's will (in effect, as it transpires, no provision at all) was inadequate for his maintenance and advancement in life and that as a matter of discretion an order should be made for provision for Nicholas by way of the payment of a legacy to Nicholas in the sum of $90,000 out of the estate and the discharge of a debt owed to the estate of $25,000. Background Facts 9The deceased died on 6 October 2009 leaving a will dated 15 April 2009. Apart from the Pymble property, the deceased left the rest of his estate to Terrance and Terrance's children, with a small bequest to a friend. Prior to the deceased's death he had resided in the Pymble property with Terrance for a number of years and Terrance had been his primary carer. Towards the end of his life, the deceased had been incontinent and suffering from dementia. The stress of caring for his father in that condition can be seen from a series of email communications sent by Terrance to his brother before his father's death (that Terrance says he now regrets and describes as 'foolish'). 10The Pymble property had been the subject of a life tenancy in favour of the brothers' mother (Diana Drayson) under the terms of her late mother's will. Under Diana's will, the property was to be sold on Diana's death and the net proceeds divided equally between Peter, Nicholas and Terrance. Diana died on 2 September 1995. However, instead of the property then being sold, it was transferred to each of Peter, Nicholas and Terrance as tenants in common in equal shares. 11For the period from 1995 onwards, Peter and Terrance continued to reside in the Pymble property (without any payment of rent to Nicholas in recognition of his interest in the property). (Nicholas conceded in cross-examination that it would have been possible for him also to reside in the property - T.40.50, although it does not seem likely that anyone seriously contemplated that this would be the case since Nicholas was by then married and living in his own home with his wife and child.) 12Nicholas, who now works part-time as a real estate agent, had, or was involved in, a variety of business ventures over the years, the nature of which was explored in his cross-examination. Those ventures included a bookshop business in Newtown that he says he bought in or about 1989/1990 (T 15.8) and in respect of which he says he incurred a lot of debts. After the sale of the bookshop he has mainly worked in real estate. It is fair to say that Nicholas' account of his work experience over the years from the 1960's onwards was somewhat imprecise in terms of the chronology of events, though nothing ultimately seems to turn on this. Nicholas says that he used a sum of about $25,000, from superannuation entitlements earned through his employment in real estate, towards the settlement of some of the book shop debts (T 16.33; T 17.7) and has no current superannuation entitlements. Nicholas does not dispute that his father gave him some financial assistance over the years (T 26.47; T 27.18), though he did not accept that he had been given substantial amounts of money as a gift (depending on how 'substantial' was defined). Terrance conceded in cross-examination that his father had given moneys to him for his benefit over the time that Terrance lived with his father (in some not insubstantial amounts). 13In 1996, Nicholas borrowed the sum of $25,000 from his father (that loan being acknowledged by Nicholas by signing a handwritten letter dated 18 March 1996 prepared by his father - CB 107). Nicholas agreed that this sum was provided in order to assist him in relation to the Newtown bookshop (T 38.27). That sum has not been repaid. (Terrance gave evidence of conversations with his father in which he says the deceased had raised the fact that this amount had not been repaid. Nicholas' evidence was that his father had not asked for it to be repaid.) Nicholas says there was an understanding within the family that this amount was to be repaid, on his father's death, out of his half share of a $50,000 deposit held by his father (T 38.43) but there is no evidence to suggest that any such arrangement was communicated to or agreed by the deceased at the time (T 38.50 - 40.32). Whether or not the question of repayment was raised with Nicholas during his father's lifetime, it is conceded that this amount remains owing. 14It would seem that in 1996 the deceased was conscious of the fact that Nicholas might wish to obtain his share of the Pymble property by a sale of the property, since the deceased wrote a letter to Nicholas and Nicholas' wife in September 1996 recording an agreement that he (the deceased) was entitled to remain in the Pymble property until he wished to sell the property (CB 108). 15In late 2004, Nicholas became convinced that he was suffering from the symptoms of cancer (a formal diagnosis of cancer not being made until about January or February 2005). He deposed to a conversation with his father in which he says that he said he had cancer and would have to stop work and says that he told his father that he would need to borrow on his one-third share of the property. Nicholas' evidence was that he approached his brother first (T 20.47) to see if he was agreeable to this. There is a dispute as to the order in which the conversations occurred but nothing seems to me to turn on this (other than to highlight the fact that both brothers' recollection of events over 6 years later may not be wholly reliable, as one might expect with the frailty of human memory). 16It was put to Nicholas that there was an inconsistency in his version of the conversation with his father (since, if he already knew that he could not borrow on his one-third interest - as he says he knew at T 20.5 - there would be no sense in him telling his father that he would need to borrow on his one-third interest - see T 22.16). It seemed to me that there was some confusion on the witness' part in relation to the cross-examination on this topic. What seems clear is that Nicholas knew (at the time of his conversation with his father about the need to borrow moneys) that he, Nicholas, would not be eligible to take out a reverse mortgage (as he was not old enough) but it is not clear to me that when Nicholas says he raised the topic with his father he did so in a manner that was inconsistent with Nicholas wishing (as he said in cross-examination he did) to borrow on his interest in the property (since all that seems to have been precluded by Nicholas' comparative youth was a reverse mortgage not a borrowing per se ). Nicholas was adamant that his position was "I own one-third of the property and I wish to borrow on that one-third" (T 23.42). I accept that this is what he was seeking to achieve when he approached his father in late 2004. 17Where there was some logical inconsistency, it seemed to me, was in the account of the discussion proceeding on the basis that Nicholas had cancer and would need to give up work, at a time prior to any formal diagnosis of cancer. However, given the fervency of Nicholas' evidence in the witness box in relation to his cancer it seems to me not implausible that Nicholas had already convinced himself of that fact and was proceeding on that assumption. In the end it does not seem to me that anything turns on this because it is not suggested that he misled his family or that there was some other purpose for the borrowing. Relevantly, it is not disputed that the purpose of transferring Nicholas' and Terrance's respective interests in the property to their father was to enable a reverse mortgage to be taken out over the property and for funds from that loan to be provided to Nicholas, which is precisely what transpired. (I note that by the time that the transactions in question took place (on 16 April 2005) Nicholas' self-diagnosis of cancer had been confirmed and treatment had begun.) 18Nicholas denied that he had any expertise (as a real estate agent) in the area of reverse mortgages. Nevertheless, it appears that he did gain some familiarity with the workings of such loans insofar as he had also obtained the benefit of a senior's loan taken out in early 2004 by an elderly aunt of the two brothers (Mrs Betty Drayson). 19According to Nicholas' affidavit, Terrance raised with him at the time of the arrangements that were being made in relation to the transfer of their respective interests in the house the question as to what would happen if their father remarried and left the house to a new wife (a possibility that Nicholas dismissed in the witness box as fanciful having regard to their father's age - T 37.20 - and seems to have dismissed at the time on the basis that his father would not do such a thing because theirs was such a loving family - T 37.10). In the witness box Nicholas at one stage suggested that it had been he, and not Terrance, who made this comment but ultimately I think nothing turns on who made the comment. What seems to me to be relevant is that it indicates that the brothers were aware that what they were doing was putting into their father's hands the title to the property and the ability to deal with it in the future (by his will or otherwise) contrary to either of their interests. 20The arrangements in relation to the transfer to Peter of the whole of the title to the Pymble property were handled by a solicitor, Mr Phillip Luca, who gave evidence in the proceedings before me. Mr Luca confirmed that he regarded his retainer as being a retainer by Peter (and not by Nicholas), although it seems that he was approached in the first instance by Nicholas for whom he had acted on other matters in the past (relating to the newsagencies in respect of which Nicholas had been involved as a real estate agent). The client file (tendered in evidence) supports the conclusion that Peter was the 'client' in relation to the transaction for the transfer of title to the property, as does various of the correspondence to which Mr Luca was taken in the witness box. 21Neither Nicholas nor Terrance obtained independent advice in relation to the transaction. Nor does it appear that any distinction was drawn by them (or for that matter by Mr Luca) between the transfer of legal title to the property and the beneficial interest in the property. Nicholas' only recollection of any advice from Mr Luca was "...it was purely to do with my father's Will and I thought that was my safeguard" (T 8.34) and (at T 8.38) that: I guess [Mr Luca said] words to the effect that "We will be drawing up your father's Will and that upon his death" that the - you will, myself will be liable for the cost of the reverse mortgage, however, I would be given one third of the property, my brother would be given one third and then my father's one third would be divided between myself and my brother, and that is the only advice that I can actually remember being given at the time. 22Nicholas contends that the agreement or arrangement pursuant to which he transferred his one-third interest in the property to his father (and under which his father provided the loan funds then obtained against the security of the property) included a term (or terms) to the effect that Nicholas would be responsible for interest and principal upon the death of his father and also included a term, if not expressly, then by implication, that the deceased would transfer a one-third share in the property back to his sons when Nicholas discharged the loan secured by the reverse mortgage. 23Pausing there, the terms so suggested seem to be somewhat inconsistent, in that if the loan was not to be discharged by Nicholas until after his father died then obviously by then his father would not be in a position to transfer title back to either of the sons, although he could have left a will making such a bequest. It would seem that what is contended in this regard, in essence, is that there was an agreement by the father to restore to each of the brothers his respective one-third interest by will - subject to Nicholas repaying the moneys provided to him out of the reverse mortgage borrowings. Whether or not there was an agreement to that effect, it certainly seems to be what Peter had intended at the time, having regard to the evidence of Mr Luca, to which I will refer shortly. 24Mr Lawson points out that in order to obtain the senior's loan it was not necessary to transfer Nicholas' (or, for that matter, Terrance's) equitable interest in the property to Peter, but only the legal interest. It is submitted that there is therefore no reason why the agreement that Nicholas entered into with his father in or about September 2004 included a term that Nicholas would transfer his equitable interest in the property. That may well be the case, but in the absence of anything to suggest that the parties turned their minds to the extent of the interest being transferred (or any reservation on the grant) there would seem to be no reason not to treat the transfer of the legal interest as carrying with it the beneficial interest in the ordinary course. Moreover, I am by no means convinced that the family arrangements pursuant to which the interests were transferred to Peter were intended to give rise to a binding legal agreement. Had that been the case then I would have expected that Mr Luca would have documented the agreement as such. 25Mr Luca gave evidence that at the beginning of the matter he was told that in addition to the transfer of the property interest there would be a will created by the deceased (and seems to have regarded that as part and parcel of the transactions he was being instructed by Peter to undertake) (T 108.2). He believes that he raised with Nicholas (at the beginning of the matter) the possibility of seeking separate representation but did not recall having made a particular recommendation to that effect (T 108.30; 36). (There was no file note of any such advice but Mr Luca confirmed his belief that he had mentioned it at T 109.17). 26Mr Luca said that the only advice that he offered about the transaction, its consequences or its effects, to Nicholas or Terrance "would have been a comment in the nature of, if you go through the transaction, your father will be the sole owner of the property and you no longer own an interest" (T 109.44). Mr Luca did not see this as the giving of legal advice, as such, to the brothers but it does indicate that the consequences of the transaction were clearly drawn to their attention and that they accepted that this would be the effect of the transfers. He conceded that he had no file note of any such advice (or of any advice given to Peter as to the nature or effect of the transaction). 27I regarded Mr Luca as a considered and honest witness. He readily conceded that it would have been prudent to send Nicholas and Terrance to somebody else for independent advice and that it was regrettable that the instructions he had received were not recorded in writing, but he seemed quietly confident that he had understood the instructions he received and as to his recollection of those instructions. 28Relevantly, (at [6] of his affidavit) he says that when Nicholas came to see him he said words to the effect: ... my father will help me out financially by taking out a seniors loan from St George. He will need to mortgage the property. The property is currently in 3 names: mine, my brother Terrance's and my father Peter's. Terrance and I will transfer our share to our father. We'll put a reverse mortgage on the house and give him the money 29At [9] of his affidavit, Mr Luca deposes to a conversation with Peter at some point in which he says he asked Peter how he "wished to play this" and said that he was giving an advantage to one son (Nicholas) by the transaction and that Peter responded: ...this is what I want to do. I want to make a Will and provide that Nicholas and Terrance each get a half share of the house on the condition that Nicholas alone has to repay all the moneys owing to St George from his own resources. 30That is consistent with what occurred. A will in that form was prepared by Mr Luca and attested by Peter on 15 December 2004. What Mr Luca did not understand the transaction to involve (and what he did not document) was any loan agreement between Peter and Nicholas (T 112.50). He commented that Peter had a very specific idea in mind as to how he wanted to achieve the result that Nicholas would receive the money and how it would be repaid (T 113.10). 31It is submitted by Mr McGrath that Mr Luca (who had had business dealings with Nicholas over many years and was open as to his connection and his friendship with Nicholas) should be believed in his evidence that the transaction he implemented was an outright transfer by Nicholas in exchange for the proceeds of the $100,000 loan secured by the reverse mortgage. I would accept that this conclusion is the one consistent with Mr Luca's recollection of his instructions and with the documentation he prepared. It is also consistent with the will that was prepared by Mr Luca under which Peter dealt with the family home as if it were then his own and in terms that are inconsistent with the existence of any such trust or equity of redemption. Mr Luca's recollection was that "The deceased was very clear and comfortable that he would raise the funds through a seniors mortgage which made him or his estate liable but he was still happy to leave the dwelling home to his sons in equal shares as long as the plaintiff paid out the loan obligation." (T 113.32) 32I do not accept the submission that it should be inferred that the brothers agreed to transfer only that which was necessary to give effect to the object of the transaction (that being said to be a transfer of the legal title in the property to their father to allow him to take out a reverse mortgage to assist Nicholas). 33Relevantly, Mr Luca gave evidence as to the instructions he received from Peter at around this time in relation to the arrangements he wished to put in place for his will, which indicate that what Peter then had in mind was effecting a balance between the brothers in order to recognise that Nicholas had had the benefit of the borrowings obtained on security of the property when it came to the disposition of this asset on his death. (That seems to me to be inconsistent with any agreement that the reverse mortgage loan would be discharged during the deceased's lifetime and hence with any agreement that the one-third shares would be transferred back to his sons during his lifetime.) 34Similarly, I cannot accept the submission that the most probable inference available is that the deceased considered himself to be under an obligation to return Nicholas' share of the property to him once Nicholas had discharged the loan even if, as Nicholas contends, that was Nicholas' understanding ([26] of Nicholas' affidavit sworn 2 June 2010). 35There is no dispute that on 16 December 2004 each of Nicholas and Terrance caused their one-third shares in the property to be transferred to their father. (No step was taken, as might have been expected had the transfer been only of a bare legal interest, for a caveat to be lodged over the property or for the circumstances in which the property was to be held by the legal owner and/or returned to the beneficial owner to be documented in any form of agreement.) 36On 16 December 2004, Peter drew down $100,000 under a "Residential Loan Offer Agreement" dated 22 October 2004 entered into with St George Bank. The loan was secured by a registered first mortgage in favour of St George over the Pymble property. Of that $100,000, after capitalised interest was deducted, an amount of approximately $71,000 was applied to Nicholas' benefit. A sum of approximately $2,000 was retained by Peter and a sum of approximately $3,000 was given to Terrance. 37A further sum (of approximately $38,000) was subsequently drawn down under the loan facility, the proceeds of which were paid to Terrance (as admitted by him in paragraph [12] of his Defence). 38Yet a further sum of $25,000 was drawn under the loan facility on or about 30 March 2006 and it seems that most of that amount was also applied for Nicholas' benefit. 39Where relationships within the family (or at least between the brothers) commenced to sour was in 2008 when Nicholas became aware that his father had changed or was about to change his will. This led, among other things, to an exchange of email correspondence between the brothers that Terrance now accepts does not reflect well on him and which I will consider in more detail in relation to the Succession Act claim. It also led to Nicholas seeking advice from Mr Luca. Mr Luca says that he advised Nicholas to obtain separate independent legal advice. He accepts that he may have raised, as one step Nicholas could consider, the possibility of placing a caveat on the property (T 119.21) but does not agree that by so suggesting this he had formed the view that Nicholas might have an equitable interest in the property. 40Suffice it at this stage to conclude this summary of the background facts by noting that in about June 2008, Mrs Betty Drayson died, leaving the bulk of her estate to Nicholas and a $20,000 bequest to Terrance - the inequitable (in a strict monetary sense) distribution under which was a matter with which Terrance seems to have taken issue (since he was at pains to point out in the witness box that Nicholas had received 98% of the estate and he 2%). It is suggested by Counsel for Terrance, Mr McGrath that it can be inferred this was what led Peter in August that year to amend his testamentary disposition so as to balance out the position as between his two sons. 41Subsequently, on 6 October 2009, Peter died (leaving the Pymble property to be divided between his sons in the manner indicated earlier and without any recognition of any equitable interest either son may have had in the one-third share formerly held by him). 42This led to the current proceedings. Initially, it was asserted by Nicholas that he had an equity of redemption in relation to his one-third interest in the property, but that claim was not pressed in the hearing before me. Rather, Nicholas rested his primary claim to the one-third interest on an alleged resulting trust or alternatively what is referred to as a classic 'common intention' constructive trust, arising out of the alleged agreement between the brothers and their father pursuant to which Peter obtained the whole of the legal title to the property. 43The claim for provision out of his father's estate is maintained only if the primary claim does not succeed. In that event, it is submitted that Nicholas should be put back in the position in which he would have been had the one-third interest not been transferred to his father (after account is taken of the moneys received by Nicholas and by Terrance from the reverse mortgage loan). 44Finally, before turning to the issues for determination, I note that I was invited by each side to make credit findings (or to view adversely the respective brothers' credit) on the basis that it was said on the one hand that Nicholas had failed to disclose all his assets and had been guilty of obfuscation in the witness box and on the other hand that Terrance had also failed to disclose all his income and had been vague and contradictory in the witness box. 45As to the failure to disclose assets, criticism can fairly be made on both sides in that regard. Nevertheless, by the close of the hearing the asset position of each had been broadly outlined. 46As to the general criticisms made of the brothers' evidence, it seems to me that there was (what may well have been a familial) tendency on the part of both brothers to answer the questions they may have thought they should be, or wanted to be, asked and to seek to tell their own story in the witness box rather than simply answering the questions put to them. Some of Terrance's evidence was so vague as to be bordering on the incredible (such as his apparent surprise and lack of knowledge at the suggestion that he had an uncle even though he later confirmed that he did and was quick to comment on his uncle's likely longevity), his evidence as to the financial matters was particularly vague and his evidence as to how the estate's asset position had been calculated for the purpose of the affidavit he swore as executor was contradictory and not compelling. On the other hand, some of Nicholas' evidence suggested flippancy (such as how much he had paid for the safety deposit box on a yearly basis) and a tendency to gloss over matters. He also at times engaged in confrontation with the cross-examiner. Ultimately, I put matters of this kind, on the part of both of the witnesses, down to the vagaries of the witnesses' personalities rather than going to their credit as such. (i) Claim to a one-third beneficial interest in the property 47At the outset I note that, insofar as the claims are based on the agreement pleaded at [7] of the Statement of Claim, Mr McGrath submitted that the evidence does not support any express term as pleaded in paragraph 7(d) nor is there a basis for the implication of a term to this effect (noting that an implied term has not been pleaded). It was submitted that the surrounding circumstances militate against any such implication. I agree. 48The evidence supports a conclusion that there was an agreement or arrangement (whether strictly binding as a matter of contract law or not) between the family members to the effect that the brothers would transfer their respective one-third interests in the property to their father so that he could take out a reverse mortgage or senior's loan in respect of the property and make funds from that loan available to Nicholas. The evidence also leads me to conclude that there was an understanding or expectation on the part of both Nicholas and Terrance that their father would then be free to deal with the property in his will as his own (albeit that it was not thought likely that he would do so in a way that would deprive either of them of a share in the property on his death). 49It does not seem to me likely that this was intended to be a binding agreement enforceable at law or that there was to be a binding obligation on Nicholas to repay the moneys provided to him (had it been I would have assumed it to be documented at the very least in the way in which the deceased had documented the $25,000 loan and more likely in a document to be prepared by Peter's solicitor). 50I do not accept that there is any documentary basis for the suggestion by Terrance (reflected in his affidavit verifying the position of the estate) that the moneys paid to him out of the St George bank facility were by way of loan but that the moneys paid to Nicholas out of the same facility were by way of gift (and that is in any event inconsistent with the proposition put by Terrance that Nicholas owes a debt for the whole of the outstanding balance of the St George mortgage without taking into account the moneys received by Terrance). There was no documentation of any loan between Terrance and his father in relation to the moneys advanced out of the second draw down and nothing to distinguish them from other sums that Terrance said were given to him as a gift. I was left with the impression that Terrance had insisted this was a loan to him because in some way he considered that in some way (not clear to me) it supported his position that Nicholas should be liable to repay the moneys he had received out of the senior's loan facility (even though Terrance's case, as put by his Counsel, was ultimately that the latter was a gift and hence consideration for the transfer of Nicholas' interest in the land). 51The suggestion that Nicholas retained an interest in the property under an agreement between the parties is not supported by his own evidence, let alone that of Terrance, and is inconsistent with the drawing of the will by Mr Luca the day before the loan was drawn down. 52Reliance was sought to be placed on a typewritten note signed by the deceased dated 12 May 2009 (p 113 CB) in which Peter gave instructions for a lapsing notice to be issued in respect of a caveat by Nicholas "as he has no financial interest in my home". I think the typewritten correspondence generally needs to be read with caution, given the evidence that the deceased did not use computers and was suffering dementia towards the end of his life. I place more weight on the evidence of Mr Luca (the only independent witness to the relevant events) and the drawing of the deceased's will in a manner inconsistent with the retention of an interest by the brothers in the land. 53As to the claim based on a resulting trust, it is submitted by Mr Lawson that the agreement reached between the parties in 2004 (whereby the arrangements were put in place to enable a senior's loan to be obtained) evinced a clear intention to transfer only the legal title to the property (for the purpose of obtaining, and possibly securing repayment of, the loan proceeds), but not Nicholas' beneficial interest, and that there is therefore a rebuttable presumption that the property is held by Peter, as transferee, on a resulting trust to the benefit of Nicholas (the transferor) (relying upon the propositions of law stated in Heydon and Leeming's Jacob's Law of Trusts in Australia (7th edn) at p 234). 54For the reasons outlined above, I do not accept that the evidence discloses an intention only to transfer an equitable interest. Therefore, the second of the categories in which a resulting trust may arise (where there is a conveyance which does not exhaust the beneficial interest) is not enlivened; nor is the third of those categories (where, upon a purchase of land, one person pays the purchase price but the title is put into the name of another person). 55As to the remaining category of case in which it has been said that a resulting trust may arise (i.e., in circumstances where there is a transfer without consideration), Mr McGrath submits that there was consideration for the transfer in question and that, even if the transaction had been gratuitous, the presumption of a resulting trust in respect of a gratuitous transfer is prevented from arising as a matter of law by the provisions of s 44(1) of the Conveyancing Act 1919 (NSW). (It is further submitted that, if any presumption did arise, it was in the circumstances rebutted on the facts.) 56Turning first to the Conveyancing Act point, there is no dispute but that the land transferred is Torrens title land. Mr McGrath refers to s 44(1) of the Conveyancing Act which provides that: No use shall be held to result merely from the absence of consideration in a conveyance of land as to which no uses or trusts are therein declared. 57In Jacob's Law of Trusts at [1220] the opinion is expressed that the finding that s 44(1) prevents a resulting trust arising in New South Wales from the gratuitous transfer of Torrens Title land is somewhat controversial (referring to the controversy as between Newcastle City Council v Kern Land Pty Ltd and Commonwealth Bank of Australia (1997) 42 NSWLR 273 at [280] - [281]; Bhana v Bhana (2002) 10 BPR [97953] at [15] - [27]; Ryan v Hopkinson (1990) 14 Fam LR 151 at [155]; and to the discussion in Ong, Trusts Law in Australia (2 nd edn) pp 390-395 favouring the conclusion in Ryan ). 58Barrett J in Singh v Singh [2004] NSWSC 109 referred to this controversy and said (at [34] - [35]): ... Hamilton J noted the conflicting views as to the effect of s.44 (1) in Ryan v Hopkinson (1990) 14 Fam LR 151 (Bryson J) and Newcastle City Council v Kern Land Pty Ltd (above). Hamilton J preferred the result reached by Windeyer J in the latter case and in doing so, made his own detailed analysis of the history and operation of s.44. He referred in particular to the report of Sir John Harvey on proposed amendments to the Conveyancing Act as an indication of the Parliamentary intent behind s.44, including the passage: "Subclause (1) of cl 44 alters the old implication of a resulting use to a settlor from a simple conveyance of land, without consideration and without the declaration of any use or a trust. As a result of this section, a conveyance purporting to be made by A to B, without more, will pass to B the whole estate of A." These and other considerations, including those concerning the applicability of Conveyancing Act provisions to land held under the Real Property Act, led Hamilton J to the view that s.44(1) of the Conveyancing Act does apply to such land and operates in relation to it in such a way as to prevent the implication of a resulting trust where such land is transferred without consideration - or, in the words of s.44(1) itself, in a case of "the absence of consideration in a conveyance of land". I find his Honour's reasoning compelling and respectfully agree with the conclusions expressed by him. 59Having regard to the report of Sir John Harvey, which indicates the intent of the legislature, and the analysis of what Hamilton J described as this "recondite and most confused" area of the law, had the matter required determination I would have followed the reasoning of Hamilton J in Ryan and the approach of Barrett J in Singh . 60As it is, it is not necessary to make such a determination because I am not satisfied that the transfer of Nicholas' one-third interest was for no consideration. True it is that Peter paid no money on the transfer of the interest as such. However, the submission that Nicholas received consideration for the transfer of the one-third interest is made on the basis that he received the money from the reverse mortgage (which he did). (Presumably, this is put on the basis that there was no express obligation to repay that money - consistent with the will drawn up the day before the loan transaction, which in effect sought to impose one posthumously - since otherwise the consideration arising from receipt of the money would largely be illusory). 61At the very least, what Nicholas received by way of consideration for the transfer of his interest in the land was the advance provision of funds that would not otherwise have been available to him in the absence of either a partition of the land itself (something he had agreed in 1996 not to do) or another means of borrowing on his one-third interest in the land. The time value of that money meant that he was able to meet his financial obligations at that time and that he was able immediately to cease work while he underwent treatment for cancer. That benefit amounts to sufficient consideration for the transfer in my view (particularly when it is accepted that within the family there was an expectation that his interest would later be bequeathed to him). 62The question whether any presumption of resulting trust had been displaced therefore does not arise. (Had it arisen, it would also have given rise to the question, not debated before me, as to its operation in the context of a transaction where Nicholas was to receive substantial funds and hence a presumption of gift might be said to have arisen from the payment of moneys from parent to child - Nelson v Nelson (1995) 184 CLR 538). 63In any event, I consider that had a presumption of resulting trust arisen it would have been rebutted by the making of a will inconsistent with the retention of any beneficial interest in the property by the brothers and the evidence as to the recognition by the brothers of the possibility that Peter might leave the property in his will otherwise than in accordance with any interest remaining in the land in favour of his sons. 64As to the alternative basis on which the equitable interest is claimed, it is submitted that a common intention constructive trust has arisen in accordance with the principles espoused by the High Court in Muschinski v Dodds (1986) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137. In Green v Green (1989) 17 NSWLR 343, Gleeson CJ noted that the most common case where equity intervenes to declare the existence of a proprietary interest in a family home (there referring to the case where the interest was of a spouse or de facto partner) is where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquisition, improvement or maintenance of the property (at p 353). 65In Muschinski, Deane J said (at p 620) that a constructive trust may rise when an assertion of a legal right would be unconscionable: Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party would so enjoy it. The content of the principal is that, in such a case, equity will not permit the other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable to do so ... 66In Baumgartner , the majority (Mason CJ, Wilson and Deane JJ) referred to the result reached by Deane J in Muschinski as an application of the general equitable principle which restores to a party contributions which he or she has made to a joint venture which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. Their Honours cited what Deane J had said in Muschinski (at [620]): ... the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do : cf Atwood v Maude [1858] LR 3 Ch App 369 at pp 374-375 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at 531). (my emphasis) 67In West v Mead [2003] NSWSC 161 Campbell J (as his Honour then was) considered what was to be established before such a trust could be imposed: first, that there be both a joint relationship or endeavour, in which expenditure is shared for the common benefit in the course of and for the purposes of which an asset is acquired (the scope of which may be of relevance, and as Deane J in Muschinski considered, may change from time to time); second, that the substratum of that joint relationship or endeavour, must have been removed or the joint endeavour prematurely terminated "without attributable blame"; and third, that there must be the requisite element of unconscionability (namely that it would be unconscionable for the benefit of those monetary and non-monetary contributions to be retained by the other party to the joint endeavour). 68In the present case it is submitted by Mr Lawson that the three family members intended the transfer of the legal title only for the purpose of obtaining or securing a loan and that once the loan was repaid then the reason for the transfer would be negated and equity would not permit the estate to retain legal title to the property because to do so in those circumstances would be unconscionable. It is submitted that this common intention is evident in the manner in which the property was dealt with in late 2006 (namely by the use of the property as security for a reverse mortgage loan, the benefit of which was applied for Nicholas). 69It is submitted by Mr McGrath that this is not a case where a trust might be found to arise out of an agreement or some lesser expression of common intention. I agree and, in particular, I consider that no constructive trust should be imposed on the basis that, absent an agreement as to retention of an equitable interest, there seems to me to be no unconscionability in the estate retaining the benefit of the property (the debt in respect of the St George Bank borrowings remaining a debt of the estate). (i) Was there a joint endeavour? 70The first question to be addressed is whether there was a joint endeavour between the parties in connection with the transfer of the Pymble property. I accept that in a loose sense it could be said that there was a joint endeavour insofar as there was an arrangement between the family members that the sons' interests would be transferred to the father in order to permit him to borrow against the property and to make funds from the borrowing available to assist Nicholas. I do not accept that the joint endeavour went beyond that. (ii) Failure of joint endeavour without attributable blame 71The next question is whether the joint endeavour failed or was prematurely terminated "without attributable blame". 72In Cetojevic v Cetojevic [2006] NSWSC 431, Campbell J applied the principles relevant to what he had explained as the principles relating to the imposition of a Baumgartner constructive trust in West v Mead to the joint relationship there between the parties. His Honour noted (at [43]): In accordance with the principles set out at paragraph [59] in West v Mead [2003] NSWSC 161 where there is a joint relationship or endeavour, and an asset is acquired for the purpose and in the course of, and the joint endeavour comes to an end without attributable fault on anyone's part (as clearly happened here), a starting point for ownership of the asset is that the beneficial interest ought be shared equally. That application of the maxim equity is equality places an onus of attributing any other conclusion on a person who asserts that the title should be held unequally. (my emphasis) 73In Henderson v Miles (No 2) (2005) 12 BPR 23,579, Young CJ in Eq, as his Honour then was, said at [18]: As can be seen from its roots in cases such as Lyon v Tweddell, the expression "without attributable blame" in the standard formula does not mean that the court must try and work out which of the parties in a domestic relationship was of the greater fault; see Callaghan v Callaghan (1995) 64 SASR 396 at 407, where Perry J said that the question as to whether equity gives relief does not turn on the nice question as to where the blame lies [in the breakdown in the relationship between the parties in that case]. 74The meaning (and potential uncertainty) of that requirement was apparently considered to be of sufficient import by the High Court to warrant a grant of special leave, insofar as in Gazzola v Gazzola (1990) 92 ALR 45, Brennan, Deane, Dawson, Toohey and Gaudron JJ said that their "main consideration" in granting special leave was that the issues would include "questions about the nature and effect of 'attributable blame'". However, as it transpired, their Honours did not have the opportunity to consider what was meant by attributable blame because "those questions only arise in the present case if the appellants succeed in showing either that there was a common intention among the parties to create a trust or that the facts of the case are such that, subject to any question of the existence or effect of any 'blame' or 'unconscionable conduct' on the part of one or both of the appellants, a constructive trust arose or should be imposed" and, the court having found that the facts precluded a finding of a common intention to create a trust and did "not give rise to, or warrant the imposition of, a constructive trust upon any of the grounds for which the appellants contend". Their Honours accordingly revoked the grant of special leave. 75Here, the only joint endeavour that I consider could be said to have arisen has not failed or come to a premature end (with or without attributable blame). Precisely what was sought to be achieved by the transfer was achieved. Therefore, it seems to me that this second requirement is not satisfied. (iii) Unconscionability 76The third element is whether there is the necessary degree of unconscionability to warrant the imposition of a constructive trust. 77In Baumgartner the majority noted (at 148) that Deane J in Muschinski had "pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention 'to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle'" but had rejected the notion that it should be imposed in accordance with the idiosyncratic notions of what was just and fair. 78In West v Mead, Campbell J said (at [62]) that: The Baumgartner type of constructive trust is imposed to prevent an unconscionable assertion of legal title, in circumstances where the parties had no explicit intention about how the legal title would be held in the circumstances which have arisen. ... Part of the justification for imposing a Baumgartner constructive trust is that the parties have jointly been building up assets, on the basis that those assets will be available to the joint endeavour in future. Part of the reason why it can be unconscionable to let the legal title lie where it falls, if the relationship fails, is that each knew that the other was contributing to a common pool on the basis that the common pool and assets acquired from it, would be used for the ongoing common benefit. It is unconscionable for the party who ends up, at the end of the relationship, with a disproportionate share of the assets which were built up during the relationship, to keep those assets when he or she knew that that was the basis on which the assets were being built up. 79In Cetojevic v Cetojevic [2007] NSWCA 33, Hodgson JA, with whom Tobias and McColl JJA agreed, said (at [34]): I accept that it is insufficient for the establishment of a constructive trust that it be considered inconvenient or unfair that legal rights be relied on. I accept that in the circumstances of this case, it was necessary for the respondent to show both that circumstances had arisen which were so outside the contemplation or intentions of the parties at the time of entry into the joint endeavour that it can fairly be said that the joint endeavour had broken down, and also that in those circumstances it was unconscionable for the appellants to rely on their legal rights. (my emphasis) 80As I have noted elsewhere, the test of unconscionability must, at least in circumstances such as this, be framed by reference not simply to whether it is unconscionable for the other party to the relationship or joint endeavour to deny the claimed benefits but also by reference to whether, had that party been in a position to do so, it would have been unconscionable for it to deny the benefits. (Otherwise, in cases where the relationship was prematurely terminated by death (such as in Parianos v Melluish [2003] FCA 190) it is difficult to see how the test could apply.) 81In the present case, I do not see that there would have been any element of unconscionability in the deceased, while he was alive, acting on the basis that he had the legal right in the property and could dispose of it by will, since I find that that was the basis of the arrangement into which the deceased entered with his sons. There might have been a basis for complaint as to his change of the will if there had been a binding promise that he would leave his estate in the manner contemplated by the 2004 will but that was not the case that was put in these proceedings. 82Therefore, I find the third element has not been satisfied. 83As a result, I find that no "common intention" constructive trust arose. I turn then to the alternative claim brought under the Succession Act . (ii) Succession Act claim 84As noted, Nicholas maintains a claim under the Succession Act as an alternative (and, at one stage, said to be in addition) to the claim for declaratory relief. There is no dispute that Nicholas is an eligible person entitled to bring such a claim under s 59 of the Succession Act . 85The test to be applied under this section is that which was applicable under the comparable provision of the now-repealed Family Provision Act 1982 (NSW). That test, as outlined in Singer v Berghouse (No 2) (1994) 181 CLR 201, is a two-stage test. 86The first stage is a question of fact, namely whether the provision (if any) made for the applicant is inadequate for his or her proper maintenance, education and advancement in life. An assessment of whether the provision, if any, made was "inadequate"; involves an assessment as to what level of maintenance was appropriate having regard to the applicant's financial position, the size and nature of the estate, the relationship between the applicant and the deceased and the relationship between the deceased and other persons who have legitimate (and in this sense competing) claims upon the deceased's bounty. 87The second stage, which involves the exercise of discretion, is for the court to assess the proper level of maintenance and adequate provision which should be made. The factors to be taken in account in making such a determination are contributions to the property and welfare of the deceased; the character and conduct of the applicant in relation to the deceased; and the circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased). 88A factual finding that the provision made by the deceased is inadequate for Nicholas' proper maintenance, education and advancement in life is necessary in order to enliven the statutory power to make an order for provision (referring to Collings v Vakas [2006] NSWSC 393 at [66] per Campbell J, as his Honour then was). 89The question as to the adequacy of provision falls to be decided having regard to facts as they exist at the time of the hearing, not at the time of the death ( Nicholls v Hall [2007] NSWCA 356 at [40]). Is the provision made for Nicholas under the will, as a matter of fact, inadequate? 90Under the will Nicholas is required (in order to take any benefit in relation to the Pymble property) to repay the whole of the estate's liability to St George Bank (even though some of that liability is referable to moneys drawn down under the facility for the benefit of Terrance). 91A 25% share of the property would therefore be worth around $208,750 on that valuation. Accordingly, if Nicholas is required, as a condition of the bequest, to pay $240,000 to the estate in order to take a benefit of $208,750, it is submitted that Nicholas has in effect been left nothing under the will of his late father (but has, instead, been "gifted" a debt of $31,250.00). 92In effect, the provision made for Nicholas under the will is illusory. Therefore, the question is whether in the circumstances the making of no provision under the will is inadequate for Nicholas having regard to the factors referred to above. Mr McGrath submits that it is not inadequate on the basis that Nicholas in effect sold his share of any inheritance for the benefit of the moneys he received upfront while his father was alive. (I note that implicit in this submission, though this was inconsistent with Terrance's affidavit as executor, is that acknowledgement that Nicholas has no liability to the estate in relation to the repayment of the St George bank loan.) * Applicant's financial circumstances 93Nicholas is 65 years old and is no longer able to work on a full-time basis. He has deposed that he wished to retire before or at 65 ([96] of Nicholas' affidavit sworn 2 June 2010) but has had to work beyond his planned retirement age so that he can service the mortgage on his home ([100]). He earns approximately $40,000 per year. His wife is 54 and works as a fitness instructor earning approximately $45,000 per year. She is said to be nearing retirement. They have no dependent children. 94Nicholas' needs are set out at [96] to [102] of his affidavit sworn 2 June 2010. He has assets totalling $1,176,000 (of which the family home accounts for $970,000) and liabilities of $151,000. Not disclosed in Nicholas' affidavit is the fact that his wife has some estate jewellery (the value of which is not in evidence). Nicholas explained the failure to refer to this on the basis that it is of sentimental value and he did not regard it as an 'asset', from which I infer that it is not likely that this would be sold to meet living expenses. (It was suggested that I should infer that the jewellery was valuable because it was kept in a safety deposit box. However, it may also have been kept there for the reason that it had sentimental value, as Nicholas said.) I am not able to draw any inference as to the value of the jewellery. Also not disclosed is a judgment debt of around $12,000 owing to Nicholas by Terrance's son (though I understand that there are bankruptcy proceedings now on foot so it may be a moot point whether there is ultimately any recovery of this debt). 95Leaving aside the family home, the equity in which is approximately $200,000, Nicholas' affidavit disclosed assets of some $55,000. By the time of hearing he had incurred further debts of around $70,000 in relation to the funds required for these proceedings and also in relation to proceedings in Canada in which his wife is involved in an estate claim with other members of her family. Nicholas' evidence was that those proceedings were not far advanced and his expectation was that it was not likely that his wife would recover more than roughly what she had put into the cost of providing security for the proceedings. 96Both Nicholas and Terrance have a contingent interest in a trust fund that, upon the death of their uncle (which both brothers confidently expect not to be in the short term notwithstanding his advance age), will realise a significant sum of money (as deposed to in [89] of Nicholas' affidavit) (expected to be at least $500,000 for each). In the meantime, each of the brothers receives a regular income distribution from the trust. Neither Nicholas nor Terrance has any superannuation fund upon which to draw in retirement. 97It is submitted by Mr Lawson that Nicholas has needs in the short to medium term that will not be met (given the uncertainty as to when the receipt of moneys from his uncle's estate will occur). Nicholas and his wife's household annual income is $112,000 with annual expenses of $75,400. Thus, it is submitted, if the earning capacity of either Nicholas or his wife were to be adversely affected their savings would be quickly eroded by their living expenses. It is submitted that there is a clear need for provision in the form of an award of cash by way of a buffer against the exigencies of life. 98As to the criticism made of the failure of Nicholas to disclose the existence of estate jewellery owned by his wife, reliance was placed on what was said in Collings v Vakas by Campbell J (as his Honour then was) when dismissing an application for family provision in circumstances where a crucial element of the plaintiff's financial situation (her income and expenditure) had not been satisfactorily proved. There, his Honour was satisfied about two elements of the plaintiff's financial situation - that she owned no real estate and had ongoing family responsibilities, but not as to the plaintiff's income and expenditure. His Honour said (at [67]): ...before a court can be satisfied that a plaintiff was left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff's financial situation. 99Here, Mr Lawson submits that the information that has been provided, albeit in the witness box under cross-examination, does not materially alter the position in relation to Nicholas' financial circumstances. I accept that this is the case. * Size and nature of the estate 100As noted already, the main asset of the estate is the Pymble property (said to be now worth about $835,000 on which there is a mortgage debt of approximately $240,000 (as deposed to by Terrance in his affidavit sworn 22 June 2011 at [4]) although elsewhere Terrance puts that amount as slightly higher). The distributable estate is therefore in the order of some $595,000 (less any deduction that might be made for costs of the present proceedings). Relationship between deceased and applicant/others with claim on the estate 101Nicholas claims to have had a close relationship with his father. True it is that he did not physically care for his father (as Terrance did) on a day-to-day basis. However, Terrance accepted that his brother had visited his father weekly and it is apparent that over the years Nicholas assisted his father at least in the fact that he did not enforce any right to have the Pymble property sold after his mother's death in order to obtain the fruits of his inheritance under her will. 102As to the relationship between the deceased and those with competing claims on the estate, in this case the person with a competing claim is Terrance. There is no suggestion that there was any estrangement in the relationship between the deceased and Terrance. He had lived in the family home with his father for some years until his death and had been his father's carer. Given the intemperate language of some of the communications with his brother towards the end of his father's life, it would appear that Terrance found that a burdensome task at times, as it may well have been. However, while disrespectful of his father, there is no suggestion that these comments were made to his father (as opposed to having been made to Nicholas). 103There was no submission that this amounted to disentitling conduct as such (or that Terrance had behaved towards his father in a manner which had caused his father distress) and I do not consider that the e-mails to Nicholas amount to disentitling conduct on Terrance's part within the sense in which that term is used (see De Groot and Nickel, Family Provision in Australia (3rd edn); Re Gilbert (1946) 46 SR (NSW) 318 at [321]; Pengilley v Public Trustee ( unreported, NSWSC, 9 October 1985 ). 104I would therefore accept that each of the brothers contributed to the welfare of their father and had a sufficiently close relationship with him that there would be an expectation that if one or both of them had needs, and his father were able to meet them, his father would do so. Conclusion as to first issue 105I find the first stage of the Singer v Berghouse test is satisfied. Nicholas' position needs to be tested as at the date of the hearing. Whether or not his father (or, for that matter, Terrance) may have considered Nicholas' lifestyle profligate (as to which there was some evidence, to the authenticity of which objection was raised and which was not ultimately pressed in submissions), and whether or not he was provided with the lion's share of this aunt's estate (which seems to have been dissipated, whether on bookshop or other debts or the proceedings in Canada or simply on living expenses), the fact that Nicholas has little surplus income after his regular living expenses and no superannuation (though some equity in his home) and is nearing retirement age, leads me to conclude that to make no provision for him out of an estate of in effect some $595,000 is inadequate as a matter of fact (even having regard to the fact that his brother is not in an affluent position and has no home of his own). Proper provision for Nicholas? 106Having found, as a matter of fact, that there was inadequate provision for Nicholas under the will, the second stage of the test in Singer v Berghouse requires the making of what has been described as an holistic and multi-faceted judgment of an evaluative kind as to the proper provision to be made for him ( Kalmar v Kalmar [2006] NSWSC 437 at [67] per White J; Foley v Ellis [2008] NSWCA 288 at [3] per Basten JA). I have summarized earlier the factors to be taken into account in that regard and I deal with them in turn. * Contribution by the applicant to the property and welfare of the deceased 107Section 60(2) of the Succession Act provides that in determining whether an award should be made under s 59 the Court may consider any of the matters referred to in s 60(2). 108Insofar as s 60(2)(b) permits the Court to consider: the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate. it is submitted by Mr Lawson that the deceased owed an obligation to Nicholas to restore Nicholas at least to the position that he was in prior to the transfer of the Pymble property (upon Nicholas repaying to the estate the money owed under the St George loans, or at least that amount the benefit of which was received by Nicholas). I have already found that there was no contractual obligation as such. 109Insofar as s 60(2)(h) permits the Court to have regard to: any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant it is submitted that Nicholas made a significant financial contribution to the deceased's estate in that he transferred his one-third interest in the Pymble property to the deceased for no consideration and permitted the deceased to live in the Pymble property (of which he was a one-third owner) rent-free for a number of years up until the transfer of the one-third interest to the deceased (and, to the extent that Nicholas contends that he remained an equitable owner of that share of the property, up until the date of the deceased's death). I accept that Nicholas conferred a benefit on the estate by transferring his one-third interest to his father (although I do not accept that he received no consideration therefor and I note that the estate assumed a debt, albeit for less than the worth of that one-third interest, for the benefit of Nicholas). * Character and conduct of the applicant in relation to the deceased 110I have made reference earlier to the position of Nicholas vis a vis the deceased. While he was not the principal carer, the evidence is that he maintained regular contact with his father. Although Terrance gave evidence as to occasions when his father was upset or angry (attributed by him to Nicholas' conduct) there seems no suggestion that this was more than what might be described as the ordinary ups and downs of family relationships in this regard. (Furthermore, I take into account Terrance's evidence that his father was suffering from dementia towards the end of his life which may have contributed to his then emotional state.) The fact (if it be the case) that his father may not have approved of Nicholas' lifestyle does not suggest to me that there was not a close relationship between them. * The circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased) 111I have considered Nicholas' circumstances as set out above. As to Terrance, there was less information provided in his affidavits. I also consider that there was force in the submission that Terrance had not disclosed all of his income (whether that be taxable or not) in the form of money received from his father over the years. Terrance's evidence was (whether intentionally or otherwise) extremely vague and, surprisingly perhaps for someone whose business is to lecture in foreign exchange, unworldly in relation to the financial matters on which he was questioned. It was vague in other aspects (such as whether he had an uncle - in relation to the trust fund of which he is a beneficiary - or his rights in relation to that trust fund). 112I accept that Terrance has a strong claim on the estate by reference to the fact that he had for some years been his father's principal carer and that he has no home of his own, with an income from the trust fund equivalent to that of his brother. Terrance received, it would seem, not insubstantial income from his father during at least some of the last years of his father's life but is now restricted to what he may earn through his business. He is divorced and he has no dependent children although he acts as a guardian for a young child. His expenses seem in part to be funded through his business (presumably bringing with that the possibility of tax deductions on the expenses incurred). He, too, as I understand it has no superannuation. 113It was put to me in submissions by Mr McGrath that the reverse mortgage was part of some calculated arrangement whereby Nicholas sought to achieve an advantage over his brother in relation to the timing of the reverse mortgage. Mr McGrath in closing submissions (T 139.25-140.7 and T 141.17-19) put it this way: This was an arrangement, your Honour, which was not one with no consideration for Nicholas Drayson. Nicholas Drayson, who was a businessman used to operating in a commercial environment, conceived this arrangement for his own benefit, no one else. Nicholas Drayson persuaded his father and his brother to enter into the arrangement. Nicholas Drayson got many benefits from it. Nicholas Drayson got cash straight away that was not otherwise available. Nicholas Drayson did not have trouble with his father saying there was an arrangement under which the principal property could not be sold, and a view his father had expressed before. Nicholas Drayson did not de-house his father, something no doubt that would have had repercussions in his father's will. Nicholas Drayson, it is submitted, was an excluded man in desperate circumstances who entered into this in circumstances where there was a reasonable chance that his father would have to repay the Saint George loan or perhaps more accurately, his father's estate within a short space of time before the compounding interest ran away. Nicholas Drayson also had an expectation or a hope that his father would not alter his will. Nicholas Drayson was on a winner, the odds were all his way. His father was 90 years old and male. He really had some reason to expect that his father wouldn't be around for a very long time. He hoped to collect the property back under his father's will. He received the $100,000 in cash, and it was an arrangement that offered all these benefits to Nicholas Drayson. In a practical financial sense it was a very clever arrangement for Nicholas Drayson to promote and to give, the reaction of his brother being prepared to put in his share and his father being prepared to borrow the money and give it to them, it was an arrangement that was strongly beneficial for Nicholas Drayson in almost all circumstances. Now, Nicholas Drayson knew his father could change his will and that was a very good bet, if you like ... It went wrong for Nicholas Drayson on what was otherwise a very intelligent and well conceived plan, when Betty died before dad, and dad worked it out, no doubt helped by Terrance, and decided to change his will. 114I do not accept that the evidence warrants any such conclusion. I accept Nicholas' evidence that what he was seeking was to obtain assistance through the raising of a reverse mortgage loan in order to meet expenses while he was treated for cancer. The suggestion that in some fashion he was seeking to obtain any further benefit seems to me to be unwarranted. * Community expectations 115In McGrath v Eves [2005] NSWSC 1006 , Gzell J considered the position of claims by adult children for provision from their father's estate: 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. ... 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. (my emphasis) 116See also Delaney v Jones [2008] NSWSC 229. Nevertheless, as White J has noted, there does not seem to be any rule to the effect that proper provision for an adult and presently able-bodied child could not extend (in an appropriate case) to providing him or her with a house or money to buy one ( Mayfield v Lloyd-Williams [2004] NSWSC 419 at [109]-[110] per White J, his Honour there referring to Re Buckland, deceased [1966] VR 404 and Ogden v Green [2003] NSWCA 352 where such provision had been made). 117Mr McGrath submits that the evidence shows that the deceased carefully considered the position of each of them in relation to the bounty that the deceased was able to bestow; that the deceased had assisted Nicholas financially on more than one occasion by providing him with money and that in 2004 the deceased had assisted Nicholas to retain his home. (The deceased had also provided not inconsiderable financial assistance for Terrance over the years.) It is submitted that the deceased was clearly affected by the consideration that he wished both his sons to have homes of their own. (In regard to the latter submission, this is not necessarily the same as the earlier submission that Peter had sought to even the scales between the sons, so to speak.) 118As at the date of the hearing, Nicholas owns his own home with his wife (though that is heavily mortgaged). It is submitted by Mr McGrath that Terrance does not have the resources or income that would enable him to buy a home absent the bequest and that, while there is a possibility that both parties may inherit in the future, Terrance requires the security of a roof over his head now. It is submitted that the deceased sought to secure this, taking a wider view of what was fair and of his moral obligations to his children than that which Nicholas now urges on the Court. 119In that regard, I noted that if, as seems to be accepted, Nicholas has no obligation to the estate in relation to the St George Bank loan, then there must be every prospect that Terrance will have to sell the Pymble home in any event (since it did not seem to be suggested that he was in a position to service the whole of the St George Bank debt). If Nicholas were to disclaim the bequest of a 25% share in the property, then in effect what Terrance would have (as the residuary beneficiary) would be the whole of the property but also the whole of the debt secured over the property (roughly an asset worth $595,000) as opposed to the position he would be in if Nicholas obtains provision in the amount he is seeking (roughly leaving Terrance with $465,000). There is nothing to suggest that either amount (or somewhere in between) would not permit Terrance to acquire a home of his own suitable for his needs, whether in the area in which he is living or elsewhere. Therefore, insofar as it is suggested that community expectations (or the deceased's intention) would be to ensure that Terrance had a home of his own, the making of some form of provision for Nicholas would not be inconsistent therewith. 120Furthermore, given that Nicholas' home is heavily mortgaged, the provision he seeks is, in effect, to provide an ongoing buffer so that he can retain his home (something his father had seemingly sought to assist over the years). Conclusion as to second issue 121Of the total benefits drawn out of the St George Bank loan, Nicholas received $82,614.30 out of the initial $100,000 loan ([31] of his affidavit sworn 2 June 2010); none of the second loan for $38,000 ([35]); and $25,000 under the second loan ([36]), totalling $107,614.30. The total benefit received by Terrance out of the reverse mortgage loan is admitted to be $38,000.00. (The deceased received a small benefit of either $2,000.00 or $3,000 out of those monies). 122Having regard to the total St George debt of about $240,000 (including interest and fees), it is submitted by Mr Lawson that Nicholas received 73% of the benefit of the loan moneys that were available and should only be responsible for that amount of the monies due to St George Bank. Mr Lawson accepts that if this figure were to be adjusted (taking into account that the fact that Terrance has repaid some $13,450 of the amount received by him out of the loan moneys) (ignoring the effect of interest) then Nicholas has received some 80% of the loan monies available under the reverse mortgage. 123It is submitted by Mr Lawson that the appropriate provision for Nicholas would be that which would attribute to him responsibility, in effect, for 80% of the monies presently owing by the estate to St George Bank (namely $192,000.00) but that he should be placed in the position he would have been in had he had an entitlement to one-third of the Pymble property (which he would have had but for the loan and the arrangement that he entered into with his father). Therefore, leaving aside any gift that Nicholas might have received under his late father's will, it is said that he would have had an asset worth one-third of $835,000 ($278,333) and hence that the minimum provision for Nicholas should be $278,333 less $192,000, namely $86,333. 124Mr Lawson also submits that account should be taken of the net benefit to the deceased of rent-free occupation of the property from 1995 to his death (calculated at $43,723.33 by adding the rental figures for the years that the deceased occupied the Pymble home, dividing that total by 3 (because there were three owners) and further dividing that total by 2 (because the deceased occupied the property with Terrance). 125Therefore it is submitted that the total minimum award to make adequate provision for Nicholas should be the sum of $130,056.33 (or $130,000 if rounded down) in lieu of the provision made to Nicholas by the will and free of the obligations that the will seeks to impose upon him as a condition of receiving any inheritance. 126Mr McGrath submits that there should be no provision made for Nicholas at all. Reliance was placed by Mr McGrath on what was said by Stephen J in Cooper v Dungan (1975) 9 ALR 93 at [99] where he commented "equality may be equity" but that "in this jurisdiction equality is not in itself an aim and to seek to attain it may well indicate that the discretion exercisable in this statutory jurisdiction has miscarried". 127As I have noted in other matters, the court should be careful not to interfere with freedom of testation except in circumstances where the legislation requires this to be done. In Vigolo v Bostin (2005) 221 CLR 191, Gleeson CJ observed that the justification for interference with freedom of testation is to be found in the failure of a testator to meet the obligations which the community would expect in terms of maintenance for those persons within the class of eligible persons. 128I accept that the court should not interfere with a testator's dispositions beyond that which is necessary and I note the caution expressed in Cooper v Dungan against a natural tendency to reform the testator's will according to what the court regards as a proper total distribution of the estate (rather than restricting itself to its proper function of ensuring that adequate provision has been made for the proper maintenance and support of an applicant) and in Cropley v Cropley [2002] NSWSC 349, where Barrett J said (at [53]): It must also be borne in mind that, if the threshold is resolved in favour of intervention by the court, that intervention should only be to the minimum extent necessary to make adequate provision for the proper maintenance, education and advancement in life of an applicant. (Citing Permanent Trustee Co Limited v Fraser (1995) 36 NSWLR 24; King v Foster (unreported, NSWCA, 7 December 1995).) 129In Cropley, Barrett J adopted (at [55]) the approach to an application of this kind (albeit there by a widow) that was suggested by Young CJ in Eq in O'Loughlin v Low [2002] NSWSC 222: Putting it all together, what provision should the testator have made for this lady? What, in other words, is the provision that the community would think a person in the position of the testator should have made for his widow? 130Adapting that test to the present circumstances, what is the provision that the community would think a person in the position of the deceased should have made for Nicholas? It seems to me that it would be consistent with community expectations for the deceased to have made such provision as he was able (having regard to any particular needs of his other child) to assist Nicholas to be protected against the contingencies of life having regard to his age and liabilities (irrespective of whether he considered that Nicholas had been profligate in the past). 131Taking into account the respective positions of the brothers and the matters referred to above, it seems to me that the appropriate provision is to offset the benefit obtained through the rent free accommodation over the years against the $25,000 loan (and treat that loan as having been discharged) and to provide for a legacy in favour of Nicholas in the amount of $90,000 to provide a fund out of which he can meet unforeseen contingencies and provide some buffer for his retirement. That represents in effect a one-third share of the property (roughly valued at $ 278,000, less 80% of the St George bank debt, quantified by Mr Lawson at $192,000, to reflect the proportion out of that loan of the moneys received by him). In effect, that means that Terrance receives a sum that represents the one-third interest in the property that he transferred to assist his brother (less that part of the St George bank debt representing the moneys advanced to him personally out of the loan) and the whole of the remaining one-third of the property. Orders 132I therefore order as follows: 1. Declare that as at the date of the death of the late Peter Ernest Drayson he held the full legal and beneficial interest in the Pymble property and that this was not subject to any constructive or resulting trust in favour of the plaintiff. 2. Order that t here be provision made out of the estate of the deceased for the plaintiff in the form of a legacy of $90,000 and the release of the debt in the amount of $25,000 owing to the estate pursuant to the loan recorded in a letter agreement of 18 March 1996. 133I will hear submissions as to costs. ********** 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: 26 August 2011