Supreme Court New South Wales Medium Neutral Citation: Szypica v O'Beirne [2013] NSWSC 297 Hearing dates: 25 - 27 March 2013 Decision date: 05 April 2013 Jurisdiction: Equity Division Before: Stevenson J Decision: Further provision made under s 59 of the Succession Act Catchwords: SUCCESSION - family provision and maintenance - application by adult son for provision from mother's estate pursuant to s 59 of the Succession Act 2006 - will left unequal legacies to three siblings - whether "two-stage" test remains applicable - whether inadequate provision made for plaintiff and, if so, what provision ought to be made Legislation Cited: Family Provision Act 1982 Succession Act 2006 Cases Cited: Andrew v Andrew [2012] NSWCA 308 Bondelmonte v Blanckensee [1989] WAR 305 De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported) Gersbach v Blake [2011] NSWSC 368 Gorton v Parks (1989) 17 NSWLR 1 Hawkins v Prestage (1989) 1 WAR 37 Jones v Dunkel (1959) 101 CLR 298 Keep v Bourke [2012] NSWCA 64 Kleinig v Neal (No 2) [1981] 2 NSWLR 532 Lajcarova v Todorov [2011] NSWSC 522 Lewis v Lewis [2001] NSWSC 321 Manuel v lane [2013] NSWCA 61 McCosker v McCosker (1957) 97 CLR 566 McGrath v Eves [2005] NSWSC 1006 McKenzie v Topp [2004] VSC 90 Nowak v Beska [2013] NSWSC 166 Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 Singer v Berghouse (No 2) (1994) 181 CLR 201 Taylor v Farrugia [2009] NSWSC 801 Category: Principal judgment Parties: Stephen Walter Szypica (plaintiff) Halina Barbara O'Beirne as Executrix of the Estate of the late Stanislawa Szypica (defendant) Representation: Counsel: E M Picker (plaintiff) D M Roberts (defendant) Solicitors: Peter Dawson & Associates (plaintiff) George West Solicitor and Attorney (defendant) File Number(s): SC 2012/213915 Publication restriction: Nil Judgment Introduction 1This is an application by an adult son for family provision from the estate of his late mother. 2The proceedings concern the estate of the late Stanislawa Szypica. 3For convenience, and without intending any disrespect, I shall refer to the persons involved in these proceedings by their given names. 4The deceased (who was known as, and who I shall refer to as "Stella") died on 23 June 2011. 5Stella was the widow of Wladyslaw Szypica, who died on 2 May 1970. After Wladyslaw died, Stella formed a relationship with Jan Doloszycki ("John"). John died in 1997. Stella was the sole beneficiary of John's estate. 6Stella and Wladyslaw had three children: - (a)George Anthony Szypica ("George") who is now aged 66; (b)the plaintiff ("Stephen") who is now aged 61; and (c)the defendant ("Halina") who is now aged 59. 7Each of George, Stephen and Halina gave evidence, as did Halina's husband, Vincent O'Beirne ("Vincent"). 8Stephen married Sandra Szypica ("Sandra") in 1976. Sandra is now 58. 9Sandra was present throughout the hearing. She did not, however, give evidence. Sandra's absence from the witness box was not explained. As emerges below, she clearly could have cast light on some aspects of the evidence, particularly in relation to financial matters. In those circumstances, I have drawn a number of inferences adversely to her, which I set out below: see Jones v Dunkel (1959) 101 CLR 298. 10Stella left a will dated 6 August 2010 ("the Will") appointing Halina as Executrix. 11The Will was admitted to probate on 26 August 2011. 12Pursuant to the Will, Stella left: - (a)a property at Victoria Street, Rooty Hill to Halina; (b)funds invested with St George Bank equally to Halina and George; and (c)the residue to be divided: - (i)as to 50 per cent to Halina; (ii)as to 25 per cent to each of Stephen and George. 13In addition to the Victoria Street property and the funds at St George Bank, Stella's estate ("the Estate") comprised a property at Kimberley Street, Rooty Hill (where Stella lived from 1973 until her death in 2011) and a property at Neville Road, Riverstone. 14The Kimberley Street property was sold in 2011. The remaining properties are not sold. Joint valuations of both properties are in evidence. 15It is common ground that taking into account the proceeds of the sale of Kimberley Street, and the valuations of the other two properties, the effect of the Will is that the Estate is to be distributed as follows: - Estate Property Halina George Stephen Victoria Street, Rooty Hill $300,000.00 Kimberley Street, Rooty Hill $160,000.00 $80,000.00 $80,000.00 Neville Road Riverstone $300,000.00 $150,000.00 $150,000.00 Subtotal $760,000.00 $280,000.00 $230,000.00 St George Bank account proceeds $50,000.00 $50,000.00 TOTAL $810,000.00 $330,000.00 $230,000.00 59.1% 24.1% 16.8% Total assets per Inventory of Property: $1,370,000.00 16Stephen makes an application for provision under s 59 of the Succession Act 2006 ("the Act"). Stephen is an "eligible person" for the purposes of s 57 of the Act. 17These proceedings were commenced on 10 July 2012; 17 days after the expiry of the time specified in s 58(2) of the Act as being that within which an application for a family provision order must be made. Thus, an order for family provision must not be made "unless the Court otherwise orders on sufficient cause being shown". Has sufficient cause been shown for the purpose of s 58(2) of the Act? 18In my opinion, "sufficient cause" has been shown for the purpose of s 58(2). 19Factors relevant to the exercise of discretion under s 58(2) include: - (a)the explanation given for the failure to commence proceedings in time; (b)the existence and strength of a case for relief under the Act; (c)any prejudice caused by the late commencement of proceedings; and (d)any unconscionable conduct by either side. (Lewis v Lewis [2001] NSWSC 321 at [82] per Hodgson CJ in Eq as his Honour then was). 20There is no dispute that both Stephen and his legal advisers were aware of the time limit in s 58 of the Act. Nor is there any dispute that Halina's solicitors made repeated enquiries of Stephen's solicitors as to whether an application was to be made under the Act. 21The delay in commencing proceedings was, in large part, a result of difficulties that Stephen's legal advisers had in obtaining instructions from him. 22On 4 December 1996 Stephen had a severe brain haemorrhage as a result of a brain aneurysm that left him with some cognitive deficits. 23Stephen's solicitor, Ms Chantelle Tabone, gave evidence: - "Our delay [in commencing the proceedings] was...caused due to [Stephen's] acquired brain injury which required him to be given significant periods of time to recall details of events, edit the information contained in his affidavit and compile relevant materials. [Stephen] often became very anxious and distressed whilst recalling these events and needed extended periods of time to process the information requested from him and ensure that all information provided was accurate." 24In light of the evidence concerning Stephen's medical condition (to which I will return below), and having observed him in cross-examination for almost a full day, I accept that Stephen may have faced difficulties writing what he described as the "story of my life". I also accept that Stephen's legal advisers encountered difficulties in obtaining instructions from Stephen and putting those instructions into the form of the affidavit that Stephen ultimately swore on 6 July 2012; four days before these proceedings were commenced. 25Ms Tabone said further reasons for delay were difficulties encountered in obtaining a copy of the inventory of assets relating to John's estate and in locating copies of Stephen's medical reports and financial records. 26I find that these matters constitute an adequate explanation for the delay in commencing proceedings. 27There is no prejudice caused by the late commencement of the proceedings. The estate has not been distributed. The delay was a matter of 17 days. 28There is no evidence of unconscionable conduct by either party. 29So far as concerns the existence and strength of Stephen's case for relief, it is not appropriate, in my opinion, for me to give detailed consideration to this at the threshold stage. I prefer the view expressed by Sheller JA in De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported) that all that is necessary for Stephen to show, for this purpose, is that his application is not bound to fail. I am so satisfied. 30For those reasons, I am satisfied that "sufficient cause" has been shown. I will now consider the substance of Stephen's application. Application for provision 31The key provision of the Act is s 59. I consider that the test to be applied remains the two-stage test referred to in Singer v Berghouse (No 2) (1994) 181 CLR 201 at 208-209; namely, determining whether adequate provision has been made in the Will for Stephen, and, if not, what provision should be made. 32A different view as to the applicability of the two-stage test has been expressed by one member of the Court of Appeal (Basten JA in Andrew v Andrew [2012] NSWCA 308 at [29] and [41]). Differing views were expressed by other members of the Court in that case (see Allsop P at [6] and Barrett JA at [65], [79]-[81] and [94]. In an earlier decision, Keep v Bourke [2012] NSWCA 64 (which appears to be the only other case in which the Court of Appeal has considered family provision under the Act) the Court appears to have assumed that the two-stage test continues to operate under the Act. 33In those circumstances, I propose to follow the course adopted by Hallen J in Nowak v Beska [2013] NSWSC 166 at [113]: - "It seems to me that the two stage approach adopted in the myriad of cases determined under the former Act and under the Act, including Keep v Bourke [2012] NSWCA 64, enables me, despite what has been said by Basten JA [in Andrew v Andrew], and until uncertainty is resolved, to continue to follow that approach in determining cases under the Act. As Allsop P said [in Andrew v Andrew], 'it may be an analytical question of little consequence' [at [6]] since what has to be decided by the Court is whether to make a family provision order and the nature of any order." 34The first stage of the two-stage test involves a question of fact, namely whether Stella has made adequate provision for Stephen's proper maintenance, education and advancement in life. 35The aim of the first stage is to assess whether the Court can make an order for provision. As Hallen AsJ (as his Honour then was) said in Lajcarova v Todorov [2011] NSWSC 522 at [79]: - "Unless the court comes to the conclusion that inadequate provision has been made, it is not empowered to make an award. This is commonly referred to as 'the jurisdictional question'. At this stage, the court will consider whether it can make an order for provision for the maintenance, education and advancement in life of a particular applicant." (emphasis added) 36The second stage, should it arise, involves an exercise of discretion. The Court must assess whether provision ought to be made in Stephen's favour. 37The object of the second stage is to assess whether the Court should make an order for provision. As Hallen AsJ said in Lajcarova v Todorov at [84]: - "At the second stage, the court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the court at the time the order is made. The fact that the court has a discretion means that it may refuse to make an order even though the jurisdictional question has been answered in the applicant's favour." (emphasis added) 38Although Hallen AsJ was then considering a claim under the former Family Provision Act 1982, I see no reason to adopt a different approach under the Act. 39It is clear that the determination of the second stage involves similar considerations to that of the first stage: Singer v Berghouse (No 2) at 209-210. 40What is involved is "an evaluative determination of a discretionary nature, not susceptible of complete exposition" and one which is "inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific" (Manuel v Lane [2013] NSWCA 61 at [9] per Emmett JA, with whom Meagher and Ward JJA agreed, speaking of the discretion to be exercised under s 20 the Property (Relationships) Act 1984; which I see as involving, in this respect, the same notions as arise under the Act). 41The guiding "principles" were recently summarised by Hallen AsJ in Gersbach v Blake [2011] NSWSC 368 at [94]-[96] as follows: - (a)it is not appropriate to endeavour to achieve a "fair" disposition of the deceased's estate; (b)it is not part of the court's role to achieve some kind of equity between the various claimants; (c)the court's role is not to reward an applicant, or to distribute the deceased's estate according to notions of fairness or equity; (d)rather, the court's role is of a specific type and goes no further than a making of "adequate" provision in all the circumstances for the "proper" maintenance, education and advancement in life of an applicant (see also Bryson J in Gorton v Parks (1989) 17 NSWLR 1 at 6); (e)the court's discretion is not untrammelled, or to be exercised according to idiosyncratic notions of what is thought to be fair, or in such a way as to transgress, unnecessarily, upon the deceased's freedom of testation (see also Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19; (1962) 107 CLR 9 at 19 per Dixon CJ and McKenzie v Topp [2004] VSC 90 at [63] per Nettle J); and (f)freedom of testamentary disposition remains a prominent feature of the Australian legal system; see also Lajcarova v Todorov at [91]. 42In relation to a claim under the Act by an adult child, Hallen AsJ said in Gersbach v Blake at [98]: - "(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. (b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801]. (c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such [as] a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia . (d) There is no need for an adult child to show some special need or some special claim: McCosker v McCosker (1957) 97 CLR 566; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45." Background 43Stella and Wladyslaw married in Germany in January 1944 and, with George, came to Australia a short time later. 44Wladyslaw worked on the construction of Warragamba Dam and was involved in a number of workplace accidents. He was not able to work in the last few years of his life. 45Stephen, Halina and George were brought up on a property on Railway Street, Rooty Hill on which the family maintained a market garden growing, amongst other things, tomatoes. 46Until approximately 1982 or 1983 Stella worked full time on afternoon shifts at Bonds Mills in Pendle Hill. 47Shortly after Wladyslaw died in 1970, the Railway Street property was resumed by the State government for the purpose of building Mount Druitt Hospital. 48Stella used the proceeds of the resumption to purchase a new home at Kimberley Street, Rooty Hill, where she lived for the rest of her life. 49Stephen, Halina and George lived with Stella at Kimberley Street for some time. Whilst the children were working, it was their practice to give Stella all of their wages from which Stella would meet household expenses and make available to each of the children an allowance for daily needs. 50Ultimately, each of Stephen, Halina and George married and ceased living at Kimberley Street. 51Halina married Vincent O'Beirne in November 1974. From that time Halina and Vincent lived approximately five houses down the road from Stella in Kimberley Street, Rooty Hill. This close physical proximity between Stella and Halina endured for the rest of Stella's life. Halina devoted a considerable part of her life to the care of her mother. 52Vincent gave evidence, which I accept, that: - "During the 37 years I have now been married to Halina, and noting that Halina is now 59 years of age, inclusive of the time Halina and I have been away on holidays, in my estimation there would not have been more than 100 days during this time that Halina did not spend time with Mum. On those occasions when Halina and I were on holidays, Halina in my observation spoke to Mum on the telephone every day and she organised daily visits either by our children or Mum's neighbours to check on Mum. From the time of my marriage to Halina until Mum's death, Halina and Mum from my observation ran their respective households together. They were a couple who in my observation and perception were inseparable." 53Halina's role in Stella's life became particularly significant when, in her later years, Stella encountered health difficulties. 54As I have mentioned, in approximately 1976, Stella formed a relationship with John. That relationship endured until John's death in 1997. In later years, when John's health failed, he lived at Kimberly Street on a full time basis, and was cared for by Stella. Stella was the sole beneficiary of John's estate. Amongst the bequests to Stella from that estate were the Victoria Street and Neville Road properties referred to above. 55Up to December 1996, Stephen conducted a business buying and selling motor vehicles. 56The evidence suggests that, until 1996, Stephen had a close relationship with Stella. As Mr Roberts, who appeared for Halina, put to Stephen in cross-examination; during this period Stephen was "the apple of [his] mother's eye". Stephen's aneurysm 57On 4 December 1996, Stephen suffered a spontaneous intracerebral bleed which required neurosurgical intervention. 58Dr Dorsch, Staff Specialist Neurosurgeon at Westmead Hospital described Stephen's situation as follows: - "Mr Szypica had a severe brain haemorrhage in early December [1996] due to a brain aneurysm. He had to have surgery for this. He has made a good physical recovery, but has been left with severe cognitive deficits, with a very deficient short term memory, and difficulty with logical thought. This has changed little since his discharge to rehabilitation, and he will almost certainly be permanently in this state. He is unfit for work which he did previously, and will remain permanently unfit for any sort of work." 59On 7 May 1997, Dr Brett Gardner, Director of Aged Care and Rehabilitation at the Campbelltown, Camden/Wollondilly Health Service, said: - "Mr Szypica has a number of cognitive problems which six months after the incident can be classed as severe, and it is certain he will have permanent brain damage. The extent of the deficits is so severe that he now shows very little interest in cars and has little to no knowledge between their differences. Although there has been continued physical improvements during the past three months there has been little or no change in his cognitive deficits. This almost certainly indicates that he suffered significant hypoxia in addition to the severe subarachnoid haemorrhage... I believe that he has no prospect of returning to his usual occupation in the wholesale purchase and sale of motor vehicles between various dealers. The cognitive deficits may show some improvements in time, however I severely doubt that he will be able to engage in any occupation where mental flexibility, planning and organising and initiative is required, or in any demanding situation, particularly when dealing with the public. His new learning is also so poor and is likely to remain severely impaired. Retraining would also not be feasible on account of these deficits... It is my opinion that he almost certainly will not return to any form of gainful occupation to which he is fitted by reasons of education, training or experience." 60No more recent medical opinion was in evidence. 61In cross-examination, Stephen said that he no longer required treatment for his condition but that he had check ups every five years or so. He accepted that he made a good physical recovery and was "pretty good now". 62However, having seen Stephen cross-examined for almost a day, it seems clear to me that many of the difficulties that Drs Dorsch and Gardner predicted continue to trouble Stephen. His memory appeared to me to be poor; he presented as being a suggestible witness who had little grasp of financial and other details. 63Stephen said that when he was recovering from the aneurysm "my business failed and my family suffered drastically both financially and emotionally". 64The evidence suggests that Stephen's relationship with other members of his family also became difficult after this time. 65I am not able to reach any firm conclusions as to the relationship between these matters and Stephen's aneurysm. However, the evidence does suggest that the relationship between Stephen and his mother and siblings had hitherto been harmonious, but became more strained and difficult after Stephen's aneurysm. 66In cross-examination, Halina gave this evidence: - "Q: You've read the annexures that [Stephen] put on his affidavit in relation to his medical reports for his brain injury, you've read those? A: Yes. Q: And you've had the opportunity yesterday to see [Stephen] in the witness box? A: Yes. Q: Would you say from your knowledge of [Stephen] before he had the brain injury and seeing him yesterday that he's changed? A: No, because I think [Stephen] is a nicer man now than what he was earlier, that's my opinion. That is just my opinion. Stephen is what he used to be like." 67I understood Halina to be saying that, as he presented in cross-examination (as opposed to how he had been since 1996), Stephen was "a nicer man now" and was "what he used to be like" before his aneurysm. 68In July 1997, Stephen received what he described as a "Total Permanent Disability payout from Westpac" of $689,562.86 which he used to: - (a)pay $126,105.35 off a home mortgage; (b)pay a personal loan of $6,900; (c)pay business expenses of $219,916.33; and (d)pay "motor vehicle payments" to Power Ford Castle Hill of $96,500. 69In about 2003 to 2004 Stephen received a further "Disability Insurance Policy payout" of approximately $300,000. Property purchases and sales 70Using some or all of these funds, Stephen and Sandra purchased and sold real estate summarised in the following table: - Property Date Purchased Purchase Price Date Sold Sale Price Charnwood Court, Glen Alpine 1987 $48,000 (then vacant land) 3 August 2004 (with house) $690,000 Gledswood Place, Glen Alpine 1 November 1999 $155,000 20 April 2001 $210,000 Parkholme Circuit, Campbelltown 2000 $156,000 25 November 2002 $262,000 Poplar Crescent, Bradbury 3 October 2001 $247,500 December 2002 $325,000 Poplar Crescent, Bradbury 3 October 2001 $247,500 October 2003 $340,000 Bourke Street, Wollongong 2002 $470,000 29 April 2006 $605,000 Theseus Circuit, Rosemeadow 26 June 2003 $286,500 February 2004 $362,500 Bidura Close, Glen Alpine 11 November 2005 $542,500 Still own 71The first and last of these properties comprised two of Stephen and Sandra's matrimonial homes; Charnwood Court to 2004 and Bidura Close from 2005. So far as the evidence reveals, such profit as Stephen and Sandra made from the purchase and sale of the other six properties is now represented by their equity in the Bidura Close property. Stella's wills 72In 2010, Stella became extremely ill. She was admitted to Blacktown Hospital for one week and then transferred to Mt Druitt Hospital where she remained for rehabilitation for a period of approximately 10 weeks. 73At around that time, Stephen asked Stella for a copy of her will. Stella would not provide Stephen with such a copy but said: - "It's the same, the same as it has always been. Nothing has changed. Halina gets a little bit more and you boys get 30% each." 74According to Halina, she had a number of discussions with Stella concerning Stella's testamentary intention. Halina said that while Stella was a patient at Mt Druitt Hospital in 2010, the following discussion took place: - "Stella: Halina, I want to leave you more than the boys because you've been doing everything for me. I want to leave you the farm [that is the Riverstone property referred to at [13]] and 50% of everything else. The money is to be divided 50% to you and 50% to George. Halina: Muma, I don't want the farm. Stella: Well, Halina, you will have Victoria Street." 75Shortly after Stella's discharge from Mt Druitt Hospital, Stella and Halina had the following conversation, in George's presence: - "Stella: George, you and Halina are getting 50% of the money and Stevie and is getting none of it. Halina: Why isn't Steve getting any of the money? Stella: Because Stevie hasn't been coming to see me. When he does come its only to see if I'm still breathing. I'm not prepared to leave Stevie the money because I'm concerned Sandra will leave him. She's just waiting for me to die." 76At around this time, Stella made the Will. As we have seen, the Will was in substance as Stella had stated in these two conversations. 77There was a dispute on the evidence as to how often Stephen visited Stella during her 2010 stay at Blacktown and Mt Druitt Hospitals. 78Stephen stated that he visited Stella weekly; his siblings asserted his visits were less frequent. 79A social worker at Mt Druitt Hospital made a note, on 3 June 2010: - "[Patient] reports her son Georgio visits daily and Stephen visits 1x per month." 80Vincent gave evidence that at Mt Druitt Hospital in 2010 Stella said: - "What I'm going to do with my will is I'm going to change some things. I don't know what I've done to Stefu [Stephen]. [Halina's] going to get more because she's looked after me. Victoria Street and [Riverstone] are going to [Halina]...George will get half of the money in St George. Stefu is not getting any of that. Stefu will be provided for from a share of this house [Kimberley Street] and [Riverstone]." 81This evidence points to the probability that Stephen's visits to Stella at hospital in 2010 were less frequent than was satisfactory to Stella. It also suggests that the reason she changed her will from one where Stephen (and George) would receive a 30 per cent interest in her property (with Halina taking a 40 per cent interest) to one where (as things have turned out) Stephen has been left something in the order of 17 per cent of the Estate, was because of her unhappiness about the attention paid to her by Stephen whilst she was in hospital in 2010. 82On 22 June 2011, Stella was suddenly admitted to hospital. Stella's condition deteriorated rapidly and she died the next day. 83Stephen said that, shortly before she died, Stella said to him: - "I never realised how sick you were". 84Stephen said that this was the first time that Stella had ever spoken to him about the aneurysm he had suffered in 1996. Stephen's and Sandra's financial positions 85Prior to suffering the aneurysm in December 1996, Stephen conducted a business purchasing and selling motor vehicles. 86Because of the affects of the aneurysm, Stephen has not been in gainful employment since that time. 87Stephen's income tax returns for the financial years ended 30 June 2009, 2010 and 2011 are in evidence. Those income tax returns show that Stephen received annual income in the sums of $35,325, $39,000 and nothing respectively. 88Stephen gave evidence that the funds in 2009 and 2010 had in fact been earned by Sandra, through a service company, for work performed by Sandra in relation to a medical practice. Sandra's income tax return disclosed similar income in years 2009 and 2010 and $89,305 in 2011. 89Stephen gave the following evidence: - "Q: You have put in tax returns? A: Yes. Q: They show you are getting income? A: Yes, that's right. I was sort of, I don't know what happened, I was trying to say it was for Sandra because she does everything. She works. Q: Is there some accountant you've got who works out what part of the income goes to you, what part goes to Sandra, is that the idea? A: Yes." 90Stephen gave evidence that he earned no income during the financial year ended 30 June 2012. 91Stephen and Sandra have the following assets and liabilities: - Stephen Asset Estimated value Jointly owned home at Bidura Close, Glen Alpine, NSW $542,500.00 Westpac Saving's Super $20,000.00 Vehicle: 1996 Ford Festiva $1000.00 Total assets $563,500.00 Less liabilities Liabilities Amount Mortgage to Westpac Banking Corporation $324,190.07 Credit cards: America Express $695.65 ANZ overdraft $3671.21 SCU personal loan $8700.00 Personal loan $11,000.00 Total liabilities $348,256.93 NET ASSETS $215,243.07 Sandra Asset Estimated value Jointly owned home at Bidura Close, Glen Alpine, NSW $542,500.00 Westpac Saving's Super $20,000.00 First State Super $65,555.59 Vehicle: 2007 Holden Astra $9000.00 Total assets $637.055.59 Less liabilities Liabilities Amount Mortgage to Westpac Banking Corporation $324,190.07 Credit cards: America Express $695.65 ANZ overdraft $3671.21 SCU personal loan $8700.00 Personal loan $11,000.00 Total liabilities $348,256.93 NET ASSETS $288,798.66 92Between 1999 and 2003, Stephen and Sandra bought and sold the properties to which I have referred to at [70], and had, in 2004, sold their property at Charnwood Court (which they purchased in 1987 as vacant land upon which they built their home) and purchased the Bidura Close property. As I have said earlier, it seems that such profit that Stephen and Sandra made from the purchase and sale of the properties is now represented by their equity in Charnwood Court. It was not suggested to Stephen in cross-examination that any undisclosed assets exist. 93The value of $542,500 attributed by Stephen to the property at Bidura Close was the price for which he and Sandra purchased the property in 2005. It seems to me to be most unlikely that, over seven years since its purchase, the Bidura Close property remains valued at $542,500. For one thing, since its purchase, Stephen and Sandra have spent (using borrowed funds) a little under $200,000 renovating the property. 94In October and November 2011, Stephen and Sandra signed loan application forms, addressed to Westpac Banking Corporation ("Westpac"), which the "market value" of Bidura Close was stated to be $700,000 or $750,000. Stephen said, and I accept, that Sandra completed the figures on these application forms. That suggests that Sandra believed that Bidura Close had a value in the range of $700,000 to $750,000, and that Stephen was prepared to sign a document making that assertion. There is no evidence that those loan application forms were forwarded to Westpac. However, a document produced by Westpac on subpoena states that, as at 12 March 2009, the estimated market value of Bidura Close was $700,000, suggesting that someone (I would infer Sandra) made a statement to this effect to Westpac. 95Further, there is in evidence a statement from Stephen and Sandra's home insurance account with GIO General Ltd ("GIO") which discloses that the insured value of Bidura Close, as at 2 October 2012, was $916,000. Stephen was not able to explain how this figure came to be on the GIO document. Initially, he suggested that GIO must have proposed the figure. Later, he accepted that it was more likely that the figure had been provided to GIO by Sandra. 96I infer that it was Sandra that nominated to GIO $916,000 as being the sum for which she wished Bidura Close to be insured. 97Ultimately, in cross-examination, Stephen accepted that Bidura Close could be worth something in the order of $600,000. I would infer from the material I have set out above that it is worth considerably more than this. Halina's financial position 98Halina's assets and liabilities (held jointly with her husband Vincent) are as follows: - Asset Estimated value Kimberley Street, Rooty Hill $380,000 Eleanor Crescent, Rooty Hill $350,000 Shares $20,000 Vince O'Beirne - Estimated Superannuation $250,000 2006 3 Series BMW $40,000 1999 A3 Audi $5000 2002 Tarago $10,000 Total assets: $1,055,000 Less liabilities Liabilities Amount Mortgage from Commonwealth Bank of Australia in respect of Eleanor Crescent, Rooty Hill $290,000 Credit card liabilities $20,000 Liabilities - overdraft CBA (joint names) $100,000 Total liabilities $410,000 NET ASSETS $645,000 99Both Halina and Vincent are in paid employment. Halina's income tax returns for the financial years ended 30 June 2009, 2010 and 2011 show that she is employed as a "corporate services manager" with a taxable income in the order of $12,000. Vincent's income tax returns show that he is employed as a manager by ISS Group Australia Pty Ltd with a taxable income of approximately $170,000, $160,000 and $100,000 in the financial years ended 30 June 2009, 2010 and 2011 respectively. George's financial position 100Although George gave evidence for the Estate in these proceedings he did not place before the Court details of his financial position and did not assert that he was a competing claimant upon the bounty of the deceased. 101He agreed that he had suggested to Stephen that he should "let the will go through" and not "contest it". Was the provision made for Stephen adequate? 102I must make an evaluation, of the kind I have described above, by reference to, first, the provision actually made for Stephen in the Will, and second, what is required for the proper maintenance and advancement in life of Stephen: s 59(2) of the Act; and see Hallen J in Nowak v Beska at [86]. 103Under the Will, Stephen receives something in the order of 17 per cent of Stella's Estate; that is considerably less than either of his siblings (although that fact, alone, is not of great weight: see [41(b)]. 104That provision would enable Stephen to retire some, but not all of the liabilities that he shares jointly with Sandra. Liabilities in the order of $120,000 would remain. 105Because of the injury suffered by Stephen in 1996 his capacity to earn an income is, in my opinion, very limited. It was suggested on behalf of the Estate that Stephen could obtain work doing odd jobs, such as lawn mowing. I do not think that a realistic prospect, in all the circumstances. 106Stephen will thus rely on Sandra's continuing ability to earn. Sandra is now 58. She did not give evidence. Accordingly, I am not able to come to any firmconclusion as to how long she is likely to work save to say that, by reason of her age, there is likely to be a limited time during which she will be able to support Stephen in the manner she has done in past years. 107Until shortly before her death, Stella proposed to provide for George and Stephen equally under her will. It appears that she changed her mind about that matter because of her unhappiness with the lack of attention that she perceived Stephen was giving her in her final years. 108Taking into account those factors, my conclusion is that the provision that Stella made for Stephen under the Will is not adequate. 109Accordingly, I must now proceed to consider what further provision should be made. What order should be made? 110Arising from the evidence that I have outlined above, my conclusion is that I should take into account the following factors: - (1)For most of his life, Stephen enjoyed a warm and loving relationship with Stella; (2)It does appear that in the last years of Stella's life, particularly after her hospitalisation in 2010, Stella stated that Stephen had been less attentive than she would have liked; (3)The aneurysm that Stephen suffered in 1996 has had a very significant effect on Stephen's life and his ability to make provision for himself. I conclude from the evidence that Stephen is not now able to make any significant contribution to his and Sandra's joint income; (4)It is true that Stephen received significant payments following the aneurysm. It is also true that he and Sandra engaged in the real estate dealings to which I have referred. Nonetheless, the position now is that Stephen (and Sandra) are the owners of only one property; namely Bidura Close. That appears to be a comfortable home, and worth more than Stephen allowed. But it is subject to a significant mortgage; (5)Although it appears likely the Sandra will be able to support herself and Stephen for sometime, it appears unlikely that her income generating capacity will enable any significant erosion to be made on the mortgage debt over their property at Bidura Close; (6)Stella has made no significant financial provision for Stephen during her life, apart from the support she gave to each of the siblings when, prior to their marriages, they lived with Stella in the family homes; (7)Stella stated, during her lifetime, that she wished to leave Halina a larger proportion of her estate than was to be left to George and Stephen, because of the significantly greater contribution that Halina made, throughout her adult life, to the care of Stella; (8)On the other hand, the only basis upon which Stella might discriminate between Stephen and George appears to be Stella's perception of Stephen's lack of attention to her in her declining years; and (9)George has decided not to place before the Court details of his financial position and has, graciously in my opinion, elected not to be an advocate for further provision under the Will. 111In all those circumstances, my opinion is that I should make no order that affects the provision made under the Will for Halina. There can be no doubt that her devotion to Stella's welfare throughout her adult life provides a sound basis for preserving the substance of the provision made by Stella for her. 112However, I consider that I should adjust the provision made for Stephen and George so that, while Halina retains her 60 per cent of the Estate, Stephen and George share the balance of the Estate equally. 113In practical terms, having regard to the figures referred to at [15], this will involve Stephen receiving approximately $50,000 more, and George receiving approximately $50,000 less than is provided for under the Will. Conclusion 114Assuming there is no reason to depart from the usual practice concerning costs orders, I propose the following orders: - (1)The costs of Halina be paid out of the Estate on an indemnity basis; (2)The costs of Stephen be paid out of the Estate on a party party basis; (3)The balance of the Estate to be divided as follows: - (a)As to 60 per cent, to Halina; (b)As to 20 per cent, to Stephen; and (c)As to 20 percent, to George. 115However, I will hear submissions from the parties before making final orders. ********** 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: 05 April 2013