Supreme Court New South Wales Medium Neutral Citation: Kamil Faltas v Hong Peng; Tammy Westbury v Hong Peng; Bianca Faltas v Hong Peng; Emile Faltas v Hong Peng [2014] NSWSC 1922 Hearing dates: Monday, 27 October 2014 Date of orders: 27 October 2014 Decision date: 27 October 2014 Jurisdiction: Equity Division Before: Brereton J Decision: Beneficiaries' to each receive legacies in the estate Catchwords: SUCCESSION – family provision – approval of settlement – where approval sought of party who has not obtained independent advice – whether independent advice is prerequisite for approval – held, it is not Legislation Cited: (NSW) Succession Act 2006, s 95 Category: Principal judgment Parties: In 2012/331344: Kamil Faltas (plaintiff) Hong Peng (defendant) In 2012/187785: Emile Faltas (plaintiff) Hong Peng (defendant) In 2012/334268: Tammy Westbury (plaintiff) Hong Peng (defendant) In 2012/336473 Bianca Faltas (plaintiff) Hong Peng (defendant) Representation: Counsel: In 2012/331344: J Armfield (plaintiff) M Gorrick (defendant) In 2012/187785: A G Rogers (plaintiff) M Gorrick (defendant) In 2012/334268: Tammy Westbury (no counsel) M Gorrick (defendant) In 2012/336473 Bianca Faltas (no counsel) M Gorrick (defendant) Solicitors: In 2012/331344: Andrew Sheeley and Associates (plaintiff) Teece Hodgson & Ward (defendant) In 2012/187785: Armstrong Legal (plaintiff) Teece Hodgson & Ward (defendant) In 2012/334268: Tammy Westbury (no counsel) Teece Hodgson & Ward (defendant) In 2012/336473 Bianca Faltas (no counsel) Teece Hodgson & Ward (defendant) File Number(s): 2012/3313442013/1877852012/334268 2012/336473 Judgment (ex tempore) 1. HIS HONOUR: In proceedings 12/331344, Kamil Faltas v Hong Peng, I grant leave to the plaintiff to file in court the affidavit of Kamil Faltas sworn 19 October 2014; the affidavit of Kamil Faltas sworn 27 October 2014 and the affidavit of Andrew James Sheahley sworn 22 October 2014. In proceedings 2012/334268, Tammy Westbury v Hong Peng, I grant leave to the plaintiff to file in court the affidavit of Tammy Westbury sworn 26 October 2014. In proceedings 2013/187785, Emile Faltas v Hong Peng, I grant leave to the plaintiff to file in court affidavit of Janet Botros of 27 October 2014. In proceedings 2012/331344, Bianca Faltas v Hong Peng, I grant leave to the defendant to file in court affidavit of Hong Peng sworn 21 October 2014 and affidavit of administrator of Hong Peng sworn 21 October 2014. 2. To the extent that no such order has already been made, I order that evidence in each proceeding be evidence in the other proceedings. I have read the affidavits and other material comprised in the Court book and the affidavits that have just been filed in court. 3. The deceased Ludtke Faltas died on 31 October 2011, aged 79, intestate; survived by his de facto spouse, the defendant Hong Peng, aged 59, by four children of his first marriage to Sohed Faltas, namely Tammy Westbury aged 55, Emile aged 54, Bianca aged 52 and Kamil aged 48, and also by two children of his relationship with Hong Peng, both of whom are still minors, M aged 17 and E aged 16. 4. The net distributable estate is approximately $1.858 million. In addition, the deceased had two life policies with AMP, the present values of which appear to be $498,000 and $258,000 respectively. The nominated beneficiaries of those policies are M and E respectively, but there is a question as to the validity of the nomination in the light of the deceased's later resumption of his de facto relationship with the defendant. In any event, the proceeds of those policies would at least arguably be liable to be designated as notional estate if the need arose. 5. Pursuant to the rules of intestacy, the defendant Hong Peng was entitled to the statutory legacy and half of the remainder of the estate, and each of the deceased's children was entitled to one sixth of the other half of the remainder. In approximate terms, the statutory legacy is about $442,000 and has attracted interest since 31 October 2012 of $54,500. Half of the remainder of the estate is approximately $680,000, and each of the children's one sixth share is in the order of $113,000. In addition, if the nominations in respect of the life policies stand, Matthew would receive an additional $498,000 and Elizabeth an additional $258,000. 6. Each of the plaintiffs, being the children of the deceased's first marriage, has commenced a proceeding for a family provision order under the (NSW) Succession Act 2006 contending that their entitlement under the rules of intestacy is inadequate for their respective proper maintenance and advancement in life. M and E do not make a claim, but their interests are liable to be affected by any order that is made and they have been represented by a tutor who has instructed counsel to appear on their behalf without being joined as parties to the proceedings. In the various major steps in the litigation, including mediations and at the commencement of the hearing today, they have been represented. 7. Of the plaintiff's claims, all but that of Emile was brought within time. Emile's was instituted out of time and can only be sustained if an order extending time is made. 8. Over the last week or so before the final hearing was to commence today, the estate and the plaintiffs have negotiated settlements of the claims of each of the plaintiffs, although the last of them was achieved only this morning. As negotiated, the settlements provided for Kamil to receive, in lieu of his statutory entitlement, a legacy of $355,000; Tammy, $235,000; Bianca, $235,000; and Emile $220,00, in each case inclusive of costs. More recently, at the instance of Bianca and Tammy, they and Emile have agreed to modify the terms of their settlements slightly, such that each of them would receive a legacy of $235,000 inclusive. 9. It is intended that the burden of these legacies, to the extent that they exceed what would be the statutory entitlement of those plaintiffs, be borne by the interests of Matthew and Elizabeth, and to the extent that those interests are insufficient for that purpose by the interest of Hong Peng, but on the basis that objections made by some of the plaintiffs to the payment by AMP of the proceeds of the insurance policies to the nominated beneficiaries be withdrawn. That would leave approximately $813,000 and $756,000 for the two minor children, being the proceeds of the insurance policies. 10. So far as Emile's application for an extension of time is concerned, in circumstances where it is consented to I do not consider that much if anything further is required to permit the Court to make the requisite order. Plainly, where there were already pending proceedings for provision out of the estate, the addition of a further claim by him could occasion no prejudice to the estate. A deterioration in his circumstances provides an explanation for his change of mind to bring proceedings, having earlier determined not to do so. I will, therefore, grant the extension of time sought in his case. 11. The settlements require the approval of the Court for two reasons. The first is the impact that the orders for legacies will have on the interests of minor beneficiaries, and the second is that each settlement includes a release under (NSW) Succession Act 2006, s 95, of the plaintiffs' right to bring proceedings for further provision out of the estate, which release is not effective unless approved by the Court. 12. As to the former, despite the adverse impact of the proposed orders on the interests of the minor beneficiaries, I do not consider that that should preclude the orders sought being made. First, provision for their mother is in part at least provision for them. Secondly, they will retain the benefit of the insurance policies of which they are the nominated beneficiaries and which will see them receive, in any event, provision larger than their statutory entitlements. Thirdly, unlike the four plaintiffs, they retain a moral claim on their mother's estate. Fourthly, they are represented by a tutor and by counsel in the proceedings who, having considered the matter, have indicated their consent to the orders sought. 13. As to the s 95 releases, what is being released is only a claim for further provision after, in each case, an order making substantial provision for each of those plaintiffs has been made. In those circumstances, and given the overall disposition of the estate pursuant to the settlements, the prospects of any claim for further provision succeeding would be remote indeed, so that what is being released does not appear to be of much if any value. Secondly, the releases are given in the context of overall settlements of what have been bitterly contested disputes over an estate and in the context of substantial orders for provision in favour of each plaintiff, so as to make clear that the settlement is in each case a once and for all settlement. Thirdly, I am satisfied on the affidavit evidence in three cases and on Bianca's oral evidence in the other that each plaintiff understands the effect of the settlement including the release. 14. Finally, I take into account that the releases are given as part of an overall compromise that will have the consequence for all parties of avoiding approximately another five days in Court and the costs of that litigation. In each case I am satisfied that at the time the agreement to make the release was made, being on or about today, it is to the advantage financially and otherwise of the releasing party to make the release: financially, because the releasing party will receive a substantial order for provision, significantly in excess of their statutory entitlement; and otherwise, because it will avoid the risks, costs and stresses of the continuing litigation. 15. For substantially the same reasons I am satisfied that it is prudent for each releasing party to make the release. I am also satisfied that the provisions of the agreement to make the release contained in the short minutes in each case are fair and reasonable and overall represent a fair compromise of the disputes in the proceeding, particularly having regard to the slight, if any, value that any claim for further provision would have in this context. 16. Finally, I am satisfied that all the releasing parties, save Bianca, have taken independent advice in relation to the releases and have given due consideration to that advice. 17. Bianca, who appears unrepresented, has not taken independent advice in relation to the release. She was formerly legally represented in the proceedings and was represented at two of the earlier negotiations, but now appears as a self represented litigant. Section 95(4)(d) requires the Court to take into account whether the releasing party has taken independent advice and, if so, has given due consideration to that advice. It does not mandate that the Court cannot approve a release unless the releasing party has taken independent advice. In order to be satisfied that Bianca understood what she was releasing and the terms of the settlement as a whole and had made an informed decision about it, I required that some oral evidence be adduced from her for that purpose. Having heard that evidence, I am so satisfied, and while I note and take into account that she has not taken independent advice, in all the circumstances I do not consider that that factor tells significantly against approving the release that she proposes to give. 18. For those reasons, I will make orders substantially as sought and subject to the modifications that have been agreed in the course of submissions. What I propose to do is in each matter to note the short minutes and then to make formal orders giving effect to what I now understand to be the agreements of the parties. 19. Accordingly, in proceedings 2012/331344, Kamil Faltas v Hong Peng, I note the document entitled "Short minutes of order" signed by the plaintiff and his solicitor and the defendant and her solicitor, initialled by me, dated this day and placed with the papers, including the matters agreed by the parties in para 7 of those short minutes and the agreement of the parties in consideration of the orders to be made set out in paras 9 through 14 of those short minutes. 20. In matter number 2012/334268, Tammy Westbury v Hong Peng, I note the document entitled "Short minutes of order" signed by the plaintiff in person and by the defendant and her solicitor and initialled by me, dated this day and placed with the papers, including the matters agreed pursuant to para 6 of those short minutes and the agreement of the parties in consideration of the orders to be made recorded in paras 8 through 14 of those short minutes. 21. In proceedings 2012/336473, Bianca Faltas v Hong Peng, I note the document entitled "Short minutes of order" signed by the plaintiff in person and by the defendant and her solicitor, initialled by me, dated this day, and placed with the papers including the matters agreed pursuant to para 7 of those short minutes and the agreement of the parties in consideration of the orders set out in paras 9 through 15 of those short minutes. 22. In proceedings 2013/187785, Emile Faltas v Hong Peng, I note the document entitled "Short Minutes of Order" signed by the solicitor for the plaintiff and the solicitor for the defendant, initialled by me, dated this day, and placed with the papers including the matters agreed pursuant to para 7 of those short minutes and the agreement recorded in consideration of the orders set out in paras 9 through 14 of those short minutes. 23. In matter 2013/187785, Emile Faltas v Hong Peng, the Court by consent orders that time for the plaintiff to apply for a Family Provision Order be extended to the date of the filing of the summons. 24. In each matter, the Court orders that in lieu of the statutory entitlements upon intestacy in respect of the estate of the Late Ludtke Faltas: 1. The plaintiff, Kamil Faltas, receive a legacy of $350,000; 2. The plaintiff Tammy Westbury receive a legacy in the sum of $230,000; 3. The plaintiff Bianca Faltas receive a legacy in the sum of $230,000; 4. The plaintiff, Emile Faltas, receive a legacy in the sum of $230,000; 5. The defendant, Hong Peng, receive the rest and residue of the estate; 6. The said legacies not bear interest if paid within 90 days of this date; namely, 27 October 2014, and otherwise bear interest at the rate prescribed for unpaid legacies in the (NSW) Probate and Administration Act 1898 on so much of the legacy as remains unpaid after that time until fully paid; 7. The release given by the plaintiff of his or her rights to apply for further provision out of the estate of the deceased be approved pursuant to Succession Act, s 95 in relation to the whole or any part of the estate or notional estate of the deceased; 8. There be no order as to the plaintiff's costs to the intent that he or she pay his or her own costs; 9. The defendant's costs on the indemnity basis be paid out of the estate of the deceased. ********** 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: 18 February 2015