Family provision “adequate provision for proper maintenance and support”

In Tasmania, a testators spouse is eligible to bring an application for further provision from an estate if at the testator’s death they have been

“left without adequate provision for (her) proper maintenance and support”: s 3(1)Testators Family Maintenance Act 1912

Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494

The Court assumes the testator is aware of all of the relevant circumstances of those eligible to claim, including reasonably foreseeable eventualities existing at the date of the testator’s death: Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494 whether or not they are known to the testator: Litchfield v Smith [2010] VSC 466 at [26].

In making the appraisal the Court is to consider – from the perspective of a wise and just testator who is aware of all of the relevant circumstances of those eligible to claim: Bosch v Perpetual Trustee Co [1938] AC 463 at 478-479 including the

  • applicant’s financial position,
  • size and nature of the deceased’s estate,
  • totality of the relationship between the applicant the deceased and
  • relationship between the deceased and other persons who have legitimate claims: Singer v Berghouse (1994) 181 CLR 201 at 210.

If assets permit a spouse should be left secure in the matrimonial home with sufficient funds to continue to live in the style to which they are accustomed and with a buffer to meet contingencies: Gargano v Coves [2018] NSWSC 985 at [160].

Background

Efterpi Karimalis, (“EK”) widow of Theodoros Karimalis (”TK”) applied for further provision out of his estate. EK met TK in Greece in 2005 and moved to Tasmania in contemplation of marriage, in 2006 at TK’s urging. The couple immediately commenced cohabitation in the marital home in Shepherd Street, where EK has lived ever since.

The couple married in June 2009, after cohabiting for about four years. It was the second marriage for both. EK owned two houses in Greece. In the late 1990s, she gave the houses, to her two daughters, leaving her with no substantial assets.

The estate is comprised almost entirely of real estate valued at about $3.6m at the TK’s date of death including the marital home which had a value of about $1.2m.

TK purchased a house in EK’s name at Coolabah Road Sandy Bay in 2009. At the time of TK’s death, the property was valued at about $900,000 and was producing a net return, of about $26,000 per annum.

In his will, made 14 February 2012, TK appointed the respondents as his executors and trustees stating

I have not made any further provision for my wife …because she has adequately been provided for during my lifetime, including by way of the purchase of property at 14 Coolabah Road, Sandy Bay in Tasmania and because the provision of clause 2 will provide my wife … with a sufficient income stream to allow her to live in the standard of living which she has been accustomed. Further, I wish the majority of my estate to be used to provide support to my daughter”.

Karimalis v Kapodistrias [2022] TASFC 10 at 51

The bequest in the will was insufficient to accommodate EK’s wish to remain in the former marital home in Shepherd Street and to have a fund, independent of income derived from her Coolabah Road property, sufficient to maintain her reasonable living expenses and enable annual return trips to Greece to visit her family. Therefore EK has brought this application for further provision from the estate.

The decision

At first instance, the Court found that EK had been left without adequate provision for her proper maintenance and support. In addition to a life interest in the former matrimonial home in Shepherd Street, the Court ordered that EK should be given a capital amount out of the estate of $300,000, in substitution for the income stream from the flat as provided for in the will.

On appeal, EK submitted that in exercising the discretion to make further provision out of the estate the primary judge erred; with the Supreme Court of Tasmania (Full Court) holding that provision must be such that it achieves the objectives of the legislation, following the well-established approach to cases of this type.

The Full Court resolved to leave EK in a position to keep Coolabah Road, to provide her with a life interest in Shepherd Street and the sum of $650,000 from the estate. The proposed further provision will allow EK to live in the style to which she had become accustomed and free of stress and anxiety as to what the future may hold.

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