Request for Estate Provision Under Family Provision Act Rejected

The claimant sought provision from her father's estate under the Family Provision Act 1982. The claim was dismissed due to lack of evidence regarding her financial status and that of her husband.

New South Wales Supreme Court

CITATION : [NAME] v [NAME] [2006] NSWSC 374

HEARING DATE(S) : 27 and 28 April 2006

JUDGMENT DATE : 4 May 2006

JURISDICTION : Equity Division

JUDGMENT OF : Windeyer J at 1

DECISION : Summons dismissed.

CATCHWORDS : FAMILY PROVISION ACT - estate left to one of two [NAME] - small estate - estrangement between plaintiff and [NAME] until shortly before death - [NAME] in poor health - plaintiff separated from husband at present time - documentary evidence that husband has considerable assets - no evidence of his assets put forward by the plaintiff

LEGISLATION CITED : Family Provision Act 1982

PARTIES : [NAME] (Plaintiff) [NAME] (Defendant)

FILE NUMBER(S) : SC 2773 of 2005

COUNSEL : [redacted] [NAME] (Defendant)

SOLICITORS : [redacted] [NAME] (Defendant)

- 13 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

THURSDAY 4 MAY 2006

2773/05 [NAME] v [NAME]

JUDGMENT

1 The plaintiff seeks an order under s7 of the Family Provision Act 1982 for provision out of the Estate of her father [NAME] ([NAME]) who died on 5 September 2004 aged 81.

2 [NAME] left a will dated 23 June 1999 probate of which was granted on 12 April 2005 to the defendant, the other of his [NAME].

3 Under the will, [NAME], after some small gifts of specific items of jewellery and the gift of his motor vehicle to his grandchildren, [NAME], who are children of the defendant, gave the whole of the residue of his estate to [NAME] and nothing to the plaintiff.

4 The estate consisted of jewellery worth about $1,500, probably being the items subject to specific gift under the will, money in a savings account of $1,600 and a one half interest in property 2 [NAME] ([NAME]). The other one half share in that property is held by the defendant. The one half share is worth somewhere in the vicinity of $300,000 to $320,000. The liabilities in the estate including funeral expenses have been paid out of the $1,600 and by the defendant from her own or borrowed funds. The net value of the estate is not likely to be more than $300,000 and after costs will be less than that.

5 [NAME] was born in Odessa in the Ukraine in 1923. He married there. There were two children of the marriage namely the defendant born in 1953, now 53 years of age, and the plaintiff born in 1962, now 43 years of age. To make things more simple I will refer to the plaintiff as Era and the defendant as [NAME].

6 [NAME] has been married twice. Her first marriage was in 1973 and apparently dissolved in that year. There was a son, [NAME], of that marriage. The second marriage was in 1974 and there is a daughter, a child of that marriage. All the family came to Australia in 1976. [NAME] and his wife purchased [NAME], which at that time had an old house on it. They demolished that and built a new house doing a lot of the work themselves, certainly with some assistance from Era, who was living with them at that time. After the death of his wife, [NAME] passed to [NAME] as surviving joint tenant.

7 Era lived at [NAME] from about 1977 until 1985. [NAME] was not living there during this period as she was living with her second husband and two children, but her second marriage ended in 1987 and just prior to that she moved into [NAME] with her children. She formed a relationship with [NAME], which is ongoing. By that time her parents were pensioners and she made adequate contributions for her share of the living expenses and running expenses of the house.

8 In 1987 Era entered into a relationship with [NAME] and they bought a property at Kensington and lived there until about 1993. [NAME] was very lonely after his wife died and it seems that at the instigation of his [NAME] he was persuaded to go out to seek company. He met a lady called [NAME]. He expressed concern to his [NAME] that [NAME] was interested in getting whatever money he had and his [NAME], after discussion with [NAME], suggested to him that, to prevent this, he could transfer [NAME] to them in equal shares. He did that in May 1991 and at the same time his [NAME] gave him a mortgage over [NAME] to secure the sum of $180,000. It was not intended that any moneys be paid as purchase price for the property, nor was it ever intended that the mortgage loan was ever repaid at least if all went well. Its purpose was to ensure that [NAME] could not be thrown out of [NAME] by his [NAME]. He continued to live at [NAME] after this transaction took place and [NAME] continued to live there with him for a short time until [NAME] moved out of that property having entered into a relationship with another woman.

9 [NAME] and [NAME] got on well and during this period away from the house [NAME] retained a key and visited on most days to do work in his shed or garage. In 1994 [NAME] and [NAME] moved out of [NAME] moved in. [NAME] remained there. At that stage at least they got on well with their aunt. In 1995 Era purchased strata title properties at Kings Cross and Brighton-le-Sands. Nothing really turns on that because she does not have them know.

10 In October or November 1996 there was a major falling out between [NAME]. Era took in boarders at [NAME]. They were for the most part students but one of them was a masseur named [NAME]. According to the version given by [NAME] to others, he went to the property and saw [NAME] in the nude with one of his customers also naked. [NAME] was very upset about this. [NAME] either put [NAME]'s belongings in the garage or in the street and required him to leave. There is some dispute about a subsequent altercation and who called the police, [NAME] saying that his daughter plaintiff required him to leave. In any event it is certain that the police did arrive and on Era's version when they ascertained that she was living in the property and that her father was not they told [NAME] to leave and to calm down. Proceedings were taken, at least in the name of Era, against [NAME] for an apprehended violence order, but this did not proceed, as Era did not appear before the magistrate. Although there is conflicting evidence about the apprehended violence order I find that Era did take the steps to obtain the order, as there is a letter from solicitors which states that to be the position. I also find that Era, or perhaps someone at her suggestion, rang the Department of Veterans' Affairs, giving some false information about there being $180,000 in the house after its sale and that the Department made some inquiries about that. There is also conflicting evidence of the relationship between [NAME]. As I accept the evidence of [NAME] as to a meeting attended by her, [NAME] to discuss the position after the apprehended violence papers were served, I find that Era had a closer relationship with [NAME] than she admitted.

11 As a result of this confrontation [NAME] brought an action in this Court on various grounds, the first ground being against Era, for obtaining his signature on the transfer documents through deceit. The proceedings also included an action for possession against [NAME] pleaded a claim as mortgagee by [NAME] as alleging default under the mortgage. Whatever the rights and wrongs of this the claim was settled in 1998, with a payment by [NAME] to Era of $15,000 and the transfer back to him by her of the one half interest which she held in the property. That is, of course, the one half interest which is the only asset in the estate. The order for this was made on 15 April 1998.

12 A week after this [NAME] wrote a document in the Russian language explaining why he intended to exclude Era from his will. The will admitted to probate was of course made some years after this, and there is no evidence as to whether or not there had been any prior wills. The document, a translation of which is in evidence, appears to start with what was intended to be a will, refers to an enclosed letter as giving the reasons why nothing is left to Era. It is perhaps desirable to set out the whole document. The will was obviously prepared in accordance with it. The letter appears to be part of the one document. TRANSLATION FROM THE RUSSIAN LANGUAGE DOCUMENT

1. To [NAME], I do not leave anything. See the enclosed letter for the reason why.

2. To [NAME], I leave $15,000 and everything in the flat that we have bought together.

3. To [NAME], I leave my gold neck chain, my personal gold ring, and Minolta 7000 camera.

4. To [NAME], I leave my gold bracelet and Sony video camera.

5. My car, Holden Camira, is to be sold and the money is to be divided between [NAME].

6. To [NAME], I leave my part of the House and everything in the house, plus everything remaining that is not included in the above. If something happens to her then everything I have left to her will go to her children, [NAME] and [NAME].

I enclose this letter to my Will as an explanation.

I wish to explain what has happened in the case, after my death, there will be some friction because of a possible [NAME]'s inheritance claim. I have two [NAME], and I have always loved them equally. If you looked back at the past life then you would be able to see that Era received much more from our family than [NAME].

Let Era remember all her whims and desires that have been fulfilled for her, starting from the example when we had to mortgage the house because of her take-away shop, and finishing with her love affairs. Or when Era brought one of boyfriends to the house and let him settle down there permanently without my consent. They set up a sex and massage room in the house; later Era explained to me that was her boyfriend's occupation. One day when Era was at work, I accidentally opened the door to the room and saw him and some woman, [NAME] naked. The next day I came to talk with Era. However, she had the front door locks changed and told .me she would not give me the key. She said also that the house was not mine, that 1 had nothing of my own in there, and that we were strangers. I was deeply hurt to hear these words from her. Immediately after that, she and her boyfriend called police. 'The police removed me from the house and showed me a paper that had been prepared by Era earlier and that was sitting on the table. The paper said that .I had sold the house in 1991 for $180,000.

Two days later, I received an AVO issued at her request. Two days after that I was summoned by the Pensioners' Department of the Veterans' Affairs Commission; Era had rung them and told I had been hiding $180,000 from the taxation. As far as I was concerned, the sale of the house was a complete fraud. It has been established later that it was a real fraud because I trusted [NAME] .Era to be my interpreter at the solicitor's office where I wanted to put together a "waterproof' will.

The case has run for 18 months. I had to engage the services of solicitor [NAME] and, sadly, had to fight to get my house back. In the process, l spent all my savings which I was going to leave to my grand-children.

[NAME] and [NAME] were the only people (apart from my friends) who provided me with a moral support and helped me financially to get my house back.

Because of the above and what I had to go through, it is my intention to exclude Era from my Will. I do everything I can to ensure she will not even be able to contest my Will. She declared to me that we were strangers, and I do not leave anything to strangers. This is my decision and. I believe that I am right.

13 Whether or not all the statements in the letter are correct is really not necessary to decide. [NAME] agreed they regarded the property as being their father's irrespective of the transfer and at least immediately after the transfer took place. But that does not mean that the sale of the house was a complete fraud. It was, I find, brought about to ensure that the demands made by [NAME], were not acted upon. Shortly after this Era moved out of [NAME] and [NAME] and [NAME] moved back in. They are still there. It is accepted [NAME] is beneficially entitled to a one half interest in [NAME].

14 Era married [NAME] in September 1998. She did not ask her father to the wedding. In fact she had no association with him from the time of the disagreement until shortly before his death. [NAME] and [NAME] said that her father should be invited, but I find that she refused to do so.

15 In 2000 [NAME] suffered a stroke which left him paralysed on the right side. He was in hospital for a time and undertook rehabilitation after which he moved back to [NAME] and was looked after by [NAME] and [NAME] for about 11 months before his death. During this time [NAME] and [NAME] provided very great assistance to [NAME], who was quite unable to look after himself. In addition to their support he required other carers while [NAME] and [NAME] were at work and [NAME] incurred some expense and had to borrow moneys to provide the necessary care and equipment for him. Era did not see her father during this time. I find that she knew that he had been in hospital and that she knew that he had returned to [NAME]. She said that she could not see him while [NAME] was living at [NAME], but I do not accept that to be the true position. In October 2003 on the advice of the Department of Social Security, [NAME] was put into a nursing home in Maroubra for high level care. He was constantly visited by [NAME] but was not seen there by Era until June or July 2004. Era said that she did not know his whereabouts, but although it seems she was not told of this by her sister, there is no doubt whatever that she could have ascertained where he was if she had wished to do so. Era says that although he was unable to speak or say anything sensible she thought it was clear that her father was pleased to see her and was pleased to see her daughter [NAME], whom he had not seen up to that stage, although she was born in 2000. By that time of course it is clear that [NAME] would not have been able to make a new will even had he wished to do so, but it is not established that he would have so wished. Era visited him regularly from July up to his death.

16 Era is not in good health. She was diagnosed with breast cancer in 2001 and had an operation for removal of one breast. This has spread. She has metastatic breast cancer which has required radiotherapy and chemotherapy treatment. She us unable to have or has difficulty in having sexual intercourse with her husband.

17 The plaintiff is separated from her husband. It was put that this was not genuine but I find that they are living separately. Era still has a good relationship with her husband and in fact does some work for him in his office and sees him socially. [NAME] was in court at the end of the hearing. I am not satisfied the separation is permanent. He is a real estate developer. There have been various property transactions involving Era and her husband. They purchased property 6/[ADDRESS], Brighton-le-Sands in 2000 and sold it at a substantial profit about three years later. They own as joint tenants property 12/[ADDRESS], Brighton-le-Sands which at the present time is leased. Era has moved to rented premises in [ADDRESS], Bondi so as to be close to a school attended by her young daughter. It is also very close to the property owned by her husband at [ADDRESS], Bondi, which consists of his office premises, another commercial shop, at it seems at least four residential units which are let out.

18 Era does not work: she receives a disability pension of $225 per week and her husband pays her $20 per week in child support. Her income just covers her expenses at least while her husband pays for private medical insurance. Her husband pays kindergarten fees for [NAME]. Era has a one half interest in 12/[ADDRESS], Bright-le-Sands. The property is worth about $300,000 and is subject to a mortgage of $210,000. Apart from this Era has superannuation of about $10,000.

19 Era did not give any details of the financial position of her husband. The only basis on which any details were obtained were as a result of subpoenas issued by the defendant. The financial position of Era's husband is obviously relevant to this action and evidence of which it was the obligation of Era to provide. [NAME] have been married for seven and a half years. There is a daughter of that marriage. It is perfectly clear that [NAME] would have obligations to support his wife and his daughter. The evidence of the plaintiff was that the proceeds of sale of the [ADDRESS] property were used to discharge or reduce other mortgages and to fund the purchase of the [ADDRESS] property now standing in the name of [NAME]. Additional drawings against 12/[ADDRESS] went towards this. [NAME] has signed documents produced on subpoena and tendered in evidence setting out his financial position, presumably in connection with the loan application made in respect of the purchase of the [ADDRESS], Bondi building. The property was purchased for $1,370,000 which Era agreed her husband had said was a good price. In a declaration of income he stated that his income was $25,000 a month and that he had total assets of $2,670,000 and total liabilities of $1,373,000, leaving a very substantial surplus of assets over liabilities.

20 There have been no proceedings for property settlement and there have been no proceedings for dissolution of marriage. It is apparent, however, that if these proceedings were brought Era could have and almost certainly would have a reasonably substantial claim against her husband for property adjustment and child maintenance. The fact that there are no proper details given by her can only rebound against her so far as this action is concerned. The court does not know the true position. Nevertheless it must be assumed that Era could be accommodated in the jointly owned unit at Brighton-le-Sands, rather than where she presently is. She said the present arrangement was only for this year to enable the child to go to a particular school. It can also be assumed that she will either be reasonably maintained by her husband or that she will succeed in a claim for a property adjustment and in addition obtain reasonable support for the child of the marriage. It is, however, I think proper to find in view of her present health position, that she is unlikely to obtain any employment of any permanent or substantial income producing nature in the future or at least for some time in the future.

21 [NAME]'s health is no better than her sister's. She has had her thyroid removed and this affects her mood. She is on constant medication for irritable bowel syndrome. She also has had breast cancer and has had one breast removed. She undertook a course of chemotherapy for six months and then radiotherapy for three months thereafter and after that had a further operation to remove her ovaries. She says she has back problems from constant lifting while looking after her father. More recently she has had worsening stomach pains and is under investigation for this. Her health problems have required her to take time off from work.

Financial position of [NAME]

22 [NAME]'s assets consist of a one-half share in [NAME], a car worth about $10,000 and superannuation of about $56,000, which of course she has not drawn yet. Her total assets are in the vicinity of $360,000. Her liabilities are credit card debts of about $2,000, a personal loan with [NAME] of about $15,000, mostly used to fund estate expenses for funeral and other liabilities and a debt to the [COMPANY] of about $72,800 of which about $23,000 has been used to purchase a car for her daughter. [NAME] considers herself responsible for that part of the loan and on that basis the total liabilities of [NAME] are in the order of $67,000 although about $15,000 of that figure would be chargeable against the estate.

23 [NAME] works as a computer draftsperson. She has a net income of about $44,000 and appears to accept responsibility for the household expenses which take up the whole of that income. Her future income capacity is uncertain in view of her health problems.

24 [NAME] is aged 55. He was retrenched from [NAME] in 2001 and the retrenchment moneys enabled them to pay off some debts. He had a minor stroke in 2003. He has superannuation entitlements of $140,000. He has credit card liabilities of $12,000. He earns about $384 per week and his expenses including child support of $100 take up most of that amount, so that there is little to spare.

Summary

25 Neither sister is in good health. Era's position is probably slightly worse than that of [NAME]. The financial position of [NAME] as established by the evidence is stronger than that of Era as she continues to earn some income. Whether Era would be able to do so will depend on how her health progresses in the future. The relationship of [NAME] with [NAME] is stable, whereas the relationship of Era with her husband is at least uncertain. [NAME] provided very substantial assistance and care for her father over three years at considerable financial cost to herself. During that period Era did not see her father and made no genuine attempt to do so. [NAME] has a strong competing claim but it must be remembered that her half interest in [NAME] came as a result of gift from [NAME].

26 It is not, I think possible to find that the plaintiff has been left without adequate provision for her maintenance and advancement. That is because of the lack of evidence of her husband's financial position and of the likely outcome of their present separation. On that basis the claim must fail. I should add that during addresses I pointed out the plaintiff's obligation to provide evidence of her husband's financial position and the problems without this. There was no application for an adjournment or to re-open and lead this.

27 However, on the basis that this finding may be incorrect I proceed to consider the matter on the basis Era has been left without adequate provision and to determine what provision, if any, ought to be made. I do that bearing in mind the problems caused by the plaintiff's failure to provide the relevant evidence. .

28 For any provision to be made [NAME] would have to be sold. It is not a luxurious home, but a freestanding three bedroom home at [NAME]. [NAME] wishes to stay there because it has no stairs, and is easy to access which assists with her back and neck disabilities. It is also suitable for [NAME] whose hearing is very bad and who turns the television up to very high volume which would make it difficult to live in an apartment block. If [NAME] were sold then [NAME] and [NAME] would have to purchase other accommodation. While there is no evidence of the cost of residential flat units in the [NAME] area, there is in the Brighton-le-Sands area, which is not very far away. That evidence shows that any reasonable unit would cost at least $350,000 and probably a little more and there would be associated costs. If Era were to receive the whole of [NAME]'s estate which is what she seeks, the defendant, to obtain reasonable accommodation, would need to borrow between $100,000 and $150,000 in addition to her present borrowings. That may be impossible and in any event she would not be able to fund the borrowing. Were a sum of say $100,000 awarded to the plaintiff, the defendant would probably be able to acquire a reasonable unit but even that is uncertain when costs of these proceedings are taken into account.

29 This is a case where there is insufficient money to provide for the needs of [NAME] parties [NAME] having needs. I think it reasonable to proceed on the basis that Era would be entitled to continue to live in the unit in [ADDRESS], Brighton-le-Sands held in the joint names of herself and her husband. I consider it proper to proceed on the basis that her husband will have to provide for maintenance for her and reasonable accommodation for her and that his assets would make that possible, whether or not they are living together. In view of the care provided by [NAME] for her father during his last years, the ill-feeling, at least until the final months of his life between [NAME], and the litigation between them which has not been established to be the fault of [NAME] then having in mind the competing claims I have come to the conclusion that no provision would be made for plaintiff had I proceeded to the second step. It is a rather sad and difficult case but that is my conclusion.

30 I consider there should be a variation of the usual order for costs. The parties should pay their own costs, so there should be no order as to costs.

Orders

1. Order the summons be dismissed.

2. No order as to costs.

3. Exhibits may be returned. **********

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