Fiorenza v Fiorenza

[2005] NSWSC 713

CITATION:	Fiorenza v Fiorenza [2005] NSWSC 713
HEARING DATE(S):	15/7/2005
JUDGMENT DATE :	18 July 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Associate Justice Macready at 1
DECISION:	Paragraph 55

CATCHWORDS:	Family Provision. Application under Family Provision Act by deceased's second wife. The house the only asset in the estate left equally to widow and son of first marriage. Orders for further provision. Discussion of costs effects of the Court's order.
PARTIES:	Antonietta Fiorenza v Vincenzo Fiorenza (Estate of Angelo Salvatore Fiorenza)
FILE NUMBER(S):	SC 2186/2004
COUNSEL:	Mr L. Ellison for plaintiff Mr D.L. Warren for defendant
SOLICITORS:	John Fisicaro & Co for plaintiff Lapaine Pomare & Forster for defendant

LOWER COURT JURISDICTION:

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

MONDAY 18 JULY 2005

2186/04 - ANTONIETTA FIORENZA v VINCENZO FIORENZA ESTATE OF ANGELO SALVATORE FIORENZA

JUDGMENT

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Angelo Fiorenza who died on 23 December 2002 aged 81 years.

2 He was survived by his second wife, the Plaintiff, and by his own child of his first marriage, the Defendant.

THE LAST WILL OF THE DECEASED

3 The Deceased made his last Will on 6 April 1996 under which he appointed both the Plaintiff and the Defendant executors, and the relevant provisions for this application is as follows:

“III. MY EXECUTOR shall hold the whole of my Estate on Trust to divide same as follows:

A. As to one-half share in the property known as 20 Robert Street, Petersham, I give absolutely to my wife ANTONIETTA NAZZARENA FIORENZA .

B. As to the remaining one-half share in the property known as 20 Robert Street, Petersham, my Executors shall hold such interest on trust to transfer it to my wife ANTONIETTA NAZZARENA FIORENZA for life with remainder to my son VINCENZO FIORENZA . The said life estate shall be terminable: -

1. Upon her failure to pay on the due dates, rates and taxes levied on the said home;

2. On the said home ceasing to be insured with a reputable Insurance Office in the amount of the difference between the improved and unimproved capital value for the time being against loss or damage by fire, storm and tempest in the name of the life tenant and the remaindermen.

3. If my said spouse ceases to occupy the property as her principal place of residence.

IV. I GIVE the rest and residue of my Estate to my wife ANTONIETTA NAZZARENA FIORENZA absolutely".

ASSETS IN THE ESTATE

4 The only asset in the estate is the deceased's home at 20 Robert Street, Petersham which has an estimated value of $600,000.

5 Costs have been incurred in this matter. The Plaintiff has estimated $28,582 and the Defendant $32,500 to which I will refer later.

6 The Plaintiff's solicitor advises it agreed not to enforce any costs against the Plaintiff until such time as she needs to sell the home in which she lives.

THE FAMILY HISTORY

7 The deceased was born on 10 October 1921 and the Plaintiff was born on 6 June 1928. The deceased married his first wife, Antonietta, in 1947 and their son, Vincenzo, was born on 18 July 1948.

8 It was on 9 December 1971 that the deceased's first wife died.

9 The Defendant was then 22 years of age undertaking a University course which, ultimately, he did not complete.

10 He married in May 1974 and continued living with his father until 1975.

11 The year before, the deceased had returned to Italy where he met the Plaintiff in the Plaintiff's village. They were married on 27 October 1974. The deceased was aged 55 years and the Plaintiff 46 years. The Plaintiff had never been married and she did not make any contribution to the assets of the marriage at that time.

12 Shortly afterwards they returned to Australia and commenced to reside at 20 Robert Street, Petersham, which probably was then owned unencumbered by the deceased.

13 In 1976 the Plaintiff was expecting a child by the deceased, but unfortunately it was stillborn. They did not go on to have children after this.

14 As I have mentioned, the Will of the deceased was made on 6 September 1996.

15 By the year 2000 the deceased's eyesight had become quite poor and he ceased driving. His health deteriorated and his wife had to put a lot of care into looking after him.

16 In July 2002 the deceased went to see a solicitor ostensibly for the purpose of putting the property into their joint names. This, however, did not proceed.

17 The deceased died on 23 December 2002.

18 The Summons was filed within time on 30 March 2004.

19 Probate was granted on 12 May 2004.

20 The Plaintiff is, of course, an eligible person.

21 In applications under the Family Provision Act, the High Court in Singer v Berghouse (1994) 181 CLR 201 set out the two stage approach that a Court must take. At page 209 it said the following:

“The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors".

PLAINTIFF'S SITUATION IN LIFE

22 The Plaintiff is 77, single and has no dependents. She lives in the Estate property, which is in reasonable repair. She receives an Australian pension of $480.00 per fortnight. She is also receiving an Italian pension. There is no precise evidence of what this pension is or the amount thereof. It is somewhere between $600.00 and $900.00 per month and is kept in Italy for her by her nephew who has arranged it.

23 She has assets in the bank of $17,000, which has increased over the last 12 months. She owns furniture worth $5,0000, electrical goods worth $1,000, jewellery worth $2,000 and, of course, her interest in the house under the Will.

24 Obviously, there was a good relationship with the deceased over the 30 year marriage. As I have noted, she made no contribution to what was the ultimate Estate of the deceased.

25 It is necessary to look at the situation in life of others having a claim on the bounty of the deceased.

26 In this case the only one is his only son, Vincenzo Fiorenza. He is aged almost 57 years. He is married. His wife does not work. He has two children who are not dependent upon him.

27 The Defendant owns his home at Enfield worth some $900,0000 and he has an investment unit on the Gold Coast worth $240,000. There is a mortgage on that for $190,000. Apart from this he does not have any other debts.

28 He owns two modest cars. He has shares worth $45,000 and superannuation worth $65,000.

29 His mortgage repayments are $1,500 per month and he receives rent of $780 per month. Obviously the property is negatively geared for his benefit.

30 Plainly, he manages to meet the payments and he apparently can live comfortably on his salary of $52,000 per annum. He has a job as an accounts officer which he has had for some years now.

31 Plainly, he had a good relationship with the deceased and is in reasonable health, apart from being diagnosed with diabetes.

32 He also has made no contributions to the assets of the Estate.

DISCUSSION

33 The Plaintiff is 77 with a life expectancy of some 15 years. She had thought of returning to Italy after the death of her husband, but after a trip back to her home town in Italy she has decided to remain in Australia. She is still able to manage in the house but recognises that at some time she will want to move into alternative aged accommodation. She asks that the whole of the Estate be given to her absolutely.

34 It is necessary to see how the Plaintiff says she has been left without proper provision for her advancement in life. It is that she submits that she has no proper provision to look after herself by the provision of alternative accommodation once she has to sell the home and move into other self-care or nursing care accommodation.

35 The provisions normally made in respect of widows have been set out in many cases and the President of the Court of Appeal in Golosky & Anor v Golosky, unreported 5 October 1993 summarised it in the following terms:

“In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:

(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the Court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales (1962) 107 CLR 9, 19; White v Barron and Anor , above, 458; Hunter , above, 576;

(b) The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher , Court of Appeal, unreported, 26 April 1985;(1985)NSWJB81.

(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70;

(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA;

(e) Considering what is "proper" and by inference what is "improper" as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced the estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. Se Re Fulop Deceased (1987) 8 NSWLR 679 (SC); Churton v Christian and Ors (1988) 13 NSWLR 241 (CA), 252.

In talking of the need to provide a house and a sum for contingencies the President is clearly referring to Wellman and passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott , unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. The court also accepted that she should have sufficient income to enable her to live in a reasonable degree of comfort and free from any financial worry.”

36 Here, of course, it was a long and happy marriage but the Plaintiff did not help build up the Estate. By the time she married, the deceased's house was unencumbered and his only son was about to marry and moved out of home shortly thereafter.

37 It is necessary to carefully consider the cost of accommodation. In this respect it should be noted that the Plaintiff does not speak English and needs to find accommodation where Italian is spoken.

38 The Plaintiff's solicitor gave evidence of the enquiries of the different types of accommodation which he had made. He pointed out the difference between hostels which cater for people with low level care needs and nursing homes for people with higher care levels. Obviously, the Plaintiff would have to be assessed by an aged care assistance team before she moves into one or other of these accommodations.

39 Entry into a hostel requires an accommodation bond if she owns a share of a house, or a house. Those bonds vary - for instance at the hostel at the Holy Spirit Croydon it is $450,000; St Joseph's, Hunters Hill, $300,000 maximum; the Scallabrini Village between $200,000 and $350,000, or there was an interest only provision.

40 In contrast if she has to, instead of going into a hostel go into nursing accommodation, there is no administration bond but there is an accommodation charge and a basic fee. Once she owns a house she will have to pay a total of $340 per week, and that will obviously require her to supplement any shortfall.

41 The Defendant also made some enquiries. These reveal two premises. One was down in the Illawarra area, which is probably not appropriate given where she now lives and there was also the Cardinal Freeman Complex at Ashfield. In self-care, the price guide for a one bedroom unit was $240,000, and one bedroom plus a den $345,000, and a two bedroom unit $385,000 - that is self-care units.

42 In the serviced accommodation there was still a bond for single suites from $155,0000 and double suites from $195,000, but the management fees were quite substantial. The weekly management fees for a double room was $273.00 with a single occupant, and with two occupants $518.00.

43 It is apparent that at the present prices her ability to purchase a self-care unit would be substantially restricted at present because her interest in the home, if she sells, is $300,000 less half the selling costs.

44 I do not think that this option of having a self-care unit is one which should be foreclosed to her. Plainly, of course, if she needed nursing accommodation she should be able to obtain it.

45 Another obvious thing that needs to be noted is that the change in her accommodation will be in some year’s time as she seems in good health at the moment. Although her home might increase in value, so will the cost of self-care accommodation.

46 One way to accommodate this may be to give her a greater share of the present home.

47 The Defendant referred me to inter alia a case of Van Eimeren v Thiemann [2005] NSWSC 686, a decision of Associate Justice McLaughlin who had to deal with a claim by an elderly defacto widow in respect of a modest estate. The widow had been left a life interest and His Honour had to consider the practical consequences of the usual costs orders, if they were made.

48 His Honour concluded that the ample practical alternatives, considering the small size of the Estate, was to leave the Plaintiff with the provision given under the Will. He then needed to address the costs consequences and he addressed it in these terms:

“48. However, a problem of a practical nature arises regarding the costs of the present proceedings. It is usual, indeed, almost universal, that a defendant executor, in upholding the terms of the will of a testator, should be entitled to have his costs out of the estate of the testator. Further, normally costs follow the event and in a claim under the Family Provision Act it is usual (other than in exceptional circumstances) for an unsuccessful plaintiff to pay the costs of the successful executor (usually with the qualification that, to the extent that the successful executor does not recover such costs from the unsuccessful plaintiff, the successful executor be entitled to recoup those costs from the assets of the estate).

49. In the instant case, if I were to make an order that the executor should receive part or all of his costs out of the estate, the inevitable consequence would be that the house property must be sold. If that were to happen then, of course, the Plaintiff would be left without a residence, and the very situation to which I have earlier adverted, the need of the Plaintiff for accommodation, would arise. (It is likely, however, that the net proceeds of sale would be sufficient for the estate to purchase for the Plaintiff a one-bedroom villa at The Figtrees, as a substitutionary residence.)

50. That is, if the Defendant executor looks to the estate for the payment of his costs of the present proceedings - which he would normally be entitled to do - then, by that very fact, the Plaintiff will be deprived of his present accommodation, with the consequence that he will have been left without adequate provision for his maintenance, and the Plaintiff will thus be entitled to succeed in the present proceedings.

51. It seems to me, therefore, that the appropriate (indeed, the only practical) course, in the light of my foregoing conclusions, is that the Court should make an order dismissing the claim, but upon the basis that the Defendant not attempt to recoup from the estate any part of his costs. For if the Defendant were entitled to receive his costs (or to recoup at least part of his costs) out of the estate, the practical consequence would be that, contrary to the present wishes of the Plaintiff and contrary to his rights under the will, the house property must be sold (unless the Plaintiff can otherwise raise funds to meet the costs of the Defendant) in order to pay the costs of the Defendant, and the Plaintiff would then be deprived of his accommodation."

49 A very similar problem arises here. Those representing the Plaintiff have sought to accommodate it by agreeing not to recover their costs until after the home is sold.

50 It is to be noted in this case that both parties are executors and we are really dealing with inter-parties litigation in which each party is trying to increase or protect their interest in the house.

51 The Defendant is in a sound financial situation for his age. Although he would like to do some repairs to his home, they are not critical and he has some funds available to him.

52 If the Defendant's costs were to be paid out of the Estate the property would have to be sold. This will place the Plaintiff in a situation which I think she should not have to face, given the length of her marriage to the deceased.

53 It seems to me that the appropriate solution is to increase the Plaintiff's share of the Estate. The Plaintiff can pay her costs when the home is sold.

54 the Defendant will at that time be able to recoup himself out of his share of the sale proceeds what he has paid for his costs.

55 Accordingly, the orders that I make are:

1. I vary the Will of the deceased by:
(a) substituting in clause III A for "one half share" the words "80 per cent share".
(b) substituting in clause III B for "one half share" the words "20 per cent share".
2. Make no order as to costs, with the intent that each party should bear their own costs.
3. The exhibit can be returned.

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