Freeman v Wetzler

[2010] NSWSC 880

CITATION:	Freeman & Anor v Wetzler [2010] NSWSC 880
HEARING DATE(S):	02/08/2010
JUDGMENT DATE :	3 August 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Macready AsJ at 1
EX TEMPORE JUDGMENT DATE:	15 August 2010
DECISION:	Paragraphs 56-59
CATCHWORDS:	Family Provision. Claim by two children left out of deceased's will. One disabled daughter received whole estate. Orders for modest legacies for the plaintiffs.
PARTIES:	Margaret Freeman and Peter Wetzler v Bronwyn Wetzler (Estate of the late Patricia Wetzler)
FILE NUMBER(S):	SC 2009/00291268
COUNSEL:	M Bridger for plaintiffs M Fraser for defendant
SOLICITORS:	Bilbie Dan Solicitors for plaintiffs Harris Wheeler Lawyers for plaintiffs

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

TUESDAY 3 AUGUST 2010

2009/00291268 MARGARET HELEN FREEMAN & PETER JOHN WETZLER v BRONWYN MAREE WETZLER (ESTATE OF LATE PATRICIA JUNE WELTZER)

JUDGMENT

1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Patricia June Wetzler who died on 5 September 2008 aged 80 years. She was survived by her four children. Two are plaintiffs and the other is a defendant. The other child Michael has been notified of the proceedings and makes no claim.

The last will of the deceased

2 The deceased made her last will on 6 February 1996. She appointed the defendant, her daughter, her executor and gave the home at Charlestown to the defendant. The residue of her estate was split between her four children in equal shares.

3 At the time of making her will the deceased left a letter explaining why, in effect, she preferred the defendant to her other children. That letter was in these terms:

“ I thought I would like to explain to you the reason I am leaving my house to Bronwyn.

Margaret has a house, although she is still paying it off, she will one day own her own house.

Michael has had a house which he left to his former wife for his three daughters. Michael has a good position earning good money. I feel in time he will be capable of owning his own house or unit.

Peter when he retires from the RAAF he can get a Defence Service loan. It may take many years before he owns it but it will be a roof over his head while you are paying it off.
Bronwyn is on an invalid pension and has at this time no chance of working. She will be unable to buy or rent a house it will be beyond her means. She needs a roof over her head. Bronwyn has always done the maintenance of the house, including garden and mowing. Also the messages & taking me to Hospitals and Doctors, taking me to War Widows meetings, being the transport for many War Widows. I could not have managed without her. As my hip and leg deteriorate she will become my carer.
I am sorry that I have no money to leave you at this stage. I just live from pension day to pension day.
I do hope you will understand why I have left the house to Bronwyn, there was no other way. Please do not let this decision divide you all up be friends. If I was wealthy my assets would be divided four ways."

4 Unfortunately the testators hope that the children would remain friends does not seem to have been realised as there is now litigation following upon the death of the deceased.

The estate of the deceased

5 The estate consists of the deceased’s house which the parties are agreed has a value of $400,000. There is cash in the amount of $1,962 and the only liability, apart from costs, is a mortgage on the house which has been paid down to $74.

6 That defendant’s costs in these proceedings are estimated at some $33,000, of which $16,196 has been paid. This leaves $16,804 still to be paid by the defendant.

7 The plaintiffs’ costs are estimated at $30,000-$35,000. Assuming $35,000, the total costs still to be paid are $51,804.

Family history

8 The deceased was born in April 1928. Her four children were born commencing in 1951 with the birth of Margaret, her eldest child, Michael was born in 1954, Peter in 1957 and the defendant, Bronwyn, was born in 1964. From 1961 they lived at their family home at Charlestown. As Margaret grew up, and when she left school aged 15 years, she started attending TAFE and obtained casual employment. She then had some employment in sales and typing before she married in 1968. She moved to a property which she had with her husband in Cardiff near Newcastle where they built a house and raised a family.

9 Margaret had four children, a child Linda born in 1969, Karen born in 1961, Brett in 1975 and Troy in 1976. In the meantime the deceased’s husband had died in 1971.

10 She continued to bring up the remaining children and Peter left school in 1977. In 1978 Bronwyn was involved in a motor vehicle accident. She was involved in three accidents over the years, all as a passenger, and eventually received some compensation monies as a result of those accidents.

11 Peter, after leaving school, joined the Royal Australian Air Force and was there for some time.

12 By 1980 Margaret's marriage had broken down. She and her husband were divorced and in the property settlement Margaret achieved the transfer of the matrimonial home to herself. She had to pay $5,000 to achieve that and this was paid by the deceased, who provided the funds to Margaret. There was then a mortgage of some $4,000 on the property.

13 In 1979 Bronwyn had left school. She was 15 years old and attended a TAFE college. In 1981 she started her first employment at Wormald as a solderer. She was retrenched and then worked in 1982 in the Newcastle Hospital laundry.

14 Peter married in 1987 and by the early 90s the deceased started to suffer from some problems and she was hospitalised for some three months.

15 In 1991 the defendant Bronwyn received a disability pension. She was living at home and had never left home. The disability pension was because of the back problems she had.

16 It was in February 2006 the deceased made her last will and I have already given details of that.

17 In 1998 Peter made a move. He left the Air Force and he and his wife bought a property at Cardiff South. They had children from an earlier marriage and Peter and his wife had their own children, Jessica being born in 1992 and Zachary, born in 1998, was born prematurely and had some health problems.

18 In 2003 the deceased suffered a stroke and was hospitalised for some weeks. In 2003 and 2004 she started to have further hospitalisation and by November of 2004 her condition was such that she was admitted to a nursing home at Cooranbong.

19 In June 2005 the deceased moved to live with the defendant in the deceased's home. At that stage she gave $50,000 to each of the four children. In March 2005 Peter Wetzler obtained his present employment with the Australian Tax Office.

20 The deceased’s mother died in 2007 and each of the children received an inheritance of $117,000 from her estate. The deceased herself, as I mentioned, died on 5 September 2008 and a grant of Probate was made on 12 November 2008. The present proceedings were commenced within time.

Eligibility

21 Both the plaintiffs are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has 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."

22 I turn to consider the situation in life of the plaintiffs.

Margaret Helen Freedman

23 Margaret is 59 years of age and lives with her alcoholic partner, whom she has lived with for the last 20 years. She also has one of her children, Karen, living with her in the home with the two children of Karen aged 14 years and 18 years. They are not self sufficient. Margaret owns her own property at Cardiff worth $230,000 and it is subject to a mortgage of $113,000. She has two cars worth $18,000, superannuation of $19,265 and she has credit card debts of $17,000. She is operating on the maximum limit of her Master Card account.

24 Despite now suffering from a bad back Margaret works five nights a week as a cleaner. Her partner still works and earns about $1,700 a fortnight. He presently pays the mortgage on the house at the minimum amount, not much more than $200 a week, but he contributes basically nothing else to the household.

25 Margaret has real well founded doubts as to whether she will continue to receive support from him. She has expenses of $985 per fortnight excluding the mortgage. Her daughter helps by paying for her own children's food and this probably makes the budget just balance, although clearly she is operating in difficult circumstances. Her superannuation only amounts to $19,000.

26 Margaret had a continuing relationship with the deceased until her death. Her mother helped her on occasions. She gave her $5,000 on the divorce to help her buy the home from her former husband. She also, like each of her siblings, received $50,000 from her grandmother in 1975 and $117,000 from her grandmother's estate in 2007.

27 Margaret seems to have spent these funds on improvements to the house, a car, a new kitchen and new furniture. None of the funds were used to really pay the mortgage on her house. Margaret did not contribute to the estate of the deceased.

Peter Weszler

28 Peter is 53 years of age, married with two dependent children aged 17 years and 12 year. The children have some health issues which need special provision. He and his wife own their own home valued at $475,000. It was built about 10 years ago. In 2005 the mortgage was $249,000 and in September 2009 the balance was $298,000. The balance now is $330,000 and the reason for the increase recently is to fund this litigation.

29 Peter is in good secure full-time employment with the Australian Tax Office. His wife is also in secure but less well paid full time employment. Their combined income is between $1,483 and $1,611 net per week. They have two dependent children, Jessica aged 18 and Zachary aged 11. Fortunately Peter has superannuation of $351,000 and his wife has superannuation of $38,100.

30 Their expenses are $1,495 per week which, at the end of this year will reduce to some $1,385 per week.

31 Peter, like his sister Margaret, also had a good relationship with the deceased. Unlike his sister, he did not receive any benefits from the deceased but did receive some benefits from his grandmother which he used on his home but which does not seem to be quite complete.

32 It is also necessary to consider the position of others having a claim on the bounty of the deceased. In this case the only person is the defendant, Bronwyn. I turn to her situation in life.

Bronwyn Maree Wetzler

33 Bronwyn is 46 years of age, single with no dependents. She has never married and she lived with the deceased until the deceased went into a nursing home, except for a period when she was very young when she was sent to live with her maternal grandmother.

34 She is unable to work because of back pain and arthritis and has been on a disability pension since 1991. She has no superannuation entitlements. She does not own a home. She has savings of $61,000 and no other significant assets, apart from her car. She has no children and thus no one to look to for support

35 Bronwyn also had a good relationship with her mother. Bronwyn looked after her in the last decades of her life. After the deceased suffered a stroke in August 2003 she required extensive care. The deceased was admitted to a nursing home in November 2004 and remained there until her death. Bronwyn visited her frequently and looked after the deceased's affairs.

36 As I mentioned, the grandmother gave each of the four children of the deceased $50,000 in 2005 and left each of them $117,000 in her will which they received in 2007. Bronwyn had standing and grounds to apply for an additional provision but did not do so. She was unaware of her rights in that regard but also was content with the deceased's assurances that she would be able to continue living in the home. These assurances were given before the deceased went into a nursing home in 2004. Her grandmother moved into the home shortly thereafter.

37 No doubt fortified by these promises, the grandmother spent $90,000 on the home on improvements of which $30,000 of this amount was given back to her by Bronwyn out of the $50,000 she received, like her siblings. Bronwyn also contributed $30,247 for improvements to the property from her own funds.

38 Many years ago Bronwyn received $66,000 from her various damages claims arising out of several car accidents which she had. That increased over the years but recently she has lost $30,000 of that investment as a result of the collapse of one of the investments following the global financial crisis.

39 Putting aside Bronwyn’s contributions to the house of some $60,000, out of the extra $100,000 she received from her grandmother, she now has only $61,000 left representing this and all the other investments resulting from the accident which in 2007 totalled at least $62,807. Plainly she also spent funds without any regard for her future security.

Discussion

40 Bronwyn claims that she needs a home, that she likes the present one and she wishes to remain there with her dog. She resists all suggestions that she move to a unit. Evidence shows that a unit in the area can be purchased in the low $200,000’s for a two bedroom unit and a two bedroom villa unit with a yard can be purchased for $290,000. Such a yard would no doubt accommodate her dog.

41 She has received free accommodation all her life and, admittedly, after 1991 she has had no opportunity to do anything else.

42 However, the situation of her sister, Margaret, is precarious. In some senses Margaret brought this upon herself by not husbanding the funds she received from her grandmother. However, she is the last natural rock standing for her family who continue to call upon her. She stands a real chance of losing her home if her partner ceases to contribute and, given his problems, that is more than likely to happen.

43 Margaret is 57 years of age, still working five nights a week to keep the family afloat by undertaking cleaning work with a bad back.

44 Peter has little equity and a large mortgage. For him there is light at the end of the tunnel as their superannuation will enable them to pay the mortgage in due course.

45 It is necessary to see how Peter and Margaret claim they have been left without adequate and proper provision for their maintenance, education and advancement in life.

46 For Margaret it is obvious she needs to pay down the mortgage which she should have done before. She now realises the importance of this. For Peter some small income supplement as he is only acting in his present position and it is likely he will revert to his former position with less income. Although his older child is leaving school, he still has a younger child aged 12 years who needs further support.

47 Certainly Bronwyn needs some accommodation. As her mother rightly pointed out, this is a small estate which she has left. However, it is not appropriate that the present needs of the other children not be recognised. Bronwyn cannot just simply sit back and expect to receive the whole of the estate. It was not possible for her mother to foresee the situation the other children are in now as they appear before the court.

48 The court has to consider the situation of the various children now and when the testator made her will back in 1996.

49 When one looks at the assets in the estate, the house is worth $400,000 and it is the only real asset. Selling that will involve costs of some $12,000, which would leave $388,000. If one takes the costs that have to be paid if an order is made in favour of the plaintiffs, that leaves $336,000.

50 There is very little to go around. Fortunately for Bronwyn she still maintains some of her investment and has $61,000.

51 Margaret asked for a legacy of $100,000 and Peter $50,000. However, providing legacies of that amount will leave the defendant, Bronwyn, without sufficient funds to buy a home. Plainly she cannot borrow and her only opportunity is to obtain a unit or, if she wishes, a villa.

52 In my view an appropriate order is that the plaintiff Margaret receive a legacy of $75,000. I have given consideration as to whether I should apply some conditions to this to ensure that it is applied in reduction of the mortgage, but that could probably be circumvented in due course so I will leave it to Margaret's good sense. I think she now realises she is at the end of the road as far as receiving funds are concerned.

53 Unless she takes care of herself and her situation it could be the end of her home, both for her and for her children, who seem to be continually coming back and clamouring for support.

54 So far as Peter is concerned, I think he needs some assistance because he is still in that difficult situation of bringing up the youngest child who seems to have some needs and Peter is responsible for him.

55 I think a small legacy of $15,000 would be appropriate.

56 The orders I make are: in lieu of the provision in the deceased’s will of a legacy of the house to the defendant and in lieu of the provision for residue, I order that the plaintiff Margaret Helen Freeman receive a legacy in the sum of $75,000 and that the plaintiff Peter John Wetzler receive a legacy in the sum of $15,000.

57 I order that the residue of the estate pass to the defendant Bronwyn Maree Wetzler. Interest is to run on the legacies if they are not paid within four months from today's date and from that date at the rate provided for under the Probate and Administration Act.

58 I order that the plaintiffs’ costs on the ordinary basis and the defendant’s costs on an indemnity basis be paid or retained out of the estate of the deceased.

59 I order the exhibits be returned.

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