Mair v Hastings
[2002] NSWSC 522
•31 May 2002
CITATION: Mair v Hastings [2002] NSWSC 522 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 4175/01 HEARING DATE(S): 31/05/2002 JUDGMENT DATE: 31 May 2002 PARTIES :
Balthasar Mair v John Howard Hastings - Estate of the late Romano Giovanni WallnoferJUDGMENT OF: Master Macready at 1
COUNSEL : Mr A. Enright for plaintiff
Mr C. Simpson for defendantSOLICITORS: Jenny Bull & Company for plaintiff
John H. Hastings for defendantCATCHWORDS: Family Provision. Claim by a de facto partner given a life interest in jointly owned real estate. Long relationship of 31 years and conributions to real estate. Plaintiff granted real estate in fee simple. DECISION: Paragraph 54
THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
MASTER MACREADY
FRIDAY 31 MAY 2002
004175/01 - BALTHASAR MAIR v JOHN HOWARD HASTINGS - ESTATE OF THE LATE ROMANO GIOVANNI WALLNOFER
JUDGMENT
1 HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Romano Giovanni Wallnofer who died on 5 April 2000 aged 63 years.
2 He was survived by the plaintiff, who submits that he lived with the deceased as his de facto partner at the date of death. The deceased had never married and had no children.
3 The deceased made his last will on 17 March 1999 and under the terms of that will he appointed the plaintiff and the defendant executor and gave some specific bequests. The first was to his nephew, Ronald Wallnofer, and his niece, Marina Stadler, in Italy of his interest in his estates in Italy which basically comprised some real estate. He also, in clause 3(b), gave a bequest to Ronald Wallnofer of his investment unit at 1/43 Barcom Street, Darlinghurst with an option for the plaintiff to be able to purchase it.
4 In clause 3(c) he gave his interest in his real estate known as 180 Paddington Street, Paddington upon trusts basically to provide for the plaintiff to be able to reside in the property. The estate only had a half interest in that property and the other half interest was owned by the plaintiff. The provision was a detailed one and, in particular, included the provision to enable the plaintiff during his lifetime to sell and have the funds reinvested in further real estate.
5 In clause 4 he gave the residue of his estate to the plaintiff after payment of all his debts.
6 The present situation in the estate is that there are four main assets. There is the Italian real estate worth $80,802, the unit at Darlinghurst worth $267,500 and the half interest of 180 Paddington Street worth $382,500. The residue of the estate has been got in and amounts to $105,071.
7 Plaintiff’s costs have been incurred in the amount of $24,620, defendant’s costs $33,040. There are probate costs of $8,550. There also are quite a number of liabilities and taking into account these costs (to which I referred) the total costs and liabilities in the estate amount to $198,142. It is clear, therefore, that there will be a shortfall of residue of at least about $94,000.
8 The practicality is that the Italian estate has in fact been taken by the nephew and the niece in Italy under Italian law and the executor cannot access that to apportion part of the debts to it or in any other way reach it. Accordingly from a practical point of view the shortfall of $94,000 will have to be borne pro rata by the Darlinghurst unit and a half share in Paddington Street. That means that Paddington Street will bear $55,000 and the unit $39,000.
9 I will deal with a little of the history of the relationship of the parties. The deceased was born in 1937 and the plaintiff in 1947, both of them in Italy. The deceased finished his high school in Italy in 1964 and the plaintiff, who studied architecture, finished his tertiary qualifications in 1968. In 1969 the plaintiff and the deceased met in Paris and they commenced to live together. At that stage the plaintiff was studying and the deceased was working as a hairdresser. In May 1971 they migrated to Australia together and they thereafter lived at Rose Bay and Paddington in rented accommodation. The plaintiff apparently is handy and accomplished in that area because apparently even in those days he renovated the Paddington house to obtain a discount in rent. The plaintiff worked as a waiter and a painter and the deceased as a hairdresser.
10 In 1974 the plaintiff obtained a position with Qantas as a flight steward. He had good qualifications because his language skills were much in demand by the airline. They continued to press him to take overseas postings which would improve his position but he declined for reasons which related to looking after the deceased.
11 It was in 1976 that the plaintiff and the deceased bought the house at 180 Paddington Street, Paddington for $43,000. In 1983 the plaintiff bought the unit in Darlinghurst Road. It was also in that year that the deceased was admitted to hospital for quite some period of time because of binge drinking. He had been an alcoholic for many years and needed treatment.
12 In 1985 the deceased was admitted to Langton Clinic for detoxification and in 1986 and 1987 the deceased had hip replacement operations.
13 There is a note made in 1987 by the deceased in which he promised to leave the plaintiff his share of the Paddington house and also his Australian property.
14 In 1989 the deceased bought the unit at Darlinghurst which is now in the estate. The purchase price was $115,000 and the money was raised in part by a mortgage on the parties’ jointly owned home at Paddington Street.
15 The plaintiff turned his skills to renovating that unit. Also in that year the plaintiff bought another unit in that building in Womerah Lane, Darlinghurst for $143,000 on mortgage. He retired in 1991 from Qantas and used his redundancy to pay out the mortgage over the Womerah Lane unit. He sold his Darlinghurst Road unit in 1992 and bought another one in Womerah Lane. The deceased himself retired in 1994 on an invalid pension.
16 The plaintiff made a will in July 1998, leaving his half share of the Paddington house to the deceased plus certain other provisions. In 1999 the deceased made his will and I have referred to the details of that.
17 The deceased died on 5 April 2000 while the plaintiff was overseas and the plaintiff came back to find that he had died. Probate was granted in due course and the proceedings were commenced within time.
18 The plaintiff says that he was living in a de facto relationship with the deceased for some 31 years and at the date of his death. He also suggests that he was living in a close personal relationship with the deceased.
19 Prior to the amendments introduced by the Property (Relationships) Legislation Amendment Act 1999 relief was only available under the then Family Provision Act in respect of relationships between a man and a woman. Under the amendments, which took effect on 28 June 1999 there was an extension of the Act, which applied to proceedings which commenced after that date. The amended Act incorporates the definition of a domestic relationship in the Property Relationships Act 1984.
20 That Act applies to domestic relationships which are defined in s 5 as follows:-
(1) For the purposes of this Act, a domestic relationship is:“5. Domestic relationships
(a) a de facto relationship, or
(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.
- (2) For the purposes of subsection (1)(b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:
- (a) for fee or reward, or
(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).
- (3) A reference in this Act to a child of the parties to a domestic relationship is a reference to any of the following:
(i) of whom the man is the father, or(a) a child born as a result of sexual relations between the parties,
(b) a child adopted by both parties,
(c) where the domestic relationship is a de facto relationship between a man and a woman, a child of the woman:
(ii) of whom the man is presumed, by virtue of the Status of Children Act 1996, to be the father, except where such a presumption is rebutted,
- (d) a child for whose long-term welfare both parties have parental responsibility (within the meaning of the Children and Young Persons (Care and Protection) Act 1998).
(4) …..Except as provided by section 6, a reference in this Act to a party to a domestic relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.”
21 It can be seen from the terms of section 5(1) that a domestic relationship can be either a de facto relationship or a close personal relationship.
22 The definition of de facto relationship itself appears in s 4 and is in the following terms:-
- 4. De facto relationships
- (1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:
- (a) who live together as a couple, and
(b) who are not married to one another or related by family.
- (a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
)g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.
- (4) Except as provided by section 6, a reference in this Act to a party to a de facto relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.”
23 This definition apart from the provisions of sub-clause (1) merely reflect the existing state of the law as it had been developed under the De Facto Relationships Act. See Light v Anderson (1992) DFC 95120 applying Simonis v Perpetual Trustee Co Ltd (1990) 21 NSWLR 677.
24 In relation to the claim that the deceased was living in a de facto relationship with the plaintiff at the date of his death the following should be noted:
1. It seems quite clear the length of the relationship was some 31 years.
2. The common residence was together, apart from a few short periods and, of course, holidays and trips away. In particular, the residence from 1976 on was in a house that they owned together.
3. There was a sexual relationship between the parties for the whole of the period of the relationship.
4. The parties bought property together and shared it. There were loans, for instance, from the plaintiff to the deceased so there was quite a degree of interdependence in respect of financial support.
5. There is, of course, the common home which they bought and shared together.
6. The mutual commitment appears from a number of things and, in particular, the making of wills in favour of each other and the commitment which the plaintiff demonstrated to the deceased by looking after him through 20 years of trouble with his drinking. That shows a substantial commitment between the parties.
7. There are, of course, no children.
8. So far as household duties are concerned, these were shared between them.
9. So far as the public aspects of the relationship, there is not much evidence of that but obviously from what comments were made in the affidavits it is clear that they went out together and that they had a social life together.
25 Although the existence of the relationship is not conceded, nothing is put to suggest that it did not exist. I am satisfied that it did exist for a period of 31 years and at the date of death and there therefore the plaintiff is an eligible person.
26 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 ‘inadequate’ 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.”
27 I turn to consider the plaintiff’s situation. He is aged 55 with no dependents and is single. He would have a life expectancy of at least some 25 years.
28 So far as his assets are concerned these are, at first blush, substantial. He has the home unit at 2/43 Womerah Lane, Darlinghurst, having an agreed value of $342,500, a home unit at 2/60 Womerah Lane, Darlinghurst, having an agreed value of $355,500. He had superannuation which now, he having achieved 55 years, is available to him totalling $196,863. He has the half interest in the house at Paddington which the parties are agreed has a total value of $765,000, his share being $382,500. He has savings and an amount which will be paid to him out of the estate for loans to the deceased of about $20,000. He has a very old Honda car which is hail damaged and worth only about $500. He puts his house contents at $45,000 and he has some shares in Italy worth about $20,000.
29 His income for the year ended 30 June 2000 was $29,265, (that is his taxable income), but for the following year ended 2001 it was $21,308. This is because of some land tax liabilities which he had to pay in that year. On that, his weekly income is only about $350 per week and his expenses exceed that because they are estimated at $492.
30 Clearly he has a very modest income and this is no doubt due to his choice of the lifestyle which he wishes to lead. His small expenses reflect the lack of dependants upon him.
31 It is necessary to consider the relationship between the plaintiff and the deceased. Clearly it was a good one and extended for a long time, although obviously there were bad times, particularly when the plaintiff had to support the deceased in respect of his alcoholism. He also nursed him in times of illnesses such as when he had his hips replaced.
32 One thing that becomes obvious from his evidence is that over the years with Qantas he declined promotions which would have involved him going overseas to take a better paid position. He did this simply so that he would not be away for as long and would be able to help the deceased with his drinking problems.
33 It is also necessary to see how he has contributed to the assets in the estate. So far as the house in Paddington Street is concerned, this was clearly purchased in a state that needed renovation and the evidence is that it was the plaintiff who did a substantial amount of the renovation work. Obviously things such are re-wiring and plumbing were done by tradesmen but the plaintiff, for instance, would prepare rooms so that those tradesmen could come in and there are a number of other things which he did obviously to bring the place up the value it now has. Unfortunately there are some further things that have to be done to the roof and various flashings and insulation which will incur some expense.
34 Apart from Paddington Street the plaintiff also contributed in a sense to the deceased’s unit at Womerah Lane. He allowed Paddington Street to be mortgaged to give security for the deceased to borrow so that he could buy that unit. He renovated that property inside and out, repaired the roof, did plumbing and organised other matters to do with getting the unit up to a position where it could be let. It seems that he is the one who took the management role in respect of those investment properties and, indeed, he has continued to look after them since the date of death.
35 There is also evidence of various loans that have been made by the plaintiff to the deceased from time to time, some of which will be now repaid out of the estate.
36 It is necessary to consider the position of others having a claim on the bounty of the deceased. In this case the relevant people are the nephew and the niece in Italy, together with their children who take a remainder interest following upon the death of the plaintiff in respect of Paddington Street.
37 The first is Ronald Wallnofer. He is married, 43 years of age and has two children aged 16 and 8. He lives in Bolzano in Italy and he works in an earth moving business that he and his sister inherited from their father. His income from that appears to be in the order, when one combines his and his wife’s income, of $A33,800 per annum.
38 His assets consist of a half interest in the business and the accounts would suggest that that half interest is worth about $45,000. He lives in a two bedroom apartment worth about $A64,500. He refers to having three vacant blocks of land of negligible value but the evidence before me indicates that he will have at least $A4,500 in respect of the Italian property. He has a Ford Escort, some personal effects and a small amount in the bank. On the face of it he has extensive liabilities because the business only carries on in partnership but the position of the business which I have set out above is its net position.
39 So far as his relationship with the deceased is concerned he was, of course, the nephew and the deceased was his godfather. The deceased would visit Italy every two to three years. In the course of those visits the deceased would meet with both Mr Wallnofer or his sister and stay with one or other of them. There certainly has been no contribution to the estate of the deceased by Mr Wallnofer and it is necessary to note the position of his children who have an interest.
40 His daughter, Valentina, is in second class in primary school and what she will do in the future is unknown. Victoria is in second year of tertiary college where she is studying social welfare. There is a possibility she may have to live away from home and will be supported by her family.
41 The other person is Marina Stadler who is aged 45, married with two children aged 21 and 19. As I have mentioned, she also owns half the business and works in it. Her husband obviously works because that is a substantial income to the family, the family income being in the order of $A47,370 per annum.
42 The assets are virtually similar to her brother’s because both of them live in two bedroom apartments in the same building and have the same value. Her husband owns a car and they have about $A23,000 in the bank. She owes some monies to a bank which she has borrowed to meet family expenses.
43 The relationship between her and the deceased is similar to that of her own brother. Her children are two, one whom is undertaking national service and who is then going to attend university. Her daughter is undertaking a diploma course and she will probably do some further studies. They also will probably have to study away from their home town which will involve their parents in costs.
44 It is obvious from the discussion earlier that there is no residue which is sufficient to meet all the debts and the costs of these proceedings. The defendant, in effect, concedes it would not be fair for the plaintiff to have to bear the debt of $55,000 which would be charged upon the estate’s share of the property.
45 However, the defendants do suggest that there are a number of reasons why the existing provisions are satisfactory. First, the terms of the will give great flexibility to the plaintiff. Second, the plaintiff is well provided for because he has assets of $1,275,363.
46 True it is that the will does give good flexibility and the provision is certainly a useful one. The difficulties with these provisions are common and I have discussed them in a number of cases. For instance, in Litoukinas v Koderitsch [2001] NSWSC 290 I discuss the various cases between paragraphs 49 and 59. I will not repeat the matters that I have there set out but the parties are aware of the views which I have there expressed.
47 In this case I think there are a number of factors which point to the provisions not being appropriate. Firstly, the plaintiff is 55 years of age, in reasonable health and he has a life expectancy of at least another 25 years. Secondly, he already owned one half of the property and the restriction on the other half of the property which is owned by the estate really deprives him of flexibility to use his capital which is tied up in his half share. He may not wish to go into other real estate, in which case the provision would mean that he would lose his share. Thirdly, and importantly, he contributed himself to the estate, apart from his half share of the purchase price. It was he who did all the work on the property and renovated. A provision like this deprives him of at least half his effort that he put into renovating the property over the years.
48 Another matter that arises, and the fourth point really, is that the property needs further work done on it. Effectively it is only going to be the plaintiff who can do that and pay those funds and, therefore, he will be, in effect, benefiting the remainder beneficiaries by his work.
49 Subject to the next matter which I will consider, I do not think it is appropriate that he have a life residency; he should have fee simple. The large size of his assets is simply a result of the fact that he has invested in real estate. The income produced by the investment units is quite modest and some of his assets have to be seen in this light. Paddington itself is in a boom area for real estate but it is the place where the plaintiff and the deceased chose to live and the plaintiff should really not be penalised for this choice which they made in 1976. He, no doubt because of his own attachment to the property and the attachment to the deceased, would want to continue to live in that property in the future.
50 The relationship was a long one. It was for 31 years. It had its own commitments between the two parties to the relationship but it must be noted that, in fact, it was only a de facto relationship and in this sense one cannot quite compare it to a situation of a married heterosexual couple who have made the public commitment of marriage (see the comments made by the Court of Appeal in Marshall v Carruthers (2002) NSWCA 47).
51 One of the important matters that I think applies here also is that there was a contribution to the estate property by the plaintiff and contributions to funds of the deceased.
52 All this has to be balanced with the extent of the relationship of the deceased and the other beneficiaries and the extent of the deceased’s obligations to them which do not appear great on the evidence before me. The only obligations relate to their ties from the particular relationships and no evidence of extensive contact or obligation has been tendered.
53 I am satisfied that in the circumstances of this case it is appropriate for the plaintiff to have Paddington in fee simple and that the other part of the estate should bear the present shortfall.
54 The orders that I make are as follows:
1. That in lieu of the provisions of clause 3(c) of the will of the deceased that the plaintiff receive a bequest of the estate’s interest in 180 Paddington Street, Paddington absolutely.
2. That to the extent that the residue is insufficient to meet the debts, funeral, testamentary expenses, death, estate duties and costs ordered to be paid out of the estate, that such be borne and charged upon the property referred to in clause 3(b) of the will.
3. Order that the plaintiff’s costs on a party and party basis and the defendant’s on an indemnity basis be paid or retained out of the estate of the deceased.
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