Michael Zannetides v Tracey Spence

[2013] NSWSC 2032

Supreme Court

New South Wales

Medium Neutral Citation:

Michael Zannetides v Tracey Spence [2013] NSWSC 2032

Hearing dates:

16 December 2013

Decision date:

16 December 2013

Jurisdiction:

Equity Division

Before:

Young AJA

Decision:

The defendant to pay the first plaintiff the sum of $17,851 for funeral costs.

The plaintiffs claims are otherwise dismissed.

The plaintiffs to pay 70% of the defendant's costs.

Catchwords:

SUCCESSION - son burying father - executor liable to reimburse - family provision - claim made 5 months too late - applicant knew of deadline - application to extend time refused

Legislation Cited:

Succession Act 2006 (NSW)

Cases Cited:

Smith v Tamworth City Council (1997) 41 NSWLR 680
Chesterman v Mitchell (1923) 24 SR (NSW) 108

Category:

Principal judgment

Parties:

Michael Zannetides (first plaintiff)
Marina Zannetides (second plaintiff)
Tracey Spence (defendant)

Representation:

Counsel:
W Washington (plaintiffs)
D Stewart (defendant)
Solicitors:
Hall Partners Pty Ltd (plaintiffs)
Matthews Dooley & Gibson (defendant)

File Number(s):

2013/00027996

Publication restriction:

Nil

Judgment

1. These are proceedings brought by two children of Tony Zannetides, who died on 15 August 2011. The plaintiffs are two children by the deceased's first wife. The defendant is the deceased's second wife. She was granted Letters of Administration on 23 April 2012.

1. The plaintiffs issued their Summons on 29 January 2013 in circumstances I will detail shortly. There are three matters which the parties seek to have determined in these proceedings and I will deal with these under discrete headings, but before I do so, I need to briefly set out the basic facts. Accordingly these reasons are structured: A. The basic facts. B. Whether the time for making a claim under Chapter 3 of the Succession Act 2006 (NSW) should be extended to 29 January 2013. C. If B is answered affirmatively, what if any provision should be made for the plaintiffs? D. Whether the first plaintiff is entitled to be reimbursed for funeral expenses and the costs of erecting a headstone, and if so, how much? E. What is the result of the case and what are the proper cost orders and what formal orders should be made?

1. I have heard proceedings today. They were to last a day and a bit but as a result of counsel's efficiency, we have managed to finish them in less than a day and I thank Mr W Washington who appeared for the plaintiffs and Mr D C P Stewart who appeared for the defendant, for bringing that about.

A. The Basic Facts

1. The deceased was born on 20 January 1956 and thus was 55 when he died on 15 August 2011. The first plaintiff, Michael Zannetides, to whom I will just refer as "the son", was born on 16 November 1980 to the deceased and his first wife. He is thus now 33. The second plaintiff, Marina Zannetides, to whom I will refer as "the daughter", was born on 1 August 1985 to the same mother, and she is now 28. The deceased's first wife is still alive. She apparently lives in Richmond, New South Wales and I am told she makes no claim on the estate.

1. The deceased married the defendant on 16 February 2002 though the defendant says that they had lived together for a year immediately prior to the marriage.

1. The deceased's matrimonial home was at Quakers Hill. The title was held by the deceased as to 51 per cent and the defendant as to 49 per cent as tenants in common. It would seem that the deceased was only able to purchase that home because his father died in July 2010 and left him approximately $700,000. For the first time in his life the deceased had some disposable money. The deceased used his legacy to buy both his 51 per cent share and the defendant's 49 per cent share in the Quakers Hill property.

1. The plaintiffs' grandfather also gave each of the plaintiffs a legacy of $100,000. The son has evidently used his $100,000 in paying debts and other expenses, but the daughter has most of her $100,000 intact.

1. At his death, the deceased's only asset was his interest in the matrimonial home which, it would seem, had a value of $281,778.70 - or at least that was the net amount of realisation in his share. In addition, he was entitled to superannuation of approximately $91,000. The trustee of that superannuation fund had that money paid to the defendant so that as a result of the deceased's death, the defendant has obtained the house outright, the superannuation of $91,000 and some other amounts of cash which the evidence suggests have now all been expended. Accordingly, if I am only dealing with the actual estate, the amount involved is $281,778.70 less the costs of these proceedings. The plaintiffs' costs of these proceedings are said by the plaintiff to be $72,000 which will be slightly reduced because this case finished today, and the costs of the defendant is $53,000, again with the same reduction, so that if those costs were fully allowed, we would be dealing with an actual estate of something like $160,000.

1. Each of the plaintiffs is in employment. The son is a salesman and he says he earns about $43,000 a year. The daughter describes herself sometimes as a store manager, sometimes as a senior store assistant, and she earns about $50,000. Both accordingly are only earning modest incomes. Neither of them owns their own home and apart from that, they are able-bodied persons who are able to make their way in the world.

1. The deceased did intend to make a will, giving some money to the children. He evidently wrote it out but never got around to signing it. The plaintiffs say that this shows that he had a strong intention of benefiting his children, however, it is significant that he never got around to making a formal will, but against that, one has to put the circumstance that he died suddenly, aged only 55. There was some consideration later on of seeking to have the unexecuted document proved as an informal will, but that step was never actually taken and Letters of Administration on the basis of intestacy were granted to the defendant by White J. I think that is enough consideration of the facts in order to make the decision understandable.

B. Should the Time for Making an Application for Time be Extended?

1. Section 58(2) of the Succession Act provides that "An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown".

1. As I indicated earlier, the deceased died on 15 August 2011 so that, at the very latest, an application had to be made by 15 August 2012. This application was not made for another five months. The plaintiffs give evidence that they sought advice from a solicitor shortly after their father died and that the solicitor briefed a barrister to give further advice. It would seem most probable that the barrister and solicitor were concerned with (a) the informal will, (b) whether the superannuation moneys could be paid to the parties and (c) whether there could be a family provision application.

1. The son gives evidence that he constantly tried to get in touch with the solicitor and found it extremely difficult to get any reaction. He was just told that the matter was in abeyance or that the solicitor was awaiting counsel's advice. So the son sought to give me the impression that it was reasonable not to proceed until those matters became definite. However, during cross-examination he conceded that he knew that the claim had to be made by 15 August 2012. He knew that there would be difficulty in bringing a claim and he also knew that from at least 11 May 2012 that the trustees for the superannuation fund had resolved to pay the whole of the amount to the defendant. So the evidence shows that he knew from 12 May that he needed to make a decision by 13 August 2012 as to whether he would make an application or not, and he did not do so. It was only when he realised that the house at Quakers Hill was being sold, because he kept an eye on the market, and when the sale was about to be completed, and he would expect that cash moneys would be going to the defendant, that he took action. He moved the Duty Judge for an injunction to freeze the proceeds of sale. That was the Summons which also contained the application under the Act.

1. The daughter took some part in what was happening during 2012 and it is quite clear that she was fully aware of what her brother was doing at all times.

1. The subsection that I have set out says that the Court may "otherwise order", but only if sufficient cause is shown. One cannot confine a statutory discretion, but the cases which have been decided on section 58(2) or its predecessors show that the courts have focused on a number of factors, namely:

(a)   The excuse for not filing the claim in time.

(b)   The knowledge of the plaintiffs of their rights.

(c)   The strength of the plaintiffs' case.

(d)   Negligence of the solicitor involved.

(e)   Prejudice to the defendant.

(f)   Any unconscionable conduct.

1. In this case I can disregard unconscionable conduct because there is no evidence of any. The excuse for not filing the claim within time is centred on the lackadaisical performance of the solicitor, however, the cases show that the lackadaisical performance of the solicitor or even his or her negligence is not, in itself, sufficient to justify an extension of the time. The strength of the plaintiffs' case is not strong, on any view of it. The authorities show that when there is a small estate and when there is a widow, then ordinarily one would expect the prime duties of the testator or deceased is to provide accommodation for his widow in the style to which she has been accustomed to in marriage, and it is only after that obligation is fulfilled that one looks past the widow. Even if the deceased were a very wealthy person, the needs of the children are not particularly strong, though, of course, everybody needs more money and one can appreciate that these plaintiffs do need to get into the property market, and it would be difficult for them to do so on their modest incomes.

1. Then we get to what I say is the basal point. Whilst there is the knowledge by the plaintiffs of their rights, from the cross-examination of the son, it is quite clear that from 12 May 2012 he knew that the claim had to be made by 15 August 2012. He was advised by the solicitor, rightly or wrongly, that he would have difficulty in his claim and it would be expensive and the claim was not pursued by the deadline. It seems to me that this shows that there is just not sufficient cause for the Court to extend the time and accordingly I should not extend the time.

1. I would not have said, as Mr Washington said, that there was no prejudice to the defendant. That is not completely correct. As Mr Stewart pointed out, the late application did prejudice the defendant because she might reasonably have expected that she could go along and sell the property. Even getting herself new accommodation in Perth-which was her first intention-or buying a more appropriate house for herself-which was her later intention-would have been affected by the passing of the limitation period. But if that were the only factor, I would not have thought it was sufficient from preventing me from finding sufficient cause. No extension should be granted.

C. If B were Answered Affirmatively, What Order Should be Made?

1. I do not need to deal with it but the authorities say that at first instance, judges should deal with all matters in case there is an appeal so that the appellate court would be aware of what is being dealt with. As I have said, a man's principal duties are to his widow. In the instant case the widow needs accommodation. She is not a wealthy woman herself. She has some health problems. If the only benefit she got out of the estate was the house, it would be clear that the application must fail. However there is that $91,000 that was paid to her by the trustees from the superannuation fund so there is no part of the estate that could be designated as part of a notional estate. That $91,000 is going to be eaten up in costs because her own costs are $53,000 and if an order were made for the plaintiffs, then their costs would ordinarily be allowed and capped at the amount of their order. At one stage Mr Washington suggested that a proper order would be $40,000 for the son and $20,000 for the daughter because the daughter still retains the bulk of her legacy of $100,000. That would mean that the costs of the plaintiffs would be capped at $60,000, the defendant's at $50,000, which still gives $115,000 that has to be found and there is only $91,000 from the superannuation fund. So the fact of the existence of the superannuation fund I do not think makes the matter any better for the plaintiffs.

1. Accordingly, even if the time were extended and even bearing in mind that the deceased intended to remember his children and was to remember his children, the basic fact is that there was just not enough money in this estate for the deceased to benefit both his widow and his children. The authorities show a wise and just testator must think more of his widow in ill health rather than his able-bodied children, even though he might love them.

D. The Claim for Funeral Expenses

1. It is odd that this claim is made. It is one that rarely comes up before the Court. The facts are that the son looked after the funeral expenses and he also arranged for burial of his father in the Botany Lawn Cemetery and he has also provided for his father an ornate head stone with a candilli in which candles and other religious items could be displayed. The son gave evidence that his father expressed the desire to be buried in that cemetery and his religious beliefs were such that the son feels that the arrangements that he made were quite appropriate.

1. The defendant baulked at the high amount claimed. The basal principles are set out in the authorities, particularly in Smith v Tamworth City Council (1997) 41 NSWLR 680 at 693-694 where I set out a number of propositions which I thought were justified by authorities in this country and overseas. At 694, no 9 of those was, "A person who expends funds in burying a body has a restitutionary action to recover his or her reasonable costs and expenses". No 13 was "The reasonable cost of a reasonable headstone is recoverable from the deceased's estate." No 4 is "Where no executor is named, the person with the highest right to take out administration will have the privilege" to arrange for burial. The decision of Chesterman v Mitchell (1923) 24 SR (NSW) 108 is to the same effect.

1. It appears on the facts in this case that this was left to the son (with everybody's knowledge) to make these arrangements and that the son arranged a funeral which was, he thought, worthy of his father. The funeral, and the catering for the funeral, the acquisition of the access to the burial plot and the headstone with candilli came to $24,000 of which $6,000 has been paid. The son claims $17,851. The defendant says it is far too much but it seems to me the whole of the evidence shows that in all the circumstances it was reasonable, particularly as the son does not claim any interest.

E. The result

1. Accordingly there should be an order that the defendant, as the administratrix of the estate of the late Tony Zannetides, pay to the first plaintiff the sum of $17,851. The order is not to carry interest if paid by 31 January 2014. It follows from what I said that I should make orders 7 and 8 in the Amended Summons but otherwise dismiss the claim.

1. The question of costs is an awkward one. The defendant has succeeded and normally the rule of costs is that she who wins get costs, they who lose pay costs; though there are some unique provisions applying to family provision proceedings, where, in the proper case, the Court can ameliorate this.

1. If the case were decided apart from any ameliorating factor, and I think it should be, then the defendant would be entitled to the basic costs of the action but the plaintiff would be entitled to the costs of the issue as to the headstone. The issue did not take very long to decide. Mr Washington says that it was a vital issue and the intransigence of the defendant meant that the parties would have had to come to Court in any event.

1. I always find these questions of costs hard to decide because the factors involved are so nebulous. However, it seems to me that the proper order is to discount the costs by 30 per cent and order that the plaintiffs pay 70 per cent of the defendant's costs of the proceedings.

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Decision last updated: 11 April 2014