Miller v Michele

[1999] NSWSC 1028

CITATION:	MILLER v MICHELE [1999] NSWSC 1028
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	1495/98
HEARING DATE(S):	15/09/99
JUDGMENT DATE:	16 September 1999
PARTIES :	Nicole Joanne Miller v Pascaline de Michele
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr K. Pryde for the plaintiff Mr M. Willmott for the defendant
SOLICITORS:	Hinde & Ginges for the plaintiff Eric Butler for the defendant
CATCHWORDS:	Family Provision. Application by a daughter under Family Provision Act. Whole estate left to widow. Provision of small legacy appropriate.
DECISION:	Paras 35 and 37

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

THURSDAY 16 SEPTEMBER 1999

1495/98 - NICOLE JOANNE MILLER v PASCALINE DE MICHELE

JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Peter Holeva who died on 24 March 1997. The deceased was survived by his defacto spouse the defendant, his two daughters of that relationship Peta and Franchesca and his daughter Nicole, the plaintiff in the proceedings. Nicole is the daughter of the deceased and Tracey Klein with whom the deceased lived between 1976 and mid 1980.

2   Under his will made 1 November 1993 the deceased gave the whole of his estate to the defendant and appointed her executrix.

3   The estate consists of unit 17/164 Bondi Road, Bondi. There is evidence of the value and after allowing for selling expenses one would expect the amount to be in the order of $145,000.

4   There is money in an account and after payment of costs of commission the amount remaining is $8,799, a total of $153,799.

5   Unfortunately in this matter costs have been incurred. The defendant's costs amount to $20,000 and those of the plaintiff $22,344. There are also airfares for the plaintiff and her mother who gave evidence of some $3,020. Accordingly the net distributable estate if orders were made in the usual terms would be $128,425.

6   The other assets involved are the house at 112 Beach Road, Bondi that was owned by the deceased and the defendant as joint tenants which has passed by survivorship to the defendant. It has a value in the range of $550,000 to $600,000. There are also three trust accounts, two of which were in the deceased's name. One was an investment with St George in the name of the deceased in trust for his daughter Franchesca in the sum of $130,000. The other was a deposit in the Commonwealth Bank in a term deposit in the name of the deceased in trust for Peta in the sum of $50,000. Although it was not referred to in the defendant's affidavit specifically, it transpired in cross-examination that there was also another deposit in the St George Bank in the name of the defendant. That was in trust for both Peta and Franchesca in the amount of $58,000 but which has now reduced down to $38,000.

7   I refer to some of the history in the matter in order to put the matter into context. It was in 1968 that the deceased and his brother Paul Holeva arrived in Australia from Czechoslovakia. In 1976 Tracey Klein and the deceased commenced living together first in a flat at Rose Bay and later in Bondi. The plaintiff was born on 13 November 1978. In about the middle of 1980 the deceased and the plaintiff's mother separated, the plaintiff then being about twenty-one months old.

8   In January the next year, 1981, the deceased and the defendant commenced to live together. They had a child Peta born on 14 June 1982. Not long after her birth the defendant and the deceased separated and remained separated for some four years. At the end of 1982 in November the plaintiff and her mother left Australia for the USA and took up permanent residence in the United States. The circumstances in which they left caused the deceased some hurt but that is not a matter which is the fault of the plaintiff. The plaintiff at that stage was aged four years. In due course the plaintiff's mother married Mr Weaver in 1982 although that marriage only lasted several years.

9   It was in 1986 that the deceased and the defendant resumed their cohabitation and in November of that year they purchased the property at Beach Road Bondi having sold the house they had at Paddington. On 18 February 1987 the deceased and defendant's second daughter Franchesca was born. She is now aged twelve. On 1 November 1993 the deceased executed and published his last will and he died on 24 March 1997.

10   By May of 1997 the plaintiff had completed her education at Douglas High School and in August of that year her mother married Mr Klein. In August the plaintiff commenced her Bachelor's Degree at Birmingham Southern College, Birmingham Alabama. She studies English and Art. In due course probate was granted and these proceedings were commenced.

11 In applications under the Family Provision Act the High Court has recently in Singer v Berghouse (1994) 181 CLR set out a 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 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."

12   Having regard to what is said by the High Court it is necessary to look at the plaintiff's situation. The plaintiff herself has no assets of any substance. She is presently twenty-two years of age and she is two years into a four year degree course. Apart from completing this degree course she wishes to do a Master’s degree for two years at Graduate school. The purpose of this is to enable her to attain a teaching qualification and it would seem to be a necessary progression from the basic degree which she is presently studying. She has had a number of expenses at the moment in respect of her education. They are, firstly, her tuition fees of US$13,750 and an activity fee of US$210. She shares a flat with a friend and the expenses and utilities are in the order of US$5,640. She has expenses for food at $40 per week, a total of US$2,080. This is a total living and education expense of US$21,680.

13   However, she has been able to obtain grants and scholarships and her grant amounts to US$5,850 per year. Her income from her part-time work is some $4,200. There is thus a shortfall of US$11,630 for her various expenditures. She has, in the past, borrowed for fees and has loans of approximately $13,020 which will have to be paid when she completes her course. If she continues to borrow during the course of her education she would be likely to have a sum in the order of A$45,000 to pay at the end of her course.

14   Clearly the plaintiff works hard to support herself at college and she still needs the assistance of her mother and stepfather to make ends meet. Her mother and stepfather live in Horton Alabama in the USA. Their circumstances are modest. They both work in a drug store which the stepfather operates and between them they draw a total wage of about US$30,000 per annum.

15   Their assets are as follows; the plaintiff's mother has the house which she bought in the United States in Alabama which is worth about US$42,000. She has had a loan on that which will be paid out in September next year and that loan at the moment is about $6,000. She has an old car and some personal effects.

16   Her husband owns the home which they occupy in Horton Alabama worth about US$40,000 which has a loan of some US$4800. The drug shop is valued at approximately US$108,000 and there are two motor vehicles which the stepfather has.

17   The contact between the plaintiff and the deceased is, of course, an important matter. The plaintiff moved to the United States from Australia when she was four in circumstances as I have indicated before. There was, however, communication between the deceased and the plaintiff. He used to write to her on birthdays and at Christmas, apart from a few odd occasions when she had moved. At times she was sent a small gift such as earrings and occasionally amounts of $100 on these occasions.

18   Clearly the plaintiff responded to this communication from her father. She would send him photos and on at least one occasion when she was growing up, she thinks when she was seven, she spoke to him on the phone. The fact that she wished to see her father is evident in plans she made in 1996 when she planned to come to Australia. Apparently her father indicated that he would try and help her financially to come out but her mother agreed to pay her return airfare and the plan was to come at Christmas 1997. Although she wrote in 1997, the plaintiff did not hear from her father for six months. In October she found out from a friend that her father had died in March 1997. The circumstances of that must have been a shock to the plaintiff but in due course they did come for a holiday.

19   The contact clearly is one which was reciprocated by the plaintiff during the period prior to the death of the deceased. Whether the plaintiff has been left without adequate and proper means for education and maintenance in life is quite clear because she is at a crucial stage in her education. She has had a real need for assistance. She is doing everything she can to get herself through college. Her need over the next four years, putting aside the assistance she gets from her parents approximates $70,000. Even with this she will still have her present debts of US$13,020 which will have to be paid off.

20   It is, of course, necessary to consider the position of others who have a claim on the bounty of the deceased. These are Franchesca, Peta and the defendant.

21   Peta is seventeen and will finish school in the year 2000. She then wishes to go to the University of New South Wales.

22   Franchesca is aged twelve and is in year seven at the local Holy Cross school. She wishes to go to Kambala possibly as a boarder although that is not necessary. She lives with her mother near the school. Apart from the trust fund of $215,000, they have no assets.

23   The defendant's situation certainly is not secure. By way of assets she has the house at Bondi valued at $550,000 to $600,000. The house is adequate for her needs and the needs of her daughters and there is no suggestion that there should be any change in this housing arrangement. She also has the flat which is presently providing an income of $15,000. If it were sold it would realise $145,000. She has something in excess of $10,000 in shares. Her income situation is not good. Her wage amounts to $19,760. The interest on the other two trust accounts as $8,794 and the rental is $7,800 which is a total of $36,354. She also gets interest from the $35,000 investment which would probably amount to $1,750 per annum. After tax this leaves her with income of $460 per week. Her expenses, including the childrens' expenses, are $30,854.85 per annum. She is clearly not making ends meet. This is borne out by the fact that she has used $20,000 of funds over the last two and a half years and has done so by using the capital in the account in her name. Her real needs in the future relate to meeting her daughters' education.

24   So far as Peta is concerned there is $50,000 in a trust fund and this is clearly sufficient to unable her to complete her University education comfortably.

25   Franchesca wants to go to Kambala. The deceased and the defendant talked of this prior to the deceased's death and clearly it is a reasonable desire on their part. The fees for Kambala presently at the moment range up to $10,000 per annum by the year 12 and if she boarded there would be another $10,000 per annum. Obviously at Franchesca's present age the fees are somewhat less. The suggestion of boarding apparently came from Franchesca but there is no reason why it is necessary. In fact no serious reasons as to why she should board have been put forward. Clearly the $130,000 will be sufficient to enable Franchesca to complete schooling and also attend University if she wishes.

26   The defendant works part-time. It is approximately twenty-four hours a week that she averages and she works as a sales assistant. Her income potential in this regard is limited because she has no other experience or background training. She is fifty years of age and her present employer is going through difficulties in the business and is likely to close. However, it is obvious to me that the defendant is certainly a capable woman and I think, notwithstanding her age, she would be able to get employment as the business closes down. As her children get older she will be able to work more. She would also like to buy a carport for some $24,000 for a car which was recently damaged in a hail storm.

27   The case is really quite a difficult one. Widow's claims are frequently the subject of applications in this Court. Although the defendant does not have to justify the provisions in the will, consideration of a widow's claim is useful in order to set in context the proper considerations.

28 The Court of Appeal in Goloski V Goloski (unreported 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to a decision of Powell in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliot v Elliot, which was approved by the Court of Appeal on 24 April 1986. There his Honour said:

"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".

29   In the present case the length of the relationship between the deceased and the plaintiff has gone for some twelve years. There was a break in it for a period of four years while the parties separated. Apart from this, there is nothing in the evidence to suggest that the relationship was not happy. Although it is of a reasonable duration, it is not probably the type of length of relationship which was being referred to by his Honour in the quote to which I have just referred.

30   An important point, however, in the defendant's favour is that she has contributed substantially to the house. Originally the defendant had a property in Paddington which was in her name. She had purchased it for $31,000 and in order to make the deceased more comfortable and secure she had placed it in his name without receiving any payment. At that stage the mortgage was about $27,000 and she and the deceased continued to pay it off. When they got back together again they sold the property at Paddington and purchased the beach house property at Bondi for $148,000. The source of the financing for that were $85,000 from the proceeds of Paddington, $40,000 from the parties' joint savings and $23,000 as a gift from the defendant's father.

31   So far as the other assets are concerned, and these of course are the flat and the $215,000 in trust, there is little evidence as to how these were accumulated, presumably by the deceased and the defendant. An important aspect is that these funds were held in trust for Peta and Franchesca. This really allows the burden of their education and maintenance over the next few years to be accommodated. It will require capital to be used from time to time but it is sufficient. Importantly they were intended by the deceased and the defendant to be used for that purpose.

32   Here we are not dealing with a claim of a child which is based upon what is sometimes referred to in cases as a matter of paternity. The plaintiff was separated from the deceased at an early age but this was not her fault. There was communication throughout the child's life. It was a two way matter. Indeed Franchesca and Peta frequently wrote, no doubt encouraged by their father, the deceased. There were also the plans for the major trip to reunite the plaintiff with her father. These are not insignificant. Yet the deceased has not recognised the plaintiff in his will. This treatment of the plaintiff is in marked contrast with the way the deceased treated his own children during his relationship with the defendant in his life time when he put substantial sums away for their future education at his own expense.

33   I do not suggest there should have been equal treatment between the three girls. The sad fact is the plaintiff has been for the majority of her life part of another family unit. Her own mother has responsibility towards her. The difficulty is with the position of the defendant. Fortunately, she has the unit. Given the level of the legacy, I am considering she will have the option of mortgaging that unit or selling it to meet the legacy and costs.

34   It seems to me that the appropriate order, balancing all the considerations and evidence, most of which I have referred to, require that there be a legacy in favour of the plaintiff in the sum of $35,000.

35   Accordingly, I order that the plaintiff receive out of the estate of the deceased a legacy of $35,000.

36   So far as costs are concerned, there have been tendered some letters concerning the need for the plaintiff and her mother to come to Australia. I do not think it is appropriate that I should resolve that matter. It is really a matter for the costs assessor in due course.

37   Accordingly, I order the costs of the plaintiff on a party and party basis and the defendant on an indemnity basis be paid or retained out of the estate of the deceased.

Last Modified: 10/13/1999