Re Marcuola-Bel Estate; Marcuola-Bel v Thi Ly Tran

[2005] NSWSC 1182

CITATION:	Marcuola-Bel Estate: Ines Marcuola-Bel v. Thi Ly Tran [2005] NSWSC 1182
HEARING DATE(S):	16 and 17 November 2005
JUDGMENT DATE :	17 November 2005
JURISDICTION:	Equity Division Probate List
JUDGMENT OF:	Palmer J
DECISION:	Provision ordered.

CATCHWORDS:	FAMILY PROVISION ACT – Whether claimant in de facto relationship with deceased – whether claimant entitled to provision from deceased’s estate.
LEGISLATION CITED:	Family Provision Act 1982 (NSW) – s.7
CASES CITED:	D’Albora v D’Albora [1999] NSWSC 468 Ernst v Mowbray [2004] NSWSC 1140 Hardcastle v Perkuhn [1999] NSWSC 860 Luciano v Rosenblum (1985) 2 NSWLR 65
PARTIES:	Ines Marcuola-Bel – Plaintiff/First Cross Defendant Thi Ly Tran – Defendant/Cross Claimant Maria Mollame – Second Cross Defendant
FILE NUMBER(S):	SC 117205/02
COUNSEL:	In person – Plaintiff/First Cross Defendant J.R. Wilson SC – Defendant/Cross Claimant I.S. McLachlan – Second Cross Defendant
SOLICITORS:	In person – Plaintiff/First Cross Defendant Thomas Tarmo & Co – Defendant/Cross Claimant Warren & Warren – Second Cross Defendant

LOWER COURT JURISDICTION:

Ex tempore

Introduction

1 These proceedings were commenced by the Plaintiff who sought revocation of the grant of probate to the defendant of a will of Giovanni Marcuola-Bel dated 31 March 1998. The Plaintiff sought the grant to her of probate of a later will of the deceased dated 21 July 2002. The Plaintiff's claim succeeded and she was granted probate of the 2002 will. The Defendant has cross claimed for an order under s.7 of the Family Provision Act 1982 (NSW) and it is that claim which is now being determined.

2    For the sake of convenient reference and without intending any disrespect, I will refer to the family members by their first names. 3    The Defendant/Cross Claimant, (“Ly”) claims to have been the de facto wife of the deceased at the time of his death. The Plaintiff/First Cross Defendant (“Ines”) is one of the deceased's daughters and is the executrix of the deceased's 2002 will. The Second Cross Defendant (“Mrs Mollame”) is the former wife of the deceased. She was joined as a necessary party because Ly claimed that an asset of the deceased’s estate had been transferred to Mrs Mollame by Ines as executrix at an under-value, so that it should be declared notional estate. That claim has been compromised and I need say nothing further about it at this stage.


Family background

4    The deceased was born in Italy on 13 October 1927 and died on 22 August 2002 aged 74 years. He migrated to Australia in the 1950s and married Maria Mollame on 10 October 1958. There were four children of the marriage: Ida, Rita, Franca and Ines. The deceased and Maria Mollame were divorced in 1984. The deceased worked as a boilermaker for most of his life until he retired in about 1991. He then received the pension. 5    Ly was born in Vietnam in 1957. She and her family came to Australia as refugees in 1983. In 1984 she obtained work as a cleaner at Asquith High School. In that year she met the deceased. 6    The deceased purchased a house in Marlborough Street, Homebush West, in 1984. Ly says that she moved into the Homebush property in April 1988 and began cohabitating with the deceased as man and wife. She says that she continued to work as a cleaner in a number of schools and that she shared household and living expenses with the deceased during their cohabitation. She says that she continued to live with the deceased at the Homebush West property until April 2002, when the deceased sold the property and purchased a house in Tomah Street, Carlingford, with the assistance of a contribution of $40,000 from her. The Carlingford property was purchased in the sole name of the deceased. 7    Ly says that she and the deceased moved into the Carlingford house on 18 August 2002. Unfortunately, four days later the deceased died of a sudden heart attack. The last will of the deceased made on 21 July 2002 makes no provision at all for Ly.


Whether Ly an “eligible person”

8 Ly claims that she is an eligible person for the purpose of an application under s.7 of the Act because she was a person with whom the deceased was living in a domestic relationship at the time of his death. She says, in short, that she and the deceased lived together in a de facto marriage from 1988 until the deceased's death in August 2002. 9 Ines denies that the deceased and Ly were living in a domestic relationship. She says that the relationship between them was essentially that of landlord and boarder. She says that Ly may have been pressuring the deceased into marrying her and that the deceased did not want to marry Ly. 10 I have no hesitation in accepting the evidence of Ly that the relationship between her and the deceased from 1988 to 2002 was a de facto marriage, as she says, and that she is an eligible person for the purpose of s.7 of the Act. My reasons are as follows. 11 First, Ly gave her evidence in a straightforward and convincing manner. There was no inconsistency or implausibility in her evidence. Her evidence of a consistent and apparently loving relationship is corroborated by neighbours who are not related to her and give evidence of attending social occasions with the deceased and Ly as a couple. 12 Second, of critical and decisive importance are two documents signed by the deceased on 31 March 1998. Both were prepared by the deceased's solicitor, Mr Fisher, obviously on the deceased's instructions. The first is a will in which the deceased appoints as his sole executrix and sole beneficiary "my de facto wife Thi Ly Tran" . A second document is a general Power of Attorney in which the deceased appoints " my de facto wife Thi Ly Tran" . It is inconceivable that, in these documents prepared by a solicitor on the deceased's instructions, the deceased described Ly as his de facto wife without a proper understanding of the meaning of that term. It is inconceivable that the deceased would have left the whole of his estate and have appointed as his attorney a person with whom his relationship was merely that of landlord and boarder. 13    Third, of great importance is a will of the deceased dated 24 September 1992. Again, the document was prepared by the deceased's solicitor. In that will the deceased describes Ly as "my friend" , and appoints her as sole executrix and beneficiary. As has been suggested, it is quite possible that in 1992 the deceased did not wish to describe Ly as his de facto wife because he thought it might affect his pension entitlement. He may have had some entirely different reason. However, what is significant about the will is that it leaves the whole of the deceased's estate to Ly. One does not make that kind of testamentary disposition in favour of a mere boarder. 14    Fourth, a solicitor, Mr Tarmo, has given evidence that he acted on the purchase of the Carlingford property by the deceased. He says that the deceased and Ly came together to see him about the purchase of the property on at least five occasions. He said that the deceased expressed an intention that the title of the property be in both their names but had a reservation or anxiety about how his pension entitlement might be affected. 15    Fifth, there is no dispute that Ly provided $40,000 towards the purchase of the Carlingford property. This is inconsistent with the relationship being one of landlord and boarder. 16    The deceased and Ly lived apart for a short time in 2002 between the time when the Homebush West house was sold and the purchase of the Carlingford house was completed. I accept that this was a temporary arrangement arising purely from the convenience of travel arrangements. I accept Ly's evidence that she and the deceased resumed cohabitation at the Cumberland Hotel before moving together into the Carlingford house. 17    I bear in mind the evidence of Ines and her sister which is to the contrary of the conclusion that there was a de facto relationship between Ly and the deceased. However, that evidence is largely based upon hearsay, principally what the deceased told Ines and her sisters at various times. Hearsay evidence is, of course, far less reliable than the evidence of direct observation. Hearsay evidence is easily susceptible of being misunderstood or even misremembered with the passage of time. In short, evidence as a result of direct observation such as is adduced by Ly's corroborating witnesses and evidence in the form of contemporaneous documents such as the wills that I have referred to is far more reliable than evidence based upon hearsay. That is essentially the reason that I have accepted the evidence adduced by Ly. 18    There is no explanation as to why the deceased in his 2002 will made no provision at all for Ly. It may be that he felt guilty about his treatment of his daughters. Certainly, however, it was not because his de facto relationship with Ly had ceased.


The deceased’s estate

19    The assets of the deceased's estate as at the date of his death comprised the following: 53 Tomah Street, Carlingford, valued at $701,000, a motor vehicle valued at $10,000, cash in a Commonwealth Bank account of $2,402, and a credit to the deceased's National Bank cheque account of $1,000. The total value of the estate therefore was $714,402. 20    The Carlingford house was sold by Ines to Ms Mollame after notice had been given of the claim by Ly under the Family Provision Act . The purchase price of the house was $450,000 together with payment of certain expenses relating to the estate. The total consideration paid by Mrs Mollame was a little less than $600,000 whereas the value of the Carlingford property has been agreed at $700,000. Ly and Mrs Mollame have reached an agreement whereby the Carlingford property is designated as notional estate and an order is to be made that Ly be paid a legacy in the sum of $140,000 out of that notional estate, such legacy to be charged on the property. Ines has no objection to that agreement and to its implementation. 21    The estate now in contest in the remainder of the proceedings is represented by the sum of $450,000 paid by Mrs Mollame to Ines in part consideration of the purchase of the Carlingford property and the value of the deceased's motor car. 22    The purchase price of the Carlingford property was paid into Ines' bank account in October 2004. By withdrawals made in very close succession, mostly in substantial amounts of cash, Ines has reduced the amount in that bank account to a matter of a few thousand dollars. She says that she gave at least $150,000 of that money to her sisters. Most of the balance, some $250,000, was kept in cash in bags, first at Ines' house and then at her sister's house. 23    Ines says that on the evening of 7 November this year, that is, very shortly before this trial was due to commence, she took the cash from her sister's house to her business premises. She says that while she was in those premises she was robbed of the cash by two armed men. Accordingly, she says she does not have available such balance of the proceeds of sale of the Carlingford property as remained after the payment of cash to her sisters. 24    I need not enter into the question whether or not there was indeed a robbery of the balance of proceeds of sale of the Carlingford property, as Ines claims. What is clear from Ines' evidence is that after the proceeds of sale of the property were deposited in her bank account and with full knowledge of the claim which was being made by Ly under the Act, she regularly withdrew cash from the bank account so that the proceeds of sale of the Carlingford property would not fall into the hands of Ly should her claim for provision from the estate succeed. Whether the money has been lost in a robbery or whether Ines retains it does not matter for the purposes of Ines' liability to account for it. An executor with notice of an application under the Family Provision Act who disburses assets of the estate remains personally liable to a successful applicant for provision under the Act who suffers a loss as a result: see Ernst v Mowbray [2004] NSWSC 1140; D’Albora v D’Albora [1999] NSWSC 468 and Hardcastle v Perkuhn [1999] NSWSC 860. 25 Accordingly, in this case, if the available assets of the estate are now insufficient to meet any order which may be made in Ly's favour as a result of this application, Ines herself as the executrix who distributed the estate with notice of that claim, will be personally liable to provide the funds required to satisfy the order.


Whether Ly entitled to provision

26    Ly has filed affidavit evidence as to her financial position and condition in life. Neither Ines nor any other member of the family who may have a claim or might have had a claim under the Act against the estate have filed any evidence as to their own financial position. Indeed, Ines has not filed any affidavit setting out in a convenient summary form what the present position of the estate is. Accordingly, the Court is not called upon to decide a contest between persons claiming the need for testamentary provision from the estate according to their own circumstances: the Court has only the evidence of Ly as to her financial circumstance and Ly's assets. 27    Ly is now aged 48 years. She lives in her own home unit, which was intended to be an investment property. She still works as a cleaner and she has apparently secure employment. She has modest savings and a motor vehicle. The home unit in which Ly lives is in Lidcombe and it is valued at about $182,000. She says that the unit is badly in need of repairs. A quote for those repairs has been provided in the sum of $12,650. 28    She has an account with the CBA which is in credit in the order of about $6,000. Her motor car is worth about $4,000, and she has furnishings and personal effects of insignificant value. She has a liability for legal costs in relation to the contested application for probate, totalling $140,000. Also, of course, she will be liable to her own legal representatives for the costs of these proceedings. 29    Ly says that since the death of the deceased her health has deteriorated. She has a bad back and knees and she is allergic to some substances. She does not know how long she can continue in her job as a cleaner. A report from a consultant psychiatrist describes Ly as presenting a history of major depressive disorder with melancholic and marked anxiety features. She has had to take medication for her mental condition. 30    None of this evidence has been challenged by Ines. 31    In the often cited decision of Luciano v Rosenblum (1985) 2 NSWLR 65, the Court observed that, as a general rule and in the absence of special circumstances, the duty of a testator is to give his widow provision from the estate such as to secure her in her home, to ensure that she has an income sufficient to permit her to live in a style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies. That principle is equally applicable to the position of a person who occupies the position of a de facto wife. 32 In my opinion, Ly has established a need for provision from the deceased’s estate. The deceased has failed to make any provision for Ly, as was his obligation in law. Accordingly, Ly is entitled to an order under s.7 of the Act. The question is, what is adequate provision. 33 I bear in mind that the de facto relationship between Ly and the deceased was of some fourteen years’ duration. I bear in mind that Ly contributed to living expenses as well as to the purchase of the Carlingford property. It seems to me that there is nothing to indicate other than that the deceased ought to have made provision for Ly to the extent that any husband should make provision for his wife after a long and supportive relationship of mutual dependency. 34 It is significant, I think, that in his 1998 will, as well as in his 1992 will, the deceased himself considered it appropriate to dispose of the whole of his estate in favour of Ly. As I say, one just does not know the reason that he made the disposition which he did in the 2002 will but it seems to me that, bearing in mind the financial circumstances of Ly and the state of her health, as well as her age, the proper provision which the deceased ought to have made in his 2002 will was to exactly the same effect as he had made in his 1998 will and in his 1992 will. In other words, proper provision for Ly out of the estate of the deceased means that Ly is entitled to the whole of the estate. As I say, I make this decision bearing in mind that there are no other claims under the Act and I have no evidence at all as to the circumstances of Ines and the other children of the deceased. 35 Bearing in mind the disposition of the deceased's estate by Ines in the way that I have described, Mr Wilson seeks a direction that Ines file an affidavit disclosing her assets and liabilities. The affidavit is sought for the purpose of tracing assets of the estate in order to implement the orders which I am about to make. That a direction to file such an affidavit is within the power of the Court is, I think, clear from the provisions of s.15(1)(a)(11). Under that provision the Court is empowered to make an order for the "doing of such other things as the Court thinks necessary in relation to the performance of an order" . 36    It seems to me that as Ines has, in effect, dissipated the estate with knowledge of Ly's claim, a tracing exercise to enable the estate to be restored, if it can be, is required. It seems to me that the affidavit sought from Ines is a necessary step in the tracing exercise. Accordingly, I propose to give such a direction.


Re Application to Defer Entry of Judgment

37    Earlier today I delivered judgment in these proceedings. I decided that the deceased had failed to make adequate provision for the Defendant/Cross Claimant out of his estate and that proper provision, in effect, was represented by the whole of the deceased's estate. There were, at the time that I gave judgment, no competing claims under the Act put before the Court. 38    I stood the matter down for a short time to enable Short Minutes of Order to be prepared by Mr Wilson SC, who appears for the Defendant/Cross Claimant. 39    When the matter came back this afternoon for the making of orders, Ms Ines Marcuola-Bel gave to me a statement by each of her sisters, Ida and Franca, in which they set out, respectively, their financial positions and conditions of life. Mr Wilson did not object to my receiving those statements. A reading of those statements demonstrated that there was a possibility that Ida and Franca had claims under the Family Provision Act against the estate of their father. However, the making of those claims now would be considerably outside the time limit imposed by the Act. An extension of time for the commencement of the proceedings would have to be obtained. 40    It seems to me that the members of the deceased's family who may have legitimate claims against the estate have been prejudiced by the fact that they have not had legal representation. The reasons for that decision are not clear and it would not be proper for me to enter into a consideration of them at this stage. It is sufficient for me to say that the material placed before me now on behalf of Franca and Ida demonstrates they possibly have a claim, or would have had a claim, against the estate if it had been made in time. Because of the prejudice which they suffer by reason of lack of legal representation, I consider it just, in the circumstances, to enable them to obtain legal advice if they so choose within a limited time from today. 41    I realise that the prolongation of these proceedings causes a great deal of continuing stress and anxiety to everyone who is involved in them. However, the interests of justice also require that those who have valid claims against the estate be given an opportunity to prosecute them, if they are diligent in doing so. 42    In those circumstances I propose to pronounce the orders which are set out in the Short Minutes prepared by Mr Wilson but, in order to give Ida and Franca an opportunity of making an application for extension of time under the Act, I will stay those orders for a certain specified time. If no application is made to the Court within that time, then the orders which I pronounce today will automatically take effect. 43    I make an order in terms of paragraph 1 of the Short Minutes of Order, dated today, initialled by me and placed with the papers. 44    I note paragraph 2 of the Short Minutes of Order. 45    I make no order as to costs in accordance with paragraph 3. 46    I give a direction in accordance with paragraph 4 of the Short Minutes. 47    By consent between the Defendant/Cross Claimant and the Second Cross Defendant, I make orders in terms of paragraph 5 of the Short Minutes of Order and I grant liberty in accordance with paragraph 6 of the Short Minutes. 48    The order in paragraph 1 will be stayed and will not have effect until midnight on 12 December, 2005. 49    If an application is brought by any of the children of the deceased within that time for an extension of time to commence proceedings under the Family Provision Act , then the stay that I have ordered will continue until such time as that application is determined. 50    The stay may either be continued or terminated as the Court orders, having regard to the fate of any application for extension of time which may be brought. 51    If no application for an extension of time is brought within the stay period which I have ordered, the order which I have made today will take effect immediately.

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