Rutkiewitz v Ross Re Estate Isaac Rutkiewtz

[1999] NSWSC 184

NEW SOUTH WALES SUPREME COURT

CITATION:        Rutkiewitz v Ross Re Estate Isaac Rutkiewtz [1999]  NSWSC 184

CURRENT JURISDICTION:         Equity

FILE NUMBER(S):          3715 of 1982

HEARING DATE{S):      5 March 1999

JUDGMENT DATE:        05/03/1999
 PARTIES:

Zelda Rutkiewitz (Plaintiff)
Joseph David Ross (Defendant)

JUDGMENT OF:              Windeyer J     

LOWER COURT JURISDICTION:              Not Applicable

LOWER COURT FILE NUMBER(S):         Not Applicable

LOWER COURT JUDICIAL OFFICER:      Not Applicable

COUNSEL:
Mr. M.S. Willmott (Plaintiff)
Mr. M.A. Ashhurst (Defendant)

SOLICITORS:
Lang Gellert & Noonan (Plaintiff)
Landerer & Company (Defendant)

CATCHWORDS:
WILLS - TESTATORS FAMILY MAINTENANCE - plaintiff seeks order pursuant to s6(4) of the Testators and Family Maintenance and Guardianship of Infants Act 1916 to vary court orders as to her maintenance - power of the court to make an order for an increase in benefits - held no power

ACTS CITED:

DECISION:

JUDGMENT:

- 5 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 5 MARCH 1999

3715/82 ZELDA RUTKIEWITZ v JOSEPH DAVID ROSS- ESTATE OF ISAAC RUTKIEWITZ

JUDGMENT

1 HIS HONOUR: In this matter the plaintiff, by notice of motion filed on 5 February 1999 seeks an order pursuant to s6(4) of the Testators and Family Maintenance and Guardianship of Infants Act 1916, varying the provisions of an order made by Justice Cohen on 12 September 1985 pursuant to which provision was made for the maintenance and advancement of the plaintiff out of the estate of her late husband Isaac Rutkiewitz . Under that will, in the events which have happened, the only benefit which the plaintiff received was an annuity of $3,120 per annum, indexed in accordance with the consumers price index.

2             By the orders, provision was made by substituting for that benefit which the plaintiff received under the will, namely an annuity, a life interest in the property, 402 Ithaca Road, Elizabeth Bay, a legacy of $20,000 and a life estate in residue. The remainder interests were held upon the trusts of the will for the grandchildren, or in one case a child of the testator.

3             The order provided that the trustee was required, at the request of the plaintiff's widow, to sell the Ithaca Road property:

and purchase such house. home unit or dwelling or right of accommodation in a retirement or convalescent home unit as the plaintiff should choose, to be held upon the same trust and to be sold at the further request of the plaintiff on the same terms.

4             It was further provided that any part of the proceeds of sale not so applied would be held upon trust for the plaintiff for life, and of course thereafter would go in accordance with the will.

5             The provision of the will was contained in Order 4 which provided as follows:

In the event of the acquisition of any unit for accommodation in a retirement or convalescent home or village requiring the payment of capital which is not repayable, the trustee is empowered and required at the request of the plaintiff to extend for that purpose up to one third of the proceeds of sale.  Including that part of the proceeds which is invested.

6             The evidence shows that the Ithaca road property was sold, and another home unit property purchased in Diamond Bay Road Vaucluse. That property has now been sold for, I was told without objection, a sum of $235,000, giving as I understand it, a net figure of about $220,000. The plaintiff is 82 years of age, and she is not in particularly good health.  She has been admitted to the Sir Moses Montefiore Jewish Home at Woollahra as a permanent resident in hostel accommodation. She wishes to remain in the Eastern Suburbs, remaining close to a Jewish community with which she is familiar.

7             The income available to her from a part pension and from her life estate is not sufficient to enable her to pay the costs of accommodation in the home.  On the evidence which is somewhat difficult to understand there is a short fall of about $24,000 a year. The trustee has provided to the Home by way of interest free loans an amount of $75,500 dollars or a little more, being one third of the net proceeds of sale. This would be in accordance with the obligation of the trustee to do so at the request of the plaintiff, pursuant to Order 4, which I have set out.

8             In addition to that the trustee would have been obliged to pay one third of any difference received between the sale moneys from the sale of Ithaca Road and the purchase moneys paid on the purchase of the Vaucluse unit, but that does not really arise.

9             The order which is sought by the plaintiff is a variation of the wording of Order 4, (1) so that there would be a requirement to expend up to one third of the proceeds of sale, not only towards the acquisition of accommodation, but towards the payment of any annual or other fees or outgoings in respect of that accommodation, and (2) if that is not sufficient to pay the annual fees or outgoings when taken together with the income received by the plaintiff, then to pay any excess amount out of the corpus of the estate.

10           The effect of what is sought would be that so far as there were any moneys in the estate, the trustee would be required to use them for the purposes of maintaining the plaintiff in the particular home where she wishes to live. In saying that I am not suggesting that her wish to live in the home where she is presently accommodated is in any way an improper wish.

11           The other order sought by the plaintiff is a declaration that upon the true construction of Order 2 of the original orders the words:

And from the proceeds purchase such other house home unit or other dwelling or unit or right of accommodation in a retirement or convalescent home or village.

means not only to pay the capital sum required for that acquisition at the time, but also any continuing annual fees or out-goings in respect of that acquisition or right of accommodation.

12           As far as the first matter is concerned, namely the claim under s 6(4) of the Testators Family Maintenance Act, it is my view that there is no power to make that order. This is clearly established by the case of re Denis Molloy (1928) 28 SR (NSW) 546. The only cases put forward by the plaintiff's counsel in support of his contention are the cases of re William Butler deceased (1923), 23 SR(NSW) 540, and re Dekantzow (1968), 88 SR NSW 437.. Neither of those cases involved an order for an increase in benefits, but rather involved applications by the trustee for the variation. The first case was discussed by Harvey CJ in Equity in re Molloy but he considered the wording of s 6(4) of the Act was such that it did not allow applications by the original applicant for any increase in benefits.  As was explained in Molloy, the last sentence of the relevant subsection supports this result in that notice of motion for a variation is required to be served on all persons taking under the order sought be rescinded or altered. In other words the persons who obtained a benefit under the original order were obviously thought to be those persons whose rights would be affected on such an application. Re Molloy has stood the test of time for many years and there is no basis on which this court should disturb it. The same result has been arrived at under the Victorian legislation in the case of Re Bishop deceased [1952] VLR 543.

13           That disposes of the first order sought apart from the argument of Mr Willmot, for the plaintiff, that it was not really an increase in benefit which was being sought but rather what was originally intended. To some extent that goes to the construction of the order, but insofar as it goes outside that in my view there is no basis for that submission. 

14           As far as the declaration is concerned, while I was taken to the judgment it seems to me that is irrelevant as the order itself is quite clear.  In saying that I should explain that  the formal order which no doubt was taken out, is not before the court and the parties are content that the judge's notes which are in evidence be taken to be the orders.  Order 2 quite clearly relates to the purchase of a home unit or right of accommodation.  Order 4 quite clearly relates to a payment being required for the acquisition of such right of accommodation. On no basis can it thought that the proper construction of those orders meant that the capital sum which the trustee was entitled and obliged to pay for such acquisition was also to be made available for the expenses involved in living in the accommodation acquired. That disposes of both of the claims.

15           I should conclude by saying that these matters are always difficult because one cannot help feeling some sympathy towards the widow.  However, the fact is that the relief which she seeks is not available to her. In those circumstance the notice of motion should be dismissed.

16           On the question of costs, counsel for the defendant says that there was really never any basis for the application and that it was bound to fail.  While I consider that is really correct, I am not prepared to think that the solicitor or counsel for the plaintiff just proceeded with a hopeless case knowing it was hopeless. 

17           I do not think that the plaintiff should have any order for costs out of the estate but I do not think that she should be ordered to pay the costs of the defendant.  What the defendant seeks though is an order that those costs be paid out of the income of the estate rather than the corpus of the estate which would have the effect of the widow bearing them rather than being shared between the life tenant and the remaindermen on the basis that the income would be slightly decreased.  I have wavered on this but consider the responsibility should be shared.

18           No order as to costs for the plaintiff.  I order that the costs of the defendant on an indemnity basis be paid out of the estate of the deceased.

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LAST UPDATED:            23/03/1999