Spagnol v Briffa

[2005] NSWSC 118

CITATION:	Spagnol v Briffa [2005] NSWSC 118
HEARING DATE(S):	16 November 2004
JUDGMENT DATE :	1 March 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Master McLaughlin at 1
DECISION:	(1). I order that the Plaintiff receive from the estate of the late George Spagnol ("the Deceased") a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 1 April 2005, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898. (2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased. (3). The exhibits may be returned. (4). I order that liberty to apply be reserved.

CATCHWORDS:	Succession. Family Provision. Claim by adult daughter. Financial and material circumstances of Plaintiff. Competing claim of Defendant (who is principal beneficiary). Whether Plaintiff has been left without adequate provision for her proper maintenance. Distribution of assets by Defendant as executor to herself as beneficiary. Whether assets held by Defendant should be designated notional estate of Deceased.
LEGISLATION CITED:	Family Provision Act 1982 Wills, Probate and Administration Act 1898
CASES CITED:	Barns v Barns (2003) 214 CLR 169 Easterbrook v Young (1977) 136 CLR 308 Singer v Berghouse (1994) 181 CLR 201
PARTIES:	Georgina Spagnol (Plaintiff) Tania Briffa (Defendant)
FILE NUMBER(S):	SC 4089/03
COUNSEL:	Mr. P. Bolster (Plaintiff) Mr. S. Stewart (Defendant)
SOLICITORS:	Marando (Plaintiff) Tony Vella Solicitors (Defendant)

LOWER COURT JURISDICTION:

- 13 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Tuesday, 1 March 2005

4089/03 GEORGINA SPAGNOL –v- TANIA BRIFFA

JUDGMENT

1 MASTER: These are proceedings under the Family Provision Act 1982.

2 By summons filed on 1 August 2003 Georgina Spagnol claims an order for provision for her maintenance out of the estate of her late father George Briffa (to whom I shall refer as “the Deceased”).

3 Subsequently, at the commencement of the hearing on 16 November 2004 the Plaintiff filed an amended summons, by which, in addition, she sought an order designating certain items of property as notional estate of the Deceased.

4 The Deceased died on 15 December 2002, aged 72 years. He left a will dated 5 May 2002, probate whereof was on 22 April 2003 granted to Tania Briffa, the executor named in such will (who is the Defendant to the present proceedings).

5 The inventory of property discloses that the only assets of the Deceased at the time of his death were moneys held in two accounts with the St. George Bank, totalling $292,587. By his will the Deceased gave a legacy of $10,000 and a motor vehicle to his brother Mario Briffa, and gave the residue of his estate to the Defendant.

6 The Plaintiff is the only child of the marriage of the Deceased to her mother, Mrs Cettina Briffa. That marriage terminated in divorce when the Plaintiff was aged about twelve (but said by her to be in about 1963). So far as the Plaintiff is aware the Deceased did not again marry.

7 The Plaintiff was born on 10 December 1952 and is presently aged 52 years. From the departure of the Deceased from the family home (said by the Plaintiff to have been in 1965) the Plaintiff resided with and was supported by her mother until her marriage in 1971. From that time the Plaintiff and her husband, and, subsequently, their children, continued to reside with the Plaintiff’s mother.

8 From the time of her father’s departure from the family home the Plaintiff had no contact with the Deceased. She did, however, have some contact with the Deceased’s brother, Mario Briffa.

9 The Plaintiff was in employment for about four or five years between leaving school and marrying. Of her marriage the Plaintiff has five children, now aged between 33 and 17. All of those children are unmarried and four of them still remain with the Plaintiff at her residence at Bossley Park. The Plaintiff’s marriage broke down and she and her husband separated in 2000. After the separation the Plaintiff’s mother, who had resided with the Plaintiff and her husband until 1997, returned to live with the Plaintiff and her children.

10 The Plaintiff’s eldest two sons, Wayne and Jason, established an embroidery business called Hallmark Sportswear & Embroidery in 1990. That business is conducted by a company, Unipro Pty. Limited, of which the Plaintiff and her husband, Leslie Spagnol, were the original shareholders and directors. At the time when that business was established Wayne was aged no more than nineteen and Jason no more than seventeen. The Plaintiff and her husband provided various properties as security for bank loans obtained by the company.

11 Although a director and a shareholder (now the sole shareholder), it was the Plaintiff’s evidence that she has not had any practical control over the conduct or affairs of the company or the business. From time to time the Plaintiff has been involved in basic tasks in the business, such as packing, collecting, deliveries, banking, and the like. The Plaintiff has no business or secretarial qualifications. She cannot type or use a computer. Until her separation from her husband the Plaintiff was totally dependent upon him. After the separation the Plaintiff began to draw a salary from the company in an amount of $400 a week.

12 On about 30 November 2000 the Family Court of Australia, made orders, by consent, in respect to property owned by the Plaintiff and her husband, and in respect to the custody and welfare of their youngest child Dean, who was aged only about thirteen at that time.

13 As a result of the foregoing orders in the Family Court, and the sale of the house property situate at and known as 376 The Entrance Road, Long Jetty, the Plaintiff received a net amount of about $170,000. She thereupon purchased her present residence, situate at and known as 11 Borneo Court, Bossley Park, for $260,000. The shortfall in the purchase price was borrowed by the Plaintiff from the National Australia Bank, that housing loan being secured by mortgage, in respect whereof the Plaintiff makes payments of about $319 a month. There is presently $13,551 outstanding under that housing loan.

14 In consequence of the foregoing orders of the Family Court, the Plaintiff’s husband resigned as a director of Unipro, and his share in that company was transferred to the Plaintiff. In addition, the Plaintiff retained her own motor car (which she estimates was then worth about $7,000).

15 At the present time the Plaintiff has no savings or other assets of any significance.

16 There was no evidence before the Court of the present value of the Plaintiff’s Bossley Park residence, or of the present value of the Plaintiff’s shareholding in Unipro Pty. Limited or of the present value of the business conducted by the company or of its assets, especially the real property at Wetherill Park where the business is conducted. The most recent valuations relating to the company, its business and other assets were for the year ended 30 June 2002.

17 From 1978 until late 1999 the Deceased was in a long term relationship with Kelina Camenzuli. At the time when they met Mrs Camenzuli was divorced and was supporting her family of seven children in her residence at 14 Woodland Avenue, St. Mary’s. The Deceased at that time was residing in rented accommodation at Paddington and was working on the wharves in Sydney. It was his practice to spend weekends with Mrs Camenzuli at St. Mary’s. The Deceased retired from employment in the early 1990s when he was aged about 60. He then went on a protracted visit to Malta for three years. Upon his return to Australia he moved into residence with Mrs Camenzuli.

18 Apparently the Deceased was diagnosed as suffering from asbestosis. As a result of a disagreement concerning his claim for compensation, Mrs Camenzuli requested the Deceased to leave her residence, which he did in October – early November 1999. She did not have any contact with him thereafter.

19 According to Mrs Camenzuli, the Deceased on a number of occasions expressed uncertainty as to whether the Defendant was his daughter. Until shortly after she attained the age of eighteen in 1995 the Defendant used the surname Bugeja (which is the surname of her mother, Rita Bugeja). However, it would appear that, at the request of the Deceased, the Defendant then changed her surname to Briffa.

20 When the Deceased retired from his employment on the wharves he received a lump sum of almost $240,000. During his residence at Malta he purchased a property, which he subsequently sold when his medical condition was diagnosed. According to Mrs Camenzuli it had until then been the intention of Deceased to return to Malta and remain there permanently. However, because of his lung condition he was not able to travel by air, and that plan had to be abandoned.

21 Arrangements for the sale of the residential property in Malta were effected by the Deceased through his niece, Josette Cutajar, to whom he gave for that purpose a power of attorney. Upon the sale of that property in February 2002, Mrs Cutajar transmitted to the Deceased only 9,000 pounds (Maltese), and has retained the balance of 30,000 pounds (Maltese), the value of which in Australian currency is about $120,000. The Defendant has instructed her Australian solicitors to retain a solicitor in Malta to commence recovery proceedings against Mrs Cutajar for the outstanding balance.

22 If the foregoing amount owed to the Deceased by Mrs Cutajar is recovered, the net value of the estate (after payment of the legacy of $10,000 to Mario Briffa and the transfer of the Deceased’s motor vehicle to Mr. Briffa, and disregarding furniture and personalty, to which a value of $2,000 is ascribed) will be $424,587. If, however, the foregoing amount cannot be recovered in Malta, then the net value of the estate will be about $294,587. The Defendant has paid the legacy and transferred the motor vehicle to her uncle and has distributed the balance of the estate to herself.

23 It will be appreciated, however, that in calculating the value of the estate which may be the subject of any order for provision in favour of the Plaintiff, the costs of the present proceedings must be taken into account. It is estimated that the costs of the Plaintiff will total $56,000, whilst those of the Defendant will total $25,000. That is, the totality of the costs will be in the order of $81,000. (I would observe, in passing, that costs of $56,000, (including a component of at least $43,229 for solicitor’s costs and expenses) for a one day hearing in proceedings which are in no way out of the ordinary appear to me to be excessive.)

24 It is appropriate, therefore, that the Court should proceed upon the basis that the net value of the distributable estate will be no less than $213,500, and, if the recovery proceedings in Malta are successful, may be in the order of $333,500 (although, even if successful, those recovery proceedings will doubtless involve costs to the estate which may not be retrieved from Mrs. Cutajar). It would appear prudent that I should proceed upon the basis that the net amount available for distribution will be about $213,500.

25 It will be appreciated that that amount has already been distributed to the Defendant, and that a substantial part thereof has subsequently been expended by her on the purchase of various pieces of real property (to the details whereof I shall shortly make reference).

26 The Defendant was born on 8 September 1977 and is presently 27 years of age. She resides in Melbourne. Until shortly before the hearing she had been employed by a shoe retailer for a period of about four years. She was expecting to commence employment with a business involving retail sales at a salary of $40,000 a year.

27 Whilst she was growing up the Defendant had contact with the Deceased, although she resided in Melbourne and the Deceased resided in Sydney. She regarded the Deceased as her father, and he treated her and addressed her as such. In his will he referred to the Defendant as “my daughter Tania Briffa”. Despite the statements attributed by Mrs Camenzuli to the Deceased, in which he is said to have queried his paternity of the Defendant, there is no evidence before the Court to support any uncertainty as to the Defendant being the daughter of the Deceased. (The matter could, of course, have been placed beyond question by evidence from the Defendant’s mother.)

28 Throughout her lifetime the Defendant received various monetary gifts and cash advances from the Deceased, totalling $82,259. They included a gift of $18,000 in cash in November 2001, which the Defendant applied towards repayment of the mortgage on a residential property at 8 Sandstone Walk, Delahey in Victoria (which is the present residence of the Defendant). That property had been acquired by the Defendant and her former partner, Matthew Malvaso in December 1999. When their relationship broke down in about April 2000 Mr Malvaso transferred his interest in the property to the Defendant, who thereupon assumed responsibility for the mortgage.

29 In 2001 the Deceased made a payment of $9,100 towards the Defendant’s home loan over the Delahey property, and made subsequent payments to her of $20,565 (from the proceeds of sale of his property in Malta) on 6 March 2002, of $8,000 on 15 April 2002, and of $7,844 on 12 June 2002. In September 2002, shortly before the Defendant’s twenty-fifth birthday, the Deceased gave her a further amount of $17,100, which enabled the discharge of the home loan on the Delahey property to be effected.

30 After the death of the Deceased and the transfer to her of his estate the Defendant in September 2003 purchased an investment property at 8/10 Darcy Lane, Flemington in Victoria for $350,000. She provided a deposit of $80,000, the balance being advanced by the Bank of Melbourne, secured by a mortgage, of which an amount of $230,000 remains outstanding.

31 In May 2003 the Defendant purchased a property at Hindmarsh Way, Taylors Hill in Victoria for $130,000. That purchase was effected conjointly with the Defendant’s present partner Darren Hall. That purchase was funded by an amount of $70,000 from the estate of the Deceased, the balance being provided by a loan from the Bank of Melbourne, secured by a mortgage. It would appear that the total amount presently outstanding under that mortgage is $76,000. The Defendant and Mr Hall are currently in the process of selling that land, for which they expect to receive between $135,000 and $140,000. The Defendant will be entitled to one-half of the net proceeds of that sale.

32 The present assets of the Defendant consist of:

8 Sandstone Walk, Delahey, having a present estimated value of $180,000;
8/10 Darcy Lane, Flemington, having a present estimated value of $350,000 and being subject to a mortgage in an amount of $230,000

A one half interest in land at Taylors Hill, having a present estimated value of $134,000 and being subject to a mortgage in an amount of $76,000

Honda Civic motor vehicle, having an estimated value of $5,500

Moneys in bank account - $5,000

Personal effects - $12,000

33 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff.

34 I have had the benefit of receiving chronologies from Counsel for the respective parties, together with what is described as a List of Issues from Counsel for the Defendant.

35 The Plaintiff as a daughter of the Deceased is an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. As such she has the standing to bring the present proceedings.

36 It will be appreciated that the Defendant also is an eligible person within the same paragraph of the foregoing definition. In addition, Mrs Cettina Briffa, the mother of the Plaintiff and the former wife of the Deceased, is also an eligible person, within paragraph (c) of that definition. There is a suggestion that Mrs. Kalina Camenzuli may also be an eligible person. She stated that she was not in a de facto relationship with the Deceased, and thus she cannot be an eligible person within paragraph (a) of the definition. She resided with the Deceased from 1978 until late 1999 (although throughout that period they were residing together only at weekends). However, Mrs Camenzuli said that she was never dependent upon the Deceased. Thus she does not come within paragraph (d) of the foregoing definition. She is not in my conclusion an eligible person. In any event, Mrs Camenzuli does not make any claim upon the estate of the Deceased.

37 The evidence discloses that from the time when the Deceased left the family home, when the Plaintiff was aged about twelve, the Plaintiff had no contact with her father, and made no effort to effect any such contact. The Plaintiff offered an explanation in this regard, being that shortly before his departure from the family home the Deceased had attempted to sexually interfere with the Plaintiff, and that in consequence of the Plaintiff informing her mother of this attempt (which appears not to have succeeded) the Deceased left the family home. The Plaintiff was not cross-examined about the foregoing explanation offered by her, which, if true, would justify her deliberate lack of contact with her father for the rest of his life. It should also be observed that the Deceased himself made no attempt thereafter to have any contact with the Plaintiff, and indeed, he made it clear to the Defendant that he did not want to have any form of contact or relationship with the Plaintiff.

38 It was submitted on behalf of the Plaintiff that, although she is a director and the sole shareholder in Unipro Pty. Limited, her status as such is essentially a formality, being for the benefit of her children, who actually conduct the business. The Plaintiff receives a salary of only $400 a week. It was submitted that in reality she is dependent upon the bounty of her children. I am in agreement with the foregoing submissions. The reality of the situation is that the business is controlled by the Plaintiff’s children, especially by her eldest son Wayne, and that the Plaintiff has no participation in the decision making or in the conduct of the business. Indeed, she is a lady of limited education and business experience, and would not be qualified to make such decisions.

39 If for any reason the Plaintiff were no longer to receive her modest salary from the business, then she would not be able to support herself in the workforce.

40 I am satisfied that in performing the first stage in the two-stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208, the Plaintiff has been left without adequate provision for her proper maintenance.

41 It is submitted on behalf of the Plaintiff that she should receive from the estate of the Deceased an amount sufficient to discharge the mortgage upon her residence, which is in an amount of $13,551, and to effect certain repairs upon the house, as well as to provide a fund to meet unforseen contingencies.

42 It is submitted on behalf of the Plaintiff that she should receive out of the estate of the Deceased a total amount of $100,000. That amount seems to me to be excessive for the foregoing purposes. In my conclusion an appropriate amount is $60,000.

43 It will be appreciated, however, that the claim of the Plaintiff must be approached in the light of the competing claim of the Defendant, who is the chosen object of the testamentary beneficence of the Deceased. The Defendant does not have to prove anything. The financial and material circumstances of the Defendant may have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise have established. But the circumstances of the Defendant cannot have the effect of enhancing the claim of the Plaintiff.

44 The Defendant is a young woman, secure in her employment, who owns three separate pieces of real property, one of which, being her residence, is unencumbered. No details have been placed before the Court concerning the nature of that residence. I am satisfied that the financial and material circumstances of the Defendant are such as would not have the effect of reducing, let alone extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise have established. As I have already observed, I consider it appropriate that the Plaintiff should receive from the estate of the Deceased a legacy in the sum of $60,000.

45 Since the value of the net distributable estate (calculated even upon the prudent basis that the balance of the proceeds of sale of the property in Malta will not be recovered) is more than adequate to meet the payment of that amount, it is not necessary for the Plaintiff to invoke the provisions of Part II, Division 2 of the Family Provision Act and seek to have any of the monetary advances and gifts made by the Deceased to the Defendant in the year preceding his death identified as prescribed transactions by the Deceased.

46 It will, nevertheless, be appreciated that the Defendant has distributed to herself the assets of the estate and has then expended most of those assets upon the purchase of the Taylor Hill property and the Flemington property (the latter purchase being effected after the institution of the present proceedings and both purchases being effected within the limitation period of eighteen months after the death of the Deceased). It will be for the Defendant to decide from what source the legacy to the Plaintiff will be paid. In the event of any problem concerning the manner of payment of the legacy or in the event that it may become necessary for the Court to designate assets held by the Defendant as notional estate of the Deceased, pursuant to section 24 of the Family Provision Act, or to designate assets which should bear the burden of the legacy, it is appropriate that liberty to apply should be reserved. (Since any relevant distribution of assets was a notional distribution by the Defendant as executor to herself as beneficiary, and since the present order takes effect as if it had been made in a codicil to the will of the Deceased (section 14(1)), it may well be that it is not necessary for the Court to invoke the provisions of section 24. See Easterbrook v Young (1977) 136 CLR 308 at 316-317; Barns v Barns (2003) 214 CLR 169 at 190-191.)

47 I make the following orders:

(1). I order that the Plaintiff receive from the estate of the late George Spagnol (“the Deceased”) a legacy in the sum of $60,000, such legacy not to bear interest if paid on or before 1 April 2005, and if not so paid to bear interest at the rates prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898.

(2). I order that the costs of the Plaintiff on the party and party basis and the costs of the Defendant on the indemnity basis be paid out of the estate of the Deceased.

(3). The exhibits may be returned.

(4). I order that liberty to apply be reserved.