Stevens and Anor. v Reiner

[2004] NSWCA 246

CITATION:	Stevens & Anor. v Reiner [2004] NSWCA 246
HEARING DATE(S):	14 July 2004
JUDGMENT DATE:	14 July 2004
JUDGMENT OF:	Sheller JA at 41, 43; Hodgson JA at 1; Ipp JA at 42
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	SUCCESSION - Family provision and maintenance - Widower's application - Failure to make finding as to assets of estate - Whether decision vitiated.
PARTIES :	Yolanda Stevens and Elizabeth Green - appellants Anton Reiner - respondent
FILE NUMBER(S):	CA 40228/04
COUNSEL:	Mr. D.E. Baran for appellants Mr. C.M. Harris for respondent
SOLICITORS:	Dorrough Smart, Surry Hills for appellants Tress Cox, Sydney for respondent

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 5427/02
LOWER COURT JUDICIAL OFFICER :	Master Macready

CA 40228/04
SC 5427/02

SHELLER JA
HODGSON JA
IPP JA

Wednesday 14 July 2004

STEVENS & ANOR. V. REINER

Judgment

1 HODGSON JA: The late Maria Reiner died on 4 April 2002 aged 76. She was survived by the respondent, her widower, and by the appellants, two daughters from her first marriage. By her last will dated 4 May 1983, the deceased appointed the appellants her executors, gave a legacy of $30,000 to the respondent, gave the second appellant, Ms Green, a legacy of $25,000 and a house at Dover Heights, and gave the residue of her estate equally between the two appellants.

2 According to the inventory of assets and liabilities provided with the probate application, the estate of the deceased comprised a Dover Heights house, given in that inventory an estimated value of $1.25 million; six residential units at Randwick, given in the inventory an estimated value of $1.23 million; and NRMA shares said to be worth $1,220.

3 Probate of the will was granted to the appellants on 14 October 2002, and on 7 November 2002 the respondent commenced proceedings against the appellants seeking provision under the Family Provision Act. On 19 December 2003, Master Macready ordered that in lieu of the legacy of $30,000 the respondent receive a legacy of $810,000, and that the respondent’s costs be paid out of the estate. The appellants appeal from that decision.

4 I will give an outline of the background circumstances.

5 The deceased was born in 1926 and married her first husband in Poland. Ms Green was born in 1946 in Poland, and the first appellant Mrs Stevens was born in 1948 in Poland. The family emigrated to Australia in about 1951.

6 The respondent was born in Paris in 1927. He met the deceased in 1951, and they commenced a relationship. The relationship ultimately led to the deceased being divorced from her first husband in 1974, and the deceased and the respondent were married on 24 July 1976. They remained married until the death of the deceased. There were no children of this marriage. The deceased’s first husband died in about 1985.

7 The real property left by the deceased was acquired by her as a result of a property settlement from her first husband. The respondent worked during the marriage in businesses, and then from about 1980 until his retirement in 1995, for Katies. The respondent’s wages were paid into a joint account of the respondent and the deceased with the Commonwealth Bank. The respondent and the deceased had another joint account with the National Australia Bank, into which German war compensation pensions for both of them were paid. The deceased looked after the financial aspects of the marriage, and apparently provided the respondent with a small allowance.

8 There was evidence before the Master that at the time of the hearing the Dover Heights House was worth about $2.65 million, and the Randwick units about $2.27 million. Although Mr Baran for the appellants submitted that the appellants did not agree with these values, it is plain beyond argument that this was the best evidence of the value of the real estate that was before the Court.

9 There was also some evidence that, in addition to the assets referred to in the inventory, there were additional assets associated with the estate of the deceased relevant to the application.

10 Firstly there was a sum of about $58,500 in the joint account with the National Australia Bank, and $8,634 in the joint account with the Commonwealth Bank.

11 Then, there was a sum of something over $243,000 in an account with St George Bank. According to Ms Green, this represented proceeds of the sale of property which she and Mrs Stevens had received from the estate of their late father in about 1985, plus accumulated interest. However, Ms Green did not assert that this was held on trust for her and/or Mrs Stevens, but asserted it was part of the deceased’s estate. On 26 April 2002 St George Bank issued a bank cheque for $243,749. How and at whose instigation that happened was not explored in evidence. That bank cheque was paid into the joint account with the Commonwealth Bank on 3 May 2002.

12 There were a number of significant withdrawals from the joint accounts in April and May 2002. An amount of $56,980 was withdrawn from the National Australia Bank account on 16 April 2002. The respondent’s evidence was that this was withdrawn in cash, and half given to Ms Green. Ms Green did not respond to that evidence. Amounts of $8,600, $1,870 and $6,178 were withdrawn from the Commonwealth Bank account, on 9 April 2002, 22 April 2002 and 26 April 2002 respectively, on the basis of withdrawal forms filled out and signed by the respondent. It appears he received these amounts, and no issue was taken concerning them.

13 A major factual issue in the case concerned a withdrawal of $243,749 from the Commonwealth Bank on 24 May 2002. That was on the basis of a withdrawal form apparently written out by Ms Green and signed by the respondent. I will say more about this later.

14 The last matter concerning additional assets relevant to these proceedings and the appeal arose from evidence given by the respondent that he found in the house cash amounting to $120,000 and a further $11,000 in French money. His affidavit evidence was that Ms Green took $80,000 of this, Mrs Stevens took $40,000, and he kept the French money. Ms Green did not respond to that evidence in her affidavit, although in her oral evidence she denied she received $80,000 but accepted that the respondent received the French money. Mrs Stevens in her affidavit said that the allegation concerning $120,000 in cash and $11,000 in French money being hidden in the deceased’s bedroom and those matters attributed to her were untrue.

15 Dealing next with some events that occurred after the death of the deceased, it was not in issue that the respondent was not shown any will by the appellants before he went overseas a little time after the death. The respondent’s evidence in his affidavit was that he was not told about the will between the time he returned from overseas on 15 August 2002 until 18 October 2002, when the appellants told him they had a will from 1977.

16 There was evidence before the Court that shortly after the deceased’s death, the appellants offered to purchase a one-bedroom unit and to permit the respondent to reside there. Apparently at that time the respondent objected to this on the basis that the unit would not belong to him. The respondent consulted solicitors, Tress Cocks & Maddox, who on 13 September 2002 wrote to various bodies and placed an advertisement in the Sydney Morning Herald asking about a will. On 14 October 2002 Tress Cocks & Maddox wrote to each appellant asking about a will, and referring to the respondent’s attempts to obtain a copy. There was no response to that letter, but on the very same day probate of the will was actually granted to the appellants.

17 In her affidavit in response to the respondent’s affidavit, Ms Green said she could not find a will. She did not say when she found the will, or suggest that she told the respondent anything about it prior to 14 October 2002, or give any explanation for not telling the respondent about it.

18 In her affidavit in response to the respondent’s affidavit, Mrs Stevens said that as soon as the will was located she took all necessary steps to bring it to the respondent’s attention as soon as possible, and that until service of the summons they were seeing each other every day. There was no statement of what steps were taken or of what was said to the respondent about the will.

19 The summons was issued on 7 November 2002. On 22 November 2002 solicitors who acted for the appellants on the probate application advised that they were specifically instructed not to accept service of the summons. Tress Cocks & Maddox also sent letters to the appellants and their solicitors requesting payment of the legacy of $30,000, and there was no response to those letters.

20 I turn now to evidence before the Master concerning financial circumstances.

21 The respondent’s evidence was that he lived in a rental property to which he had moved in about January 2003. His evidence was that his total monthly income was about $2,030 and his total monthly outgoings $2,122 including rent of $975. He asserted he had no assets other than an old car which he put at $4,000 and the unpaid legacy amounting to about $31,000 with interest. He said that he had a debt of $33,500 arising from a loan to assist with legal costs of the proceedings. He said he was in reasonably good health for his age.

22 Ms Green’s evidence was that she was fifty-seven and was living in the Dover Heights house. Her evidence was that her main asset was a loan due to her of about $26,000. She said she had borrowed $12,800 from her sister. Her income was $385 net per fortnight sickness benefit, and there was a monthly shortfall of income of $277. Under the will she was to receive the Dover Heights house and about $1 million. Her evidence was that she was in extremely poor health.

23 Mrs Stevens’ evidence was that she was fifty-five, was married and had children from a former marriage who were not dependent on her. She and her husband lived in the house at Dover Heights of which her share was worth $1.3 million. She had a BMW car valued at $35,000, a bank account of about $20,000, and there was a mortgage of $350,000 over the house. Her husband had recently sold his business and was unemployed. She would receive about $1 million under the will. (Both these figures of $1 million were subject to reduction in the event that the respondent obtained an order under the Family Provision Act.) Mrs Stevens had some health problems.

24 In his reasons, the Master accepted the evidence on both sides concerning the financial position of the parties, subject to questions concerning the amount of about $243,000 to which I have referred, and also perhaps the amount of $120,000. I will return to those matters. He referred to evidence concerning disputes between the respondent and the deceased, but found that the marriage was a long and happy one and he did not regard the evidence of disputes as of great importance. He referred to the respondent’s claim as being for between $1 million and $1.1 million, based on a two-bedroom unit plus $300,000 for contingencies; and he said that he considered that was an appropriate order subject to the question of whether the respondent had already received benefits from the estate. He said there was no doubt the respondent took the $11,000 French money. He made no express finding concerning the $120,000. As regards the $56,980, he apparently disregarded this because it was from the joint bank account.

25 As regards the $243,000, the Master referred to the evidence of Ms Green and considered it to some extent supported by Mrs Stevens, this evidence being that the money was withdrawn from the Commonwealth Bank and then taken by the respondent; and he also considered the respondent’s evidence that he did not get the money. He considered the respondent’s evidence concerning the signature to the withdrawal form, and his evidence as to whether or not he was at the bank, and he said this evidence was unsatisfactory. He also gave weight to admissions by the respondent to the effect that when he was working for Katies, he was making $200 to $300 per week selling wire coat hangers. He preferred the evidence of the appellants on this matter, and found that the respondent retained the $243,000. In the result he awarded $810,000.

26 The appellants relied on the following grounds of appeal:

1. The learned Master made a material error of fact in holding that the respondent's accommodation needs should be referable to a two bedroom Unit despite concessions made by the respondent that he was prepared to accept proposals from the appellants for the Estate to contribute to the purchase of a one bed room Unit.

2. The learned Master made an error of legal principle by making a preliminary determination that the amount proposed by the respondent for additional provision out of the Estate was appropriate at paragraph 40 of the Master’s judgment.

3. The learned Master erred in the exercise of his discretion in coming to a final determination of a legacy of $810,000.00 by failing to deduct from that legacy the sums of $243,749.72, $56,980.00, $120,000.00 and $11,000.00 in French currency.

4. In the alternative the Master denied the appellants procedural fairness by failing to give adequate reasons as to how the sum of $810,000.00 was determined.

5. The learned Master erred in using a bench mark or base figure well in excess of a valuable one bedroom Unit in the Eastern Suburbs having regard to his Honour's preliminary determination that a value of a two bedroom Unit would range between $500,000.00 and $750.000.00 and thereafter deducting $56,980.00, $120,000.00, $11,000.00 in French currency and $243,749.72.

6. The learned Master erred in failing to make a determination in the appellants favour that no sum save and except for a sum for accommodation was required having regard to the learned Master's findings at paragraph 27 of the Judgment, namely that the respondent had additional income and moreover that there was evidence before the Master of several pensions upon which the respondent was entitled to draw, such that any lump sum for provision additional to the cost of a one bedroom Unit was not required for the future maintenance and advancement in life of the respondent.

7. The learned Master failed to disclose his reasoning process in coming to a legacy of $810,000.00 and denied the appellants procedural fairness by failing to disclose such reasons.

8. The learned Master erred in the exercise of his discretion by failing to give adequate weight to the non-disclosure by the respondent of undisclosed earnings and earnings from selling merchandise from Katie's without authority when considering the two stage process, in particular, whether or not adequate provision was made for the respondent during the lifetime of the deceased.

9. Alternatively, the learned Master erred by failing to make a determination ultimately that having regard to the amounts of cash that had been received by the respondent before and shortly after the deceased passed away that adequate provision had been made in favour of the respondent by utilising that cash, or in the alternative only providing for such further amount as would enable the respondent to purchase a one bedroom Unit.

27 The principal submissions on appeal related to the following matters. First, a deficiency of reasons in that the Master did not explain how he arrived at the figure of $810,000. Second, it was put that the Master should have found that a one-bedroom unit was sufficient for the respondent. Third, it was submitted that the Master erred in failing to reduce the amount awarded by the sums of $243,000, $120,000, $56,980 and $11,000. Fourth, it was submitted there was a deficiency of reasons in failing to make proper findings as to the $120,000. Finally, it was submitted that there was a deficiency of reasons in that the Master did not make and apply the adverse credit finding, resulting from his resolution of the issue concerning $243,000, in reaching his conclusions concerning the respondent’s assets, the strength of his claim against the estate and the appropriate amount of the award.

28 On the first matter, namely the question of how $810,000 was arrived at, in my opinion it is clear that the Master adopted the mid-point of the range suggested by the respondent’s counsel of between $1 million and $1.1 million, that is $1.05 million, deducted $243,000 from that, and rounded the result out to $810,000. The figure of $1.05 million in turn included $300,000 for contingencies, an allowance for a two-bedroom unit in the range $500,000 to $750,000, allowance for furniture put at about $25,000, for a car put at between $30,000 and $40,000, and a holiday. That calculation, in my opinion, emerges quite clearly from the judgment, and adequately so.

29 On the question of the sufficiency of a one-bedroom unit, Mr Baran submitted that the respondent accepted that he was perfectly content to have a one-bedroom unit in Bondi in his name (see Black Book 24S). However, the question giving rise to that response was in a series of questions concerning the respondent’s attitude at the time offers were made “just after” the deceased passed away (see Black Book 22U), at a time before the appellant had seen the will or had legal advice. In my opinion, in that context, the concession has little weight. The respondent had lived for over twenty-five years in a house in Dover Heights worth about $2.65 million at the time of the hearing. In my opinion provision of between about $600,000 and $700,000 for a two-bedroom unit in that general area, that is about one-quarter of the value of the house, would be no more than adequate provision for the proper maintenance of the respondent in respect of his housing.

30 Next, on the question of monetary deductions, it is clear, for the reasons I have given, that $243,000 was deducted. In my opinion there was plainly no occasion to deduct $56,980: that was money from a joint account and was prima facie the respondent’s own money, and there was no evidence that this was affected by any trust. There is no reason to suppose that the Master disregarded evidence concerning this amount in reaching the conclusion he did concerning the respondent’s financial position at the time of the hearing.

31 As regards the $11,000 French money, there was a real question whether some or all of this may have been the respondent’s anyway. There is no reason to suppose that this amount was disregarded by the Master in reaching his conclusion concerning the respondent’s financial position at the time of the hearing. In my opinion this amount was not of sufficient significance to require express consideration or deduction.

32 The $120,00 is in a different category. It is a substantial amount, and although on the evidence it could have arisen from proceeds of withdrawals from the joint account and therefore been owned as to one-half by the respondent, even $60,000 is not an insignificant amount. It seems to me, however, that the Master made no finding as to whether or not this $120,000 was part of the estate, or if so, what happened to it. On that basis, there would be no error not to have deducted it or any part of it from the award, but this does give rise to the following question, concerning deficiency of reasons concerning the $120,000.

33 Mr Baran did submit that the Master should be taken as having decided that the respondent did take $120,000, since he decided the respondent took $243,000 and, having accepted the appellants’ evidence, must have accepted that they received no part of the $120,000. However the only evidence that $120,000 existed was that of the respondent, and his evidence was that $80,000 of that amount went to Ms Green and $40,000 to Mrs Stevens. If in fact $120,000 had been found by the respondent, and if the appellants’ evidence was accepted, the respondent had no reason to believe they knew about it and no reason to bring it up if he had in fact dishonestly taken it. Further, although the Master said Ms Green appeared to give her evidence in a fairly straightforward way, and preferred the evidence of the appellants concerning $243,000, he did in fact limit this preference to “this aspect” (see Red Book 28V) and did not say that the appellants were satisfactory witnesses.

34 For my part, I am not prepared to accept that the Master found that the appellants were entirely satisfactory witnesses, or to dispose of this appeal on the basis that their evidence and conduct in the matter can be considered entirely satisfactory. Although there may be some explanation, their conduct in withholding the will from the respondent until after they had obtained probate seems unreasonable, as does their specific instruction to their solicitor not to accept the summons. I note also that Ms Green did not respond in her affidavit to the respondent’s evidence concerning $120,000, and that Mrs Stevens’ response was worded in such a way as to deny the existence of the $120,000 as well as her involvement.

35 Mr Baran submitted that, if the Master did not make a finding as to the existence and fate of the $120,000, he should have done so. There is force in this submission. A Court dealing with a Family Provision Act application should so far as possible make findings as to the assets of the estate and what has happened to them. In circumstances where there was a question of whether this $120,000 was part of the estate, and if so what happened to it, the Master should have made findings about it.

36 The question then is, does this deficiency vitiate his judgment and require a new trial? In my opinion it would do so only if it appeared to this Court that, on the way the case was conducted, the Master should have considered a finding concerning this $120,000 that would have impacted adversely on the respondent’s case. However, it was never put to the respondent in cross-examination that he had the benefit of this $120,000.

37 Mr Baran suggested this could not have been put. However, plainly it could have been put to the respondent that $120,000 was not given to Ms Green and Mrs Stevens, and even this was not done. It seems to me also that it could have been put to the respondent that he said $120,000 had been found, and that if it did not go to Ms Green and Mrs Stevens, as they suggested, he must have taken it. Mr Baran was not able to tell us if a submission was made to the Master that the Master should find that the respondent took the $120,000. In those circumstances, I am not satisfied that the matter was put to the Master in such a way that the Master should have considered a finding concerning the $120,000 which would have adversely impacted on the respondent’s case. I note that a finding that $120,000 was part of the estate, without an associated finding that the respondent took it or some of it, would tend to help his case by increasing the amount of the estate, and would not damage his case in any way.

38 I would add that I am not satisfied that there would in any event be a reasonable chance that, if the matter had been put in that way and decided, this would have affected the result adversely to the respondent. I have already mentioned the consideration that, if the appellants’ evidence was correct, it would be hard to understand why the respondent would volunteer the existence of $120,000 which he had taken, in circumstances where the existence of this amount was apparently unknown to anyone else.

39 The final matter argued was to the effect that the Master made a finding concerning $243,000 which impacted very severely on the credit of the respondent. It was put that that was not taken into account in the Master making his findings concerning the financial position of the respondent, the strength of his legitimate claim and the amount which should, prima facie, be provided to him. This was a reserved judgment, and the judgment contained the adverse finding to which I have referred. I would not conclude from the terms of the judgment that the Master disregarded his credit finding concerning the respondent in reaching the conclusions which he did about the respondent’s financial position, the strength of his claim and the amount, prima facie, to be provided from the estate. Plainly he made a finding that affected the respondent’s credibility, and in my opinion he must have taken that into account in reaching his conclusions on these matters.

40 For those reasons, in my opinion, all the matters put in support of the appeal fail. In my opinion the appeal should be dismissed with costs.

41 SHELLER JA: I agree with the reasons for judgment given by Justice Hodgson and the orders he proposes.

42 IPP JA: I also agree.

43 SHELLER JA: The orders of the Court will therefore be as Justice Hodgson has proposed.

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Last Modified: 07/26/2004