Szarvas v Tizzano; Muller v Tizzano
[2014] VSC 620
•11 December 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL & EQUITY DIVISION
IN THE MATTER of Part IV of the Administration and Probate Act 1958
- and -
IN THE MATTER OF the Will and Estate of IMRE CSUHAI, deceased
S CI 2013 01383
| ZSUZSANNA KERNACSNE SZARVAS | Plaintiff |
| v | |
| KATALIN TIZZANO (who is sued as the Administrator of the Estate of IMRE CSUHAI (deceased)) | Defendant |
- and -
S CI 2013 03417
| JOZSEF MULLER | Plaintiff |
| v | |
| KATALIN TIZZANO (who is sued as the Administrator of the estate of the above named deceased) | Defendant |
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JUDGE: | WILLIAMS J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22 September 2014 |
DATE OF JUDGMENT: | 11 December 2014 |
CASE MAY BE CITED AS: | Szarvas v Tizzano; Muller v Tizzano |
MEDIUM NEUTRAL CITATION: | [2014] VSC 620 FIRST REVISION: 18 December 2014 |
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SUCCESSION LAW – Testator’s family maintenance – Intestacy – Deceased survived by two adult daughters – Application by partner – Application by adult stepson – Nature of relationship between plaintiffs and deceased – Whether plaintiffs persons for whom the deceased had responsibility to make provision – Competing claims against estate of the deceased – Administration and Probate Act 1958 Part IV.
APPEARANCES: | Counsel | Solicitors |
In S CI 2013 01383: | ||
| For the Plaintiff | Mr P Pascoe | Bella & Associates Lawyers |
| For the Defendant | No appearance | |
In S CI 2013 03417 | ||
| For the Plaintiff | Mr R Boaden | Slater and Gordon Lawyers |
| For the Defendant | No appearance |
HER HONOUR:
The claims
The plaintiff in each of the proceedings before the Court claims provision out of the estate of the late Imre Csuhai (‘the deceased’) under Part IV of the Administration and Probate Act 1958 (‘the Act’).
As the deceased died intestate, he is taken to have made a ‘fictional will’ to the effect of the Act’s intestacy provisions.[1] Under those provisions, his estate would have been distributed to his two daughters from his first marriage, Katalin Tizzano (‘Katalin’) and her sister Zsuzsanna Csuhai (known as ‘Zsuzsa’).
[1]Re Russell [1970] QWN 22; Iwasivka v State Trustees Ltd [2005] 323, [5] (Hansen J).
The plaintiff in proceeding No 1383 of 2013 is Zsuzsanna Szarvas (‘Zsuzsanna’) who claims to have been the deceased’s domestic partner. She does not contend that she would be entitled to share in the estate under the intestacy provisions as a ‘domestic partner’ and therefore a ‘partner’ within the definition in s 3(1) of the Act.
The plaintiff in proceeding No 3417 of 2013 is the deceased’s stepson, Jozsef Muller (‘Jozsef’).
Katalin, the deceased’s daughter, is the defendant in each case. Letters of administration of the deceased’s estate were granted to her on 4 October 2012.
The proceedings have been heard together and relevant evidence in one was ordered to be evidence in the other. The parties have referred to one another and to other people by their first names throughout and I will do the same.
Katalin was represented in each proceeding by the solicitors Trumble Szanto Lawyers (‘TSL’) up to 25 March 2014 when they were granted leave to cease acting for her. Beforehand, they had filed and served affidavits sworn by her on 24 August 2013 in response to each application.
On 25 August 2013, the day after she had made her affidavits, Katalin entered into a contract for the sale for $625,000 of the deceased’s former home at 84 Bignell Road, Bentleigh East (‘the Bignell Road property’) which was the principal asset of the estate. Settlement occurred on or about 7 October 2013. It is common ground for the purposes of these proceedings that the Court should proceed on the basis that TSL has paid an amount representing the net estate including the proceeds of the sale to Katalin.[2]
[2]This alleged payment is the subject of a separate proceeding brought by Jozsef against TSL under s 29 of the Civil Procedure Act 2009: Jozsef Muller v Trumble Szanto Lawyers, S CI 2013 6456.
Katalin did not appear to defend the claims. She was given notice of the hearing and served with all relevant materials by email and by post directed to her last known residential address in Dirkshown, Holland. She responded by email directly to the Court, making factual assertions which I have taken into account as evidence in all the circumstances.
Zsuzsanna and Jozsef submit that the Court should proceed on the basis that the estate comprises the sum of $544,433.65, which was held in trust by TSL on 15 October 2013, less approximately $75,000 for Zsuzsanna’s costs and $65,000 for Jozsef’s costs, leaving a net estate of approximately $400,000. This assumes that the costs of each applicant would be paid out of the estate.
Section 91 of the Act
Each plaintiff claims further provision from the deceased’s estate under s 91 of the Act. That section relevantly provides:
91 Power of the Court to make maintenance order
(1)Despite anything in this Act to the contrary, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of a person for whom the deceased had responsibility to make provision.
(2)The Court must not make an order under subsection (1) in favour of a person unless—
(a) that person has applied for the order;…
(3)The Court must not make an order under subsection (1) in favour of a person unless the Court is of the opinion that the distribution of the estate of the deceased person effected by—…
(b) the operation of the provisions of Part I, Division 6; …
does not make adequate provision for the proper maintenance and support of the person.
(4) The Court in determining—
(a)whether or not the deceased had responsibility to make provision for a person; and
(b)whether or not the distribution of the estate of the deceased person as effected by—…
(ii) the operation of the provisions of Part I, Division 6; …
makes adequate provision for the proper maintenance and support of the person; and
(c)the amount of provision (if any) which the Court may order for the person; and
(d)any other matter related to an application for an order under subsection (1)—
must have regard to—
(e)any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship;
(f)any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate;
(g)the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject;
(h)the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future;
(i)any physical, mental or intellectual disability of any applicant or any beneficiary of the estate;
(j) the age of the applicant;
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased;
(l)any benefits previously given by the deceased person to any applicant or to any beneficiary;
(m)whether the applicant was being maintained by the deceased person before that person's death either wholly or partly and, where the Court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility;
(n) the liability of any other person to maintain the applicant;
(o) the character and conduct of the applicant or any other person;
(p) any other matter the Court considers relevant.
The evidence
Zsuzsanna relies upon:
(a) affidavits sworn by her on 9 May 2013 and 8 September 2014, respectively; and
(b) those sworn by her friends, Anna Majhen and Rozalia Bogar, on 2 October 2013.
Katalin relies on her own affidavits of 24 August 2013 and the factual assertions made in her 3 September 2014 email to the Court.
Jozsef relies upon:
(a) his own affidavits sworn on 10 October 2013 and 27 August 2014;
(b)those of his solicitor, Roger Batrouney of Slater and Gordon, sworn on 20 August 2013, 26 August 2014, 29 August 2014 and 18 September 2014; and
(c) an affidavit of Rose Levacsics, his aunt, sworn on 1 October 2013.
Applicable principles
The Court has jurisdiction under s 91 of the Act to order provision from the intestate deceased’s estate for a person for whom he had responsibility to make provision. No order can be made unless the Court is of the opinion that the distribution of the estate under the intestacy provisions fails to make adequate provision for the proper maintenance and support of that person.
The Court must determine the issues as to whether the deceased had responsibility to provide for the proper maintenance and support of each of the plaintiffs, and if so, whether the intestacy provisions made adequate provision for them, and if not, the amount of any provision it might order, by reference to the deceased’s moral duty or obligation to adequately provide for the claimant’s proper maintenance and support, having regard to the matters listed in s 91(4)(e)-(p) of the Act.
The Court’s discretion is not at large or to be exercised on the basis of general ideas of fairness. Its jurisdiction is based upon its responsibility to enforce moral obligations.[3] The test is as to ‘what provision a wise and just testator would have thought it his moral duty to make in the interests of the claimant.’[4] The cases explaining the nature of that moral duty or obligation, decided before the amendments to the Act introducing the list of factors for consideration, remain applicable.[5]
[3]Morris v Smoel [2014] VSC 31, [32] (McMillan J).
[4]Blair v Blair (2004) 10 VR 69, 75-6 [41] (Nettle JA).
[5]Ibid 84 [13] (Chernov JA (Nettle JA and Hansen AJA agreeing)).
In Collicoat v McMillan,[6] Ormiston J described the moral duty as follows:
a duty resting on a testator to make not merely adequate or sufficient financial provision for members of his or her family in the specified class but also the obligation to measure that adequacy or sufficiency by reference to what is right and proper according to accepted community standards. What is right and proper, and thus what the wise and just testator must do, is not determined by the “character and conduct” of each applicant but by what the testator ought to have felt in duty bound to provide notwithstanding any defects in character or conduct but nevertheless having due regard to the nature of their relationship with and their treatment (whether morally reprehensible or the opposite) of the testator during his or her lifetime.[7]
[6](1999) 3 VR 803.
[7]Ibid 818 [43].
Callaway J had also said this in Grey v Harrison[8] about the concept of proper maintenance and support:
There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that the reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight.[9]
[8](1997) 2 VR 359.
[9]Ibid 366-7.
Under s 91, the class of persons for whom the deceased may have a responsibility to provide extends beyond those related by blood or marriage.[10] Each claimant bears the onus of proving that he had a moral duty to make provision for their maintenance and support.[11] The so-called Briginshaw standard of proof[12] is applicable as the Court is asked to interfere with the deceased’s intention with regard to the destination of his estate.[13]
[10]See Forsyth vSinclair [2010] VSCA 147, [85] (Neave JA).
[11]Morris v Smoel [2014] VSC 31, [35] (McMillan J).
[12]See Briginshaw v Briginshaw (1938) 60 CLR 336.
[13]Morris v Smoel [2014] VSC 31, [35] (McMillan J), citing Schmidt v Watkins [2002] VSC 273 [17]–[21] (Harper J).
In Morris v Smoel,[14] McMillan J characterised the Court’s role as one involving ‘a broad evaluative judgment, made with respect to a capable testator’s judgment as to who should benefit from the estate’.[15]
[14][2014] VSC 31.
[15]Ibid [34], citing White v Barron (1980) 144 CLR 431, 440 (Stephen J); Whitehead v State Trustees [2011] VSC 424 [40] (Bell J); Andrew v Andrew (2012) 81 NSWLR 656, 660 (Allsop P) 679–80 (Barrett JA); Slack v Rogan [2013] NSWSC 522 [125]–[127] (White J).
Once the jurisdictional requirements have been made out, a claimant must also demonstrate need before the Court will exercise its jurisdiction under s 91.[16]
[16]Blair v Blair (2004) 10 VR 69, 78 [21] (Chernov JA (Nettle JA and Hansen AJA agreeing)).
Before referring to the parties’ arguments, I will state my findings of fact to establish the context in which their submissions can be evaluated.
The facts
Whilst there were some conflicting accounts in relation to some matters in the material before the Court, I am satisfied as to the following facts.
The deceased was born in Hungary on 20 August 1942 and died, at the age of 69, whilst holidaying there with Zsuzsanna on 23 July 2012. He was survived by Katalin and Zsuzsa, his two daughters from his first marriage, and by Jozsef and Zsuzsanna.
The deceased married Katalin and Zsuzsa’s mother, Erzsebet, in Hungary in 1968. They lived together in his house in Budapest. Their elder daughter Zsuzsa was born on 27 March 1970. She was 42 when the deceased died and is now 44 years old. Katalin, their second daughter, was born on 17 October 1972. She was 39 when the deceased died and is now aged 42.
The deceased and Erzsebet were divorced in 1979. He moved out of the Budapest house, leaving it to her and their daughters. Erzsebet went on to raise Katalin and Zsuzsa alone without maintenance from the deceased and they were impoverished.
Early in the same year of 1979, the deceased was working as a taxi driver when he met Eva Muller, a divorcee. She worked as a hairdresser and Jozsef was her 17-year-old son. Jozsef was born on 22 December 1962 and is now 51.
The deceased moved in to live with Eva and her parents in Budapest within a few months of their meeting in 1979. By late that year, the couple had decided to marry and to leave Hungary for Australia, where Eva’s sister, Rose Levacsics, and her brother-in-law, Michael Levacsics, were living in East Bentleigh in Victoria. Jozsef was unable to accompany his mother and the deceased to Australia because of his mandatory period of military service in Hungary up to 1986. He planned to follow afterwards.
The deceased and Eva saved money for the move for a year. They then spent nine months in Germany, unable to work, to complete immigration formalities. Subsequently, they were granted visas and migrated to Australia, arriving on 6 May 1991. They had very little money and lived with Rose and Michael in East Bentleigh.
Jozsef telephoned his mother and the deceased each week. Rose overheard the deceased calling Jozsef ‘fiae’, or ‘son’, in Hungarian, during those calls. She heard the deceased telling Jozsef that he loved and missed him and saying to others in the house that he had to fight to get Jozsef to Australia.
Eva was unable to find employment as a hairdresser but, after four months of support from Rose and Michael, she found work in a clothing factory in Caulfield. She worked there six days a week. The deceased was employed by Collins Custom Electric, before leaving to work for three days a week for Rose and Michael’s electrical business in Moorabbin. He was paid a part-time wage, as that was all Rose and Michael could afford.
The deceased and Eva moved into a rented unit in Carnegie and saved for a deposit for a property. On 7 January 1985, they bought a unit in Argyle Street, East Bentleigh with their Australian savings. They set up an auto-reconditioning business, ‘IM & EV Electronics’, in the garage at the property. Eva continued with her clothing factory job and worked for the auto-reconditioning business six evenings a week. The work she did was difficult: involving washing, delivering and carrying motors. She and the deceased worked hard and saved their money, wanting to pay off the unit.
In 1986, Jozsef was released by the army and moved back to live with his grandparents in Budapest. He kept in regular telephone contact with his mother and the deceased. He married in the same year. Eva and the deceased returned to Hungary for Jozsef’s wedding. The deceased also saw Katalin and Zsuzsa during this visit.
It was in July 1987 that Eva and the deceased purchased the Bignell Road property for $97,000, using their joint savings. Their growing business had required more room. They mortgaged the Bignell Road property. Eva had made enquiries about financing the purchase.
Eva continued to be careful with her money, saving to pay off the mortgage on the Bignell Road property. She often refused to spend on clothing that Rose suggested she buy when they went shopping together. It was Eva who attended to the finances of the couple’s business.
The deceased and Eva sold the Argyle Street unit in April 1989. In the same year, 17-year-old Katalin travelled to Melbourne alone and spent four months with Eva and the deceased. The deceased wanted her to stay and was unhappy when she returned to Hungary to her mother and sister. They kept up regular telephone and postal contact afterwards.
The deceased made arrangements for Jozsef to migrate to Australia, with the help of Michael Levacsics. The deceased engaged a lawyer to assist with visa applications. Jozsef and his wife, Anna, arrived in 1991. They lived at the Bignell Road property for a month before moving to a rented flat. Jozsef worked in the business run by his mother and the deceased. He called the deceased ‘Papa’, at the deceased’s request. They spent time with each other, attending movies and the football and going to the beach.
Zsuzsa also visited the deceased and Eva in Australia for two months some time before February 1992.
On 22 February 1992, Eva died unexpectedly, as a result of a stroke. The deceased became the surviving proprietor of the Bignell Road property and took her estate. Jozsef made no claim to it. Whilst I accept that Eva had told Jozsef at some time before her death that there was less than $40,000 owing under the mortgage over the Bignell Road property, I am unable to determine the amount of the mortgage debt as at the date of her death.
After Eva’s death, the deceased appeared lonely and lost to Jozsef. Jozsef supported him by visiting almost every day. He and his wife Anna also shared meals with him three times a week throughout the following year. Jozsef helped with the deceased’s financial affairs as well, whilst Anna looked after his house.
In 1993, Erzsebet, Katalin and Zsuzsa received the proceeds of the sale of the deceased and Erzsebet’s former matrimonial home in Budapest. Katalin’s daughter Pamela was also born in Hungary on 14 June of that year.
It was in about 1993, too, that Jozsef and Anna decided to move to Perth as Jozsef was struggling to come to grips with his mother’s sudden death. The deceased supported their decision. Jozsef found work as a bricklayer. The close relationship between Jozsef and the deceased continued and they spoke by telephone each week.
Jozsef stayed in Perth until 1997 when he moved to the Gold Coast in Queensland. Whilst he was Western Australia, he returned twice to Melbourne for two weeks each time to visit the deceased. Throughout, the two men kept up the contact between them The deceased gave Jozsef advice and Jozsef regarded him as the father he felt he had never had. In 1995, Jozsef and Anna separated. The deceased again supported Jozsef during this difficult time for him. In 1996, Jozsef married Palma. They were ultimately divorced in about 2002.
On 16 March 1996, the mortgage over the Bignell Road property was discharged and the deceased’s title as surviving proprietor became unencumbered. In the same year, Zsuzsa commenced a de facto relationship with Zoltan Bologh in Hungary.
Both Zsuzsa and her sister Katalin were to have profoundly disabled sons. Katalin’s son, Salvatore Diego, was born on 9 April 1997, both physically and intellectually disabled. Katalin subsequently settled a claim against the hospital in which he was born and received some 4 million Hungarian Forints (‘HUF’) or approximately $20,000 from the hospital. Zsuzsa’s disabled son, Zolika, was born in 1998.
In 1997, Jozsef had moved to the Gold Coast in Queensland and found work as a hotel cleaner. He and the deceased kept in regular telephone contact. Each year from 1997 to 2006, Jozsef came to Melbourne to visit the deceased. They celebrated Easter and Christmas together many times.
In 2001, Katalin was divorced from the father of her children. He subsequently paid maintenance to her under court orders but the amount has not exceeded 100 EUR annually. In 2001, Katalin used 2 million HUF of the settlement monies she had received from the hospital as a deposit on a small apartment in Budapest for which she paid 11 million HUF. The apartment has one bedroom and is 45 square metres in size. She and her children lived there until 2012 when they moved to Holland to live with her new partner. Katalin mortgaged the apartment to secure a loan for the balance of its purchase price. The monthly mortgage payments were approximately 80,000 HUF.
From 2006, the deceased and Jozsef kept in contact each week through Skype. During their conversations, the deceased told Jozsef that he found it sad that his daughters wanted only money but no relationship with him.
In 2007, Zsuzsa’s partner, Zoltan, died of cancer in Hungary. Erzsebet moved in with Zsuzsa to help her care for Zolika. They all lived in Zsuzsa’s small mud house in Tapioszele, a small remote Hungarian rural village.
On 22 June 2007, Zsuzsanna’s husband, Joseph Katai, died in Budapest. She inherited $50,00 from him and also received the sum of $30,000 from their joint bank account. Joseph Katai’s son took his father’s residuary estate, which included the Northcote property where Zsuzsanna and her late husband had lived.
At that time, the deceased was involved in a relationship with another woman. His relationship with that woman ended shortly after he attended Joseph Katai’s funeral in Australia in late-August 2007. The deceased then asked Zsuzsanna to housekeep and cook for him. She lived in Northcote and he paid her both for her housekeeping and for the food she bought to cook for him.
It was in November 2007 that Zsuzsanna and the deceased began a sexual relationship. From that time on, he did not pay her for the housework she did. Their relationship was an exclusive one and she moved in to live with him at the Bignell Road property in January 2008.
Zsuzsanna introduced the deceased to her friends, Anna Mahjen and Rozalia Bogar, and to Rozalia’s husband. The deceased and Zsuzsanna impressed their friends as a devoted couple and the deceased told both Anna and Rozalia how lucky he was to be with Zsuzsanna who was such a cultured and attractive woman.
After moving in with the deceased, Zsuzsanna performed all the domestic duties and contributed to the couple’s food costs, whilst the deceased met most of their domestic, holiday and social outing expenses. Zsuzsanna’s son, Zsolt, also lived with them for about three months at one point.
In light of the evidence from Zsuzsanna and her friends about the relationship, I am not persuaded by Katalin’s assertions that it was a more limited business-like arrangement, based on the provision of domestic services by Zsuzsanna. Katalin herself acknowledges the couple’s sexual relationship and that they socialised and travelled together. I accept that the deceased may have complained about Zsuzsanna to Katalin from time to time, as she alleges, and may have referred to her questions about his assets or demands that he meet expenses. Nevertheless, they behaved as partners when living together. And it was Zsuzsanna, for example, who cared for the deceased for approximately eight to ten days after he had a cardiac procedure in March 2008.
In February 2009, Jozsef married Ildiko who is now 50 years old.
In May 2009, Zsuzsanna travelled to Hungary to visit her family and the deceased joined her for six to eight weeks from June or July. He was able to visit his daughter Zsuzsa at her home during this visit.
In 2010, the deceased spent a three-day holiday with Jozsef at the Gold Coast. Zsuzsanna and Joseph never met during the deceased’s lifetime.
The deceased helped Zsuzsanna obtain Australian citizenship in 2010. Although he attended the citizenship ceremony in May 2010, it was at about that point that their relationship broke down because the deceased objected to Zsuzsanna travelling to Hungary again. Zsuzsanna moved out of the Bignell Road property and into a unit in the Canterbury Memorial Homes in Canterbury Road, Canterbury, Victoria, run by the City of Boroondara. On 3 June 2010, she travelled to Hungary.
The deceased then started a relationship with another woman.
After Zsuzsanna’s return from Hungary in August 2010, the couple were reconciled and their relationship resumed but they did not live together. Zsuzsanna kept her Canterbury unit because she did not want to lose it, being conscious that she and the deceased had had their differences in the past. She spent two or three nights per week at the Bignell Road property and kept clothes, toiletries and some belongings there.
In 2011, in Hungary, Katalin and Zsuzsa’s mother, Erzsebet, contracted meningitis and became an invalid, suffering from heart disease and memory loss.
In December 2011, Jozsef visited the deceased in Melbourne. The deceased complained about his daughters, saying that they were harassing him for money. He told Jozsef that he found this hard to understand because he had given them the Budapest house.
In 2012, Katalin and her two children moved from her Budapest apartment to the unit in Dirkshown Holland belonging to the man who was or was to become her fiancé. She agreed not to claim any interest in that unit. Katalin let her own apartment for 80,000 HUF per month, being the amount of her mortgage payments.
In February or March 2012, Jozsef suggested that the deceased move to Queensland to be closer to him. The deceased refused, saying that he had many friends in Melbourne. Their last conversation was in July 2012, when the deceased told Jozsef that he was going to Hungary on holiday.
Zsuzsanna had left for Hungary on 30 April of that year. The deceased collected her mail up to the time he left to join her, doing so on 3 July. He collapsed six days later, on 9 July 2012, having suffered a heart attack whilst mowing the lawn at Zsuzsanna’s holiday home in Agard. The deceased died in hospital in Hungary on 23 July 2012.
Some ill feeling developed between Zsuzsanna and Katalin subsequently as a result of Zsuzsanna retaining the deceased’s gold chain as a memento. There is no evidence as to the value of the chain.
Katalin was granted letters of administration of the deceased’s estate on 4 October 2012. She became engaged in December of that year
Zsuzsanna’s circumstances
Zsuzsanna is now 71 years old and in good health. Having dual citizenship, she receives an Australian pension of about $1,191 per month and a monthly Hungarian pension the equivalent of about $650. Her rent for the Canterbury unit is $472 per month. She has total savings of $130,000, including the $80,000 she received when her husband Joseph Katai died and $20,000 which he had given her previously.
Zsuzsanna also has property in Hungary. She owns the holiday home in Agard, Hungary, which she values at $40,000. She is also the proprietor of a half share of her former matrimonial home in Budapest. She values her half share at approximately $28,000. Whilst Katalin deposes that the deceased told her that Zsuzsanna had inherited two properties in Agard and two in Budapest from her former spouses, I accept Zsuzsanna’s evidence as to the extent of her own assets.
Jozsef’s circumstances
Jozsef is 51 years of age. He and Ildiko live in rented accommodation in Surfers Paradise for which they pay $500 a week. As a car detailer and chauffeur, he earns $40,000 gross per annum. His second mobile car detailing business earns him a further $15,000 gross annually. Ildiko has no income or assets.
Jozsef has superannuation of $45,000, but no other assets of any value. He has credit card debts of $5,000. After paying rent, bills and the credit card account, the couple have about $100 left between them.
I am satisfied that the deceased would have been generally aware of Jozsef’s financial situation, given the extent of their interaction.
Katalin’s circumstances
Katalin is engaged to a Dutch man and has lived with her 17 and 21 year old children in his apartment in Holland since 2012. She and her fiancé have agreed that she is to have no interest in the apartment.
Katalin provides no information as to the extent to which her fiancé supports her or her children. She says that her daughter Pamela is studying and working in two places, without providing any more detail. Katalin has living expenses totalling 60,000 HUF per month. Her apartment in Budapest effectively finances itself, as the 80,000 HUF rental meets her obligations under the mortgage loan. The apartment is worth some 10 million HUF.
Katalin’s son, Diego, has severe physical and intellectual disabilities. As he attends a special school for five hours each morning, five days a week, this affects Katalin’s ability to work. Whilst describing herself as an interpreter, she states that she is employed in ‘low’ jobs such as babysitting and cleaning for ‘low’ pay. She provides no further information as to her income.
Katalin owns a second-hand motor vehicle which she estimates is worth less than 500,000 HUF. I am not persuaded that she owns a newer or more valuable car by Zsuzsanna’s statement that she has seen her driving one in Hungary.
As to Katalin’s health, she has recently contracted an unidentified autoimmune disease and refers generally to having a ‘disc herniation’.
Zsuza’s circumstances
Zsuzsa has not made an affidavit in relation to her own situation, nor has Katalin, as the administratrix defending the claims, provided much detail as to her sister’s circumstances. It does not appear to be disputed however, that Zsuzsa and her invalid mother live in a two-roomed mud house in a remote village in rural Hungary and that she is impoverished.
Zsuzsanna deposes that the deceased told her that Zsuza’s disabled son Zolika was in government care because she could not look after him properly. Katalin does not expressly state where Zolika lives now but, in her email to the Court, she does say with reference to their disabled children that they have similar conditions and that Zsuzsa ‘has the same problems and sacrifices as I do (sic)’.
In the circumstances, I accept that Zsuzsa supports Zolika who is severely intellectually and physically disabled, whether or not he lives with her. I also accept that she has her 72-year-old mother, who is an invalid, living with her and that she and Katalin contribute to Erzsebet’s medical expenses.
There is some dispute as to the frequency of the deceased’s visits to Hungary to his daughters. Nevertheless, it would appear that he did visit them from time to time. I am satisfied that he would have been at least generally aware of their respective financial situations and, indeed, he complained about the financial demands they made of him.
Submissions
Zsuzsanna’s claim
Here, counsel for Zsuzsanna submits that her relationship with the deceased should be regarded as one giving rise to a responsibility on his part to make provision for her under s 91.
Zsuzsanna argues that the Court should conclude that:
(a)she was, or, alternatively, regarded herself as being in a domestic or de facto relationship with the deceased from November 2007 until May 2010 and then again from about August 2010: a total period of approximately four years and four months. Whilst they did not live together between August 2010 and July 2012, a shared common residence was not a pre-requisite for the existence of a domestic or de facto relationship;[17] or, alternatively
(b)that she was in a loving, intimate, exclusive and caring personal relationship with the deceased between November 2007 and May 2010 and, after a reconciliation, between August 2010 and the deceased’s death on 9 July 2012; and
(c)that she and the deceased were regarded by mutual friends as a couple, in the same period.
[17]Counsel cites the definition of a ‘domestic relationship’ in s 35 of the Relationships Act 2008 under which the nature and extent of common residence is a factor which may be relevant to a determination as to the existence of a domestic relationship, under s 35(2)(c).
Zsuzsanna contends that her connection with the deceased was of the type which Harper J held in Schmidt v Watkins[18] would suffice to establish the requisite ‘responsibility’ to make provision under s 91 of the Act. There, whilst concluding that the plaintiff had failed to establish such a relationship, his Honour said this:
A mere business relationship would not of itself be enough. Nor would one which did not go beyond that of debtor and creditor. Even one founded upon, or which resulted in, acts of kindness or consideration that went well beyond the ordinary, might not do so. Generally speaking, however, a “domestic [relationship] where there is mutual commitment to an intimate personal relationship and shared life as a couple, irrespective of the gender of each partner” would be sufficient to bring either one of those partners within the class of persons to whom the other had responsibility…[19]
[18][2002] VSC 273.
[19]Ibid [22], citing Statute Law Amendment Relationships Act 2001, s 1(2).
Counsel for Zsuzsanna also cites Sinclair v Forsyth,[20] where his Honour did find that the deceased had had a responsibility to make provision for the plaintiff, even though their longstanding relationship of over 12 years lacked a number of features common to a de facto or domestic relationship. They did not live together, the plaintiff was not financially dependent upon the deceased and they had kept their finances separate. Harper J concluded that the couple had had a longstanding intimate and caring relationship, with strong ‘emotional and spiritual’ bonds and a deep affection for one another. They had shared nearly all of the significant moments of their lives. The plaintiff had also offered some level of care and support to the deceased and they had made a commitment to living together in the future.
[20][2008] VSC 250.
Harper J’s approach, findings and conclusion were upheld on appeal.[21] Neave JA (with whom Habersberger AJA agreed) held that they were not contrary to prevailing community standards and that his Honour’s findings were open on the evidence. Neave JA noted that although Harper J had not explicitly found a de facto partnership, their relationship could have been so described.[22] Redlich JA agreed, but considered that the case was ‘at the margin’.[23]
[21]Forsyth v Sinclair [2010] VSCA 147.
[22]Ibid [88].
[23]Ibid [106].
Zsuzsanna argues that her de jure or de facto widowhood raises a prima facie case for the existence of a moral claim to provision from the deceased’s estate. She maintains that their relationship bore the particular quality necessary to impose such responsibility. Proper provision for a widow should ensure security in her own home and sufficient income to live as she has been accustomed.[24] On that basis, Zsuzsanna submits that provision should be made for her by way of one-third of the deceased’s net estate. She argues that this would enable her to invest the monies and apply them to secure aged persons accommodation in the future. She does not adduce any evidence as to the required amount but submits generally that the greater the deposit she provides, the less her ongoing costs of accommodation will be.
[24]See Ross v Ross [2002] VSC 544, [52] (Ashley J).
Jozsef’s claim
Counsel for Jozsef relies upon McKenzie v Topp,[25] where Nettle J dealt with a claim by another stepson whose mother had died when he was six and whose father had re-married when he was ten. The stepmother had had no children, treating the stepson in much the same way as she would have a son. The stepson had fallen upon hard times and returned to live with his stepmother, on a disability pension. The stepmother had left the whole of the residue to a nephew, having maintained close ties with her own blood relatives.
[25][2004] VSC 90.
Nettle J awarded half the net estate of $550,000 to the stepson to enable him to buy a modest home. His Honour said this:
Other things being equal, right thinking members of society are likely to accept that the needs of the widow of a second marriage should rank in priority ahead of the claims of the children of a first marriage; although of course it is always a question of fact. But equally, upon the death of the widow, and as it were in the event of a surplus, most would surely say that the children of the first marriage should rank for their fair share. For once the widow is gone, and therefore no longer in need of provision, her needs no longer warrant that the children rank behind her or thus her chosen successors.[26]
[26]Ibid [58].
As Vickery J noted in Robertson v Koska,[27] Nettle J treated the origin of the property in the surviving spouse’s estate as just one of the factors to be taken into account.[28] Counsel for Jozsef submits that, adopting that approach, the Court should have regard to both Eva’s significant contributions to the acquisition of the Bignell Road property and the contributions he and his wife at the time made to the deceased’s welfare after her death and during the remaining 20 years of his life.
[27][2010] VSC 134, [95].
[28]See McKenzie v Topp [2004] VSC 90 [46].
Jozsef relies upon the close relationship he had with the deceased for 25 years between 1987 and 2012. He argues that it would have been likely that the deceased would have made provision for him in a will and that it is significant that the Court is not being asked to make an order contrary to the deceased’s express wishes in any will.
In all the circumstances, including the lack of evidence relating to the financial needs of Katalin and Zsuzsa to be compared with those of Jozsef, he argues that proper provision for him should amount to half of the net distributable estate.
Discussion
The nature and content of the deceased’s moral obligation or duty to make provision for Zsuzsanna and Jozsef must be considered having regard to the statutory factors in s 91(4)(e)-(p) of the Act.
Relationship between the deceased and the applicants – s 91(4)(e)
Zsuzsanna
Zsuzsanna and the deceased had an exclusive relationship in which they lived together as partners from the beginning of 2008 to about May 2010, when they separated.
When Zsuzsanna returned from Hungary in August 2010, the couple were reconciled to the extent that she stayed with him between two or three nights a week, but lived at her Canterbury unit for the rest of the time. Whilst Zsuzsanna has described their relationship as loving, she was conscious of their past differences and retained the Canterbury unit.
In all the circumstances, I am satisfied that Zsuzsanna and the deceased had an affectionate relationship of some four years and four months duration in all, which was cut short by the deceased’s death.
Jozsef
Jozsef had known the deceased from the age of 17 and had had a close relationship with him as a stepson for approximately 25 years. It was characterised by mutual affection and had many of the aspects of the interaction which might occur between a father and son. The relationship survived Eva’s death and persisted for the life of the deceased, notwithstanding their geographical separation. It is indicative of the character of the bond that Jozsef suggested that the deceased move to Queensland to be nearer to him as he aged.
Obligations to claimants and beneficiaries – s 91(4)(f)
It is common ground that the deceased had obligations to provide for the maintenance and support of his two daughters.
Jozsef does not dispute Zsuzsanna’s proposition that the deceased also had obligations to provide for her, as well as for him as his stepson.
Zsuzsanna recognises the deceased’s obligations to provide for his daughters, but contends that he was also obliged to provide for her as his de facto widow.
I will return to the issue as to the deceased’s obligations in the context of my analysis as to whether he had a responsibility to make provision for either of the claimant plaintiffs.
Size and nature of the estate – s 91(4)(g)
The net estate is essentially made up of the proceeds of the sale of the Bignell Road property, purchased by the deceased and Eva, Jozsef’s mother.
The Court is urged to make orders in terms of specific amounts of provision. It is common ground that whilst Katalin has failed to account for the deceased’s 2006 Ford Falcon valued in the inventory at $15,000 or the sum of $20,367.98 in an ANZ bank account, the Court should deal with the claims on the basis that the net estate comprises the sum of approximately $400,000. This assumes that the costs of the plaintiffs will be met out of the estate.
Financial resources and needs of applicants and beneficiaries – s 91(4)(h)
I have set out my findings as to the respective financial situations of Zsuzsanna, Jozsef, Katalin and Zsuzsa.
I note that Zsuzsanna gives no details of her living expenses and there is no evidence as to how the expenses of her travel to Hungary for some months each year have been met. Whilst she seeks funds to invest and ultimately pay for what is referred to as a ‘Refundable Accommodation Deposit’ in respect of aged care accommodation, no specifics of the amounts required are provided.
Katalin gives little detail as to her own financial situation in the context of her relationship with her fiancé. While she has apparently received the net assets of the estate, she has failed to account for them. I cannot conclude that she has distributed any money to Zsuzsa. Katalin also provides only general information about Zsuzsa’s situation, but it is not contended that she is well off and I am satisfied that she is impoverished.
Age of the applicants – s 91(4)(j)
As stated in the findings of fact, Zsuzsanna is 71 years old and Jozsef 51.
For the purposes of comparison, I note that Katalin is 42 and Zsuzsa 44.
Contribution of applicants to building up the estate or welfare of the deceased or his family – s 91(4)(k)
Zsuzsanna contributed to the deceased’s welfare by doing the housework and contributing to household expenses when they lived together, and by acting as his partner in social situations then and later when they lived apart.
Jozsef contributed to the estate by not making any claim to his mother’s estate. Eva had made a substantial direct and indirect contribution to the purchase of the principal asset of the estate, the Bignell Road property. Her contribution was to the joint financial situation overall, regardless of the actual amount outstanding under the mortgage over that property when she died.
Jozsef and Anna also contributed to the deceased’s welfare by supporting him after Eva’s death and Jozsef continued to contribute to his welfare in the context of their lasting affectionate relationship.
Benefits previously given by the deceased to applicants or beneficiaries – s 91(4)(l)
The deceased had left the former matrimonial home in Budapest to his former wife and daughters.
Maintenance of applicant by the deceased – s 91(4)(m)
The deceased had maintained Zsuzsanna to the extent of his contributions to her living and other expenses.
Jozsef was not maintained by the deceased, although he and Anna lived with him and his mother for a period before moving into rented accommodation.
Character and conduct of the applicant or any other person – s 91(4)(o)
There is no evidence to suggest any defect of character or conduct on the part of either Zsuzsanna or Jozsef which would explain the lack of provision for them by the deceased on the basis of it being a disentitling kind. [29]
[29]See Brown v Brown (Unreported, Supreme Court of Victoria, Eames J, 7 July 1995), 53-5.
Although Katalin has to date failed to account in relation to the assets of the estate transmitted to her, I do not regard that behaviour as relevant conduct for the purposes of s 91(4)(o).
Conclusions
Zsuzsanna’s claim
Zsuzsanna had a close relationship with the deceased for some four years and four months and made some contribution towards his welfare during that period.
The relationship between Zsuzsanna and the deceased was not of long standing and had changed after the differences between them and its breakdown in 2010. No longer did the couple live together and Zsuzsanna retained the accommodation she had arranged during the period of their separation. She explains this on the basis that she was conscious of their past differences, but there is no evidence that she would not be able to secure that or similar accommodation in the event of future relationship problems. Nor am I satisfied that the couple planned to live together in the future in any event.
On the limited evidence as to her assets and expenses, Zsuzsanna’s situation was and is comfortable when compared with those of Katalin, Zsuzsa and Jozsef. She can and could afford the accommodation she took up after leaving the Bignell Road property in 2010. By at least 23 April 2013, she had savings of $130,000 and was in receipt of two pensions. She also had interests in two Hungarian properties. Further, she has not established any need for specific additional amounts to secure different accommodation or fund her living expenses as she ages. She travelled to Hungary for holidays each year of her relationship with the deceased and there is no suggestion that she may not be able to afford to continue to use her property there. She has failed to establish the requisite need for provision.
In all the circumstances, Zsuzsanna has not satisfied me that the deceased had any responsibility under s 91 of the Act to make adequate provision for her proper maintenance and support. Accordingly, her claim should fail.
Jozsef’s claim
Jozsef made a significant contribution towards the estate by not claiming any interest in the Bignell Road property or his mother’s estate after her death. I am not able to determine what precise amount was owing under the mortgage loan relating to the property at his mother’s death, but the couple had worked long and hard together to build up their joint assets after arriving in this country virtually penniless. The Bignell Road property was their second joint purchase and their finances were intermingled. It was only as a result of their combined efforts that the deceased has been in a position to pay out the mortgage loan when he did.
Jozsef himself had a lengthy and close relationship with the deceased who was like a father to him. Their relationship continued for many years after his mother’s death. In my view, it was a relationship that gave rise to the deceased having a moral responsibility to make provision for Jozsef’s proper maintenance and support.
Jozsef was not well off at the date of the deceased’s death and remains in the same situation. He has only been able to just meet his living expenses and those of Ildiko, who has no income. He does not own any property. Bearing in mind the factors to which I have had regard, and, in particular, the size of the net estate and the relative situations of Katalin and Zsuzsa, I am satisfied that the deceased failed to carry out his responsibility to make provision for Jozsef’s proper maintenance and support.
Having regard to his financial position and need, I am persuaded that the Court should order that provision of $150,000 be made for him out of the estate. Such sum would provide him with a nest egg for his immediate and future needs whilst leaving sufficient for Katalin and Zsuzsa, whose financial needs are more pressing, whether or not the plaintiffs’ costs are to be paid out of the estate.
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