Wicks v Melchiori
[2014] VCC 1456
•5 September 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
FAMILY PROPERTY DIVISION
Case No. CI-13-04122
IN THE MATTER of an application under Part IV of the Administration and Probate Act 1958
AND IN THE MATTER of the Will and Estate of STEPHANIE MELCHIORI, Deceased
BETWEEN
| ELISABETH WICKS and LIDDY NANKERVIS | Plaintiffs | |
| -and- | ||
| ERVINO HUMBERTO MELCHIORI | Defendant | |
| (who is sued as the Executor of the Will and Estate of STEPHANIE MELCHIORI, Deceased) | ||
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 August 2014 | |
DATE OF JUDGMENT: | 5 September 2014 | |
CASE MAY BE CITED AS: | Wicks & Anor v Melchiori | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 1456 | |
REASONS FOR JUDGMENT
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Subject: TESTATOR’S FAMILY MAINTENANCE
Catchwords: Application pursuant to Part IV of the Administration and Probate Act 1958 – deceased survived by a son and two daughters – modest provision made for the daughters – estate comprising the deceased’s home – claim by the daughters of the deceased – whether the deceased had responsible entity to make further provision for her daughters – competing moral claim of the deceased son
Legislation Cited: Administration and Probate Act 1958, s19; Evidence (Miscellaneous Provisions) Act 1958, s124(1)(b)
Cases Cited: Briggs v Mantz [2014] VSC 281
Judgment: Further provision made for the plaintiffs.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr N McOmish | Issy Lissek |
| For the Defendant | The defendant appeared in person | - |
HIS HONOUR:
Introduction
1 Stephanie Melchiori was born on 24 May 1925. She died on 17 November 2012. She was married to Stefano Melchiori, who predeceased her. Stephanie and Stefano had three children: Elisabeth, who was born in August 1944, and who is now 68 years of age; Liddy, who was born in March 1949, and who is now 65 years of age, and Ervino, who was born in May 1952, and is now 62 years of age.
2 Stephanie left a Will dated 29 November 1995. She appointed Ervino her executor and trustee. By her Will, she left $10,000 to Elisabeth and $10,000 to Liddy. She left the balance of her estate to Ervino. Ervino obtained probate of Stephanie’s Will on 7 February 2013.
3 At the time of Stephanie’s death, she was living at 169 Nelson Place, Williamstown. It comprised the major asset in her estate. Ervino presently resides at the property.
4 By an Originating Motion filed 6 August 2013, Elisabeth and Liddy claim that Stephanie did not make adequate provision for their maintenance and support. They seek orders that adequate provision be made for them.
5 Mr N McOmish of Counsel appeared for Elisabeth and Liddy. Ervino appeared in person. He had previously retained solicitors. His solicitors made application to file and serve a notice of ceasing to act which was granted by the Court.
6 The Court file reveals that an Order was made that the parties attend a judicial settlement conference on 23 May 2014. The parties were represented by Counsel. I was informed that Ervino did not attend the judicial settlement conference. At the conclusion of the judicial settlement conference, Judge Kings made an Order, among others, that the proceeding be fixed for trial on 25 August 2014.
7 Ervino had retained Peter Boyle, Solicitor, to act for him. Mr Boyle applied to the Court for leave to file and serve a notice of ceasing to act. That application was granted on 4 August 2014 by Judge Kings. Her Honour made an Order confirming the trial date of 25 August 2014, and obliging Mr Boyle to serve a copy of the Order on all of the parties to the proceeding and also on Ervino.
8 I have set out the foregoing, because it became relevant to the manner in which the trial was undertaken. When the proceeding was called on before me at 10.30am on 25 August 2014, Ervino did not appear. I stood the proceeding down and directed my Senior Associate to make telephone contact with Ervino to inform him that if he intended to defend the proceeding, he needed to attend the Court immediately.
9 Ervino appeared at about 11.45am. He said that he was unaware that the proceeding was still on foot. He said that he had not been informed of the trial date. He was visibly very angry, and made a number of statements directed to the Court demonstrating his anger. To his great credit, he calmed down quickly as I gave him an explanation of the Orders that had been made, the nature of the proceeding, and what Elisabeth and Liddy were claiming.
10 Ervino appeared to have with him a body of documents which I understood to include the affidavits relied upon by Elisabeth and Liddy. Mr McOmish, very helpfully, informed me that a draft of an affidavit prepared by Mr Boyle was produced at the judicial settlement conference. He provided me with a copy. I made a copy of it and had my Senior Associate hand it to Ervino. I also provided him with a copy of Part IV of the Administration and Probate Act 1958 in the hope that he would understand that there was a proper basis for the proceeding brought by Elisabeth and Liddy. I subsequently stood the proceeding down until 2.15pm so that Ervino could study the affidavits, and in particular, his own draft affidavit.
11 On the resumption of the proceeding at 2.15pm, I enquired of Ervino whether he proposed to defend the proceeding and, if so, in what manner. He informed me that he intended to defend the proceeding. I invited him to adopt the draft affidavit during sworn evidence. I invited him to consider whether he wanted to cross-examine Elisabeth and Liddy. He declined to do so. Initially, he was reluctant to adopt the contents of the draft affidavit. On a cursory examination of it, I considered that it was in his interests to tender the affidavit. I invited him to enter the witness box, to take an oath and to adopt the draft affidavit as his evidence. He did so. I invited Mr McOmish to cross-examine Ervino. He declined to do so.
12 The trial proceeded by the parties tendering the following affidavits:
· Elisabeth’s affidavit sworn on 1 November 2013: exhibit A;
· Liddy’s affidavit sworn on 10 February 2014: exhibit B;
· The affidavit of Deborah Leshinsky, certified practising Valuer and Solicitor, sworn 14 August 2014 with two exhibits: exhibit C;
· Ervino’s affidavit, adopted by him during his oral evidence given on 25 August 2014: exhibit 1.
Liddy’s affidavit
13 Liddy is a resident in Sacramento, California in the United States of America. She swore an affidavit before an Attorney-at-Law. She was available to give evidence by videolink. Ervino declined the opportunity to cross-examine her. In the course of addresses, he did not contest any of the facts deposed to by either Elisabeth or Liddy.
14 Section 124(1)(b) of the Evidence (Miscellaneous Provisions) Act 1958 permits the Court to use an affidavit which has been sworn or taken in any place outside Victoria before any person having authority to administer an oath in that place. The person before whom Liddy swore the affidavit purports to have the authority to administer an oath. Therefore, I see no reason why I should not receive the evidence contained in the affidavit.
The evidence
15 Elisabeth was born in August 1944. She is now 70 years of age. She left school in 1959 when she was 15 years of age. She then went out to work. She left the family home in 1961 when she was 17 years of age. She married in 1968. She is still married. She has two children, who I assume are adult and independent of her and her husband.
16 Elizabeth had a reasonable relationship with her parents. They came to rely on her because they were having significant problems with Ervino. She alleges that Ervino was a difficult person. He stayed with her and her husband on three occasions to give her parents some respite from the trouble which she alleges he was causing.
17 Elisabeth had a good relationship with Stephanie. Stephanie relied upon her for emotional support. Stefano suffered a stroke in 1977. Elizabeth visited him weekly after he suffered a stroke.
18 In about 2000, Stephanie telephoned Elisabeth. She was in a state of anger. It would appear that her anger was driven by her allegation that Elisabeth had not telephoned her at some earlier stage. Stephanie announced that she disowned Elisabeth. She told Elisabeth that she was no longer her daughter. Elisabeth tried to make contact with Stephanie without success.
19 Elisabeth was not informed of Stefano’s death. She was upset when she found out that her father had died. She did not reconcile with Stephanie. There were two reasons for that: firstly, because Stephanie had disowned her, and secondly, because she was fearful of Ervino.
20 Stephanie’s financial circumstances are modest. In summary, they are:
· She lives in a caravan park in Dingley because she cannot afford to live anywhere else;
· She owns a unit in Werribee. She values it at $200,000. It is mortgaged to the extent of $50,000. She purchased it from her aunt, Helen Kolasinsky. She granted Helen the right to occupy the unit for the rest of her life. There appears to be some conflict between Elisabeth and Helen. Helen asserts that she is an unpaid vendor owed $212,290.98 by Elisabeth. She has lodged a caveat over the unit;
· She has credit card debts of $10,000;
· She and her husband have a pension entitlement of $1,200 per fortnight. From that pension she pays $245 per fortnight as mortgage instalments over the unit;
· She is in good health. Her husband is 75 years of age. He is not in good health. He is a diabetic. He has a heart condition requiring medication.
21 Liddy was born in March 1949. She is now 65 years of age. She left school in 1966 when she was 17 years of age. She then went out to work. She left the family home in 1970 when she was almost 21 years of age. She married in 1977. She separated from her husband in 1992. He had a very poor working record. Liddy worked two jobs during her 17-year marriage.
22 Liddy had a good relationship with Stephanie and Stefano. She visited them on most weekends. She was close to both of them. They enjoyed a common interest in horse racing. She did not enjoy such a good relationship with Ervino. She alleges that he was violent and threatening toward her.
23 When Liddy separated from her husband in 1992, she moved to the United States of America. She telephoned Stephanie and Stefano frequently after she moved.
24 Liddy became a citizen of the United States of America on 24 January 2001. She telephoned Stephanie and informed her of her new citizenship. Stephanie accused Liddy of not being there for her and her father. She told Liddy that she no longer had a mother and that she should forget about both her and Stefano.
25 Liddy was not informed of Stefano’s death until she received a telephone call from Elisabeth, who informed her that Stefano had died. She did not reconcile with Stephanie.
26 Liddy’s financial circumstances are modest. They are somewhat better than Elisabeth’s. In summary, they are:
· She lives in a rented apartment. She has not disclosed what rent she is paying,
· After she separated from her husband, she obtained a property settlement of $50,000 which she subsequently invested;
· She has savings as follows: $68,000 in a retirement account, $65,000 in a KMPG retirement fund, and $1,300 cash in a banking account’
· She has credit card debts of $5,000;
· She owns a car worth $8,000. She has a car loan of $5,500;
· She is fully employed with KPMG as a secretary. She earns $57,000 gross per year. She earns a further $7,000 per year doing research work;
· She is in good health. She will retire in the next two years.
27 Ervino was born in May 1952. He is now 62 years of age. He left school in 1964 when he was 14 years of age. At some stage after leaving school, he commenced working in the meat industry. He retired from work in 1996.
28 Ervino has lived in the property since it was purchased by Stephanie and Stefano in the early 1960s. He had a very good relationship with Stephanie and Stefano. In their later life, he was largely responsible for looking after them.
29 Ervino’s financial circumstances are reasonable. In summary, they are:
· He is entitled to the property. I will refer to its value later in these reasons;
· He has $687,000 cash in a banking account. He lives off the interest. He did not adduce any evidence of the income earned by him from that investment. Common knowledge accessible over the internet shows that, for example, the Commonwealth bank offers 2.5 per cent on deposits over $100,000. At that interest rate, he would earn $17,175 per year or $330.29 per week;
· His other source of income is a Disability Pension of $309 per fortnight;
· He owns a car valued at $1,000.
The competing positions
30 Elisabeth and Liddy both contend that they are in a relatively parlous financial state. They submitted that they and Ervino should have an equal share in the property.
31 Ervino submitted that he has lived in the property practically all his life. He has nowhere else to live. It was Stephanie’s wish that he be given the property, and therefore, her Will should be upheld.
32 Elisabeth and Liddy allege that Ervino was violent, and that he used illicit drugs. They also allege, by implication, that he caused problems for Stephanie and Stefano. There is also a suggestion that it was his conduct which drove a wedge between Elisabeth, Liddy and Stephanie. Ervino denies those allegations. Despite the allegations and counter allegations, it occurs to me that they do not matter so much because of the submissions made by Ervino.
33 One of the issues which Elisabeth and Liddy anticipated Ervino would rely upon was their alleged estrangement from Stephanie; however, Ervino disavowed any reliance upon any alleged estrangement. I was at pains to ensure that Ervino understood the ramifications of making that concession. He submitted that the interruption to Elisabeth and Liddy’s relationship with Stephanie was not so much estrangement, because it occurred at a time when something was happening which required space to be created between them. It also occurred to me that he was not necessarily contesting that a responsibility was owed by Stephanie to Elizabeth and Liddy, that there was a breach of the moral duty owed by Stephanie to Elizabeth and Liddy, and that both Elisabeth and Liddy were in need.
The principles of law
34 There is so little controversy on the facts in this proceeding that I think it is unnecessary for me to review the principles of law in any particular detail. In Briggs v Mantz,[1] Macmillan J summarised the principles of law referred to and analysed in a number of her Honour’s other judgments. The following is her Honour’s summary, which I respectfully adopt:
[1][2014] VSC 281
“I have considered the principles applicable in Pt IV applications by adult children at length in a number of recent decisions, including Baxter v Baxter, Brandon v Hanley, Morris v Smoel, and Salloum v Assouni. For convenience, I repeat those principles here insofar as they are relevant. In an application for provision made under s 91 of the Act, the court must decide:
(a) at the date of death of the deceased, whether the deceased had a responsibility to make provision for the maintenance and support of an applicant;
(b) if so, whether the deceased’s will made adequate provision for an applicant’s proper maintenance and support; and
(c) if not, the amount of provision that should be ordered.
In considering these questions:
(a) the court must have regard to the matters set out in ss 91(4)(e)–(p);
(b) the court must determine whether the deceased had a moral duty, responsibility or obligation to the applicant;
(c) keeping in mind the weight given to the freedom of testation, the court will only interfere if the testator has failed in his or her moral duty; and
(d) that moral duty reflects an obligation to make adequate or sufficient provision by what is right and proper according to community standards.5
The basis of the court’s jurisdiction is responsibility, traditionally described as the enforcement of moral obligations.6 The question is what a wise and just testator would have thought it his moral duty to make for the plaintiff … .” [2]
[2]Paragraphs [94-95] – footnotes omitted
Application of the principles of law
35 I will firstly turn to the matters set out in s91(4)(e)–(p). I propose to do so compendiously with respect to Elisabeth and Liddy.
36 Elizabeth and Liddy are the natural daughters of Stephanie. Their relationship was cordial until Stephanie disowned them for reasons which are unexplained. There is no evidence to suggest that Elizabeth and Liddy behaved in a manner deserving of being disowned.
37 There is a moral obligation on a parent to make adequate or sufficient provision for the proper maintenance and support of a child – even an adult child when the adult child is of modest financial means.
38 The estate is potentially moderate in size. The valuation of Leshinsky & Associates is a kerbside valuation. Leshinsky valued the property at $950,000. It appears to me to be a valuation which is reliable, because it is based on a comparison with the sale price of other properties in the same street. That provides a reasonable yardstick to support the valuation. I propose to rely upon the valuation.
39 I do not think there is much doubt that Elisabeth and Liddy are in need. Certainly Elisabeth’s financial position is parlous. Liddy’s is somewhat better. Ervino is in a reasonably sound position while living in the property. He has a cash resource which is earning him income. He has a part Disability Pension. Despite that, he has a clear competing moral claim on the estate because I consider that he is also in need.
40 There does not seem to be any issue about the present health of Elisabeth, Liddy and Ervino. Elisabeth’s husband is in poor health which is no doubt an emotional and financial drain on their limited resources.
41 I have referred to the ages of Elisabeth, Liddy and Ervino above. They are all within the range of an accepted retirement age.
42 It would appear that Elisabeth and Liddy had a normal relationship with Stephanie. Elisabeth had more direct contact with her than Liddy, who was living in the United States of America. There is some doubt about Ervino’s relationship with Stephanie and Stefano. However, I make no finding about the allegations made against him of misconduct relevant to Stephanie and Stefano, and Elizabeth and Liddy. It is likely that Elizabeth and Liddy would have had a continuing normal relationship with Stephanie had she not disowned them.
43 The benefits extended to Elizabeth and Liddy by Stephanie and Stefano were very limited. There is little evidence to determine whether any such benefits were extended to Ervino, except that he has lived rent free in the property since its purchase.
44 Elisabeth, Liddy and Ervino were not being maintained by Stephanie, although perhaps Ervino was to the extent that he was living in the property rent free.
45 There is no evidence to suggest that any person has a liability to maintain Elisabeth or Liddy.
46 Although the character of Ervino has been called into question. I make no finding about the allegations made by Elizabeth and Liddy. The allegations were not tested. Ervino denies that he behaved in the manner alleged. In any event, it is a relatively small issue when I look at the evidence in the broad. There is no issue about the character of Elisabeth and Liddy being relatively dutiful daughters until they were disowned by Stephanie.
47 I have no hesitation in concluding that at the time of her death, Stephanie had a responsibility to make provision for the maintenance and support of Elisabeth and Liddy. The provision made for each of them in the Will is, without any question, wholly inadequate to provide for the proper maintenance and support of Elisabeth and Liddy.
48 I have had due regard to the matters set out in s91(4)(e)–(p) in concluding that Stephanie was in breach of her moral duty to provide proper maintenance and support for Elisabeth and Liddy. I have given due regard to Stephanie’s right to freedom of testation; however, the facts of this proceeding, demonstrate very clearly that I should interfere with Stephanie’s Will because of the breach by her of her moral duty.
49 I consider that as a wise and just testatrix, Stephanie should have concluded that it was her moral duty to make provision for Elisabeth and Liddy to a significantly greater extent than she did in her Will.
50 I accept the valuation of Leshinsky & Associates that the property has a sale value of $950,000.
51 There is clearly a distinction between the position of Elisabeth, Liddy and Ervino financially and in terms of resources. I think that is evident from my summary of their individual positions set out above. My intuitive synthesis is that Elisabeth is in greater need than Liddy and Ervino. Liddy is in greater need than Ervino, but if it is inevitable that the property must be sold, then, of course, Ervino will be without a place to live. The purchase of an alternative residence will consume his share of the proceeds of sale of the property and some of his cash. It may be that his entitlement to a pension will increase, but I suspect that will be marginal.
52 Mr McOmish urged me to order that each of Elisabeth, Liddy and Ervino are entitled to an equal share in the property. I am not convinced that I should make provision for Elisabeth and Liddy on that basis. There is good authority for the proposition that an equal division amongst children is not a sound basis for a Court to proceed when considering what a wise and just testatrix would have thought it her moral duty in making provision for her children.
53 I think community standards, supported by the pathway of reasoning in nearly all of the authorities I am aware of, is to consider that the wise and just testatrix would have made provision for Elisabeth and Liddy by attempting to provide them with a roof over their head and something for contingencies. Of course, that is not always achievable because of the size of estates, but it stands as a yardstick to apply with variation as the facts of individual cases require.
54 In the circumstances, I think that the provision which Stephanie should have made is as follows:
· $350,000 for Elisabeth.
· $250,000 for Liddy.
55 The foregoing recognises the need of Elisabeth and Liddy, and recognises the competing moral claim of Ervino.
Practical matters
56 I detected during the trial that Ervino does not want the property to be sold. That is understandable, because the property has been his home for so long. The estate has no assets from which the provision for Elisabeth and Liddy can be paid, so it is almost inevitable that the property will have to be sold.
57 I have not been encouraged to make alternative orders for the sale of the property should there be an impasse between Elizabeth, Liddy and Ervino regarding how the estate proposes to pay the foregoing sums to Elisabeth and Liddy. If a sale is inevitable, then after the costs of sale, the share of the proceeds of sale should be determined by using the present value of $950,000 as a base with Elisabeth’s share of $350,000, Liddy’s share of $250,000 and Ervino’s share of $350,000 being determined as fractions of $950,000 so that if the property sells for less or more, then they should take in accordance with their fractional interests.
Orders
58 I propose to order that further provision be made in conformity with the conclusions I have reached as set out above.
59 I will now invite the parties to address me on the form of order, and any application for costs.
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