Winarczyk v Winarczyk
[2011] NSWSC 407
•21 April 2011
Supreme Court
New South Wales
Medium Neutral Citation: Winarczyk v Winarczyk [2011] NSWSC 407 Hearing dates: Thursday 21 April 2011 Decision date: 21 April 2011 Jurisdiction: Equity Division Before: Associate Justice Macready Decision: (1) the defendant's property identified in folio identifier xxxx as notional estate to the extent necessary to meet the following orders
(2) the plaintiff is to receive a legacy of $75,000 out of the notional estate of the deceased
(3) Interest at the rate provided for under the Probate & Administration Act 1898 to run from one month from today's date
Category: Principal judgment Parties: Arthur Winarczyk v Roman Winarczyk Representation: Counsel:
Mr R. Jefferis for plaintiff
Mr M Cleary for defendant
In person for plaintiff
Roman Winarczyk for defendant
File Number(s): 2010/83570
Judgment
HIS HONOUR: This is an application in respect of the estate of the late Janina Ewa Winarczyk who died on 11 November 2008 aged 85 years. She was survived by the two parties who are her children. She made her last will on 28 October 2005 and appointed the defendant executor and left him the whole of the estate.
The estate of the deceased was very modest. It consisted of her unencumbered home at Doonside, cash of about $5,570 and furniture of negligible value. The defendant sold the house in January 2010 for $270,000. From that sale price there has to be deducted a number of expenses. There is first the sale expenses of $7,000 and $12,000 which he spent on the property to get it ready for sale, funeral expenses of $15,000, probate costs of $3,801. Taking these into account and also giving the benefit to the defendant of the cash, the amount finally received and distributed to him from the estate would appear to be in the order of $237,770.
Family history
The deceased was born in Poland in December 1923. The plaintiff also was born in Poland in October 1955 and the defendant was born in August 1963. In 1965 the deceased and her husband and two children arrived in Australia. On 15 July 1975 the deceased and her husband were divorced. There was a decree nisi on that day.
Neither of the parties knows the whereabouts of the former husband of the deceased and in the circumstances it is not practical to serve him with notice of this application.
Accordingly I will proceed with the matter.
In April 1976 the deceased executed a will which I think from recollection left the property to both the children. In March 1977 the deceased and the defendant were granted Australian citizenship. On 15 June 1978 the deceased was hit by a truck while walking to work. She suffered severe back and head injuries and was not able to work after that date. In February 1982 she purchased the present home at Doonside. On 25 October 2004 there was an apprehended violence order issued at Blacktown Court. This resulted from an incident the day before when, according to the defendant, he was attacked by the plaintiff at his mother's home. They apparently had an argument over who should have possession of their mother's credit card. The final hearing of that matter was on 12 July 2005 and the apprehended violence order was put in place for a period of two years.
In October 2005 the deceased appointed the defendant her attorney and her guardian pursuant to enduring documents which were then signed. Her last will was made in October 2005. In November 2005 there was an application by the plaintiff to the Guardianship Tribunal to appoint a guardian but that application was dismissed.
In May 2007 the plaintiff visited the deceased in hospital. As the apprehended violence order was one which was made for the benefit of both the deceased and the defendant, that visit to the deceased by the plaintiff was in fact a breach of that order. He was charged with a breach but received an order under s. 10 of the Crimes Act.
Once the apprehended violence order had expired he then did visit the deceased when she was in the nursing home. The deceased, as I have mentioned, died on 11 November 2008 and probate was granted to the defendant on 6 February 2009.
In September 2009 the plaintiff separated from his wife and he had to relocate to a home to which I will refer shortly. From the family property settlement he received approximately $130,000 which he spent as to $92,000 for the home in which he now occupies, $10,000 on a car, $4,500 on a boat. He used the remainder of the settlement monies to live on until he was reduced to living on a Centrelink pension.
Eligibility
The plaintiff is an eligible person, he being a son of the deceased.
In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) l81 CLR 201 has set out the two-stage approach that a Court must take. At page 209 it said the following:-
"The first question is, was the provision (if any) made for the applicant 'in adequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosh v Perpetual Trustee Co Limited . The determination of the first stage in a two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was a proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the Court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a Court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."
Plaintiff
The plaintiff is 55 years of age. He is now single with no dependents. His assets consist of what he has described as a manufactured one-bedroom home by the lake at Windang, south of Port Kembla. He could not afford to purchase it outright so he made a part purchase of approximately $90,000.
The effect of this is that if he wishes to move away or sell it, his interest in it reduces by 1.5% per annum until it gets to 50% of the value where it remains at that amount. He also has a car worth $8,000 and a boat which he says is worth $2,500. He has other minor personal properties.
Plaintiff's liabilities
So far as liabilities are concerned he credit card liabilities of $3,600, Court costs in the sum of $1,500 and a liability of $500. As far as his income is concerned, of recent years it has been quite low. He has been surviving on fortnightly Centrelink payments which are approximately $600 per fortnight. He also receives income from time to time for delivering what he calls "junk mail". He has to walk around putting things in letterboxes. How much he earns depends very much on the weather and the time of the year. Sometimes he might earn $l00 or more but mostly it is less. Naturally, of course, he can earn some income over and above his Centrelink pension. $60 a week can be earned without affecting his pension.
The relationship with the deceased is always important. He spent some time visiting his mother although it was his brother, the defendant, who moved in with his mother for a long time. There are two matters which affect the relationship between the plaintiff and the deceased. One was a matter which did not quite affect the relationship but is relevant for the Court to take into account in considering his conduct towards the deceased. That was that in 2001 while his mother was in hospital suffering from bowel surgery his brother, in evidence, said that the plaintiff used a credit card to take monies from his mother's account and the figure of $1,500 was mentioned. The amount was not repaid, according to the defendant. There have been produced in evidence bank statements of the deceased which show withdrawals being made from the Canberra Catholic Club, sometimes several a day, which were at the relevant time when his mother was away having surgery.
The plaintiff's explanation for that was not convincing and I think it probably the fact that he did take some money from his mother when she was in hospital. There is no doubt that at other times he would use her account but on those occasions it was for things for his mother's expenses.
The other matter concerns the dispute in 2004. Plainly, there was an altercation at home and the Court thought it appropriate that the mother should also be protected because of the threat of violence. This is something which affected the contact because obviously by force of the order he could not see his mother for some two years.
The question of estrangement has been dealt with in many cases. In Foley v Ellis (2008) NSWCA 288 the Court of Appeal referred to this kind of problem in these terms:
"101. The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of that testator or testatrix to provide for the claimant. ln Palmer v Dolman Ipp JA, after a review of the cases, observed (at ll0) that:
"...The mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirement under the Act."
See also Wheatley v Wheatley (2006) NSWCA 262 AT (22) - (23) per Bryson JA (with whom Santow and McColl JJA agreed), addressing the second stage of the process required by Singer v Berghouse .
l102. The authorities indicated that where the claimant has been estranged from the testator or testatrix, the application of s. 7 of the Family Provisions Act requires that the estrangement be appraised and its causes considered. Wentworth v Wentworth estate of G M Wentworth (Bryson) quoted in Wheatley v Wheatley at (22). In addition, s. 9 (3) (b) expressly requires the character and conduct of the eligible person to be taken into account at the second stage of the process. Care should be taken, however, not to oversimplify the complex and nuanced relationships within a family by yielding to the temptation to condemn categorically behaviour of one party or the other. Events viewed years later through the cold prism of a courtroom may give a different impression than when the events are set in the context of raw emotions experienced at the time. The "wise and just" testator or testatrix ( Bosch v Perpetual Trustee Co Ltd (l938) AC 463 at 478-479 PER Lord Romer) will be taken to understand this."
In Wheatley v Wheatley (2006) NSWCA 262 Bryson J had the following to say:
"37. The poor state of the relationship between Mr Wheatley and he testatrix, illustrated by the absence of visits during the last 13 years of her life, operates to restrain amplitude in the provision to be ordered. However, Mr Wheatley is an eligible person, the testatrix's only son and one of only two children, and his needs are severe and go far beyond the need for renovation of his flat and dental treatment which the trial judge's order provided for. Amplitude would not be appropriate in ordering provision for him, but it must be observed that provision for him, even the full amount nominated by his counsel, would not produce any hardship for Ms Wheatley, who would still be provided for on a scale according full an appropriate recognition to her claims."
The matter was further discussed recently by White J in Kay v Archbold (2008) NSWSC 254 in these terms:
"94. Senior counsel for the defendant submitted by reference to observations of Bryson JA (with whom Santow and McColl JJA agreed) in Wheatley v Wheatley (2006) NSWCA 262 at (37) that the poor state of the relationship between the deceased and the plaintiff, illustrated by their lack of communication between 1999 and 2006, even though the plaintiff was aware that her mother was ill and seriously so, operated to "restrain amplitude in the provision to be ordered".
95. Their estrangement is certainly a factor to be taken into account in determining what provision should be ordered. However, cases are infinitely various. There is no rule that irrespective of the claimant's need, the size of the estate, and the existence or absence of other claims on the estate, a claimant is not entitled to "ample" provision if he or she has been estranged from the testator. Bryson JA was making observations appropriate to the facts in Wheatley v Wheatley. He was not espousing any general principle as to the relevance of amplitude. The very general directions in sections 7 and 9 of the Family Provision Act require close attention to the facts of individual cases. It is an error to seek to extract statements of general principle from observations directed to the facts of specific case.
96. The present is not a case of "bare paternity" or "bare maternity". But even in such cases, the fact of parenthood is highly material to the existence of a duty to make provision. In this case some provision was made. The question is as to its adequacy."
In this case the conduct, although serious in some sense, merely reflected an argument between the brothers and some improper use of the deceased's funds by the plaintiff. Plainly, the plaintiff even after this was over still kept in contact with his mother. In those circumstances it is not something which would mean that the plaintiff should not have a claim but it might be appropriate to bear in mind when considering the extent of any provision which should be made for the plaintiff.
There were no other contributions to the estate of the deceased by the plaintiff other than work which he did around the home. His mother paid for those matters so far as materials and the like are concerned.
Defendant
The defendant is 47 years old and is single with no dependents. He works as a solicitor in sole practice. He has accommodation which he owns on the Central Coast. His current house on the Central Coast is a unit worth $415,000 and the mortgage on that is now $156,563. Prior to the sale of the deceased's home the mortgage was $390,000. The defendant has personal effects worth $10,000, a car worth $35,000, savings of $84,000 and a term deposit as security for a lease of $6,566. He has debts of $1,500 and his costs. The defendant has said he has been in private practice as a sole practitioner and that his income was $54,793 in 2006, in 2007 his income was nil, in 2008 his income was $22,l76, in 2009 his income was $120,328 and in 2010 his income was $35,163.
Plainly, the defendant's relationship with the deceased was good. He lived with her for most of his life and cared for her, particularly in the latter years when she was dementing. He likewise did not make any substantial contributions towards the estate except for the monies he spent on the house before it was sold.
Discussion
The plaintiff's work history shows that he was able to earn a reasonable wage at one stage in the past. He had a university degree and also had skills in the computer area. From time to time he had jobs in that area. However, he has not had such a job over the last six years and he seems to have descended into an area where he in fact is living on a pension and doing manual work such as delivering circulars to households. The fact that he is doing that suggests to me that his ability for work has been decreased. He had designed a computer programme which was being sold but the most he makes from selling that computer programme is several hundred dollars a year.
It may be that it is a matter of choice and the defendant would urge that as being the situation but frankly I would have thought that if the plaintiff were able to do more he probably would. There is no doubt that he lives reasonably close to Wollongong and there would be available work but he just seems to be stuck in this situation. He has really nothing behind him and it is necessary to see how he says he has been left without adequate proper provision for his maintenance, education and advancement in life. It is suggested that apart from moving house, of which there is no evidence as to what the cost of a suitable place would be and that he would like some monies to do some dental work. Apparently he needs four new crowns which cost $1,500 each. He also would like some provision for contingencies which would provide him with a slightly stronger financial situation.
The defendant's position is not good but he does have some real estate which is more valuable than the plaintiff's. He has a problem with his practice in that it is decreasing. Most of his work is motor-vehicle work and compensation work and it is plain that now there is not a large amount of such work available. However, I would have thought that if he did decide to give up sole practice he would have some opportunity working as an employed solicitor. In my view, he has better work prospects than the plaintiff.
This is a small estate and, in my view, the plaintiff needs some small provision to protect him from the contingencies in life. I would think an appropriate figure would be $75,000. The estate has already been distributed and it will be necessary to designate a notional estate. The only relevant estate in this respect is the defendant's unit.
Section 27 of the Family Provision Act is in the following terms:
"(1) On an application in relation to a deceased person, the Court shall not make an order designating properties as notional estate of the deceased person unless it has considered:
(a) the importance of not interfering with reasonable expectations in relation to property;
(b) the substantial justice and merits involved in making or refusing to make the order; and
(c) any other matter which it considers relevant in the circumstances.
(2) in determining what property should be designated as notional estate of the deceased person, the Court shall have regard to;
(a) the value and nature of property the subject of any relevant prescribed transactional distribution from the estate of the deceased person;
(b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration;
(c) any changes over the time that has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of the property of the same nature as the property the subject of the prescribed transactions, the distribution or the consideration, as the case may be;
(d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during that time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and
(e) any other matter which it considers relevant in the circumstances."
Having regard to the matters referred to in the section I do not think there is any reasonable expectation in relation to the property. The property was sold before the time expired for the purposes of making an application.
It was suggested in submissions that there was a notice under s. 35 of the Family Provisions Act that was published of intended distribution. However, as I have pointed out in D'Albora v D'Albora (1999) NSWSC 468, that is not a relevant matter.
So far as the substantial justice and merits are concerned I have canvassed those and I think it is appropriate to make an order. Accordingly, the orders I will make:
(1) the defendant's property identified in folio identifier xxxx as notional estate to the extent necessary to meet the following orders
(2) the plaintiff is to receive a legacy of $75,000 out of the notional estate of the deceased
(3) Interest at the rate provided for under the Probate & Administration Act 1898 to run from one month from today's date
I will note that the plaintiff has no liability for legal costs and no order will be made. As the defendant has obtained the whole of the estate it is not necessary to make an order in relation to the defendant's costs. I order that the exhibits be returned.
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Decision last updated: 11 May 2011
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