Wlodarczyk v Public Trustee of New South Wales

[2006] NSWSC 493

CITATION:	Wlodarczyk v Public Trustee of New South Wales [2006] NSWSC 493
HEARING DATE(S):	05/05/06
JUDGMENT DATE :	26 May 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Costs of both parties to be paid out of estate on the indemnity basis. Whole of balance of estate to be transferred to plaintiff.
CATCHWORDS:	SUCCESSION - family provision - application by widow - thirty year marriage - widow receives home by survivorship and half estate - other half left to ex-nuptial child of deceased who never formed part of deceased's household and with whom deceased had infrequent contact - home in need of extensive repair - widow in immediate need of various necessities - inadequate fund to meet these needs and to provide for contingencies
LEGISLATION CITED:	Family Provision Act 1982, s.7
CASES CITED:	Golosky v Golosky, NSWCA, unreported, 5 October 1993 Singer v Berghouse (1994) 181 CLR 201
PARTIES:	Wladyslawa Wlodarczyk - Plaintiff Public Trustee of New South Wales - Defendant
FILE NUMBER(S):	SC 2605/05
COUNSEL:	Ms M.T. Bridger - Plaintiff Mr C.M. Wilson - Defendant
SOLICITORS:	Bilbie Dan - Plaintiff B. Maher - Solicitor for Public Trustee

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

FRIDAY, 26 MAY 2006

2605/05 WLADYSLAWA WLODARCZYK v PUBLIC TRUSTEE OF NEW SOUTH WALES

JUDGMENT

1 The plaintiff seeks an order under s.7 of the Family Provision Act 1982 that provision be made for her maintenance and advancement in life out of the estate of Zygmunt Szepan Wlodarczyk (“the deceased”).

2 The plaintiff is the widow of the deceased. They were both born in Poland, the deceased in 1922 and the plaintiff in 1932. They married there in 1972. The plaintiff had previously been married and had two daughters. The deceased had also previously been married but it appears that there were no children of that marriage. The deceased did, however, have one son, Tadeusz Ryaczewski. The son was born in France in 1945 as a result of a relationship between the deceased and a Polish woman when both were working as conscripted labourers under the German occupation. The son never formed part of the deceased’s household. He was brought up by his mother and the husband she later married. There were no children of the marriage of the plaintiff and the deceased.

3 The deceased died on 4 November 2003. He had made a will on 6 February 1991 naming the plaintiff and his sister-in-law as executrices. Both renounced probate. A grant of letters of administration with the will annexed was in due course made to the Public Trustee on 2 June 2005.

4 By his will, the deceased purported to devise to the plaintiff “my property situate and known as No 53 Alfred Street, Waratah” (this was their home). That property was, however, held by the deceased and the plaintiff as joint tenants, so that it passed to the plaintiff by operation of law in consequence of her surviving the deceased. The will directed that the residue, after payment of debts and expenses, be divided equally between the plaintiff and the deceased’s son Tadeusz. In the events which happened, the only assets recorded in the inventory attached to the letters of administration were a property at 1 Hewson Street, Mayfield (valued at $190,000) and a sum of $5,405.97 being rent from that property held by estate agents. It is accepted that the Mayfield property was an investment property acquired by the deceased after his retirement.

5 The plaintiff maintains that she should have the whole estate.

6 The plaintiff and the deceased came to Australia less than a year after their marriage in 1972. One of the plaintiff’s daughters (then aged 9) came with them. They lived from the beginning in the Waratah property. The deceased worked until retiring age but would not let the plaintiff work in her chosen calling of hairdressing. The plaintiff looked after the home and did some casual work from time to time. At the time of the deceased’s death, she had little money. She paid some $8,400 for funeral and headstone expenses out of their joint savings account of $9,778.18. Her assets at present consist of the Waratah property and about $1000 in a building society account. Her only income is from a Centrelink pension of $247.35 per week, virtually all of which she spends on ordinary living expenses.

7 The plaintiff is not in good health. She had a heart valve replaced in 1982 and continues to take Warfrin for her heart condition. She suffers badly from osteoarthritis which, she says, resulted from malnutrition in Poland during the Second World War and the subsequent communist regime. She takes medication for this condition. She is also on medication to manage high blood pressure.

8 The Waratah property is old and needs extensive repairs. The defendant has put into evidence a report by Mr McGuire, Property Inspector for the Public Trustee, who has qualifications in building, building surveying and construction management. The plaintiff adopts the content of the report. Mr McGuire refers to a need for “major works” and says that the house “is not structurally sound for one of its type and age”. He then goes on to describe particular repairs required. He estimates that repairs would cost something of the order of $50,000, apart from aspects involving the bathroom and kitchen which are of a structural nature and which Mr McGuire has been unable to assess by his inspection. He comments that $50,000 would be the maximum worth spending on the existing building and that the only real alternative would be to demolish it and build a new house at a cost of $100,000. The plaintiff has lived in the house for more than thirty years. She is familiar with and well settled in the locality. She does not drive a car. She wants to stay there.

9 The plaintiff, in her affidavit, provides details of particular needs in relation to the house, apart from the repairs dealt with in Mr McGuire’s report. I mention those relevant to her ordinary living requirements. The only toilet is outside and she must use a staircase to access it. The toilet bowl is cracked. The only shower is over the bath, so that she has to climb into the bath to use the shower. There is no laundry and the washing machine is in the bathroom. The water heater is old and of only fifty litres capacity. It needs replacing. She also needs a new television and a new refrigerator. The existing television does not work on all channels. The refrigerator leaks and she has to use towels to stop the water spreading. All these matters are of concern to a woman aged 74.

10 The deceased’s son Tadeusz, now aged 61, still lives in Poland. An affidavit sworn by him was read over the plaintiff’s objection, he not being present for cross-examination. I therefore treat the affidavit with some caution. Tadeusz has a wife and a daughter aged 15 years. He receives a disability pension from the Polish government, as does the wife. This is their only income. They own a flat in which they live and a garage (there is no reference to either owning a car or receiving rent for the garage). Although the flat is said to be an asset, they apparently have to pay “rental” for it. Both Tadeusz and his wife suffer from numerous medical conditions. Their daughter is also receiving treatment for an ongoing illness. While, as I have said, I must treat Tadeusz’s evidence with caution, I am satisfied that he is a man of very modest means indeed.

11 Tadeusz gave no evidence of his contact and relationship with the deceased. Evidence on that matter was, however, given by the plaintiff. She deposes to having found, after the deceased’s death, evidence that he had been sending money to his sisters and Tadeusz in Poland “on a regular basis”. She gives no details. She refers also to the deceased having visited Poland “every two or three years by himself”; but whether the deceased then saw Tadeusz the plaintiff does not say. The plaintiff referred in cross-examination to two occasions on which Tadeusz visited Australia and stayed with the plaintiff and the deceased at Waratah – on the first occasion for three months and on the second occasion for two months. I quote from the cross-examination:

“WILSON: Q. And he treated you well when he was visiting the house?
A. No, no. No, he didn't treated me well. I was doing all his washing, I was cooking for him and instead of thanking me, he turned back at me - he turned his back on me. He didn't even say good-bye to me, didn't say thank you for everything.

HIS HONOUR: Q. Was he rude to your husband as well?
A. Yes. They were fighting all the time. He even went to my daughter's bedroom. She was in high school then and she started to scream and my husband went in there and he was abusing Tadeuz because of that.”

12 The first question to be addressed in relation to the plaintiff is whether she has been left without adequate provision for her proper maintenance, education and advancement in life. If that question is answered in the affirmative, the court must decide what provision should be made for her out of the estate. This is the approach specified by the High Court in Singer v Berghouse (1994) 181 CLR 201.

13 I am satisfied that the plaintiff has been left without adequate provision. She has the matrimonial home but no readily available fund from which to pay for the extensive repairs it needs or the necessities to which she refers in her evidence, let alone to care for herself for the rest of her life. She is entitled to half the residue which consists, effectively, of the Mayfield property valued at $190,000. If it were sold for that amount, the plaintiff might realise, say, $90,000 after expenses, disregarding the impact of the costs of these proceedings, which is the next matter for consideration.

14 The defendant’s costs are estimated by its solicitor to be $11,907 – say, $12,000. The plaintiff’s costs are estimated at $29,700 – say, $30,000. Total costs are therefore of the order of $42,000 and, if they were paid out of residue, the net residuary estate would be about $138,000 and the plaintiff’s share of approximately $90,000 (net) to which I have referred would reduce to $69,000. That sum would be largely absorbed by the house repairs and the basic living items of which the plaintiff stands in need. There would be little left over to permit her to augment her basic pension income or to provide a buffer for future needs and unforeseen contingencies.

15 The plaintiff is in poor health and is aged 74. She and the deceased were married for more than 30 years. The expectation that a widow in these circumstances be left not only with a home but also a fund for contingencies is recognised in the case law (see, for example, the decision of the Court of Appeal in Golosky v Golosky (5 October 1993)).

16 The claim of Tadeusz upon the deceased’s bounty is quite problematic. Although there was a blood relationship and the deceased apparently sent Tadeusz money from time to time, the plaintiff’s evidence about Tadeusz’s two visits to Australia would suggest that the interaction was not a particularly harmonious one. Nor, as I have said, was Tadeusz ever part of the deceased’s household.

17 Because the provision made for the plaintiff is inadequate, I must move to the second stage of the Singer v Berghouse inquiry and decide what the provision should be. The plaintiff says that she should have the whole estate. The demonstrated needs are, however, for funds to repair the house and obtain the immediately necessary items, as well as to provide the fund for contingencies to which I have referred. At age 74, the plaintiff probably has about ten years remaining to her. The house repairs and other immediate needs account for about $60,000. Her share of the residue, after costs, is about $69,000. That leaves only $9,000 to last her for the rest of her life.

18 In my view, the plaintiff should have out of the estate a sum which not only enables her to meet the immediate needs of $60,000 but provides her with a supplement to her income so that she may live in reasonable comfort for the rest of her life. The balance of $9,000 from her net share of residue would, if invested at 5% per annum, enable her to have an annual sum of $1,110 (or about $21 per week) over a period of ten years. This is obviously inadequate for her needs. To produce $7,500 per year (or about $150 per week) over the same period, the invested sum would have to be $81,000. The balance of $9,000 would thus need to have a further $72,000 added to it in order to produce that result.

19 On this basis, the plaintiff needs a total of $141,000 – being $60,000 for the house repairs and immediately necessary items and $81,000 by way of the buffer or supplement for contingencies to which I have referred. This calculated sum of $141,000 is roughly equal to the balance of the residuary estate after allowing for the costs of the proceedings. As stated at paragraph [14] above, that balance is of the order of $138,000, even disregarding commission payable to the Public Trustee (so far not mentioned).

20 I have made and set out the various calculations above in order to test the proposition vadvanced by the plaintiff that she should have the whole estate. I do not mean, of course, to engage in any exercise of mathematical precision. The real point is that the calculations do verify the plaintiff’s claim that proper provision for her in accordance with the Act will entail her having the whole estate.

21 I am therefore of the opinion that the plaintiff has made out a case for the relief she seeks. In the particular circumstances, the orders of the court are as follows:

1. Order that the plaintiff’s costs of these proceedings as assessed or agreed on the indemnity basis be paid out of the estate of Zygmunt Szepan Wlodarczyk.
2. Order that the defendant’s costs of these proceedings as assessed or agreed on the indemnity basis be paid out of the estate of Zygmunt Szepan Wlodarczyk.
3. Order that provision be made for the maintenance and advancement in life of the plaintiff out of the estate of Zygmunt Szepan Wlodarczyk by transfer to her of the whole of the remainder of the estate.
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