Barca v Ceravolo

PARTIES : Susan Gay Barca & 3 Ors v Teresa Ceravolo

COUNSEL : Mr R. Tregenza for plaintiff Miss R Winfield for defendant

SOLICITORS : Watson Stafford for plaintiff Stormer Lawyers for defendant

• 1- IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2158/2007 Susan Gay Barca & ors v Teresa Ceravolo (Estate of the late Vincent Barca) JUDGMENT 1 His Honour: This is an application under the Family Provision Act 1982 in respect of the estate of the late Vincent Barca who died on 27 December 2006 aged 61 years. The first plaintiff, his widow and his three daughters who are also plaintiffs survived him. The last will of the deceased 2 The deceased made his last will on 29 October 2003 in which he appointed the defendant his sister as executrix. He left legacies of $50,000 to each of his daughters and left the residue of his estate to be divided between the defendant and her two daughters, Carmelo Ceravolo and Francesco Ceravolo. He made no provision for his widow from whom he had been separated for many years. He stated in his will that the reason why he had made provision for the residuary beneficiaries was because for the last six years the defendant was the only relative to have cared and regularly visited him. The estate of the deceased 3 The estate of the deceased consisted of his house at Llandilo now valued at $460,000 and cash of $222,406. There is a debt due to the executor of $3,012 which has not been paid. There are also debts due to the deceased's sister Maria Pedri of $45,000 which although statute barred are likely to be honoured by the defendant and thus should be taken into account. There is also an extraordinary claim by the executor for travelling expenses of $15,660 and lawn mowing and feeding the deceased's dogs of $22,000. There are the defendant's costs which are estimated at $41,520. The plaintiffs 'costs are estimated at $46,499. If all these claims are met the net estate will be $508,717 less selling costs of the property. Family history 4 The deceased was born in May 1945 and the first plaintiff Susan was born in November 1951. They first met in 1966 when the Susan was 14 years old and the deceased was 21 years old. 5 Susan started work as a machinist in 1967. The deceased and Susan married in January 1975. At the time Susanne was employed as a machinist the deceased worked for the Department of Main Roads as a labourer. They lived in a property in Terrybrook road Llandilo which was owned by the deceased and on which he had built a house. 6 Their first child Anne was born in September 1975 and their second child Christie was born in October 1977. The plaintiff had a difficult relationship with the deceased and separated from the deceased while pregnant with Christie but returned to live with him before Christie was born. 7 In about late 1979 the plaintiff finally separated from the deceased. Her third daughter Kelly was born in February 1980. The deceased paid maintenance for the children until Anne turned 16 in 1991. They lived with their mother as they grew up at her parent's home and other places. 8 In due course the children married and have started their own families. I will deal later with the extent of contact they had with their father. 9 As I have mentioned the deceased made his will on 29 October 2003 and died on 27 December 2006. Probate was granted and these proceedings commenced within time. Eligibility 10 All the plaintiffs are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 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 'inadequate 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 Bosch v Perpetual Trustee Co Limited . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the 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."

11 I turn to consider the situation in life of the four plaintiffs. The defendant and her daughters have not put before the court their financial situation. In these circumstances the court can proceed on the basis that they do not wish the court to have regard to this matter. The defendant has referred to the relationship between her and the deceased but the other two residuary beneficiaries did not refer to the relationship that they had with the deceased. In these circumstances the court can proceed on the basis that they do not wish the court to have regard to those matters when considering the present applications. The widow of the deceased 12 Susan is 57 years of age and lives with her mother for whom she cares. She is not in a relationship with any person. She has small amounts of personalty by way of assets and her income is $720 per fortnight by way of a carer's allowance. Her mother receives approximately $500 per fortnight by way of pension which is used in the combined household. 13 Her liabilities included rental of $245 per week for the property which is a converted garage at the rear of her landlord's home. 14 Susan had a difficult relationship with the deceased who she found to be controlling and possessive. In due course they separated after only a short time. The difficulties were probably brought about by the differences in their backgrounds. After separation there was no property settlement or any adjustment between them. She received limited child support until Anne the eldest child turned 16. 15 Susan did not contribute to the estate of the deceased other than by her efforts as the deceased's wife. Anne Marie Bowers 16 Anne is 32 years of age and is married with five children ranging in age from a few months of age to ten years of the age. Her husband works and their combined income with benefits is $1344 per week. The whole of this income is used to raise their family. Their only asset is a car that has recently been purchased for $37,500. They have liabilities for personal loans and car loans totalling $105,004. 17 One of their children requires special treatment by a child psychiatrist for what she believes is attention deficit syndrome. This costs $300 each six months. Anne left home with her mother when the parents separated when she was five or six. After the separation she still saw her father but the contact was limited by the various locations they moved to from time to time. After the children moved to Mount Pleasant they saw the deceased on some weekends. By the time the children started to work the extent of these visits were reduced. They had difficulty with their father because at the time he retired he started to drink during the day and would become abusive towards them and at times he was physically violent. 18 Notwithstanding these difficulties contact was maintained on a more occasional basis. For example Anne took her first son to see the deceased when he was a year old. There was an occasion when the deceased suggested they should live together but that did not eventuate. Notwithstanding further difficulties Anne continued to help the deceased with some medical appointments but the relationship was difficult. For example, when she took him a casserole on Father's Day in 2003 he knocked it out of her hands. It seems that the deceased by this stage for some unexplained reason had turned his mind against his children. 19 In my view she did, like her other sisters, all that she could in order to maintain contact with the deceased despite his somewhat erratic and irresponsible attitude. 20 She did not contribute to the estate of the deceased. Christy Lee Malika 21 Christie is 31 years of age, married with two children and is expecting her third child. Her husband is a builder and over the last six months his net earnings after expenses amounted to $12,000. Christy receives a parenting allowance of $580 per fortnight as she has not able to work at present. They have a house worth $280,000, which is subject to a mortgage of $265,000. Their mortgage repayments are $1900 per month. They have had to increase the mortgage to live on capital. Their other property is a car, a work vehicle and a boat they believe is worth $1000. 22 She had a similar relationship with the deceased but was only three years of age when her parents separated. She also endeavoured to assist the deceased and visited him over the years encountering similar difficulties as her older sister. 23 She did not contribute to the estate of the deceased. Kelly Zahra 24 Kelly is 28 years of age and is now married. Although they have a home which is worth $350,000 they cannot afford to live in it as they need to rent it to meet the mortgage repayments. The current mortgage is $170,000 and they have to repay $350 per week. They own a 1989 Ford laser car and their income after tax is $1235 per week. Their expenditure leaving aside rental is about $876 per week. 25 Kelly did not live with her parents as the separation occurred soon after her birth. She also assisted with her sisters in visiting the deceased and suffered the same difficulties in having a relationship with him. 26 She did not contribute to the estate of the deceased. 27 It is necessary to consider the situation in life of any others having a claim on the bounty of the deceased. In this regard I note, as mentioned above, that no one else puts his or her financial situation forward for consideration by the court. The defendant gave evidence that she had looked after the deceased for some years prior to his death. There is no doubt that this occurred but it also was the case that the deceased's mother cooked and washed for him until shortly before she died in 1999. 28 There was a dispute between the three children and the defendant as to the degree of contact that they had with the deceased. There were claims from the children and the defendant that they had never send the other at the deceased's home. This may well have been because the defendant and the children did not visit as often as they had all claimed. I accept that the plaintiff's children did attempt to maintain contact with their difficult father. Discussion 29 It is necessary to see how the plaintiffs say they have been left without adequate and proper provision for their maintenance, education and advancement in life. The first plaintiff received nothing under the will of the deceased and she had no property settlement at the time of separation. Her case when first presented was for the provision of some accommodation but it turned out due to valuation evidence that the estate was substantially less than what the parties originally thought. In those circumstances the first plaintiff's case has been changed to seek a lump sum for contingencies where the primary contingency that could be provided for would be to rent accommodation in Sydney. 30 Widow's claims are frequently the subject of applications in this Court. The Court of Appeal in Golosky v Golosky (unreported NSWCA 5 October 1993) has referred to formulations of this standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott (unreported NSWSC 18 May 1984) where his Honour said: "Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which a deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring".

31 There have been reminders about the limited use of such formulations. In Marshall v Carruthers [2002] NSWCA 47 Young CJ in Eq said: "73 It must be remembered that Powell J put his proposition as a "broad general rule". However, there is in fact no " standard former spouse" to which one can just apply that proposition as a rule of thumb. 74 Powell J's broad general rule may not be a good guide as to what the Court will consider as the duty of a testator towards a spouse except in the case of a financially dependent spouse where there is a history of bringing up children with the deceased or in supporting the deceased while he was amassing his fortune. The broad general rule may well be inapplicable in cases of other spouses. Indeed, the cases in the first half of the 20th century show that as far as widowers were concerned, the proposition was quite untrue. 75 I also take this opportunity to reject Mr Ellison's submission that a person who has a claim as a class (a) eligible person ipso facto has a stronger claim than a person who comes under class (b). Indeed, in many cases, such as where there are infant children, this may not be so." 32 Palmer JA concurred in these sentiments. 33 The matter was again dealt within more detail in Bladwell v Davis & Anor [2004] NSWCA 170. In that case Bryson JA with whom Ipp JA concurred on this aspect said: "12 There have been many statements in judicial decisions, including decisions in the Court of Appeal, generally to the effect that primacy of some kind is accorded to claims of widows for proper maintenance and advancement in life, including continuance of housing arrangements which they enjoyed during the lifetimes of their late husbands. These statements are not altogether uniform in expression, and should be understood as made in each case in relation to the facts under consideration; and those facts vary widely and in truth are unique to each particular case. " Widow takes all" is not a rule which has been or could be established by judicial decisions: the Court cannot resign the functions which it has under s 7 of the Family Provision Act 1982 in favour of rules of thumb. A rule which was once followed which practically prevented ordering provision for an adult son who was fit to work has been abandoned. 13 Observations on the claims of widows were made by Powell J in Luciano v. Rosenblum [1985] 2 NSWLR 65 at 69-70 in these terms: It seems to me that, as a broad general rule, and in the absence of special circumstances, the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies. These observations were not made in the context of a competing claim or proved need by another eligible person, and were introduced by a guarded reference to a general rule and the absence of special circumstances. However they are frequently, almost universally cited in applications where provisions for widows are under consideration. 14 In Golosky v. Golosky NSWCA 5 October 1993 (unreported) the widow, second wife of the testator, was the applicant and the sons of the first marriage, the will beneficiaries whose interests were affected, were well off and did not assert financial need. The majority (Kirby P, Cripps JA concurring) ordered further provision for the widow, and Kirby P referred to Luciano v. Rosenblum briefly for comparison, but also said: Matters such as these rule out an inflexible rule that every spouse or every widow is entitled, as of right and in every case, to look to a testator to provide accommodation for life. Such inflexible rules used to exist in this area, as for example the previous rule that an "able bodied son" was disentitled to a claim under the predecessor to the Act for that reason alone. That rule has now been abandoned in this State. See [ Hunter v Hunter and Ors (1987) 8 NSWLR 573 (CA) 575f] , 580f; cf Anderson v Teboneras and Anor [1990] VR 527 . So should inflexible rules about spousal provision. 15 In Hertzberg v. Hertzberg [2003] NSWCA 311 provision ordered by Acting Master Berecry for a widow, second wife of the testator, out of a large estate was confirmed by the Court of Appeal. There was no competing claim or circumstance of need of any will beneficiary. McColl JA said at [35] in the context of the claim of a widow for the matrimonial home (which in this case the claimant owns): His Honour's judgment recognised the community expectation that a testator should make provision for a widow to ensure that she can lead an independent and dignified life. That prospect is diminished when the widow does not have the benefit of the fee simple, but rather, a right of occupation of her home with a provision for expenses associated with that right being left in the hands of the executors. In this case the situation was exacerbated where, regrettably, the previously affectionate relationship between the appellants and the respondent had, as Acting Master Berecry found, completely broken down following the execution of the deed. Thus the situation in which the deceased may well have contemplated he had left the respondent appeared to have altered.

The statement in the first sentence of this passage should be understood in its context of a claim in a very large estate where there was no competing claim based on need. 16 In Sayer v. Sayer [1999] NSWCA 340 at [34] Sheller JA (with whom Davies AJA concurred) accorded primacy to the claim of a widow (of a second marriage) over the claim of a granddaughter who was an eligible person "in the circumstances and in accordance with prevailing community standards." This does not in my opinion express any general principle of paramountcy. 17 In Cropley v Cropley [2002] NSWSC 349 at 56 Barrett J said: When it comes to claims by adult children, it can be said at once that, if there is a competing claim by the widow and all claims cannot be fully accommodated, the widow's claim should be afforded precedence in the sense that a demonstrated requirement for the allocation of resources in aid of the widow must be satisfied before any similarly demonstrated requirement for the allocation of resources in aid of an adult child. That a widow's claim to maintenance out of the estate of her deceased husband is a claim which is "paramount" and "of a high order" is borne out by the judgments of Sheller JA in Sayer v Sayer [1999] NSWCA 340 (Davies AJA concurring) and Blackmore v Allen [2000] NSWCA 162 (Priestley JA and Foster AJA concurring). In the former case, Sheller JA described the relativities between the claims of the widow and those of an adult grandchild applicant (Francesca) as follows: "In my opinion, the question is whether [the grandchild] has satisfied the Court that there is, in the circumstances and in accordance with prevailing community standards ( Permanent Trustee v Fraser (1995) 36 NSWLR 24 at 46 ), sufficient in the estate to provide for the widow's proper maintenance and advancement in life and yet leave some amount out of which provision can be made for her."

This was accepted as an accurate statement of the law by Palmer J in Latimore v Latimore (2003) NSWSC 364 at [59]. At [57] Barrett J proceeded to approach the applications according to the two stage approach described in Singer v Berghouse (1994) 181 CLR 201. 18 In my respectful view there is an inconsistency between an approach, in the context of competing claims, to the claims of widows as paramount, and the application to the facts and circumstance of each case of s.7 and the approach established by Singer v Berghouse . Preconceptions and predispositions are likely to be the source of inadequate consideration of the process required by the Family Provision Act 1982 .

19 In the application of the test in s 7, and of the exposition thereof in Singer v. Berghouse by Mason CJ, Deane and McHugh JJ at 409-411 it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v. Berghouse , in full and with reference to the instant facts. Defeat of the opponents' claims does not necessarily follow from a demonstration, which the claimant can make, that all her needs with respect to income, home renovation, and provision for contingencies cannot be met if any provision is made for the opponents; indeed she could well demonstrate that even if the provisions of the will took effect without any modification, the provision for her is not adequate. That is not a demonstration that no claim by an eligible person can succeed; the claims and circumstances of the opponents also have to be weighed, and they too have their needs and merits."

34 Interestingly Ipp JA adopted this in para 1 of his judgment and also said as follows:

"I agree with Bryson JA, for the reasons his Honour has stated, that 'it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse (1994) 181 CLR 201…'

I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others." 35 Stein AJA agreed with both judges. 36 It will be recalled that the plaintiff is still living with her mother and looking after her in rented accommodation. She has not worked since her marriage and it unlikely that she could obtain employment given her age of 58 years. She will no doubt qualify for the pension in due course. 37 So far as the circumstances of the marriage ars concerned it was a marriage only for some four years and it was not a happy one. Probably given the fact that her husband had provided the whole of the property, any property settlement claim which she may have had following the separation would have been minimal. Nevertheless, the plaintiff is the deceased's widow although they had been separated since 1979. 38 In my view she is entitled to a sum to provide assistance with rental accommodation until she is able to receive Government assistance. The problem is that there is little quantification of this and the only evidence is that her present rental is $245 a week. That is a sum of $12,740 per annum. Given her age of 57 years the first plaintiff may have a period of some years before she qualifies for a pension. The current household and living expenses are $237 a week which is approximately $12,324 per annum. I think that in addition the first plaintiff should have a sum for contingencies. 39 Under the will of the deceased his three daughters receive $50,000 each. All three daughters have large debts, some larger than others, and they are at a time in life when relief from these debts would be of great assistance to them. I think it is appropriate that in respect of the three daughters that their legacies be increased to $75,000 each. 40 The remaining beneficiaries are the deceased sister, Maria Pedri, and her children and I have earlier commented on the lack of evidence put forward on their behalf. Plainly the deceased's sister was good to the deceased and looked after him particularly in the last years of his life. This support should be recognised by allowing provision for her and perhaps her children. 41 In my view it is appropriate that the first plaintiff should receive a legacy of $175,000 and the balance should go to the residuary beneficiaries. 42 The orders that I make are as follows:

1. That the first plaintiff, Susan Gay Barca, receive a legacy of $175,000.

2. That in lieu of the provisions in the will of the deceased made for the second plaintiff, Anne Marie Bowers, and the third plaintiff, Christy Lee Malika and the fourth plaintiff, Kelly Louise Barca Zahra each receive a legacy in the sum of $75,000.

3. I order that the 1st, 2nd, 3rd and 4th plaintiffs' costs on an ordinary basis and the defendants' costs on an indemnity basis be paid or retained out of the estate of the deceased. **********

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