Colosi v Colosi

Judgment Introduction 1This is a widow's application for provision out of the estate of Antonio Colosi pursuant to part 3.2 of the Succession Act 2006. The plaintiff and the deceased married on 9 January 1994; it was the second marriage for both. At the time of the marriage the plaintiff had three children by a former marriage and the deceased had two children by his former marriage. The deceased died on 9 August 2011. He made his last will and testament shortly before that on 22 July 2011. Probate was granted to the defendant on 28 March 2012. The will benefits the deceased's son and daughter, and the plaintiff receives no benefit at all. 2For probate purposes the estate was estimated as having a value of $1,715,572. This includes $950,000, the estimated value of the deceased's house at Strathfield. Normally it is not very reliable to take estimates for probate purposes, but basically the parties have accepted those figures as being roughly what the estate is worth. However, the Strathfield property would now appear to have a value of $1.3 million, but for reasons I will give shortly, that really is immaterial. Statement of Intention 3On 20 June 1997, that is some three and a half years after their marriage, the plaintiff and the deceased signed a document entitled "Statement of Intention." That document is set out in full in the Appendix to these reasons. 4The document was expressly said to be provisional, and it indicated that a formal document would follow, but the evidence of the solicitor who drew it showed that that was not really intended by the parties. The solicitor who drew up the document also said that he advised both parties that the document was not legally binding, it was merely a Statement of Intention. 5We do not know what the deceased thought the document meant. We do know that the solicitor no longer has his file, and, naturally enough, has no particular memory of this transaction. His affidavit merely sets out what would be his normal practice. He believes that he would have explained that the document covered all the property of the parties that they may have as at their respective deaths. 6However, the plaintiff has given evidence that she was always of the view that the document only covered the property that the parties brought into the marriage, in the deceased's case, the property at Strathfield and in her case, her then home at Mt Hawthorn in Western Australia. She says that she respects that document because she recognizes that she has no claim at all on the Strathfield property, which she considers would pass to the deceased's son Charlie, the defendant, and that was covered by the Statement of Intention. However, she says that the property which was acquired during the marriage was not, in her view, property which was covered by the document. 7Mr D P M Ash, who appeared for the widow, says that there is some external corroboration of that because of the way in which the plaintiff made her own will, but it seems to me that whilst that is some support, it is a very weak support of the plaintiff's story. However, the plaintiff was in the witness box before me. She was cross-examined for almost two hours. She was asked the question about eight times whether she acknowledged that the Statement of Intention meant that she had no claim on the estate, and she said on every occasion that the document only referred, in her view, to property that the parties brought into the marriage and not to after-acquired property. 8It seems to me that I should believe what the plaintiff says. Of course the testator is not here to give his version, and I acknowledge that the literal wording of the Statement of Intention would, in the eyes of a legally trained person, point in the opposite direction, but as a general rule when one is dealing with an agreement of this nature one has to go through a number of formalities before one can convince the Court that both parties understand what a large step they are taking. Those steps were not gone through. The plaintiff comes to a version which is one that one can accept a layperson could come to, especially in view of the recitals of the document. Accordingly, it does not seem to me that the Statement of Intention is a bar to the plaintiff's claim. 9However, the deceased was diagnosed with terminal cancer in April 2011. Although I have not been given much detail, what I do have would indicate that relationships changed after this time. The plaintiff says that the deceased was very upset that it was he that had the cancer and that it was he that was not going to live for very much longer. This does seem to have affected his attitude, especially his attitude towards his wife. 10The relationship between the parties would appear to have been fairly amicable for twenty years, although the plaintiff agrees that they were both volatile persons and that from time to time the relationship would become a bit torrid. She says - and I accept what she says - that they were old-style husband and wife, the husband was domineering, the wife submissive. She did what her husband wanted, and he provided for her. Indeed, the cross-examination showed that during the marriage she was fully and generously provided for by the deceased. Normally a wife in such a situation can expect that she will have some generous provision after her husband dies. One would discount that a little in this case because of the Statement of Intention, but generally speaking the thought would still prevail. 11As I have said earlier, under the deceased's will only the deceased's son and daughter benefit. The daughter says that she had made a claim on the estate, but she has now made an agreement with her brother. On the basis of what is in his affidavit, they have resettled the estate between them. The Deed of Release 12The next major factor in the case was that six days after the will was made the plaintiff was asked to sign a deed of release. It is quite clear that the deed of release was prepared by a legally trained person. The background to its preparation has not been revealed to me, but it would seem that on 28 July 2011 the document was drafted by the solicitor and given to the deceased, and the deceased got his wife to sign it. 13The document is very strange. Apart from stating in clause 2.1 that the parties acknowledge that each of them is under no legal or moral obligation to make any provision for the other, clause 2.2 contains a covenant by the plaintiff that she will vacate the Strathfield property with due expedition after the husband's trustee requests her to do so, and at her own expense. 14Clause 3 deals with a release of all her rights. The second clause 3.1 purports to say that each party will request the Court to approve the deed. Clause 5.1 says: Each party warrants to the other party that prior to entering into this Deed the party has received independent legal advice in relation to the provisions of this Deed, including without limitation the releases and indemnities given in this Deed, and has given due consideration to that advice. 15That is oppressive. Cases such as Lowe v Lombank Limited [1960] 1 WLR 196 make it quite clear that such statements are absolutely valueless if the party to whom they are made knows that they couldn't possibly be correct. The fact that it is put in such a deed makes it more unlikely than otherwise that the Court would ever give sanction to it. 16The plaintiff says that she was attending to her husband, she was putting on the socks over his swollen feet, when he asked her to sign the document, which she did without reading it. Now the Courts have said time and time again that they have little sympathy for people who sign documents without reading them, but it is understandable that a wife who is dependent on her husband will do so, and I accept that the plaintiff did so. 17The document is witnessed by Charlie Colosi. The defendant says he was not there when she signed it. He said that he signed it in the kitchen, but there was no evidence at all as to the background of the signature, which one would expect in this sort of case. One would have expected that Charlie Colosi would have given evidence as to what was said by the parties, where it was signed and full details but, strangely enough, there was no evidence at all on that other than the question I myself asked, which elicited that Charlie Colosi said the document was signed in the kitchen. 18In the Cross-Claim the defendant asked me to sanction the document and approve it under section 95 of the Succession Act 2006. However, virtually all the factors under section 95(4) to which the Court must refer when considering these matters would be answered negatively, and I do not approve the deed. It accordingly has no effect, except insofar as it may give some indication as to the plaintiff's expectation. The Application for Provision 19Accordingly, when one puts aside or discounts the effects of the Statement of Intention and the deed, one gets to a case where a widow of twenty years was left nothing in a will for an estate of $1.715 million, and where the competing beneficiaries, the testator's son and daughter, do not appear to be in need. 20There is no evidence at all as to what the son's assets are, and in this sort of case one knows that solicitors tell people that, unless they do give information as to their assets, the Court will assume they have no need. The Court makes that assumption. So far as the daughter is concerned, she did give some evidence as to her means, but it was deficient in at least two respects. One, that she gave no evidence at all as to the upgrading of her house. Two, that she completely omitted her interest in a restaurant business. Accordingly, whilst looking at the few details the daughter did give, one could see that she is not particularly wealthy, but one has very little reliable information. 21Accordingly, one treats this case where there is a wife of twenty years against whom really nothing is put, other than her Statement of Intention. The widow herself, however, disclaims any interest in the Strathfield home. Disclaiming any interest in the Strathfield home means that one must deduct from the estate's value of $1.715 million the $950,000 value of the Strathfield home. The evidence is that the costs of both sides are about $140,000, so one is left with what I might call disposable capital of the estate of about $625,000. 22The plaintiff is currently sixty-eight years of age. Her assets are about $1.477 million, but that includes about $670,000 to $1 million of property which is the replacement of the Mt Hawthorn property. The funds received from Mt Hawthorn went into the present residence of the plaintiff, valued at about $670,000, and also into a unit at Osborne Park of $350,000. So that if one were treating the value of her property in the same way as one treated the deceased's property, taking out the Strathfield home, she has assets of about $450,000. 23The situation therefore is that the widow has a home and she has other assets. Some of those assets, a property at Seabird in Western Australia and a property at Malaga, Western Australia are co-owned. In the Seabird property the widow has a quarter, the estate has a quarter and another couple has a quarter for the husband and a quarter for the wife. In the Malaga property the estate has half and the widow has half. It is probable that those properties will be sold and the proceeds reinvested, as it would seem neither party wishes to hold them in co-ownership. 24The plaintiff says that her income over the last few years averages out at about $27,333 per annum. Accordingly, the plaintiff is in a situation where she has a home, but she is sixty-eight. She is in fair health, but there are some problems there. She has given an estimate of her outgoings. Mr S Docker, for the executor, has attacked the schedule that the plaintiff has given, and although some of the matters on which he cross-examined were rather petty, it would seem that she has made some overestimations of some items. However, I do not consider that the overestimations that she has made are as great as Mr Docker has submitted. Furthermore, it can be seen that there were some items that she has not put in, and again one has to consider that she is entitled to a sum for contingencies, because people who are sixty-eight and over often find that all of a sudden they need some expensive medical procedure, or they have to change house or what have you, and a wife of twenty years is entitled to have a little nest egg or a contingency. 25It is very hard to do the figures accurately. Looking at it on the annual basis, if one looked at the plaintiff's estimation, one would be looking at something like $70,000 per year by way of expenses. Deduct ten per cent for overestimation, one gets $63,000. Deduct the $27,000 that she earns herself and one gets something like $36,000 a year that is needed to allow the plaintiff to live in some sort of style to which she is entitled. 26If one takes $400,000 and looks at 3.5 per cent per annum, one gets to about $14,000. If one adds this to the sum the plaintiff has already got, we get something like $42,000. This is not the conclusive way that one should look at it, because one should not just take the income that is going to be earned from the capital sum, one should look at what sort of capital sum should produce the income which the plaintiff requires, and then have the capital exhausted at the end of the period. A rough calculation of doing that is to take the income for half the period or to assume another $14,000 will come from capital. 27It seems to me that when one does that, even though, as I said in hearing argument, that the figures are a bit rubbery as they assume amongst other assumptions that the current low interest rates will continue, the best I can do on the evidence that is put before me is that the plaintiff should receive a legacy of $400,000. Again I have to assume that the plaintiff will survive another 10 to 20 years. Accordingly, I order that the plaintiff receive a legacy of $400,000, not to bear interest if paid by 31 January 2014, otherwise to carry interest in accordance with the rules. I order that the costs of the plaintiff and the costs of the defendant be paid out of the estate.