Ernst v Ryf

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Master McLaughlin Friday, 14 December 2001 2137/00 OLIVIER NIKOLAUS ERNST -V- GEORGEANNE DAWN RYF JUDGMENT 1 MASTER: These are proceedings under the Family Provision Act 1982. 2 By summons filed on 14 April 2000 the Plaintiff, Olivier Nikolaus Ernst, claims that provision be made for him out of the estate and/or notional estate of his late father Nikolaus Wilhelm Ryf (to whom I shall refer as "the Deceased"). 3 The Deceased died on 15 December 1998, aged 58. He left a will dated 30 March 1988, probate whereof was on 6 July 1999 granted to his widow, Georgeanne Dawn Ryf, the executor named in such will (who is the defendant to the present proceedings). By that will the Deceased left the entirety of his estate to the Defendant. 4 The Deceased had been born on 28 September 1940 in Wiedlisbach in Switzerland, although for at least the last twenty-two years of life he had essentially been resident in Australia. He first came to Australia in or about December 1961, and remained here for about eight years. He returned to Switzerland in or about 1972. In the latter part of his life he (together with the Defendant) had been engaged in selling and promoting wine for a German company, which activity involved him and the Defendant travelling to Switzerland three or four times each year. 5 The Deceased married three times. However, the Plaintiff, who was born of the second marriage of the Deceased, was the only child of the Deceased. 6 The first of the Deceased's three marriages was to Denise Hélène Pochon on 21 October 1960. That marriage ended in divorce on 7 May 1969. The Deceased married his second wife, Suzanne Emma Ernst, on 1 September 1972 in Switzerland. The Plaintiff was born of that marriage on 14 July 1973. 7 The Deceased and the Plaintiff's mother separated when the Plaintiff was only an infant. They were divorced on 17 December 1974, and the appropriate court in Switzerland, being the Zurich District Court, at the time of granting that divorce made orders concerning division of property and maintenance for the Plaintiff. From the time of her separation from the Deceased the Plaintiff's mother opposed the Plaintiff having any contact with his father. Not only was the Plaintiff the only child of the Deceased, but also he is the only child of his mother, who has not subsequently remarried. The Plaintiff did not, in fact, meet the Deceased until he was aged almost 18. Thereafter the Plaintiff maintained regular contact with the Deceased both in Australia and in Switzerland. The nature and extent of that contact was a matter in dispute between the parties in the present proceedings. 8 In the meantime, however, in 1976 the Deceased had met the Defendant. They commenced to live together in 1977 and married on 17 December 1983. 9 It will be appreciated that at the time when the Plaintiff (then aged almost 18) first met the Deceased in 1991, the Deceased had already made his last will, that of 30 March 1988. The Deceased did not after meeting and commencing a relationship with his son choose to alter that will. 10 At the time of his death the assets of the Deceased consisted of the proceeds of sale of a home unit in Ben Boyd Road, Neutral Bay (which had been owned by the Deceased since 1974 and had been the residence of the Deceased and the Defendant since 1989) ($825,000); the proceeds of a bank account ($15,000) and shares ($22,000); the interest of the Plaintiff as a joint tenant in a strata title unit in The Observatory, Kent Street, Sydney (which unit had been purchased conjointly by the Deceased and the Defendant in April 1998 for $1.4million); together with certain overseas assets, consisting of land in Switzerland (which land has now been sold and the net proceeds of sale whereof amount to about $70,000), and a one-half share in real property (consisting of four apartments) in France (the value of that one-half share being $290,000). 11 It will be appreciated that the interest of the Deceased as joint-tenant in the strata unit in The Observatory has passed by survivorship to the Defendant. The purchase of that strata unit was funded by way of bridging finance. The proceeds of sale of the Neutral Bay unit have since the death of the Deceased been used by the Defendant to reduce the amount of the mortgage outstanding on The Observatory apartment. 12 The entirety of the assets of the Deceased are now held by the Defendant. In consequence, any order for provision which might be made in favour of the Plaintiff can, of necessity, be made only out of the notional estate of the Deceased, rather than out of his actual estate. 13 It should also be appreciated, regarding the assets available to meet any order for provision which might ultimately be made in favour of the Plaintiff, that the costs of the Defendant of the proceedings must be provided for and, in the event that he be successful, the costs of the Plaintiff also. Evidence concerning the amounts of those costs has been filed on behalf of each party. It is estimated that the costs of the Plaintiff will total almost $66,000, whilst those of the Defendant will total about $58,000. (It should be noted, however, that those estimations were calculated on the basis that the hearing would conclude within two days, whereas, in the event, the hearing continued into a third day.) 14 The Plaintiff, who was born on 14 July 1973 in Zurich in Switzerland, is now 28 years of age. He presently resides in Zurich. The Plaintiff remained at school until he was aged 20. Thereafter he pursued a two year course at the Lausanne Business School in Switzerland, completing the degree of Bachelor of Business Administration. He then pursued a part-time one year course (apparently attending classes only on a Saturday) for the degree of Master of Business Administration at the Lausanne Business School. The Plaintiff was in part-time employment (including employment at the Lausanne Business School itself) whilst pursuing his bachelor's degree. He was also in employment throughout most of the period whilst he was pursuing the course (part-time) for his master's degree. 15 Evidence was given concerning financial assistance which the Deceased provided to the Plaintiff, by way of a payment to him of 55,000 francs (at that time worth about $53,500 in Australian currency), in order to assist in the cost of his education. Details were given concerning the Plaintiff's university fees and also concerning the reduction in those fees which the Plaintiff received in consequence of his obtaining a scholarship during his bachelor's course and during his master's course and in consequence of his being employed by the Lausanne Business School itself during his master's course. The scholarship which he received during his bachelor's course resulted in the Plaintiff's tuition fees for the totality of the two years being reduced by 15,000 francs. The scholarship which he received during his master's course, together with the earnings which he received from his employment by the Lausanne Business School itself, resulted in him not being required to "pay much" in respect to tuition fees for that latter course. 16 The first contact between the Plaintiff and the Deceased occurred in Bern in Switzerland, the meeting between the two being arranged by the Plaintiff's uncle Bernhard Ryf. Subsequently the Plaintiff remained in contact with his father, and saw him on every occasion that the Deceased visited Switzerland. The Plaintiff also maintained contact with the Deceased either by telephone or by way of facsimile transmission about once a month during the periods when the Deceased was not in Switzerland. 17 The Plaintiff travelled to Australia in June 1995, paying his own fares. During his period of residence in Australia the Plantiff resided with the Deceased and the Defendant at their Neutral Bay residence for several weeks. The Deceased gave the Plaintiff as a birthday gift an air ticket to Cairns, where he spent most of the balance of his Australian holiday. 18 The Plaintiff visited Australia again in October 1998 (again paying his own fares), shortly before the death of the Deceased. During the week while he was in Sydney the Plaintiff stayed at the residence of the Deceased and the Defendant (the Deceased being allowed to return home from hospital during the course of that visit by the Plaintiff). 19 Despite attempts on the part of the Defendant to suggest that the relationship between the Plaintiff and the Deceased was not a good one and was not a particularly close or affectionate one, and was motivated by mercenary interests on the part of the Plaintiff, the cards and letters from the Deceased (and the Defendant) to the Plaintiff, and the various photographs of the Deceased and the Plaintiff which were placed in evidence clearly indicate that there was an affectionate and loving relationship between father and son. The Plaintiff even deferred receiving his bachelor's degree, to enable the Deceased to attend that graduation ceremony in 1997. 20 The Plaintiff, although not married, has been in a de facto relationship with a lady named Cerly Bicerra. The evidence did not disclose with precision when that de facto relationship commenced, although it would appear from the Plaintiff's evidence that it had commenced not long before the Plaintiff came to Australia in October 1998. One child, a son Alexander (who is now aged 2), was born of that relationship in December 1999. In addition, Cerly has a son Ivan (who is now aged 10) born of her former marriage. Since November 2000 Cerly has been residing with her two children in Hombrechtikon, a town located some 60 kilometres from Zurich. 21 It was asserted by the Plaintiff that he was still living in a de facto relationship with Cerly, although the Plaintiff resides in Zurich, whilst Cerly and the children reside in Hombrechtikon. 22 During the period whilst the Plaintiff and Cerly have been residing separately, Cerly has been receiving from the appropriate government entity in Switzerland payment of maintenance in respect of the Plaintiff's son Alexander. The Plaintiff has signed an appropriate legal document acknowledging his liability to reimburse the government authorities for the payment of that maintenance. Under that agreement the Plaintiff is liable to pay to Cerly maintenance for Alexander in the amount of 1,200 francs (about $1,560 a month). As I understand it, that is the amount which Cerly receives from the appropriate government entity in Switzerland. Under that maintenance agreement the liability of the Plaintiff to reimburse that government entity commenced in December 2000, and under that agreement the Plaintiff's liability, which has not in any way been met, but which continues to accrue, had by October 2001 reached $13,200 francs (about $17,140). However, for reasons which did not at the hearing emerge with any clarity, the Plaintiff has not made those payments to the appropriate government entity in Switzerland. 23 The entire arrangement which since the latter part of 2000 has obtained between the Plaintiff and his asserted de facto spouse presents a deeply dubious character. It may well be that the purpose of that arrangement has been to ensure that, without any present cost to the Plaintiff, his de facto spouse receives maintenance for his child. It may also be that the Plaintiff and Cerly are (despite the Plaintiff's assertion in this regard) no longer in a de facto relationship. No evidence was offered by Cerly in the present proceedings. The Plaintiff under cross-examination said that he had not requested her to provide an affidavit. 24 The Plaintiff asserted that for a not inconsiderable period between the conclusion of his university studies and early 2001 he had been unemployed. Throughout that period he received unemployment benefits from the Swiss Government. However, at the hearing it emerged that throughout that period the Plaintiff had been in receipt of a very significant income as a result of share trading on the internet. One of his investments in that period (in July 1999) had resulted in a profit to him in excess of 200,000 francs. 25 The Plaintiff was extensively cross-examined concerning various transactions appearing in his bank statements relating to that period whilst he was receiving unemployment benefits. There was no satisfactory explanation for the origin of deposits of significant amounts during that period. 26 Also during that period the Plaintiff was involved in a public company, Advanced Orbital Services (referred to as AOS). I considered the information which emerged under cross-examination of the Plaintiff concerning that company and his involvement therein to be quite unsatisfactory. According to the Plaintiff's evidence he had made an investment of 50,000 francs in that company, of which he was the president and one of the founders, and in which, according to his evidence, he was closely involved and to which he devoted a very considerable amount of his time and effort. Nevertheless, it was the Plaintiff's evidence that he received no remuneration from that company, but that he had a present claim against the company for an amount of 120,000 francs, a claim which he appears not to have pursued. 27 It is difficult to accept that the Plaintiff would have devoted to the affairs of that company the very large amounts of money, time and energy which he asserted, without receiving, or indeed expecting to receive, any remuneration. The Plaintiff could offer no satisfactory explanation as to why he was not paid the expected remuneration, especially since he as president of the company was in a position to effect that payment to himself. 28 It is not for this Court to express any views concerning the policy of the Swiss Government regarding the payment to its citizens of unemployment benefits. Nevertheless, the Plaintiff grounds his present application upon an asserted need. In circumstances where, as here, the Plaintiff, although unemployed for a period and in receipt of unemployment benefits, was generating for himself a very significant income, it is appropriate that the Court should scrutinise with care the evidence proferred to support the existence of such a present need. 29 The Plaintiff presently resides in rented accommodation in central Zurich, for which he pays 1300 francs (being the equivalent of about $1,700) a month. His asserted de facto spouse Cerly is also residing in rented accommodation, in Hombrechtikon, for which she pays about 1200 francs a month. 30 Since the institution of the present proceedings the Plaintiff has obtained employment. Since January 2001 he has been in permanent employment as a product controller employed by Credit Suisse First Boston Bank at its head office in Zurich, and receives a salary of 90,000 francs, (being in the equivalent of $117,000 a year). In addition, he receives from his employer family allowances totalling 400 francs ($519) a month. (That employer was described in the evidence as being one of the largest merchant banks in the world.) 31 Such evidence as was offered to the Court discloses that during the last few years the Plaintiff has expended a very considerable quantity of money on maintaining what appears to be an affluent and generous lifestyle. His credit card statements disclose very considerable expenditures at hotels, restaurants, boutique clothing shops and the like. He drives a BMW motor car, which he holds under a leasing arrangement, in respect of which he pays 1000 francs (about $1300) a month. 32 The information which the Plaintiff provided to the Court concerning his present income and his present outgoings revealed that he has a monthly surplus in excess of 4,000 francs. Nevertheless, the Plaintiff in his affidavit of 5 October 2001 asserted that he had not been able to save any of his income since he commenced his present employment in January 2001. 33 The Plaintiff did not offer any satisfactory explanation as to why he and Cerly and her children did not move into one single residence, which would appear to be a much more reasonable arrangement (so far as rental is concerned) than the present arrangement where rent is paid on two separate apartments. Until Cerly and the children removed to Hombrechtikon thirteen months ago, they and the Plaintiff had resided together in a rented apartment in Kuesnacht, a suburb of Zurich. That location was described in the evidence as one of the most expensive and prestigeful parts of Zurich, the Defendant asserting that Kuesnacht was a residential district comparable to Vaucluse or Point Piper in Sydney. 34 According to the Plaintiff's affidavit evidence, he underwent a knee operation in 1991, in consequence whereof he still experiences difficulties, which limit his ability to play sports. Otherwise his health is good. 35 I have had the benefit of receiving a summary of written submissions from Counsel for the respective parties. Those written submissions will be retained in the Court file. 36 The Plaintiff, as a child of the Deceased, is an eligible person within paragraph (b) of the definition of that phrase contained in section 6(1) of the Family Provision Act. The Defendant, who was the third wife of the Deceased, is also, as the widow of the Deceased, an eligible person, within paragraph (a) of that definition. The only other eligible persons in relation to the Deceased are his two former wives, each of whom is an eligible person within paragraph (c) of that definition. Neither of those former wives (each of whom has been served with a notice of claim) has made any claim for an order for provision out of the estate of the Deceased. 37 It cannot be emphasised too strongly that in claims for provision under the Family Provision Act it is the responsibility of the applicant to set forth as fully and as frankly as possible all details of his financial and material circumstances, including details of his assets and liabilities, of his income and outgoings (and, where the applicant has a spouse, be that spouse legal or de facto, those of the spouse). 38 In the instant case this the Plaintiff has significantly failed to do. He has been far from frank, or forthcoming, especially concerning the details of his assets. He would have had the Court believe that for a significant period he was unemployed and was subsisting on unemployment benefits. It emerged only during the course of cross-examination that during the period whilst the Plaintiff was nominally unemployed, he was in fact conducting a significant business of share trading on the internet, from which he received extremely handsome profits. Further, there were numerous unexplained deposits in significant amounts made into the Plaintiff's bank account during that period. The Plaintiff's involvement with Advanced Orbital Services was enshrouded in a total lack of precision. It seemed to me hardly likely that anyone, let alone someone with the qualifications of the Plaintiff, would have devoted his money, time and energy to that company, without any remuneration, or indeed expectation of remuneration. 39 Further, it emerged that the Plaintiff has, in relatively recent times, during the period whist he asserted that he was unemployed and impecunious, made quite generous monetary loans to friends, of which he has not chosen to seek repayment. 40 Further, the Plaintiff has not placed before the Court any information concerning the financial and material circumstances of his asserted de facto spouse Cerly. There has been no affidavit evidence of Cerly herself filed in the present proceedings. 41 I was not favourably impressed by the attempted explanation offered by the Plaintiff as to the reason why Cerly (with whom he asserts that he is still living in a de facto relationship) and the children are residing in one location, whilst the Plaintiff is residing in another location 60 kilometres away. 42 The entire arrangement which has obtained between the Plaintiff and Cerly since the latter part of last year is of a most dubious nature. It may well be that the purpose of this arrangement has been to ensure that, without any present cost to the Plaintiff, his de facto spouse receives maintenance for his child. It may also be that (despite the Plaintiff's assertion in this regard) the Plaintiff and Cerly are no longer in a de facto relationship. 43 The details of deposits and withdrawals of cash amounts from the Plaintiff's UBS bank account were not, in my view, satisfactorily explained. The Plaintiff could not satisfactorily explain certain payments made by him in cash, as a result of cash withdrawals from his bank account. Eventually, however, in re-examination, he offered the explanation that he had used those withdrawals for various loans to friends. One of those loans was in an amount of 30,000 francs, of which he asserted that 15,000 francs had been repaid. He had no documentation or other evidence to substantiate that alleged loan. 44 One might be excused for considering that, if the Plaintiff's financial and material circumstances were such as to entitle him to bring the present proceedings and obtain an order for provision, it is somewhat inconsistent that he was at the same time making unsecured and undocumented loans in quite substantial amounts to various friends. 45 I regarded much of the evidence given by the Plaintiff as quite unsatisfactory, especially concerning the arrangements (both financial and residentiary) with Cerly, the reasons why they occupied separate residences in different locations, the circumstances under which the Plaintiff entered into the agreement to reimburse the Swiss Government for maintenance in respect to his son, the various deposits and (especially) withdrawals in cash from his bank account, the circumstances in which he had been in receipt of unemployment benefits during a period whilst he had been generating a very significant income through share trading, and his involvement in Advanced Orbital Services. I have a strong suspicion that both in respect to the Plaintiff's receipt of unemployment benefits and in respect to the receipt by Cerly of maintenance from the appropriate government authority, the Plaintiff (and, in the latter case, also Cerly) have been availing themselves of social security benefits to which they might not be strictly entitled. 46 Much of the evidence adduced on behalf of the Plaintiff (especially that elicited in cross-examination of the Defendant) was directed to establishing that the Defendant is in comfortable, if not affluent, financial circumstances. It must be appreciated, however, that an applicant for an order for provision must establish his own case upon its own merits. 47 The present financial and material circumstances of the Defendant, as the chosen object of the testamentary beneficence of the Deceased, may have the effect of reducing, or even extinguishing, any order for provision an entitlement to which the Plaintiff might otherwise have established. Those circumstances, however, can in no way establish, or enhance, the claim of the Plaintiff. 48 In performing the first step in the two stage process identified by the High Court of Australia in Singer v Berghouse (1994) 181 CLR 201 at 208, in order to determine whether the Plaintiff has been left without adequate provision for his maintenance, education or advancement in life, the Court must assess whether the provision (or, as in the instant case, the absence of provision) was inadequate for what, in all the circumstances, was the proper level of maintenance appropriate for the Plaintiff, having regard, amongst other things, to the Plaintiff's financial position, the size and nature of the estate of the Deceased, the totality of the relationship between the Plaintiff and the Deceased, and the relationship between the Deceased and other persons who have a legitimate claim upon his bounty. 49 The High Court, at 210, said that that question, although it involves the exercise of value judgments, is strictly one of fact (see White v Barron (1980) 144 CLR 431 at 441-443; Goodman v Windeyer (1980) 144 CLR 490 at 501-502, 509; Hunter v Hunter (1987) 8 NSWLR 573 at 576). 50 The Plaintiff is a young man with good academic qualifications, who presently holds a permanent position with an international financial institution, and is in receipt of a relatively high salary. 51 Even on his own, somewhat unreliable, evidence, concerning his present income and present outgoings, he has a monthly surplus in excess of 4,000 francs.

52 It was the contention of the Plaintiff that he needed to acquire a residence for himself, Cerly and the children, and that the deposit for an appropriate residence would be in an amount from about $151,000 to about $208,000; that he needed to pay off his debts (totalling $43,000); and that he required a fund to meet any unexpected contingencies ($38,000). 53 Consonant with the foregoing principles stated by the Judicial Committee of the Privy Council in Bosch v Perpetual Trustee Company Limited [1938] AC 463, and by the High Court of Australia in Singer v Berghouse (and the authorities referred to therein), I have no hesitation in expressing my finding that the evidence demonstrates that the Plaintiff has not been left without adequate provision for his proper maintenance. 54 The foregoing finding is of itself sufficient to determine the present application. Even if (contrary to my foregoing finding) I were ultimately to conclude that the Plaintiff had established an entitlement to some relatively small benefit out of the estate of his father (a benefit in no way comprising the foregoing amounts which the Plaintiff submits that he should receive), it would still be necessary for me, in performing the second stage in the two stage process described in Singer v Berghouse, then to proceed to a consideration of the competing claim of the Defendant upon the testamentary bounty of the Deceased, she being the chosen object of his testamentary beneficence. 55 The Defendant was born on 13 January 1949, and is presently 52 years of age. She was born at Ballarat in Victoria, and has lived substantially all her life in Australia. The Defendant is a qualified nursing sister, although she has not practised in that profession since 1985. Nevertheless, the Defendant's nursing experience was of considerable value and assistance when the Deceased in June 1993 was diagnosed as suffering from bowel cancer. Despite surgery shortly thereafter, the Deceased's condition deteriorated from late 1995 until his death three years later in December 1998. The chief responsibility for ministering to the medical needs and general welfare of the Deceased from the time when his cancer was first diagnosed until his death fell almost entirely upon the Defendant. 56 Throughout that period the Deceased underwent surgical and other medical procedures on a number of occasions, which necessitated admissions to hospital. During the latter part of his life the Deceased was in continuous pain, for which he required morphine, which was administered to him by the Defendant. Necessary attention to his colostomy and catheter (on account of bowel and bladder incontinence) was given by the Defendant, whose nursing experience and training were invaluable during the years of the Deceased's terminal illness. 57 It is quite apparent that the relationship between the Defendant and the Deceased, extending over a period of almost twenty-two years, was a close and loving one. From the time when his bowel cancer was diagnosed in mid-1993 until his death in December 1998 the Deceased was almost entirely dependent upon the Plaintiff both physically and emotionally. 58 The Defendant met the Deceased in Melbourne in 1976. At that time the Defendant was employed as a nursing sister by a pathology practice. The Deceased was at that time unemployed, and was living in a rented unfurnished apartment in Melbourne, where he was sleeping on a mattress on the floor.

59 After the Defendant and the Deceased commenced to live together in 1977, the Deceased in February 1982 had a nervous breakdown. He was hospitalised for several months at the Royal Park Psychiatric Hospital, where he was diagnosed with a schizophrenic disorder. After his discharge from hospital the Deceased returned to live with the Defendant at her residence in Windsor, a suburb of Melbourne. In consequence of that nervous breakdown the Deceased was unable to work for a period of about ten months, receiving an invalid pension during that time. 60 The Defendant appears to have been, to a very large extent, the practical mainstay of the Deceased's life. The impression which is gathered from the evidence is that the Deceased was somewhat irresponsible and feckless in his personal affairs. Had it not been for the participation of the Defendant in the business activities of the Deceased, including his work as a commission agent in selling wines at the various wine festivals in Switzerland (to which reference has already been made), it is doubtful whether the Deceased would have achieved very much financially from that source. 61 Further, it would appear that it was the participation and intervention of the Defendant that essentially resulted in the acquisition by the Deceased of the various items of property which he owned at the time of his death. The Defendant was the person who appears to have been chiefly responsible for the conservation and improvement of those items of property.

62 According to the Defendant, from the beginning of their relationship the Defendant assumed multiple roles. She was at various times the main income earner; she was the homemaker; she was in constant employment; she was responsible for the management of the home. The Deceased could not cook, and appears to have been deficient in other household and domestic abilities. He did not undertake any domestic chores, except occasional vacuuming. The Defendant was the organiser and took charge of the financial and domestic affairs of the household. 63 The Defendant left her employment with the pathology practice in 1979, and began nursing private patients in their homes. In that area of her professional work she was on duty twelve hours a day and working six or seven days a week. She continued working those hours until 1985. By 1981 she had saved enough money for a deposit on a house property at 117 Union Street, Windsor in Melbourne, which she purchased for about $60,000. The Deceased did not make any financial contribution to that purchase. The Windsor house required extensive renovations (it had previously been a boarding house). The Defendant from her earnings in private nursing paid for those renovations. The Deceased did not contribute financially to the cost of the renovations, nor did he undertake any physical work in that regard. 64 From about 1976 until about October 1982 the Deceased was employed in various occupations, ranging from computer salesman to television repairer. None of those positions was highly paid. For long periods the Deceased was out of work. 65 It would appear that the Deceased had a flair for selling, and that he was interested in wine. At the suggestion of the Defendant, in about October 1982 he applied for and obtained a position as a sale representative for a German wine company. In that employment he was very successful. 66 In 1983 the Defendant and the Deceased purchased a small flat at Billong Street, Neutral Bay, for about $90,000. They contributed equally to the deposit on that purchase, and borrowed the balance of the purchase price. 67 When the Defendant and the Deceased married in December 1983 they were both keen to start a family. Unfortunately the Defendant had four miscarriages. They participated in an IVF program, but were unsuccessful in producing a child. 68 In 1984 the Defendant sold the Windsor house for about $150,000, the net proceeds of sale being about $100,000. She used part of the sale proceeds to discharge the mortgage of about $50,000 on the Billong Street property. 69 In 1985 the Defendant and the Deceased purchased a small wine shop in Melbourne for $50,000, the Defendant using some of the proceeds of sale of the Windsor house to purchase that wineshop. In 1985 the Defendant gave up her nursing work, and took over the management of the wine shop. In the same year the Defendant and the Deceased purchased a block on land in Switzerland near Seitz. The purchase price was about $170,000. The deposit came from part of the sale proceeds of the Windsor house, and the balance of the purchase price was borrowed. That land was sold in 1999. After deduction of the amount owing on the property and various miscellaneous expenses, the net proceeds of sale was about $30,000. 70 In or about December 1985 the Defendant and the Deceased purchased another house, in Rowe Street, North Fitzroy in Melbourne, for $240,000. They used their joint funds to pay the deposit, and borrowed the balance. 71 In 1987 the wine shop, which apparently was not trading successfully, was sold for about $50,000. Nevertheless the Defendant and the Deceased continued to participate in the wine trade, and they maintained a warehouse in Canberra from which they sold wine by mail order. In 1988 the Defendant and the Deceased sold the Rowe Street house for about $300,000. In the same year they removed their residence to Sydney. Initially they lived in the Billong Street property, which they proceeded to renovate. They sold that property in 1989 for about $240,000. They subsequently resided in the apartment in Ben Boyd Road, Neutral Bay, which the Deceased had owned since before he met the Defendant. 72 In that year, 1989, the Deceased's brother, Bernhard Ryf, who had a business trading in wine in Switzerland, commenced to employ the Defendant and the Deceased as consultants to market and sell wine at trade fairs in Europe. They were paid commissions on the sales which they effected. The Defendant and the Deceased travelled to Switzerland to attend those fairs on up to four occasions a year. They worked for uninterrupted periods of, for example, thirty-five days, then had a respite. That was essentially the only form of paid employment in which the Defendant and the Deceased participated from 1989 until the death of the Deceased in 1998. 73 In late 1989 the Deceased and the Defendant purchased a house at Gueberschwihr in France, not far from the border between France and Switzerland. They renovated that property, converting the existing building into five small flats. The property was purchased for $250,000, the entirety of which sum was borrowed, that borrowing being secured by a mortgage. From the rent the mortgage payments were met, and the principal sum reduced. On the death of the Deceased the Defendant received payment of about $40,000 in respect of an insurance policy, which she used to discharge the mortgage over the Gueberschwihr property. 74 In 1990 the Defendant and the Deceased purchased part of a duplex in Colmar in France, which they sold about two years later. However they did not make any profit on that sale. The major part of the purchase price of the property was borrowed. 75 In 1992 the Plaintiff and the Deceased sold one of the flats in the Gueberschwihr property for about $210,000. 76 In or about August 1995 the Defendant and the Deceased purchased an investment property as 36/2 Lindsay Street, Neutral Bay for $345,000. Of that purchase price they borrowed about $200,000. That property was sold in about July 1998 for about $490,000, of which about $477,000 was paid to the mortgagee from the net proceeds of sale. 77 In about July 1996 the Defendant and the Deceased purchased (together with the Deceased's brother Bernhard) a one-half share in a property known as 11/15 Anderson Street, Neutral Bay. They contributed about $11,000 towards that purchase price, the balance being provided by Bernhard Ryf. In about November 1998 Bernhard bought out the equity of the Defendant and the Deceased in that property for about $11,000. 78 In 1996 the Deceased and the Defendant received an inheritance under the will of a friend, John Gulbis, which ultimately resulted in them receiving about $10,000. 79 In about April 1998 (that is, some eight months before the death of the Deceased in December of that year) the Defendant and the Deceased purchased the apartment in The Observatory for $1.4million. They paid the 10 percent deposit from their own funds, and borrowed the balance of the purchase price, secured by mortgage over the apartment itself, the Lindsay Street property and the Montrose property (Ben Boyd Road, Neutral Bay). In September 1998, only three months before the death of the Deceased, they sold Montrose. The proceeds of sale were in an amount of about $825,000, and the major part of that amount (about $725,000) was subsequently paid in reduction of the mortgage on The Observatory. In June 1998 the Defendant and the Deceased sold the Lindsay Street property for $495,000, and the entirety of the net proceeds of sale was paid in reduction of the mortgage. There is still a balance of about $300,000 owing upon The Observatory apartment, which is secured by a mortgage over that apartment. 80 Any order for provision which might be made in favour of the Plaintiff would require the sale of assets now held beneficially by the Defendant. Despite the various submissions on behalf of the Plaintiff in that regard, especially submissions directed to establishing that the Defendant could, and should, live in a residence of a standard less than that which she presently enjoys in her apartment in The Observatory, I do not consider that there is any reason why the Defendant should be required to be dispossessed of that residence. Further, the sale of assets of the Defendant located in Switzerland or France would result in a diminution in her income. 81 It was suggested to the Defendant in cross-examination that financial necessity would require her to sell the apartment in The Observatory. The Defendant denied that suggestion, and expressed a desire to remain in residence in that apartment, which has been her home for more than three years, and which was, in her words, loved by the Deceased. 82 It must also be appreciated that the Deceased during his lifetime gave to the Plaintiff a not insignificant financial benefit, to assist him with the cost of his education. That payment, in an amount of 55,000 francs, was made in return for the Plaintiff consenting to the removal of a caveat over the Neutral Bay unit. That caveat had been lodged consequent upon an agreement between the Deceased and the Plaintiff's mother at the time of the breakdown of their marriage. 83 I do not disregard the fact that various items of correspondence passing between the Plaintiff, the Deceased and the Defendant in respect to the removal of that caveat reveal a somewhat duplicitous approach on the part of at least the Defendant (who wrote the letters, albeit with the ostensible authority of the Deceased). Those letters contain express statements that the Plaintiff, by consenting to the removal of the caveat, would not be deprived of benefit under the wills of the Deceased and the Defendant. As I have already observed, the will of the Deceased was made in 1988, several years before there was any contact between the Deceased and the Plaintiff. 84 It should be appreciated that an order for provision is not made as a reward for good conduct. Neither is such an order withheld as punishment for perceived bad conduct on the part of an applicant. 85 In her affidavit of 5 October 2001 the Defendant set forth the following information concerning her current financial position: Australian Assets Apartment at The Observatory - $1,400,000 Furniture and personal effects- $60,000 Shares in public companies - $15,000 Bank deposits/cash - $8,000 (each of the foregoing amounts is approximate) Total: $1,483,000

Australian Liabilities Mortgage to Milton Corporation (in respect to apartment at The Observatory) - $300,000 Credit Card debts - $10,000 Total: $310,000

Income Personal earnings, commissions on wine sales (approximately) - $30,000 Superannuation, widow's pension - $4,800 Total: $34,800

Expenses Levies and outgoings in respect to apartment at The Observatory - $26,000 Mortgage interest - $27,750 Total: $53,750

In addition, the Plaintiff also has usual day to day expenses; for example, food, clothing, telephone, electricity.

Foreign Assets and Income Gueberschwihr property (four flats) - $580,000 Cash in Swiss bank account - $80,000 Total: $660,000 Net rental income from Gueberschwihr flats (after deduction of all rates, taxes and expenses and property management fees) - $18,000

(Each of the foregoing figures is approximate.) 86 The amount in the Swiss bank account represents approximately $70,000, being the net proceeds of the sale of the land at Speiz, and approximately $9,500, being moneys credited to that account by the Defendant's employer, as commission on the sale of wine. 87 However, the assets in both France and Switzerland are subject to claims by the Plaintiff, and the Defendant's access to the Swiss bank account has been frozen in consequence of the Plaintiff's claim thereto. Evidence has been placed before the Court by appropriate experts in respectively Swiss inheritance law and French inheritance law. According to that evidence it will be necessary for the Defendant to commence proceedings in a Swiss Court to enable the proceeds of sale of the land at Speiz, now held in the Swiss bank account (together with moneys to which the Defendant was entitled from her employer), to be released to the Defendant. That land which is described by the Defendant as being the land at Speiz was in fact situated at Faulensee, Spiez-Grundbuchblatt Nr 2110, Thun in Switzerland. That was the only land owned by the Deceased in Switzerland at the time of his death. It was sold in 1999, with the consent of the Plaintiff. The net proceeds of sale of that land, after repayment of loans and taxes, was 86,463 francs. 88 The expert evidence concerning French inheritance law relates to the four flats located at Gueberschwihr in France. Under French inheritance law the Defendant is entitled to choose between the following two alternatives: (a) The Defendant at the present time dividing that property equally between herself and the Plaintiff; or

(b) The Defendant receiving present ownership of one quarter of that property and receiving income upon the remaining three quarters for her life; upon her death that remaining three quarters would pass to the Plaintiff. 89 I have already observed that any order for provision an entitlement to which the Plaintiff might otherwise have established would need to be made out of the notional estate of the Deceased. In considering the making of an order for provision out of notional estate, the Court must have regard to various factors which are set forth in sections 27 and 28 of the Family Provision Act. Amongst the factors referred to in section 28(1) are: (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. 90 In the instant case, from the time when she married the Deceased, the Defendant was closely involved in the business activities of the Deceased. She had reasonable expectations (which were substantiated and evidenced by the terms of the will of the Deceased made in 1988) that she would be the sole beneficiary of the testamentary dispositions of the Deceased. It is relevant here also to record that at the same time as the Deceased made his will in 1988 the Defendant herself also made a will by which, in the event that she were to predecease the Deceased, she gave the entirety of her estate to the Deceased. 91 Further, it must be appreciated that the Defendant herself had a very significant role in the acquisition, conservation and improvement of the assets of the Deceased, and in building up the business activities of the Deceased. Had it not been for the involvement of the Defendant in those property transactions and business activities, the value of estate of the Deceased at the time of his death, and the totality of the value of the apartment in The Observatory (acquired by the Deceased and the Defendant as joint tenants) would have been far less than, they in fact, were. 92 The competing claim of the Defendant upon the testamentary bounty of the Deceased (a claim which the Deceased by the terms of his will fully recognised) is such that, even if I were satisfied that the Plaintiff had established an entitlement to an order for provision by way of a relatively small legacy, I would not be disposed to make such an order, since the consequence of such an order would be to require the sale by the Defendant of her residence. In my conclusion that should not be required of her. 93 I propose, therefore, to dismiss the claim of the Plaintiff. 94 I make the following orders: (1). I order that the summons be dismissed.

(2). I order that the Plaintiff pay the costs of the Defendant, such costs to be on the party and party basis.

(3). The exhibits may be returned. ********

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