Hardcastle v Perkuhn

1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3673/98 - COLIN HARDCASTLE -V- SIGRID IRENE HANNELORE PERKUHN - ESTATE OF CECILIE PIGORSCH

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Cecilie Pigorsch who died on 7 March 1998. The deceased was survived by her daughter, the defendant, and the plaintiff who alleges that he was living with the deceased as her husband on a bona fide domestic basis since February 1994. 2 The deceased made a number of wills. On 23 November 1994 she made a will under which she left her estate to her daughter. The plaintiff was not mentioned in that will. In her will of 24 June 1996, the deceased gave the plaintiff a life estate in her unit 4/16 Gilmore Street, Wollongong. She gave the residue of her estate, which included another unit, to her daughter, the defendant. 3 On 19 February 1998 she made her last will under which she gave her car to the plaintiff and the residue of her estate to the defendant, who was also appointed executor. The defendant did not take out probate of the will and the plaintiff obtained a grant of administration under s 41A of the Wills Probate and Administration Act for the purposes of making his application to the court. 4 At the date of death the estate of the deceased consisted of a motor vehicle worth $16,500 and an amount of $6000 in bank accounts. 5 In this matter there have been costs incurred both on the plaintiff's and defendant's part. The defendant's costs were estimated at $24,000 and the plaintiff's at $24,500. In order to give some background, it is worthwhile dealing with some of the history. 6 The deceased was born in Bavaria, Germany, in 1922 and the plaintiff was born in Manchester, England on 13 July 1940. The defendant's daughter was born in Germany on 5 January 1946 and apparently the deceased married Mr Pigorsch in Munich in 1948. 7 On 26 July 1944 the deceased, the defendant and Mr Pigorsch migrated from Germany to Australia and they first lived in Kreswick, Victoria. In 1955 the Pigorsch family moved to Ballarat. 8 In 1956 they moved to a house at West Dapto in New South Wales. 9 In 1969 the defendant married Wolfgang Peter Perkuhn, and it was in 1970 that the plaintiff migrated from the United Kingdom to Australia. He commenced employment at Port Kembla and lived in that area thereafter. 10 The deceased and Mr Pigorsch apparently in the early 1970s built a block of flats on some land at 16 Gilmore Street, Wollongong and retained a number of flats. 11 In 1977 the defendant, Mr Pigorsch and their children moved to Tingha in New South Wales. (Tingha is near Inverell, about 124 kilometres north of Armidale.) 12 In 1982 the plaintiff, who had been married, separated and he was divorced in 1983. 13 In September 1989 the deceased's husband died and several years later in 1992, the deceased sold one of the units, being unit number 3, in Gilmore Street, Wollongong, for about $93,000. That led to some trips overseas by the deceased and the defendant to visit relatives. 14 It was at the end of 1992 that the plaintiff says he first met the deceased. He says that by December 1993 a sexual relationship commenced and that in February 1994 he moved into 4/16 Gilmore Street and commenced a relationship which he described as a de facto relationship with the deceased. 15 After this time there were occasions when the defendant stayed with the deceased at Wollongong, such as December 1994. Similarly, her child Neil stayed there early in 1995, and in Easter 1995 the deceased and the plaintiff stayed with the defendant and her family in Tingha. 16 It was on 25 September 1995 that the plaintiff was injured in a motor vehicle accident which led to him being unable to earn any income as a taxi driver, an occupation he had followed up until then. 17 I have already dealt with the various wills made in 1994, 1996 and 1998. 18 There were occasions in 1996 when Steven, the defendant's son, stayed with the deceased and the plaintiff at Wollongong. 19 It was in September 1997 that the deceased and the plaintiff went to Europe for about six weeks. The plaintiff went to the United Kingdom and the deceased to Germany and apparently the plaintiff joined the deceased in Germany. 20 Towards the end of 1997 the deceased started to suffer medical problems. In due course, on 19 February 1998, she made her last will. 21 On 6 March 1998 the deceased transferred the remaining units which she had in 16 Gilmore Street, Wollongong. These were units 4 and 6 and they were transferred to the defendant for no consideration. Three days later, on 9 March 1998, the deceased died. 22 On 17 March 1998 the plaintiff was evicted from the unit by the defendant. She cut off the electricity and telephone and required him to immediately vacate it. This he did and went to live in a caravan. 23 On 25 August 1998 a Family Provision Act summons was filed in this matter and on 3 September 1998 a notice of motion for interim relief in respect of unit 4 was filed by the plaintiff. That unit, in fact, was sold in September 1998. Later, a further undertaking was given in respect of the sale of unit 6. That unit was sold in December 1998 in circumstances which I have already set out in an earlier judgment. I dealt with this aspect of the matter fairly fully in my judgment of 24 May 1999 and also repeat what I said there about the events and circumstances surrounding the sale of unit 6 and the breach by the defendant of the undertaking she had given to the parties. 24 The question of whether or not the plaintiff and the deceased were living together as husband and wife on a bona fide domestic basis must be determined in accordance with the principles recently referred to by the Court of Appeal in Light v. Anderson & Ors (1992) DFC 95120. They referred with approval to the decision of Kearney J in Simonis v. Perpetual Trustee Co Limited (1987) 21 NSWLR 677 where his Honour in dealing with the expression in the Family Provision Act 1982 after reviewing the authorities said at p 685 the following: "I consider that the expression under consideration constitutes a single composite expression of a comprehensive notion or concept and therefore has to be approached by considering the expression as a whole and not in several parts. This approach, as adopted by Powell J, was also the approach preferred by the Administrative Appeals Tribunal in Waterford's case (see 106). I consider that the factors referred to by Powell J while not being regarded as a complete test, serve the purpose adequately in the present case to determine the question of eligible person. The factors indicated by Powell J are as follows (at 459): '1. The duration of the relationship. 2. The nature and extent of the common residence. 3. Whether or not a sexual relationship existed. 4. The degree of financial interdependence and any arrangements for support, between or by the parties. 5. The ownership, use and acquisition of property. 6. The procreation of children. 7. The care and support of children. 8. The performance of household duties. 9. The degree of mutual commitment and mutual support. 10. Reputation and "public" aspects of the relationship.' His Honour also referred to the support to be gained for this approach from the report of the New South Wales Law Reform Commission concerning de facto relationships (LRC 36 (1983)). His Honour quoted the following passage in the report (at 459):

'17.10 the application of the basic definition to the myriad facets of private personal relationships between men and women will inevitably be a matter of degree and proportion. The attributes and circumstances of such relationships differ greatly, ranging from what is little more than a casual liaison, to a continuing affectionate companionship, to a long term merging of lives and resources. Moreover, the nature and quality of a particular relationship may change and develop over time, making it sometimes very difficult to pin-point a time when the relationship should assume a new legal significance.

As I understand it, the parties substantially treated Powell J's approach as being appropriate to the circumstances of the present case.'" 25 Obviously, the list is not immutable and in particular cases other factors will have to be considered. The list is of use and it is convenient to discuss many of the incidents of the relationship between the plaintiff and the deceased under the headings set out above. 26 Before dealing with the individual items, it is necessary to deal with the questions of credit which arise. So far as the plaintiff's evidence is concerned, there was some criticism of him in forming a relationship with someone seventeen years his senior but that I do not think affected his acceptability as a witness. So far as I can see, there is no reason why I should not accept his account. 27 So far as the defendant is concerned, I have already formed a view which I expressed in my judgment of 24 May. I did not find her a satisfactory witness. I was not prepared to accept her on a number of matters and it seems to me that she professed ignorance on a number of matters in this case which I find quite surprising. 28 I turn to the particular matters to which I have referred above: 1. Duration of a relationship. 29 According to the plaintiff this commenced in February 1994. The cross-examination demonstrated that he was really relying on his recollection, fixing the commencement date as some time prior to his accident which occurred in September 1995. He seemed to concede that it may have been twelve months or a little bit earlier before that that he commenced the relationship. I think it is important to note that there is no reference to him in the November 1994 will which is consistent with a relationship that, perhaps, had only just started. In this circumstance it seems to me that the relationship commenced during 1994 some time, not long before September. It continued thereafter up until the death of the deceased. 2. Nature and extent of common residence.

30 There does not seem to be any dispute but that the deceased and the plaintiff lived together for the relevant period. 3. Whether there was a sexual relationship.

31 According to the plaintiff there was. There are a number of witnesses who gave evidence which substantiates this fact. Mrs Glaser and Mrs Subatic were friends of the deceased and not necessarily related to or in sympathy with any particular party. Their evidence is fairly clear as to the relationship between them. Even the son Steven supported the fact that the plaintiff and the deceased slept together in the same room, as did the defendant. 4. Financial interdependence. 32 There is no evidence of any interdependence except when the trip to Europe occurred in 1997. Air fares of some $4500 were paid by the plaintiff with each of the deceased and the plaintiff contributing to other expenses. 5. The ownership, use and acquisition of property. 33 There is only one item of property which was purchased jointly and that was the car. The plaintiff contributed $10,000 and the deceased her existing car which was traded in.

6 and 7. Children. 34 These are not relevant in this case. 8. Performance of household duties. 35 Clearly the plaintiff did not like cooking and the deceased did that. However, there is sufficient evidence from independent persons to indicate that it was a household in which there were some shared household duties. 9. Mutual commitment and mutual support. 36 There is evidence from the independent witnesses to whom I have referred of affection between the deceased and the plaintiff. Some evidence to the contrary was given by Mr Ryan but given the limited amount admitted, it has proven nothing. 10. Reputation and public aspects. 37 There is some evidence from the independent witnesses of the deceased and the plaintiff attending social events at clubs and the like in which they displayed their affection for each other. 38 There was in the affidavits of the defendant and also the son evidence of statements made by the deceased to the deponents which would denigrate the nature of the relationship. The difficulty with this, and particularly with respect to the deceased's explanation that the plaintiff was a boarder, is that one has to understand the reason why the deceased might make such statements, particularly having regard to the person to whom they were addressed. It may be hard quite often for a deceased under these circumstances to admit to a family member the true nature of a relationship. However, there certainly is nothing of a concrete manner which would suggest in any way that the plaintiff was a boarder. The plain fact in this matter is that all the evidence points to them having lived together as man and wife since a time prior to 1994 till March 1998. There is thus a period of some three and a half years when this occurred. The plaintiff, therefore, is an eligible person. 39 There were submissions made by the defendant who, today, has appeared in person, in which she raises questions of a de facto relationship being an unregistered marriage and questions of whether this would lead to bigamy, and other matters relevant to Australian citizenship. The written submissions will be marked as Ex 1 in the proceedings so that there is a record of them. However, the matters which are raised in them really are not relevant to this application which falls to be defined upon the terms of the provisions of the Family Provision Act which allow persons in the situation of the plaintiff to claim as a de facto spouse. 40 In applications under the Family Provision Act, the High Court has recently in Singer v. Berghouse (1994) 181 CLR 201 set out the two stage approach that a court must take. At p 209 it said the following: "The first question is, was the provision (if any) made for the applicant's '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 for 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." 41 As directed by the High Court, I turn to look at the plaintiff's position. He is single, aged fifty-nine and has no dependants. He lives in a caravan which he purchased for $15,000 when he moved out of the deceased's home. He has had a workers compensation claim that has finally been determined. Although he was expected to receive about $70,000 and he did get an award approaching this sum, a large part of that has been taken by garnishee to meet a liability which he has to the Child Support Agency. In the event, he finally received, after deduction of that amount and a ten per cent deduction in relation to the Health Insurance Commission, the sum of $19,503.82. He also has a car which he received under the will and he exists on what payments he receives from workers compensation which will soon be replaced by social security payments. (Mr Pesman advised that the plaintiff would be receiving a five per cent return in relation to the deduction for the Health Insurance Commission.) 42 I will note that he plaintiff is also to receive another five per cent back from the deduction for the Health Insurance Commission in due course. 43 The matters in respect of which the plaintiff was compensated for in relation to workers compensation includes a 25 per cent impairment of his back, 25 per cent permanent loss of efficient use of his right arm above the elbow, an eight per cent permanent impairment of his pelvis, five per cent permanent loss of efficient use of his right leg above the knee and also efficient use of his left leg above the knee. Accordingly, he has some medical problems. 44 So far as the way in which the plaintiff is left without adequate and proper provision for his maintenance, education and advancement in life is concerned, the case was originally put that he should receive a life interest in one of the units of the deceased. However, that is not possible but what the sales of the units do indicate is that the cost of housing in the area in which he lives is in the order of $100,000. Clearly, given his limited financial resources, he is not in a very satisfactory financial situation and any assistance the court could give him would be appropriate. 45 It is necessary also to consider others having a claim on the bounty of the deceased. In this case the only person is the defendant. She is aged fifty-three, married, and apparently has no dependants. She owns a house in her name at Tingha in which she and her husband reside which she said has a value of $24,000. She has a joint interest with her husband in another house in Tingha worth $24,000 which is occupied by her son Steven. She also refers to having a block of land worth $4000. She and her husband are in receipt of Social Security, or Job Start, having given up the position of Postmaster at Tingha. 46 Apart from this, the defendant also has received $193,500 being the proceeds of the two units which were transferred to her three days before the death of the deceased. Those sums she has given to her husband. There is evidence from the husband that he spent on a car some $16,500; $26,200 on a trip for himself and the defendant to Germany, and the rest, bar $850, has been disbursed probably to their sons. 47 It is necessary, of course, to evaluate the claim of the plaintiff in this matter. Widows' claims are frequently the subject of applications in this court. The Court of Appeal in Goloski v. Goloski (unreported 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, which was approved by the Court of Appeal on 24 April 1986. There 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 of all to ensure that his widow be secured 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." 48 Widowers are treated in the same way as are other long term partners of a deceased person; particularly this also applies to persons who live in a de facto relationship with the deceased. In this case there are a number of differences from what was referred to by the court there. However, it should be noted that the plaintiff has contributed to the car which they both enjoyed while the deceased was alive and he also purchased air tickets for a trip overseas. The extent of the contributions in part can be seen in the type of provision which the deceased made in 1996 in her will. 49 However, the relationship was one which was only of a short duration, a total of some three and a half years. One cannot in any sense compare that to the type of relationship which the court was referring to in Goloski v. Goloski to which I have referred. In particular, there is the need for a very long relationship and a building up of assets over a period. In my view, having regard to the shortness of the relationship and to the situation of the various parties, it would be appropriate if the plaintiff were to receive a legacy of $60,000. The question of how it can be paid must be faced. 50 It can only be paid by designating property as notional estate under s 23(b)(ii). Under that section the court may, subject to ss 26, 27 and 28, make an order designating property as notional estate of the deceased person such property as it may specify being property which is held by or on trust by the disponee, whether or not that property was the subject of the prescribed transaction. Here clearly the transfer of the two units to the defendant three days before the death of the deceased without consideration constitutes a prescribed transaction with the defendant being the disponee. 51 In the circumstances of this case it is probably clear that s 25(1) applies. That section deals with subsequent dispositions made by the person who received the property, such as that which occurred when the defendant gave away the proceeds to her husband. I have not considered the detail of that because, firstly, the question of special circumstances has to be considered and that has not been debated before me but, more particularly, for any appropriate order to be made there would have to be other necessary parties, such as the defendant's husband or sons to whom the property might have passed. 52 One of the items of property which the defendant does own is her house in Tingha. The plaintiff has asked that this be designated as notional estate. Quite clearly, since 24 May 1999, the fact that this property may be affected has been apparent to the defendant, given the terms of the injunction which I granted on that day. 53 Before I can designate the property a notional estate I have to consider the matters in s 27. Under s 27(1)(a) I have to consider the importance of not interfering with reasonable expectations in relation to the property. The only expectations here are the fact that the deceased transferred it to the defendant and obviously expressed a wish for her to have it. However, nothing else has been dealt with in the evidence. Having regard to the matters which I will deal with next, these are not matters which would disincline me to designate the property as notional estate. 54 Under sub-s (b) of s 27(1) I have to consider the substantial justice and merits involved in making or refusing to make the order. In this case there is clear animosity between the two parties. There has, in the circumstances in which I have dealt with earlier in this judgment, been a deliberate breach of the undertaking given by the defendant and there has also been a fairly clear course of disposing of the proceeds of the sale of the units. The affidavits of the defendant and her husband give no proper account of what has happened to the money other than the small amounts to which I have referred. 55 The money is said to have been given by the defendant to her husband who is then said to have given the balance to their sons. No explanation for why this money was given has been proffered. No suggestion was raised for the sons having a need and no explanation as to why the assets of the defendant were reduced. In particular, the defendant's complete lack of interest in what might have happened to the money is very surprising. In the circumstances I can only conclude that this was part of a deliberate attempt in order to foil the plaintiff's application. 56 In those circumstances, the justice and the merits are on the plaintiff's side and not on the defendant's. There does not appear to be other matters which I should take into account, particularly in relation to sub-s (c). Clearly under s 28(1) there is insufficient to accommodate any necessary order and under sub-s (2) of s 28 the property, if anything, would be far less than is necessary to satisfy the judgment. Therefore it is appropriate to designate the house as a notional property. 57 The plaintiff also sought additional orders, seeking orders that the defendant file and serve an affidavit setting out the circumstances of disbursement of the proceeds of sale of units 4 and 6. This is in order to facilitate the designation perhaps of other property as notional estate. The court is given a number of ancillary and consequential powers under s 15 of the Act. In s 15(1)(a)(ix) the court is given power to make orders with respect to the securing either wholly or partially of a due performance of an order under the section and under (xi) the executing of any necessary conveyance, document or instrument, purchasing of such documents and title for the vendor and such other things that the court thinks necessary in relation to the performance of any order. There is also a general power in s 15(1)(b) to make such orders with respect to such other matters as the court thinks necessary. 58 In the circumstances where there has been a disposition by the defendant of substantial property in the estate, which has the effect of defeating an order, it is, I think, necessary to ascertain with some precision what is the other property which the defendant owns and what happened so far as the defendant may know to the property which was received.

59 So far as costs are concerned, the defendant certainly has incurred costs. She has been unrepresented at today's hearing, her solicitors apparently no longer acting for her. They have filed an appropriate notice of ceasing to act and the defendant has filed an appearance. The amount of the costs no doubt have been incurred but in case some question might arise as far as recoupment from the estate, I think the defendant should pay her own costs and that she should have no entitlement to reimbursement of her costs from the estate. Clearly I think the defendant ought to pay the plaintiff's costs.

Accordingly, the orders I make in this matter are as follows: 1. That in addition to the bequest in the will of the deceased that the plaintiff receive a legacy of $60,000. 2. Designate as notional estate the defendant's property which she owns in Museum Street, Tingha, New South Wales. 3. Order the defendant to file and serve within twenty-one days of today's date an affidavit setting out her present financial situation and, in particular: (a) in respect of any real estate in which she has an interest - (i) the extent of her interest. (ii) the address and reference to the title of the real estate. (iii) any known value thereof. (b) in respect of any other property - (i) the extent of her interest. (ii) a description of the property. (iii) any known value thereof. And also setting out to the best of her knowledge the disposition of the sale proceeds of units 4 and 6, 16 Gilmore Street, Wollongong, by her husband. 3. The defendant is not to recover her costs out of the estate. 4. The defendant is to pay the plaintiff's costs and is not entitled to reimbursement of the same from the estate. 5. I direct the plaintiff if he wishes to seek the designation of any additional property as notional estate to file and serve a notice of motion within two months of today's date seeking the same and the joinder of any additional parties.

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