Kondratenko v Burec

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5833/02 KATHERINA KONDRATENKO & ANOR -v- GEORGE BUREC - ESTATE OF MARIA SAMOILENKO JUDGMENT 1 MASTER: These are proceedings under the Family Law Provision Act 1982. 2 The proceedings were instituted by summons filed by the plaintiffs Katherina Kondratenko and Olga Savell on 9 December 2002. The plaintiffs are the executors of and the beneficiaries named in the will of the late Maria Samoilenko (to whom I shall refer as "the deceased"). 3 The deceased died on 6 April 2002, aged eighty-two. She left a will dated 23 April 1997, probate whereof was on 19 June 2002 granted to the plaintiffs, who were the executors named in that will. By that will the deceased gave the entirety of her estate to the plaintiffs as tenants in common in equal shares. 4 The deceased was survived by her only child, George Burec (who is the defendant named in the summons). No provision was made for him by the will of the deceased. By the summons the plaintiffs sought an order, pursuant to section 17 of the Family Provision Act, for the shortening of the prescribed period of eighteen months after the death of the deceased in which any claim for provision by the defendant might be instituted. 5 That claim for relief has now been overtaken by events, since the defendant on 20 February 2003 (that is, within ten and a half months after the death of the deceased) filed a cross-claim. That document was in the nature of a pleading, rather than, more appropriately, being a cross-claim merely seeking relief. By the cross-claim the defendant has claimed an order for provision for his maintenance and advancement in life out of the estate and notional estate of the deceased. The hearing has proceeded upon the cross-claim of the defendant seeking an order for provision. 6 The inventory of property discloses the following assets of the deceased: A home unit situated at and known as 14/8 Edwin Street, Regents Park (to which an estimated value of $150,000 was ascribed).

Moneys in a bank account in an amount totalling $16,520. 7 The cash moneys have been entirely expended in the payment of administration costs and expenses of the estate and in payment of part of the costs of the plaintiffs for the present proceedings. 8 It has been agreed between the parties that the present value of the Regents Park home unit is $195,000. On 27 June 2002 that home unit was transferred to the plaintiffs beneficially as tenants in common in equal shares. 9 The defendant is the only child of the deceased. He was born on 24 February 1956, and is now aged forty-seven years. Evidence has been placed before the Court concerning the relationship between the defendant and his mother, the deceased, and also between the defendant's father, the husband of the deceased, and the deceased herself. That evidence discloses that the relationship between the defendants parents was not a particularly good one; neither was the relationship between the defendant himself and his mother a particularly good one. The defendant's parents were of Ukrainian ethnic background. As I understand it, both the deceased and her husband were born in the Ukraine. 10 The deceased appears to have been a lady of determined character, who had a strong desire to impose what were somewhat euphemistically described in the evidence as traditional Ukrainian views and attitudes upon her only child. When the defendant, who left school at the age of about fifteen years and immediately went into employment, became associated with a lady whom he later married, the deceased totally disapproved of that relationship, at least partly upon the grounds that that lady, Mrs Sylvia Burec, was not of Ukrainian extraction and further that she was older than the defendant and that she already had a child by an earlier relationship. 11 The defendant married Mrs Sylvia Burec on 13 June 1986. They are still married, although they separated in August 2000. That was an amicable separation. Orders were made in respect to property by the Family Court of Australia. 12 The defendant subsequently was in a de facto relationship which has now terminated, although there is a possibility that that de facto relationship may re-establish itself. The defendant has no children. 13 The defendant is an appliance repairman by occupation. The defendant's assets consist essentially of a house property situated and known as 11 Blair Street, Old Erowal Bay (which is located on the South Coast of New South Wales). That house property was acquired by the defendant in 1994 in the joint names of himself and his wife. As a result of the property settlement between them, the defendant paid to his wife a total amount of $130,000 which assisted her in relocating by acquiring a residence of her own at Bomaderry. In return the defendant is now the sole owner of the residence at Erowal Bay. The present value of that property is estimated to be in an amount of about $300,000. It is subject to a mortgage upon which an amount of $95,000 is outstanding. The only other asset of the defendant is a 1985 Ford Laser motor vehicle, to which he attributes a value of about $1,500. 14 Apart from the mortgage indebtedness upon his residence, the liabilities of the defendant are a debt to the Australian Taxation Office of $4879 (or possibly a little more, since that debt is attracting interest), and a Citibank VISA card debt of $4506. The defendant in his affidavit evidence refers to his income, which averages between $500 and $600 a week. He also refers to the fact that there has been a downturn in the work available for an appliance repairman, as a result of electrical appliances coming down in price and the general approach of the public in acquiring new appliances rather than in having old ones repaired. 15 The defendant suffers a number of health problems, which are referred to in the medical report of Dr J V Juryga dated 24 February 2003 (which is annexed to the defendant's affidavit of 27 February 2003). He has suffered heart problems. In December 2001 he sustained a serious heart attack which required him to be transferred from the Nowra Hospital to the Royal Prince Alfred Hospital, where he remained for one week. Since that heart attack he has cut back on work because, as he said in his affidavit, he feels tired by the end of the day. He has suffered irreparable damage to his heart, and at times has difficulty breathing. He is on medication constantly, taking metroprolol and linisopril. 16 The medical report to which I have referred also expresses the view that the defendant's workload in conjunction with stress was the major factor of his heart attack and that his earning capacity because of his condition has decreased by about 50 per cent. The medical report concludes by stating that "Future worsening of his condition or surgical procedures cannot be excluded". 17 The claim of the defendant must be approached in the light of the competing claims of the two plaintiffs, who are the chosen objects of the testamentary beneficence of the deceased. They are two ladies of Ukrainian extraction, each of whom was a close friend of the deceased. Details of their financial and material circumstances are set forth in affidavits which have been sworn by each of the plaintiffs. Mrs Kondratenko is a married lady who resides with her husband at Bankstown. Both she and her husband are pensioners, each receiving $370 a fortnight. They have no other income. They are each aged eighty-five years. They live in their own home and have a relatively small amount of savings of about $20,000. It is their desire to remain in their own residence for as long as they can. 18 Mrs Savell is also a pensioner. She receives a pension of $235 a fortnight. She sold her former home in late 2002 and she is currently in the process of purchasing another residential property for $350,000. She received $400,000 from the sale of her previous residence. She expects to have little, if anything, left of that amount when she has purchased her new residence after paying associated legal fees, stamp duties, moving costs and acquiring new furniture. 19 For the past six months or so since she sold her previous residence, Mrs Savell has been residing in the home unit at Regents Park which had previously belonged to the deceased and which constituted the significant asset in the estate of the deceased. She has maintained that home unit and has spent some money upon its maintenance. It is the desire of Mrs Savell to acquire a new motor vehicle in replacement for her present motor vehicle, which is more than twenty years old. She has savings of about $20,000. I gathered that when she moves into her new residence Mrs Savell will receive a full pension rather than the part pension which she is receiving at the present time. 20 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the defendant. The Court has received written outlines of submissions and chronologies from Counsel for the respective parties, and those documents will be retained in the court file. 21 The defendant, as a son 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. As such he has the standing to bring the present proceedings. Indeed, the defendant is the only eligible person in relation to the deceased, since neither of the plaintiffs is an eligible person and since the defendant's father, the former husband of the deceased, from whom the deceased was divorced in the late 1970s, is no longer alive, he having died on 3 February 1997. 22 The defendant was cross-examined concerning the nature of his relationship with the deceased and concerning the fact that contact between himself and his mother for at least the last twenty years of her life was almost entirely limited to telephone conversations. Apparently the deceased refused to divulge to her son either her address or her telephone number. But she regularly, although apparently with diminishing frequency, telephoned the defendant. He always received those phone calls and spoke with his mother, although those phone calls appear to have followed a regular pattern, consisting of denunciations by the deceased of the defendant for living with and subsequently being married to a lady who firstly was not of Ukrainian origin, secondly was older than the defendant, and thirdly had a child by a previous relationship. 23 It says a great deal for the forbearance of the defendant that he never refused to accept those telephone calls from his mother. Those telephone calls always appear to have included a repeated request by the deceased that the defendant should abandon his wife and should return home to live with his mother, even to a time when the defendant was aged in his forties. 24 To the extent that it might be suggested that the level of contact on the part of the defendant with the deceased would disentitle him for any order for provision an entitlement which he otherwise might have established, I would express the view that it was the conduct of the deceased herself, and not in any way the conduct of the defendant, which caused their relationship to be a not particularly close one. That conduct of the deceased was manifest and exemplified in an incident referred to as the "meat cleaver" incident, which occurred in about 1977 or 1978, when the deceased attacked with a meat clever the motor vehicle of the defendant in which at the time the defendant's wife, Mrs Sylvia Burec, and her child, then an infant, were seated, doing damage to the vehicle. 25 I have already referred to the fact that for practical purposes the only asset in the estate is the home unit at Regents Park. Technically that home unit since its transfer to the plaintiffs beneficially is no longer part of the actual estate of the deceased. But if the defendant is entitled to an order for provision, it may be designated as a notional estate of the deceased. However, the costs of the present proceedings must be taken into account in calculating how much is available for distribution or for designation as notional estate of the deceased. 26 It has been estimated that the total costs of the plaintiffs are $30,000, whilst those of the defendant total $27,000. However, of those costs an amount of $12,000 has already been paid to the former solicitor for the plaintiffs, so the totality of the costs which are presently outstanding is $45,000. 27 If the defendant is successful in the proceedings and the costs of all parties are to be paid out of the estate of the deceased, then there will remain from the value of the Regents Park home unit an amount of only about $150,000, that being the amount of the distributable estate. The amount will in fact be less than $150,000 if commission upon the sale of that property and stamp duty and associated legal costs be taken into account. 28 I am satisfied that the defendant has been left without adequate provision for his maintenance. Having regard to his health problems and to his diminishing income, it is appropriate that he should receive a benefit out of the estate of the deceased. The amount of that benefit in my view should be sufficient to enable him to discharge the debts which he owes to the Australian Taxation Office and the credit card debt and to discharge the mortgage of his residence and to give him some small amount after the payment of those debts. 29 I do not consider that the defendant should receive the entirety of the estate of the deceased. The Court must not overlook the fact that the plaintiffs are the chosen objects of the testamentary beneficence of the estate. They are both ladies of advanced years who, especially Mrs Kondratenko, are in very modest financial circumstances, and I do not consider that they should be entirely deprived of a benefit out of the estate. 30 I consider it is appropriate that the defendant should receive from the notional estate of the deceased a legacy in the sum of $110,000. That will leave in the estate after payment of the outstanding costs an amount of between $30,000 and $40,000, which will be shared between the two plaintiffs. 31 I propose to designate the home unit at Regents Park as notional estate of the deceased. I make the following orders.

(1). I order that so much of the home unit situate at and known as 14/8 Edwin Street, Regents Park as may be necessary to meet the legacy referred to in order 2 hereof and the costs referred to in order 3 be designated as notional estate of the late Maria Samoilenko ("the deceased").

(2). I order that the defendant receive a legacy of $110,000, payable out of the notional estate of the deceased, such legacy not to bear interest if paid on or before 16 November 2003, and if not so paid to bear interest at the rate prescribed for unpaid legacies under the Wills, Probate and Administration Act 1898.

(3). I order that the costs of the plaintiffs on the indemnity basis and the costs of the defendant on the indemnity basis be paid out of the notional estate of the deceased. **********

Last Modified: 09/25/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.