Plaintiff v Defendant

2 Freda accepts that Abraham had a moral duty to provide for Tobi's proper maintenance and support, that no provision for her is made in his will, and that an order for provision should be made out of his estate. The parties were in dispute about the amount of provision that should be ordered.

3 For the reasons that follow, I have concluded that a family provision order should be made for provision out of Abraham's estate for Tobi's proper maintenance and support in the amount of $3,150,000.

4 Abraham was born on 6 December 1928 into a Jewish family in Olkusz, Poland. In September 1939, when he was 11 years old, the German army invaded Poland. Abraham was separated from his family and over the next six years he was detained in concentration camps in Poland and Germany. He was in Buchenwald, malnourished and weak, when the American army liberated that camp on 11 April 1945. Abraham and his sister were the only members of his family to survive the Holocaust.

5 Through the Red Cross, Abraham was taken as a refugee to Switzerland, where he recuperated and learned a trade. He became a 'cutter', learning to cut collars. He was diligent, hard-working and determined to become financially independent. After a time, he migrated to Australia, arriving in Melbourne at the end of 1950.

6 Abraham and Freda met in Melbourne and married in 1954. Freda was also born in Poland, and her family had also endured displacement and loss during the war. After the end of the war, the surviving members of Freda's family made their way to Melbourne.

7 Abraham and Freda were married for 63 years. They had four children: twin boys, Michael and Joseph; a third boy, Martin; and then a girl, Tobi, who was born on 23 December 1959. The family are members of the Adass Israel community, which Tobi described as 'a very insular, self-sufficient community which practices among the strictest level of orthodoxy in the Jewish faith'.[2]

8 The Spigelman siblings grew up in a close and loving family. Abraham doted on Tobi. As she put it:[3]

He adored me and I adored him. As a child, my father always spent a lot of time with me. Growing up he taught me a lot - about the world, about religion, about politics. He was well read and we shared a love of reading. He named me after his mother, creating a very special emotional bond with me ...

9 Tobi also described a 'wonderful and very close' relationship with her brothers, in particular Michael, who she regarded as her protector. Their lives as children revolved around family, family occasions and the observance of religious traditions.

10 Tobi attended Adass Israel school in Melbourne, completing year 11, and then spent two years undertaking further Jewish studies at a seminary in Israel. After her return to Australia in 1978, she became engaged to a young man chosen by her parents, Leslie (Lazer) Kornwasser, who was also a member of the Adass community in Melbourne. Tobi and Lazer married in March 1979, and the first of their seven children was born in 1980. Their youngest child, Hadassa, was born in 1999.

11 The horrors that Abraham endured during the Holocaust shaped the way he built his life and work in Australia, and the way he cared for his family. He was determined that his family would always be financially secure and well provided for, and worked hard to achieve that. He established a successful quilt manufacturing business, which later expanded to importing and distributing Italian sheets and other textiles. Abraham also invested in property and, over time, participated in a number of large commercial and industrial developments across Melbourne. His businesses thrived and he achieved his objective of ensuring financial security for himself and his family.

12 Abraham's determination to provide for his family found concrete expression in a number of ways. In the mid-1980s, Abraham and Freda bought a Property in East St Kilda for Tobi and Lazer, on which Abraham built and furnished a four-bedroom home. Tobi and Lazer own the Property as tenants in common in equal shares. Abraham and Freda made similar provision for each of their sons. The Spigelman family home, and the homes of each of the siblings, are within walking distance of each other and the Adass Israel synagogue in Ripponlea. Tobi and Michael live next door to each other in the same street in East St Kilda.

13 Over the years, Abraham paid many other expenses for Tobi and her family. After Tobi and Lazer were married, Abraham and Freda paid for them to travel to and live in Israel for about ten months so that Lazer could continue his religious studies there. They contributed to Tobi and Lazer's living expenses on their return to Australia. Abraham paid almost all of the costs associated with sending Tobi and Lazer's children to Israel for Jewish studies after high school, Tobi and Lazer's share of the cost of the weddings of each their five married children, and contributed towards the purchase of houses for three of them. He also provided each of them with generous financial support to meet living and travel expenses, over many years. In 2015, Abraham gave $200,000 to Tobi's family trust.

14 Abraham made his last will on 11 February 2013 and a codicil dated 12 December 2014 (together, the Will). Also on 11 February 2013, Freda made a will in substantially the same terms as Abraham, and signed a joint letter of wishes with her husband. Clause 2 of both wills contains a mutual will agreement.[4]

(a) directed that his superannuation entitlements in six superannuation funds be distributed in accordance with the last binding death benefit nomination he signed, all of which were in favour of Freda; and

(b) left the residue of his estate to Freda.

16 Probate of the Will was granted to Freda on 4 December 2018. In the inventory filed in support of the application for probate, the estate was valued at $13,018,815.65 net. The estate's main assets were debts owed by various Spigelman family and related company loan accounts. By the time of the trial, the estate was valued at $10,937,133.70. The reduction in the estate's value was due to the purchase of a property for one of Tobi's children from estate funds.

17 While there was some debate about the legal effect of the mutual will agreement, Freda's unequivocal evidence was that she intends to honour it. She said that she and Abraham chose to execute mutual wills because they understood that the surviving spouse would continue to provide for family members in the same way that they had while both of them were alive. She described her will as providing, save for some specific bequests, for each of her four children equally. At the time of the trial, she estimated her estate to be worth about $42 million.

18 Freda's will appoints her two oldest sons, Michael and Joseph, to act as her executors and trustees. There are specific bequests that relate to Freda's superannuation entitlements in several superannuation funds. These entitlements are to be distributed in accordance with the last binding death benefit nomination signed by Freda. In respect of each superannuation fund, any entitlements distributed to Freda's executors are to be divided into four equal shares, to be held in a separate trust fund for each of Michael, Joseph, Martin and Tobi. Freda's residual estate is to be held by her trustees on trust to divide into four equal shares, each to be held on trust in a separate fund for each of her four children. Tobi is to be the 'Specified Beneficiary' of each of the will trusts that bear her name, including the Tobi Spigelman Will Trust. The trustees of these will trusts are to be Michael, Joseph and Tobi, acting by majority.

19 The terms of the will trusts are set out in the schedule to Freda's will. The beneficiaries of each will trust are to be the Specified Beneficiary and a wide class of other 'General Beneficiaries', including the Specified Beneficiary's parents, children, and grandchildren, their spouses and widows, uncles, aunts, nephews, nieces and cousins. The trustees of the will trusts are to have power to pay or transfer all or part of the trust fund to or for the benefit of any of the beneficiaries 'in such manner as they shall think fit'.

20 The joint letter of wishes signed by Abraham and Freda on 11 February 2013 records, among other things, their desires as to the administration of the various trusts they had established, including the will trusts. The letter merely reflects their wishes; it does not seek to impose any legal or binding obligations on the trustees 'except insofar as it is within the discretion of the Trustees to comply with such wishes and insofar as the Trustees are prepared to do so'.[5]

21 Relevantly, Abraham and Freda expressed their wish that, after the death of the surviving spouse, the net income of all of the trusts should be:[6]

held, paid, set aside or applied as follows:

(a) as to 25% to Michael (or as he may direct);

(b) as to 25% to Joseph (or as he may direct);

(c) as to 25% to Martin Spigelman ("Martin") (or as he may direct); and

(d) as to 25% to Tobi Kornwasser ("Tobi") (or as she may direct).

The same wish was expressed in relation to the balance of the assets and capital of the trusts, both before they vest, and when they are wound up.[7]

22 In short, Tobi stands to inherit one quarter of her mother's estate - at present in the order of $10 million - as the Specified Beneficiary of the Tobi Spigelman Will Trust and the other will trusts in her name. However, the will trusts are to be discretionary trusts and will not be controlled by Tobi. She is to be one of three trustees, together with her brothers Michael and Joseph, and in the event of disagreement, decisions are to be made by majority.

23 Tobi's marriage with Lazer is at an end. They separated under one roof in February 2018. Lazer moved out of the Property in October 2020, soon after Tobi obtained a family violence final intervention order against him. From that time, Lazer stopped paying anything towards Tobi's living expenses. They are not yet divorced, under either secular or Jewish law. Tobi said that Lazer was withholding a gett (a divorce under Jewish law) until the property settlement between them was finalised. In February 2019, they obtained a divorce ruling from a Beth Din (a rabbinical court), which relevantly provided:

1. Husband's inheritance from his late mother belongs exclusively to him.
2. Assets to be inherited by wife from her mother shall belong exclusively to her.
3. The marital home located at 24 Talbot Ave East St. Kilda Victoria 3183 Australia is the property of husband and wife equally.
4. The superfund (pension) is to be allocated as follows: seven thousand dollars belongs exclusively to husband. The remainder is owned by husband and wife equally.

24 Property settlement proceedings under the Family Law Act 1975 (Cth) were still pending at the time of the trial of this proceeding. Tobi's evidence was that she regards herself as bound by the Beth Din ruling, but is not confident that her husband will honour it. If the property settlement proceedings cannot be resolved by agreement, Tobi's lawyers have advised her to budget for future legal costs of $150,000.

25 Tobi's main asset is her half-interest in the Property, which is estimated to have a market value of $2,800,000. She wishes, as part of the property settlement with Lazer, to acquire his share of the Property. If that occurs, she will become responsible for rates, insurance and other outgoings on the Property, which are currently being paid by Lazer. In addition, the Property is in need of substantial repair and refurbishment, and various items of furniture need to be replaced.

(a) her interest in the Gilarth Staff superannuation fund, which had a balance of $89,000 as at August 2022; and

(b) a 50% interest in the York Investments Superannuation Fund (York Super Fund).

27 Tobi and Freda are the only members of the York Super Fund, and are the directors of its trustee company, York Investments Pty Ltd. The main asset of the York Super Fund is a commercial property in Hallam, which was valued at around $3,300,000 as at 30 June 2021, and currently generates rental income of $200,000 per year. The York Super Fund's assets may have increased since 30 June 2021. An appraisal in August 2022 valued the commercial property in the vicinity of $4,800,000 to $4,950,000, and as at 26 August 2022, there was $1,079,418.72 in York Investments' account with the Commonwealth Bank. I prefer to rely on the valuation in the financial statements for the year ended 30 June 2021, which showed net assets of $4,161,995.

28 In around April or May 2018, Tobi told her mother that she wished to cash out her superannuation benefits from the York Super Fund. This would have necessitated selling the commercial property, which Freda was reluctant to do. On 27 February 2020, Freda's solicitors proposed two options for Tobi's consideration:

(a) Tobi would be paid cash of approximately $720,000 immediately, followed by an annual tax-free pension of $144,000, at the rate of $12,000 per month, until the balance of Tobi's entitlements in the York Super Fund were paid in full; or

(b) the York Super Fund would accept as members Martin and Esther Spigelman,[8] and they would rollover from another superannuation fund enough cash to enable the payout of Tobi's benefit in full.

29 Tobi has not accepted either proposal, and nor has she sought to draw an income from the York Super Fund. As best I could understand, this is because she does not trust her mother and her brothers Michael and Joseph, who she said effectively control the fund. Tobi said that she has been trying since around 2017 to obtain information about the York Super Fund and to become a co-signatory to the bank account, without success, and has been excluded from decisions about the fund. She is not confident that she has been provided with accurate or complete information about her entitlement, and cannot verify whether the fund is compliant. She also said that she wished to retain her interest in the York Super Fund because it is tax-efficient.

30 Tobi is not in paid employment. At present, she depends on financial support from her mother, in the form of a fortnightly cash gift of $3,000. Tobi highlighted the voluntary nature of these gifts, which could end at any time. However, Freda's evidence was that she would like to continue giving Tobi this support 'until she can be provided out of the will fully', and would continue doing so 'as long as is necessary'.[9]

31 Of the fortnightly payments she receives from her mother, Tobi gives 20% to charitable organisations to distribute to people in her community who are in need, in accordance with rabbinical advice. She uses the balance to meet her living expenses, and has little to nothing left at the end of each fortnight. At times she has not been able to make ends meet. She has borrowed small amounts from family and friends, and has sought other assistance to pay bills that are in arrears.

32 Adherence to orthodox Judaism as practised by the Adass Israel community involves some strict requirements. These include daily prayers, pious dress, and adherence to and participation in religious observances including attendance at the Adass Israel synagogue in Ripponlea. Car travel is forbidden on Sabbath and festival days, and so members of the community must live within walking distance of their synagogue. Observing the dietary restrictions of the faith involves purchasing kosher food and preparing it according to strict kosher requirements. This necessitates two separate sets of kitchen appliances and cooking equipment, cutlery, crockery, and so forth for everyday use, with additional sets required for Passover.

33 All of Tobi's children are now adults, all but two of them are married, and all but two of them live in Israel or the United States. Her youngest child, Hadassa, still resides with Tobi, although since October 2021 she has spent most of her time in the United States on a two-year religious worker's visa. Before the COVID-19 pandemic, Tobi travelled regularly - about three times each year - to Israel and the United States to spend time with her children and their families. She has 23 grandchildren, 20 of whom live overseas. She wishes to resume this travel but at present cannot afford to do so.

34 While her family and her religion remain at the centre of her life, Tobi's previously close relationship with her brothers has soured. She and her brother Michael no longer speak, despite being neighbours, and she no longer feels included in family celebrations. I need not make findings about the reasons for this painful development. My strong impression is that there is very little prospect of a reconciliation. It is clear that Tobi does not trust her brothers, and is aggrieved about the extent of Michael and Joseph's control over the Spigelman family's financial affairs.

35 Tobi provided a breakdown of her claimed expenses, as at August 2022, as follows:

Part IV

Furniture, appliances, household items and furnishings

$2,248,185 (Capital sum to pay for full time in-home care at $260,000 per annum, payments to start in 15 years' time and last for 10 years, the above sum being equivalent to $3,502,600 in 15 years

2. Capital sum required to invest to produce income for annual expenses

Life expectancy by Australian Life tables - a further 25.77408 years

(a) $250,000 - lump sum of $4,000,000 - $4,300,000

(b) $200,000 - lump sum of $3,200,000 - $3,500,000

(c) $150,000 - lump sum of $2,400,000 - $2,700,000

3. Annual expenses - Household (Tobi and Dassy)

Insurance: House and contents, life and disability, car, private health

$8,800 total (car $1,400, house $3,600, private health $3,800)

Replace cars for me and Dassy - annual provision/6 years

$11,475 (6 hours per week @ $35 per hour + 15 hours pre Passover)

Telephone (Dassy and me), mobile, internet, replace - annual cost

New computer - update every 3 years. Printer, scanner

$4,000 (Jewish periodicals and AFR $2,050 per annum, $1,450 for books and subscriptions)

Gifts to children, grandchildren, friends, and when invited to bar mitzvah, weddings

$130,000 (with some overlap with holidays and pilgrimages)

$60-$80,000 (with some overlap with holidays and family travel)

$40,000-$55,000 (with some overlap with family travel and pilgrimages)

36 This itemisation of expenses was the subject of cross-examination and submissions. Tobi acknowledged that there was some overlap between the items claimed. To the extent relevant, I discuss the items claimed further below, when considering what provision is necessary for Tobi's maintenance and support.

Family provision and maintenance - legal principles

37 Part IV of the Act deals with family provision. Section 90A provides that an eligible person may apply to the Court for a family provision order. The term 'eligible person' is defined in s 90 to mean, relevantly:

(b) a child of the deceased, including a child adopted by the deceased who, at the time of the deceased's death, was -

(i) under the age of 18 years; or

(ii) a full-time student aged between 18 years and 25 years; or

(iii) a child with a disability;

(c) a stepchild of the deceased who, at the time of the deceased's death, was -

(i) under the age of 18 years; or

(ii) a full-time student aged between 18 years and 25 years; or

(iii) a stepchild with a disability;

...

(f) a child or stepchild of the deceased not referred to in paragraph (b) or (c);

...

38 Section 91 enables the Court to make a family provision order, relevantly:

(1) Despite anything to the contrary in this Act, on an application under section 90A, the Court may order that provision be made out of the estate of a deceased person for the proper maintenance and support of an eligible person.

(2) The Court must not make a family provision order under subsection (1) unless satisfied -

(a) that the person is an eligible person; and

...

(c) that, at the time of death, the deceased had a moral duty to provide for the eligible person's proper maintenance and support; and

(d) that the distribution of the deceased's estate fails to make adequate provision for the proper maintenance and support of the eligible person, whether by -

(i) the deceased's will (if any); or

(ii) the operation of Part IA; or

Note

Part IA contains the intestacy provisions.

(iii) both the will and the operation of Part IA.

(4) In determining the amount of provision to be made by a family provision order, if any, the Court must take into account -

(a) the degree to which, at the time of death, the deceased had a moral duty to provide for the eligible person; and

(b) the degree to which the distribution of the deceased's estate fails to make adequate provision for the proper maintenance and support of the eligible person; and

(c) in the case of an eligible person referred to in paragraph (f) or (g) of the definition of eligible person, the degree to which the eligible person is not capable, by reasonable means, of providing adequately for the eligible person's proper maintenance and support; and

(5) The amount of provision made by a family provision order -

(a) must not provide for an amount greater than is necessary for the eligible person's proper maintenance and support; and

39 Section 91A identifies several factors that the Court must have regard to in making a family provision order, and a number of other factors that may be relevant, as follows:

Factors to be considered in making family provision order

(1) In making a family provision order, the Court must have regard to -

(a) the deceased's will, if any; and

(b) any evidence of the deceased's reasons for making the dispositions in the deceased's will (if any); and

(c) any other evidence of the deceased's intentions in relation to providing for the eligible person.

(2) In making a family provision order, the Court may have regard to the following criteria -

(a) any family or other relationship between the deceased and the eligible person, including -

(i) the nature of the relationship; and

(ii) if relevant, the length of the relationship;

(b) any obligations or responsibilities of the deceased to -

(i) the eligible person; and

(ii) any other eligible person; and

(iii) the beneficiaries of the estate;

(c) the size and nature of the estate of the deceased and any charges and liabilities to which the estate is subject;

(d) the financial resources, including earning capacity, and the financial needs at the time of the hearing and for the foreseeable future of -

(i) the eligible person; and

(ii) any other eligible person; and

(iii) any beneficiary of the estate;

(e) any physical, mental or intellectual disability of any eligible person or any beneficiary of the estate;

(f) the age of the eligible person;

(g) any contribution (not for adequate consideration) of the eligible person to -

(i) building up the estate; or

(ii) the welfare of the deceased or the deceased's family;

(h) any benefits previously given by the deceased to any eligible person or to any beneficiary;

(i) whether the eligible person was being maintained by the deceased before that deceased's death either wholly or partly and, if the Court considers it relevant, the extent to which and the basis on which the deceased had done so;

(j) the liability of any other person to maintain the eligible person;

(k) the character and conduct of the eligible person or any other person;

(l) the effects a family provision order would have on the amounts received from the deceased's estate by other beneficiaries;

(m) any other matter the Court considers relevant.

40 The basis of the Court's jurisdiction under Pt IV of the Act is the legislature's recognition of the moral responsibility owed by testators to make adequate provision for certain family members and others who were dependent on them at the time of their death.[10] When considering whether adequate provision has been made for an eligible person, and what is necessary for their proper maintenance and support, the Court must assume the position of a wise and just testator (as distinct from a fond and foolish one), judged by current community standards.[11] The Court should not be drawn into rewriting the testator's will by reference to general considerations of fairness.[12]

41 In a case such as this one, where it is accepted that the testator had a moral duty to provide for the claimant, there are two separate, interrelated matters to be assessed:

(a) Did the testator make adequate provision for the claimant? This is to be assessed by reference to matters that were known, ought to have been known, or were reasonably foreseeable by the deceased at the time of their death.[13]

(b) If not, what provision should be made for the claimant's proper maintenance and support? This assessment involves an exercise of discretion, having regard to the mandatory considerations in s 91A(1) of the Act, and other relevant circumstances including any relevant factors set out in s 91A(2).[14] This assessment is to be made at the date of the trial, taking into account the plaintiff's position at that time.[15]

42 While the assessment of what is proper maintenance and support is structured by the considerations set out in s 91A of the Act, there is ample authority that also provides guidance about the way in which the assessment should be approached. The proper maintenance and support of a child claiming provision is relative to their 'age, sex, condition and mode of life and situation generally'.[16] It encompasses 'enough to keep the "wolf from the door" and sufficient to "keep the wolf from pattering around the house"; not just sufficient for the bread and butter of life but for a little of the cheese or jam that a just and wise parent would appreciate should be provided if circumstances permit'.[17]

43 Pt IV of the Act distinguishes the position of an adult child from that of a younger child or a child with a disability. In the case of a claim by an adult child, the relevant principles were helpfully summarised by Hallen J in Walsh v Walsh.[18] Relevantly in this case, an important consideration is the degree to which the child remained dependent on their parent in adulthood, and the corresponding community expectation that the parent will make provision to fulfil that ongoing dependency after death.[19]

44 These general principles may be applied more liberally to a claim for provision from a large estate, for two reasons. First, it is easier for all competing moral claims to be satisfied from a large estate.[20] Second, the assessment of what amounts to proper provision is affected by the lifestyle that has been enjoyed by a claimant because of their association with the testator.[21] However, the amount of provision ordered must not exceed what is necessary for the claimant's proper maintenance and support.[22]

45 Overall, the assessment calls for an instinctive synthesis of the relevant considerations; it is not an exercise involving precise mathematical calculations.[23]

46 There was no issue about Tobi's eligibility to apply for an order for provision under Pt IV of the Act. As mentioned at the outset, Freda does not dispute that Abraham had a moral duty to provide for Tobi's possible maintenance and support. Freda also accepted that Abraham had not made adequate - indeed any - provision for Tobi in his will.

47 Freda did not resist the making of a family provision order in Tobi's favour. However, she disputed that provision should be made in the amount claimed. More particularly, the parties were in dispute as to:

(a) the degree to which Tobi is not capable, by reasonable means, of providing adequately for her proper maintenance and support;

(b) the relevance of the mutual wills and Tobi's expected inheritance from her mother; and

(c) the amount of provision necessary for Tobi's proper maintenance and support.

48 I consider each of those issues in turn. The last issue requires an assessment of the mandatory ss 91(4) and 91A(1) factors, and the relevant factors under s 91A(2).

Tobi's capacity to provide for her own maintenance and support

49 Tobi is now aged 62. She did not complete her formal schooling, and has no tertiary, professional or trade qualifications. For most of her adult life, her energies were invested in her home, her family, and her religion. She has only ever worked in family businesses, and has not been in the paid workforce since 2013. She has limited if any capacity to earn an independent income.

50 While Tobi has an unencumbered half-interest in the Property, she has not accumulated any other assets of note in her own name from which she could derive an income. However, she has more than $2 million in superannuation entitlements with the York Super Fund. Tobi could have had access to this amount in full in 2020, or alternatively could have started to draw an income from the fund from that time. Her explanations for not doing either were contradictory and, in my view, unsatisfactory. There was no evidence to support her concern that the York Super Fund may not be compliant. In the end, Tobi accepted that she could draw on these funds to provide for her own maintenance and support, and that they should be taken into account.

51 I accept that Freda will keep making regular payments to Tobi to cover her living expenses, amounting to $78,000 each year. Freda's evidence was that she would continue these payments as long as is necessary. That evidence, and the fact she has made the payments throughout this litigation and despite some very strained relationships within the family, persuade me that she is likely to continue to do so during her lifetime.

52 As outlined above, Tobi has an expectation of a very substantial inheritance - in the order of $10 million - on her mother's death. Tobi can have some confidence that Freda's estate will be disposed of in accordance with her will made on 11 February 2013. The doctrine of mutual wills has the effect that Freda's estate is held subject to a constructive trust in the terms of that will, which would override any later will that Freda might make, and may be specifically enforced by Tobi as a beneficiary of the trust.[24] More importantly, I accept without reservation Freda's evidence that she intends to honour the mutual will agreement, and make provision for her four children as she and Abraham agreed.

53 However, Tobi's share of her mother's estate is to be held in discretionary will trusts. Tobi, Michael and Joseph are to be the trustees of these trusts, with decisions to be made by a majority. Tobi does not trust that she will receive the benefit of her inheritance, which she considers will be under the control of her two older brothers.

54 While I accept that Tobi's fears are genuinely held, I am not satisfied that there is an objective factual basis for them. There was no evidence to support a finding that Michael and Joseph are likely to administer the will trusts contrary to their fiduciary obligations as trustees, or in disregard of their parents' joint letter of wishes. I am not persuaded that there is any real likelihood that Tobi will not receive the benefits of those trusts. Even if Tobi's fears were to be realised, she would have a range of remedies available to her as the primary object of the trusts, up to and including applying to the Court to remove her brothers as trustees.[25]

55 It follows that the question of what provision is necessary for Tobi's proper maintenance and support is to be answered on the basis that she will in time inherit one quarter of her mother's sizeable estate.

What provision is necessary for Tobi's proper maintenance and support?

56 In closing submissions, Tobi claimed to need an amount of $4,990,000 for her proper maintenance and support, comprising:

(a) $1,500,00 to buy out Lazer's share of the Property;

(b) $780,000 for repair and refurbishment of the Property, with an allowance for duplication;

(c) $150,000 for her anticipated future legal costs in the family law proceedings;

(d) $310,000 in respect of furnishings and vehicles;

(e) $250,000 for the weddings of her two unmarried daughters;

(f) $1,000,000 for contingencies; and

(g) $1,000,000 to generate future income, in addition to her entitlements under the York Super Fund.

57 Freda accepted that provision of around $2,595,000 should be made for Tobi, comprising:

(a) $1,400,000 to buy out Lazer's share of the Property, based on the most recent appraisal of $2,800,000;

(b) $400,000 for renovations to the Property;

(c) $75,000 for future legal costs in the family law proceedings;

(d) $220,000 for furnishings for the Property and a new vehicle for Tobi;

(e) no amount for weddings, expenses that (if incurred) would be met by Freda, who has paid for the weddings of all of her married grandchildren; and

(f) $500,000 for contingencies and to produce income.

58 I will consider the ss 91(4) and 91A factors in turn.

59 In relation to the mandatory considerations set out in s 91(4) of the Act:

(a) I accept that, at the time of his death, Abraham had a moral duty to provide for Tobi, to a high degree. There are features of their relationship that increase the degree to which Abraham owed that duty, beyond that generally owed by any father to an adult daughter. Tobi's parents made choices for her early in life that limited her ability to earn an income, and committed her to a marriage with a man of their choosing. At the same time, Abraham's generous support of Tobi and her family during his lifetime had the result that she came to depend almost entirely on that support.

(b) The distribution of Abraham's estate made no provision for Tobi's maintenance and support.

(c) My findings as to Tobi's capacity to provide adequately for her own support are set out at [49] to [51] above. In short, while she has little if any capacity to earn an income from paid employment, she has access to her interest in the York Super Fund. Based on the valuation used in the financial statements for the year ended 30 June 2021, that interest is worth just over $2,000,000. Tobi's half share of the rental income from the Hallam property is $100,000 per year. In addition, in time she will inherit one quarter of her mother's estate. Until then, she can expect to continue to receive fortnightly cash gifts from her mother - an annual amount of $78,000.

60 Turning to the mandatory considerations in s 91A(1) of the Act:

(a) Abraham made no provision for Tobi in his will.

(b) However, he had a mutual will agreement with Freda that will ultimately see Tobi inheriting one quarter of the substantial assets that Abraham and Freda accumulated during their marriage.

(c) It was Freda's evidence that Abraham 'devoted considerable time and resources to estate planning and the drafting of his will, to ensure his large and extended family would all be cared for when the last surviving spouse, either himself or myself, died.' That is, Abraham made the dispositions in his will because he considered they would best provide for his entire family, including his wife, children, grandchildren and great-grandchildren. I infer from the terms of the mutual wills and the joint letter of wishes that Abraham trusted Michael and Joseph to manage the Spigelman family fortune as a whole, to the advantage of all beneficiaries, and in a way that lawfully minimises the tax liabilities of the will trusts and other entities in the Spigelman group.[26]

61 Not all of the matters set out in s 91A(2) are relevant in this case. In my view, the salient considerations here are:

(a) Abraham and Tobi had a close and loving father-daughter relationship, within a close-knit family group.[27]

(b) Abraham was acutely aware of his responsibility to provide for the financial security of his wife and each of his four children.[28] This informed his estate planning and his and Freda's mutual wills.

(c) The estate is a large one, with net assets of almost $11,000,000.[29]

(d) I have already made findings as to Tobi's financial resources and earning capacity.[30] I make findings at [62] below about her financial needs at the time of the trial and for the foresee[31]le future.31

(e) There are no competing claims on the estate. [32]

(f) Tobi is aged 62, and can be expected to live into her 80s.[33]

(g) Although Tobi made no contribution to building up Abraham's estate, she was a cherished child whose close relationship with her father gave him joy.[34] Sadly, Tobi's relationships with her family, in particular Michael, have deteriorated in recent years. That does not detract from the fact that, for many years, she was an integral part of a close and loving family group.

(h) Abraham made generous provision for Tobi, her husband and her children during his lifetime, which was in keeping with the financial support he provided to his other children and grandchildren.[35]

(i) I consider it significant that Abraham provided substantial financial support to Tobi during her adult life, including during her marriage.[36] As discussed, this had the result that she became dependent on his support, to a degree that is unusual for a person of her age and life experience.

(j) I also consider it significant that Tobi and Lazer's marriage has ended.[37] Tobi has no expectation that Lazer will maintain her in future, beyond the Beth Din ruling about the division of their marital property. Lazer ceased making regular payments towards Tobi's living expenses after he moved out of the Property in October 2020. On the other hand, Freda still gives Tobi $3,000 per fortnight for living expenses, and intends to continue to do so. This amount is given freely, and not from any legal liability.

(k) An additional matter that I consider relevant is that Abraham appears not to have anticipated the end of Tobi's marriage or her falling out with her brothers.[38] Tobi and Lazer did not separate until after Abraham's death, and there is no evidence that he was aware of the difficulties in their relationship. Similarly, it seems that Abraham did not know about the conflict between Tobi and Michael that flared in early 2017. Towards the end of Abraham's life he suffered from dementia, and it may be that he was unaware that some relationships within his close-knit family were unravelling. Had he known, he may have made different provision for Tobi in his will.

62 In relation to the specific items that Tobi claims are necessary for her proper maintenance and support, now and for the foreseeable future, I make the following findings:[39]

(a) Tobi needs $1,400,000 to buy out Lazer's interest in the Property. This is based on the Gary Peer appraisal obtained by Tobi in July 2022, which estimated the market value of the Property to be $2,800,000.

(b) She needs an additional $600,000 for repair and refurbishment of the Property. The estimate of $780,000 obtained from Tricastle Construction provided no breakdown of how that figure had been calculated. It appeared to contain some padding and there was double counting of some items. On the other hand, I accept that the Property is in a state of disrepair and needs considerable work to restore it to good condition. Doing the best I can with the limited evidence, I consider that an amount of $600,000 is needed for this purpose.

(c) I consider that Tobi is likely to need the full amount of $150,000 estimated for her future legal costs in the family law proceedings. Based on her evidence, and the fact that she and Lazer have been unable to reach agreement about the division of their property despite the Beth Din ruling, it seems that those proceedings will go to trial. Tobi would be disadvantaged if she did not have adequate provision for her legal costs.

(d) The parties agreed that some amount is needed for furnishings and vehicles. In final submissions Tobi claimed to need $310,000, while Freda said that $220,000 would be an appropriate sum. Tobi's estimate that she would need $220,000 for furniture alone was not supported by any evidence of what she needs to purchase or its price. I accept that Tobi's car needs to be replaced, but I am not persuaded that it is necessary for Tobi to buy a separate car for Hadassa's use. In my view, $250,000 will be sufficient to meet these needs.

(e) I do not consider that Tobi needs any amount for the weddings of her two unmarried daughters. There was no evidence that either of them was likely to marry in the foreseeable future. If they marry during Freda's lifetime, she will pay for their weddings in the same way that she has paid for the weddings of her other grandchildren. Tobi agreed that was likely to occur.

(f) Freda accepted that an amount should be allowed for contingencies, although less than the $1,000,000 claimed. With a large estate such as this one, there is capacity to make more generous provision for contingencies.[40] I take into account Tobi's need to travel overseas to see her children and their families, and to support them in visiting her in Melbourne. It is also foreseeable that Tobi or Hadassa may experience ill health or injury, and will need to incur medical and like expenses. Beyond that, it is difficult to quantify what additional funds Tobi might need for what are, by definition, unknown future events. My assessment is that an amount of $750,000 will make adequate provision for contingencies.

(g) Tobi's interest in the York Super Fund can generate an annual income of $100,000, without depleting the fund's assets. In addition, Tobi has her expected inheritance under her mother's will. This is more than adequate provision to generate future income. No further amount is needed.

63 Having regard to all of these matters, I have concluded that a family provision order should be made for provision out of Abraham's estate in Tobi's favour in the amount of $3,150,000. This equates to the amount that I have assessed as being necessary for her proper maintenance and support.[41]

64 The parties should confer and attempt to agree on draft orders that give effect to this judgment, and in relation to the costs of the proceeding. If they are unable to reach agreement on the form of the orders, or the appropriate costs order, I will list the matter for a further short hearing on a mutually convenient date in the new year.

[1] For clarity and convenience, I refer in this judgment to Abraham Spigelman and members of his family by their given names. No disrespect is intended.

[2] Affidavit of Tobi Kornwasser dated 22 November 2019, [13].

[3] Affidavit of Tobi Kornwasser dated 22 November 2019, [14].

[4] It was not suggested that this agreement was affected by the codicil to Abraham's will.

[5] Joint letter of wishes of Abraham and Freda Spigelman dated 11 February 2013, cl 16.

[8] Tobi's brother Martin and his wife Esther.

[9] Transcript, 31 August 2022, 153:2-3, 153:25-36.

[10] Re Allen; Allen v Manchester [1921] NZGazLawRp 155; [1922] NZLR 218, 220-1, quoted with approval in Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 479; Goodman v Windeyer [1980] HCA 31; (1980) 144 CLR 490, 497 (Gibbs J, Stephen J agreeing at 503 and Mason J agreeing at 504); Grey v Harrison [1996] VSC 74; [1997] 2 VR 359, and many other decisions.

[11] Bosch v Perpetual Trustee, 478-9; White v Barron [1980] HCA 14; (1980) 144 CLR 431, 440-1 (Stephen J), 444-5 (Mason J), 460 (Wilson J); Davison v Kempson [2018] VSCA 51, [35].

[12] Worladge v Doddridge [1957] HCA 45; (1957) 97 CLR 1, 12 (Williams and Fullagar JJ), 20-1 (Kitto J).

[13] Coates v National Trustees Executors and Agency Co Ltd [1956] HCA 23; (1956) 95 CLR 494, 507-8 (Dixon CJ).

[14] Davison v Kempson, [63], [68].

[16] The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales [1962] HCA 19; (1962) 107 CLR 9, 19 (Dixon CJ).

[17] Baxter v Baxter [2014] VSC 377, [107], quoting Re Harris [1936] SAStRp 52; [1936] SASR 497, 501; Re Borthwick (dec'd) [1949] Ch 395, 401; Blore v Lang [1960] HCA 73; (1960) 104 CLR 124, 135 (Fullagar and Menzies JJ).

[18] [2013] NSWSC 1065, [121] (Walsh v Walsh), quoted with approval in Re Janson; Gash v Ruzicka (No 2) [2022] VSC 139, [55].

[19] Walsh v Walsh, [121](c); Davison v Kempson, [91].

[21] Anasson v Phillips (Supreme Court of New South Wales, Young J, 4 March 1998), 20.

[22] Administration and Probate Act 1958 (Vic), s 91(5)(a).

[23] Blair v Blair [2004] VSCA 149; (2004) 10 VR 69, [30] (Chernov JA, Nettle JA and Hansen AJA agreeing); Davison v Kempson, [70]-[71].

[24] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 682-91 (Dixon J); Baird v Smee [2000] NSWCA 253, [64]-[65] (Giles JA); Flocas v Carlson (2015) 15 ASTLR 192, [178]-[192]. I express no conclusion about whether the constructive trust attaches to all of Freda's estate, or only to the property she inherited from Abraham.

[25] See, eg, Trustee Act 1958 (Vic), ss 48, 51; Owies v JJE Nominees Pty Ltd [2022] VSCA 142, [81]-[98], [153]-[154].

[30] See [49]-[51] above.

[35] Act, s 91A(2)(h). See [12]-[13] above.

[40] Re Buckland (deceased) [1966] VicRp 58; [1966] VR 404, 415, citing Bosch v Perpetual Trustee, 478.