Sita v Sita & 1or

Elizabeth Sita (Pl) PARTIES : Bruno Sita (Def) Franca Catalano (Def)

C.J. Dibb for plaintiff COUNSEL : A. Enright for defendant

Strathfield Law for plaintiff SOLICITORS : Staunton & Thompson for defendant

• 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1 MASTER: This is an application under the Family Provision Act 1982 in respect of the late Guiseppe Sita who died on 16 January 2002. The deceased was survived by his widow Amelita Sita, one of his former wives, the plaintiff in these proceedings Elizabeth Sita and his two children. 2 The deceased made his last will on 19 February 2001. His two children, Bruno Sita and Franca Catalano, were joint executors under the will. 3 The deceased gave a right of residence to his widow in respect of the downstairs of his home at Beacon Hill. The residue he gave to his two children equally. There was no provision for the plaintiff in the will. Assets in the Estate 4 The only substantial asset is the deceased's home, which was recently passed in at auction. However, a recent estimate shows it is expected to sell for between $730,000 and $745,000. There was cash in the estate of $10,000 and a car worth $3,500. 5 There are a number of debts in the estate. Various general debts totalled $1,000, credit card debts $9,807, funeral expenses 12,867 and there was a debt due to the plaintiff of $12,500 plus interest, which is estimated at $4,000 together with some costs. This totalled in the order of $40,000. 6 There were also proceedings by his widow, which had been settled on the basis that the widow gives up a right to the residence and in lieu thereof will receive $110,000 inclusive of costs. 7 Costs have been incurred in all matters. The defendants' costs in both matters on the basis that it is a one day case come to about $35,000. The plaintiff's costs on the basis that it is a one day case are estimated in respect of the solicitor at $34,500 and counsel at approximately $8,000. The plaintiff's costs are no doubt on a solicitor and client basis and I will refer to that later. Family History 8 The deceased was born on 28 October 1928. In 1958 he came to Australia, leaving his family at that stage back in Italy. His daughter, Franca was born on 19 July 1958. The plaintiff herself also came to Australia in 1959. In 1962 the deceased's family, namely his wife and daughter, came to Australia. On 15 December 1964 their son Bruno was born. 9 The plaintiff herself moved between Australia and Italy. She returned to Italy in 1971 and came back to Australia in 1984 when she was divorced from her husband. In 1986 she received a disability pension. 10 In June 1986 the plaintiff and the deceased met. They continued a friendship and a relationship, which was a sexual relationship from the commencement, although they did not share a house for some time. On 22 October 1993 the deceased retired from the Warringah Council where he was working for many years as a concreter. He received a payout of some $90,000, of which $25,000 was used to pay tax. 11 It was in the middle of 1994 the plaintiff moved in to live with the deceased at the deceased's home at Beacon Hill. Some weeks later, on 18 June 1994, the plaintiff and the deceased were married. 12 Between June 1994 and November 1994 the plaintiff and the deceased had a honeymoon in the United States and Italy for some four and a half months. During that period the deceased spent approximately $40,000, much of which was on gifts for various members of his family. 13 The marriage between the plaintiff and the deceased continued until they separated on 27 August 1999. The decree nisi was pronounced on 20 December 2000 and the decree absolute on 21 January 2001. 14 On 8 February 2001 the deceased married Amelita Millan, to whom I have referred. He made his last will on 19 February 2001. 15 There was a property settlement on 23 March 2001 and in May 2001 orders were made in the Family Court in respect of that property settlement. Under that settlement the plaintiff received $10,000 to be paid on or before 1 May 2001, and $12,500 on or before 1 November 2001. It was on 18 May 2001 that the $10,000 was paid to the plaintiff. The balance of the amount was not paid before the deceased died on 16 January 2002. 16 The summons in this matter was filed on 12 November 2003 and probate was granted to the defendants on 30 April 2004. The widow's application was commenced on 9 February 2005. Eligibility of the plaintiff 17 The plaintiff is a former wife of the deceased and as thus is an eligible person. She must, however, establish under s 9(1) of the Act the evidence of factors warranting the making of the application. The question of factors warranting in respect of former spouses has been dealt with in a number of cases. In Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639 a number of the judges dealt with this matter. Kirby P had the following to say: "Fifthly, the respondent, picking up one of the themes of Mr Landa's comments, urged that s 9(1) of the Act was to be read in the light of the policy of the law to promote the finality of settlements of property disputes by orders made in the Family Court. Where such orders had been made an order under the Act in the case of a former spouse should be exceptional. Only if this approach were adopted would the policy of the Family Law Act (Cth) be fully achieved. That policy is that parties whose marriage has been dissolved and in respect of whom orders have been made disposing of their matrimonial property could go their separate ways. Save for the rare and exceptional cases provided under the Family Law Act (Cth) , such parties should henceforth face no financial obligation from one to the other. This public policy was referred to by Young J in O'Shaughnessy (at p 149). It is also stressed by his Honour in the present case. There is no doubt that in most cases the achievement of a final property settlement in the Family Court would be seen by the parties in current social circumstances as terminating any moral claim of a former spouse to provision in the will of the other. Confronted by the news that he or she had been excluded from the will of the former spouse, the response would, in the overwhelming majority of cases, be: 'Our marriage was dissolved. We settled our financial affairs. We can each start a new life. That was the whole point of the Family Court proceedings.' To this extent I agree with what Young J has written in O'Shaughnessy and in this case." 18 Mahoney J said the following: "That which the Court 'shall first determine' is whether 'there are factors which warrant the making of the application'. That phrase may be contrasted with the references otherwise made to the determination of, for example, 'what provision, if any, ought to be made in favour of an eligible person...'. On the face of s 9(1) there is a distinction between 'factors which warrant the making of the application' and factors which warrant the making of an order. That distinction accords with the principle which, in my opinion, is inherent in the legislation, viz, that, special cases apart, an order is to be made only if the deceased has made default in the performance of a duty which he owed to the particular plaintiff. I do not think that this case requires a final analysis of the basis of applications under the Act: it will be sufficient to refer to this matter in general terms. But the Act authorises the Court to 'order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person' (s 7). That does not mean that, if the plaintiff establishes a financial need within the section and if on taking into account the considerations referred to in s 9(2) (the discretionary considerations) there be nothing to the contrary, an order must be made. The statute assumes that the deceased, in what he has done during his life and by his will, has failed to discharge a duty which he owed to the plaintiff (the moral duty). Thus, a plaintiff may be a former spouse who, on dissolution of the marriage, received what on any view she was entitled to have and there may have been no further relationship between them so that none of the factors in s 9(3)(a) to s 9(3)(c) are of relevance. But, at the deceased's death, she may have a financial need. In such circumstances, the fact that the plaintiff has established that she was a former spouse and has a financial need would not, as such, entitle her to an order. It would be necessary for her to establish that, in some way or because of circumstances within s 9(3)(d) the deceased had a duty to her which involved that he should have provided for her financial need. This will be so a fortiori where the basis for the eligibility of the plaintiff is alleged to be within para (d) of the definition of 'eligible person'. Importantly, it can be seen that the question of need is a separate matter and factors warranting are something different from that." 19 In another case, Churton v Christian (1988) 13 NSWLR 241 his Honour Priestley JA said the following in respect of this type of application: "Mrs Christian is a member of a class in respect of whom warranting factors may often be more difficult to find. It is common experience that divorce sometimes brings to an end all links between previously married people. In such cases, warranting factors might well be expected usually to be absent, although this need not be universally so. On the other hand, divorced persons may remain on close terms, sometimes little different from those on which they lived when married. In every case it is necessary to examine the actual relationship between the two people concerned, as far as possible without preconceptions based only on the fact of divorce." 20 In his comments he illustrated a situation which sometimes applies after there has been a divorce and a property settlement: namely, that the parties still continue to have a close association. This was not the case in the present proceeding. There was one telephone call after separation and, apart from that, virtually no contact, apart from the property settlement. 21 There has also been in recent times further attention to this matter in the Court of Appeal in the case of Brown v Faggoter, a decision given on 13 November 1998, which is a decision of Sheller JA, Sheppard and Fitzgerald AJJA. The main judgment was given by Fitzgerald AJA, who seemed to suggest that an application might be warranted if the plaintiff has reasonable prospects of success. This seems to be a somewhat different and perhaps easier test than what was referred to in the other cases in the Court of Appeal to which I have referred. I will consider the matter on both bases, given that there may be some flux in the state of the law in this regard. 22 In the present case the basis upon which it is suggested that the existence of factors warranting on the traditional grounds are demonstrated is what the second plaintiff alleges was an inappropriate property settlement. Although the second instalment was not paid by the deceased, it clearly will be paid by the estate with interest and costs once the property has been sold. It is always, of course, open during the lifetime of the parties to set aside such a property settlement. The relevant provision in the Family Law Act is s 90K, which includes the following provision: "Circumstances in which court may set aside a financial agreement or termination agreement: (1) A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that: (a) the agreement was obtained by fraud (including non-disclosure of a material matter); or

(aa) either party to the agreement entered into the agreement: (i) for the purpose, or for purposes that included the purpose of defrauding or defeating a creditor or creditors of the party; or

(ii) with reckless disregard of the interests of a creditor or creditors of the party; or (b) the agreement is void, voidable or unenforceable; or

(c) in the circumstances that have arisen since the agreement was made it is impractical for the agreement or a part of the agreement to be carried out; or

(d) since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in sub-section (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or

(e) in respect of the making of a financial agreement - a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or

(f) a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or

(g) the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.

23 The section allows the setting aside of an agreement because of fraud or unconscionable conduct by any party. No doubt if the circumstances in this case included either of these criteria one would consider that the existence of those circumstances discovered after the death of a party would ordinarily be factors warranting the making of the application. There have been no such circumstances in this case. As, however, is illustrated by the comments of Priestley JA in Churton v Christian, the concept of factors warranting extend to wider factual circumstances which were illustrated in his comments. 24 In a number of cases there have been attempts to suggest that a property settlement was inappropriate, and for that reason alone there existed factors warranting the making of the application. Examples include Mulcahy v Weldon [2001] NSWSC 474. That was a decision of Bryson J in which his Honour concluded in para 24 that there was no evidence that the settlement was not just and adequate, or that it could be set aside by the Family Court. 25 In a decision of Lynch v Lynch, unreported 24 August 1992 I made comment that the demonstrable unfairness (although on legal advice) of a settlement may be a factor warranting the making of the application. In that case there were also other factors which related to the caring of the deceased by the plaintiff after the property settlement. That, of course, did not happen in this case. 26 I turn to the factual circumstances which have been disclosed, which of course are highly relevant to deciding whether or not in this particular case there are factors warranting the making of the application. 27 The plaintiff's evidence as to the circumstances of the property settlement was, omitting the rejected material, as follows: "65. In March 2001, we came to a property settlement. At the time I was very depressed and undergoing treatment from Dr Richard Sue at Wiley Park, who prescribed me Zoloft. I knew by then also that Guiseppe was terminally ill with cancer.

66. At the time the house at Beacon Hill...was unencumbered. Guiseppe also still had about $10,000 in cash. I don't know what the contents and other things might have been worth.

67. I loved Guiseppe and I knew if I insisted on what I was entitled to in the property settlement, it would mean he would have to sell the house. I loved him and I did not want to drag him through the courts and force him out of his home at the end of his life. Also, I was too depressed to fight anyway.

68. We made an agreement that Guiseppe would pay me $22,500. This was to be paid in two instalments, one of $10,000 and the other of $12,500." 28 The other facts about the settlement of which I have evidence is that both the plaintiff and the deceased had legal advisers who acted for them and appeared for them in obtaining court approval to the settlement. 29 There has not been placed before me the evidence presented to the Family Court in support of the application. For instance, I have no evidence of the full financial circumstances of the parties at the time. 30 The other factors which emerge in the evidence before me include the following: (1) The parties had no children to their marriage. (2) Each had children from a former marriage. (3) Only one of the deceased's children, Bruno, then an adult, lived part of the time with the deceased and the plaintiff. (4) Although the relationship existed between 1986 and 1994, the deceased and the plaintiff did not live together for that period. (5) They were only married for a period of five years. (6) The deceased already owned a home at the time of the marriage. (7) There is no evidence of any contribution to the deceased's home by the plaintiff. (8) For the whole period of the marriage both parties were retired. 31 In the light of these circumstances, and absent any evidence of matters which the Family Court would have considered in approving the settlement, or from which I can make a similar judgment, I cannot conclude that the settlement was not just and adequate. In those circumstances I find there are no factors warranting making of the application on the traditional ground. 32 I then turn to whether it might be said there are prospects of success. I have already set out the circumstance of the estate and the settlement of the claim of the deceased's widow. The deceased's daughter, Franca Catalano is married and aged forty-six years. She and her husband live in a house at Bateau Bay worth about $350,000, which they own but which is in need of repairs. She and her husband have furniture and household contents estimated at $10,000. Franca and her husband own a 1987 Mitsubishi Magna worth about $1,500. Their income, including family tax benefits and social security payments, is $439 per week derived from social security payments. 33 Two adult children live at home and their daughter, Cinzia, aged eleven years, is totally dependent upon them. Their income is totally consumed in living expenses and they have a debt of $5,000 to their son. Clearly they are living in somewhat straitened circumstances. 34 Bruno Sita is forty years of age and single. He owns two vehicles which he uses in his work and in which he has an equity of some $15,000 and he has bills of $6,000. He owes child support for his children in the sum of between $5,000 and $6,000. His income from his profession of a concreter amounts to $625 net per week. 35 He had a good relationship with his father although, on the plaintiff's evidence, she did not have a good relationship with him. However, that is not particularly relevant. What is relevant is that he received $90,000 from a compensation payout in $2001. He spent $40,000 of that on renovations of his father's home. He also at that stage paid $12,000 off his father's then credit card debts. These matters are a substantial contribution to the estate of the deceased. He also at that stage paid for child support arrears of $10,000 and basically has nothing left from that recompense. 36 The plaintiff lives on a pension in a Housing Commission flat. That involves subsidised rental of some $62 per week. She gives no detail of the actual pension or of any of her expenses. Her evidence does not disclose her assets, but I would assume there are no assets. She says she would like some fund for contingencies or perhaps a car. How that would be useful she does not explain in evidence, nor does she quantify the amount necessary. 37 When one takes into account the circumstances of the plaintiff, the beneficiaries and the facts of the relationship, including the fact of the amount of the property settlement, I would think there is no prospect of success. 38 In these circumstances I dismiss the summons and, subject to submissions on the question of costs, I order the plaintiff to pay the defendants' costs. The defendants' costs on an indemnity basis may be paid or retained out of the estate of the deceased. 39 In the other matter which is before me, which is matter 1430/05, I make orders in accordance with the short minutes which I will sign and date and place with the papers. 40 Before concluding the matter I wish to say something about the costs in this matter. The defendants' costs for both matters was a total of $35,000. The plaintiff's estimate of solicitor and client costs came to $42,500. I note that the plaintiff's solicitors appropriately undertook that if only a small legacy was given he would not charge more than $7,500 more than party and party costs. 41 The Court needs accurate estimates of costs so it can see the impact of costs on a claim. This is particularly so in respect of small claims, although in this matter I would not describe it as a particularly small claim. After payment of the widow's claim there would be some $550,000 in the estate. 42 In the circumstances of this particular case in which I have given judgment, it is hard to see how such a figure for the plaintiff's costs can be justified, notwithstanding that the charge-out rate of the partner who gave evidence was $450 per hour. Firstly, there are only two affidavits in the plaintiff's case. One was a seven page affidavit by the plaintiff which had no annexures. It was a simple narrative affidavit with no detail of substance. The other was the solicitor's costs affidavit which took one page. 43 There is evidence some inappropriate motion in the proceedings was threatened but obviously it did not involve a great deal of costs. There was a suggestion that the solicitor who had been handling the matter may have seen one or two other proposed witnesses in the case. However, there was no evidence taken from them. How that could justify the amount estimated is something which I find difficult to comprehend. 44 In due course in the middle of this year there will be new rules, namely, the uniform procedure rules for both of the Supreme Court, the District Court and the Local Court. One of the important rules in that will be the rule about proportionality of costs. Costs will only be allowed in the way that they bear some proportion to the issues in the case. The matters which one would have regard to are, for instance, the amount in issue and the complexity of the issues involved in the case. Parties can expect that these principles will be enforced with limits on simple claims such as this which can be heard in a short time. For instance, in this case the evidence took less than one and a half hours to hear. 45 It is also, I emphasise, important for the court to have accurate estimates of solicitor and client and party and party costs. If inaccurate estimates are given, thought will be given as to the nature of the evidence to be supplied in these matters and that may involve a more detailed assessment of costs prior to the matter proceeding than presently is accepted by the court. 46 I order the exhibits be returned. (Counsel addressed on the question of costs.) 47 In relation to the costs' order, it can stand except there will be excepted from that costs' order any costs occasioned to the plaintiff in the present proceedings as a result of the adjournment of the matter on 10 February 2005.

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