Valda Rebecca HERTZBERG v Clio Valda HERTZBERG & Anor [2002] NSWSC 1235 | Case summary

The plaintiff and the deceased married late in life. However, they knew each other from their late teens. After completing her schooling the plaintiff undertook a Batchelor of Medicine degree at Sydney University. During her time at University she became acquainted with the deceased. She and the group they socialised with played tennis. During that period they became good friends. Subsequently, they drifted apart and the plaintiff married Mr David Katz. There was a daughter of that marriage; however, the marriage was of short duration and in 1944 they divorced, the daughter, Caroline was born in 1940. Subsequently, the plaintiff remarried. She married Dr Harold Goldberg who was an American soldier serving in Australia during the Second World War. They married in 1946 and she moved to the United States and lived with him there until his death in 1970. There was one child of that marriage. 3 In the late 1930's or early 1940's the deceased commenced seeing the plaintiff's sister. Subsequently, they married with the blessing of the plaintiff. As a result of that union there were two children, the defendants in these proceedings. 4 The plaintiff's first daughter, Caroline was adopted by the plaintiff's second husband. The family continued to live in the United States. Harold died in 1970. During the period after the Second World War to 1970 both families saw each other on a regular basis, either on occasions when the deceased and his first wife visited America or alternatively, when the plaintiff and her second husband visited Australia. Most of the contact was in the United States. The deceased became a well-known opthalmic surgeon and as his career developed so he was invited to give lectures and seminars in various parts of the world, often in the United States of America. During their trips to America they made contact with the plaintiff and her husband. 5 In 1970 the plaintiff's second husband died. The plaintiff returned to Australia in 1971 and spent several months with her sister and the deceased. She returned to America in 1972. It would appear that she continued to reside in America throughout the 1970's. In 1979 her sister, the wife of the deceased, died. She had contracted cancer and subsequently died as a result of the cancer. 6 In April 1980 the plaintiff and the deceased commenced corresponding. It would appear that both parties as a result of the death of their spouses, were lonely. The plaintiff suggested to the deceased that he should remarry. During this time she developed a close relationship with the second defendant, namely the younger daughter of the deceased and his first wife. She had repeatedly asked the plaintiff to come to Sydney and stay with her. However, in the meantime, the deceased was to attend a conference in England and he suggested that he should visit her in Pittsburgh. The plaintiff agreed with this proposal and he attended Pittsburgh on the way back from the United Kingdom. The deceased and the plaintiff then continued on to Hawaii where they spent several days together. Matters developed from that point and subsequently a proposal of marriage was made by the deceased to the plaintiff. The couple married in 1982. 7 The evidence is that the relationship was a happy and harmonious one. Prior to their marriage the plaintiff sought the views of the deceased's two daughters and of her own two daughters. It was unanimous that the daughters were happy and supportive of the couple marrying. As a result of that unanimity they married in 1982. 8 In 1979 the deceased purchased a unit known as 10/4 Greenoakes Avenue, Darling Point. After the marriage the couple resided at the unit. The plaintiff's evidence is, and it is not contradicted by the defendants, that the marriage was a happy and harmonious marriage. They did things together, took overseas trips, had dinner parties with colleagues, enjoyed the theatre, the Art Gallery and in general enjoyed each others company and each others interests. The marriage was happy and successful. There was a close physical relationship between the parties. However, in the early 1990's the deceased's health deteriorated. He retired from work as an opthalmic surgeon in the early 1990's. At about this time he became incontinent but nevertheless during his early years of retirement he undertook a Master of Science degree. There were two issues which concerned the deceased and perhaps, but for the intervention of the plaintiff, his relationship with his daughters may have been very different to what they were during the later part of his life. His younger daughter, the second defendant, married a gentile. The deceased was concerned about this and initially expressed great disappointment. However, the plaintiff's evidence is, and it is not contradicted by the defendants, that she was able to play the role of a diplomat and convince the deceased that if his daughter was happy, it would probably be a happy marriage and he should be supportive of her for that very reason. It would appear that the deceased fully accepted the second defendant's husband as a member of his extended family. It was also during the marriage that the deceased became aware that his elder daughter, the first defendant, was a lesbian. Once again, he was very disappointed. However, the plaintiff acted as a peace maker and convinced the deceased that he should think in terms of what provides happiness for his daughter. As a result of her intervention, the deceased accepted the first defendant's sexuality and the relationship between father and daughter continued to be strong up to his death. 9 The marriage appears to have been a normal happy and physical marriage for the first eight to nine years. Thereafter, the deceased's physical affection towards the plaintiff diminished. Once the deceased became incapable of sexual intercourse all physical affection ceased according to the plaintiff. There is no evidence which contradicts the plaintiff. At about this time he had completed a Master of Science degree and at about this time he started to suffer from depression. The plaintiff's evidence is that he lost interest in everything apart from the second defendant's children. 10 As a result of the deceased's incontinence, the plaintiff was required to undertake a number of tasks associated with the deceased's condition which must not have been pleasant. The deceased refused to seek medical intervention for his problem. This resulted in the deceased having bowel malfunction. For the last ten years of his life the plaintiff was required to clean the deceased, his clothes, sheets and carpet as a result of his incontinence. 11 Throughout the plaintiff's married life to the deceased he appears to have been reluctant to carry out any renovations or maintenance on the Darling Point property. This is notwithstanding requests from the plaintiff that work needed to be done. Her evidence is that she paid for linoleum to be laid in the kitchen replacing the badly worn linoleum that had been there for many years. The evidence is, that the unit is in poor condition and needs a substantial amount of money spent to modernise it. Evidence has been put on be a builder that the costs of renovations is in the vicinity of $100,000.00. 12 In 1996 he had a mild stroke. His health continued to decline and this placed greater stress on the plaintiff. By this stage both parties were well into their eighties. The plaintiff performed the duties, not only of a wife but of a carer for the deceased because of his medical conditions. As a result of the constant demand on her she felt exhausted. Over the last ten years of the deceased's life the plaintiff's primary role was that of carer. By 1999-2000 the position had become so acute that she required assistance. The assistance was not forthcoming from the defendants. A mediation was conducted by Rabbi Selwyn with the plaintiff and the defendants in attendance. A regime was agreed upon which would give the plaintiff some respite. It appears that broadly speaking the arrangement was that each of the daughters would take the deceased on alternate Saturdays or Sundays giving the plaintiff some respite, enabling her to attend the theatre or the opera. 13 The evidence of the first defendant is that, prior to the mediation she had regular contact with her father and used to accompany him to medical appointments and also to a Jewish library at Five-ways. However, as a result of the mediation it would appear that it became clear to all concerned that the plaintiff needed some respite from her daily role as carer for the deceased. Both daughters willingly agreed to participate in a program which would give the plaintiff some respite. The first defendant looked after her father at least one day at the week-end on every alternate week-end and the second defendant on the other week-ends. There was also some evidence that there was at least one time when the second defendant cared for the deceased at her home for a period of time. However, that was not explored and I do not know the length of the period that the deceased stayed with the second defendant. 14 It is unfortunate that as a result of certain events in September 1999 the relationship between the plaintiff and the defendants appeared to deteriorate. For whatever reason the plaintiff became concerned about what provision would be made for her by the deceased should he predecease her. There was some discussion in September 1999 that he would provide an amount of $400,000.00. However, the plaintiff expressed the view that this amount was not enough. Thereafter negotiations took place between the plaintiff, the deceased and their accountant. The outcome of those negotiations were that the deceased would make provision for payment to the plaintiff of $1,000,000.00 during his lifetime. Thereafter, in October the deceased executed the will which was the subject of the grant of probate. A week after he executed the will he and the plaintiff signed a deed which guaranteed payment of the $1,000,000.00 and certain other benefits which bound his executors and trustees. 15 It was not long prior to the execution of the will and the signing of the deed that the deceased gave his two daughters an enduring power of attorney. This caused some disquiet with the plaintiff. She attempted to explain to the deceased how they could deal with his assets pursuant to the power of attorney. Her evidence was, however, that the deceased was of the view that the power of attorney did not operate until after his death. Having regard to the professional standing of the deceased I find it difficult to believe that the deceased was so confused concerning the effect of a power of attorney that he formed an intractable view that it only took effect upon his death. In my view, he had an ulterior motive for executing the power of attorney in favour of his two daughters. 16 Although the relationship between the deceased and the plaintiff appeared to continue to be harmonious it could not be said the same for the relationship between the plaintiff and the two defendants. The plaintiff and the first defendant were never close. The evidence is that after 1999 there was virtually no contact between the two. However, the relationship between the plaintiff and the second defendant had been very close, warm and, as the second defendant admitted, it grew in strength after the death of her mother, the sister of the plaintiff. However, the events of 1999 seemed to poison the relationship between the defendants and the plaintiff, that relationship has reached the point where the parties can no longer talk to one another but communicate through either their lawyers or by correspondence. There has, therefore, been a complete break-down in the relationship and one which I find will, in all probability, never be mended. 17 As a result of the plaintiff and the deceased entering into the deed there arises a number of problems. It would appear that the intention created by the deed was that it would be a mirror reflection of the terms of the will. However, that has not happened and it is in a different, and in some respects contradictory terms to the will. It would appear that in essence what was attempted to be done with the deed was to set-out with greater particularity the intention that the deceased expressed in the will. Under the terms of the will the plaintiff receives absolutely nothing other than the right to reside in the premises at Darling Point. The deceased acknowledged that provision was to be made during his lifetime of $1,000,000.00 to the plaintiff. That is reflected in the deed. The deed also reflects the obligations that would be imposed on the executors and trustees administering his estate. There is provision generally for the plaintiff's right to occupy the Darling Point property and provision for her medical and health requirements. 18 The precise terms of the estate's obligations concerning the plaintiff's medical and health needs has become an issue between the parties. It would appear that the defendants have taken a black letter law interpretation of the deed. They have not been prepared to exercise any discretion in respect of their powers under the deed. The plaintiff has been denied the right to purchase through the estate an important piece of equipment for a woman in her eighties, namely, a Vitalcall telephone system. The system was to cost $800.00 but the defendants declined to provide the funds to enable the plaintiff to purchase it. The plaintiff purchased the equipment out of her own resources. It would seem that it was fortuitous for her to do that because shortly after the rejection by the defendants a situation arose which could have resulted in the plaintiff dying but for the use of the Vitalcall program. The plaintiff uses this is an example of the difficulties and the embarrassment that she faces with being controlled by the whim of the defendants. In my view, it does raise serious questions in relation to the efficacy of the deed in the context of the plaintiff's health. 19 After the deceased and the plaintiff had executed the deed it would appear that the deceased may have had second thoughts about signing it. There is some suggestion that he spoke to both his daughters about his reservations and they embarked on a chain of enquiries to ascertain whether or not the deed could be overturned. The evidence given by both defendants is that the purpose for their enquiries was to determine precisely what the plaintiff saw as her future needs. However, the independent evidence does not support the assertions made by both defendants in the witness box. I do not accept their evidence that they merely sought to ascertain what the plaintiff's future needs were. In my view, they embarked on a course to ultimately set aside the deed. Their only motive from my observations of both defendants in the witness box was to have the Court declare that the deed was invalid. The matter did not progress that far as the defendants have never commenced legal proceedings seeking declaratory relief in relation to the deed. However, in my mind, having observed the two defendants, I accept the plaintiff's assertion that they both sought to attack the deed and not ascertain what the needs of the plaintiff were. The correspondence that has been tendered during the course of these proceedings makes it quite clear that it was the attempt to overturn the deed that motivated the defendants not their desire to ascertain what were the true needs of the plaintiff. 20 The defendants' evidence is that they still wish to uphold their father's will. They wish to provide for the plaintiff the reasonable needs that she has for the remaining years of her life. They are prepared to provide funds to ensure that she enjoys a secure life at the Darling Point property. They have no intention of trespassing on her rights to enjoy exclusive occupancy of the property and they are prepared to meet her medical and health expenses. Their offer is that she remains in the Darling Point property with a right of residency for the rest of her life and that they will pay to her all medical and health expenses that she incurs by the advancement of $20,000.00 at the beginning of each year and then topped-up as and when it requires topping-up. To that extent the defendants are prepared to move from the terms of the will and the deed. 21 The plaintiff made it abundantly clear that she was not prepared to accept those terms. Her view is that having been the wife of the deceased for almost nineteen years, having enjoyed a full and happy life with him during the first ten years and then subsequently looking after the deceased in his failing years, she is entitled to more than a right of residency or some other nebulous concept of occupancy of the property at Darling Point. The plaintiff's attitude is that she wants security of accommodation, she wants to be able to call her residence her. Langtry v Campbell, unreported, Powell J, 7.3.91 says: "That where, after all the appropriate interests have been taken into account, it is possible to do so, a widow in the position of the plaintiff ought to be put into a position where she is mistress of her own life, and in which, for the remainder of her life, she is not beholden to the executors or trustee, and to remainderman." 22 In exercising its jurisdiction the Court is required to undertake its two stage process. The first stage is to determine whether the provision made for the plaintiff by the deceased inter vivos and by will is, at the time of the hearing, inadequate for the proper maintenance and advancement in life of the plaintiff. If the Court so determines, it is then required to decide what provision ought to be made out of the deceased's estate for the plaintiff: see Singer v Berghouse (1994) 181 CLR 201 at 209-211 per Mason CJ, Deane & McHugh JJ.. 23 Financial Resources

National Flexi Account $16,875.00 National Common Fund Account $64,378.00 ANZ Money Manager Account $ 1,502.00 ANZ Priority Manager Account $895,000.00 T D Waterhouse No. 1 Account $415,523.00 (That is the value of that account) Wiggs Bank $A22,428.00 AMP Security Units (The value thereof) $ 2,500.00 Units/Shares in Farmstock Inc. $163,729.00 $1,575,383.00 29 The plaintiff's income from various sources for the financial year ending 30 June 2001 was $123,769.00. There was an issue in regard to the tax that the plaintiff was liable to pay for the last financial year. The notice of assessment indicated tax payable at $11,299.97. However, the actual liability for that financial year was $3,528.70. 30 In the plaintiff's second affidavit she lists her annual expenditure. Included in that expenditure is provision for trips to the United States to visit her daughters. The total expenditure is approximately $61,000.00. Travel to the United States of America includes accommodation and first class air travel. The reason the plaintiff gives for first class air travel is that although she is in very good health for a woman of her age, she does have a back problem. When one considers the size of the estate and the life the parties led prior to 1991, in my view, it is not unreasonable for her to expect to be able to travel to the United States to visit her daughters in first class travel every couple of years. 31 There is also in evidence the income that she derived from sources in the United States. That income however, is included in the $123,769.00 mentioned above. It is not in addition to that sum. It would appear that her second husband created a trust which provided for the plaintiff and for her daughters. The trust is divided into two parts, marital trust and a residuary trust. Under the marital trust the plaintiff is entitled to income from the capital of the trust. Her evidence is that in 1972 she received capital from that trust. In relation to the residuary trust she has entitlement to income but not to the capital. That trust, for all intents and purposes is a discretionary trust. It may well be that she may not receive any further funds from that trust as it is completely at the discretion of the trustee. In my view, the fact that there are funds in the United States of America, do not advance the defendants' position that the plaintiff has, or is likely to receive additional funds from that source in the future. 32 One important element of the funds that she receives by way of income presently is an amount of $40,000.00 in relation to an annuity. That annuity runs out in the next couple of years. That will then have the effect of reducing her income to approximately $83,000.00. It cannot be said that the other components of her income are stable. They are subject to market fluctuations and it is difficult to predict whether in future years she will receive increased income as a result of the market or whether the fluctuations will go against her and the income will decrease. It would seem to me that whilst she certainly has an economic cushion, it cannot be said that the present income that she enjoys will continue and will grow. 33 On the life expectancy tables the plaintiff will live another 5.36 years. In theory therefore, it would appear that she has sufficient funds to provide for her day to day living expenses and well being for that period of time. However, from my observations of her in the witness box she is in exceptional health for a woman of her age. She is spritely, she was alert. The only apparent problem she had was hearing and she readily admitted that she had a hearing aid and that assisted her. Her view, of course, is that she is going to live for quite some time. Her statement was that she would live to 104. That may or may not be the case but it would seem to me that in all probability she has the potential, having regard to her health at the present time, to live beyond the Australian average for a lady of 88 years. Currently she has no other provision out of the estate other than the $1,000,000.00. The totality of her investments provide her with an income of $123,000.00 approximately. The question is whether or not adequate provision has been made for her. 34 Evidence has been put on that the unit requires extensive renovations. An affidavit has been put on by Hugh Clarke, a building contractor, giving an estimate of $98,000.00 for work that is required to be carried out on the premises. There is no guarantee that the defendants would provide funds for any renovations. Mr Clarke's report states that work needs to be carried out on the unit. Just about every area of the unit requires some renovation. By way of illustration he estimates that the kitchen fixtures are approximately thirty-five years old, the bathroom fixtures are thirty years old. Both these areas require extensive work. The plaintiff finds herself in a position that if agreement cannot be reached with the two defendants then she is going to live out the last years of her life in accommodation which is deteriorating. There is evidence which would suggest that the defendants may not be prepared to meet all the reasonable requests of the plaintiff. 35 The plaintiff has given evidence that since her return to Australia in 1982 she has resided continually at the unit. She has built up a network of friends in the Eastern Suburbs; she enjoys the area; goes for daily walks and feels comfortable and secure in that area. If she is forced to move out of the property there is no guarantee that a property in the same area would be provided for her. The defendants have admitted that there is a complete break-down in the relationship; they no longer speak with the plaintiff; all contact is made through solicitors or through correspondence. There is evidence that the defendants denied her $800 to purchase a vital call security program. It does not leave one with much confidence that should she require extensive but essential renovations to the unit that the defendants would consent. The plaintiff is therefore placed in a position where she is at the beck and call of the defendants. Not only does she not have security of occupancy but she does not have peace of mind that her occupancy won't be disturbed. The defendants have stated in evidence that they will provide the things that would make the plaintiff's life comfortable; that is, any work that is required to be done on the unit, continue to meet the rates, taxes and levies and to cover her medical expenses, but one cannot be absolutely confident that that will happen having regard to past events. It is clear from the authorities that a surviving widow should not be placed in the position that the plaintiff finds herself in. See Elliott v Elliott, unreported, Powell J, 18.5.84 at p 11: "I take the view - which view I believe, is supported by authorities - that, in a case such as this, 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 the deceased owes to his widow can be no less than (to the extent which his assets permit him to achieve that result) first, to ensure that his widow be secure in her home for the rest of her life, and that if, either the need arises, or, the whim strikes her, she has 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 worries; and, thirdly, that she have available to her a fund to which she might resort in order to provide herself with the modest luxuries as she might chose, and which would provide her with a hedge against any unforeseen contingency or disaster that life might bring." 36 It has been submitted on behalf of the defendants that the age of the deceased and of the plaintiff should be a significant factor in determining whether or not additional provision should be made for the plaintiff. It is also put that the plaintiff's case can be distinguished from many authorities on the basis that they married late in life, did not have children, they did not acquire and conserve assets together, did not have the type of marriage that one usually associates with people who marry in their twenties and thirties and have families and buy a home and struggle to establish themselves in life; that this was a marriage of convenience. In my view that is not a proper approach to take. It is clear from the authorities notwithstanding comments made in Marshall v Carruthers, unreported, (2002) NSWCA 47, that as a general rule the primary responsibility of a testator is to his spouse. In my view, there is very little distinction to be made between this plaintiff as a second wife and a surviving spouse who was the first and only wife of a deceased. 37 It is proper to have regard to the expectation of the community. The plaintiff should be entitled to more than a right to reside in the matrimonial home. In Blackford v Salmon, unreported, Young J, 27.7.94 his Honour was of the view that where the second marriage was a long and harmonious marriage the expectation of the community would be that a wise and just testator would have left the plaintiff the house in fee simple. His Honour in that case considered three alternative orders: 1. that the plaintiff have the house in fee simple. 2. That a Crisp order be made. 3. that a trustee be appointed pursuant to s 15 of the Family Provision Act. His Honour formed the view that the proper order was for the plaintiff to receive the property in fee simple. In his view, the Crisp order and the appointment of a trustee was wholly inappropriate in this day and age. 38 They were married for nineteen years. She cared for him throughout that period of time. They had a happy life and a harmonious marriage. She was required to care for his debilitating condition in the last nine years of his life. In my view, the care, love and companionship that she brought to the deceased should be given significant recognition. Such recognition in my view equates with a marriage between younger people starting out in life. The fact that they married late in life does not reduce the obligation that the deceased had towards his wife. If anything, it maintains or increases the duty that he had towards her. She was a woman in her mid eighties when the deceased made his will. It was encumbent upon him to ensure that she had proper accommodation for her station in life. Secure accommodation and a fund of money to ensure that she lived, at the very least, a comfortable life, but in all probability, was able to continue with the lifestyle prior to the death of the deceased. The annuity of $40,000.00 will be expended within the next few years. I am conscious of the life tables. However, from my observation of the plaintiff there is a strong possibility that she will prove the exception to the rule. 39 The defendants elected not to put into evidence their financial circumstances. In the absence of any evidence it can be assumed that they do not have needs which are likely to compete with the needs of the plaintiff. 40 In my view, therefore provision should be made for her by way of a lump sum payment. It is my view that the property at Darling Point should be transferred to her. It is submitted on behalf of the plaintiff that a lump sum payment to her of $1,000,000.00 would be appropriate in all the circumstances. In my view, a figure less than that amount should be provided to the plaintiff. The plaintiff should received out of the estate a fund of money which will provide for the alterations and renovations that are required according to Mr Clarke's report, a fund which will replace the annuity which expires in the next couple of years, and will thus ensure that her current level of income is maintained and a fund of money which will ensure that she is able to meet the rates, taxes and other levies in respect of the property together with all her medical requirements. In my view, it is in the interests of the parties that their rights, entitlements and obligations under the deed be severed and terminated. It is abundantly clear to me from the evidence that I have heard that the relationship has completely broken-down. The first defendant was asked whether or not the relationship could be revived. I have no confidence in the answer that she gave. If a personal relationship is to be revived as a result of the outcome of proceedings and through correspondence through solicitors then it is doomed to failure. It is better that there is a complete severance of the relationship without any obligations on any of the parties. It may well be then that if there is to be a renewal of the relationship then it will grow out of natural affection rather than through the artificial environment of interceding lawyers. 41 Therefore, the orders that I make are:

Valda Rebecca HERTZBERG v Clio Valda HERTZBERG & Anor

At a glance

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Decision date

Before

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Judgment (10 paragraphs)

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Cases Cited (1)